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MANILA, Philippines – Borrowers can now benefit from a two-month reprieve to repay their loans from banks and other financial institutions that are under the regulatory powers of the central bank.
In a mobile phone message to reporters, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno said he signed on Friday (September 18) the memorandum putting into effect the provision of the Bayanihan Heal As One Act that ordered a moratorium of 60 days. on all loan payments.
According to the head of the central bank, the law “requires that all covered institutions implement a mandatory, single, 60-day grace period for all existing, current and pending, overdue loans or any part thereof, on or before 31 December. December 2020 “.
This grace period will apply to each individual and corporate loan with multiple loans, according to the memo.
Financial institutions supervised by BSP will not charge or apply interest on interest, penalties, fees or other charges during the mandatory grace period for future payments or borrower repayments, Diokno said. These institutions include universal and commercial banks, savings banks, rural banks, cooperative banks, savings and credit associations, and pawn shops, among others.
Likewise, these financial institutions are prohibited from requiring their clients to waive the application of the provisions of the Bayanihan Heal As One Act, which was recently approved by Congress and enacted by President Rodrigo Duterte to provide multiple stimulus packages to various sectors. of the economy reeling from the COVID-19 pandemic.
“No exemption previously executed by borrowers that covers payments due through December 31, 2020, will be valid,” Diokno said.
The borrower can pay the interest accrued during this one-time grace period on a staggered basis until the end of this year.
“However, this will not prevent the borrower from paying the accrued interest in full on the new due date,” explained the head of BSP.
In addition, lending financial institutions and borrowers can agree to a grace period longer than the mandatory 60-day period, or staggered payment of accrued interest beyond the end of the year, he said.
The 60-day grace period was agreed to by lawmakers amid vigorous debate over the length of the moratorium.
The House of Representatives had initially wanted a one-year moratorium on loan payments, but banks and government regulators opposed it, citing potential risks to the banking system and the Philippine economy from a prolonged delay in loan payments. loans.
Meanwhile, the Senate wanted a 45-day moratorium, and the 60-day compromise was reached during committee meetings of the bicameral conference.
TSB
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