Legal & Tax Updates [Back to list]

BSP Issues Guidelines on the Computation and Payment of Rebates, Refunds and Incentives (“RRI”) for Unfit Banknote Deposits

The Bangko Sentral ng Pilipinas (“BSP”) issued Memorandum No. M-2022-034 on 08 August 2022 to provide guidelines to be observed in the computation and payment of RRIs for unfit banknote deposits of banks to the BSP. 

The Guidelines cover the banks’ banknote withdrawals and unfit banknote deposits since the implementation of BSP Circular No. 1106 dated 23 December 2020, as follows:

  1. 13 January 2021 for banks being serviced by the BSP Greater Manila Regional Office; and
  2. 01 June 2021 for banks being serviced by other BSP Regional Offices and Branches (
    “ROBs”).

Guidelines

  1. RRIs to be applied on new and fit banknote withdrawals shall be based on the distribution of unfit banknote deposits per denomination using the following rates per bundle:

    Denomination

    Rebate/Refund Rates per Bundle of Proportioned Unfit Deposits (in PHP)

    Incentive Rates per Bundle of Excess Unfit Banknote Deposits over Withdrawals (in PHP)

    NEW

    FIT

    1000 - Piso

    160

    100

    50

    500 - Piso

    60

    30

    15

    200 – Piso

    40

    28

    14

    100 – Piso

    20

    14

    7

    50 – Piso

    10

    7

    3.5

    20 - Piso

    4

    3

    1.5



  2. Rebates and Refunds may only be applied to the service fees on withdrawals for the current year provided that the bank has unfit banknote deposits with the BSP on the same year.
  3. Incentives for the excess bundles of unfit banknote deposits over withdrawals may be applied to the service fees on withdrawals in the current year and the succeeding two (2) years. Any balance on incentives after the said period can no longer be utilized.
  4. Likewise, any excess service fees on withdrawals over incentives by the end of the year shall be carried over to the next two (2) succeeding years and any balance can no longer be recovered after the said period.
  5. The total RRIs shall be applied to the total service fees on banknote withdrawals, regardless of the denomination.
  6. The application of RRIs on withdrawal service fees shall be on a First In, First Out basis, wherein the balances of incentives or service fees carried over from previous years that will expire first, shall be utilized first.
  7. Payment of RRIs shall not be greater than the total amount of service fees charged on withdrawals, including carry-overs.
  8. A Statement of Rebates, Refunds and Incentives shall be issued to the banks prior to payment. Any concerns or clarifications may be raised by the banks within five (5) working days from the receipt thereof.
  9. The BSP ROB shall pay the RRIs through direct credit to the respective Demand Deposit Account of banks with a corresponding issuance of credit advice evidencing payment every first quarter of the succeeding year.