Banks will have to report even more details about their property financing activities under new rules approved by the Bangko Sentral ng Pilipinas’ (BSP) policy-making Monetary Board.
These “enhancements to prudential reporting requirements,” the BSP said on Friday, would strengthen its oversight over banks with the aim of maintaining financial sector stability.
“The reportorial enhancements form part of BSP’s macroprudential toolkit and are being deployed to sharpen the BSP’s assessment of banking system exposures to the property sector,” the central bank said.
“Granular information”— meaning specific details—will have to be submitted regarding real estate loans for mid- and high-end housing units in addition to socialized and low-cost housing
Covered banks will also need report what commercial project — residential units, office buildings, malls and factory/plant facilities — they are financing.
Universal and commercial banks (U/KBs) will have to submit a new Report on Project Finance Exposures, which should include information on the type of infrastructure project and project phases.
“This report will enable the BSP to obtain a better grasp of the extent and quality of U/KB exposures to project finance, especially since demand for project finance is expected to increase and gain further traction as the country moves towards achieving its infrastructure goals,” the central bank said.
“A deeper understanding of these exposures will improve the quality of BSP’s financial surveillance process as well as enable the BSP to adopt calibrated policy measures that shall be targeted only towards areas that warrant supervisory action,” it added.
The measures will support the existing regulatory framework, which caps real estate loans to 20 percent of a bank’s total loan portfolio net of interbank loans, and stress test limits adopted by the central bank.
A test run for the submission of the revised Expanded Report on Real Estate Exposures will be done for the first quarter reporting period next year, to be followed by full implementation “starting with the quarter-ending 30 June 2018,” the BSP said.