COMMISSION ON AUDIT CIRCULAR NO.

96-008
May 30, 1996

TO : The Heads of Bangko Sentral ng Pilipinas, Development Bank of the

Philippines, Philippine National Bank, PNB Republic Bank; All the Directors of
COA Regional Offices and Corporate Audit Office I, Corporate and Branch
Auditors of said Banks; and All Other Concerned.

SUBJECT : Substitute documents to support the claims of sugar producers whose

promissory notes can no longer be located, in connection with the
implementation of Republic Act. No. 7202, otherwise known as the Sugar
Restitution Law.

Reports received by this Commission disclosed that the promissory notes to support the claims of
sugar producers under R.A. No. 7202, can no longer be located.

In this connection, Section 12.b of the Rules and Regulations issued by the Bangko Sentral ng
Pilipinas (BSP), Implementing R.A. No. 7202, provides, among others, the following:

"xxx.

In cases where the loan records which will serve as the basis for computing the excess payments of the
sugar producer are no longer available, the lending bank shall immediately notify the BSP. The BSP shall
then direct the claimant sugar producer to submit documents in his possession which are acceptable to
COA to substantiate his claim. xxxx." (underscoring ours)

In view hereof and for uniformity and/or consistency of COA audit action, all of the following
documents must be submitted to substantiate the claims of sugar producers whose promissory notes can
no longer be located:

1. Subsidiary ledgers of the Agricultural Sugar Crop Loans (ASCL) -

These bank records contain vital information such as payments, accrual of interests, penalties
imposed and other movements of the loans which can be used as bases for loan recomputation
purposes. They should, however, be authenticated by the bank as genuine.

2. Loan agreements, real estate mortgage contracts, chattel mortgage contracts which are
notarized, registered and duly signed by the contracting parties can be used in lieu of the
promissory notes to establish the existence of a loan transaction between the bank and the sugar
producer.
3. Loan approvals, demand letters and documents submitted/presented in courts in case of litigation
can also be used as additional proofs of the existence of a loan transaction.

For the information and guidance of all concerned.

 (Sgd.) CELSO D. GAÑGAN
Chairman

(Sgd.) ROGELIO B. ESPIRITU (Sgd.) SOFRONIO B. URSAL

Commissioner Commissioner