NORMALLY very stringent-banking rules temporarily do not apply on a large swath of the country inundated by rampaging waters or hit by landslides the past many weeks.
The monetary board, the policymaking body of the Bangko Sentral ng Pilipinas, has lifted normally strict regulatory standards applied against thrift, rural and cooperative banks operating in areas cited by the National Disaster Risk Reduction and Management Council as having been visited by disruptive weather.
The exempt areas read like a weather bulletin from the Philippine Atmospheric Geophysical and Astronomical Services Administration or Pag-asa and covers Palawan, the Bicol area, and various flood-stricken provinces in the Visayas and Mindanao.
The regulatory relief includes the exclusion from the mandatory reporting of all past-due accounts for one year starting Dec. 29, 2010 to Dec. 31, 2011 as long as the delinquency is shown to have been calamity-related and that prudent operational controls are put in place.
The relief means the past due loans of lenders in afflicted areas could widen without the banks having to make expensive provisioning that limits further their ability to mobilize funds for the stricken population.
As a further concession, the general loan-loss provisioning had also been cut to just 1 percent instead of the usual 5 percent and will remain in place for a year till end-2011.
Reserve-deficient banks should likewise not be penalized during a six-month period ending June 30 this year.
The banks have also been allowed to book allowances for probable losses on a staggered basis over a five-year stretch, subject to prior BSP approval on loans outstanding as of Dec. 29, 2010.
Likewise, affected banks have been allowed to provide financial assistance to officers and employees even beyond the scope of existing BSP-approved fringe-benefit programs.
Banks with outstanding rediscounting obligations as of Dec. 29, 2010 were also given two months or 60 days to settle these obligations.
The regulatory relief extended in this case cover banks operating not just in Palawan but also those in Region 5 or the provinces of Albay, Sorsogon, Camarines Sur and Catanduanes; Region 6, which is principally Negros Occidental; Region 7 covering Cebu, Bohol, Negros Oriental and Siquijor; Region 8 covering Southern Leyte, Eastern Samar, Western Samar, Northern Samar and Leyte; Region 10 principally covering Lanao del Norte and Misamis Occidental; and Region 11 comprising Compostela Valley, Davao del Norte, Davao del Sur and Davao Oriental.
Also included was Region 12 or South Cotabato, the Caraga area, Surigao del Norte, Surigao del Sur, Agusan del Norte, Agusan del Sur and Maguindanao in the Autonomous Region of Muslim Mindanao.
