BSP extends relief to banks affected by Agaton

By Kathleen A. Martin, The Philippine Star

Posted at Feb 12 2014 07:51 AM | Updated as of Feb 12 2014 03:51 PM

MANILA, Philippines - The Bangko Sentral ng Pilipinas has extended regulatory and rediscounting relief to banks affected by tropical depression Agaton, which struck Mindanao last month.

In a statement, the central bank said the measures will relieve banks’ financial burden.

Banks qualified for the relief measures are those located in the provinces of Bukidnon, Camiguin, Lanao del Norte, Misamis Occidental, Misamis Oriental, Compostela Valley, Davao del Norte, Davao del Sur, and Davao Oriental.

Those in North Cotabato, Agusan del Norte, Agusan del Sur, Dinagat Islands, Surigao del Norte, Surigao del Sur, and Maguindanao are also eligible for the relief package.

Tropical depression Agaton, which hit the country on Jan. 17, left 70 people dead and destroyed P567-million worth of infrastructure and agriculture crops.

Under the BSP’s regulatory and relief measures, thrift, rural, and cooperative banks may exclude the existing loans of borrowers in affected areas from the computation of past due ratios, and also decrease the general loan loss provision to one percent from five percent for restructured loans.

The same banks may also be exempted from penalties on legal reserves deficiencies, and on delays in the submission of supervisory reports. The BSP will also extend a moratorium on their monthly payments due to the central bank.

Banks will also be allowed to book allowance for probable losses on a staggered basis over a maximum of five years for credit extended to clients affected by the typhoon.

The central bank also said banks may extend financial assistance to their officers and employees affected by the calamity.

Meanwhile, rediscounting banks are given a 60-day grace period to settle outstanding obligations as of Jan. 17. They may also restructure with the BSP current loans of affected borrowers.

“These measures will be in effect for a defined period and covered by additional specific and other prudential conditions,” the BSP noted.

Earlier, the BSP extended the same relief package to banks affected by typhoons Yolanda, Labuyo, Maring, and Santi, the 7.2-magnitude earthquake in Central Visayas, and the southwest monsoon that hit the country last year.

The BSP has also granted the same measures following typhoons Sendong, Pedring, Mina and Juaning in 2011, and typhoons Helen, Gener, and Pablo, and tropical depression Quinta in 2012.