Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno on Monday said it has already provided micro, small and medium enterprises hard hit by the COVID-19 pandemic with regulatory relief.
Diokno was reacting the President Rodrigo Duterte's call during his State-of-the-Nation Address for the BSP and banks to provide such relief to small businesses and allow payment extensions without charges.
“The BSP has already provided lots of regulatory relief measures to MSMEs. The payment extensions are up to the discretion of banks,” Diokno told the Manila Standard.
“The list [of relief measures] is very long. The most recent is the 100 basis points cut in reserve requirements for thrift and rural banksm which released P10 billion for additional lending to MSMEs,” Diokno said.
In May, the policy-setting Monetary Board of the BSP approved measures to assist MSMEs to carry on with their businesses amid the pandemic, and to hasten their recovery in the post-crisis period.
MSMEs account for 99.5 percent of all businesses in the country and generated 5.7 million jobs, equivalent to 63.2 percent of the country’s total employment.
Moreover, the MSME sector contributed 35.7 percent in terms of value added and accounted for 25 percent of the country's total export revenue.
The first set of measures by the BSP were amendments to the regulatory capital treatment of exposures to MSMEs, which frees up capital and enables supervised financial institutions to extend more credit to the sector.
These include the temporary reduction in the credit risk weights of loans granted to MSMEs that are current in status, and assignment of a lower risk weight for MSME exposures that are covered by uarantees.
The BSP also lengthened the period of relief on the reporting of past due and non-performing loans of borrowers affected by the COVID-19 to Dec. 31, 2021, from the original date of March 8, 2021.
Overall, Diokno said these measures are expected to channel liquidity directly to MSMEs while ensuring the health and safety of the financial system.
The chairman emeritus of the Philippine Chamber of Commerce and Industry (PCCI), Francis Chua, expressed his support for the President's programs.
“Once again he showed his love for the country and ordinary people,” Chua said after the SONA.
He added that the business community is aware that the President recognizes the country's predicament and is providing solutions to address each problem.
The Philippine Export Confederation of the Philippines, meanwhile, expressed satisfaction over how the President is handling the COVID-19 pandemic.
“We are happy with the recovery plan. The President mentioned ARISE. We are looking for this kind of support because we are in the recovery period,” said the group's president, Sergio Ortiz-Luiz.