Our resiliency as a nation is once again tried after a series of natural catastrophes hit most parts of the country as the fourth quarter of this year draws in. As natural disasters strike, even the wealthiest, best-prepared countries can experience large-scale damage and destruction but the scenario is far worse in countries where there are little or no resources allocated to protect its people and economy.
According to London-based Institution of Mechanical Engineers, about 38% of disaster-related global economic losses occurred in the Asia Pacific Region from 1980 to 2009. Countries in the same region are particularly susceptible to the effects of extreme natural events due to degradation of natural barriers brought about by the expansion of cities and urban areas.
In effect, these natural disasters such as earthquakes and floods impose an economic blockage that may challenge the little growth that lifts people out of poverty. These perhaps are nature’s own way of saying that rapid urbanization has a cost.
Apart from economic value, the recent damage brought by Typhoon Santi as well as the earthquakes that rocked Central Visayas brought to fore the realization that life is indeed too short to be taken for granted. We all have to appreciate what we have right now – family, health, property, etc. – because we do not know when they will be taken from us.
While natural events are haphazard, it is the poor households that is the most vulnerable as they have fewer options for coping. Unfortunately, their little hard-earned money is greatly sacrificed.
Disasters affect the ability of the household to earn a living especially since a long period of recovery or rehabilitation might take place. As such, it might be difficult or impossible for income-earners to even pay for existing loans when the disaster have caused enormous damage or destruction to income-generating assets such as crops, livestock or even tools-of-trade. The loss of these assets may have a long-term impact on the household’s ability to generate income especially when it has scarce or no funds to replace.
That is why the Rural Bankers Association of the Philippines (RBAP) requested from the Bangko Sentral ng Pilipinas (BSP) to grant temporary regulatory relief to member rural banks affected by the said calamity, as part of the whole industry’s commitment to assist our kababayans who were adversely affected. This goes to show that even behind the capitalistic nature of the banking business, there are times when the mindset of making money is set aside in times of need.
The BSP’s positive response in granting temporary regulatory relief will enable banks, including rural banks, to likewise assist and ease the financial burden of their customers, who are still trying to recover from the effects of the disaster, particularly those in the provinces of Pangasinan, Isabela, Nueva Vizcaya, Quirino, Aurora, Bataan, Bulacan, Nueva Ecija, Pampanga, Tarlac, Zambales, Laguna, and Rizal.
According to a National Disaster Risk Reduction and Management Council (NDRRMC) report dated Oct. 16, Santi caused the death of 15 individuals and displaced at least 14,684 families. It likewise posed damage to agriculture amounting to P3.172 billion, while damage to infrastructure summed up to P114.473 million.
The rural banking industry primarily caters to the agricultural sector.
For rural/thrift/cooperative banks, the temporary regulatory relief allows existing loans of borrowers in affected areas to be excluded from the computation of past due ratios provided these are restructured or given relief; reducing the five-percent general loan loss provision to one percent for restructured loans of borrowers in the affected areas; and non-imposition of penalties on legal reserves deficiencies with head office and/or branches in the affected areas.
The regulatory relief also includes the moratorium on the monthly payments due to BSP for banks with ongoing rehabilitation programs; subject to BSP approval, booking of allowance for probable losses on a staggered basis over a maximum of five years for all types of credit extended to individual and business directly affected by the calamity; and the non-imposition of monetary penalties for delay in the submission of supervisory reports.
For all types of banks affected, the BSP has allowed them to grant financial assistance to officers or employees affected by the typhoon.
For rediscounting banks, the central bank gave them a 60-day grace period to settle outstanding obligations as of Oct. 13 and allowed them to restructure with the BSP current loans of affected borrowers.
The BSP has granted similar relief measures following the torturous visits of typhoons Sendong, Pedring, Mina and Juaning in 2011, and typhoons Helen, Gener, and Pablo, and tropical depression Quinta last year. It has also extended the same relief measures after typhoon Labuyo, a southwest Habagat, and tropical storm Maring hit the country earlier this year.