As of 15 February 2022

IMPLEMENTING GUIDELINES
For the Streamlined Procedures for Applications
for Mergers, Consolidations, and Acquisitions of Banks

Section 1. Scope and Coverage

The Guidelines shall apply to the applications for Mergers, Consolidations, and
Acquisitions (MCA) of banks, which are non-notifiable or are exempted from
compulsory notification under an effective guideline or circular issued by the
Philippine Competition Commission, and do not involve financial assistance from the
Philippine Deposit Insurance Corporation under Section 22 (e) of Republic Act
No. 3591, as amended.

Section 2. Definition of Terms

Acquisitions – refer to acquisition transactions between banks involving the purchase

of recorded assets and assumption of recorded liabilities (P&A), subject to the
provisions of existing and applicable laws.

Agency – refers individually to any agency between and among the Philippine
Competition Commission (PCC), Philippine Deposit Insurance Corporation (PDIC),
Bangko Sentral ng Pilipinas (BSP), Securities Exchange Commission (SEC), and
Cooperative Development Authority (CDA).

Agencies – refers collectively to the PCC, PDIC, BSP, SEC, and CDA involved in the
harmonization of the list of requirements and synchronization of process flow and
timelines for the evaluation of MCA.

Agreement – refers to the “Memorandum of Agreement on the Procedures for

Applications for Mergers Consolidations and Acquisitions of Banks” dated 29 October
2021 executed by and among the Agencies.

Banks – refer to entities engaged in the lending of funds obtained in the form of
deposits and are classified into universal banks, commercial banks, thrift banks, rural
banks, cooperative banks, Islamic banks, digital banks, and other classification of
banks as determined by the Monetary Board of the BSP.

Business Day – refers to Monday to Friday except local and national holidays, and
non-working days due to a declaration of suspension or cancellation of work for
government offices.

Calendar Day – refers to all the days of the year including Saturday, Sunday, and
holidays.

Page 1 of 8
Draft Implementing Guidelines for MCA of Banks
Consolidation – is the union of two (2) or more banks into a single new bank, called
the consolidated bank, all the constituent banks thereby ceasing to exist as separate
entities. The consolidated bank shall thereupon and thereafter possess all the rights,
privileges, immunities, franchises and properties, and assume all the liabilities and
obligations of each of the constituent banks in the same manner as if it had itself
incurred such liabilities or obligations.

Corporate Documents – refer to the Articles of Incorporation/Cooperation, By-Laws,

Articles of Merger/Consolidation, Plan of Merger/Consolidation, Purchase and Sale
Agreement, and any other corporate document, including any agreements or
documents relating to the incorporation, ownership or management of the entity
subject of the MCA application.

Lead Proponent Bank – refers to the bank overseeing the arrangement of the merger,
consolidation or acquisition transaction; one whose financial condition shall be the
basis of determining compliance with the web-based self-assessment questionnaire
(SAQ) of the BSP.

Letter of Acknowledgment – refers to the PCC’s confirmation that the MCA

transaction is a Non-Notifiable Transaction.

Letter of Non-Coverage from Compulsory Notification – refers to the letter submitted

to the PCC by Proponent Banks seeking confirmation that an MCA transaction is not
covered by the compulsory notification requirement under Section 17 of the
Philippine Competition Act (PCA), if required by the BSP, PDIC, SEC, or CDA.

Merger – is the absorption of one (1) or more banks by another existing bank, which
retains its identity and takes over the rights, privileges, franchises, and properties, and
assumes all the liabilities and obligations of the absorbed bank/s in the same manner
as if it had itself incurred such liabilities or obligations. The absorbing bank continues
its existence while the life or lives of the other bank/s is/are terminated.

Non-Notifiable Transactions – refer to MCA transactions that do not reach the

notification thresholds provided under Rule 4, Section 3 of the Implementing Rules
and Regulations of R.A. No. 10667 or the PCA, as amended by PCC Memorandum
Circular No. 18-001, or provided under a law, or are exempted from compulsory
notification under an effective circular or guideline issued by the PCC.

Proponent Banks – refers to banks applying for MCA.

Section 3. Submission of the Application of the Proponent Banks

3.1. The Lead Proponent Bank shall accomplish the SAQ (Annex A) pursuant to
Section 111 and Appendix 124 of the Manual of Regulations for Banks, as
implemented by BSP Memorandum No. M-2020-077 dated 28 September 2020.
The accomplishment of the SAQ will be acknowledged by the BSP via
automatic-reply, copy furnished the Agencies.

Within five (5) business days from the automatic reply, the BSP shall
notify/confirm with the Proponent Banks, copy furnished the Agencies, of its
eligibility/non-eligibility to submit the MCA application and documentary
requirements. The confirmation of eligibility at this point should not be
construed as BSP’s pre-approval of the MCA application.
Page 2 of 8
Draft Implementing Guidelines for MCA of Banks
3.2. The Proponent Banks shall submit simultaneously to the Agencies concerned
the duly-accomplished Application Form (Annex B), together with the
documents required under the Harmonized List of Requirements classified as
follows:
a. Common Documents Required by All Agencies (Annex C);
b. Distinct Documents Required by Each Agency (Annex D).

The authorized signatory/ies is/are the person/s authorized by the respective

Boards of the Proponent Banks as its representative/s in the MCA transaction.

Upon receipt by each Agency of the duly filled-up Application Form and
documentary requirements, the application form shall be stamped, either in
wet, digital and/or electronic stamp/signature, with the actual date of receipt
by the Agencies.

3.3. BSP shall assign a Unified Application Number (UAN) to the MCA application
upon confirmation of receipt thereof by all the Agencies. The BSP shall
immediately disseminate the UAN to the Agencies through e-mail. All
correspondences regarding the MCA application shall indicate thereon the
assigned UAN.

3.4. The MCA Application and documentary requirements may be submitted to the
Agencies either by personal service, registered mail or courier service, or
transmitted by electronic mail or other electronic means, in accordance with
each Agency’s rules and regulations, addressed to the following:

Agency Designated Officer and Email address

Address
PCC The Director mergers@phcc.gov.ph or
Mergers and Acquisitions Office mergers1nd@phcc.gov.ph
Philippine Competition
Commission
25F Vertis North Corporate
Center 1
North Avenue, Quezon City
PDIC President and CEO mca@pdic.gov.ph
Philippine Deposit Insurance
Corporation
7F SSS Building Ayala Ave.,
Cor. Rufino St., Makati City
BSP The Director mca-applications@bsp.gov.ph
Financial Supervision
Department
Bangko Sentral ng Pilipinas
A. Mabini St. Malate, Manila
SEC Assistant Director mergersconsobanks_faad@sec.gov.ph
Financial Analysis and Audit
Division
Company Registration and
Monitoring Department
Securities and Exchange
Commission

Page 3 of 8
Draft Implementing Guidelines for MCA of Banks
 CDA The Administrator, thru The registration@cda.gov.ph
Director
Registration, Supervision and
Examination Service
Cooperative Development
Authority
827 Aurora Blvd, Brgy.
Immaculate Concepcion
Cubao, Quezon City

MCA Application and documentary requirements transmitted by electronic

mail or other electronic means shall be encrypted or password-protected. The
transmission of the password of the files shall be made in a separate e-mail or
through other means.

Section 4. Assessment of the Completeness of Documents

4.1. Each Agency shall undertake an independent initial review/assessment of the

submitted documents as to completeness, based on their respective mandates
and requirements and in accordance with the respective turn-around times
(TAT) of the Agencies.

4.2. If found to be incomplete, each Agency shall notify the Proponent Banks of,
the deficiencies noted, within the TAT provided below:

Agency TAT to Notify Proponent Banks

PCC Within seven (7) business days from receipt of the MCA
application
PDIC Within seven (7) business days from receipt of the MCA
application
BSP Within seven (7) business days from latest receipt by
any of the Agencies of the MCA application
SEC Within seven (7) business days from receipt of the MCA
application
CDA Within seven (7) business days from receipt of the MCA
application

The Proponent Banks shall have fifteen (15) calendar days from receipt of
notice within which to submit/comply with any noted deficiency subject to the
inextendible period of five (5) calendar days upon written request from the
Proponent Banks to the Agencies concerned prior to the lapse of the first fifteen
(15) days of compliance. Should the Proponent Banks fail to comply/submit the
noted deficiencies within the periods provided in this Section, the MCA
application shall no longer be processed and considered closed or terminated
without prejudice to the refiling thereof.

4.3. The Agencies shall commence their respective evaluation of the Proponent
Banks’ application upon receipt of the MCA application and complete
requirements and payment of fees, as applicable.

Page 4 of 8
Draft Implementing Guidelines for MCA of Banks
Section 5. Evaluation of the MCA Application

5.1. Each Agency shall undertake an independent evaluation of the MCA

application, based on their respective mandates, as follows:

Agency Determination

PCC Determination if the proposed MCA transaction is

non-notifiable
Should the PCC find during the evaluation of an MCA
Application that the Proponent Banks must file Notification
Forms, the PCC shall inform the Proponent Banks of such
finding and require the Proponent Banks to file Notification
Forms. In such case, the fifty-five (55) business days
timeline under these Guidelines shall not apply. The BSP,
PDIC, SEC or CDA shall proceed with the processing of the
MCA application in accordance with their respective
policies, rules, and regulations.

PDIC Compliance with PDIC Charter and PDIC Regulatory

Issuances

BSP Viability assessment of the business plan, and compliance

with banking laws and BSP regulations

SEC Compliance with the Revised Corporation Code and

applicable Rules and Regulations

CDA Compliance with the Philippine Cooperative Code of 2008

5.2. The Agencies shall have a total of fifty-five (55) business days to process the
MCA application, which shall be reckoned from the date of receipt by the
Lead Proponent Banks of the latest Notice of Complete Submission issued by
any of the Agencies or the receipt by the BSP, PDIC, SEC, and CDA of the PCC’s
email notifying the other Agencies of the complete submission of requirements
by the Proponent Banks, whichever is later (the “Reckoning Date”).

5.3. The Proponent Banks shall have a continuing obligation to inform the Agencies
of any change in their proposal.

The MCA application shall be deemed withdrawn and/or terminated, without

prejudice to refiling in case of any of the following major changes, such as, but
not limited to:

a. Changes in the composition of the Proponent Banks and/or change in the

Lead Proponent Bank;
b. Changes in the mode of business combination (e.g., from merger to
consolidation or to P&A or vice-versa);
c. Changes in the ownership and/or beneficial ownership; or
d. Changes in the cut-off dates of the assets and liabilities to be transferred to
the Surviving Bank (for mergers or P&A) or to the new entity (for
consolidation).

Page 5 of 8
Draft Implementing Guidelines for MCA of Banks
 Should there be other changes in their proposal considered to be major by any
of the Agencies, the Proponent Banks will be notified by the Agency
concerned, copy furnished the other Agencies, that the MCA application is
deemed withdrawn and/or terminated without prejudice to refiling.

Should the change occur after the PCC shall have issued the Letter of
Acknowledgment stated in Section 5.4 for changes not deemed a substantial
modification under the PCC Rules on Merger Procedure, said Letter shall be
vacated without prejudice to reinstatement after re-filing and upon full
compliance by the Proponent Banks with the requirements of all the Agencies.

5.4. Each Agency shall evaluate the MCA application and issue the following
notices/issuances to the Proponent Banks, copy furnished the other Agencies,
within the TAT hereunder indicated:

Agency TAT from Document to be Issued

Reckoning Date
PCC Within seven (7) Letter of Acknowledgment
business days
PDIC Within twenty Written consent subject to the approval of the
(20) business MB and the conditions enumerated under
days Section 5.5

BSP Within forty (40) Certificate of Authority to Register (CoAR) or

business days favorable recommendation in case of Mergers
and Consolidations, or, the Notice of Approval
by the Monetary Board in case of Acquisitions;
or, Letter of Non-Compliance, informing the
Proponent Banks, of the: (i) deficiencies noted;
and (ii) the return of its application and
accompanying documents and that the same
is considered as “closed,” as applicable.
SEC Within twenty Notification Letter to the BSP on the Proponent
(20) business Banks’ compliance with the Revised
days Corporation Code and applicable Rules and
Regulations; or, Letter of Non-compliance to the
Proponent Banks, as applicable.
CDA Within twenty Notification Letter to the BSP on the Proponent
(20) business Banks’ compliance with the Philippine
days Cooperative Code of 2008 and applicable rules
and regulation; or, Letter of Non-Compliance to
the Proponent Banks, as applicable.

5.5. Not later than five (5) business days after receipt of the CoAR/favorable
recommendation or MB approval, as applicable, the Proponent Banks shall
submit to the PDIC, BSP, and SEC / CDA, a Notarized Certification and/or Proof
of Notice to Creditors/Depositors and Proof of Publication or Posting
Announcement of merger, consolidation, or acquisition by the Proponent
Banks that shall include the following:

Page 6 of 8
Draft Implementing Guidelines for MCA of Banks
 (a) the respective depositors and creditors have been duly notified of the
approved transaction and its full implication on the: (1) deposit liabilities
of the Proponent Banks and (2) the rights of the depositors; and

(b) the Proponent Banks have set aside sufficient funds to cover possible
withdrawal of depositors upon the actual merger, consolidation or
acquisition.

5.6. The SEC or the CDA, as applicable, shall issue the following within the period
indicated and after payment of applicable fees:

Agency Documents to be Issued TAT from receipt of

the Notice to Depositors/Creditors
under 5.5 and payment of
applicable fees
SEC Certificate of Filing of the Within fifteen (15) business days
Articles and Plan of
Merger or Certificate of
Filing of the Articles and
Plan of Consolidation
CDA Certificate of Merger or Within ten (10) business days
Certificate of Registration

5.7. If upon evaluation, the MCA application does not meet the requirements of
one or more Agencies, the MCA application shall be returned and the
application process shall be deemed terminated. The Agency/ies concerned
shall issue the following notice or letter copy furnished the other Agencies
indicating the ground/s for the denial and/or termination of the application:

Agency Document to be Issued

PCC Notice of Non-Acceptance of the Letter of
Non-Coverage from Compulsory Notification
PDIC Letter of Denial of MCA Application
BSP Letter of Non-Compliance
SEC Letter of Non-Compliance
CDA Letter of Non-Compliance

Upon receipt by the Proponent Banks of any of the above notice or letter as
applicable, from the Agency/ies concerned, clearances which may have
been issued by the PDIC, BSP, SEC or CDA to the MCA application prior to such
Letter of Denial from PDIC, or Letter of Non-Compliance from BSP, SEC or CDA,
shall cease to have force and effect.

Such Letter of Denial of the MCA application from PDIC, or Letter of

Non-Compliance from BSP, SEC or CDA shall be without prejudice to the filing
by the Proponent Banks of another MCA application.

5.8. Notices shall be served to the Proponents Banks either through email, registered
mail, or courier addressed to the Proponent Banks’ designated email address
or contact person.

Page 7 of 8
Draft Implementing Guidelines for MCA of Banks
 Notice to the Proponent Banks shall be deemed complete, as follows:

a. E-mail – upon transmission unless notice on the failure of delivery is

received.

b. Correspondence sent through courier or delivered through personal

service – based on the date of receipt by the addressee.

c. Registered mail – upon actual receipt by the addressee or five (5)

calendar days after the date of receipt of the first notice from the
postmaster.

5.9. The mode of communication to the Proponent Banks and among the Agencies
shall be through printed letter or electronically-signed letter sent via email using
the official addresses indicated in Section 3.4 of this Guidelines.

Section 6. Amendment and Review

These Guidelines may be reviewed and amended by the Agencies as the need
arises in order to carry out the objectives of the Agreement. Any request for the
amendment of all or any part of these Guidelines may be made at the instance of
any Agency. Any such amendment agreed to shall be reduced in writing via
issuance of another Joint Circular by the Agencies to provide proper notice to the
banks and shall come into force and effect upon date of publication.

Section 7. Effectivity

These Guidelines shall take effect within fifteen (15) calendar days from the date of
publication in a newspaper of general circulation.

Page 8 of 8
Draft Implementing Guidelines for MCA of Banks