BSP eases regulations on Typhoon ‘Josie’-affected areas
The Bangko Sentral ng Pilipinas (BSP) has moved to allow lenders in areas affected by Typhoon “Josie” to provide debt relief to their borrowers by granting regulatory and rediscounting relief measures to banks and other financial institutions.
Typhoon Josie’s devastation in July warrants central bank’s immediate response through the grant of regulatory and rediscounting relief measures to banks and non-bank financial institutions with quasi-banking functions (NBQBs) with head offices or branches located in: Region I (Ilocos Norte, Ilocos Sur, La Union, and Pangasinan); Cordillera Administrative Region (Abra, Benguet, Ifugao, Kalinga, and Mountain Province); Region II (Cagayan); Region III (Bataan, Bulacan, Nueva Ecija, Pampanga, Tarlac, and Zambales) Region IV-A (Cavite, Laguna, Batangas, Rizal and Quezon); Region IV-B (Occidental Mindoro and Oriental Mindoro); Region VI (Aklan, Antique, Iloilo, and Negros Occidental); and National Capital Region (cities of Malabon, Marikina, Parañaque, Pasig, Quezon, and Valenzuela).
The areas were identified based on the July 27, 2018 situation report of the National Disaster Risk Reduction and Management Council, the Bangko Sentral ng Pilipinas (BSP) said in a statement on Wednesday.
Approved on August 10 by the Monetary Board, the BSP said for thrift banks/rural banks/cooperative banks and NBQBs, the temporary relief measures were the exclusion of existing loans of borrowers in affected areas from the computation of past due loan ratio provided that appropriate and prudent operational control measures are adopted; non-imposition of penalties on legal reserves deficiencies” with head office or branches in the affected areas; and moratorium on monthly payments due the central bank for banks with ongoing rehabilitation programs.
The relief also includes the non-imposition of monetary penalties for delays in the submission of supervisory reports; and subject to Bangko Sentral approval, booking of allowance for probable losses on a staggered basis over maximum of five years for all types of credit extended to individual and businesses directly affected by the calamity.
For all banks, the regulatory relief allows banks to “provide financial assistance to their officers and employees who were affected by the calamity even if the purpose of such assistance is not identified as eligible for credit accommodation under their existing BSP-approved Fringe Benefit Program.”
For all rediscounting banks, the relief includes the granting of a 60-day grace period to settle the outstanding rediscounting obligations as of July 21, 2018; and allowing banks to restructure with the central bank, on a case-to-case basis, the outstanding rediscounted loans of borrowers affected by the calamity.
“These measures will be in effect for a defined period and covered by additional specific and other prudential conditions,” the Bangko Sentral said, adding that the regulatory relief is meant to assist the affected financial institutions’ recovery and allow them to resume normal operations. MAYVELLIN U. CARABALLO
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