BSP: Extension of regulatory relief won’t be easy for DBP
The Bangko Sentral ng Pilipinas (BSP) is open to extending the regulatory relief it granted to Development Bank of the Philippines (DBP) following its mammoth contribution to the Maharlika Investment Fund (MIF), but the state-run bank would have to give “a very strong” justification for such a request.
Speaking to reporters over the weekend, Deputy Governor Chuchi Fonacier said the decision of the central bank would be pegged on certain metrics like capital adequacy and asset quality.
Ultimately, Fonacier, head of the BSP department that regulates banks, said the verdict would consider the need to maintain a level playing field for the industry.
“So, there are many things to consider. But of course, we guard against moral hazards,” she said.
“We really look at it on a per institution basis. But also, we need to take a look at what is the impact on the entire system because if it’s no longer resulting in a level playing field, then there’s something there,” she added.
Last month, DBP president and CEO Michael de Jesus said that while the bank would meet all the minimum capital requirements this year, the lender would still seek an extension of the relief for “comfort.”
