BSP lets Philippine banks exclude paper losses from capital ratios

The measure is in effect until December 2026.

The Bangko Sentral ng Pilipinas (BSP) is allowing banks and quasi-banks to temporarily exclude certain unrealized losses on computing regulatory capital.

Paper losses on peso government securities may be temporarily removed from computation of banks’ and quasi banks’ regulatory capital, under BSP Memorandum No. 2026-027.

The measure is in effect from April to December 2026. The usual capital rules will apply from January 2027.

The BSP hopes that the relief will help cushion the impact of market volatility due to the Middle East conflict, it said in an announcement.

BSP said that this is “aimed at preventing transitory market movements from unduly affecting the reported capital strength of banks and quasi-banks.”

The financial institutions who avail of the relief must still disclose all unrealized losses in financial reports to the BSP.