Philippine central bank to relax rules on ASF, COVID-hit banks

BSP may stagger booking allowance of credit losses and waive penalties.

The Bangko Sentral ng Pilipinas (BSP) will grant regulatory relief to banks and quasi-banks (QBs) hit by COVID-19 and the African swine fever (ASF), according to a news release.

This is available to institutions who have suffered losses due to exposures to borrowers, industries and sectors affected by the aforementioned diseases.

Temporary measures may 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 has institutionalised the grant of regulatory reliefs to calamity-hit banks under a circular order dated October 2018 which could be extended to ASF and COVID-19 even without a declaration of a state of calamity in certain areas of the country.

Banks that will avail of the relief will be evaluated by the BSP on a case-by-case basis.

Photo courtesy of Wikimedia Commons.

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