Emergency Financial Stability and Consumer Protection Act

Senate /Office of the Secretary TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES MAY -6 P4:07 First Regular Session RECEIVED BY: SENATE 2121 Senate Bill No. Introduced by Senator JOEL VILLANUEVA AN ACT GRANTING THE BANGKO SENTRAL NG PILIPINAS EMERGENCY REGULATORY POWERS OVER SUPERVISED INSTITUTIONS DURING A DECLARED NATIONAL EMERGENCY EXPLANATORY NOTE The stability and continuity of the Philippine financial system are indispensable to the protection of public welfare, economic activity, and national resilience during times of crisis. Emergencies such as pandemics, natural disasters, armed conflict, cyber incidents, and other extraordinary disruptions can severely impair the ability of individuals, businesses, and financial institutions to meet financial obligations and maintain access to essential financial services. The country's experience during the COVID-19 pandemic exposed the limitations of the existing legal framework governing emergency financial regulatory interventions. During the pandemic and the declaration of a State of Public Health Emergency and State of National Emergency, the Bangko Sentral ng Pilipinas (BSP) issued various regulatory relief measures and policy guidance encouraging BSP- Supervised Financial Institutions (BSFIs) to provide payment accommodations, waive certain fees and penalties, maintain uninterrupted delivery of financial services, and implement other forms of consumer assistance. 1 Recent global developments, including the ongoing armed conflict and escalating tensions in the Middle East, have also demonstrated the far-reaching economic and financial consequences of geopolitical instability. Such events disrupt global supply chains, increase volatility in fuel and commodity prices, heighten inflationary Primer Memorandum M-2020-008. https://www.bsp.gov.ph/Media_and_Research/Primers%20Faqs/Primer.pdf. Accessed on 06 May 2026.

pressures, and expose domestic financial systems to heightened operational and systemic risks. These developments underscore the importance of ensuring that Philippine financial regulators are adequately equipped to respond swiftly and effectively during periods of national emergency and economic disruption. In April 2026, pursuant to the declaration of a State of National Energy Emergency, the BSP authorized BSFIs to extend relief and support measures to affected clients and communities. However, while many financial institutions voluntarily complied, the BSP's authority to compel uniform implementation of such emergency relief measures remained limited absent specific legislated authorization. Recent emergencies have highlighted the need for a clear legal framework empowering the BSP to issue binding and enforceable emergency regulatory directives during periods of national emergency. As the country's central monetary authority and primary financial regulator, the BSP plays a vital role in preserving financial stability, maintaining public confidence in the banking and payments system, protecting depositors and consumers, and ensuring continued access to financial services during times of crisis. Thus, this bill seeks to grant the BSP emergency regulatory powers over BSFIs during a declared National Emergency. Specifically, this proposed measure authorizes the BSP, upon determination by the Monetary Board that extraordinary regulatory intervention is necessary, to issue mandatory directives relating to financial relief measures, operational continuity, prudential accommodations, liquidity preservation, cybersecurity, consumer protection, and other emergency measures necessary to safeguard the Philippine financial system and the public interest. This bill likewise provides appropriate safeguards to ensure that the exercise of emergency powers remains temporary, proportionate, and subject to limitations prescribed by law. It further provides mechanisms for enforcement, congressional reporting, interagency coordination, and protection for good faith compliance by covered institutions. By institutionalizing a responsive and enforceable emergency financial regulatory framework, this measure aims to strengthen the country's crisis preparedness, enhance financial system resilience, protect financial consumers, and promote economic stability during periods of national emergency. In view of the foregoing, the immediate passage of this bill is earnestly sought. JOEL

Senate Office of the sertetary TWENTIETH CONGRESS OF THE REPUBLIC OF THE PHILIPPINES MAY -6 P4:07 First Regular Session ) RECEIVED BY. SENATE Senate Bill No. _ 2121 Introduced by Senator JOEL VILLANUEVA AN ACT GRANTING THE BANGKO SENTRAL NG PILIPINAS EMERGENCY REGULATORY POWERS OVER SUPERVISED INSTITUTIONS DURING A DECLARED NATIONAL EMERGENCY Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

SECTION 1. Short Title. - This Act shall be known as the "Emergency Financial

2 Stability and Consumer Protection Act".

SEC. 2. Declaration of Policy. -The State shall ensure the stability, resiliency,

integrity, and continuity of the Philippine financial system during periods of national 5 emergency, disaster, public health crisis, armed conflict, cyber incident, or other extraordinary events affecting public welfare and economic activity. The State likewise recognizes the critical role of the Bangko Sentral ng Pilipinas 8 (BSP) in preserving public confidence in the banking and payments system, protecting 9 financial consumers, maintaining liquidity, and ensuring continued access to financial services during emergencies. Towards this end, the State shall grant the BSP the authority to issue binding emergency regulatory directives to BSP-Supervised Financial Institutions (BSFIs) during a declared national emergency.

SEC. 3. Definition of Terms. - For purposes of this Act:

(a) BSP-Supervised Financial Institutions (BSFIs) refer to banks, quasi-banks, non-bank financial institutions, electronic money issuers, payment system operators, trust entities, foreign bank branches, and all other entities subject to the supervision, regulation, or examination authority of the BSP. (b) Emergency Regulatory Measures refer to temporary directives, controls, relief measures, operational requirements, accommodations, restrictions, or supervisory actions imposed by the BSP during a National Emergency pursuant to this Act. (c) National Emergency refers to any of the following: (i) A State of Calamity declared pursuant to law; (ii) A State of Public Health Emergency; (iT) A State of National Emergency declared by the President pursuant to the Constitution; (iv) Any other emergency formally declared by the President pursuant to law which results in substantial disruption to the Philippine financial system, payment system, or access to financial services.

SEC. 4. Authority of the BSP During National Emergencies. - Upon the

declaration of a National Emergency and upon determination by the Monetary Board that extraordinary regulatory intervention is necessary to preserve financial stability, protect depositors and financial consumers, maintain liquidity, or ensure continued access to financial services, the BSP may, when public interest so requires, after considering the nature, severity, duration, and economic impact of the emergency, issue binding directives to BSFIs. Such directives may include, but shall not be limited to: (a) Mandatory grace periods, payment deferments, restructuring accommodations, consumer assistance programs, and other financial relief

measures for loans, credit card obligations, and other covered financial liabilities; (b) Temporary suspension, waiver, reduction, limitation, or moratorium on fees, penalties, surcharges, interest charges, transfer fees, interbank transaction fees, digital payment fees, and similar charges relating to electronic payment systems, including InstaPay, PESONet, and other BSP- designated payment channels, where necessary to ensure affordable and accessible financial services during a National Emergency; Temporary limits, restrictions, or conditions on certain financial activities, transactions, or operations where necessary to preserve systemic stability, protect consumers, or maintain the integrity of the financial system; and (d) Such other temporary emergency measures directly related and reasonably necessary to preserve financial stability, maintain access to essential financial services, protect financial consumers, or ensure the integrity and resiliency of the Philippine financial system during a declared National Emergency. The BSP may likewise prescribe tiered, targeted, or transaction-based relief measures, including reduced or waived fees for small-value transactions or vulnerable sectors, taking into consideration financial inclusion objectives, operational sustainability, and systemic stability.

SEC. 5. Legal Effect of BSP Emergency Directives. - All circulars,

memoranda, resolutions, orders, directives, and similar issuances promulgated by the BSP pursuant to this Act shall be mandatory and binding upon all BSFIs for the period specified therein. Compliance with such directives shall be mandatory notwithstanding any contractual stipulation, internal policy, or inconsistent private agreement, except where prohibited by the Constitution or existing law.

SEC. 6. Limitations and Safeguards. - The exercise of powers under this Act

29 shall be subject to the following limitations and safeguards:

(a) All emergency measures issued pursuant to this Act shall be temporary, proportionate, reasonable, and strictly necessary to address the declared National Emergency and mitigate its actual or potential impact on the Philippine financial system, financial consumers, and the broader economy; (b) Measures imposed under this Act shall not permanently impair vested rights or contractual obligations beyond the period reasonably necessary to address the National Emergency and restore financial stability; (C) In the exercise of its emergency powers under this Act, the BSP shall take into consideration the nature, severity, duration, and economic impact of the National Emergency, as well as the operational viability, solvency, liquidity, financial condition, safety, soundness, and sustainability of affected BSFIs and payment system participants, and shall, whenever practicable, implement emergency measures in a manner that minimizes undue operational disruption, unreasonable financial burden, or material adverse effect on such entities; (d) Prior to implementing emergency measures affecting payment systems, transfer fees, digital transaction charges, interoperable payment arrangements, or similar financial infrastructure, the BSP shall, whenever practicable, assess the operational, financial, competitive, and systemic impact of such measures on BSFIs, payment system participants, clearing switch operators, financial market infrastructure, and financial consumers; (e) The BSP shall publicly disclose, through appropriate official channels, the rationale, scope, duration, covered institutions, transactions, or activities, and other material terms and conditions of emergency measures issued pursuant to this Act, consistent with the requirements of financial stability, market integrity, operational security, and public interest; (f) No emergency directive issued pursuant to this Act shall remain effective beyond one hundred eighty (180) days after the termination of the National Emergency unless earlier revoked by the BSP or extended by law; and (g) Emergency measures implemented pursuant to this Act shall, whenever practicable, be subject to periodic review by the BSP to determine their

continued necessity, proportionality, operational feasibility, and impact on financial stability and consumer welfare.

SEC. 7. Enforcement Powers. - Failure or refusal to comply with BSP

4 directives issued pursuant to this Act shall constitute a regulatory violation subject to 5 enforcement action by the BSP under existing banking, payments, and financial laws. The BSP may impose upon non-compliant BSFIs and/or their responsible 7 directors, officers, or employees administrative fines, suspension or restriction of authorities, cease-and-desist orders, corrective action directives, and such other 9 supervisory or enforcement actions as may be authorized under applicable laws.

SEC. 8. Protection for Good Faith Compliance. - No BSFI, nor any of its

11 directors, trustees, officers, or employees acting in good faith compliance with BSP emergency directives issued pursuant to this Act, shall be subject to any civil, administrative, or criminal liability solely arising from such compliance, absent fraud, gross negligence, or willful misconduct.

SEC. 9. Coordination with Government Agencies. - The BSP may

coordinate with the Department of Finance (DOF), Securities and Exchange Commission (SEC), Philippine Deposit Insurance Corporation (PDIC), Anti-Money Laundering Council (AMLC), Insurance Commission (IC), and other relevant agencies 19 in the implementation of emergency financial stability measures.

SEC. 10. Congressional Reporting Requirement. - Within sixty (60) days

following the termination of a National Emergency, the BSP shall submit to Congress a report containing the emergency measures implemented, the covered institutions and sectors, the economic and financial impacts observed, the enforcement actions undertaken, and recommendations for future crisis preparedness.

SEC. 11. Implementing Rules and Regulations. - The rules and regulations

necessary for the effective and efficient enforcement of the provisions of this Act shall be formulated by the BSP, in consultation with the relevant stakeholders, and shall be 28 implemented within ninety (90) days from the effectivity of this Act.

SEC. 12. Repealing Clause. - All laws, presidential decrees, executive orders,

letters of instruction, proclamations, administrative orders, issuances, rules, and regulations that are inconsistent with the provisions of this Act are hereby repealed, amended, or modified accordingly.

SEC. 13. Separability Clause. - If any provision of this Act is declared

6 unconstitutional, the remainder hereof not otherwise affected shall remain in full force 7 and effect.

SEC. 14. Effectivity. - This Act shall take effect after fifteen (15) days following

its publication in the Official Gazette or in a newspaper of general circulation. Approved,