By Manila Bulletin
The Bangko Sentral ng Pilipinas (BSP) is extending its prudential relief measure by relaxing the credit risk weight for loans to micro, small and medium enterprises (MSMEs) to ensure continued credit access while the economy is still recovering.
Based on BSP Memorandum No. M-2021-041, signed by BSP Deputy Governor Chuchi G. Fonacier on Sept. 23, the relief measure which reduced the capital treatment for exposures from 75 percent to 50 percent, will still be applied until June 30, 2023.
The regulatory capital treatment of exposures to MSMEs free up capital and enable banks to extend more credit to the MSME sector.
“The Monetary Board, in its Resolution No. 1378 (Setp. 16) approved the amendments to the BSP relief measure on the relaxation of the credit risk weight for loans MSMEs under the BSP’s Risk-Based Capital Adequacy Frameworks to encourage lending to MSMEs and ensure their continued access to financial services,” said Fonacier in the memo.
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