The Bangko Sentral ng Pilipinas said in a statement yesterday that it will issue a new rules rationalizing the director/officer/ stockholder/related interests rules and regulations for state borrowings in government financial institutions.

The new rules provide that loans, other credit accommodations, and guarantees to the national government, its departments, agencies, and bureaus, including the BSP shall be considered non-risk and not subject to any ceiling.

However, borrowings of government-owned or controlled corporations and corporations where the national government, its departments, agencies, and bureaus and GOCCs own at least 20 percent of the capital stock are considered indirect borrowings and are subject to the DOSRI ceilings, BSP said in the statement.

Borrowings of local government units from GFIs shall not be considered DOSRI credit accommodations.

BSP said these amendments were proposed in the wake of concerns raised on the existing DOSRI regulations which tend to restrict borrowings of the ROP, its departments, agencies, and bureaus, as well as GOCCs in GFIs, such as the Development Bank of the Philippines, Land Bank of the Philippines and Small Business Guarantee and Finance Corp.

Under existing rules, borrowings, including guarantees of DOSRI are limited to their respective unencumbered deposits and book value of their paid-in capital contribution in the lending entity, the BSP added.*

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