BSP wants detailed reports for conglomerate-run banks

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) is set to require a more detailed report from universal and commercial banks controlled by the country’s largest family-owned conglomerates.

In a draft circular, BSP Governor Benjamin Diokno said the BSP is seeking to amend the guidelines on reporting of conglomerate structures and material related party transactions under the Manual of Regulations for Banks (MORB).

The proposed amendment seeks to require additional information in the conglomerate map.

“Universal and commercial banks that are part of conglomerates shall report all entities in the conglomerate structure where it belongs including the total assets of the entities forming part of the conglomerate, extend in the controlled corporations, and major lines of business or activities that the member corporations are engaged in,” Diokno said in the proposed circular.

Likewise the deadline for the electronic submission of the said report has been shortened to 15 instead of 30 banking days after the end of every calendar year.

The electronic submission of the report on conglomerate structure will take effect starting with the reporting period ending Dec. 31, 2020.

The regulator warned non-compliance with the reporting standards would be dealt with sanctions and penalties.

In addition to the required reports on directors, officers, stockholders and their related interests (DOSRI) as well as transactions with subsidiaries and affiliates, Diokno said big banks are now required to submit a report on material transactions with their related parties including of their non-bank subsidiaries and affiliates.

“Supervised non-bank financial subsidiaries and affiliates are therefore expected to report their material related party transactions to the parent bank which in turn shall report the same to the BSP,” he said.

The BSP chief said electronic submission of the report on material related party transactions would take effect starting with the reporting period ending June this year.

The country’s banking industry is dominated by family-owned conglomerates.

These include BDO Unibank and China Bank of the SM Group owned by the family of the late retail and banking magnate Henry Sy, Metropolitan Bank and Trust Co. founded by the late taipan George SK Ty’s GT Capital, Ayala-led Bank of the Philippine Islands, Philippine National Bank of tobacco and airline magnate Lucio Tan, Union Bank of the Philippines of the Aboitiz clan, Rizal Commercial Banking Corp. of the late tycoon Alfonso Yuchengco, and Gotianun-owned East West Bank.