Banks lending to farmers hit by El Nino get relief from BSP
Banks lending to farmers crippled by the El Nino phenomenon are getting regulatory relief from the Bangko Sentral ng Pilipinas (BSP) that will allow them to continue lending to the sector and help farmers recover.
“Due to severe drought conditions affecting several provinces, borrowers in the affected areas could face difficulty in paying their loans,” the BSP said.
“These circumstances warrant BSP’s immediate response through the grant of regulatory and rediscounting relief measures to banks and NBQBs (nonbank quasi banks) with head offices and/or branches located in the areas which have been declared by the National Disaster Risk Reduction management or the local sanggunian, upon the recommendation of the Regional or Local Disaster Risk Reduction Management, as under a state of calamity,” it added. “By providing regulatory relief, these financial institutions will be able to provide debt relief to their borrowers.”
The Monetary Board, the policy making body of the central bank, approved the grant of relief to thrift banks, rural banks, cooperative banks, and NBQBs in areas declared to be in a state of calamity because of the drought. Among the measures provided are:
· A 60-day grace period to all rediscounting banks in settling outstanding rediscounting obligations with the BSP
· Restructuring of their loans with the BSP, on a case-to-case basis, the outstanding rediscounted loans of borrowers affected by the El Nino
· Moratorium on monthly payments due to BSP for banks in on ongoing rehabilitation program
· Booking of allowance for probable losses on a staggered basis over a maximum of five years for all types of credits extended to individuals and businesses affected by the El Nino