The Bangko Sentral ng Pilipinas (BSP) said 17 prudential reports will go on live application programming interface (API) using the reference period of June 30, 2023 to further strengthen monitoring of banks.
BSP Memorandum No. M-2023-022 signed by BSP Deputy Governor Chuchi G. Fonacier on Thursday, July 20, provides fresh guidelines on the submission of reports using extensible mark-up language (XML) format through the API.
Fonacier said universal and commercial banks and their subsidiary thrift banks and rural/cooperative banks as well as digital banks will submit their own-generated XML report via machine-to-machine modality as coordinated with the BSP while stand-alone thrift banks and rural/cooperative banks can still use the integral financial supervision system (IFSS) submission portal under the BSP relationship management system (BRMS) until further notice.
Stand-alone thrift banks and rural/cooperative banks, however, will submit an updated user registration form.
“The XML submitted shall be considered the official submission of the bank, thus FI Portal and electronic mail submissions for the mentioned reports and reference period shall be discontinued,” said Fonacier.
The memo also included a grace period for non-imposition of penalties for reporting violation for the first two reporting periods beginning live implementation.
Seven of the 17 prudential reports to go on live API are the following: Financial Reporting Package (FRP); Basel 1.5 Capital Adequacy Ratio or CAR Report; Basel III Capital Adequacy Ratio Report; Basel III Leverage Ratio or BLR Report; Basel III Liquidity Coverage Ratio or LCR Report; Basel III Net Stable Funding Ratio or NSFR Report; and the Expanded Report on Real Estate Exposures or ERREE.
The other 10 prudential reports are: Financial Reporting Package for Trust Institutions or FRPTI; Income Statement on Retail Microfinance Operations and Report on Microfinance Products; Minimum Liquidity Ratio or MLR Report; Report of Selected Branch Accounts; Report on Compliance with Mandatory Credit Allocation Required Under Republic Act Np. 6977 (as amended by RA 8289 and 9501) or the MSME Compliance Report; Report on Cross-Border Financial Positions; Report on Electronic Money Transactions; Report on Project Finance Exposures or RPFE; Report on Repurchase Agreements of Banks/Quasi-Banks or the REPO Report; and Stress Testing Reports Covering Credit and Market Risks or STRESS TEST.
Earlier this month, the BSP issued BSP Circular No. 1177, amending the due date and category of prudential reports in XML through API.
Fonacier in the circular memo said that the category of all prudential reports submitted using the XML format through the API are now amended as Category A-1 which was based on the current category of the FRP.
She said reports will be considered as a single report “for the purpose of determining compliance with the prescribed submission requirements and the computation of the corresponding penalty for reporting violations.”
The BSP has a goal of strengthening its surveillance of all banks and changing the category and due dates for the prudential reports migrating to API is part of this objective.
The migration to API platforms was adopted in stages for efficiency in data preparation and in the validation and processing of information by the BSP.
Basically, API is a set of standard messages between two computer systems – such as BSP and the banks – for machine-to-machine submission and validation of reports.
Besides XML, the API accepts other file formats such as MS Excel, PDF, CSV, among others. The BSP however, prefers XML because it restructures various reports to a single report, thus enabling a more streamlined reporting process.
The BSP first announced the API adoption in 2019 to enable the BSP to eliminate significant human intervention in the reporting process. The API system will change the central bank’s regulatory reports process and will minimize risks related to human intervention and e-mail transmission of reports at less costs for BSP supervised financial institutions or BSFIs.
BSP Governor Eli M. Remolona said last Monday, July 17, that API RegTech/SupTech or the regulatory and supervisory technology processes will allow BSP to have available bank and non-bank data on a daily basis instead of monthly.
Remolona said this makes their job of supervising BSFIs “much easier”.
Last January 1, the BSP adopted the Advance Suptech Engine for Risk-based Compliance or ASTERisC* which streamlines and automates regulatory supervision, reporting, and compliance assessment of all BSFIs’ cybersecurity risk management.
Remolona, who took the helm as BSP’s seventh governor last July 3, said BSP will benefit from digitalization by digitizing reportorial requirements, develop digital platforms, and employ various artificial intelligence integration projects.
As a cloud-based solution, ASTERisC* supports the BSP's end-to-end process on cybersecurity supervision and oversight to include cyber-profiling, cyber incident reporting and cybersecurity control self-assessments, among others.