BSP issues guidelines on regulatory relief to calamity-hit banks

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) has approved the adoption of a policy framework on the grant of regulatory relief to banks and financial institutions affected by calamities.

BSP officer-in-charge Maria Almasara Cyd Tuaño-Amador has issued Circular 1017 laying down the guidelines on the grant of regulatory relief measures to banks affected by disasters, particularly typhoons.

“The BSP recognizes that the Philippines is vulnerable to calamities, whether caused by natural or human-induced hazards, that may adversely affect certain areas/localities, and result in declaration thereof under state of calamity,” Tuaño-Amador said in the circular.

The regulator pointed out the damages brought about by calamities to people’s resources and livelihood may affect the paying capacity and risk profile of the borrowers and clients of banks.

This, it added, could translate to higher past due ratios and inability to meet the legal reserve requirements.

With the framework, the BSP said it could extend a set of uniform and specific approach in granting regulatory relief and at the same time provide adequate support to the recovery efforts.

Within a period of one year, banks and financial institutions could avail of financial assistance to officers who are affected by the calamity within 30 days.

Thrift, rural, and cooperative banks are entitled to a temporary grace period for payment or upon approval of the restructuring as well as exclusion from the computation of past due ratio of the loans of borrowers in affected areas

Likewise, monetary penalties for delays incurred in the submission of all supervisory reports due to be submitted would not be imposed up to six months after the calamity.

Furthermore, staggered booking of allowance for credit losses computed would be allowed over a maximum period of five years for all types of credits extended to individuals and businesses directly affected by calamities.

The BSP would also grant a 60-day grace period to all rediscounting banks to settle their outstanding obligations with the central bank. Likewise, the criteria on reserve requirement for the renewal of rediscounting line would be relaxed up to six months.

Last August, the BSP granted temporary regulatory and rediscounting relief measures to banks and financial institutions in areas affected by Tropical Storm Josie.

The regulator extended similar temporary relief measures for those affected by Tropical Storms Maring in 2017 and Nina in late 2016.