BSP to review relief measures for thrift banks as economy recovers

THE CENTRAL BANK will assess if there is still a need to extend the pandemic-driven regulatory relief measures it granted to thrift lenders as the economy recovers.

“A review will be undertaken as necessary taking into consideration the liquidity requirements and the economic condition of the country,” BSP Governor Benjamin E. Diokno said in a virtual briefing on Thursday.

The minimum liquidity ratio (MLR) for stand-alone thrift lenders was reduced to 16% from 20% in 2020 as part of relief measures for the industry at the height of the pandemic.

The BSP chief said liquidity ratios of thrift banks have remained well above the minimum requirement, noting the industry-wide MLR was at 37.3% as of end-January 2022.

Thrift banks also remained well-capitalized despite the crisis. The industry-wide capital adequacy ratio stood at 19.3% as of end-September 2021, above the 10% minimum requirement as well as the 17.5% seen a year earlier.

Mr. Diokno said thrift banks have been instrumental in extending credit to retail borrowers as well as small businesses.

“Data show that households remain the primary market of thrift banks. This segment held the largest share of the industry’s loans at 60.4% share and deposits at 58.7% share,” he said.

Thrift lenders also disbursed loans worth P61.3 billion and P22 billion to micro-, small, and medium-sized enterprises (MSMEs) and the agriculture sector, respectively.

At end-March, thrift lenders had 45 bank offices and 2,519 branches and branch lite units across the country.

The industry’s net profit climbed 30% to P12.8 billion in 2021 from a year earlier. — L.W.T. Noble