The Bangko Sentral ng Pilipinas (BSP) has tightened regulations for banks regarding credit risk from loans guaranteed within banking groups. Under the new rules established in Circular No. 1233, effective May 18, banks must apply a risk-weighted cap on credit risk transfers. This adjustment mandates that while intragroup guarantees can still offset up to 100% of a bank's outstanding loan portfolio, they must now reflect the risk weight of the guaranteeing entity. This change aims to provide a more accurate representation of financial risks associated with loans. Recent data indicates that nonperforming loans (NPL) in the Philippine banking sector stood at 3.29% of the total lending portfolio as of March, marking a decrease from previous months. However, the total amount of bad loans has increased to approximately P568.6 billion, highlighting ongoing challenges within the sector. The BSP noted that banks are actively improving their credit risk management practices, including stricter underwriting standards and enhanced use of digital tools.