The Bangko Sentral ng Pilipinas (BSP) has granted temporary regulatory relief to banks and quasi-banks to shield their reported capital positions from unrealized losses on peso government securities caused by market volatility from the Middle East conflict, Philstar Biz reported.
The relief measures allow lenders to exclude certain mark-to-market losses on government securities from their capital adequacy ratio calculations, providing a buffer against the sharp repricing of bonds triggered by geopolitical tensions in the Middle East. The central bank emphasized that the exemption is temporary and subject to strict reporting requirements to ensure financial stability.
Industry analysts said the move is a proactive step to prevent a credit crunch and maintain confidence in the banking system during a period of heightened uncertainty. The BSP's action mirrors similar relief measures adopted by other central banks in past crisis episodes, such as the COVID-19 pandemic, to support the financial sector's resilience.