Philippines: Circular No. 272 Series of 2001

This Circular includes guidelines pursuant to Monetary Board Resolution No.40 dated January 11, 2001. The document lists the procedure that need to be observed in implementing the General Banking Law of 2000 with respect to microfinancing loans.

Pertaining to microfinance loans, the circular states that:

• These loans are small loans granted to the basic sector and are typically unsecured;
• The maximum principal amount of such loans shall not exceed 150,000;
• The loans may be amortized on a daily, weekly, bi-monthly or monthly basis;
• Interest on loans shall be reasonable and the interest rate shall not be lower than prevailing market rates;
• For the loans that meet the criteria in items 1 to 3, the banks may not require from its credit applicants statement of assets and liabilities, and of income and expenditure;
• The microfinance loans shall be considered in compliance with required loans to small and medium enterprises under R.A.6977.

Finally, the document lists some points when microfinance loans may be exempted from rules and regulation issued by the Monetary Board.