The Bangko Sentral ng Pilipinas (BSP) is proposing to formalise regulatory relief measures for banks in the Philippines impacted by natural disasters. This aims to bolster the operational resilience of financial institutions during crises, allowing them to continue providing essential services.
A draft circular from the BSP outlines the institutionalisation of temporary relief policies. These were previously granted to banks impacted by severe weather events in late 2024, such as Tropical Storm Kristine and Super Typhoons Leon, Ofel, and Pepito.
These amendments to existing policies, the central bank stated, will offer additional regulatory support. The support aims to enhance banks’ ability to recover and continue providing timely financial services to their clients.
Among the proposed changes, the BSP may permit banks to access regulatory relief within one year from a calamity’s onset. This would remove the requirement for them to wait for a formal declaration of a state of calamity. This adjustment acknowledges that banks often experience operational strain from the moment a disaster strikes.
The proposed relief package also includes flexibility for financial assistance to bank officers affected by calamities. The BSP would extend the deadline for submitting requests for loan accommodations to officers in impacted areas from 30 to 90 days.
Additionally, banks could grant borrowers in affected regions a grace period of up to six months for loan repayments. Banks might also exclude these loans from past due and non-performing loan calculations for one year from the start of the calamity.
Furthermore, the BSP is adopting some measures implemented during the COVID-19 pandemic. Instances include such as relaxed identification requirements for households and micro-businesses, into formal regulations.
For temporary branch closures due to hazards, banks would not require prior notification. However, they must submit a consolidated report within five days. There is also a proposal to allow banks to defer the opening of approved branches in affected areas for up to three years.
The BSP is also suggesting a standardised forbearance measure specifically for agricultural loans. They are recognising the agricultural sector’s vulnerability to climate-related hazards. Under this, agricultural borrowers could have their loan payments deferred, with repayment terms adjusted based on factors like crop cycles.
The BSP has invited stakeholders to provide feedback on the draft circular until 18 June.
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