BSP eases rules for disaster-hit banks

The Bangko Sentral ng Pilipinas (BSP). INQUIRER FILE PHOTO / GRIG C. MONTEGRANDE

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) has approved additional relief measures for banks in areas hit by calamities. The intention is to strengthen their recovery and ensure continued service to clients during crises.

In a new circular, the BSP said the measures were designed to bolster the operational resilience of financial institutions and support business continuity in a country frequently battered by typhoons, earthquakes, and volcanic eruptions.

“The Bangko Sentral recognizes the vulnerability of the Philippines to both natural and human-induced hazards. which can lead to certain areas being declared under a state of calamity,” the BSP said.

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

Banks with head offices, branches, branch-lite units or customers located in disaster-stricken areas may avail themselves of the relief package within the prescribed period, the BSP said.

Under the guidelines, lenders may extend financial assistance to officers affected by calamities. They may also assist employees who are not officers but have been similarly impacted.

The BSP said banks could grant a temporary grace period of up to six months to borrowers in affected areas. Loans under such arrangements may be excluded from the computation of past-due and nonperforming loan ratios if payments are deferred or restructured.

Deferred payments

Lenders were likewise encouraged to grant payment deferments for agricultural loans.

The temporary closure of a bank branch or branch-lite unit in disaster-hit areas will not be subject to the usual notification requirements, the BSP added.

To ensure continued access to physical currency during states of calamity, the central bank will temporarily allow lenders not yet registered with PhilPaSS Plus nor enrolled in the Regional Operations Sub-Sector’s currency management system to withdraw cash directly from BSP’s regional offices.

The BSP said the same measure would apply during work suspensions caused by events that significantly disrupt normal banking operations.