The Manila Times

Loans to enterprises reach P197B

MAYVELIN U. CARABALLO

LOANS extended by banks to micro up to large enterprises have hit P197 billion since the Bangko Sentral ng Pilipinas (BSP) eased the reserve requirement rules for lenders.

In a report released over the weekend, the central bank said for the week ending last March 25, loans extended to micro, small and medium enterprises (MSME) used as alternative compliance amounted to P163.5 billion, translating to 11.5 percent of total required reserves.

Meanwhile, loans to large enterprises used as alternative compliance hit P33.7 billion, amounting to 2.4 percent of total required reserves.

“The data on banks’ utilization of MSME loans as alternative compliance with the reserve requirements confirm banks’ support for MSME financing,” the BSP said.

In April last year, the Bangko Sentral’s policymaking Monetary Board adopted a policy recognizing new loans granted to MSMEs as a form of alternative compliance with reserve requirements effective April 24, 2020 until Dec. 30, 2021.

It amended this policy the following month to allow lenders to count their loans to large enterprises as part of those requirements.

Last October, the central bank extended the initial deadline for the regulatory relief until the end of 2022.

The BSP also approved a limit on loans

to MSMEs and large enterprises used as alternative compliance at P300 billion and P425 billion, respectively.

“Once the set limits are reached prior to 29 December 2022, the BSP will proceed to amend existing policy by closing the eligibility window on the use of the relief measure,” the Bangko Sentral noted.

Besides the relaxed reserve requirement rules, the central bank said it fosters a conducive regulatory environment for the continued development and growth of MSMEs.

In this regard, it supports the passage of the Government Financial Institutions (GFIs) Unified Initiatives to Distressed Enterprises for Economic Recovery bill, which seeks to strengthen the capacity of GFIs, namely Land Bank of the Philippines and Development Bank of the Philippines, in order to provide the needed assistance to MSMEs and other strategically important companies.

Business Times

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2021-05-10T07:00:00.0000000Z

2021-05-10T07:00:00.0000000Z

https://manilatimes.pressreader.com/article/281788516936481

The Manila Times