Statement of the BSP governor on the regulatory relief for banks

March 16, 2020

I recognize the significant impact of the Corona Virus Disease 2019 (COVID-19) to the general public. In order to alleviate difficulties faced by the general public, we at the Bangko Sentral issued guidelines which will encourage our supervised FIs to provide financial relief to their retail customers, corporate clients and employees affected by the outbreak of the COVID-19. This is part of our efforts to assist the Filipino people in these trying times. 

The regulatory relief measures available to supervised institutions that extend loans and credits to affected customers include: (i) exclusion from the past due loan ratio of loans to affected borrowers for a period of one (1) year, and (ii) staggered booking of provision for probable losses over a period of five (5) years, subject to prior approval of the BSP. Financial assistance may be granted by BSFIs to their employees that are affected by the COVID-19, subject to subsequent regularization with the BSP, if necessary. 

These measures aim to encourage our BSFIs to grant a temporary grace period for loan payments or restructure loan accounts of their borrowers. 

Since the outbreak of the COVID-19 may result in disruption in bank operations, the BSP will not impose monetary penalties on the delayed submission of their supervisory reports and on legal reserve deficiencies, with the latter subject to BSP approval. 

BSFIs under rehabilitation programs may be given a moratorium on their monthly payments that are due to the BSP. 

Banks which intend to avail or have availed of the BSP rediscounting facility are entitled to (i) a 60-day grace period on the settlement of outstanding rediscounting obligations with the BSP, without penalty charges, (ii) restructuring of rediscounted loans of their end-user borrowers affected by the COVID-19, and (iii) relaxed eligibility criteria. 

The measures may already be availed up to one (1) year from 8 March 2020. This period may be extended depending on the developments of the COVID-19 situation. 

In order to avail of the regulatory package, BSFIs only need to notify us of their intention to avail of the regulatory relief and the specific measures that shall be availed depending on their business operations, situation and condition. 

Meanwhile, we strongly encourage our supervised financial institutions to temporarily suspend all fees and charges imposed on the use of online banking platforms or electronic money, including those imposed on the use of Instapay or PesoNet electronic fund transfer. This will enable the general public to facilitate banking transactions during the COVID-19 situation. DMS