BSP realigns P5-B unused typhoon fund to help El Nino victims

The central bank realigned P5 billion in unused funds previously set aside to help bank customers adversely affected by tropical storm Ondoy and typhoon Pepeng last year to help clients affected by the El Nino weather condition. Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. issued Memorandum Order No. M-2010-007 laying down the guidelines for the regulatory relief for rural and cooperative banks in areas affected by the El Nino phenomenon. The package of relief measures allows the use of the unavailed portion of P5 billion budget exclusively for the restructuring of rediscounting obligations of banks and new availments of banks intended as rediscounting relief for bank customers adversely affected by the typhoons last year. Tetangco said the rules also gives affected rural and cooperative banks up to May 31 to apply for a special rediscounting line and up to December 31 this year to avail themselves of such line. He pointed out that the loans availed by affected the affected banks under the special rediscounting lines are subject to renewal based on the original term of the loans but not to exceed five years He added that the package also allows the rediscounting banks to restructure with the BSP on a case-to-case basis the outstanding rediscounted loans of their end-user borrowers affected by the calamity. The BSP chief said the package approved by the Monetary Board provides temporary relief to banks including a temporary grace period for payment or upon their restructuring and subject to reporting to the BSP, exclusion of the loans of the affected borrowers of rural and cooperative banks. These restructured loans should have been reclassified as past due loans under Section X306 of the Manual of Regulations for Banks on March 1 and those maturing up to April 30 from computation of PDL ratio. It also calls for the reduction of the five percent general loan loss provision to one percent for restructured loans to borrowers of rural and cooperative Banks in affected areas from March 1 to April 30. He added that the relief also calls for the non-imposition of penalties on legal reserve deficiencies of rural and cooperative banks in the affected areas incurred or that maybe incurred starting from reserve weeks ended March 4 March to September 30 provided these reserve deficiencies could be shown to be calamity related rather than due to pre-existing condition. According to him, the package also allows the booking of allowances for probable losses for all types of credits extended to individuals and businesses directly affected by El Nino on a staggered basis over a maximum period of five years reckoned from April 8 on loans outstanding as of March 31, 2010. Entitled to the relief measures are banks located in all the regions excluding Region VIII and the National Capital Region (NCR) identified by the National Disaster Coordinating Council (NDCC). These include La Union , Pangasinan, Ilocos Norte, and Ilocos Sur in Region 1; Cagayan, Isabela, Nueva Vizcaya, and Quirino in Region II; Bataan , Bulacan, Nueva Ecija, Pampanga, Tarlac, and Zambales in Region III; Cavite , Laguna, Batangas, Rizal, and Quezon in Region IV-A; Albay (six municipalities and two cities), Camarines Sur (18 municipalities and two cities), Camarines Norte (nine municipalities), Sorsogon (one municipality), Catanduanes (six municipalities), and Masbate (14 municipalities and one city) in Region V; and Antique, Guimaras, Iloilo , Negros Occidental and Capiz in Region VI. Also covered are 28 mountain barangays in Cebu City , and Negros Oriental in Region VII; Zamboanga del Norte, Zamboanga Sibugay, and Zamboanga City in Region IX; Lanao del Sur, Lanao del Norte, Bukidnon, Misamis Occidental, and Misamis Oriental in Region X; Davao del Sur, Davao del Norte, and Davao City in Region XI; Cotabato Province , Sultan Kudarat, Sarangani, South Cotabato, and Maguindanao Province (75 municipalities) in Region XII; and Ifugao, Kalinga, Apayao, Mt. Province and Abra in the Cordillera Administrative Region. Damages brought about by the El Nino phenomenon would reach P20 billion based on estimates by the Department of Agriculture. - GMANews.TV