The Bangko Sentral ng Pilipinas (BSP) is set to approve this month or in December at the latest, the expanded and more granular surveillance of banks’ credit and equity exposures to improve the detection of emerging risks in the financial system.

In a report, the BSP said the draft circular for the Comprehensive Credit and Equity Exposures Report (COCREE) is expected to be approved by the Monetary Board in the last quarter of 2023.

The circular contained the expanded COCREE of 2023 or COCREE 2.0, and its new reporting package. The banking industry has also submitted all its suggestions and feedback as of Sept. 19 with regards to COCREE.

The expanded COCREE will have more data points, from 85 to 164 to incorporate other relevant supplemental details, said the BSP. It will also cover not just banks, but also non-banks and trust corporations.

The BSP said the data capture extend to smaller institutions, such as rural banks and stand-alone thrift banks, quasi-banks and trust corporations.

Before COCREE, there was the CREDEX first adopted in 2003, but the past monitoring of bank exposures was limited since the latter will only check exposures with outstanding balances of P1 million and above. As such, it does not capture the granular micro, small and medium enterprises (MSMEs) and consumer lending.

The COCREE, using new technologies, is expected to fill up the gaps in bank exposures’ surveillance since it will have 85 data points which will be later expanded to 164 compared to just 35 under the CREDEX.

In the report, the BSP said COCREE will provide  more granular information to support on-site examination and off-site surveillance activities, including forward-looking stress testing and scenario analysis, both on a micro and macro level.

“All credit and equity exposures, except written-off accounts with nominal value, are required to be reported in the COCREE. This allows the BSP to conduct an in-depth analysis of borrower performance and behavior, including the portfolio of retail consumers and micro and small borrowers that were excluded from the CREDEX," said the BSP. 

The BSP also said that the "increase in data elements, specifically the identifiers, also improved the capability of the BSP to distinguish one borrower from another."

In addition, the BSP noted that with COCREE, it will have a stable monthly compilation of granular credit and equity exposures of its large supervised entities.

The BSP has a monthly average of 31.7 million records it can compile, and this is composed of granular borrower demographics or 11.3 million records, as well as credit and equity exposure details or 20.4 million records from the report of all banks and non-banks. This accounted for more than 95 percent of the outstanding loan portfolio of the banking system.

Back in May, the BSP said the COCREE report will have an eventual live implementation by January 2024.

By February next year, non-linked thrift banks, non-banks and trust corporations will go live and by March, rural and cooperative banks will also go live.

To prepare for the live implementation, all banks and non-banks will pilot test the submission of the new reporting system within the current quarter.