Banks to pay higher annual fees

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) will begin sending notices to banks next month, asking them to pay, starting this year, higher annual fees to cover for the costs of their supervision and regulation.

Supervisory fees, under the Manual of Regulations for Banks (MORB), are annual payments by lenders to partly cover for the expenses incurred by the BSP in overseeing the banking system through various tests and examinations.

In a memorandum, the  BSP said banks will be given 10 days from receipt of notice to check the accuracy of the payment being asked from them, which include a two-percent creditable withholding tax.

Under Circular 791 issued last April 3, the central bank raised the fees back to their original level in 2009, saying banks could already handle higher amounts considering their healthy capital position.

The amount is determined using a bank’s average assessable assets (AAAs), which are computed by dividing the banks’ total assets with number of months in operation “during the particular assessment period.”

Universal and commercial banks, which account for the bulk of assets in the local banking industry, will now have to pay 1/28 of one percent of their AAAs. Rural and cooperative banks will be required to shell out 1/40 of one percent.

Non-banks with quasi-bank functions are required to settle 1/28 of one percent.

Prior to the adjustment, big banks pay 1/32 of one percent of their assets, country-side and cooperative lenders pay 1/45 of one percent.

Payments will be debited from demand deposits by the entities with BSP “on the specified date referred to in the notice,” the memorandum stated.

“The BSP will not accept checks as mode of ASF payment,” it added.

In addition, entities are also mandated to keep an “adequate balance” on their demand deposits not only to cover the supervisory fee, plus two-percent tax, but also “other daily obligations.”

The two-percent tax should be withheld by the paying bank and that proper documentation should be submitted to the BSP as proof. Among others, the BSP should be furnished a copy of Form 2307 of the Bureau of Internal Revenue (BIR).

The form is also called the Certificate of Creditable Tax Withheld at Source.