BSP offers relief to banks with virus-hit clients
Credit to Author: Mayvelin U. Caraballo, TMT| Date: Tue, 25 Feb 2020 16:57:32 +0000
QUALIFIED lenders that sustained losses due to their exposure to borrowers and industries severely affected by the African swine fever (ASF) and the coronavirus disease 2019 (Covid-19) may get relief from the Bangko Sentral ng Pilipinas (BSP).
In a statement on Tuesday, BSP Governor Benjamin Diokno said granting regulatory relief to these banks and quasibanks (QBs) “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,” he added.
According to the central bank, it institutionalized the granting of regulatory relief to banks and QBs hit by calamities under Circular 1071 on the Adoption of Policy Framework on the Grant of Regulatory Relief to Banks/Quasi-Banks Affected by Calamities dated Oct. 10, 2018.
While the circular aims to provide a framework to grant relief to affected banks and support their recovery efforts, its coverage may be extended to ASF and Covid-19 events even without a declaration of a state of calamity in specific areas of the country.
The Bangko Sentral said temporary regulatory relief measures that might be granted include 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.
The central bank would evaluate these banks availing themselves of these measures on a case-by-case basis, it added.
First breaking out in the country in July, ASF struck central and southern Luzon, and has reached Mindanao. The number of pigs culled reached 230,000, the Department of Agriculture said on Thursday.
The figure is equivalent to 1.8 percent of the national swine population of 12.7 million. Of the total, only 15 percent were infected with the hog disease.
First emerging in the city of Wuhan in China’s central Hubei province in December, Covid-19 has spread to more than two dozen countries. It has killed more than 2,600 people — including one, a Chinese tourist, in the Philippines earlier this month — and infected over 79,000 others as of Tuesday.
The virus prompted Beijing to shut down many of its cities and businesses in the East Asian country to suspend operations for weeks. It also disrupted supply chains worldwide.
The World Health Organization has warned that the Covid-19 outbreak risks turning into a pandemic.
WITH REPORTS FROM EIREENE JAIREE GOMEZ AND AFP