BSP proposes reporting changes to improve regulatory compliance

THE BANGKO SENTRAL ng Pilipinas (BSP) is looking to introduce a revised reporting governance framework aimed at enhancing regulatory compliance and improving its oversight of the financial system.

“The Bangko Sentral espouses a data-driven approach to decision-making in support of its mandate to promote financial stability. In this respect, the Bangko Sentral expects banks to adopt a sound reporting governance framework that promotes the integrity, accuracy, and timeliness of prudential and regulatory reports submitted,” the central bank said in its explanatory note for the draft circular that proposes to amend provisions of the Manual of Regulations for Banks related to reporting governance.

Banks are required to submit these reports to the BSP to allow the regulator to assess their financial condition, risk levels, and compliance with its rules.

The central bank said the proposed changes provide clear standards for an “acceptable” report, including completeness, accuracy, timeliness, and adaptability.

“The revised reporting governance framework clarifies supervisory expectations, outlining the roles of the board, senior management, and oversight committees. The framework shifts focus from defining specific reporting violations — such as erroneous, delayed, or unsubmitted reports,” it said.

“Failure to meet any of the criteria may subject a bank to sanctions for noncompliance with reporting requirements. This change promotes a more proactive and quality-focused approach to regulatory compliance.”

The draft circular sets reporting penalties that are appropriate to banks’ asset size to reflect their systemic importance and risk proportionality, it said. These monetary assessments will be imposed for each calendar day of noncompliance, and will range from P1,000 for banks with an asset size of up to P1 billion to P10,000 daily for those that have above P400 billion in assets.

It also removes the categorization of reports and changes authorized signatories for these submissions, and drops the notarization requirement for some reports.

The circular also proposes a new way to track institutions’ repeat violations for supervisory action.

Under the changes, there will be new deadlines for select prudential and regulatory reports submitted in Extensible Mark-up Language format through the Prudential Reporting Innovation and Monitoring Engine (PRIME) “to ensure efficiency in data preparation and timely validation and processing of information by the Bangko Sentral,” it said.

“Moreover, the framework encourages banks to pro-actively utilize BSP facilities (e.g., PRIME sandbox) during period of testing/parallel run to ensure accuracy in their reports upon live implementation.”

Banks will have a six-month transition period to upgrade their systems and processes to comply with the changes if the circular is approved. — Katherine K. Chan

BSP proposes reporting changes to improve regulatory compliance
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