BSP approves relief for banks in typhoon-hit areas

MANILA, Philippines — The Bangko Sentral ng Pilipinas approved the grant of “additional regulatory relief measures” for banks with head offices and branches located in areas devastated by powerful storms late last year.

In a memorandum signed by Governor Eli Remolona Jr. on Jan. 30, the BSP said the relief would also apply to banks with end-user borrowers in areas battered by Tropical Storm “Kristine” and Super Typhoons “Leon” and “Ofel.”

Eligible banks must notify the BSP, through the supervising department, of the intention to avail the regulatory relief measures.

“These relief measures are aimed at enabling banks to carry on with their business operations after extreme weather events and extend equivalent financial relief to their affected borrowers,” the memo read.

READ: Typhoon damage may delay BSP rate cuts

The BSP said lenders may avail of the usual regulatory relief package specified in the manual of regulations for banks, like allowing banks to extend financial aid to affected officers and the non-imposition of penalties for delayed submission of reports, among others.

But the memo provided “enhanced” provisions. For one, the reckoning period of the regulatory relief measures will be on the respective dates of the landfall of the typhoons in affected areas, instead of the date of declaration of state of calamity.

For financial assistance provided to typhoon-hit officers, the request for post-approval of the grant of loans, advances, or any other forms of credit accommodations must be submitted to the BSP on or before March 31, longer than the usual period of 30 calendar days.

Lastly, no penalties will be imposed on legal reserve deficiencies, if any, starting from the reserve week of Oct. 18, 2024, up to six months thereafter. That is a more relaxed rule compared with the typical provision that only allows such a relief starting from the reserve week after the date of declaration of a state of calamity.

Grace period

Meanwhile, the BSP said eligible banks may grant a temporary grace period of up to six months –– or shorter –– to clients affected by the typhoons.

Such relief may cover all outstanding loans with payment of principal and/or interest falling due on the date of landfall of the typhoons.

The loans will be excluded from the computation of past due and non-performing loan ratios of banks. But such credit will still be subject to prudential reporting for supervisory purposes.