SEC, BSP: New Bayanihan Act loans grace period compulsory

SEC, BSP: New Bayanihan Act loans grace period compulsory

SIGH no more, debtors—Republic Act 11494 (Bayanihan to Recover as One Act or Bayanihan 2) has allowed a one-time 60-day grace period for all existing current and outstanding loans, including credit card payments.

The Securities and Exchange Commission (SEC) has directed financing firms and microfinance non-governmental organizations to implement the two-month grace period for loans due on or before Dec. 31, 2020 without interests, penalties and other charges.

The Bangko Sentral ng Pilipinas (BSP) has also mandated the financial institutions under its supervision to also implement the same.

Bayanihan 2, signed by President Rodrigo Duterte on Sept. 11 replaced Republic Act 11469 (Bayanihan to Heal as One Act), which expired last June 24; it gives emergency powers to the President in dealing with the country’s woes caused by the coronavirus disease 2019 (Covid-19) pandemic.

The law also aims to ease the burden of Filipinos amid a public health crisis.

Covered institutions

The 60-day grace period under Bayanihan 2, the SEC said, must be implemented by all banks, quasi-banks, financing and lending companies, real estate developers, insurance companies providing life insurance policies, pre-need companies, entities providing in-house financing for goods and properties purchased, and asset and liabilities management companies.

Other public and private financial institutions, including the Government Service Insurance System, the Social Security System and the Home Development Mutual Fund (Pag-IBIG Fund) must also follow the Bayanihan 2 grace period, according to the SEC.

Bayanihan 2 covers, but is not limited to, salary, personal, housing, commercial and motor vehicle loans, amortizations, financial lease payments and premium payments, as well as credit card payments, without interests, penalties, fees and other charges.

BSP statement

The BSP said the institutions covered by Bayanihan 2 must not charge or apply the foregone interest on interests, penalties, fees and other charges during the mandatory one time 60-day period to future payments or amortizations of the borrowers.

Requiring clients to waive the application of the mandatory one-time 60-day grace period is also prohibited.

The institutions supervised by the BSP include banks, quasi-banks, non-stock savings and loan associations, credit card issuers, trust companies, pawnshops and other credit granting entities.

Invalid also are the waivers previously executed by borrowers covering payments falling due on or before Dec. 31, the BSP said.

However, the grant of the grace period by covered institutions under Bayanihan 2 does not preclude the borrowers from choosing not to avail themselves of the said grace period and paying their obligations as they fall due.

BSP Governor Benjamin Diokno said loans include, but are not limited to, salary, personal, housing, commercial and motor vehicle loans, amortizations, and financial lease, premium and credit card payments.

The mandatory grace period, he said, does not apply to interbank loans and bank borrowings.

It applies to loans that are existing, current and outstanding upon the effectivity of Bayanihan 2, Diokno said. The law took effect upon its publication on Sept. 14 in the Official Gazette, the public journal and main publication of the Philippine Government.

Existing loan refers to a loan granted, or a transaction made by a person using a credit card, prior to the effectivity of Bayanihan 2.

The grace period also applies to multiple loans of individuals and entities, with principal and/or interest, including amortizations, falling due on or before Dec. 31. The grace period applies to each loan.

The principal and accrued interest falling due may be paid by the borrower in full after the application of the 60-day grace period. The borrower may also pay on a staggered basis until Dec. 31.

Bank announcement

Metrobank, in its advisory on Sept. 30, said all the car and home loans in current status with amortizations due on Dec. 31 are qualified for a 60-day payment grace period.

Metrobank said the interest on interests, penalties, fees and other charges will not be applied during the grace period. But the interest will continue to accrue, it said.

If its clients who had issued post-dated checks or an auto-debit arrangement would like to hold the payment for their account or would like to avail themselves of the Bayanihan 2 grace period, the clients may inform Metrobank by calling (02) 88-700-700 at least five days before the payment due date. (JOB with WBS)


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