BSP extends regulatory relief to banks affected by ASF, Covid-19 outbreak

THE Bangko Sentral ng Pilipinas (BSP) has made available a grant of regulatory relief to banks and quasi banks (QBs) that have sustained losses due to exposures to borrowers, industries and sectors severely affected by the African swine fever (ASF) and the Covid-19.

“This is in recognition of the potentially crippling impact of these events on key industries. We believe that the grant of regulatory and rediscounting relief measures is also applicable to financial institutions whose clients have suffered from adverse effects of these crises,” BSP Gov. Benjamin Diokno said.

The BSP has institutionalized the grant of regulatory relief to banks and QBs impacted by calamities under Circular 1071 on the adoption of policy framework on the grant of regulatory relief to banks/quasi-banks affected by calamities on Oct. 10, 2018. While the circular is aimed at providing a framework to systematically grant relief to banks affected by calamities and to support their recovery efforts, its coverage may be extended to the ASF and Covid-19 events even without a declaration of a state of calamity in specific areas of the country.

Temporary regulatory relief measures that may be granted include, among others, staggered booking of allowance for credit losses, non-imposition of penalties on legal reserve deficiencies and non-recognition of certain defaulted accounts as past due.

Banks that will avail themselves of the relief measures will be evaluated by the BSP on a case-by-case basis. (PR)