Section 3Sec./Art. 3

Definition of Terms. For Purpose of this Act, the term:

(a) "Approval Certificate" means the certificate of approval or authority issued by the Commission to an application by an SPV to issue Investment Unit Instruments (IUIs), pursuant to the provisions of this Act.

(b) "Approved Plan" means an SPV Plan for which an Approval Certificate has been issued by the Commission.

(c) "BSP" refers to the Banko Sentral ng Pilipinas.

(d) "Commission" refers to the Securities and Exchange Commission

(e) "Financial Institutions or Ifs" means credit-granting institutions which shall be limited to the following:

(1) the BSP;

(2) a bank as defined under Republic Act No.8791, also known as "The General Banking Law";

(3) a financing company as defined under Republic Act No. 8556, also known as "The Financing Company Act of 1998";

(4) an investment house as defined in Presidential Decree No. 129, also known as "The Investment Houses Law";

(5) government financial institutions (GFIs), which for purposes of this Act, shall be limited to the Philippine Deposit Insurance Corporation (PDIC), Land Bank of the Philippines (LBP), and Development Bank of the Philippines (DBP);

(6) government-owned-or-controlled-corporations (GOCCs),which for purposes of this Act, shall be limited to the National Home Mortgage Finance Corporation (NHMFC), Home Guarantee Corporation (HGC), Home Development Mutual Fund (HDMF), Social Security System (SSS), Government Service Insurance System (GSIS), Trade and Investment Development Corporation (TIDCORP), Small Business Guarantee and Finance Corporation (SBGFC), Technology and Livelihood Resource Center (TLRC), Livelihood Corporation (LIVECOR), National Development Corporation (NDC), Quedan and Rural Credit Guarantee Corporation (QUEDANCOR), National Housing Authority (NHA), and Armed Forces of the Philippines- Retirement and Separation Benefits System (AFP-(RSBS); and

(7) other institutions licensed by the BSP to perform quasi-banking functions.

(f) "Investment Unit Instruments or IUIs" refers to participation certificates, debt instruments or similar instruments issued by the SPV and subscribed by Permitted Investors as provided in Section 11 hereof, pursuant to an Approved Plan: Provided, That these shall not include the instruments to be issued by the SPV to the selling FIs as full or partial settlement of the non-performing assets transferred to the said SPV: Provided, further, That such issuances of the SPV shall not be considered as deposit substitutes: Provided, finally, That these shall not form part of the capital stock of the SPV.

(g) "Non-Performing Assets or NPAs" consist of the Non-Performing Loans and Real and Other Properties Owned or Acquired by FIs.

(h) "Non-Performing Loans or NPLs" refers to loans and receivables such as mortgage loans, unsecured loans, consumption loans, trade receivables, lease receivables, credit card receivables and all registered and unregistered security and collateral instruments, including but not limited to, real state mortgages, chattel mortgages, pledges and antichresis, whose principal and/or interest have remained unpaid for at least one hundred and eighty (180) days after they have become past due or any of the events of default under the loan agreement has occurred.

(i) "ROPOAs" refers to real and other properties owned or acquired by an FI in settlement of loans and receivables, including real properties, shares of stocks, and chattels formerly constituting collateral's for secured loans which have been acquired by way of dation in payment (dacion en pago) or judicial or extra-judicial foreclosure or execution of judgement.

(j) "SPV" means the special Purpose Vehicle created pursuant to the provisions of this Act.

(k) "SPV Plan" refers to the plan submitted to and approved by the Commission as pre-requisite to the issuance of an IUI.

(l) "True Sale" refers to a sale wherein the selling FI transfers or sells its NPAs without recourse for cash or property to an SPV with the following results:

(1) The transferor relinquishes effective control over the transferred NPAs; and

(2) The transferred NPAs are legally isolated and put beyond the reach of the transferor and its creditors"

Provided, That the transferring FI shall not have direct or indirect management of the transferee SPV: Provided, further, That the selling FI does not posses a claim of beneficial ownership of more than five percent (5%) in the transferee SPV.

ARTICLE II

Special Purpose Vehicle