The document outlines updates on price transparency and microfinance regulations presented by Gerardo Butardo from Bangko Sentral ng Pilipinas at a national roundtable conference in June 2012. Key points include the requirement for transparent loan terms, revised microfinance reporting, and the establishment of micro-banking offices to expand services. It also discusses regulatory changes regarding relationships between banks and NGOs, customer risk classification, and the introduction of electronic money systems.

1. Session
1:
Price
Transparency
and
Microfinance
Related
Regula9ons
Gerardo Butardo
Bangko Sentral ng Pilipinas
2012 RBAP-MABS National Roundtable Conference
June 7-8, 2012
Hyatt Hotel & Manila

2. BANGKO SENTRAL NG PILIPINAS
LATEST REGULATORY
UPDATES
MABS ROUNDTABLE
Hyatt Hotel
07 June 2012

3. o Loan transaction transparency
o Revised MF reports
o Microfinance Products
o Extension of MSEs exemption

4. o Bank – NGO relationship
o Reduced barriers to customers
acquisition
o Expanded Physical Network
o Expanded Virtual Reach

5. o Coverage:
o All banks;
o NBFIs under BSP supervision; and
o Entities with credit-granting
facilities not covered by issuances
of BSP, SEC, IC and CDA

6. o Requires charging of interest on the
outstanding balance of a loan
o Defines effective interest rate and
requires that this will be the only rate
used in all loan documents and marketing
materials
o Requires a uniform disclosure of the loan
terms
o Requires posting in conspicuous places
the revised format of disclosure
statement

7. o Report on Microfinance Products
(monthly) and Income Statement on
Retail Microfinance Operations
(quarterly)
o Contain data on MF loans both retail
and wholesale, and micro-deposits

8. o Retail MF loan – refers to a loan
directly granted to end-users, e.g.
m i c r o - e n t r e p r e n e u r s ,
microenterprises, etc.
o Wholesale MF loan – refers to a loan
granted to an FI for on-lending to
qualified end-users

9. o “Other Loans – Microenterprises” –
loans granted to microenterprises
but not classified as “microfinance
loans”
o “ M i c r o - l o a n s ” – r e f e r t o t h e
combined balances of “microfinance
loans” and “other loans –
microenterprises”

10. o Microenterprise Loan Plus or
Microfinance Plus – range from
P150,001 to P300,000; borrowers
w/ track record of at least 2 loan
cycles in the range of P50K to
P150K

11. o Micro-Agri loans
o Amended existing regulations to
include minimum prudential
requirements to approve application:
o CAMELS at least “3” & MGT score of at
least “3”;
o CAR of at least 12%;
o No major supervisory concerns
o No arrearages on MF borrowings

12. o Micro-Agri loans
o Non-compliant bank is given one
examination-cycle to correct;
provided the bank submits a viable
plan

13. o Extended exemption of loans
granted to micro & small
enterprises from certain
documentary requirements, e.g.
ITR, audited FS, etc., up to 31
December 2014

14. o NGO/foundation engaged in retail
MF operation and incorporated by
any stockholders, directors,
officers of a related bank as
“related interest”

15. o Transactions between banks and
related NGOs/foundations shall
be covered with notarized
contracts/agreements classified
as category A-3 reports

16. o Bank officers are not allowed to be
involved in the daily MF operations
of related NGO/foundation
o Issuance of general principles and
standards governing business
relationships between banks & their
related NGO/foundations

17. o Introduction of a risk-based and
tiered system of classifying
customers, i.e. low, average & high
risk)
o A framework for applying reduced,
average and enhanced due diligence,
customer acceptance, retention &
identification process

18. o Possibility of outsourcing or
relying on a third party on the
face to face requirement for KYC,
gathering of information and
documents

19. o Establishment of Micro-banking Offices
(MBOs)
o Expands the products and services that can be offered
o Micro-loans
o Micro-deposits
o Check deposits of existing microfinance clients
o Microinsurance
o E-money Conversion
o Collection/ Pay out of benefits from government
o Utility payments
o Purchase of foreign currency

20. o Electronic Money Circular
o Defines electronic money
o Allows the establishment of e-money issuers
(whether bank or non-bank)
o Provides the platform for an efficient retail
payments platform
o Fosters the establishment of a ubiquitous agent
network

21. Wider
Range
of
Products
•
Micro-­‐deposits
Expanded
Physical
• Microinsurance
Network
• Micro-­‐agri
Loans
•
Opening
of
Micro-­‐banking
• Housing
Microfinance
Offices
(MBOs)
• Microfinance
Plus
Expanded
Virtual
Reach
Lower
Barriers
to
•
E-­‐money
Issuers
Customer
Acquisi9on
• E-­‐money
Network
Service
•
Updated
AnI-­‐Money
Laundering
Providers
Rules
Consumer
Protec9on
and
Financial
Literacy

22. www.bsp.gov.ph
gbutardo@bsp.gov.ph