groundwork Shaping a Sustainable Housing Industry 22nd SHDA National Developers Convention 26 September 2013 Judith E. Sungsai, Director Office of Supervisory Policy Development Disclaimer: Opinions/views expressed are those of the presenter and do not necessarily reflect those of the Bangko Sentral ng Pilipinas
A Common Goal . . . 2 0 1 1 –2 0 1 6
P H I L
Inclusive Growth and Poverty Reduction
D E V T P L A N
Social Development Through Access to Shelter Security
Resilient and Inclusive Financial System
SHDA VISION:
BSP FINANCIAL INCLUSION OBJECTIVE:
Every Filipino family has the right to live with dignity in the comfort of one’s own home regardless of economic status.
Continuous promotion and establishment of an enabling policy and regulatory environment to increase access to financial services for all
Our Differing Approaches . . . Inclusive Growth and Poverty Reduction
SHDA
Increase housing production
Enhance shelter affordability
SHDA Road Map Mobilize generate housing finance
Improve housing regulatory environment
SHDA Housing Roadmap
Widened range of products
Expanded physical network and virtual reach
BSP Initiatives Liberalized customer on-boarding
Established framework for consumer protection
BSP Financial Inclusion Initiatives 2012
‌Financial Access Points Increased access points through the promotion of alternative innovative financial service channels
(E-money agents, ATMs with Cash-In and Cash-Out capabilities and other financial service providers)
…More Products Widened range of financial products that are appropriately designed, priced and tailor-fitted to market needs and capacities
Small Enterprise Loans
Microenterprise Loans Microfinance Plus Loans (P150,001 to P300T) Microinsurance (Premium < 5% of daily wage)
Housing Microfinance Loans (up to P300T) Microfinance Loans (up to P150T)
P A Y I N G C A P A C I T Y
In 2010, the BSP expanded the application of microfinance principles and methodologies to the provision of housing finance in order to service the housing needs of those who are unable to access traditional housing finance. In 2010, the BSP allowed thrift, rural and cooperative banks to sell micronsurance products to meet risk protection needs of the poor (llife and non-life). In 2011, the BSP introduced “Microfinance Plus” to align with increasing credit requirements of microfinance borrowers.
BSP Financial Inclusion Initiatives 2012
…Simplified Requirements Lowered barriers to customer on-boarding in the area of financing
Microfinance, micro- and small enterprise loans are exempt from the submission of documentary requirements such as ITR and latest audited financial statements on the grant of credit Banks are allowed to maintain a risk-based and tiered system of classifying customers wherein the implementation of due diligence/KYC shall be based on the level or risk of the customer
BSP Financial Inclusion Initiatives 2012
…Consumer Protection The BSP financial consumer protection framework visualizes an engaged stakeholder in an inclusive financial system and an enabling environment that protects the interest of financial consumers
Collective Responsibility • Standards of Conduct
• Consumer Assistance • Financial Education
• On-site Assessment
Consumer Empowerment
Market Conduct
• Off-site Surveillance • Market Monitoring • Enforcement Actions
â&#x20AC;ŚMore Responsive Banking Provided regulatory incentives to promote housing finance: Housing loans are accorded higher loan-to-value ratios (70% - 80%)
Housing loans are subject to lower risk weights in determining capital requirements (0% - 50%)
Certain housing loans are excluded from computation of 20% real estate loan limit
Housing loans are eligible for rediscounting with the BSP
â&#x20AC;ŚBalance of Financial Inclusion and Financial Stability Investments in Debt and Equity Securities for Real Estate Financing
Prudent Credit Underwriting Standards
Safety and soundness of an individual bank
Safety and soundness of the banking system
The grant of real estate loans should be balanced by prudent credit underwriting standards and risk management systems on the part of banks â&#x20AC;Ś and does not give rise to vulnerabilities in the financial system.
...is BSP worried?
â&#x20AC;Śis the BSP worried? Loans to the real estate, renting and business activities is the 1st largest intake
Systemic Implication of a downturn in the Real Estate Sector to the Banking System
BSP’s Policy Response . . . Enhanced Monitoring Coverage • MAB 2012-046 dated 21 Sept 2012
Coverage U/KBs, TBs and Trust Departments Reporting: solo and consolidated (parent and subsidiary banks and other financial allied undertakings excluding insurance companies) Reporting scope: • RELs to individual household for occupancy • Commercial RELs (including brokers, lessors, property management, holding companies) • Investment in debt and equity securities to finance real estate activities
VIDEO PRESENTATION
â&#x20AC;&#x153;We need our financial system to reach out to the underserved and the presently unserved. Together, we should work on having an inclusive financial system that brings about inclusive growth in our country.â&#x20AC;? Governor Amando M. Tetangco, Jr. 16 May 2012
Thank you