Published 3 April 2020, The Daily Tribune

Showing that the private sector can help alleviate the blow of the coronavirus disease 2019  (COVID-19) and the related imposition  of enhanced community quarantine throughout Luzon, many banks, utility companies and other billers announced an extension of payment of bills that fall due within the enhanced quarantine period. Most companies granted their customers thirty (30) days from the original due date to settle their payments, while some outdid the others by granting sixty (60) days.

This form of relief is not limited to retail and corporate clients with respect to their bills, loans and other credits. In a recent announcement, the Bangko Sentral ng Pilipinas issued Memorandum No. M-2020-008 granting regulatory relief for all Bangko Sentral-supervised financial institutions or BSFIs affected by COVID-19 to encourage BSFIs to provide financial relief to their customers and employees amid the crisis.

The Bangko Sentral recognized that the outbreak of COVID-19 has potential significant impact on the operations of BSFIs in terms of risks related to exposures to borrowers and/or industries or businesses severely disrupted or affected by the COVID-19. It took into account the disruption in operations due to measures implemented to control the spread of virus such as lockdown situation, localized work suspension, heightened health and safety risks faced by BSFIs’ employees and customers.

Hence, in Resolution No. 397 dated 13 March 2020, the  Monetary Board of the Bangko Sentral approved the granting of temporary regulatory and rediscounting relief measures to BSFIs. The regulatory relief available to BSFIs that extend loans and credits to affected customers include:

  • Allowing BSFIs to provide financial assistance for loans, advances, and other credit accommodations to officers who are affected, for the grant of loans, advances, or any other forms of credit accommodations to officers, subject to subsequent submission of request for approval within thirty (30) calendar days from the approval thereof of the BSFI’s Board of Directors, to the appropriate supervising department of the Bangko Sentral for regularization.
  • Upon grant by BSFIs of a temporary grace period for payment or upon approval of the restructuring, but subject to reporting to Bangko Sentral, exclusion from the computation of past due ratio of the loans of borrowers in affected areas which should have been reclassified as past due from 8 March 2020, including those loans becoming past due six (6) months thereafter. The exclusion shall be for a period of one (1) year from 8 March 2020 For this purpose, Bangko Sentral documentary requirements for restructuring of loans may be waived. However, the BSFI will adopt appropriate and prudent operational control measures.
  • Non-imposition of monetary penalties for delays incurred in the submission of all supervisory reports due to be submitted from 8 March 2020, up to six (6) months thereafter.
  • Subject to prior approval of the Bangko Sentral, staggered booking of allowance for credit losses.
  • Moratorium, without penalty, on monthly payments due to the Bangko Sentral, for a period of six (6) months from 8 March 2020, for BSFIs with ongoing rehabilitation upon filing of application for extension/rescheduling with the Department of Loans and Credit.
  • Subject to prior approval of the Bangko Sentral, non-imposition of penalties on legal reserve deficiencies starting from reserve week following 8 March 2020, up to six (6) months thereafter.

All BSFIs are eligible to avail themselves of the regulatory relief package within one (1) year from 8 March 2020, the date of declaration of the President of the state of public health emergency under Presidential Proclamation No. 922. The period of eligibility may be extended depending on the developments of the COVID-19 situation.

Prior to availment of the regulatory relief package, BSFIs shall submit, through the appropriate supervising department of the Bangko Sentral, a letter-notification stating the BSFI’s intention to avail of the regulatory relief package, signed by the BSFI’s President or officer of equivalent rank. The notice shall, at a minimum, cite the specific relief measures to be availed and the affected offices of the BSFI. Applicants must also submit a resolution of the Board of Directors authorizing the BSFI to avail of the regulatory relief package.

As the nation hopes for a full recovery, these financial reliefs go a long way in assisting various individuals and businesses during these trying times. Knowing that the Filipino people and affected financial institutions are given ample leeway in their respective finances and businesses give some comfort that the public health crisis  will not turn into an economic crisis.

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