BSP Governor Benjamin Diokno. CONTRIBUTED PHOTO
The BANK’s loans to micro, small and medium-sized enterprises (MSMEs) have increased to more than 200 billion pesos after the Bangko Sentral ng Pilipinas (BSP) lowered the reserve requirement rules for lenders, according to the governor of the BSP Benjamin Diokno.
“For the week ending October 31, 2021, the banking system allocated an average of 202.2 billion pesos in loans to MSMEs as an alternative to respecting reserve requirements,” he announced Wednesday at the Arangkada Philippines forum. Common Foreign Chambers of the Philippines.
Diokno said this was a significant increase from the 8.7 billion pesos in average loans to MSMEs reported for the week ending April 30, 2020. In addition, the current level stands at 13.6% of total required reserves, up from 0.6% on April 30, 2020. In April of last year, the Central Bank’s Monetary Council established a policy that recognizes new loans to small businesses as an alternative to the minimum reserve requirement on the 24th. April 2020 to December 30 of this year.
He amended the regulations the following month to allow lenders to account for their loans to large businesses according to those standards. In early October last year, Bangko Sentral extended the first regulatory relief deadline until the end of 2022. “BSP recognizes the crucial role of micro, small and medium enterprises in the Philippine economy,” said underlined Diokno.
The Monetary Board has also approved prudential measures to help MSMEs, he added.
It was at this point that the regulatory capital treatment of MSME exposures was changed to temporarily lower the risk weights of MSME loans. The updated risk-based capital structure for banks has also been postponed from the end of 2021 to the end of 2022.
The relief period on reporting past due and non-performing loans from borrowers affected by the pandemic has also been extended to December 31 of this year, from the original deadline of March 8, 2021, subject to reporting. at the central bank, the Bangko The head of Sentral further pointed out.