The Monetary Board in its Resolution Nos. 797, 838, and 1071 dated July 19, 1991, July 26, 1991 and September 20, 1991, respectively, approved the Countryside Financial Institutions Enhancement Program (CFIEP). The said Program shall be implemented under the following terms of reference:

SECTION 1. Statement of Policy Objectives - The CFIEP aims to:

1.1 raise the capital base of the countryside financial institutions by encouraging existing and new investors to infuse fresh equity into said institutions and thereby accelerate the government ™s economic development efforts;

1.2 reduce the debt burden of eligible countryside financial institutions and the corresponding financial strain on the government in continually assisting them; and

1.3 improve the long-term viability of the countryside financial institutions and establish such institutions as an effective means to mobilize savings and credit.

SECTION 2. Qualified Participants - The Program shall be open to the following:

2.1 All operating rural banks except those with serious irregularities based on the examination findings of the Central Bank of the Philippines (CBP).

2.2 Thrift banks as may be determined by the Task Force which have their main operations in the countryside.

2.3 Individuals, cooperatives and/or corporations as may be qualified to make an investment in the rural bank or qualified thrift bank.

SECTION 3. Coverage of the Program - All past due borrowings (principal and interests) with the CBP of rural banks and qualified thrift banks as of August 30, 1991 in the forms of rediscounted loans, CB: IBRD loans including those under plans of payment, and arrearages converted into Land Bank of the Philippines (LBP) equity under CBP Circulars 1143/1172.

SECTION 4. CFIEP Task Force - To effectively attain the objective hereinabove cited, a Task Force composed of the Governor of the Central Bank of the Philippines, the President of the Land Bank of the Philippines, the President of the Philippine Deposit Insurance Corporation, has been constituted with the following principal tasks:

a. Issue the implementing guidelines of the CFIEP; and

b. coordinate all activities relating to, and oversee the implementation of, the CFIEP.

SECTION 5. Incentives - As the Task Force may allow, participants to the Program are entitled to the following incentives approved by the Monetary Board:

a. Exemption of voting stockholdings of any person or persons related to each other within the third degree of consanguinity or affinity, cooperatives, or corporations participating in the program, from the application of prescribed equity ceilings, as may be warranted; and

b. Waiver of penalties and other charges due on arrearages covered by the program.

SECTION 6. Applicability of Relevant Laws - Nothing herein shall be construed as a waiver by the CBP from proceeding under Section 29 of Central Bank Act, as amended, or other pertinent provisions in said Act and the Rural Banks Act, as amended, in the event that circumstances shall exist as would warrant action under such provision of law.

SECTION 7. Effectivity - This Circular shall take effect immediately.

Adopted: 29 Oct. 1991

(SGD.) JOSE L. CUISIA, JR.
Governor