The Bangko Sentral ng Pilipinas (BSP) has extended several regulatory relief measures to its supervised financial institutions (BSFIs) including a higher single borrower’s limit (SBL) until end-December 2022 to increase loans and other financing for the productivity sector.
Enclosed in two memorandums and signed by BSP Deputy Governor Chuchi G. Fonacier on Jan. 17, the pandemic-related reprieves were approved as amendments to the BSP regulations on the prudential relief measures for BSFIs affected by COVID-19.
The relief measures should “sustain momentum of bank lending and ensure continued access to financial services by the public, including vulnerable sectors of the economy,” said Fonacier in one of the memos.
Another significant amendment that extended relief measures until end-2022 is the relaxation in the credit risk weight for loans to micro-, small- and medium enterprises under the BSP’s Risk-Based Capital Adequacy Frameworks.
The BSP also maintained the lower minimum liquidity ratio of stand-alone thrift banks, rural banks and cooperative banks to 16 percent from 20 percent, as well as the temporary relaxation of the maximum borrowing limit of pawnshops from 50 percent to 70 percent of pledged loans.
Fonacier in the memo also said that the relief measure on customer identification while there is still a pandemic has likewise been extended until the end of this year. This means that any requirement for the presentation of valid IDs will continue to be relaxed, including for electronic or online customer onboarding and transactions as long as the customer is either a permanent or temporary resident or who conducts business in the area which has been declared to be under community quarantine.
These BSP’s prudential relief measures were first issued in March 2020 when the global pandemic was declared by the World Health Organization.
When the pandemic was at its early months, the BSP raised the SBL from 25 percent to 30 percent as an additional operational relief measures. So far, the higher SBL has been extended for a fourth time. The other relief measures were also extended by as much.
Banks may apply the separate SBL for project finance exposures, including those to water concessionaires, subject to compliance with certain conditions.
Bank lending has shown signs of gradual improvement after eight months of contraction. Big banks’ outstanding loans grew higher by four percent year-on-year in November 2021.
BSP Governor Benjamin E. Diokno said last week that the Philippine banking system has remained sound amid the COVID-19 pandemic.
The banking system’s total resources grew year-on-year by 6.6 percent to P20.1 trillion as of end-October 2021, he noted, while industry assets expanded by 8.6 percent to P15.6 trillion, funded mainly by deposits and “reflecting continued trust and confidence of the public in the banking system.”