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Standby Credit Agreement for Philippines

Standby Credit Agreement Template for Philippines

A Standby Credit Agreement governed by Philippine law is a financial instrument where a bank commits to provide credit or payment to a beneficiary upon specified conditions. The agreement is structured under Philippine banking regulations, particularly the New Central Bank Act and General Banking Law, establishing the terms, conditions, and mechanisms for the credit facility. It serves as a contingent payment mechanism, typically used as a form of financial security or backup facility, with specific provisions addressing local regulatory requirements, payment mechanisms, and enforcement procedures under Philippine jurisdiction.

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What is a Standby Credit Agreement?

The Standby Credit Agreement is a crucial financial instrument in Philippine banking practice, typically used when businesses need contingent financing or want to provide financial assurance to their counterparties. This document type is particularly relevant in scenarios requiring backup liquidity, performance security, or financial guarantees in commercial transactions. The agreement must comply with Philippine banking regulations, including BSP circulars and the General Banking Law, while establishing clear terms for credit availability, drawing conditions, and enforcement mechanisms. It's commonly used in international trade, infrastructure projects, and large commercial transactions where Philippine entities need to demonstrate financial backing. The document includes comprehensive provisions on credit terms, conditions precedent, drawing procedures, fees, and compliance requirements specific to the Philippine regulatory environment.

What sections should be included in a Standby Credit Agreement?

1. Parties: Identification of the credit provider (bank) and the applicant/beneficiary

2. Background: Context of the agreement and purpose of the standby credit facility

3. Definitions and Interpretation: Definitions of key terms used in the agreement and rules of interpretation

4. Facility Terms: Core terms including credit amount, availability period, and purpose

5. Conditions Precedent: Conditions that must be satisfied before the facility becomes available

6. Drawing and Utilization: Procedures and requirements for drawing under the facility

7. Fees and Expenses: All applicable fees, charges, and expense allocation

8. Representations and Warranties: Standard and facility-specific representations and warranties

9. Covenants: Positive and negative undertakings of the applicant

10. Events of Default: Circumstances constituting default and consequences

11. Payments and Calculations: Payment mechanics, calculations, and currency provisions

12. Changes to Parties: Rules regarding assignment and transfer

13. Administration: Administrative provisions including notices and calculations

14. Governing Law and Enforcement: Choice of Philippine law and enforcement provisions

What sections are optional to include in a Standby Credit Agreement?

1. Security: Required when the facility is secured by collateral or guarantees

2. Tax Provisions: Detailed tax provisions needed for cross-border transactions or complex tax structures

3. Regulatory Compliance: Additional section needed when specific regulatory requirements must be addressed

4. Counter-Indemnity: Required when additional parties provide indemnities

5. Electronic Banking Provisions: Include when facility operates through electronic banking systems

6. Foreign Currency Provisions: Required for facilities involving foreign currency

7. Multiple Drawing Provisions: Include when multiple drawings are permitted under the facility

What schedules should be included in a Standby Credit Agreement?

1. Facility Terms Schedule: Detailed commercial terms of the facility

2. Form of Drawing Request: Standard form for making drawings under the facility

3. Conditions Precedent Documents: List of required documents and conditions

4. Fee Schedule: Detailed breakdown of all applicable fees

5. Form of Transfer Certificate: Standard form for transferring rights under the agreement

6. Specimen Signatures: Authorized signatures for drawing requests and notices

7. Compliance Certificate: Form of periodic compliance certification

8. BSP Reporting Requirements: Forms and requirements for Central Bank reporting

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Philippines

Publisher

Ƶ

Document Type

Credit Agreement

Sector

Banking

Cost

Free to use
Relevant legal definitions

















































Clauses



































Relevant Industries

Banking and Financial Services

International Trade

Construction and Infrastructure

Manufacturing

Energy and Utilities

Telecommunications

Real Estate Development

Mining and Resources

Retail and Commerce

Transportation and Logistics

Relevant Teams

Legal

Finance

Treasury

Compliance

Risk Management

Corporate Banking

Trade Finance

Credit Administration

Operations

Documentation

Relevant Roles

Chief Financial Officer

Treasury Manager

Finance Director

Credit Risk Manager

Banking Relationship Manager

Corporate Counsel

Compliance Officer

Trade Finance Manager

Financial Controller

Project Finance Manager

Credit Analysis Manager

Banking Operations Manager

Senior Legal Counsel

Documentary Credits Specialist

Corporate Banking Officer

Industries








Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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