Central Bank of the Philippines grants temporary capital relief for unrealized losses on Peso government securities in FVOCI portfolios

The Central Bank of the Philippines has approved a temporary capital relief measure for banks and quasi-banks facing valuation losses on Peso government securities classified as fair value through other comprehensive income. For the purpose of calculating the Capital Adequacy Ratio and Common Equity Tier 1 ratio, affected institutions may avoid deducting certain cumulative unrealized losses on those securities from CET1 capital during the relief period, which runs from 01 April to 31 December 2026. The measure applies only to investments in Peso government securities recorded under the FVOCI account. Institutions that already had net unrealized losses on their FVOCI Peso government securities as of 28 February 2026 may exclude only the additional cumulative losses beyond that level when computing capital ratios during the relief period. Institutions that had net unrealized gains as of 28 February 2026 may refrain from deducting any unrealized losses on their FVOCI Peso government securities from CET1 capital during that period. Actual unrealized FVOCI losses must still be reported in all other financial reports, including the Financial Reporting Package and financial statements, and realized and unrealized losses, including impairment losses, must continue to be reported in full. Retroactive application may be implemented on April and May 2026 capital figures. Banks and quasi-banks that use the relief must notify their supervising department by email and attach their February 2026 solo capital adequacy report, including the control prooflist showing net unrealized gains or losses on FVOCI Peso government securities.