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Published
TALK
By IGNACIO R. BUNYE
Ignacio R. Bunye
Immediately after the announcement of a blockade across Luzon, the banking sector saw a wave of cash withdrawals.
BPI President and CEO Bong Consing described the situation in consecutive interviews with Michelle Krystle Ong and Cathy Yang of ANC, therefore: “These are very unique times. Cash in circulation is going down because many companies are closed. The entire cash cycle has changed. People withdraw cash. They keep it at home. Companies could be withdrawing cash and keeping them in safes somewhere. The entire cash cycle has changed. So the challenge now is getting enough cash at branches and ATMs. “
Across the industry, about 30 percent of Luzon bank branches remained open, especially in key areas so that customers don’t have to go far to meet their banking needs. As for ATMs, “95% of 99% are active”.
The pressure eased a bit a couple of weeks later: … “But as the quarantine lengthens more and more, the amount of cash withdrawn from ATMs decreases. Therefore, the need to replenish ATMs with cash are rapidly shrinking. ”
Even in the worst case scenario, Consing (who is also the president of the Philippine Bankers Association (BAP) ruled out any fear of a bank run or bankruptcy.
“There is no risk of a bank run. Absolutely none. Banks are in very good shape …… (B) Capital ratios in the Philippines are so high and so strong that we can do this indefinitely.
“The capital ratios of the banking system in the Philippines are in the 15s. There are so many buffers. The central bank has adequately prepared banks for crises like this. This is not going to be a banking problem.
“They (the BSP) have reduced the reserve requirements. They have lowered the cost of loans. They have made the regulations easier. They are trying to make sure that the banks have the means to continue the loans. “
Increasing NPLs is a concern. “… (But) a bank like us is prepared not to earn money or money, and in some cases lose money, to do our part. I can only speak for BIS, but I suspect that many other banks will try to do the same. We all realize that we have to help here. And if that means lower profits, so be it. If that means extended payment terms, so be it. We all have to do our part. “
BPI has announced a 30-day payment deferment due to its consumer loan clients. Consing also announced a “special offer” for our frontline heroes in the fight against COVID 19.
“I want to take this opportunity to say that if you are a medical professional who works on the front line, if you are a doctor, if you are a nurse, if you are a medical technologist, if you are a soldier, if you are a police officer, in the midst of this COVID 19 problem, We give you a 90-day deferment. And here’s what’s important. We give you these 90 days with no interest. Feel free to use our money during this time. We admire what you’re doing. We know it’s a big sacrifice. We know you’re doing this at great risk to yourselves. This is the least we can do right now. Use our money anyway. Don’t worry about paying us for the next 90 days. Do what you are doing. We salute you right now.
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Tags: Ignacio R. Bunye
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