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BSP Approves a 3-Year Extension for the Separate 25% SBL for PPP Projects

12.20.2012

The Monetary Board decided to extend for another three (3) years the original three (3)-year period allowing a separate single  borrower’s  loan (SBL) limit of 25% of  the net  worth of the lending  bank/quasi-bank for loans, credit  accommodations  and  guarantees  granted  for  undertaking infrastructure and/or development  projects  under  the Public-Private  Partnership  (PPP)  Program of the  government duly certified by the Secretary of Socio-Economic Planning.

It may be recalled that in December 2010, the BSP issued Circular No. 700 allowing a separate SBL for PPP projects for a period of three (3) years which is supposed to end on 28 December 2013. However, due to the long and complex process involved in the awarding of PPP projects, very few projects were awarded subsequent to said BSP issuance. Several PPP projects are still in the pipeline.
 
With the extension, the window will be opened until 28 December 2016. Loans, credit accommodations and guarantees based on the contracted amount as of 28 December 2016 period shall not be increased but may be reduced and once reduced, said exposures shall not be increased thereafter.

The extension of another three (3) years for the separate 25% SBL for PPP infrastructure and/or development projects is expected to encourage the financial sector’s participation in the PPP Program of the government, particularly with respect to the projects that are still in the pipeline

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