The Central Bank of the Philippines has granted temporary regulatory relief for banks and quasi-banks to help cushion the impact of abrupt market moves linked to unrest in the Middle East. Under Memorandum No. 2026-027, covered institutions may temporarily exclude certain paper losses on peso government securities caused by sharp market volatility from the calculation of regulatory capital. The measure is intended to prevent short-term market swings from unnecessarily weakening the reported capital position of banks and quasi-banks. Those losses must still be reported to the central bank and recognized in financial statements. Paper losses would normally feed through to regulatory capital and can reduce Common Equity Tier 1, a core component of the capital adequacy ratio. The relief applies from April 1 to Dec. 31, 2026. Standard capital rules will resume in January 2027.
Central Bank of the Philippines2026-06-23
Central Bank of the Philippines grants temporary capital relief on peso government securities losses through December 2026
The Central Bank of the Philippines has allowed banks and quasi-banks to temporarily exclude certain paper losses on peso government securities from regulatory capital calculations. The relief applies from April 1 to Dec. 31, 2026, but the losses must still be reported to the central bank and recorded in financial statements. Normal capital rules will resume in January 2027.