The banking sector is asking the Bangko Sentral ng Pilipinas (BSP) to ease the single borrowers limit (SBL) rule for infrastructure projects since most banks are about to breach the ceiling.

The Bankers Association of the Philippines (BAP) is consulting with its members to formalize the request to the BSP, according to BDO Capital President Ed Francisco. They expect to present arguments for the raising of the SBL soon.

At the moment the BSP’s SBL rule is equivalent to 25 percent of the lender’s net worth. Banks want a higher ceiling since funding requirements of corporates for example San Miguel Corp. and Metro Pacific” are bigger, exceeding banks lending limit.

Last May the central bank relaxed a rule that made it easier for companies bidding for power projects to avail of financing from banks by revising the DOSRI (directors, officers, stockholders and their related interests) regulations on bank loans to subsidiaries in the energy and power generation sectors if projects are in line with the government’s Medium Term Development Program or part of the public investment strategies and certified by the National Economic Development Authority.

BSP Circular No. 654, signed on May 12, amended the ceiling on loans, other credit and guarantees to subsidiaries and affiliates of banks/quasi-banks with businesses in energy and power generation by allowing a separate individual limit to loans of banks/quasi-banks.

The DOSRI limit is 25 percent of the net worth of the lending bank provided that the unsecured portion will not exceed 12.5 percent.

The last time the BSP adjusted the DOSRI to a particular sector was in December when it revised rules as applied to the government borrowings of government financial institutions.

The BSP has been known to be “harsh” on DOSRI transactions but in the last years, it has been conducting reviews on relaxing circulars.

Under the General Banking Law of 2000, the BSP has the authority to tighten or relax DOSRI loans.