BSP hikes supervisory fees on banks

By Prinz P. Magtulis, The Philippine Star

Posted at Apr 07 2013 10:35 AM | Updated as of Apr 07 2013 06:35 PM

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) has ordered local banks to pay higher annual supervisory fees beginning this year, a move seen bearable to the industry and beneficial to the loss-incurring central bank.

Supervisory fees, according to the Manual of Regulations for Banks (MORB), are annual payments by lenders to partly cover for the expenses the BSP incurs in overseeing the banking sector through regular examinations.

According to Circular No. 791, universal, commercial and thrift banks are required to pay 1/28 of one percent of their average assessable assets yearly, while rural banks and cooperative lenders have to settle 1/40 of one percent.

Prior to the adjustment, big banks pay 1/32 of one percent of their assets, while countryside and cooperative lenders pay 1/45 of one percent.

Average assessable assets are computed by dividing a banks’ total assets with the number of months in operation “during the particular assessment period.”

BSP Deputy Governor Nestor Espenilla Jr., in a text message, said the move was a mere “restoration to the original fee schedule” suspended in 2010 “to assist banks in building up their capital bases.”

The goal then was to ensure that local lenders will be able to meet higher capital requirements set by the Basel III standards that will be implemented in the country by January 2014.

“There is no more need (for discounted fees) since banks are adequately capitalized and quite profitable,” Espenilla pointed out.

The BSP official likewise assured the public that the return to original rates would not result in higher service fees for depositors.

Supervisory fees serve as “additional BSP income,” Espenilla said, and thus the fee hike would benefit the central bank in the process.

The BSP is poised to record its widest loss so far since its inception in 1993 due to high interest payments to deposits and dwindling revenues as a result of lower gold sales, its latest financial statement showed.

Losses amounted to P86.31 billion as of November last year, creeping close to record P86.94-billion loss in 2007.

There are worries the BSP’s ballooning losses may actually prevent it from pursuing its mandate of price and financial stability. The old central bank itself was shuttered after accumulating billions in debts.