Memo Circular No. 3516 March 5, 2019 TO : All Check Clearing Participant Banks/lnstitutions RE : UPDATED LIST OF PESONet PARTICIPANTS 1. Please find below complete list of active participants in the Phil. EFT System Operations Network (PESONet) ACH with corresponding Bank Identification Codes (BIC), to wit: BANK NAME BIC BRSTN 1 AL-AMANAH ISLAMIC INVESTMENT BANK AIIPPHM1XXX 01036-001-5 2. ASIA UNITED BANK AUBKPHMMXXX 01102-001-1 3. AUSTRALIA & NEW ZEALAND BANK ANZBPHMXXXX 01070-001-5 4. BANCO DE ORO UNIBANK, INC. BNORPHMMXXX 01053-066-7 5. BANGKOK BANK PUBLIC CO., LTD. BKKBPHMMXXX 01067-001-9 6. BANK OF AMERICA, NAT'L. ASS'N. BOFAPH2XXXX 01012-001-9 7. BANK OF CHINA BKCHPHMMXXX 01114-001-4 8. BANK OF COMMERCE PABIPHMMXXX 01044-001-6 9. BANK OF THE PHILIPPINE ISLANDS BOPIPHMMXXX 01004-001-8 10. CHINA BANK SAVINGS, INC. CHSVPHM1XXX 01112-999-6 11 . CHINA BANKING CORPORATION CHBKPHMMXXX 01010-001-3 12. CITIBANK, N. A. CITIPHMXXXX 01007-001-7 13. CTBC BANK (PHILIPPINES)CORP. CTCBPHMMXXX 01069-001-5 14. DEUTSCHE BANK DEUTPHMMXXX 01065-001-3 15. DEVT. BANK OF THE PHILIPPINES DPHPHMNIXXX 01059-001-8 16. EAST-WEST BANKING CORPORATION EWBCPHMMXXX 01062-001-4 17. EQUICOM SAVINGS BANK, INC. EQSNPHM1XXX 01096-001-7 18. FIRST CONSOLIDATED BANK FIOOPHM1XXX 02078-001-2 19. HONG KONG AND SHANGHAI BANK HSBCPHMMXXX 01006-001-4 20. INDUSTRIAL BANK OF KOREA IBKOPHMMXXX 01131-001-9 21. ING BANK N.V. INGBPHMMRTL 01066-002-9 22. CHASE BANK CHASPHMMXXX 01072-001-1 23. КЕВ HANA ВАNК КОЕХРНММХХХ 01071-001-8 24. LAND ВАNK ОF ТНЕ PHlLlPPlNES ТЕВРРНММХХХ 01035-002-5 25. MAYBANK PHlLS., INC. МВВЕРНММХХХ 01022-001-6 26. MEGA INTL СОММL BANK СО. LTD СВСРНММХХХ 01056-001-9 27. METROPOLITAN ВАNK AND TRUST СО МВТСРНММХХХ 01026-999-6 28. MlZUHO BANK,LTD. МНСВРНММХХХ 01064-001-0 29. MUFG ВАNK, LTD ВОТКРНММХХХ 01046-001-2 30. PHlL. ВАNK ОF COMMUNICATlONS CPHIPHMMХХХ 01011-001-6 31. PHlLlPPlNE NATlONAL ВАNK РNВМРНММХХХ 01008-001-0 32. PHlLlPPlNE SAVINGS ВАNK PHSBPHMMXXX 01047-099-2 33. PHILlPPlNE TRUST COMPANY PHTBPHМMХХХ 01009-003-9 34. PHlLlPPlNE VETERANS BANK PHVBPHMMXXX 01033-001-6 35. PRODUCERS SAVlNGS ВАNK PSCOPHM1ХХХ 01122-001-5 36. RlZAL COMMERClAL BANklNG CORP. RCBCPHMMXXX 01028-001-4 37. ROBlNSONS ВАNК CORPORATlON ROBPPHMQXXX 01107-001-6 38. SECURlTY ВАNК CORPORATlON SETCPHMMXXX 01014-001-5 39. SHlNHAN ВАNК 5НВКРНММХХХ 01130-001-6 40. STERLING ВАNK ОF ASlA STLAPH22XXX 01119-001 9 41. SUMlTOMO MlTSUl BANKlNG CORP. SMBCPHMMXXX 01128-001-3 42. ТНЕ STANDARD CHARTERED ВАNК SCBLPHMMXXX 01005-001-1 43. UNlON ВАNК ОР ТНЕ PHIlLlPPlNES ВРНРНММХХХ 01041-999-5 44. UNlTED COCONUT PLANTERS ВАNК ЕЈСРВРНММХХХ 01029-999-5 45. UNITED OVERSEAS ВАNК PHlLS. UOVBPHMMXXX 01027-034-1 46. WEALTH DEVELOPMENT ВАNK, СОР. WEDVPHM1ХХХ 02120-005-4 47. YUANTA SAVlNGS ВАNК ТУВКРНММХХХ 01113-001-1 2. For your guidance/reference.

Memo Circular No. 3516 March 5, 2019 TO : All Check Clearing Participant Banks/lnstitutions RE : UPDATED LIST OF PESONet PARTICIPANTS 1. Please find below complete list of active participants in the Phil. EFT System Operations Network (PESONet) ACH with corresponding Bank Identification Codes (BIC), to wit: BANK NAME BIC BRSTN 1 AL-AMANAH ISLAMIC INVESTMENT BANK AIIPPHM1XXX 01036-001-5 2. ASIA UNITED BANK AUBKPHMMXXX 01102-001-1 3. AUSTRALIA & NEW ZEALAND BANK ANZBPHMXXXX 01070-001-5 4. BANCO DE ORO UNIBANK, INC. BNORPHMMXXX 01053-066-7 5. BANGKOK BANK PUBLIC CO., LTD. BKKBPHMMXXX 01067-001-9 6. BANK OF AMERICA, NAT'L. ASS'N. BOFAPH2XXXX 01012-001-9 7. BANK OF CHINA BKCHPHMMXXX 01114-001-4 8. BANK OF COMMERCE PABIPHMMXXX 01044-001-6 9. BANK OF THE PHILIPPINE ISLANDS BOPIPHMMXXX 01004-001-8 10. CHINA BANK SAVINGS, INC. CHSVPHM1XXX 01112-999-6 11 . CHINA BANKING CORPORATION CHBKPHMMXXX 01010-001-3 12. CITIBANK, N. A. CITIPHMXXXX 01007-001-7 13. CTBC BANK (PHILIPPINES)CORP. CTCBPHMMXXX 01069-001-5 14. DEUTSCHE BANK DEUTPHMMXXX 01065-001-3 15. DEVT. BANK OF THE PHILIPPINES DPHPHMNIXXX 01059-001-8 16. EAST-WEST BANKING CORPORATION EWBCPHMMXXX 01062-001-4 17. EQUICOM SAVINGS BANK, INC. EQSNPHM1XXX 01096-001-7 18. FIRST CONSOLIDATED BANK FIOOPHM1XXX 02078-001-2 19. HONG KONG AND SHANGHAI BANK HSBCPHMMXXX 01006-001-4 20. INDUSTRIAL BANK OF KOREA IBKOPHMMXXX 01131-001-9 21. ING BANK N.V. INGBPHMMRTL 01066-002-9 22. CHASE BANK CHASPHMMXXX 01072-001-1 23. КЕВ HANA ВАNК КОЕХРНММХХХ 01071-001-8 24. LAND ВАNK ОF ТНЕ PHlLlPPlNES ТЕВРРНММХХХ 01035-002-5 25. MAYBANK PHlLS.,lNC. МВВЕРНММХХХ 01022-001-6 26. MEGA INTL СОММL BANK СО. LTD СВСРНММХХХ 01056-001-9 27. METROPOLITAN ВАNK AND TRUST СО МВТСРНММХХХ 01026-999-6 28. MlZUHO BANK,LTD. МНСВРНММХХХ 01064-001-0 29. MUFG ВАNK, LTD ВОТКРНММХХХ 01046-001-2 30. PHlL. ВАNK ОF COMMUNICATlONS CPHIPHMMХХХ 01011-001-6 31. PHlLlPPlNE NATlONAL ВАNK РNВМРНММХХХ 01008-001-0 32. PHlLlPPlNE SAVINGS ВАNK PHSBPHMMXXX 01047-099-2 33. PHILlPPlNE TRUST COMPANY PHTBPHМMХХХ 01009-003-9 34. PHlLlPPlNE VETERANS BANK PHVBPHMMXXX 01033-001-6 35. PRODUCERS SAVlNGS ВАNK PSCOPHM1ХХХ 01122-001-5 36. RlZAL COMMERClAL BANklNG CORP. RCBCPHMMXXX 01028-001-4 37. ROBlNSONS ВАNК CORPORATlON ROBPPHMQXXX 01107-001-6 38. SECURlTY ВАNК CORPORATlON SETCPHMMXXX 01014-001-5 39. SHlNHAN ВАNК 5НВКРНММХХХ 01130-001-6 40. STERLING ВАNK ОF ASlA STLAPH22XXX 01119-001 9 41. SUMlTOMO MlTSUl BANKlNG CORP. SMBCPHMMXXX 01128-001-3 42. ТНЕ STANDARD CHARTERED ВАNК SCBLPHMMXXX 01005-001-1 43. UNlON ВАNК ОР ТНЕ PHIlLlPPlNES ВРНРНММХХХ 01041-999-5 44. UNlTED COCONUT PLANTERS ВАNК ЕЈСРВРНММХХХ 01029-999-5 45. UNITED OVERSEAS ВАNК PHlLS. UOVBPHMMXXX 01027-034-1 46. WEALTH DEVELOPMENT ВАNK, СОР. WEDVPHM1ХХХ 02120-005-4 47. YUANTA SAVlNGS ВАNК ТУВКРНММХХХ 01113-001-1 2. For your guidance/reference.

CICS OM No. 17-016 04 July 2017 T O : All Member/Participant Banks R E : SPECIAL CLEARING/DIRECT PRESENTATION OF RETURNED CICS ITEMS DUE TO TECHNICALITIES 1. It is provided in Section 1.1 of CICS OM No. 17-007 that special clearing of items which the Drawee Bank (DB) does not like to pay due to technicalities is being allowed by way of direct presentation of the item to the Presenting Bank (PB), subject to the consent or agreement of the latter. 2. As stated in the guidelines, when such consent or agreement is obtained by the DB, it should deliver to the PB the Special Return Check Advice (SCRA) together with the Clearing Receipt/Charge Slip (CRCS) no later than 11:00 AM of the next banking day (i.e., clearing day following the date the item’s image is transmitted to the DB for clearing through CICS). The acceptance by the PB of the return of the item shall be manifested by the signature/s of its authorized representative/s on the CRCS. 3. Based on gathered feedback however, not all Member Banks observe this 11:00 AM deadline; in most cases, both PB and DB would agree on the time of delivery that goes beyond banking hours thereby making the 11:00 AM deadline irrelevant. 4. As a result, some banks are citing the non-conformity to the 11:00 AM deadline as a major factor for their inability to make funds available the next banking day (T+1). Delayed availability of funds to the customers defeats the very purpose of the Check Image Clearing System (CICS). 5. We wish to remind that pursuant to Section 16.3 of our CICS Rules and Regulations, the PB warrants that the deposited Check is complete and regular on its face which means that prior to submission/transmission of a Check’s image for clearing, the PB shall have already scrutinized the Check for technical deficiencies so that the DB can focus more on the verification of Drawer’s signature through image. 6. The image and electronic payment information which are contained in Image Cash Letter (ICL) file are then immediately pushed to the DB by PCHC as soon as they are received. This means that the DB can perform immediate validation/verification of its incoming images/data (or ICLs) and can do same-day ‘pay/no pay’ decision or call clients to confirm any technicalities or deficiencies on the signature of Check/s issued. 7. In case items are to be dishonored, the DB has then 2 clearing windows to choose from in tagging the dishonored item/s to be returned. This is within the same regular clearing session OR during the Morning Returns Clearing Window which is immediately opened after the 4:30 PM cut-off time of same day until 7:30 AM of the next banking day. 8. In view of the foregoing and in order: a) for the remaining non-compliant banks to meet the T+1 fund availability requirement; and b) eventually for all banks to uniformly make funds available earlier than 3:00 PM, we are adjusting the reference delivery deadline of special clearing of returned items from 11:00 AM to 10:00 AM effective 04 August 2017. 9. We wish to emphasize that the ultimate goal of CICS is to make funds against issued Checks available when the bank opens the next banking day. As such, we will again evaluate three (3) months after August 2017 if there is a need for the system to cover special clearing of returns. It is to be noted that this special clearing arrangement is done outside of the CICS system and its execution/implementation is prudentially anchored on the agreement between the Drawee and the Presenting Banks. 10. To assist our Member Banks with big volume of returns on days after holidays and peakdays, we will make representation with the BSP to extend their Morning Returns cutoff for clearing results to give ample time to process dishonored items. 11. We count on the support and mutual cooperation of all Member Banks.

16 May 2017 Memo To : All Member/Participant Banks Subject : STORAGE GUIDELINES FOR NEGOTIATED/PAID ORIGINAL CHECKS 1. Pursuant to Section 12 of the Amended Check Image clearing System Rules and Regulations (CICS RR), and as a matter of policy, all Member/Participant Banks are REQUIRED to keep the Original Checks that are already paid/negotiated at a Central Storage Facility authorized and designated by PCHC. 2. In this regard, we are pleased to announce the designation of LANE ARCHIVE TECHNOLOGIES (LAT) as the Central Storage Provider for all paid/negotiated Checks. 3. The designation of a single storage company emanated from the need to provide participating member banks a securely managed document archiving facility that is relatively available throughout the country (Luzon, Visayas and Mindanao). the expertise of LAT in document management will also ensure performance of unified process in retrieving original checks when such need arises. 4. Pursuant thereto, we circulate the Operating Guidelines to be observed in keeping/storing paid/honored Checks by all participants, including the retrieval process if circumstance so require. 4.1. Each Member/Participant Bank shall negotiate directly and execute individual Service Level Agreement (SLA) with the PCHC designated Storage Provider (SP). 4.2. Participating Banks shall deliver paid/honored Checks to the designated Storage Provider's storage facility at the place, and at the time and frequency (minimum of one delivery per month) to be agreed between the parties. 4.3. Original paid/honored Checks must be placed in the prescribed standard double sided/walled box with dimension either 16" x 125" x 13" (for big volume banks) or 8.5" x 12.5" x 3.5" (for small volume banks). Content of the larger box should not exceed 20 kgs in weight. 4.4. Unless the member bank has its own Document Management Solution that creates unique labeling that easily identify items submitted for storage, outward items processed in a particular day must be bundled/wrapped and labelled with the following details: 4.4.1. BRSTN of the Presenting Bank 4.4.2. Transaction Date 4.5. Bundles should be placed inside the prescribed standard box and labelled externally with the following information: 4.5.1. BRSTN of the Presenting Bank 4.5.2. Date the box is sealed and ready for transport to the warehouse 4.5.3. Box number written on both sides, in case of multiple boxes turned over to the Storage Provider 4.6. For easy tracking, the Branch should create an inventory list using the information indicated on the label of each box, e.g. 4.6.1. Box Label = BRSTN + date sealed + box number Example: Box 1: 01004-001-8 + 11/11/2016 + 001 = 11/02/2016, 11/03/2016, 11/04/2016 Box 2: 01004-001-8 + 11/18/2016 + 002 = 11/15/2016, 11/16/2016, 11/17/2016 * For more systematic and faster retrieval/search, banks may employ Document Management Solution that can provide details of item content in the box. 4.7. If a box is ready for storage, the Presenting Bank/Branch shall seal it and attached the barcode sticker secured from the Storage Provider beforehand. An accomplished e-Service Request Form (template to be prescribed by the Storage Provider) shall be sent via e-mail for the SP to schedule pick-up or delivery of the box, as agreed between the Presenting Bank and the Storage Provider. 4.8. The minimum compliance is for banks to deliver at least one (1) box to the storage facility per month at a time and date agreed between the parties. 5. Upon receipt of the documents for storage, facility personnel shall scan the barcode sticker attached to the box. The Storage Provider may refuse acceptance if turnover or delivery is not compliant with the specifications/prescribed standards or procedures. 6. The facility personnel for record and tracking purposes shall encode the details of the barcode sticker and box label. 7. Accepted documents for storage will be kept for a period of twelve (12) months, after which the stored documents shall be destroyed when no request for retrieval is received by the storage provider in response to the written Notification of Destruction (which in no case shall be less than thirty (30) days prior to destruction date. The Presenting Bank concerned may send a representative to witness the destruction, if it so requires. Alternately, the Presenting Bank may opt to retrieve their documents in which case should submit a Notice of Retrieval five (5) days before the scheduled destruction. 8. Within the 12-month retention period, a Bank may request for a paid/honored Original Check/s drawn against it (the "Drawee Bank") by sending a formal letter of request to the Presenting Bank/s, copy furnished PCHC, stating the following: 8.1. Purpose or nature of the request 8.2. Date of Presentation or Transaction Date 8.3. Check Number and Account Number 8.4. Drawee Bank/Branch Name 8.5. BRSTN of the Drawee Bank 8.6. Amount 8.7. Presenting Bank/Branch Name and BRSTN 9. Presenting bank shall only entertain requests for retrieval for any of the following reasons, viz: 9.1. Litigation Court Orders 9.2. Fraud Investigation 9.3. Validation of Duplicate Items 10. The requesting Bank's authorized signatory should sign the letter. 11. Standard turnaround time. 11.1. If the parties belong to the same region, the Presenting Bank is given five (5) working days to respond and inform the requesting bank/s cc: PCHC, on the status of the request. PCHC shall not entertain any query or complaint regarding request for paid/honored Original Check/s if it is not furnished any prior communication regarding the request. 11.2. Within five (5) working days from its receipt of the request of the Drawee Bank, the Presenting Bank shall submit a written Notice of Retrieval to the Storage Provider. From date of its receipt or retrieval of the requested item/s, the Presenting Bank has another five (5) days to make available the retrieved item/s to the requesting Drawee Bank. 11.3. If either of the Parties belongs to a different region (provincial/GMA), the Presenting bank has additional five (5) working days (a total of 10 working days) to make available the retrieved items/s to the requesting Drawee Bank. 12. The requesting Drawee Bank shall arrange for pick-up of the retrieved item/s from the Presenting Bank. Any pick-up to be made by the Drawee Bank shall be supported with authority to retrieve from the Presenting Bank/Branch concerned. 13. Once the requesting Drawee Bank obtains possession of the retrieved item/s, it shall automatically become the custodian of the said item/s. Hence, it shall formally inform the Presenting Bank and PCHC of its receipt of the retrieved item/s. 14. It is the responsibility of the Presenting Bank to strictly observe the foregoing policy and procedures. In case of lapses or violation (i.e. did not keep/store the Check in the Central Storage), the Presenting Bank shall be liable for the entire value of the Check if the requesting Drawee Bank loses in a dispute/court case mainly due to its failure to produce/show the relevant Original Check within the required retention period. 15. As only authorized bank personnel are allowed to locate/retrieve items from the SP, banks should also submit to the Storage Provider (cc: PCHC) the names of their authorized representatives/ signatories for Metro Manila/Luzon, Cebu and Davao as well as designated signatory to the SLA. 16. Should you need further details or more information, please do not hesitate to call our Help Desk at 523-0315 (look for Frederick Garcia or Hector Lasaleta) or 886-1344 to 47 (look for Anthony Manongas). Alternatively, any concern may be e-mailed at PHILCLEAR@pchc.com.ph.

Memo Circular No. 3515 December 02, 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 BRSTN ADDRESS BPI - AYALA NEX TOWER 01004-477-1 Nex Building, Ayala Avenue, Makati City PBB - CATBALOGAN 67097-001-0 San Francisco St. corner Rizal Avenue Catbalogan City, Samar 1.2 Relocation/Change in Branch Name and/or Address BRSTN BANK/BRANCH NAME FROM TO 01122-003-1 "SBC Pasig ADB Avenue 29122-003-9 PSBC Malay Caticlan 1.3 Deletion of the following branches BANK BRANCH NAME BRSTN ONB - EO KM. 11 03118-032-6 ONB - SAN ENRIQUE 08118-002-0 1 .4 Inclusion of the following branches in the list of BIR AABs BANK BRANCH NAME BRSTN LBP - MUNOZ SCIENCE CITY 13035-020-6 2. Pursuant to CICS 0M No. 17-004 dated 18 January 2017, the aforementioned updates will be implemented effective 01 March 2019. 3. For your information and guidance.

07 April 2017 Memo To : All Member/Participant Banks Subject : CONTINGENCY MEASURES TO BE OBSERVED IN CASE A PARTICIPANT BANK IS UNABLE TO TRANSMIT ICL TO PCHC 1. We enumerate the contingency measures to be observed whenever the following exceptions/ scenarios are encountered, to wit: 1.1.Scenario 1. Inability to use the CICS Front-end System and there is no connectivity to the Head Office PBM Assumption: Connectivity between the bank's head offic3 and its branch/es is unavailable. PBM server at the head office and connectivity to PCHC are available. banks may consider using or availing any of the following options: 1.1.1. On-Premise PCHC Frond-end Back-up Facility - As part of service commitment to our member banks, a generic CICS Front-end System (FES) will be made available at PCHC Manila and Makati Offices to serve as "last mile" back up for Member Banks. This facility shall also be made available for new entrants i.e. clearing subscribers with small clearing volume. Below are the guidelines in availing PCHC's On-premise CICS Front-end System: 1.1.1.1. Coordinate schedule through PCHC Service Help Desk prior to use. Walk-in shall be entertained on a first-come first-served basis. 1.1.1.2. Observance of the cut-off in CICS transmission shall be strictly observed. As such, we advise participant banks using the facility to allot ample time to complete outward clearing preparation/transmission. 1.1.1.3. PCHC Service personnel will be assigned to assist availing banks. 1.1.2. Remote CICS Front-end Back-up - Banks having trouble with their FES but still have a working capture device (scanner) may access CICS FES remotely if such device is supported. This arrangement however, requires prior registration of the bank/branch so that secure access and client FES application licenses can be provided beforehand by PCHC. This option includes transmission of generated ICL directly to PCHC. A registration form is attached (Annex A) for this purpose. 1.1.2.1. Connect using the CICS FES and transmit the generated outward ICL Files 1.1.2.2. Once PCHC receives the ICL Files, they will be sent to the PCHC Backend Server 1.1.2.3. Login to the Web Portal and verify that all outward ICL files have been received successfully 1.1.2.4. The use of any of the foregoing options under Scenario 1 is nevertheless subject to the same applicable security measures required to any participant banks using their own FES 1.1.3. Banks availing any of the above options are however cautioned that any successful transmission previously made using their own facility (i.e. FES and PBM) may result to duplicate items which may be automatically returned by the Drawee PBM if inadvertently retransmitted using a different PBM. it is necessary that careful verification shall be made in the Web Portal prior to resending ICLs. 1.2. Scenario 2. Inability to transmit ICL thru the PBM located at the Head Office Assumptions: Primary PBM at the head office is either not working or connectivity between the PBM Server and PCHC cannot be established. There are at least three (3) possible options available tot he banks under Scenario 2. 1.2.1. Use of a Secondary PBM. PCHC enjoined the banks to make provisions for a Back-up PBM. Such as set-up will enable the bank to immediately switch to a backup PBM when the Primary PBM fails. Activation of a backup PBM or reconfiguring a Secondary PBM to serve as Primary requires the following steps: 1.2.1.1. A Bank that suffers PBM malfunction shall reconfigure its FES to access the backup/secondary PBM server instead of the primary 1.2.1.2. As inward ICLs and reports are pushed by the Clearing House Module (CHM) to the Primary PBM of the Drawee Bank, there is a need for the bank switching to a backup/secondary PBM to inform PCHC so that PCHC can change the parameter at the backend accordingly. 1.2.1.3. Once the reconfigured backup/secondary PBM is up, all inward ICLs and Reports will then be directed to it. 1.2.1.4. Reverting to the previous/primary PBM will require the bank to change the configuration of its FES and to advise PCHC to slip back the parameter at the PCHC Backend. 1.2.2. Use of Portable Media. Should a bank loses connectivity to PCHC and its PBM is unable to transmit outward ICL files to PCHC; the bank may physically transfer outward ICL using a portable drive or media. 1.2.2.1. Bank should coordinate with PCHC informing the transfer of outward ICL Files using a portable media. 1.2.2.2. PCHC may set a deadline for acceptance of such portable media which is earlier than the fixed 4:30 PM cut-off. 1.2.2.3. Once clearance from PCHC is obtained and that according to the concerned bank's assessment, it can deliver, the bank may proceed to copy all generated ICL Files from the FES/PBM into the portable media. 1.2.2.4. The portable media containing the generated outward ICL Files must reach PCHC on or before the specified deadline. 1.2.2.5. Generated outward ICL Files will be processed by PCHC subject to the same security validation that is applied to such files when transmitted via PBM. 1.2.2.6. Banks availing of this option may login to the Web Portal to verify and validate 'sent outward' transactions. 1.2.3. Use of e-mail Facility. Small-volume banks (less than 100 outward items) experiencing problem in transmitting ICL thru its PBM may, as an alternate option, send the generated ICL Files via e-mail. for this purpose, kindly also indicate in the registration form attached to this Operating Memo (Annex A). 1.2.3.1. Banks shall coordinate with PCHC (via phone call) for the use of this e-mail facility. Advise PCHC prior to availment of this option. 1.2.3.2. Generate all the outward ICLs or copy generated ICLs from FES/PBM. 1.2.3.3. Zip all generated/copied ICL Files with embedded password. 1.2.3.4. Send the Zipped files thru e-mail to the designated email account mentioned in the acknowledgment sent in response to your registration (using the attached registration form). 1.2.3.5. Upon receipt, PCHC shall extract the outward ICL Files using the Password sent to a separate e-mail address or mobile number. 1.2.3.6. Extracted files will be submitted to the CHM subject to the same security validation performed by the bank's PBM. 1.2.3.7. Sender Bank may login to the Web Portal to verify status of the e-mailed ICL. 1.3. Scenario 3. Inability to use Front-end System but connectivity to PBM is working Assumptions: Connectivity between head office and its branches is working. PBM is working and connectivity to PCHC is available. Front-end System of the head office is not working. 1.3.1. Guest User Facility. The guest user facility is a feature in some bank's Front-end application which may be made available for use by other banks. Banks that support the guest user feature have the discretion of making this feature available for other banks' use. Should a Member bank allow, below are the guidelines to be observed: 1.3.1.1. Bring all unprocessed checks to a nearby bank/branch with Guest User Facility 1.3.1.2. Capture Data/Images and perform the Data Entry, Correction, and Balancing processes at the Host bank/branch's front-end system 1.3.1.3. Generate the Outward Image Cash Letter ( copy all into any portable media 1.3.1.4. Go back to own bank's premises and follow internal procedures to send those generated outward ICLs for processing by the PBM. 2. We trust everything is in order.

20 January 2017 Memo To : All Member/Participant Banks Subject : SCHEDULE OF BANK-TO-BANK PENALTIES/CHARGES 1. We enumerate hereunder the updated list of Bank-to-Bank penalties/charges to be implemented under the Check Image Clearing System (CICS), to wit: 1.Bank-to-Bank Description Penalty 1.1.Checks w/o UIC or Bank Guarantee Stamp ₱100.00 per item 1.2.Checks with Unreadable BRSTN on the UIC or Bank Guarantee Stamp ₱50.00 per item 1.3.Checks w/o 2nd Presentment Stamp ₱200.00 per item 1.4.Returned Checks w/o Prescribed Return Stamp and/or w/o any of the required info on stamp ₱100.00 per item 1.5.Old Format Checks (effective 01 July 2017) To be collected by Presenting Bank from its ₱500.00 per item depositor to be distributed as follows: PCHC ₱250.00 per item Presenting Bank/Branch ₱250.00 per item 1.6.Special Clearing of Return Items ₱1,000.00 per presentation or delivery 1.7.3rd Presentation and Dishonor of an item Amount of the item multiplied by the average IBCL rate for the day (minimum of ₱1,000.00 per day) 1.8.Re-clearing of PAYMENT STOPPED or CLOSED Amount of the item multiplied by the ACCOUNT Checks average IBCL rate of the day (minimum of ₱1,000.00 per day) 1.9.Re-clearing of a Check by a Bank Other than the Amount of the item multiplied by the Original Presenting Bank average IBCL rate of the day (minimum of ₱1,000.00 per day) 1.10.Failure to affix 'CLOSED ACCOUNT' ₱200.00 per item or 'PAYMENT STOPPED' stamp and to perforate the MICR code line 1.11.CICS Amount Greater than the Actual Amount of Check * Receiving Bank opted NOT to adjust Amount of discrepancy multiplied by the Result thru the AM Returns by the average IBCL rate for the day (minimum of ₱100.00 per day) * Receiving Bank adjusted Clearing Result Handling Fee of ₱1,000.00 1.12.CICS Amount Less than the Actual Amount of Check Fixed ₱100.00 per item 1.13.Miscleared Regular Clearing Item Amount of the item multiplied by the average IBCL rate for the day (minimum of ₱100.00 per day) 1.14.Duplicate CICS Item (Regular or Returned) Amount of the item multiplied by the average IBCL rate for the day (minimum of ₱100.00 per day) 1.15.Service Charge on Returned Items ₱2,000.00 per returned Check broken down as follows: * Credit of Presenting Bank ₱1,000.00 (Note: Non-remittance of ₱1,000.00 to the Presenting Bank subject to penalty of ₱100.00 per day, plus the unremitted service charge) * Credit of Drawee Bank ₱1,000.00 (Even if covered by deposit on next clearing day) 1.16.Post-dated/Stale-dated/Out-of-Date or Missing Amount of item multiplied by the Drawer's Signature(s) Average IBCL Rate for the day (minimum of ₱100.00 per day) 1.17.Checks returned for the reason "Previously Amount of item multiplied by the Negotiated/Cancelled" Average IBCL Rate for the day (minimum of ₱1,000.00 per day) 1.18.Additional Penalty Charge for DAUD/DAIF against ₱200.00 per day for every ₱40,000.00 the Drawer amount of Check or a fraction thereof 1.19.Using reason for return other than DAUD/DAIF as ₱200.00 per item prescribed in CICS RR Section 24.5 1.20.Errors and Omissions in the Electronic Payment Information * Depository Account Number in case of a ₱1,000.00 per item Returned Check * Check No. & Transaction Code ₱100.00 per item 1.21.Reward for discovery of Clearing Fraud 10% of Check's face amount but not to exceed ₱20,000.00 1.22.Failure to tag BIR or BOC Checks ₱100.00 per item on 1st Presentation ₱1,000.00 per item on 2nd Presentation (re-clearing) ₱1,000.00 per item for Untagged Check sent by Non-AAB For information and guidance.

18 January 2017 Memo To : All Member/Participant Banks Subject :HANDLING OF CLEARING ITEMS W/ AMOUNTS PHP 10 BILLION & ABOVE 1. The maximum number of characters that can be entered for the amount field under the Check Image Clearing System (CICS) is twelve (12). As such, we enumerate the procedures to be observed whenever a Check or a Clearing Item amounting to Php 10 Billion and above is presented: Batch the item separately. Split the item amount in order to fit into the twelve (12) digits character limit (i.e., Php 12 Billion = Php 9 Billion + Php 3 Billion) Handwrite clearly the amount of Php 9 Billion along the MICR code line of the original Check. Prepare Clearing Receipt/Charge Slip (CR/CS) for the remaining amount. Indicate the following information on CR/CS: ==> Front Side: Tick mark 'Others (specify)' and indicate: "Partial amount of clearing item which exceeds or is equal to Php 10 Billion." ==>Dorsal Side: "Partial amount of outward clearing item which exceeds/equal to Php 10 Billion. Full Amount: Php __________________________; Drawee Bank/Branch ____________ _______________________________________; Check No. _______________________ BRSTN ________________; Account No. _________________________." Capture via CICS the images and the payment information of the original high value clearing item except the Account Number of the drawer in the MICR Code Line. The account number field of the Electronic Payment Information (EPI) should be zeroed out to prevent posting of the partial amount to the client's account. Capture next the Charge Slip/s representing the remaining partial amount, similarly leaving the account number to be zero. 2. In view of the significant amount involved, we encourage the presenting/collecting bank to communicate with the receiving/drawee bank beforehand for the latter to prepare and expect the high value clearing transaction. 3. Please be guided accordingly.

18 January 2017 Memo To : All Member/Participant Banks Subject : HANDLING OF CHECKS PAYABLE TO THE BIR and BOC 1. With the truncation of checks under the Check Image Clearing System (CICS), the existing procedures in handling checks payable to the Bureau of Internal Revenue (BIR) and Bureau of Customs (BOC), has to be updated to conform to the new processes. 2. Below is the Guidelines/Procedures in processing Checks made payable to BIR and BOC: 2.1. Outward Preparation of Presenting Authorized Agent Bank 2.1.1. Outward clearing items payable to the BIR and the BOC shall be presented for clearing by the Authorized Agent Banks (AABs) only. 2.1.1.1. Batch all items payable to BIR separately. 2.1.1.2. In the same manner, items payable to BOC should also be in separate batch. 2.1.2. During capture, Front-end System of AABs should be able to identify thru tagging as BIR or BOC checks. 2.1.3. From the ICLs received by PCHC from AABs, it shall provide MIS Reports to both the Presenting and Drawee Banks to serve as tools in their respective proving/reconciliation. 2.1.4. Presenting AABs should reconcile their internal reports against the MIS Reports provided by PCHC. 2.2. Verification of Inward Items by Drawee Banks 2.2.1. Drawee Banks should validate if items payable to BIR/BOC are accordingly tagged by the Presenting Bank by comparing them to the MIS Reports provided by PCHC or as indicated in the Image Cash Letter (ICL). 2.2.2. Non-printing of BIR/BOC UIC does not affect tagging of the item. As such, should not serve as reason for dishonor. 2.2.3. In case of a discrepancy, the Drawee Bank should notify the presenting bank immediately. 2.2.3.1. Drawee bank shall dishonor untagged items made payable to the BIR/BOC and return within the prescribed period using the reason: (M) – Untagged BIR/BOC Check 2.2.3.2. Drawee bank shall charge the presenting bank: 2.2.3.2.1. For AAB, Php100.00 per item for failure to tag as BIR/BOC checks; or 2.2.3.2.2. Php1,000.00 per item if the presenting bank is not an AAB or the presenting bank is an AAB but the untagged items are already for re- clearing; or 2.2.3.2.3. Reward of 10% of the face amount of the item or Php20,000.00 whichever is lower, on discovery of a “check switching” attempt; 2.2.3.3. The debit entry to the Drawer’s Account should not in the meantime be reversed. Instead, book the return under the following suggested accounting entries: 2.2.3.3.1. Debit (DR): Due from BSP 2.2.3.3.2. Credit (CR): Sundry Credit-Untagged BIR/BOC Check 2.2.3.3.3. Collection of applicable penalty is via charge slip. 2.2.3.3.4. When untagged check presented by AAB is re-cleared, reverse the Sundry Account entry. 2.2.3.4. In case the untagged BIR/BOC Check has funding issue or has technical defects aside from being untagged, i.e. DAIF, CLOSED ACCOUNT, POST-DATED, such reason shall be used in returning the same, applying corresponding penalty if any. Indicating “untagged” is unnecessary since tagging on re-presentation may not cure the primary reason for its return. 2.2.3.5. If dishonored untagged BIR/BOC Check is not re-cleared on the next clearing session from the return thereof, Drawee Bank shall immediately notify the Presenting AAB’s Liaison/Clearing Officer/Internal Auditor using the attached pro forma BIR/BOC Notification and Confirmation Form. 2.2.3.6. If the notification for re-clearing is not responded and subject item is not re- presented for clearing on the succeeding clearing session (3rd clearing session counting from the original presentation of untagged BIR/BOC Check), the applicable Reward as defined under 1.1.6.2.3. can be collected by the Drawee Bank (as failure of the Presenting Bank to re-clear the untagged item may be construed that such item is indeed fraudulently negotiated). As such, the following action should be performed: 2.2.3.6.1. Reverse the Sundry Credit and lodge the amount involved in an appropriate account. 2.2.3.6.2. DR: Sundry Credit 2.2.3.6.3. CR: Accounts Payable (or to the applicable Account Name) 2.3. Procedures to be observed by Presenting AAB in re-clearing untagged BIR/BOC Checks 2.3.1. As soon as a returned ICL containing Untagged BIR/BOC Check is received, verify if the item is credited to the account of the BIR/BOC. 2.3.1.1. If Not Credited, conduct immediate verification where the item was credited and correspondingly debit the account to avoid withdrawal of proceeds from the check in question. If found to be fraudulently negotiated, each individual bank’s internal control and legal policies shall be observed. 2.3.1.2. If Credited, the following procedures shall apply: 2.3.1.2.1. Book appropriate accounting entries 2.3.1.2.2. DR Entry: Sundry Debit-Untagged BIR/BOC Check 2.3.1.2.3. CR Entry: Due from BSP 2.3.2. Re-clear the item by re-scanning the Original BIR/BOC Check 2.3.2.1. Batch the Item separately as BIR/BOC Check 2.3.2.2. Tagged the Item as Re-clearing 2.3.2.3. Reverse the Sundry Account Entries 2.3.2.4. DR Entry: Due from BSP 2.3.2.5. CR Entry: Sundry Debit-Untagged BIR/BOC Check 2.3.3. If unable to re-clear the returned untagged BIR/BOC Check despite the notification of the Drawee Bank, the Presenting Bank is mandated to immediately deliver its duly accomplished Confirmation Form by Fax and/or by hand. Failure to do so shall be considered that the subject check was indeed fraudulently negotiated. 2.4. Immediate settlement of discrepancy arising from the non-tagging of BIR/BOC Check should be a collaborative effort of all the transacting parties. Hence, both the Presenting and Returning Drawee Banks must endeavour to settle the Sundry Account the soonest possible time. 2.5. We wish it noted that the booking entries as proposed herein are suggestive and should not be construed as the ones prescribed. The booking of entries may vary depending on each bank’s internal rules and standards. 3. The foregoing procedures/guidelines shall become effective on the date set by PCHC as the Full Implementation of CICS. 4. For your information and guidance.

18 January 2017 T 0 : All Member/Participant Banks R E : GUIDELINES/PROCEDURES TO BE OBSERVED IN THE SETTLEMENT OF DISCRIPANCIES UNDER THE CHECK IMAGE CLEARING SYSTEM (CICS) 1. We append the detailed guidelines/procedures to be observed by all PCHC Member/Participant Banks in the settlement process covering the following clearing discrepancies: 1.1. Electronic Payment Information (EPI) amount is greater than the amount shown on the Image of the Clearing Item 1.2. EPI amount is less than the amount shown on the Image of the Clearing Item 1.3. Miscleared CICS Item 1.4. Duplicate CICS Item or Set of CICS Items (RCI or Return ICL) 1.5. Error/s or Omission/s on electronically transmitted EPI 2. As a matter of policy, the electronic payment information (EPI) derived from the Image Cash Letters (ICLs) shall be used as basis to debit or credit the banks' respective Demand Deposit Accounts (DDA) maintained with the Settlement Bank. 3. For Member/Participant Banks which are not yet ready to accept/process ICL Files, ICLs intended for them will be converted into ECCS files which shall be used for their inward file processing/uploading. 4. As provided in Section 23 of CICS Rules and Regulations, settlement of discrepancies shall be thru Clearing Receipt/Charge Slip (CR/CS). Penalties, where appropriate, shall be separately collected via CR/CS. 5. The guidelines/procedures shall be effective upon full implementation of CICS. 6. Please be guided accordingly.