The Bangko Sentral ng Pilipinas (BSP) is granting regulatory and rediscounting relief measures to thrift, rural, and cooperative banks to enable them to similarly assist and ease the financial burden of bank customers adversely affected by landslides and flooding which devastated several parts of the country starting 29 December 2010.
Eligible for the relief measures are those in the following areas identified by the National Disaster Risk Reduction and Management Council on 13 January 2011: Region IV-B: Palawan; Region V: Albay, Sorsogon, Camarines Sur, and Catanduanes; Region VI: Negros Occidental; Region VII: Cebu, Bohol, Negros Oriental, and Siquijor; Region VIII: Southern Leyte, Eastern Samar, Western Samar, Northern Samar, and Leyte; Region X: Lanao del Norte and Misamis Occidental; Region XI: Compostela Valley, Davao del Norte, Davao del Sur, and Davao Oriental; Region XII: South Cotabato; CARAGA: Surigao del Norte, Surigao del Sur, Agusan del Norte, and Agusan del Sur; and Autonomous Region of Muslim Mindanao: Maguindanao.
Similar relief measures were extended by the BSP to thrift and rural/cooperative banks in provinces that were hit by previous typhoons such as Cosme, Frank, Ondoy, Pepeng, and Juan.
As approved last 20 January 2011 by the Monetary Board, the BSP’s policy-making body, the temporary relief measures include:
1. Excluding existing loans of borrowers in affected areas from the computation of past due ratios provided these are restructured or given relief;
2. Reducing the 5% general loan loss provision to 1% for restructured loans of borrowers in the affected areas;
3. Non-imposition of penalties on legal reserves deficiencies with head office and/or branches in the affected areas;
4. Moratorium on monthly payments due to BSP for banks with ongoing rehabilitation programs;
5. Subject to BSP approval, booking of allowance for probable losses on a staggered basis over maximum of five years for all types of credit extended to individual and businesses directly affected by landslides/flooding;
6. Non-imposition of monetary penalties for delays in the submission of supervisory reports;
7. Allowing banks to provide financial assistance to their officers and employees who were affected by the calamity including those assistance that may not be within the scope of the existing BSP-approved Fringe Benefit Program;
8. Granting of a 60-day grace period to settle the outstanding rediscounting obligations as of 29 December 2010 with the BSP of all rediscounting banks in the affected areas; and
9. Allowing banks to restructure with the BSP, on a case-to-case basis, the outstanding rediscounted loans of borrowers affected by the calamity.
These measures will be in effect for a defined period and covered by additional specific and other prudential conditions.