BSP CIRCULAR NO. 226, February 09, 2000
LGU BONDS
decided to consider LGU Bonds as alternative compliance with P.D. No.
717 in line with Section 4 of said P.D. which allows banking
institutions to invest, in such government securities as may be declared
eligible by the Bangko Sentral, any portion of the amount set aside for
agrarian reform credit not actually loaned out.
Banks’ investments in the said bonds, which are allowed as
alternative compliance with the agrarian reform credit requirement under
P.D. No. 717, shall be subject to the following conditions:
i. Such bonds shall not be hypothecated in any way or earmarked for any other purpose; and
ii. In case the bonds are the subject of a repurchase/resale
agreement, only the buying/lending bank may use such bonds as
compliance with the agrarian reform credit requirement during the
holding period; Provided, That the repurchase/resale agreement shall be
for a term of at least thirty (30) days without pretermination during
the first thirty (30) days.
This Circular shall take effect immediately.
Adopted: 9 Feb. 2000
(SGD.) RAFAEL B. BUENAVENTURA
Governor