The Central Bank of the Philippines (BSP) announced that clients may continue to approach their banks for financial relief even if BSP does not issue a mandatory moratorium or grace period for loans during the Enhanced Community Quarantine from August 06, 2021 to 20, 2021. BSP has urged the supervised financial institutions to renew, restructure, or extend terms of loans of their clients in consideration of their cash flows. Banks and their clients may agree on loan terms that fit the financial capability of the bank and the financing requirements of the client. The regulator also emphasized the role of digital banking framework and noted that the Monetary Board has approved the applications of four digital banks as of July 2021. The approved digital banks are known to be UnionDigital (the most recent entity to receive approval as a digital bank), Overseas Filipino Bank, UNOBANK, and Tonik Digital Bank Inc.
BSP highlighted that the recently issued digital banking framework sets a distinct bank classification for digital banks and provides the corresponding guidelines for their establishment. It is also seen as an integral building block in promoting an enabling regulatory environment that fosters responsible innovation, promotes cyber resilience, and contributes toward advancing the digitalization of the financial sector. In a separate notification, BSP encourages healthy cooperative competition or "co-opetition" among banks and fintech companies that offer breakthrough systems to automate, expand, and facilitate access to financial services. The European Chamber of Commerce of the Philippines hosted an event that gathered key international stakeholders from the private and public sector, chief finance executives, and experts to discuss integration of machine learning, artificial intelligence, and big data analysis in the transformation of the financial services sector. Finally, via another notification, the Financial Stability Coordination Council in the Philippines released a report that assesses the stability of the financial sector in the country, highlighting that debt-servicing remains the main risk and that it is important to be vigilant and pre-emptive against the backdrop of an uneven pace of recovery across jurisdictions.
- Press Release on Pandemic Relief Measures
- Press Release on Digital Banking Framework
- Circular 1105 on Digital Banking Framework (PDF)
- Press Release on "Co-Opetition" of Banks and Fintech Firms
- Press Release on Financial Stability Report
- Financial Stability Report (PDF)
Keywords: Asia Pacific, Philippines, Banking, COVID-19, Digital Banking Framework, Fintech, Credit Risk, Digital Banks, Loan Moratorium, Financial Stability, Regtech, BSP
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