BSP requires detailed reports on loan, deposit rates

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By Melissa Luz T. Lopez, Senior Reporter

THE CENTRAL BANK will soon require lenders to submit more detailed reports on the interest rates they impose on loans and deposits, which is seen to boost transparency and enhance the regulator’s watch on the market.

The Bangko Sentral ng Pilipinas (BSP) will mandate banks to submit more specific data capturing the interest rates they levy on various loan and deposit products, as the central bank looks to capture “greater granularity” in order to enhance market monitoring.

Circular 1029 issued by Deputy Governor Chuchi G. Fonacier on Jan. 25 lists several changes to reporting templates as they now require universal and commercial banks to submit more detailed reports to the BSP’s Supervisory Data Center, such as the weekly data on the volume of transactions and weighted average interest rates on deposits received and loans granted with relevant details as to maturity, size and product category/type.

On top of this, lenders must also submit a monthly report on the weighted average interest rate on outstanding loans and deposits by product category or type. The reports specifically require banks to report the volume and interest rates charged for peso-denominated loans and receivables, peso deposits, and dollar deposits.

Currently, the BSP publishes quoted lending rates of commercial banks on the central bank web site.

The financial firms are given the whole month of February as the transition period, while all changes to the reporting templates must take effect by March 1.

“The information generated from said reports provide analytical support for policy decisions as well as assessment of interest rate risk exposure of the industry,” the central bank said in a statement, noting that the latest reforms will promote greater consumer protection and market transparency.

“These will provide consumers with more valuable information to compare costs and evaluate their needs based on the best loans and deposits products available to them.”

While the BSP’s Monetary Board sets the benchmark interest rates for the Philippine financial system, lenders set their own lending and deposit rates by adding a premium on top of the central bank’s key policy rates.