Banks’ disaster relief measures formalized

Under BSP proposal

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) is proposing to formalize a set of regulatory relief measures first introduced in response to previous calamities, as part of its broader push to boost the operational resilience of banks during disasters.

In a draft circular, the BSP said it is institutionalizing the temporary relief policies granted to banks affected by Tropical Storm Kristine as well as Super Typhoons Leon, Ofel and Pepito, which struck the country in late 2024.

“Consistent with the aim of strengthening banks’ operational resilience..., the BSP is amending the regulatory relief policy for banks by providing additional regulatory measures that will enhance their capacity to bounce back and continue providing timely financial services to their clients,” the BSP said.

One of the key changes under the proposed rules is to allow banks to begin availing themselves of regulatory relief within one year from the actual onset of a calamity, rather than waiting for the formal declaration of a state of calamity. This adjustment acknowledges that banks often face operational stress as early as the day the disaster strikes.

The relief package may also include flexibility in granting financial assistance for officers affected by calamities. The deadline for submitting post-BSP approval requests for loan accommodations to officers in affected areas will be extended to 90 days from 30 days previously.

There will also be a temporary grace period for loan payments. Banks may grant borrowers in affected areas a grace period of up to six months for loan repayments. These loans may be excluded from past due and non-performing loan computations for one year from the start of the calamity.

Some interventions that were implemented during the COVID-19 pandemic will also be adopted into formal regulations, including relaxation of ID requirements for households or micro-businesses.

Temporary closure of branches or branch-lite units due to hazards will be exempted from prior notification requirements of the BSP, provided that a consolidated report will be submitted within five days.

Banks may also defer for up to three years the opening of approved branches or branch-lite units in affected areas.

Meanwhile, the BSP is proposing a standardized forbearance measure covering agricultural loans since the agricultural sector is typically affected by climate-related hazards.

“Loan payments for agricultural borrowers may be deferred, with repayment terms adjusted based on crop cycles and other relevant factors,” the central bank said.

The BSP has invited stakeholders to submit feedback on the draft circular until June 18.