Alternative RRR compliance
As a reserve ratio compliance, the Bangko Sentral ng Pilipinas (BSP) said loans to micro, small and medium enterprises (MSMEs are now averaging P82.4 billion a day.
The BSP, citing preliminary data as of July 23, said that there are now 97 banks that have granted loans to MSMEs as an alternative mode of compliance with the reserve requirement ratio (RRR) with an average daily balance of P84.2 billion which was 750.5 percent higher than the P9.9 billion average daily balance as of April 30. The previous number of banks using RRR as compliance to MSME loans was 55.
BSP Governor Benjamin E. Diokno said funding for MSMEs are flowing after the BSP tweaked the RRR rules as part of relief measures.
“This indicates that banks have continued to grant new loans or re-finance existing ones to MSMEs and large enterprises even through the quarantine. We see this contributing positively to whole-of-nation efforts to mitigate the economic impact of the health crisis,” said Diokno in a statement.
There are also 13 banks that have extended loans to large enterprises and the average daily loan balance is at P12.3 billion, based on preliminary data as of July 23. The BSP said this is a significant increase from the P376 million average daily loan balance to large enterprises last June 4.
The BSP has approved a package of relief measures to help MSMEs such as the banks’ compliance with the RRR.
Diokno said previously that these measures complement monetary actions to “shore up market confidence and cushion domestic economic activity, along with various time-bound relaxation of various regulations (calculation of penalties on required reserves and single borrower limits, among others).”
The BSP has been supporting MSMEs and the agricultural sector through their ongoing programs such as credit enhancement mechanisms to encourage bank lending to MSMEs and agribusinesses through the Credit Surety Fund and Credit Risk Database, and the promotion of non-traditional financing approaches such as agriculture value chain finance and supply chain finance.