In response to the numerous queries we have received from members regarding compliance with the Revenue Memorandum Order No. 15-2005 (requiring all rural banks to submit a list of borrowers, co-makers, endorsers and/or guarantors who were extended loans the third day after the close of every month0 which we have received in recent days fromt he BIR, please be informed that we brought the matter up for discussion in our meeting with the bank Supervision Policy Committee (BSPC) last July 27, chaired by Deputy Governor Nestor J. Espenilla, Jr., together with our concerns as to the practicability and difficulties involved in fulfilling the requirements as stated in BSP Circular 472.

As a reply, Gov. Espenilla said that he will call for a meeting with the BIR to clarify Revenue Regulations No. 4-2005 because as he correctly observed, there is nothing in BSP Circular No. 472 that would even slightly suggest that a listing of borrowers, etc., is necessary for the proper implementation of said circular.

Therefore, insofar as the BSP is concerned, said listing being “requested by the BIR at present, is not part of the required compliance with BSP Circular No. 472 and it may not be improper to defer submission of the requested listing of loan clients, pending further clarification from BSP after their dialogue with the BIR shall have taken place.

However, with respect to the other provisions explicitly stated in the abovementioned BSP circular (i.e. requiring ITR and Audited FS from even small and medium-sized business borrowers), please be informed that it is BSP’s view that no exemptions are allowed at present as such measures are in the interest of national survival. Our nation is at the grip of a serious financial crisis and we are all enjoined to help the government ensure compliance with tax regulations, as responsible corporate citizens dedicated to the cause of coutnryside development.

We hope that this will clarify matters for all rural bankers.

We wish to thank all who had forwarded their manifestations and expressed their positon (or opposition) to the discussion at hand and further encourage written feedback from the federations and confederations regarding relevant current issues affecting the industry, so that we may elevate the same to the proper authorities concerend.

Very truly yours,