Banking Bulletin - February 2023

February 27, 2023

SyCipLaw's Banking, Finance & Securities Department's Banking Bulletin for February 2023 features the latest issuances from the Bangko Sentral ng Pilipinas (BSP):

BSP Issues Implementing Rules of Financial Consumer Protection Act

On 28 November 2022, the Bangko Sentral ng Pilipinas (the Philippine Central Bank or "BSP") issued Circular No. 1160, series of 2022 (link here) and adopted the Amended Regulations and Guidelines on Financial Consumer Protection ("FCP") Framework to implement Republic Act No. 11765 (the Financial Products and Services Consumer Protection Act or "FPSCPA"). The approval of the FP Guidelines carries with it the amendment of the relevant provisions of the Manual of Regulations for Banks (MORB) and Manual of Regulations for Non-Bank Financial Institutions (MORNBFI).

BSP Amends UITF Regulations

UITFs refer to an open-ended pooled trust funds denominated in pesos or any acceptable currency, which are operated and administered by a trust entity ("TE") and made available by participation. UITFs are generally similar to mutual funds, except that investments in mutual funds involve the purchase of shares in a mutual fund company, whereas investments in UITFs involve the purchase of units of investments in a trust administered by a bank.

UITFs do not include long term funds that are designed as long-term investments (i.e., those with a tenor of at least five years), the interest income from which is currently exempt from income taxes (subject to certain conditions, including where the recipient is an individual citizen (resident or non-resident) or resident alien or non-resident alien engaged in trade or business in the Philippines). (Manual of Regulations for Banks ("MORB"), Section 403; Manual of Regulations for Non-Bank Financial Institutions ("MORNBFI"), Section 403-Q). Note, however, that this exemption will be lifted if the current version of the Passive Income and Financial Intermediary Taxation Act (PIFITA) is enacted into law (which is expected to take place later in 2023).

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