The Bangko Sentral ng Pilipinas (BSP) has approved amendments to its guidelines on granting regulatory relief measures to banks affected by natural and human-induced calamities to support their recovery and enable prompt relief to affected borrowers and stakeholders.
The BSP’s Monetary Board, in a circular signed on Oct. 23, approved the changes, which introduce new measures such as temporary grace periods for loan payments and the deferral of loan payments for current agricultural borrowers.
Under the amended rules, banks with head offices, branches, branch-lite units or clients in affected areas can avail of regulatory relief measures for one year from the calamity’s inception date.
For tropical cyclones, the inception date is the date of landfall or the occurrence date of hazard-related incidents if there is no landfall. For other natural hazards, it is the earliest recorded occurrence date of the hazard, and for human-induced hazards, it is the date a state of calamity is declared.
The new relief package introduces the option to grant a temporary grace period of up to six months and defer loan payments for current agricultural borrowers.
The grace period may cover all outstanding loans with principal or interest payments falling due from the inception date. The deferment period may range from six to 12 months, depending on a bank’s historical experience and assessment of affected borrowers.
The BSP said that “such calamities can disrupt business operations and result in damages and losses, affecting income streams or cash flows, including paying capacity and risk profile of clients of banks,” recognizing the Philippines’ vulnerability to hazards.
Banks may also waive documentary requirements for loan restructuring and exclude the loans of severely impacted borrowers from the computation of past due and non-performing loan ratios upon being granted a temporary grace period for payment or restructuring.
For bank operations, the temporary closure of bank branches and branch-lite units due to calamities will not be subject to the notification requirements under Section 105 of the Manual of Regulations for Banks.
The notification requirements will be relaxed for changes in banking days and hours in affected areas, and banks may defer the opening of approved bank branches or branch-lite units to be established in declared affected areas.
Thrift banks, rural banks and cooperative banks may request the staggered booking of allowance for credit losses and impairment losses of physical assets over a maximum period of three years. Rediscounting banks can apply for a 60-day grace period to settle outstanding rediscounting obligations with the BSP.
Banks availing of these measures must submit additional documentary proof substantiating the inception date of the calamity and supporting documents for staggered booking. They must also electronically submit a supplemental report on the availed relief and inform the BSP within 30 calendar days after one year from the inception date of their action plans to return to full compliance.
The amended guidelines also allow for the temporary relaxation of identification requirements for financial transactions, except for account opening.
They also temporarily permit banks not yet registered in the currency management system to directly withdraw currency from BSP regional offices and branches, provided they adhere to central bank conditions.
The BSP said the circular would take effect 15 calendar days following its publication.
