The Bangko Sentral ng Pilipinas (BSP) has issued the circular guidelines for the expanded Comprehensive Credit and Equity Exposures Report (COCREE) which enhances the 2021 version of the same report, to further strengthen the surveillance and analysis of emerging risks to all banks.
BSP Governor Eli M. Remolona Jr. signed BSP Circular No. 1184 last Friday, Dec. 15, for the enhanced COCREE 2023 version or COCREE 2.0.
In the circular memo, the BSP chief said the report “is designed to capture granular borrower/counterparty information for all credit and equity exposures of BSP supervised financial institutions (BSFIs).”
By January 2024, the COCREE 2.0 will be pilot tested until it goes on live implementation.
As per the circular, big banks, thrift banks, digital banks, non-banks and trust companies will have to go on live by June next year with a monthly reporting frequency.
By September next year, stand-alone thrift banks, trust firms and non-banks will go live with a monthly reporting frequency and by December, rural banks and cooperative banks will also go live with a required quarterly reporting frequency.
Since the expanded and more granular surveillance of banks’ credit and equity exposures will improve the detection of emerging risks in the financial system, it could avoid a contagion.
The expanded COCREE will have more data points, from 85 to 164 to incorporate other relevant supplemental details, said the BSP in a previous report.
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. The increase in data elements, specifically the identifiers, also improved the capability of the BSP to distinguish one borrower from another,” said the BSP.
In addition, expanded COCREE 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.