The Monetary Board, the policy-making body of the Bangko Sentral ng Pilipinas, on Friday unveiled P726 billion worth of loans that can be extended to micro-, small- and medium enterprises and large businesses as banks’ alternative compliance with the reserve requirements.
It said in a statement the aggregate loans to MSMEs and large enterprises under the relief measure should not exceed P300 billion and P425 billion, respectively.
“Limits are calibrated based on different simulations and are meant to ensure that the use of loans as an alternative mode of compliance is in line with domestic liquidity conditions and projected growth,” BSP Governor Benjamin Diokno, who is also the board chairman, said.
Diokno said BSP-supervised financial institutions were encouraged to continue to avail of the relief measure to sustain lending and financial support to viable MSMEs and large enterprises.
“Access to finance by these businesses will contribute to the recovery of the domestic economy and will help secure our envisioned path of sustainable and inclusive growth,” Diokno said.
Based on preliminary data, the average amount of MSME loans and loans to large enterprises utilized by banks as compliance with the reserve requirements for the reserve week ending Nov. 12, 2020 amounted to P123.6 billion and P29.5 billion, respectively.
Existing guidelines allow supervised financial institutions to utilize loans to MSMEs and large enterprises as alternative compliance with reserve requirement until Dec. 29, 2022, subject to early closure, if warranted and with prior notice.
Once the set limits are reached prior to Dec. 29, 2022, the BSP would proceed to amend existing policy by closing the eligibility window on the use of the relief measure.