The Bangko Sentral ng Pilipinas (BSP) recently published Circular No. 678 titled, “Rules and Regulations for the Approval and Provision of Housing Microfinance,” which encourages banks to extend microfinance housing loans.
Pursuant to Circular No. 678, a bank can provide housing loans of a maximum amount of PHP 300,000 (USD 6,588). The bank must have a track record of at least two years in conducting microfinance programs, including acceptable “portfolio-at-risk” levels. These measures are in place to ensure that banks uphold adequate and appropriate risk management systems. In support of this new regulation, Amando M. Tetangco, Jr., the current governor of BSP stated, “It has been proven that clients of microfinance also need a wide range of financial services including housing finance. [It] is typical that some microfinance clients also use their access to credit for their homes.” In order to participate in the microfinance housing loan program, banks must meet CAMELS rating standards, have no history of “prompt corrective action” issued by BSP and have no microfinance loans in arrears.
About Bangko Sentral ng Pilipinas (BSP):
Established in July 1993, Bangko Sentral ng Pilipinas (BSP) is the central bank of the Republic of the Philippines. BSP has three regional offices performing cash operations and cash administration and eighteen branch offices. BSP participates in advocacy programs concerning microfinance, financial education and consumer protection. BSP website: http://www.bsp.gov.ph
Bibliography:
BSP: https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=Bangko+Sentral+ng+Pilipinas+%28BSP%29%2C
Additional Resources:
[1] Circular No. 678, published on January 6, 2010: http://www.bsp.gov.ph/regulations/regulations.asp?id=2490
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