Section 4Sec./Art. 4

Capital Requirements. (i) For Locally Incorporated Subsidiaries The minimum capital required for locally incorporated subsidiaries of foreign banks shall be equal to that prescribed by the Monetary Board for domestic banks of the same category.

(ii) For Foreign Bank Branches Foreign banks seeking entry pursuant to Section 2(iii) of this Act shall permanently assign capital of not less than the U.S. dollar equivalent of Two hundred ten million pesos (₱210,000,000.00) at the exchange rate on the date of the effectivity of this Act, as ascertained by the Monetary Board. The permanently assigned capital shall be inwardly remitted and converted into Philippine currency. The foreign bank shall be entitled to three (3) branches.

The foreign bank may open three (3) additional branches in locations designated by the Monetary Board by inwardly remitting and converting into Philippine currency as permanently assigned capital, the U.S. dollar equivalent of thirty-five million pesos (₱35,000,000.00) per additional branch at the exchange rate on the date of the effectivity of this Act, as ascertained by the Monetary Board. The total number of branches for each new foreign bank entrant shall not exceed six (6).

For purposes of meeting the prescribed capital ratios, the term "capital" shall include permanently assigned capital plus "net due to head office, branches and subsidiaries and offices outside the Philippines" in the ratio prescribed by law or as may be prescribed by the Monetary Board:Provided,That in all cases, the permanently assigned capital and fifteen percent (15%) of "net due to" required to comply with prescribed capital ratios shall be inwardly remitted and converted to Philippine currency:Provided, further,That amounts invested in productive enterprises or utilized by Philippine companies for export activities, shall not be subject to conversion into Philippine currency:Provided, finally,That the Monetary Board shall monitor the effective use of the "net due to" funds.

Whenever there results "net due from head office" outside the Philippines, this shall be deducted from the capital accounts for purposes of determining the required capital ratios.