BSP to monitor credit, equity exposures of small banks

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) is set to closely monitor the credit and equity exposures of small banks to further strengthen the surveillance and analysis of emerging risks.

In a draft circular, the regulator is looking at requiring rural and cooperative banks to also submit comprehensive credit and equity exposures report (COCREE) as early as March next year.

The BSP currently requires big banks and mid-sized banks, as well as non-bank financial institutions with quasi-banking functions, trust corporations and digital banks to submit the COCREE.

However, the central bank is now set to require universal and commercial banks, thrift banks and non-bank financial institutions with quasi-banking functions to submit an enhanced COCREE by January and February next year.

BSP Governor Eli Remolona Jr. said in the draft circular that the enhanced 2021 COCREE expands its data requirements in support of further strengthening the surveillance and analysis of emerging risks in BSP-supervised financial institutions (BSFIs) and the financial system.

“Pursuant to such objective, coverage of the enhanced report, referred to as COCREE 2.0, is likewise expanded to all thrift banks, rural banks, cooperative banks, non-bank financial institutions with quasi-banking functions and trust corporations,” Remolona said.

The report will be submitted electronically monthly within 15 working days after the end of the reference month.

According to the BSP, the 2021 COCREE will no longer be required upon live implementation of COCREE 2.0.

“To prepare for the live implementation, BSFIs can pilot test the submission of the COCREE 2.0 in Q4 2023,” it said.

The regulator pointed out that penalties for reporting violations of COCREE 2.0 would not be imposed during the pilot period.

However, it said the imposition of penalties would be strictly enforced after the grace period of COCREE 2.0’s live implementation.

Latest data showed that the assets of the Philippine financial system rose by 7.8 percent to P28.53 trillion in end-May this year from P26.46 trillion a year ago.

The resources of Philippine banks grew by 9.1 percent to P23.49 trillion in end- May this year from P21.53 trillion in end-May last year, while that of non-banks stood at P5.03 trillion as of end-December 2022.