BSP provides relief to banks in storm-hit areas

The Bangko Sentral ng Pilipinas is extending regulatory relief to banks in areas hit by tropical storm “Helen” so that they can temporarily relax loan collection from affected customers.

Officials said calamities adversely affect the ability of bank clients to promptly pay their loans and other obligations, thus granting a temporary relief was appropriate.

Under the relief program, loans of borrowers residing in areas affected by the tropical storm will be temporarily excluded from the computation of past due ratios of concerned banks.

Also, the loan loss provision required to cover restructured loans will be temporarily reduced from 5 to 1 percent. Supposed penalties on deficient reserves and delays in submission of documentary reports will also be temporarily lifted.

The BSP also said affected banks would not be required to promptly remit payments on their loans to the central bank, if they have any, so that they can focus on rehabilitation.

Concerned banks will also be allowed to book on a staggered basis, over a maximum of five years, the allowance for probable losses arising from loans they have extended to individuals and corporate borrowers affected by the calamity.

The central bank also said concerned banks may extend financial assistance to employees affected by the calamity, even if the assistance is not included in the Fringe Benefit Program approved by the BSP.

The BSP also said it was granting grace periods and, on a case-to-case basis, restructuring of loans to banks in affected areas.

Banks covered by the regulatory relief are those in the following areas: Ilocos Norte, Ilocos Sur, La Union, Pangasinan, Isabela, Zambales, Occidental Mindoro, Apayao, Benguet and Mt. Province.

Tropical storm “Helen” hit the country on August 13 to 16.

Earlier, the BSP granted regulator relief to banks affected by the southwest monsoon or “Habagat.”

Similar relief measures were granted to banks affected by typhoons Sendong, Pedring, Mina and Juaning in 2011.