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Rules on Foreign Investments

A. Inward Investments by Non-residents

For purposes of registration, foreign investments may be in the form of:

a) foreign direct investments in Philippine firms or enterprises;
b) Investments in peso-denominated certificates of indebtedness issued by public sector entities;
c) Investments in securities listed in the PSE;
d) Investments in peso-denominated money market instruments 2/; and
e) Investments in peso time deposits with maturity of at least 90 days

2. Items (a) and (d) above shall be registered directly with the BSP while the registration of other portfolio
investments (items b, c and e) may be made thru a local custodian bank [an AAB or an offshore banking
unit (OBU)].

3. As a general rule, inward remittance of FX funding foreign direct investments (item a) need not be
converted to pesos while inward remittance of FX funding portfolio investments (items b,c,d and e)
requires conversion to pesos.

4. A Bangko Sentral Registration Document (BSRD) is issued for each investment directly registered with
the BSP. However, for investments registered by custodian banks on behalf of the BSP, only one BSRD
is issued per investor.

5. Documentary requirements for BSP registration of foreign investments are as follows:

I. For applications for registration to be filed directly with the BSP

A. For Cash Investments

i. Certificate of inward remittance (CIR) of foreign exchange through an AAB in the prescribed format
[Sample CIR and Guide/Instructions for Filling-Out CIR Form is under Appendix 10.1 and Appendix 10.2
of the Manual of Regulations on Foreign Exchange Transactions (FX Manual), respectively]; and

ii. Sworn certification of the officer of the investee firm concerned attesting to the number of shares and
amount paid for the investment [Suggested format is under Appendix 10.3A (for Stock Corporations) and
Appendix 10.3B of the FX Manual (for Branches/Representative Offices/Regional Headquarters/Regional
Operating Headquarters)].

B. For Investment in Kind

i. Shipping documents;
ii. Bureau of Customs Import Entry and Internal Revenue Declaration (IEIRD); and
iii. Sworn certification of the officer of the investee firm concerned attesting to the number of shares and
amount paid for the investment [Suggested format is under Appendix 10.3A (for Stock Corporations) and
Appendix 10.3B (for Branches/Representative Offices/Regional Headquarters/Regional Operating
Headquarters) of the FX Manual].

The value of investments in kind shall be assessed and appraised by the BSP before their registration.

. Purchase Price Letter/Agreement. Sworn certification from investee firm’s authorized officer attesting to the number of shares and amount paid for the investment remittable outward and that such are funded from foreign loans/payables converted to equity.1 of the FX Manual) for foreign loans not registered with the BSP. D.1 of the FX Manual). and ii. or ii. Contract/Certificate of investment For bonds or PNs issued by private domestic firms that were purchased from local creditor banks. the following additional documents shall be required: i. among others. Copies of bonds or PNs. Sworn certification signed by the investee firm’s authorized officer declaring the stock split/reverse stock split. Investments in Peso-denominated Money Market Instruments Registration of Investments in money market instruments. Investments funded by foreign loan/s and other payables converted into equity i. shall be supported by the following documents: i. such as but not limited to bonds. v. which refer to all peso-denominated debt instruments. Stock splits/reverse stock splits on BSP-registered investments in non-PSE-listed firms i. promissory notes (PNs). Copy of BSRD. Sworn certification signed by the investee firm’s authorized officer on the declaration of the stock and/or property dividend. iv. issued onshore by private resident firms.C. to include relevant excerpts of the covering Board Resolution H. Deed of Assignment of foreign loan or other payables. and F. and ii. Stock and/or property dividends accruing on BSP-registered investments in non-PSE-listed firms i. and ii. bills payables. Latest audited financial statements of investee firm. Deed of Assignment of the loan. and ii. iii. iii. E. ii. Original CIR of foreign exchange and its conversion to pesos through an AAB in the prescribed form (Appendix 10. Copy of BSRD. to include relevant excerpts of the covering Board Resolution G. Registration as foreign investments of capitalized oil/gas/geothermal exploration expenditures i. For investment in financial institutions which are governed and regulated by the BSP: Clearance from the Supervision and Examination Sector of the BSP shall be required in addition to the documentary requirements for investments in cash or in kind. Original CIR of FX through an AAB in the prescribed format (Appendix 10. the distribution of validated expenditures among the partners under the service contract/other contract. Copy of BSP registration for foreign loans registered with the BSP. Government-approved service contract/other contract. not included in Section 23 of the FX Manual. Copy of the Department of Energy (DOE)/National Power Corporation (NPC) letter-validation of expenditures showing. and non- participating preferred shares.

iii. For new investments: a. and peso time deposits with tenor of at least 90 days as described in Items 1.1 of the FX Manual). and v. Outward Investments by Residents . ii. “Authority to Disclose Information” in the prescribed format (Appendix 10. Investments in peso-denominated government securities (GS) i. Original CIR of foreign exchange and its conversion to pesos through an AAB in the prescribed format (Appendix 10.4 of the FX Manual) B. ii. the following additional document/s shall be required: Purchase invoice. ii. Bank certification of peso time deposit. The duplicate copy of the new BSRD issued by custodian banks together with the following requisite supporting documents shall be submitted to the BSP within two (2) banking days from date of registration for post audit purposes: A. For application for registration to be filed with Custodian Banks Foreign investments in peso-denominated government securities. For annotation in the BSRD of stock dividends which accrued to duly registered investments: PSE Notice (Circular for Brokers) announcing the issuance of Stock Dividend iii. “Authority to Disclose Information” in the prescribed format (Appendix 10. or subscription agreement and/or proof of listing in the local stock exchange for new/additional II. Investments in peso time deposits with tenor of at least 90 days i. 2. and 4 under Section 35 of the FX Manual shall be registered with custodian banks designated by the foreign investors. Notice of Assignment of the loan. Original CIR of foreign exchange and its conversion to pesos through an AAB in the prescribed format (Appendix 10. or subscription agreement and/or proof of listing in the local stock exchange for new/additional issues/stock rights: and b. Accredited dealer’s Confirmation of Sale (COS). Investments in PSE-listed securities i.1 of the FX Manual). Acknowledgment by debtor of the Notice of Assignment For foreign investments in non-participating preferred shares of Philippine investee enterprises. Purchase invoice. Original Certificate of Inward Remittance (CIR) of foreign exchange and its conversion to pesos through an AAB in the prescribed format (Appendix 10. and iii. Custodian banks are authorized to issue on behalf of the BSP the BSRD for such investments. For annotation in the BSRD of stock splits/reverse stock splits PSE Notice (Circular for Brokers) announcing the issuance of Stock Splits/Reverse Stock Splits C.1 of the FX Manual). The original copy of the BSRD shall remain in the custody of the issuing custodian bank.iv. PSE-listed securities.4 of the FX Manual) B.

provided such purchases when aggregated with the aforementioned outward investments will not exceed $60 million per investor per year. net worth and size of assets being managed. not included in Section 23 of the FX Manual 3/Forexisting unregistered foreign direct investments that are recorded in the investee firm’s books and whose foreign exchange funding were inwardly remitted/assets were transferred more than 5 years prior to 15 December 2011. After said period the BSP will no longer register such investments.1. and non-participating preferred shares. collective/pooled funds. public or private pension or retirement or provident funds and such other entities and funds as the BSP may determine as QIs on the basis of such factors as financial sophistication. Application to purchase FX for outward investments shall be supported by documents prescribed under Item C. such as but not limited to bonds. Residents may also purchase FX from AABs and/or AAB-forex corporations without prior BSP approval for investments in bonds/notes of the Republic of the Philippines or other Philippine resident entities requiring settlement in foreign currency. issued onshore by private firms. 1/ AABs shall refer to all categories of banks except Offshore Banking Units (OBUs) duly licensed by the BSP. 2/Refer to all peso-denominated debt instruments. Residents are allowed to purchase FX from AABs and/or AAB-forex corporations for investments abroad up to US$60 million or its equivalent per investor a year. promissory notes. bills payables. 2. FX received by residents as dividends/earnings or divestment proceeds from outward investments and investments in bonds/notes issued by residents offshore that were funded with FX purchased from AABs or AAB-forex corps. retirement and provident funds for a higher annual outward investment limit may be effected through its governing board or through its trustee. 4. the BSP is providing a grace period from 15 December 2011 to 14 December 2012 to register these investments. need not be inwardly remitted and sold for pesos. . or per fund a year for qualified investors (QIs).4 of Appendix 1 of the FX Manual. For this purpose. Purchases to fund outward investments exceeding the limit require BSP approval. whether in a corporate or contractual structure. QIs may apply with the BSP for a higher annual outward investment limit. QIs shall be limited to the following: insurance and pre-need companies. size and regularity of financial transactions. unit investment trust funds and variable insurance. The application of collective/pooled funds and pension. such as mutual funds. 3.