CBP Circular Letter 580-89

September 19, 1989

CBP CIRCULAR LETTER NO. 580-89 SUBJECT :

Amendment of Circular No. 317, Series of 1970 and Circular No. 432, Series of 1974

SECTION 1.

Time and Place of Exchanges

The clearing of checks, bills and other demand items contemplated in this circular shall be conducted in the premises of the Central Bank on the ground floor of the Central Bank Building and at such other places in regional clearing centers which the Central Bank may designate. The hour for making such exchanges shall be at 4:00 P. M. on each business day as well as on all local holidays in the clearing centers and/or at such other times which may be fixed by the Central Bank. LLphil

SECTION 2. Settling Clerks The head office of each bank, institution or entity together with all its branches within designated clearing areas (Annex "1") shall be considered as one (1) unit and shall be represented by one or more (but not exceeding six) competent clerks/representatives to deliver and receive the items to be exchanged. The facsimile signatures and NBI clearances of representatives shall be submitted to the Accounting Department. All representatives shall be issued their respective ID cards which shall be presented for admission in the clearing office or regional clearing units. SECTION 3.

Items for Clearing

All checks and documents payable on demand and drawn against a bank/branch, institution or entity allowed to clear may be exchanged through the Clearing Office in Manila and the Regional Clearing Units in regional clearing centers designated by the Central Bank. As evidence of the channel through which they were negotiated, all items to be exchanged shall be properly endorsed and guaranteed before being sent to the Clearing Office/Unit and shall bear the name of the bank/branch, institution or entity to which they belong. Likewise they shall be impressed by the sending bank/branch, institution or entity with a special stamp to the Copyright 2015 CD Technologies Asia, Inc.

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effect that they have been cleared through the clearing facilities of the Central Bank of the Philippines. The Clearing Office/Unit of the Central Bank of the Philippines shall in no way be responsible for any flows or defects in the items of for any irregularity whatsoever in any of their features. Matured Philippine Treasury Bills which may be presented for clearing shall be impressed with a special stamp with the word "PAID" and the name of the bank/branch, institution or entity and the date of payment. The Treasury Bills shall be sealed in separate envelopes properly stamped in bold letters "TREASURY BILLS" with a machine tape listing the serial numbers and corresponding amounts, the total of which shall be included as a debit against the Central Bank of the Philippines. Treasury Bills for return may be sent through clearing following the procedure stated under Section 4(c) hereunder. LLphil

SECTION 4.

Clearing Procedures

(a) Procedure for Regular Clearing Each bank/branch, institution or entity, through its representative/s, shall deliver their respective demands in sealed envelopes made out separately against the other banks/branches, institutions or entities allowed to clear. The total of each demand shall be listed in a certified adding machine tape attached to the sealed envelope. In acknowledgment of receipt of the demands against the bank/branch, institution or entity he represents, the settling clerk concerned shall prepare and sign a Clearing Office Statement (Clearing Form No. 4) in duplicate for local clearing. The original and duplicate of the statement shall be submitted to the Chief, Clearing Office, in Manila or the Regional Clearing Officer in the regional clearing centers. The original shall be retained and shall be the basis for settlement of clearing balances in the respective deposit accounts with the Central Bank. The duplicate duly authenticated by the Chief, Clearing Office or the Regional Clearing Officer concerned, shall be returned to the bank/branch, institution or entity concerned through their clearing representatives. The duplicate shall be the basis of each bank/branch, institution or entity for taking up corresponding entries in their respective books of accounts on the date of clearing. For out-of-town clearing, the Clearing Office Statement (Clearing Form No. 4-A) shall be prepared in quadruplicate for authentication by the Clearing Officer who retains one copy. The third copy shall be returned to the sending bank/branch, institution or entity through their respective clearing representatives. The original and Copyright 2015 CD Technologies Asia, Inc.

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duplicate shall be shipped to or retained in the Manila Clearing Office, as the case may be. LLphil

Out-of-town demands presented in a clearing center against a bank without any branch in that particular clearing area shall be delivered to the Clearing Officer who shall prepare a debit advice (Clearing Form No. 4-B) for the head office of the drawee bank/branch concerned in the Manila clearing area. In acknowledgement of receipt of out-of-town demands, the duplicate of the Clearing Office Statement and/or the original of the debit advice/s, settling clerks of respective drawee banks/branches in each clearing center shall sign the shipping manifest. These clearing office statements and/or the debit advice/s shall serve as bases for the head offices in the Manila clearing area to record the results of out-of-town exchanges in their books on the date of receipt. (b) Procedure for Special Clearing Demands may be presented directly to the drawee banks/branches, institutions or entities concerned at times other than that specified in Section 1. For this purpose, the Special Clearing Receipt (Cash Form No. 10) shall be used. The original and duplicate copies of the receipt shall be retained by the sending bank/branch, institution or entity and the triplicate shall be delivered to the drawee bank/branch. At the following clearing session, the original of the Special Clearing Receipt shall be presented as a demand against the bank/branch, institution or entity concerned. Nothing in this section shall prevent direct settlement between the parties concerned. (c) Procedure for Returned Items Items which should be returned for any reason whatsoever shall be presented not later than the next regular clearing for local exchanges. Out-of-town exchanges shall be returned within the period specified in the Memorandum to Authorized Agent Banks announcing the opening of clearing facilities in each of the authorized regional clearing centers. Items for return shall be sealed in special red envelopes and shall be considered and accounted for as debits to the demanding banks/branches, institutions or entities and credits to the returning banks/branches, institutions or entities. Nothing in this section shall prevent direct settlement of returned items between the parties concerned. Items which have been the subject of a material alteration or items bearing a forged endorsement when such endorsement is necessary for negotiation shall be Copyright 2015 CD Technologies Asia, Inc.

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returned within twenty-four (24) hours after discovery of the alteration or the forgery but in no event beyond the period fixed or provided by law for filing of a legal action by the returning bank/branch, institution or entity sending the same. Missorts or items misdirected through clearing shall be returned at the next clearing session in special yellow envelopes and shall be accounted for as debits to the bank/branch, institution or entity which had misdirected the items. (d) Procedure for Excluded Member(s) In case any bank/branch, institution or entity is excluded from clearing on any day on account of tardiness or absence, value shall be given to deliveries of the others present for credit to their accounts in accordance with normal settling procedures. The total of said deliveries shall be debited to the account of the excluded bank/branch, institution or entity. The bank/branch, institution or entity excluded from clearing shall, as heretofore, send its representative to the Clearing Office/Unit to prepare the clearing statement and accept deliveries on it. In case of failure to send its representative, the Clearing Office/Unit shall, in the meantime, receive such deliveries which should be picked up by the excluded bank/branch, institution or entity not later than 5:30 P. M. on the same day. In the event of strike or force majeure which presents a bank/branch, institution or entity allowed to clear from having access to its records or otherwise ascertaining whether checks delivered to it shall be honored or returned, notice of such circumstances shall immediately be given to the Central Bank Clearing Office/Unit. In such cases, items drawn against the bank/branch, institution or entity concerned shall not be presented for clearing. SECTION 5. Loss of Clearing Items Any loss or damaged arising from theft, pilferage, or other causes affecting it in transit shall be for the account of the sending bank/branch, institution or entity concerned.

(SGD.) G. S. LICAROS Governor

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