ADDENDUM TO MEMORANDUM OF INSTRUCTION NO. 57 PRESCRIBING THE POLICY GUIDELINES ON LOAN RESTRUCTURING

In the interest of the service and in view of the growing number
requests received from our Re-Entry Program beneficiaries for loan
restructuring the following guidelines are hereby issued for the
observance of all concerned.

Loan restructuring shall be prepared/recommended by the Project
Officer/Monitoring Officer.  This shall be forwarded to the Regional
Supervisor in the region while the Chief of the Project Documentation
and Monitoring Division in the National Capital Region.  The request
shall be accompanied by an Alternative Plan, Actual and Projected Cash
Flow Statements, copies of which shall be furnished to OWWA Main Office
for reference and adjustments.

Request for loan restructuring shall be granted only on the following conditions:

1.       When business is hardly hit by natural calamity i.e.
typhoon, flood, earthquake, drought, crop infestation, pestilence and
the likes;

2.       When business is struck by man-made calamity i.e. arson,
power interruption causing projects to operate below projected capacity
level, robbery, civil disorder and the likes;

3.       When client met an accident, contracted a disease or
injury causing the project to close shop or to operate below normal
level;

4.       When loan release is made within the business cycle and
the amortization due date does not fall during the harvest season;

5.       When projects with semi-annual/annual gestation period are erroneously extended a monthly repayment term;

6.       High/optimistic projections in the documentation process that were not realized in the actual business operation;

7.       When the project is liquid that the proponent wishes to shorten the loan term;

8.       When all other means have been exhausted and the proponent
has no other choice but to continue drawing out funds from the business
for basic personal necessities;

Request for loan restructuring shall be denied under the following circumstances:

1.       Mismanagement of business operation;

2.       Diversion of fund utilization without prior notice from the office causing low sales.

In no case shall loan term exceeds 1 year for loan intended for
working capital and 1.5 to 2 years for loan intended for building
improvement and/or purchase of machinery. Loan restructure extending
beyond the original loan term shall need the approval of the Program Manager.

Request for restructuring for reasons not covered in this Instruction shall be forwarded to the Program Manager for approval/disapproval.

For compliance.

Adopted: 24 April 1990

(SGD.) ATANACIO V. MARONILLA
Administrator