Calamity-hit nonbanks poised to get regulatory relief
The Bangko Sentral ng Pilipinas (BSP) is considering regulatory relief for nonbank financial firms that would be affected by disasters, aiming to help them bounce back more quickly and continue serving their clients.
The draft circular would extend a framework first introduced for banks, allowing financial institutions to support borrowers and maintain essential financial services during calamities.
Nonbank financial firms under BSP supervision include quasibanks, nonstock savings and loan associations, pawnshops, trust corporations, nonbank credit card issuers, money service businesses and other regulated institutions.
The industry has until April 10 to comment on the proposed regulations.
Key features of the plan include greater flexibility in extending financial assistance to officers and employees of the financial company. Requests for post-BSP approval of loans or credit accommodations to affected staff would see the deadline extended from 30 to 90 calendar days.
Nonbank financial companies could also grant borrowers in impacted areas a grace period of up to six months for loan repayments, with no interest-on-interest or penalties during the deferment. Payments for agricultural loans may be deferred for six to 12 months—or longer—depending on production cycles, in line with crop or sector recovery timelines.
Regulated firms may also waive certain BSP documentary requirements for loan restructuring, provided proper internal controls are observed.
Eligible calamity-affected loan accounts could be excluded from past-due and nonperforming loan ratios for up to one year from the calamity’s start, helping ensure temporary payment difficulties do not distort an institution’s financial indicators. Allowances for credit losses and impairment of damaged physical assets may be booked over a maximum of three years, subject to BSP approval.
For a specified period, nonbank financial institutions may temporarily relax ID requirements for clients who lost documents due to the calamity, subject to limits on transaction size and customer certifications.
For nonstock savings and loan associations, the opening of previously approved service units in impacted areas may be deferred for up to three years, in line with existing regulations.
