The Market Monitor Minding the Nation's Business
The Social Security System (SSS) forged a memorandum of agreement with Enterprise Bank (A Thrift Bank) as its new partner in providing housing and business loans to members and employers during ceremonies held at the Executive Lounge of the SSS main building in Diliman, Quezon City, recently.
Enterprise Bank is the first thrift bank accredited in 2016 by the SSS as a participating financial institution (PFI) for the agency’s housing and business loan programs.
The bank is expected to help the state pension fund provide financial assistance to individual members and businesses—including micro, small and medium enterprises—particularly in the Visayas and Mindanao.
Other SSS-accredited PFIs include the Development Bank of the Philippines, Land Bank of the Philippines, Philippine National Bank, and Philippine Veterans Bank.
The agreement came as the Bangko Sentral (BSP) ng Pilipinas granted regulatory and rediscounting relief measures to banks/non-bank financial institutions with quasi-banking functions (NBQBs) with head offices and/or branches in areas affected by the El Niño phenomenon.
Due to the severe drought affecting several provinces, borrowers in the affected areas could face difficulty in paying their loans. These circumstances warrant the BSP’s immediate response through the grant of regulatory and rediscounting relief measures to banks and NBQBs with head offices and/or branches in the areas that have been or may be declared by the National Disaster Risk Reduction Management or the local council, upon the recommendation of the Regional or Local Disaster Risk Reduction Management, as under a state of calamity.
By providing regulatory relief, these financial institutions will be able to provide debt relief to their borrowers.
As approved on May 13 by the Monetary Board (MB), the BSP’s policy-making body, the relief measures for thrift banks (TBs), rural banks (RBs), cooperative (co-op) banks, and NBQBs include the:
• Exclusion of the outstanding loans of borrowers in the affected areas from the computation of past due ratios provided these are restructured or given relief.
• Reduction of the 5-percent general loan-loss provision to 1 percent for restructured loans of borrowers in the affected areas.
• Non-imposition of penalties on legal reserves deficiencies of TBs, RBs, co-op banks, and NBQBs with its head office and/or branches in the affected areas;
• Moratorium on monthly payments due to the BSP for banks with ongoing rehabilitation programs.
• Subject to BSP approval, 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 directly affected areas by El Niño.
For all rediscounting banks, the measures include:
• Granting a 60-day grace period to rediscounting banks in the affected areas to settle the outstanding rediscounting obligations as of declaration date of a state of calamity with the BSP.
• Allowomg banks to restructure with the BSP, on a case-to-case basis, the outstanding rediscounted loans of borrowers affected by El Niño.
These measures will be in effect for one year, reckoned from the date of declaration of a state of calamity, and covered by additional specific and other prudential conditions.