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4. Loans requiring prior BSP approval which have been signed and/or
drawn/availed of prior to securing the requisite approval shall not be eligible for
registration and subsequent servicing using foreign exchange purchased from AABs or
AAB-forex corps.

(As amended by Circular No. 742 dated 21 November 2011 and Circular No. 925
dated 13 September 2016)

Section 29. Servicing of Loans9

1. All foreign exchange purchases from AABs/AAB-forex corps for servicing

of foreign/foreign currency loans shall either be:

a. remitted directly to the intended beneficiary’s account on the date of

purchase; or

b. credited to the FCDU account of the resident borrower/guarantor (with

the same or another AAB) for eventual remittance by the depository AAB
to the intended beneficiary for the declared purpose: Provided, that if
the depository bank is different from the foreign exchange selling
institution:
(i) the foreign exchange selling institution shall directly transfer the
foreign exchange purchases to the depository bank of the purchaser; and
(ii) the depository bank shall also be the foreign exchange remitting AAB.

2. Foreign exchange requirements for payment of principal, interest, fees

and related charges on loans duly registered with the BSP may be fully purchased from
AABs/AAB-forex corps and remitted through AABs as these fall due without prior BSP
approval, provided such interest, fees and charges are indicated in the BSP registration
document, and documents listed under Appendix 1 hereof are submitted to the foreign
exchange selling institution.

3. Payments for the following shall, however, be subject to prior BSP

approval:

a. Prepayment of public sector/publicly guaranteed private sector loans;

9
Unregistered private sector foreign loans were temporarily allowed to be paid using foreign exchange
to be purchased from AABs and/or AAB-forex corps under the following BSP Circulars, subject to
certain conditions:
BSP Issuance Period Covered
Circular No. 741 dated 17 November 2011 December 2011 to February 2012
Circular No. 795 dated 18 April 2013 May 2013 to December 2013

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