The Monetary Board, in its Resolution No. 415 dated March 15, 2001, decided to restore six months lag in the computation of loans-to-deposits ratio of banks for the purpose of determining compliance with the loans-to-deposits ratio requirement prescribed under Section X393 of the Manual of Regulations for Banks (MORB).

Section X393 of the MORB is hereby amended by adding anew subsection to read as follows:

"Subsection X393.4 Lagged Computation - For purposes of determining compliance with the loans-to-deposits ratio, a six months lagged computation shall be adopted, i.e., the loans-to-deposits ratio as of reporting date shall be computed using levels of deposits as of two previous quarter ends and loans as of the current quarter end."

The first paragraph of Subsection X393.2 is also hereby amended to read as follows;

"Subsection X393.2 Other methods of compliance.  The policy shall be deemed complied with, if, in a geographical grouping, the bank's lendings for the financing of agricultural and export industries constitute sixty percent (60%) of its deposits".

This Circular shall take effect immediately.

Adopted: 29 March 2001

(SGD.) RAFAEL B. BUENAVENTURA
Governor