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BSP grants relief for flood-stricken banks

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) has granted temporary regulatory and rediscounting relief to banks in areas affected by landslide and massive flooding as a result of moderate to heavy rains in different parts of the country.

BSP Deputy Governor Nestor Espenilla Jr. said the central bank approved the regulatory and relief for banks affected by landslide and flooding in Regions lV-B, V, Vl, Vll, Vlll, X, Xl, Xll, CARAGA, and Autonomous Region of Muslim Mindanao (ARMM) through Resolution No.99 dated Jan. 20.

Espenilla said the relief package would involve a temporary grace period for payment or upon their restructuring and subject to reporting to the BSP, the exclusion of the loans of borrowers in affected areas that should have been reclassified as past due loans on end-December lastyear and those becoming past due on Dec. 31 this year.

He added that other relief include the reduction of the five percent general loan loss provision to one percent for restructured loans to borrowers in affected areas; the non-imposition of penalties on legal reserve deficiencies of thrift, rural, and cooperative banks with head offices or branches in the affected areas; and moratorium without penalty on monthly payments due to the BSP until June 30 this year for banks with ongoing rehabilitation programs.

The BSP also agreed not to impose monetary penalties for delays in the submission of all supervisory reports due to be submitted from Dec. 29 last year to June 30 this year and allowed the booking of allowances for probable losses over a maximum period of five years for all types of credits extended to individuals and businesses affected by the calamity.

Likewise, Espenilla said the BSP allowed banks to provide financial assistance to their officers and employees who were affected by the calamity even if not within the scope of the existing BSP-approved Fringe Benefit Program.

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For all rediscountins banks, he explained that the central bank agreed to grant a 50-day grace period to settle the outstanding rediscounting obligations as of December 29 last year 2010 and allowed the rediscounting banks to restructure with the BSP the outstanding rediscounted loans of their end-user borrowers affected by the calamity.

The National Disaster Risk Reduction and Management Council identified areas affected by the calamity as Palawan, Albay, Sorsogon, Camarines Sur, Catanduanes, Negros Occidental, Cebu, Bohol, Negros Oriental, Siquijor, Southern Leyte, Eastern Samar, Western Samar, Northern Samar, Leyte, Lanao del Norte, Misamis Occidental, Compostela Valley, Davao del Norte, Davao del Sur, Davao Oriental, South Cotabato, Surigao del Norte, Surigao del Sur, Agusan del Norte, Agusan del Sur, and Maguindanao.

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