The Bangko Sentral ng Pilipinas (BSP) is expanding relief measures for banks and borrowers affected by disasters, including a six-month recovery period without penalties and eased loan classification rules.

Taking effect two weeks after publication, the BSP’s latest circular amends the regulatory relief policy to support banks in their recovery from calamities and enable them to provide “prompt and direct relief to affected borrowers and other stakeholders.”

According to the BSP, this rule recognizes the country’s exposure to various hazards that may cause certain areas to be placed under a state of calamity.

“Such calamities can disrupt business operations and result in damages and losses, affecting income streams or cash flows, including the paying capacity and risk profile of clients of banks,” the BSP said.

As such, the central bank said banks “may grant a temporary grace period of up to six months to borrowers adversely impacted by calamities in declared affected areas.”

It added that during the grace period, banks should refrain from imposing additional interest, penalties, fees, and other charges to protect borrowers from compounding debt burdens.

Banks are also advised to exclude loans of borrowers affected by calamities from their past due and bad loan calculations once a grace period or restructuring has been granted.

Banks are likewise encouraged to extend payment periods for agricultural loans that were in good standing before the calamity began.

“For borrowers directly engaged in crop production activities, loan payments may be deferred, and repayment terms may be adjusted to align with the production cycle of the affected crop,” the BSP said.

Payment extensions—without additional interest—may start from the onset of the calamity and last between six months and one year, depending on the bank’s assessment and past experience with affected borrowers.

Banks may grant longer payment extensions on a case-by-case basis, depending on the severity of the calamity’s impact, damage to agricultural infrastructure, and the borrower’s recovery conditions.

Similar relief may also be extended to borrowers in the agricultural value chain within affected areas, provided banks verify the borrower’s link to damaged production activities and properly document the assistance.

Additionally, the BSP is temporarily relaxing identification card (ID) requirements for financial transactions in disaster-hit areas to help affected residents access funds more easily.

This covers both physical and online transactions, allowing customers without valid IDs to transact up to ₱50,000 per day with a signed certification.

ID relaxation takes effect upon the declaration of a state of calamity and remains valid for up to three months, unless extended or lifted earlier.