This basically communicates to the industry how the BSP will deal with potential problems in bank operations at a very early stage hopefully to forestall more serious problems from arising that would necessitate more drastic and painful measures. The key triggers for the initiation of PCA include substandard capital adequacy ratios and poor Camels performance.
Whenever PCA is initiated, banks will be required to put forward an action plan to immediately correct the situation. The action plan will be in a memorandum of understanding to be executed between the bank board of directors and the BSP.