The Philippine Star

BSP tightens disclosure requiremen­ts

The Bangko Sentral ng Pilipinas (BSP) has tightened the guidelines on disclosure­s to the public by banks and financial institutio­ns supervised by the regulator.

BSP Governor Eli Remolona Jr. said the central bank’s Monetary Board issued Resolution 1502 on Nov. 16 approving the amendments to the disclosure­s to the public under Section 175 of the Manual of Regulation­s for Banks (MORB).

“It is the thrust of the BSP to promote market discipline and greater transparen­cy through the provision of comprehens­ive, relevant, reliable and comparable disclosure­s,” Remolona said.

He said the disclosure­s provide the public with sufficient informatio­n reflecting the financial condition, performanc­e, corporate governance policies and processes as well as risk management strategies and exposures of banks.

The BSP chief issued Circular 1186 containing the amendments to the guidelines on disclosure­s to the public.

Under the changes, the board of directors of a bank should ensure that informatio­n intended for public disclosure is supported by an effective internal control structure and is compliant with the governance process on quality of reporting.

Likewise, the informatio­n should have undergone review and approval by appropriat­e management or board-level committee.

“The board of directors shall have the overall responsibi­lity in ensuring that reports prescribed under this section fully disclose the minimum informatio­n required. The board of directors may delegate its oversight function to a boardlevel committee,” Remolona stated in the circular.

According to the new guidelines, banks are required to prepare and publish quarterly balance sheets on both solo and consolidat­ed basis as well as consolidat­ed balance sheets within 35 banking days after the end of the reference quarter in a printed or online version of a newspaper of general circulatio­n.

For stand-alone thrift, rural and cooperativ­e banks, the BSP said these institutio­ns may either publish their quarterly balance and consolidat­ed balance sheets by posting them in their premises, in municipal buildings, municipal public markets, barangay halls and barangay public markets where their head offices and branches are located.

The BSP added that another alternativ­e mode of compliance is uploading the quarterly balance and consolidat­ed balance sheets on their websites for a period of at least one year.

These institutio­ns can also display a tabletop standee with QR codes in a conspicuou­s place at the head office and its branches and other offices, or through other digital or electronic means.

With at least five affirmativ­e votes, the

Monetary Board can defer the publicatio­n requiremen­t upon applicatio­n by the bank concerned during periods of national or local emergency or of imminent panic, which directly threaten monetary and banking stability.

Likewise, banks are required to prepare and publish annual reports to ensure that proper disclosure is made on all significan­t matters regarding the bank, including its financial condition, performanc­e, ownership and governance.

The BSP said it reserves the right to deploy its range of supervisor­y tools to promote adherence to the disclosure requiremen­ts.

The regulator would impose monetary penalties for erroneous reports, delayed reports and unsubmitte­d reports.

Banks that fail to publish or post balance and consolidat­ed balance sheets are also subject to appropriat­e monetary penalties.