BSP requires banks to secure eTitles for real estate assets

GMA News - The Banko Sentral ng Pilipinas is now requiring banks to secure electronic land titles for all their capital and foreclosed assets.

In its Memorandum Number M-2012-037, the BSP explained that the requirement reinforces “an institution’s risk management system”.

Furthermore, the BSP said electronic versions of land titles, compared with manually issued ones, are more secure and less prone to tampering, fraud, and destruction.

“To safeguard the claims of banks and other BSP-supervised institutions over securities and collaterals constituted over real properties, the aforementioned institutions should promote the conversion of manual titles to eTitles for properties received as collateral or security to loans,” BSP Deputy Governor Nestor Espenilla Jr. said in the memorandum issued Friday.

The central bank’s memorandum also states that banks are encouraged to secure eTitles on land lodged as collateral by their borrowers, even as the loans of said borrowers are active and are not non-performing.

Data from the BSP showed that the combined real and other properties acquired (ROPA), or foreclosed assets, by universal and commercial banks in the country were valued at P107.84 billion as of end-May. This was down by 11 percent from P121.34 billion as of the same period last year.

The Land Registration Authority of the Philippines and the Land Registration Systems, Inc. launched the Voluntary Title Standardization, or eTitle Program, March of this year.

The program gives registered landowners the chance to replace their existing titles with eTitles which are printed on security paper with unique technological features.

For latest update on real estate development and its RA 9646, the Real Estate Service Act of 2009, visit www.ra9646.com.