The Bangko Sentral ng Pilipinas (BSP) has issued Memorandum No. 2026-027 providing temporary regulatory relief to banks and quasi-banks. This measure is designed to reduce the impact of market instability caused by the ongoing conflict in the Middle East.
Under the new rule, financial institutions may temporarily exclude certain unrealized or “paper losses” on peso government securities from the calculation of their regulatory capital. These losses occur when the market value of securities drops but they have not yet been sold.
This time-bound relief ensures that temporary market fluctuations do not negatively distort the reported capital strength of banks and quasi-banks. It supports financial stability by preventing unnecessary adjustments to capital reserves due to short-term market movements. Institutions using this relief are still required to fully disclose all unrealized losses in their reports to the BSP and to the public.
The policy will take effect from 1 April 2026 until 31 December 2026. Standard capital requirements will be reinstated starting January 2027.
