MANILA, Philippines– Banking regulations were relaxed for lenders located in areas affected by the African Swine Flu (ASF) and Coronavirus Disease-19 (COVID-19), the first time such action was taken by the central bank as a response to health emergencies.
The Bangko Sentral ng Pilipinas (BSP) said Tuesday “temporary” regulatory relief were extended, including staggered booking of credit losses, waiving of penalties on reserve deficiencies and exempting their clients’ defaulted loans, which can damage a bank’s financial standing, from accounting books.
While a regulatory leeway is only typically given to lenders in areas under a state of calamity, BSP Governor Benjamin Diokno said like natural calamities, health emergencies like ASF and COVID-19 also have a “potentially crippling impact” on “key industries.”
BSP previously granted regulatory relief to lenders affected by the Taal volcano eruption.
“We believe the grant of regulatory and rediscounting relief measures is also applicable to financial institutions whose clients have suffered from adverse effects of these crises,” he said in a statement.
As per BSP’s Circular 1017, series of 2018, banks may avail of the relief for one year. “Banks that will avail of relief measures will be evaluated on a case-to-case basis,” the central bank said.
As of Monday, 156 individuals are admitted for possible COVID-19 infection in 13 of 17 regions in the Philippines, Health department data show.
The country so far has three confirmed cases of the disease, two of whom had already recovered from symptoms, while one had died.
Meanwhile, ASF infection, which is not known to affect humans, had been recorded in hogs located in select areas in Eastern Visayas, Davao, Central Luzon.