BANKS continued to actively lend and restructure borrower loans during the Covid-19 pandemic, according to the Bangko Sentral ng Pilipinas (BSP).
“Partly due to the BSP’s existing Covid-19 regulatory toolkit and political reforms, banks continued to actively lend and restructure borrower loans during the pandemic,” BSP Governor Benjamin said on Thursday. Diokno, during a briefing.
For example, he said, the amount of restructured loans increased 2.6 times to 338.5 billion pesos at the end of September 2021, from 130.9 billion pesos the year before.
By the end of September this year, the share of restructured loans in the total loan portfolio had risen to 3.1%, from 1.2% a year ago.
In the meantime, Diokno pointed out, the amount of new loans granted by Universal and Commercial Banks (UKBs) on a monthly basis has remained reasonably constant, varying between 6 and 8% of the outstanding loans in the reference month.
In September 2021, universal and commercial banks issued 816.1 billion pesos in new loans, representing 8.1% of the UK industry’s total loan portfolio of 10,000 billion pesos at the time.
“Banks also continue to lend or restructure loans to micro, small and medium enterprises or MSMEs (micro, small and medium enterprises),” Diokno added.
Banks used an average of P202.2 billion in loans to MSMEs to meet reserve requirements for the reserve week ended on November 4 this year. This is a substantial increase from the 8.7 billion pesos in MSME loans reported in April 2020.
Diokno also said the central bank was working to increase incentives for banks to provide financial relief and new loans to borrowers.
“With the continued normalization of economic activity, sustained financing for households and productive businesses will be crucial for their recovery and the resumption of operations in a post-Covid-19 environment,” he said.
In support of the country’s steady trajectory towards balanced growth, Diokno pointed out that Bangko Sentral recently approved two relief measures.
Amid the pandemic, he pointed out, the PASB provided additional relief measures on restructured loans and the impact of loan provisioning on bank capital to encourage its supervised financial institutions to grant new loans. and provide financial relief to borrowers.
Both measures are consistent with the recommendations and practices of the Basel Committee on Banking Supervision in other jurisdictions.
â€œBSP expects the back-to-back relief measures to further strengthen the bank’s efforts to assist its customers through the extension of appropriate financing arrangements,â€ he said.