By Joann S. Villanueva
Central bank’s policy-making Monetary Board (MB) has approved a 25 percent single borrower’s limit (SBL) for loans to be used for projects under the government’s public private partnership (PPP) initiative.
Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr., in his speech in the first day of the two-day Infrastructure Philippines 2010 at the Marriot Hotel in Pasay City Thursday, said the new policy was made to enable entities that want to join the PPP program more access to funds.
The SBL for PPP projects is separate to the existing 25 percent that BSP allows banks to allocate from their total loanable fund.
Under the new rule, SBL would be given to projects certified by the Secretary of the National Economic Development Authority (NEDA) as among the PPP projects.
“This is intended to allow banks to more actively participate in the PPP program but without setting aside prudential consideration,” Tetangco said.
The BSP chief said that because the additional exposure would entail higher risk, banks would be “required to submit their plan to address any resulting credit concentration risk.”