THE BANGKO SENTRAL ng Pilipinas (BSP) has further extended the effectivity of relief measures for financial institutions to sustain lending recovery and support the economy amid the pandemic.
Memorandum No. M-2022-024 signed by BSP Deputy Governor Chuchi G. Fonacier said the extension for the implementation of the measures was approved by the Monetary Board on Jan. 13.
“[This will]…sustain momentum of bank lending and ensure continued access to financial services by the public, including vulnerable sectors of the economy,” the memorandum said.
The reduction of the credit risk weight for pandemic-hit micro-, small- and medium-sized enterprises to 50% will be effective until the end of 2022. The provisions originally in Memorandum No. M-2020-034 were supposed to expire by the end of 2021.
The minimum liquidity ratio (MLR) for thrift, rural, and cooperative banks of 16% is also effective for another year and will expire by the end of 2022. The MLR was temporarily cut from 20% originally in April 2020 due to the pandemic.
The effectivity of the 30% single borrowers’ limit to encourage lending was likewise extended to the end of this year.
Regulatory relief for pawnshops through bringing the allowed percentage of their total borrowings to 70% from 50% will also be in effect until Dec. 31.
Separately, the BSP through Memorandum No. M-2022-005 also outlined the extension of operational relief measures for financial institutions. This will help ensure continued delivery of services and protect the health of employees and clients as the pandemic continues.
For one, financial institutions will not be required to notify the BSP in case of temporary closure or changes in their banking days and hours until the end of the year.
The central bank is also allowing lenders to submit until June any supervisory and notification requirements that will fall due in the first quarter.
BSP Governor Benjamin E. Diokno has said they will be “outcome-based” and “not calendar-based” in their approach to gradually unwinding the policy measures it implemented due to the pandemic.
Mr. Diokno last week said in a Bloomberg interview that the BSP is unlikely to hike benchmark rates in the first half of this year as it waits for the economic recovery to become entrenched and unemployment to fall.
The Philippines’ key interest rate has been at a record low 2% for more than a year, withstanding mounting inflation in 2021. — L.W.T. Noble