LEVEL OF CAPITALIZATION PRESCRIBED FOR BANKS

Pursuant to Monetary Board Resolution Nos. 943 and 1159 dated 9 June
2000 and 14 July 2000, respectively, universal banks, commercial banks,
thrift banks and rural banks are advised that:

1.         The target level of capitalization prescribed for banks as of end-2000 has been set aside;

2.         The level of required capitalization as of end-2000 shall be the same as that prescribed as of end-1999;

3.         For new entrants in the banking system, the minimum
level of capitalization, unless otherwise prescribed by the Monetary
Board, shall be as follows:

Bank Category	Minimum Capital (In Millions)
Universal Banks	P4,950
Commercial Banks	2,400
Thrift Banks
With Head Office within Metro Manila	325
With Head Office outside Metro Manila	52
Rural Banks
Within Metro Manila	26
Cities of Cebu and Davao	13
1st/2nd/3rd class cities and 1st class municipalities	6.5
4th/5th/6th class cities and 2nd/3rd/4 th class municipalities	3.9
5th and 6th class municipalities	2.6

4.         For banks that have executed a Memoranda of Understanding (MOU)
with the Bangko Sentral ng Pilipinas (BSP), in compliance with Circular
No. 181 dated 14 November 1998, the following guidelines shall apply:

1.      For banks with capital deficiency but with capital-to-risk assets ratio within the minimum prescribed and
with no weaknesses (i.e, high past due loans, DOSRI violations, etc.),
the MOU may be set aside; provided, that the bank will be able to comply
with the minimum capital requirements as herein prescribed; and

2.      For banks with capital deficiency but with significant
weaknesses (i.e. deficiency in capital-to-risk assets ratio, liquidity
problems, high past due loans, etc.) the MOU, as executed, shall
continue to be in full force and in effect until such time it shall be
amended by mutual consent of the parties thereto; waived and/or
terminated by the BSP.

Non-compliance with the above capital requirements shall subject
the bank to sanctions/penalties provided under existing banking laws and
BSP rules and regulations.

Adopted: 15 August 2000

(SGD.) RAFAEL B. BUENAVENTURA
Governor