Banks rediscount less than P1 billion in MSME loans

MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) said banks have so far availed less than 20 percent of the P5-billion special rediscounting budget for micro, small, and medium enterprises (MSMEs).

BSP Deputy Governor Nestor Espenilla Jr. told reporters that requests for restructuring from banks have not yet reached the P1-billion level since the facility was introduced early this month.

“So far we have been monitoring the situation and the request for restructuring from banks that have informed us is less than P1 billion,” Espenilla added.

Last Oct. 8, the central bank’s Monetary Board decided to earmark P5 billion in special rediscounting budget to help MSMEs ravaged by the recent natural calamities.

The MB decided to allocate additional rediscounting loans as nearly 98 percent of its P60-billion rediscounting budget has already been utilized.

The BSP official earlier said billions worth of loans are at risk of default as the central bank has identified about P500 billion worth of retail loans in areas affected by the typhoons.

The amount was 24 percent of the banks’ total loan portfolio of P2.3 trillion.

Espenilla said, even one percent of the loans at risk would already amount to P5 billion.

“It is hard to tell, it is too soon to tell at this time. The P500 billion is the estimate of retail loan portfolio affected in the calamity areas,” he said.

The MB also decided to liberalize the guidelines on collaterals by including extended or restructured loans among the acceptable rediscountable papers by the BSP. Banks have until March 31 next year to apply for special rediscounting lines and up to Dec. 31 to avail from these loans that could be renewed based on the original terms of the loan not exceeding five years.

Other relief measures for banks to enable them to extend assistance to bank customers adversely affected by the natural calamities include the exclusion of the existing loans of borrowers in affected areas from the computation of past due ratios, provided these are restructured or given relief.

Furthermore, the general loan loss provision for restructured loans of borrowers in affected areas would be reduced to one percent from five percent. The penalties for delays in the submission of supervisory reports were also suspended.

Banks would also be allowed to provide financial assistance to their officers and employees who were affected by the calamity including those assistance that may not be within the scope of the existing BSP-approved Fringe Benefit Program.

The central bank also granted a 60-day grace period to settle the outstanding rediscounting obligations as of Sept. 28 with the BSP of all rediscounting banks in the affected areas. It also allowed banks to restructure with the BSP the outstanding rediscounted loans of borrowers affected by the calamity.