BSP sets deadline for reporting project finance exposures of banks

The Bangko Sentral ng Pilipinas (BSP) is directing banks to submit the enhanced reportorial requirements for project finance and real estate exposures by July 31 and October 19 this year as a pilot run.

In a memo issued on Monday, BSP Deputy Governor Chuchi G. Fonacier announced the rationalized deadlines of the two reports – the Report on Project Finance Exposures (RPFE) and the Revised Expanded Report on Real Estate Exposures (ERREE).

While the BSP sets July 31 for the pilot run deadline for the RPFE for reporting periods ending end-March and endJune for solo and consolidated bases, it has required October 19 as deadline for the submission of revised ERREE.

Fonacier said the live implementation for RPFE for end-September banking data will be on October 19 for solo basis and November 13 for consolidated basis.

“Effective upon the live implementation of both the RPFE and revised ERREE on reporting quarter ending 30 September 2018, covered banks shall submit the solo report within 15 banking days from reference quarter and the consolidated report within 30 banking days from reference quarter,” Fonacier said in the memo.

She reminded banks that the guidelines on the electronic submission and the official release of the prescribed data entry templates of the RPFE and revised ERREE will be issued in a separate memo.

Last year, the BSP announced that banks in capital-intensive infrastructure projects are required to submit a report on project finance exposures to improve the BSP’s monitoring and assessments of risks on their real estate and project finance exposures. A bank’s project finance report must include all material information on the infrastructure project and the project phase.

The purpose for the enhanced reporting is to guide the BSP on its policy measures on risks areas that may warrant supervisory action. At the moment, regulatory measures governing real estate exposures of banks include a loan limit of 20 percent of total loan portfolio, net of interbank loans, as well as the real estate stress test limits which were adopted in pursuit of the BSP’s objective of fostering financial stability.

"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," the BSP said.

Earlier this year, the BSP approved a separate single borrower’s limit (SBL) on special purpose entities to release more funds for the government’s infra program and “in consideration of the independence they usually enjoy under project finance schemes,” said the BSP.

In amending its SBL rules anew, the BSP assumes that banks and quasibanks are aware of the risks of “such exposures.”