BSP temporarily raises single borrower's limit to 30%

The Bangko Sentral ng Pilipinas (BSP) has temporarily raised the single borrower's limit (SBL) for banks and non-banks to 30% from 25% for a six-month period to help the financial sector cope with the effects of the pandemic lockdown.

This measure is part of several temporary regulatory relief measures designed to assist BSP supervised financial institutions (BSFIs) in continuing to provide financial services during the enhanced community quarantine and beyond.

The increased SBL allows banks to lend a larger portion of their capital to a single client, a deviation from the usual practice of spreading risks to avoid losses.

Other regulatory relaxations include eased penalties for reserve deficiencies, relaxed notification requirements for changes in banking hours and temporary branch closures, and more flexible reporting deadlines to the BSP.

These initiatives are intended to help banks and non-banks manage heightened health and safety risks and maintain their ability to serve the public during this extraordinary situation.