On Sunday, a food vendor sets up a plastic cover to protect her in her stall in Paco, Manila. PHOTO BY MICHELLE ALQUINTO
BANK loans to small businesses soared to more than 183 billion pesos after Bangko Sentral ng Pilipinas (BSP) relaxed reserve requirement rules for lenders, BSP Governor Benjamin Diokno said on Friday. in the Manila Times mid-year 2021 economic report.
“As of the week of June 17, 2021, the banking system allocated an average of 183.9 billion pesos in loans to MSMEs (micro, small and medium-sized enterprises) as an alternative to respecting reserve requirements,” he said. of the forum.
This is much more, Diokno added, than the average loans of 8.7 billion pesos to MSMEs reported for the week ending April 30, 2020. The current level is also equivalent to 12.6% of total reserve requirements, against 0.6% on April 30. 2020.
In April, the central bank’s Monetary Board adopted a policy recognizing new loans to small businesses as an alternative form of reserve requirement compliance from April 24, 2020 until December 30, 2021.
He changed that policy the following month to allow lenders to count their large business loans against those requirements.
In early October, Bangko Sentral extended the initial deadline for regulatory relief until the end of 2022.
According to Diokno, the amended policy is just one of many central bank policies, regulatory and relief measures aimed at helping small businesses throughout the 2019 coronavirus disease (Covid-19) pandemic. .
He added that the BSP Monetary Board has also temporarily lowered the risk weights of loans to MSMEs. In addition, the updated risk-based capital structure for banks has been postponed from the end of 2021 to the end of 2022.
The period of relief on the declaration of past due and non-performing loans from borrowers affected by Covid-19 has also been extended until December 31, 2021 compared to the initial schedule of March 8, 2021.
“These policing issues reinforce BSP’s earlier statements that relax know-your-customer requirements for retail clients to facilitate their access to formal funding channels,” said Diokno.
He added that small businesses are also supported in the following ways: promoting innovative financing mechanisms; improving digital and financial infrastructure by addressing the risks and cost issues that have made lending to MSMEs and agriculture a high-risk, low-margin proposition; and filling information and data gaps for more evidence-based policy making and addressing market information asymmetry.
Going forward, Diokno said Bangko Sentral is dedicated to helping the economy for as long as needed to ensure a strong and long-term recovery.
He added: “As such, the BSP will maintain its accommodative stance for as long as necessary to sustain and sustain the recovery of the economy.”