Lenders affected by the tropical depression Maring will be subject to less strict regulatory measures on loans and, in turn, can provide debt relief to their borrowers, the Bangko Sentral ng Pilipinas (BSP) said.
Last Sunday the Central Bank released a statement saying banks in places ravaged by the tropical depression—which hit Luzon in September—will be granted temporary regulatory and rediscounting relief measures.
The central bank said banks and non-bank financial institutions with quasi-banking functions whose head offices and branches are located in the areas that were identified by the National Disaster Risk Reduction and Management Council as affected by the tropical depression will be given the usual package for temporary relief.
These areas include Malabon City, Manila City, Marikina City, Navotas City, San Juan City, Taguig City and Valenzuela City in the National Capital Region (NCR), and Bulacan and Zambales in Central Luzon.
Banks and other lenders in Batangas, Cavite, Laguna, Quezon and Rizal in Southern Luzon will also be given the same package.
With these measures, the outstanding loans of borrowers in the affected areas will now be excluded from the computation of past due ratios of smaller banks in the areas, provided these are restructured or given relief.
All banks are also allowed to provide financial assistance to their officers and employees affected by the calamity even if the purpose of the assistance is not identified as eligible for credit accommodation under their existing BSP-approved Fringe Benefit Programs.
Other measures also include the non-imposition of penalties on legal reserves deficiencies of smaller banks with head office and/or branches in the affected areas, and a moratorium on monthly payments due to the BSP for banks with ongoing rehabilitation programs.
Also, subject to BSP approval, there will be booking of allowance for probable losses on a staggered basis over a maximum of five years for all types of credits extended to individuals and businesses in calamity-affected areas.
For all rediscounting banks affected, meanwhile, the BSP is granting a 60-day grace period to settle the outstanding rediscounting obligations as of declaration date of a state of calamity with the BSP.
It also gave moratorium on monthly payments due to the BSP for smaller banks with ongoing rehabilitation programs.
The BSP said the measures will be in effect for a defined period and are covered by additional specific and other prudential conditions.
This temporary regulatory and rediscounting relief measures are usually extended by the BSP to areas affected by natural calamities, such as typhoons and El Niño.
Image credits: AP