Client advisory letter - PwC

Client advisory letter

ISSN 2094-1226/October 2013Rise in investment to continue in Asia Pacific p2 | Bureau of Internal Revenue p4 Court decisions p6 | Executive issuances p9| Meet us p10

Isla Lipana & Co.

2 Client advisory letter 2013

Rise in investment to continue in Asia Pacific

Forty two percent of chief executive officers (CEOs) in Asia Pacific are ‘very confident’ of revenue growth over the next 12 months and close to 70% intend to increase their investments in the region, according to a study by PwC.

The study, ‘Towards resilience and growth: Asia Pacific business in transition’, surveyed nearly 500 business leaders on their attitudes towards doing business in the region. It was released today at a meeting of the Asia Pacific Economic Cooperation (APEC) in Bali, Indonesia.

The survey found confidence among Asia Pacific-based executives on the rise. Some 42% of executives say they are ‘very confident’ of revenue growth in the coming year, up from 36% last year. Longer term, 52% say they are confident of growth over the next three to five years, about the same as in 2012.

According to the survey, the trend towards urbanisation in many Asia Pacific economies, the emergence of the local middle-class, and the need for infrastructure development are the main reasons for driving the increase in confidence.

“Executives in the Asia Pacific region are in the midst of a major transformation taking place within the region driven by a gradual but steady rise in income and economic opportunity for millions of people,” says Dennis M. Nally, Chairman of PricewaterhouseCoopers International Ltd. “While overall confidence in growth in Asia Pacific remains undiminished, APEC economies now also face many of the uncertainties of slower growth, previously limited to the more developed markets.”

In the survey, executives were also asked to identify their ‘dark horse’ pick – an Asia Pacific economy that could surprise with more business opportunity than is currently expected. Indonesia was the top pick, followed by Myanmar, China, The Philippines, and Viet Nam. Among the most cited attractive qualities were expanding middle classes, ample natural resources, increasing transparency, infrastructure improvement plans and political stability.

In other findings:

• Nearly 90% of Asia Pacific CEOs say their growth strategies are influenced by the growing market of middle-income consumers. And nearly half of investment increases are focused on new products, services and distribution - growth areas for serving the growing middle class.

• About one in five CEOs is pursuing mobile-enabled products and services such as transactions.


China, Indonesia, US ranked as top investment destinationsUrbanisation, rising middle class, infrastructure— potential sources of growthOpportunities in overcoming regulatory, legal, trade barriers

• Developing broadband network and urban transport will bolster economic growth, as will changes in regulatory and legal barriers and trade infrastructure.

• Regulatory consistency across the region could unleash additional investment. A fifth of CEOs say that if rules concerning intellectual property, corporate governance and services are harmonised they are ‘highly likely’ to invest more.

• The multiple trade discussions among APEC economies is welcomed by about 70% of regional CEOs, but 22% also see them leading to more uncertainty and administrative costs.

“Investment prospects are looking positive across Asia Pacific,” says Mr Nally. “However, if governments use the APEC meeting in Bali to effectively tackle CEOs’ concerns about regulatory and legal barriers, and to speed up progress on trade negotiations, this could unleash an even greater wave of new investment and help secure CEO confidence in the region.”

Notes to editors

About APECThe Asia-Pacific Economic Cooperation (APEC) forum is the premier economic organisation in the Asia-Pacific region. Established in 1989 by 12 economies, APEC fosters growth and prosperity by facilitating economic cooperation and expanding trade and investment throughout the region. APEC’s 21 member economies today account for 55% of global GDP.

The APEC CEO Summit is the Asia-Pacific’s premier business event, drawing thousands of economic and business leaders from around the region and beyond. The 2013 CEO Summit will be held from 5th to 7th October in Bali, Indonesia.

Survey MethodologyCarried out by PwC International Survey Unit, the APEC CEO Survey 2013 was conducted between June and August 2013 covering 478 CEOs and industry leaders in all 21 APEC economies. The full survey report can be found here www.pwc.com/us/apec/2013


Bureau of Internal Revenue

Revenue Regulations (RR)New rules on the taxation of tiangges or privilege storesThe BIR issued updated regulations covering the taxation of persons who sell goods or services through the use of privilege stores or “tiangges”, revoking RR Nos. 16-2003 and 24-2003 and prescribing new rules on the collection of tax on income payments by/to such privilege stores and on the obligations of organizers/exhibitors/operators.

Some of the salient amendments are as follows:

• Under the new rules, privilege stores should not engage in any business activity for a cumulative period of more than 15 days in a taxable year. Thus, persons exceeding the 15-day maximum period shall not qualify as privilege store operators but shall be registered as regular taxpayers. In computing the cumulative number of days, each business activity shall count as one day regardless of whether the additional business activity is done in the same or separate venue.

• Exhibitors/organizers are reminded of their reportorial

requirements under RR No. 12-2011 and are directed to demand that regular taxpayers (i.e., those exceeding the 15-day period) present their TINs, invoices and official receipts, and proof of payment of withholding tax due on income payments. Moreover, they must also ensure that privilege store operators submit their Information Statement on Privilege Store Activities on or before the first day of operation indicating the inclusive dates of business operations, name and TIN of the exhibitor/organizer, name and address of the event/exhibit, and duration of operations in any given year.

• Exhibitors/organizers are required to provide Cash

Register Machines/Point-of-Sale (CRM/POS) Machines for each qualified privilege store operator, centralized CRM/POS/Payment Centers, or allow the use of their

own manual official receipts/ invoices for the exclusive use of the privilege store operators to monitor the sales of the latter. They are also obliged to reconcile the list of sales submitted by the privilege store operators to the CRM/POS.

• The relationship between the exhibitor/organizer

and the privilege store operators shall be that of consignor-consignee. The consignee is only acting as a “pass through entity” where the income on the sale is ultimately taxed to the consignor.

(RR No. 16-2013 dated 22 August 2013)

Updated regulations on taxation of international carriers With the enactment of RA 10378 recognizing the principle of reciprocity as basis for granting tax exemptions to international carriers, the BIR issued updated regulations to implement the new law.

The major amendments are summarized as follows:

• The regulations now also cover the taxation of international sea carriers (not just international air carriers) and provides guidance on the computation of their GPB.

• International carriers who intend to avail of preferential

income tax rates under applicable tax treaties are specifically directed to observe the procedures under RMO No. 72-2010 which requires the prior filing of an application with the ITAD of the BIR. Nonetheless, international carriers with previously filed or granted TTRAs prior to the effective date of the new RR need not file a new TTRA.

• An international carrier may invoke the principle

of reciprocity as basis for GPB tax exemption when its home country grants income tax exemption to Philippine carriers, and such Philippine carriers are actually enjoying such exemption. An application for exemption ruling must be filed with the ITAD of the BIR together with prescribed supporting documents such as competent proof of reciprocity. In addition, a sworn certification stating that there is no change in the domestic laws of the relevant foreign country granting income tax exemption to Philippine carriers must be


BIR - Bureau of Internal RevenueGPB - Gross Philippine BillingsITAD - International Tax Affairs DivisionNIRC - National Internal Revenue CodeRA - Republic ActRMO - Revenue Memorandum OrderRR - Revenue RegulationsTIN - Tax Identification NumberTTRA - Tax Treaty Relief ApplicationVAT - Value added tax

Glossary

submitted on or before 31 January of each year from the time the international carrier is issued an exemption ruling by the BIR. Non-submission of the sworn certification shall be a ground to revoke the ruling.

• Demurrage fees and detention fees are specifically cited

as income from Philippine sources subject to income tax at the regular rate (not being part of GPB).

• The 3% Common Carrier’s Tax shall be computed based

on “gross receipts” as defined under the RR, and shall no longer be based on the same tax base for computing GPB tax.

• Applying the new law, the transport of passengers or

cargo by international carriers doing business in the Philippines are exempt from VAT under Sections 109(1)(S) and 109(1)(E) of the NIRC. The 3% Common Carrier’s Tax under Section 118 is now limited to the carriage of cargoes.

(RR No. 15-2013 issued on 20 September 2013)

Simplified definition of raw sugar for VAT purposesThe BIR amended the definition of raw sugar under RR No. 13-08 (consolidated regulations on advance VAT on the sale of refined sugar). Henceforth, raw sugar, which is exempt from VAT, shall refer only to muscovado sugar.

Other types of sugar that undergo centrifugal processing are subject to VAT since that is not a simple process. (RR No. 13-2013 dated 20 September 2013)

Amended withholding tax rules on medical practitioners To further enhance tax compliance on fees paid to medical practitioners, the BIR amended the pertinent provisions of RR No. 2-98 (otherwise known as the withholding tax regulations).

The RR directs hospitals, clinics and other similar establishments not to allow their accredited medical practitioners (which include doctors of medicine, doctors of veterinary science and dentists) to receive professional fees directly from patients who are admitted and confined to such hospitals and clinics. Instead, these professional fees shall be included in the total medical bill of the patient and shall be collected directly by the hospital or clinic so that the applicable 10%/15% tax can be properly withheld and remitted to the BIR.

Hospitals and clinics are also directed to submit a complete and updated list of their accredited medical practitioners to the BIR.

This new rule is effective beginning 1 October 2013.(RR No. 14-2013 dated 20 September 2013)

Ten-year retention period for accounting recordsTaxpayers are required to preserve their books of accounts, including subsidiary books and other accounting records, for a period of ten years, counting from the due date or actual filing date of the annual income tax return, whichever is later.

The independent certified public accountant (CPA) who audited the records and certified the financial statements must also maintain copies of the audited financial statements for the same ten-year period.(RR No. 17-2013 dated 27 September 2013)

Revenue Memorandum Circular (RMC) Revocation of tax exemption granted to a recreational club The BIR revoked BIR Ruling No. NSNP-(S30C-028) 726-09 which previously granted income tax exemption to an organization dedicated to advancing the study and breeding of purebred dogs through the maintenance of a registry. The previous exemption ruling was based on Section 30(C) of the NIRC covering beneficiary societies, orders or associations which, according to the BIR, does not apply to the taxpayer.

Prior to 1998, clubs organized and operated exclusively for pleasure, recreation, and other non-profitable purposes were among the list of organizations granted exemption from income tax under the old NIRC. However, it was omitted with the enactment of RA No. 8424 (Tax Code of 1997), thus making such organizations subject to regular income tax. (RMC No. 64-2013 dated 30 September 2013)

ITAD


Court Decisions

Court of Tax Appeals

Amounts paid under an application for abatement should be refunded following availment of tax amnestyA domestic corporation filed 12 applications for administrative abatement with the BIR related to deficiency tax assessments covering taxable years prior to 2005. Under the CIR’s abatement program (RR No. 15-06, as amended by RR No. 3-07), assessment for penalties/surcharge and interest shall be cancelled after payment of the basic tax. On account of the denial of four of the applications and the inaction by the CIR with regard to the other eight applications, the company subsequently filed an amnesty application for the said assessments. The tax amnesty program (TAP) under RA No. 9480 provides that a taxpayer who availed of the tax amnesty is entitled to immunities and privileges, such as immunity from the payment of tax and penalties arising from the failure to pay any and all internal revenue taxes for the taxable year 2005 and prior years.

A year later, the company filed an administrative claim with the CIR for refund and/or issuance of tax credit certificate representing the amount it paid in connection with its applications for abatement. Due to the CIR’s inaction over the claim, the company sought relief through a petition for review before the CTA.

Thus, the issue to be resolved is whether the company is entitled to a refund and/or issuance of tax credit certificate representing the amount it paid for the settlement of its deficiency tax assessment under the abatement program and by virtue of an application under the TAP.

Upon review of the records, the CTA ruled in favor of the company. While initially the tax sought to be refunded was considered as legally collected, the happening of a supervening cause, i.e., the CIR’s denial/inaction on the application for abatement, and the subsequent availment of the TAP, gave rise to the company’s entitlement to a tax refund under Sections 229 and 204(C) of the NIRC. Since the company’s administrative claim was filed within the two-year prescriptive period for the recovery of tax

erroneously or illegally collected, a tax refund is in order. The two year period is reckoned from the date of tax payment, regardless of the presence or non-existence of any supervening cause.

Moreover, the court granted the request for tax refund since the application for abatement was not yet final. Section 5 of RR No. 15-2007 provides that an application for abatement is deemed terminated upon the issuance of a Termination Letter and Authority to Cancel Assessment (ATCA) relative to the penalties/ interest to be abated. In the absence of a Termination Letter and ATCA, there was no showing of acceptance by the CIR of the offer for abatement. Consequently, the payments made by the company should be returned based on the principle of solutio indebiti (“payment by mistake”) under Article 2154 of the Civil Code. The CIR has the duty to refund without unreasonable delay what it has erroneously collected as tax.

The CIR cannot argue that the amounts paid by the company represent the staggered or installment payments of the basic tax. In the absence of records showing that the company requested to pay on a staggered basis, and that the same has been approved by the BIR, the argument is unfounded.

However, considering that a portion of the tax payment was not covered by tax amnesty under Section 8(f) of RA No. 9480, the amount for tax refund was proportionately reduced. Thus, the company’s claim for refund was partially granted.(CTA Case No. 7938 dated 5 August 2013)

Mere protest letters will not suspend the statute of limitations for assessment/collection; Defense of prescription may be raised for the first time during judicial appeal if the related deficiency tax is assessed only in an FDDAA domestic company was assessed by the BIR for deficiency taxes due to alleged under-declared sources of funds. In its protest letter, the company explained that the assessed amount represents payments made for technical assistance services rendered by aliens and a nonresident foreign


corporation. These payments were subjected to FWT and remitted to the BIR applying the preferential rates under the relevant tax treaty.

In 2006, the company received a Tax Verification Notice (TVN) stating that pertinent records and documents will be verified by the Revenue Officer relative to an alleged request by the company for reinvestigation. Thereafter, the company received an FDDA and Details of Deficiency holding it liable for deficiency FWT because it failed to submit a copy of its application for tax treaty duly stamped by the ITAD. Contesting the assessment, the company filed a petition for review with the CTA. The Court in Division ruled for the company after noting that the three-year period for the CIR to conduct its assessment had long expired by the time the company received the FDDA in 2009. With the denial of its motion for reconsideration, the CIR elevated the case before the Court En Banc.

Finding no reason to disturb the decision of the CTA Division, the court ruled in favor of the company on the following grounds:

First, the CIR asserted that the three-year prescriptive period had been suspended when the company requested for reinvestigation. However, Section 223 of the NIRC states that a request for reinvestigation must be made by the taxpayer and approved by the CIR in order to suspend the running of the periods for assessment and collection. Upon review of the records, the court found no evidence of a request for reinvestigation emanating from the company, but mere protest letters refuting the assessment.

Second, as to the issue of prescription as a defense raised for the first time on appeal, the argument is unmeritorious. The court ruled that there can be no failure to invoke or raise the defense of prescription at the administrative level if the company was not given any opportunity to do so. Since the company learned of the FWT assessment for the first time when it received the FDDA in 2009, it was able to raise the issue on prescription only in its petition for review.

Citing Republic vs. Ablaza, the SC rationalized that “The law prescribing a limitation of actions for the collection of the income tax is beneficial both to the Government and to its citizens; to the Government because tax officers would be obliged to act promptly in the making of assessment, and to citizens because after the lapse of the period of prescription citizens would have a feeling of security against unscrupulous tax agents who will always find an excuse to inspect the books of taxpayers . The law on prescription being a remedial measure should be interpreted in a way conducive to bringing about the beneficent purpose of affording protection to the taxpayer.”

Given the above, the CIR’s petition for review was denied.(CTA EB Case No. 882 dated 13 August 2013)

Conditions to be satisfied in claims for refund/tax credit representing unutilized CWTA domestic corporation filed an administrative claim for issuance of tax credit certificate due to unutilized CWT for the calendar year 2007. On account of the inaction of the CIR over its claim, the company filed a petition for review before the CTA. On appeal, the CIR objected to the validity of the claim for refund on the following grounds: that the said unutilized CWT was not proven by the company to be included in its gross income for the taxable year 2007; that the corporation already carried over the subject of its claim to the succeeding taxable quarters/years; and that the company failed to comply with the legal requirements as to the prescriptive period for filing claims for refunds.

To be entitled to the issuance of tax credit certificate for excess/unutilized CWT, the taxpayer must satisfy the following essential requisites: (1) That the claim for refund was filed within the two-year prescriptive period as provided under Section 204(C) in relation to Section 229 of the NIRC; (2) That the fact of withholding is established by a copy of a statement (BIR Form No. 2307) duly issued by the payor (withholding agent) to the payee, showing the amount paid and the amount of tax withheld; and (3) That the income upon which taxes were withheld was included in the return of the recipient.

With regard to the first requisite, the CTA found the company compliant. The two-year prescriptive period for requesting a refund commences to run from the date of filing of the annual ITR. The rationale is that it is only upon filing the ITR covering the whole year that the taxpayer would know whether a tax is still due or a refund can be claimed based on the adjusted and audited figures.

Glossary

BIR - Bureau of Internal RevenueCIR - Commissioner of Internal RevenueCTA - Court of Tax AppealsCWT - Creditable Withholding TaxFDDA - Final Decision on Disputed AssessmentFWT - Final Withholding TaxITAD - International Tax Affairs DivisionITR - Income Tax ReturnNIRC - National Internal Revenue CodeRA - Republic ActRR - Revenue RegulationsTAP - Tax Amnesty Program

Glossary


As for the second requisite, again, the company satisfied the condition. Claims for refund of CWT shall only be given due course when the income payment has been declared and the fact of withholding is established by a copy of the withholding tax statement or BIR Form No. 2307 issued by the income-payor to the recipient-payee under Section 2.58.3(B) of RR No. 2-98.

Regarding the third requisite, only a portion from the entire amount claimed was included in the return of the company. Hence, only the partial amount as indicated on the return was proven and may be entitled to a refund.

Finally, under Section 76 of the NIRC, a corporate taxpayer with excess tax credits or overpaid income tax in a given taxable year may either be refunded (either in the form of cash or tax credit certificate) or may opt to carry-over/apply the excess to the succeeding taxable years. However, once the option to carry-over and apply the excess quarterly income tax against income tax due on the succeeding taxable year has been made, it shall be irrevocable and any application for refund shall not be considered. Upon review of the company’s ITR, the claimed CWT was not carried over to the succeeding quarters or taxable year, but instead reflects the phrase “To be Issued a Tax Credit Certificate”.

Having complied with all three requirements, the company is entitled to the issuance of tax credit certificate for the excess/unutilized CWT in a reduced amount as proven. (CTA Case No. 8084 dated 12 August 2013)


Executive Issuances

Securities and Exchange Commission (SEC)Schedule of filing of financial statements for calendar year 2013To maintain an organized and orderly filing of AFS, companies with fiscal year ending on 31 December 2013 should observe the following schedule depending on the last numerical digit of their SEC registration or license number:

14 - 18 April “1”, “2”

21 - 25 April “3”, “4”

28 April - 2 May “5”, “6”

5 - 9 May “7”, “8”

12 - 16 May “9”, “0”

The above schedule shall not apply to companies listed on the Philippine Stock Exchange, those operating on a fiscal year that does not end on 31 December 2013 and those with AFS being audited by the COA, subject to the submission of required documents confirming the COA audit.

The SEC will accept all AFS filed before 14 April 2014 regardless of the SEC registration or license number. Late filings shall be accepted starting 19 May 2014 subject to prescribed penalties.(SEC Memorandum Circular No. 16 dated 13 September 2013)

Guidelines for re-registration of corporations with dissolved or revoked registrationsWith this circular, the SEC amended Section 15 of SEC Memorandum Circular No. 5, series of 2008, by requiring the submission of the following documents when applying for re-registration of corporations with dissolved or revoked certificates of registration:

1. Board resolution signed under oath by the hold-over board of directors/trustees of the dissolved or revoked company attesting that:

a. The applicant is a new corporation intending to use the name of the dissolved or revoked corporation;

b. The re-registration is approved by majority of the directors and stockholders;

c. The articles of incorporation shall include a statement that the new corporation is using the name of the dissolved/revoked corporation; and

d. If applicable, they will no longer file a petition to set aside the order of revocation.

2. Latest General Information Sheet of the dissolved or revoked corporation filed with the SEC

3. Affidavit of the hold-over corporate secretary, attesting that:

a. There are no properties owned by the dissolved or revoked corporation due for liquidation; or

b. In case there are properties owned by the dissolved or revoked corporation, no property is transferred to the new corporation or, in case of stock corporations, used for subscription payment without undergoing corporate liquidation process.

(SEC Memorandum No. 17 dated 25 September 2013)

AFS - Annual Financial StatementsBIR - Bureau of Internal RevenueCOA - Commission on AuditCTA - Court of Tax AppealsCWT - Creditable Withholding TaxITR - Income Tax ReturnNIRC - National Internal Revenue CodeRR - Revenue RegulationsSEC - Securiities and Exchange Commission

Glossary

Continued on page 11


The project was made possible with the help of the Philippine Tourism and Promotion Board of the Department of Tourism and the University of the Philippines - Asia Institute of Tourism, which were part of the screening committee together with representatives from the Management Association of the Philippines and FleishmanHillard Manila, travel blogger James Betia and media personalities Love Añover and Jing Lejano and ace director, Jose Javier Reyes.

The firm started with a list of 175 destinations gathered from their employees and online travel bloggers and trimmed this down to 50. The screening committee agreed on a shortlist of 25 destinations which were opened to public online voting to determine the ten Philippine Gems.

For more information, visit www.philippinegems.com.

Logo and tagline

Philippine GemsRediscovering the country’s natural assets

Meet us

Isla Lipana & Co. announces the 10 Philippine Gems Believing that the Philippine has a lot more to offer, Isla Lipana and Co., a member firm of PricewaterhouseCoopers in the Philippines, announced recently the ten up and coming tourist destinations. The project, dubbed as the Philippine Gems, is part of the firm’s 91st anniversary celebration and corporate social responsibility project.

“The search for the ten Philippine Gems envisions the upholding of both domestic and foreign tourism that would hopefully encourage business investments,” said Isla Lipana & Co. Chairman and Senior Partner, Atty. Alexander Cabrera. “The Philippine Gems steers awareness and appreciation for the country’s pristine and natural sites, even the underdeveloped ones. In our modest way, we aim for these places to gain local and international attention, and in due course, greater economic activity.”

The ten Philippine Gems are Apo Island, Batanes, Biri Rock Formation, Calaguas Islands, Caramoan, Danjugan, Lake Sebu, Mt. Kanlaon, Panglao Island and Tubbataha. These destinations were chosen from an initial list of 25 by the public through online voting, which was open from 26 June to 25 September.

L-R: Isla Lipana & Co. Vice Chairman & Assurance Partner Rick Danao, Philippine Reef & Rainforest Conservation Foundation Executive Director Gerardo Ledesma, Isla Lipana & Co. Assurance Managing Partner Blesilda Pestaño, PPP Center of the Philippines Executive Director Cosette Canilao, Isla Lipana & Co. Chairman & Senior Partner Alex Cabrera, Biri Island Mayor Antonio delos Reyes, Isla Lipana & Co. Assurance & Finance Partner Che Javier, and University of the Philippines-Asian Tourism Institute Assistant Professor Caloy Libosada.


Talk to us

For further discussion on the contents of this issue of the Client Advisory Letter, please contact any of our partners.

Malou P. LimTax Managing PartnerT: +63 (2) 459 2016 malou.p.lim@ ph.pwc.com

Lawrence C. BiscochoT: +63 (2) 459 2007 [email protected]

Carlos T. Carado IIT: +63 (2) 459 2020 carlos.carado@ ph.pwc.com

Fedna B. ParallagT: +63 (2) 459 3109 [email protected]

Melissa L. RamosT: +63 (2) 459 3059 [email protected]

Request for copies of text

You may ask for the full text of the Client Advisory Letter by writing our Tax Department, Isla Lipana & Co., 29th Floor, Philamlife Tower, 8767 Paseo de Roxas, 1226 Makati City, Philippines. T: +63 (2) 845 2728. F: +63 (2) 845 2806. Email [email protected].

Executive Issuances

Bangko Sentral ng Pilipinas (BSP)Amendment on market valuation of Government SecuritiesThe BSP issued this memorandum to further define the benchmarks and establish a pricing and valuation standard for peso-denominated government securities. In the absence of weighted average done deals, the simple average of all firm bids shall be used in calculating the benchmark. For non-benchmark securities, the same shall be the basis for the market valuation. However, in the absence of both done and bid rates, interpolated yields derived from benchmark or reference rates shall be used. (BSP Circular No. 813 dated 27 September 2013)

New reporting requirement for non-performing loansThe BSP requires banks to submit reports in a prescribed format to account for the movement in and the aging of NPLs.

Reports should be submitted to the SES within 15 banking days after the end of each quarter; otherwise, the banks shall be subjected to the fines and penalties for delayed submission and/or incomplete/erroneous filing of Category A reports.(BSP Circular No. 814 dated 27 September 2013)

BSP - Bangko Sentral ng PilipinasNPL - Non-performing LoansSES - Supervision and Examination Sector

Glossary

Continued from page 9

www.pwc.com/ph© 2013 Isla Lipana & Co. All rights reserved.

PwC refers to the [territory] (e.g. United States) member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details.

Isla Lipana & Co. helps organisations and individuals create the value they’re looking for. We’re a network of firms in 158 countries with more than 180,000 people who are committed to delivering quality in assurance, tax and advisory services. Tell us what matters to you and find out more by visiting us at www.pwc.com/ph.

DisclaimerThe contents of this advisory letter are summaries, in general terms, of selected issuances from various government agencies. They do not necessarily reflect the official position of Isla Lipana & Co. They are intended for guidance only and as such should not be regarded as a substitute for professional advice.

Documents

Client advisory letter - PwC