18 January 2017 TO : All Member/Participant Banks RE : 1. PROCEDURES ON AFFEXING OPTIONAL BANK GUARANTEE STAMP 2. COLLECTION OF PENALTY ON CHECKS WITHOUT THE UIC 1. As provided in Section 16.b of the CICS Rules and Regulations, a Unique Identification Code (UIC) shall be printed at the dorsal side of the original Check. If the capture device cannot print UIC on the original Check, it can be electronically imposed on the dorsal image of the Check. In case of electronic imposition of UIC on the dorsal image, the original Check must be stamped with the bank’s guarantee stamp. 1.1. At its option, a Member Bank may manually stamp or print on the dorsal side of the Check a Bank Guarantee Stamp. 1.1.1. In case a Check is deposited for clearing at a non-member bank which have conduit arrangement with a PCHC member bank, it (non-member bank) shall limit its endorsement to the following information: 1.1.1.1. Bank Name 1.1.1.2. Branch Name 1.1.1.3. Address (or Locality) 1.1.2. No other extraneous information is added thereto which may mislead the drawee bank. For this purpose, the size of the non-member bank’s endorsement stamp should be no more than 3/4" x 2”. 1.2. Member Banks may affix the prescribed guarantee stamp below in lieu of the mandatory Unique Identification Code (UIC), in the following format: 1.2.1. The maximum actual size of the rubber stamp should be 1 & 1/2” x 2 & 1/2". 1.2.2. It shall be the responsibility of the Presenting Bank/branch to make sure that its guarantee stamp is affixed in case the mandatory UIC failed to be printed on the original Check or in case only electronic imposition of UIC on the dorsal image of the Check is made. This is to ensure that all clearing items accepted for deposit bear indication that they have been negotiated. 2. No Drawee Bank shall return any Regular Clearing Item (RCI) by reason only of the absence or lack of UIC or Bank Guarantee Stamp on the check image. The absence or incompleteness of UIC however, shall be subject to a penalty if there is no Bank Guarantee Stamp in lieu of the UIC. 2.1. Drawee Bank shall include in the next clearing session, a Clearing Receipt/Charge Slip for collection of penalty. 2.2. The following information should be indicated in the Charge Slip: 2.2.1. Sender Bank/Branch Name 2.2.2. BRSTN 2.2.3. Check Number 2.2.4. Transaction Date 2.2.5. Amount 2.3. Absence of UIC or Bank Guarantee on the dorsal image of the Check shall be subject to Php100.00 penalty to be collected by the Drawee Bank from the Presenting Bank/Branch. 2.4. Incompleteness or unreadability of the UIC or of the Guarantee Stamp (in lieu of UIC) shall be subject to Php50.00 penalty to be collected by the Drawee Bank from the Presenting Bank/Branch.

14 February 2017 TO : All Clearing Banks/Institutions RE : HANDLING OF AN EXCEPTION INVOLVING A REGULAR CLEARING ITEM TREATED AS DUPLICATE BY THE DRAWEE BANK'S PBM 1. We received a report regarding a Regular Clearing Item (RCI) that was automatically returned by the PBM of the receiving Drawee Bank due to ‘duplicate’ record. 2. While auto-return of duplicates form part of normal CICS operations, a legit item may be treated as duplicate thus, automatically returned to the Presenting Bank within the forward session if the following circumstance occur: 2.1. Two checks with sequential serial number drawn against Bank A on same account number were issued to two different Payees. 2.2. The 1st Check was deposited to Bank B which then scanned the document. However, during scanning, the Serial Number was misread which necessitated a correction. Unfortunately, instead of keying the correct Serial number e.g. 123456, entered 123457 which is the serial number of the 2nd Check issued to the other Payee who deposited it to Bank C. 2.3. Bank A did not mind the error despite the tag made by the Front-end System of Bank B (tagging of corrected MICR code line is a requirement under CICS). Hence honored it. On the other hand, the 2nd Check that was transmitted by Bank C was automatically rejected by the PBM of Bank A as duplicate item since details of the pre-qualified MICR code line of the check image was already stored at its PBM. 2.4. Bank C now asks how to address and settle this kind of exception noting that it did not actually send a duplicate item. This accordingly will not sit well with its customer if informed that funds availability will be delayed. 3. In view of the foregoing, hereunder are the relevant procedures to be observed when such type of exception is encountered: 3.1. Re-clear the RCI within the same clearing session using a different work type i.e. Re-Clearing; OR 3.2. Settle the exception with a CR/CS; in case re-clearing would still result to duplication (duplicate record has also been re-presented as re-clearing). 3.2.1. Upon confirmation by the receiving Drawee Bank (DB) that the auto-returned as duplicate item is a legit demand against it, the Presenting Bank (PB) shall prepare a Clearing Receipt/Charge Slip (CR/CS) to regularize the transaction. The CR/CS shall be transmitted within the same clearing session to the Drawee Bank to settle the discrepancy/exception. 3.3. PB shall indicate in the CR/CS the following information: “Settlement of the duplicate item record automatically returned by the Drawee Bank’s PBM”. 3.4. PB shall encode the minimum required MICR code line on the CR/CS such as: 3.4.1. Serial number of the CR/CS 3.4.2. BRSTN of the Drawee Bank 3.4.3. Transaction code 3.4.4. Amount of the item 3.5. If transmission missed the same clearing session, the CR/CS will be scanned/processed as part of the CICS outward demand of the Presenting Bank on the next regular clearing session. 3.6. The affected PB (in this case Bank C) shall impose an inconvenience fee against the erring other PB (in this case Bank B). The fee to be collected separately via CR/CS shall be the amount of the item multiplied by the average IBCL rate for the day (minimum of Php1,000.00). 4. Should you need further information, please do not hesitate to call our Help Desk at 5230315 (look for Frenildo Ayonon, Erick Garcia or Hector Lasaleta) or 8861344-47 (look for Anthony Manongas).

11 May 2017 TO : All Clearing Banks/Institutions RE : SUGGESTED RECONCILLIATION PROCEDURES UNDER CICS 1. To assist banks in their accounting and reconciliation of outward and inward CICS clearing transactions, we are issuing the following suggested procedures to supplement the recon tasks mentioned in the earlier published Member Banks User Guide. 2. Reconciliation is a mandatory task that needs to be performed after cut-off time in order to establish the actual value of transactions included in the clearing results submitted to the BSP. As a matter of operating procedure therefore, Member Banks must validate and verify the completeness of the ICL files sent and received vis-à-vis the clearing results, to wit: 2.1. Outward Transactions Reconciliation 2.1.1. With reference to the Web Portal Facility: 2.1.1.1. Check if the files listed on the ICL Arrival tile matches that of the files processed at the Front-end system. 2.1.1.2. Validate the corresponding outward total items and outward total amount processed in CICS 2.1.1.3. Open the Net Position Summary tile or the Net Position Detail to view the total outward transactions processed at CICS. 2.1.2. View or print the following reports generated at CICS and transferred to the PBM’s shared folder after the cut-off time: 2.1.2.1. Member Bank Settlement Report 2.1.2.2. Member Bank ICL Received Log 2.1.2.3. Member Bank’s ICL Received Summary 2.1.2.4. Member Bank’s Forward Tran Total Presented 2.1.3. Compare the total outward transactions processed at the Front-end system to the reports mentioned in 2.1.1 or 2.1.2 above. 2.1.4. In case of discrepancy, check the acknowledgement files for any items rejected when the outward files were sent. 2.1.5. Should discrepancy persist, login to the Supervisor Module of the PBM. 2.1.5.1. Generate the PBM ICL received log report in case there was an issue in transferring the files from the Front-end to the PBM. 2.1.5.2. Check the number of files processed against that of the FES. 2.1.5.3. If there is inconsistency, generate the PBM Supervisor Import Log report to account for any file imported but eventually rejected by the PBM. 2.1.5.4. Account for the difference. 2.2. Inward Transactions Reconciliation 2.2.1. Using again the Web Portal Facility as reference: 2.2.1.1. Check the list of files on the ICL Departures tile and compare that to the ICLs received and processed at the front-end system 2.2.1.2. Check the number of Inward ICL files received from CICS 2.2.1.3. Open the Net Position Summary tile or the Net Position Detail to view the total inward transactions processed. 2.2.2. View or print the following reports generated at CICS after the cut-off time: 2.2.2.1. Member Bank Settlement Report 2.2.2.2. Member Bank’s Transactions Total Received 2.2.3. Compare the total count and amount processed by the front-end system to the information indicated in either 2.2.1 or 2.2.2 above. 2.2.4. In case of discrepancy, login to the PBM Supervisor Module and generate the exception reports of the PBM server. 2.2.5. Identify unprocessed ICL files due to exceptions like duplicates and other validation exceptions. 2.2.6. Account for the difference. 3. Should you need further clarification and/or additional guidance, please do not hesitate to call our Service Help Desk at 523-0315 or 523-4019 local 102, 103 & 106.

18 January 2017 TO : All Member/Participant Banks RE : IMPLEMENTING GUIDELINES COVERING BANKS INVOKING SELF-EXCLUSION FROM CHECK IMAGE CLEARING SYSTEM (CICS) 1. Pursuant to Section 6.2 of the CICS Rules and Regulations, we enumerate the guidelines to be observed in unwinding inward transactions of a participating bank that will declare exclusion from clearing operations due self- declared bank holiday, labor strike or force majeure, to wit: a. As soon as notification is received and confirmed, PCHC shall notify all participating banks by fastest means of communication for such exclusion and will immediately tag the affected bank as excluded in CICS. The notification shall be confirmed by a Memo Circular to be emailed to all Liaison/Clearing Officers with hard copy produced and sent to all bank presidents. b. Upon exclusion of the bank, all clearing items that are already accepted, processed and pushed to the different Drawee Banks via CICS prior to receipt of such notice shall automatically be excluded in the day’s netting process. In order to account the affected items, PCHC shall provide detail list of the affected transactions to all banks for their information only as their respective DDA balance are not affected. c. After the bank has been excluded, no further transactions will ever be processed for the bank as all will be automatically rejected if sent. d. Collection of fees due from the ‘excluded bank’ shall be supported with a report generated from the unwinding process initiated by PCHC. 2. For information and guidance.

December 21, 2020 TO : All PESONet Participating Banks/Institutions RE : IMPLEMENTATION OF THE ENHANCED INTERFACE FILE (EIF) FORMAT FOR PESONet 1. We wish to issue our final reminder that effective February 01, 2021, PESONet will only accept transactions that follow one standard ISO20022 format whether sent via the Enhanced Interface File (EIF) upload, via API or via the web-based front-end application provided by PCHC. 2. It may be recalled that we have issued a similar reminder on October 29, 2020 after members of the PESONet ACH Steering Committee agreed to grant a non-extendable cutover date for the adoption of one standard format in PESONet. 3. The implementation on the said date would mean that conventional file formats used in the PESONet Front-End Application will no longer be accepted for processing, to wit: a. EPCS Outward File Format b. PhilPass Remit Outward File Format c. PESONet Status Update File (non-EIF) 4. Additionally, PCHC shall no longer generate the inward counterparts of the above-mentioned files, to wit: a. EPCS Inward File Format b. PESONet Status Interface File (non-EIF) c. PESONet Status Update File (non-EIF) 5. PESONet participants are enjoined to ensure that a minimum, have implemented the PESONet Enhanced Interface File Format on the said date. 6. Participants that are PESONet Web Service API are also reminded that inherent in an API, is a shared responsibility. Therefore, participants should implement the PESONet Enhanced Interface File format as part of their exception handling and to adopt as an integral component of a BCP scenario. Everyone is expected to handle exception situations such as but not limited to: a. Exception Handling in the Event of Time-out - as the PESONet Web Service API is delivered over the internet, communication issues do occur, and participants are expected to handle such exceptions accordingly. b. Exception Handling in the Event of Non-Acceptance - in the event of issues with acceptance of transactions, participants are expected to be able to transmit and receive PESONet transactions, as appropriate using the PESONet Enhanced Interface File via PESONet Front-End Application, c. Exception Handling in the Event of Non-Availability - participants are expected to be able to continue to process both their inward and outward transactions via the PESONet Front-End Application using the PESONet Enhanced Interface File in the event, that for any reason, that the PESONet Web Service API is unavailable. 7. Participants implementing the PESONet Web Service API are also reminded that participants bear the ultimate responsibility for transactions they transmit to PCHC for processing which means that participants must ensure that they perform the necessary validation and integrity checks on transactions prior to sending. 8. Likewise for participants that have already implemented the PESONet Web Service API but are not yet using the PESONet Enhanced Interface File, we strongly encourage to do the same henceforth to prevent any operational issues. 9. We trust for your full cooperation.

03 August 2020 TO : All Clearing Banks/Institutions RE : NEW CLEARING PARTICIPANTS/BRSTN REGISTER UPDATES 1. With reference to various request letters/notices received from the clearing participant banks, we enumerate hereunder the following updates to the PCHC clearing participant banks/BRSTN Register and Operating Parameter, viz: 1.1 New Clearing Participants BANK/BRANCH NAME BRSTN ADDRESS METRO - FORT MILESTONE 5TH 01026-445-4 Milestone Bldg. 5th Ave., Bonifacio Global City, AVE. Taguig City 1ST VALLEY - MIDSAYAP 53127-001-1 VDT Building, National Highway, Brgy. Poblacion 8, Midsayap, North Cotabato CBB - COMEMBO 01145-006-3 56 Sampaguita St., Comembo, Makati City CBB - MUZON 13145-003-7 Zone 2 Libis Muzon, San Jose Del Monte City, Bulacan CBB - STA ROSA 31145-001-9 Old National Highway, Brgy. Dila, Sta. Rosa, Laguna CBB - BINAN 31145-002-2 Jacobo Gonzalez St., Poblacion, Biñan, Laguna CBB - LOS BANOS 31145-003-5 Rizal St., Poblacion, Los Baños, Laguna CBB - DASMARINAS 41145-001-6 Congressional Road South Burol I, Dasmarinas, Cavite CBB - GMA 41145-002-9 Poblacion 1 Congressional Road, GMA, Cavite RBGI - GUBAT 16148-004-8 Manook St., Pinontingan, Gubat, Sorsogon RBGI - LIGAO 16148-005-1 Mackinley St., Dunao, Ligao City, Albay 1.2. Relocation/Change in Branch Name and/or Address BRSTN BANK/BRANCH NAME FROM TO 52127-007-6 1ST VALLEY - Cabanglasan Cabanglasan, Bukidnon Purok 10 Poblacion, Cabanglasan, Bukidnon 2. Pursuant to CICS OM No. 17-004 dated 18 January 2017, the aforementioned updates will be implemented effective 03 August 2020 . 3. For your information and guidance.

ARBITRATION RULES OF PROCEDURE Sec. 1 - Any dispute or controversy between two or more clearing participants involving any cheque/item cleared thru PCHC shall be submitted to the Arbitration Committee (ARBICOM for short) upon written complaint of any involved participant. The complaint which shall be prepared in seven (7) copies shall state concisely the ultimate facts constituting the plaintiff’s cause or causes of action and shall specify the relief sought and the names and addresses of the parties. Five (5) copies thereof shall be filed with the ARBICOM after serving a copy upon the respondent or respondents. The hereto attached model form Annex “A” of the Complaint is recommended, to be accompanied, whenever applicable, by either Annex “B” or Annex “C” also attached. Sec. 2 - The complainant shall upon filing its complaint pay to the ARBICOM a fee in accordance with the following schedule: Case Amount Filing Fee a) P 50,000.00 or less P 2,000.00 (minimum) b) Any amount over P 2,000.00 + P10.00 per P50,000.00 P 1,000.00 or fraction thereof The excess over P50,000.00 Sec. 3 - The respondent/s shall, within a non-extendible period of thirty (30) days from receipt of the complaint, file its/their answer and serve copy thereof to the complainant. Within a period of thirty-five (35) days from filing/submission of the complaint, the ARBICOM, through its Secretariat, shall notify the parties of the composition of its panel or the name of the Sole Arbitrator, as the case may be. The parties shall have five (5) days from receipt of the written notice within which to file with the Arbitration Secretariat their respective formal objection/challenge to the arbitrator/s stating the grounds therefore. Failure to file such formal objection/challenge within the prescribed period shall be construed as an acceptance of the qualifications and appointment of the arbitrator/s. Within a period of fifteen (15) days after the selection/appointment of the arbitrator/s has been finally agreed upon, the ARBICOM must set the case for preliminary conference, which should be terminated within twenty (20)

20 June 2005 MEMO TO : All Clearing Banks/Institutions SUBJECT : AMENDMENTS TO THE ARBITRATION RULES OF PROCEDURES (ARP) 1. Pursuant to Resolution No. 13-2005 of the Board of Directors, adopted on 22 April 2005, certain identified Sections of the PCHC Arbitration Rules of Procedure are hereby amended as indicated by underscoring in Annex A hereof. 2. For ease of reference, following are Highlights of the Amendments to the Arbitration Rules: a) SEC. 3 -A measure was installed to forestall delaying tactics at the preliminary conference stage. b) SEC. 4 -Reworded so that the President may now designate any qualified incumbent or retired senior bank officer, and/or any duly accredited attorney-at-law to sit as Substitute Arbitrator and/or Law Member respectively, whenever the designated Arbitrator and/or Law Member is unavailable for any hearing and such unavailability would cause a lack of quorum to proceed with a scheduled hearing Case-amount that shall be heard by a Sole Arbitrator is raised to P1.0 million from P300,000.00 or less c) SEC. 7 -Now provides that the parties shall be represented at the hearings by any duly authorized officer knowledgeable of the facts of the case and the issues involved. The assistance of legal counsel at hearings is now optional. d) SEC. 8 -Deals with the postponement or resetting of hearings and imposing penalties accordingly Likewise, a party who fails repeatedly to appear at the preliminary conference or resetting thereof and/or at any of the scheduled hearings may be non-suited or considered as in default. e) SEC. 10 -Deals with the procedures in filing and/or non-filing of Motion for Reconsideration and now prescribing a filing fee therefor. f) SEC. 13 -Now stipulates that “should any of the litigants elevate the case at hand to the trial courts, all expenses incurred by the PCHC relative to the court litigation shall be chargeable to the party who loses the case in court: 3. The applicability of the affected Sections shall be as follows: a) Section 3 amendment shall be prospective in application; provided, where an arbitration case is currently in its preliminary conference stage, the requirement for a written document of Lawyer’s Authority therefor shall apply. b) Section 4 amendments are applicable to ongoing cases in arbitration and all new cases; provided, the paragraph pertaining to the new threshold of jurisdiction of the Sole Arbitrator (i.e. up to PESOS: One Million) shall not apply to ongoing cases. c) Section 7 amendment is immediately applicable. d) Section 8 amendments are likewise immediately applicable. e) Section 10 amendments shall be prospective in application only insofar as the Reconsideration Fee is concerned. Hence, any pending Motion for Reconsideration shall not be subject to the Reconsideration Fee required hereunder. f) Section 13 amendment shall apply to all Petitions for Review currently pending in the trial courts. 4. Resolution No. 13-2005 shall be effective immediately, subject only to the provisos specified in item 3 above. 5. For information and guidance.

29 July 2005 MEMO TO : All Clearing Banks/Institutions SUBJECT : ARBITRATION FEE ADJUSTMENTS 29 July 2005 MEMO TO : All Clearing Banks/Institutions SUBJECT : ARBITRATION FEE ADJUSTMENTS 1. At its meeting held on 28 June 2005, the Board approved for implementation by management the upward adjustments of the various types of fees payable to Members of the Arbitration Committee for services rendered in the resolution of cases submitted for arbitration, as follows: TYPE OF FEE NEW FEE PREVIOUS FEE DATE LAST AMENDED P3,000.00 – Member of Committee N O N E N. A. --------------------------------------------------------------------------------------------------------------------------------- Acceptance Fee P5,000.00 – Sole Arbitrator N O N E N. A. -------------------------------------------------------------------------------------------------------------------------------------------------------- P3,000.00 – per session of not more than four P2,000.00 – Nov. 1998 (4) hours, with an additional Member of P1,000.00 for every hour or Committee/ fraction thereof thereafter; for each Law Member Committee Member/Law Member ----------------------------------------------------------------------------------------------------------------------------------- Appearance Fee P5,000.00 – per session of not more than four P2,000.00 – Nov. 1998 (4) hours, with an additional Sole Arbitrator P1,000.00 for every hour or fraction thereof thereafter; for a Sole Arbitrator ---------------------------------------------------------------------------------------------------------------------------------------------------------- Decision P10,000.00, except where Decision is based N O N E N. A. Drafting Fee Upon Compromise Agreement ---------------------------------------------------------------------------------------------------------------------------------------------------------- Motion for P10,000.00 N O N E N. A. Reconsideration (MR) Resolution Drafting Fee ----------------------------------------------------------------------------------------------------------------------------------------------------------- 2. Explanatory Notes: a) Acceptance Fee. This adopts the recommendation of Arbitration Oversight Committee (AOC). Rationale advanced is that this provides an incentive for invited arbitrators/law members to accept appointment to an Arbitration Committee, or to act as Sole Arbitrator. This recognizes, too, that accepting arbitrators/ law members need to study the cases and prepare for initial conferences. CHOM No. 407 Page - 2 - _______________ b) Appearance Fee. This adopts the adjustment that the Executive Committee had earlier approved for Arbitrators serving in a Committee. As discussed in the AOC Meeting of 14 June 2005, inasmuch as the Sole Arbitrator serves alone (though assisted by the Law Member), he/she should be entitled to a higher Appearance Fee. The Law Member, however, is paid a uniform minimum fee of P3,000.00 per session, whether he/she serves in a Committee or with a Sole Arbitrator. Entitlement is for every appearance of not more than four (4) hours. Any period of time in excess thereof entitles the serving Arbitrator/Law Member to an additional P1,000.00 per hour or fraction thereof in excess. The total monthly Appearance Fees shall be charged to the parties on a monthly basis, each party to the submission to arbitration sharing pro-rata with any opposing party/ies; provided, however, that should the Decision provide a different distribution of fee-sharing, the fees, as already charged and collected, shall be accordingly adjusted. c) Decision Drafting Fee. A uniform fee of P10,000.00 is paid for drafting Decisions. The cost here for shall be shouldered by the losing party, or by both parties pro-rata whenever the Decision awards pro-rata sharing of the amount in dispute, or in such other sharing distribution as the Committee or the Sole Arbitrator may otherwise award. d) Motion for Reconsideration (MR) Resolution Drafting Fee. A uniform fee of P10,000.00 is paid for drafting MR Resolutions. The cost herefor shall be shouldered by the losing party, or by both parties pro-rata whenever the MR Resolution awards pro-rata sharing of the amount in dispute, or in such other sharing distribution as the Board may otherwise award. 3. Effectivity of the new rates shall commence on 01 August 2005 and shall apply to Committee Member(s) appearances/attendance, henceforth, in cases still on-going and pending decisions prior to this date, enforceable until revised by the Board. 4. Please be guided accordingly.

20 March 2006 TO : All Clearing Banks/Institutions RE : AMENDMENT OF SECTION 20.3 – CHRR 1. In light of the rise in incidence of spurious checks and as a preliminary measure leading towards a comprehensive review and amendment of the Clearing House Rules and Regulations (CHRR) to match the migration to Check Imaging, the Board approved at its meeting held on 27 February 2006 the recommendation of the Arbitration Oversight Committee (AOC) to amend Section 20.3 of the CHRR to include a second paragraph, which should now read: 20.3 However, the right of the Drawee Bank to recover the amount of the item(s) returned shall remain to be governed by the general principles of law when the defect(s) are discovered after the “reglementary period”. To avail of this right of recovery, the drawee claimant must comply by analogy with the procedures prescribed in Section 21 of the CHRR and CHOM No. 82. 2. This amendment shall take effect immediately. 3. For all participants’ guidance.