THE BANGKO SENTRAL ng Pilipinas (BSP) is granting regulatory relief to banks in areas hit by recent typhoons.
The Monetary Board, in a resolution dated Jan. 9, approved the grant of additional regulatory relief measures for banks with head offices, branches, branch-lite units, or end-users in areas affected by the weather disturbances that hit the country late last year, namely Tropical Storm Kristine and super typhoons Leon, Ofel and Pepito, the central bank said in a memorandum posted on its website.
“These relief measures are aimed at enabling banks to carry on with their business operations after extreme weather events and extend equivalent financial relief to their affected borrowers,” the BSP said.
“The reckoning period of the regulatory relief measures shall be on the respective dates of the landfall of the typhoons in affected areas.”
Data from the National Disaster Risk Reduction and Management Council showed the combined effects of typhoons Kristine and Leon resulted in P10.57 billion in damage to infrastructure.
It also recorded P2.96 billion in infrastructure losses due to typhoons Nika, Ofel and Pepito.
The BSP also provided guidelines on how banks may deal with clients that were affected by the storms.
“Taking a critical balance of their fiduciary duty and financial intermediation role, eligible banks are not precluded from granting a temporary grace period of up to six months to their clients who were affected by the typhoons,” it said.
“The temporary grace period may cover all outstanding loans’ with payment of principal and/or interest falling due that may start on the respective dates of landfall of the typhoons.”
The temporary grace period will be based on terms agreed on by the banks and borrowers concerned, the BSP said. It may also be shorter than six months if agreed upon by both parties, it added.
“Banks are expected to discuss with their borrowers the other available options aside from the temporary grace period empowering the latter to make informed decisions considering their financial capabilities.”
The BSP added that the loans covered by the temporary grace period shall be excluded from the computation of past due and nonperforming loans ratios of the banks.
“Said loans, however, shall still be subject to prudential reporting for supervisory purposes,” it added.
Banks may also refer to Section 1151 of the Manual of Regulations for Banks (MORB), which covers regulatory relief policy, to check their eligibility for availing the relief measures.
If the financial assistance is not within the scope of BSP-approved purposes, the request for post-approval of the grant of loans, advances, or any other forms of credit accommodations to officers shall be submitted on or before March 31 to the appropriate supervising department of the BSP for regularization.
“No penalties shall be imposed on legal reserve deficiencies, if any, by thrift banks, rural banks and cooperative banks computed under Section 255 of the MORB.” — Luisa Maria Jacinta C. Jocson
