BSP set limits in the amount of loans to MSMEs and to large enterprises.
Monetary Board, the policy-setting of the Bangko Sentral ng Pilipinas (BSP), had set limits in the amount of loans to micro, small, and medium enterprises and to large enterprises that might be used by BSP-supervised financial institutions to serve as an “alternative compliance with the reserve requirements”.
This, as the Bangko Sentral ng Pilipinas said in a statement on Friday that the aggregate loans to micro, small, and medium enterprises and to large enterprises utilized under the relief measure shouldn’t exceed PHP 300 billion and PHP 425 billion, respectively.
BSP Governor Benjamin Diokno said that the limits were calibrated based on various simulations and were meant to make sure that the use of loans as an “alternative mode of compliance” was in line with projected growth and domestic liquidity conditions.
Diokno also said that BSFIs were urged to continue to avail of the relief measures in order to sustain lending and financial support to viable MSMEs and large enterprises.
He also said that access to finance by these businesses would contribute to the recovery of the domestic economy and would help secure their “envisioned path of sustainable and inclusive growth”.
Based on a preliminary BSP data, the average amount of MSME loans and loans to large enterprises used by banks as compliance with the reserve requirements for the reserve week ending November 12, 2020 were PHP 123.6 billion and PHP 29.5 billion, respectively.
“Existing guidelines allow BSFIs to utilize loans MSMEs and LEs as alternative compliance with RR until December 29, 2022, subject to early closure, if warranted and with prior notice,” BSP said.
Moreover, the Bangko Sentral ng Pilipinas said that the BSP would proceed to amend existing policy by closing the eligibility window on the use of the relief measure once the set limits were reached before December 29, 2022.