BSP expands calamity relief for banks and borrowers

The Bangko Sentral ng Pilipinas (BSP) has expanded its regulatory relief framework to better support banks and borrowers in calamity-affected areas.

The initiative, formalized through BSP Circular No. 1221, Series of 2025, aims to safeguard financial stability and ensure continuity of banking services during crises.

“These reforms highlight our dedication to enhancing operational resilience of banks and delivering meaningful support to affected borrowers,” said BSP Governor Eli M. Remolona, Jr.

“By ensuring that banks can continue to provide essential services and assistance during times of crisis, we help protect the stability of the banking sector and the welfare of those who depend on it,” Remolona added.

To address the agriculture sector’s heightened vulnerability, the circular encourages banks to grant affected borrowers loan payment deferments of up to 12 months.

Depending on the impact’s severity, deferments may be extended further based on banks’ assessments, historical data, production cycles, rehabilitation timelines, and borrower-specific factors.

No additional charges may be imposed during these deferment periods.

A grace period of up to six months for loan repayments is now available to any borrower in calamity-hit areas, building on relief extended in January to victims of Typhoons Kristine, Leon, Ofel, and Pepito.

The relief also applies to calamities triggered by tropical typhoons, other natural hazards, or human-induced disasters—whether or not these events make landfall.

To support liquidity during emergencies, banks that are not yet part of PhilPaSSPlus or the BSP’s currency management system may withdraw cash from BSP Regional Offices and Branches until 31 December 2027.

This measure ensures continued funding for disaster relief operations and sustains economic activity in affected areas.

The BSP now permits banks to temporarily ease identification requirements for account openings and transactions during calamities.

This adjustment helps individuals without personal documents access financial aid and critical banking services.

Banks may also access their own relief options, such as financial aid for affected staff, relaxed reporting standards for disaster-hit loans, and simplified procedures for altering banking schedules or temporarily closing branches.

Additionally, banks may stagger the recognition of losses stemming from calamity-related damage to physical assets.

By relaxing regulatory obligations, the BSP aims to help banks remain operational and responsive, enabling faster recovery in disaster-stricken communities.