TO PROVIDE financial relief to closed bank borrowers and hasten the liquidation of closed banks’ loan portfolios, the Philippine Deposit Insurance Corp. (PDIC) has extended the implementation of the Closed Bank Loan Incentive Program (Clip) 2.0 until the end of 2024.
Clip was first launched in 2021 as a pandemic relief measure for closed bank borrowers.
With the positive reception of borrowers to Clip and its significant contribution to the collection efforts of closed banks, it has since been enhanced and extended from January 2023 until year-end 2024.
Designed to incentivize borrowers of closed banks to settle their loan obligations, Clip provides substantial discounts on loan principal and reduction or waiver of interest rates and penalties, preserving the creditworthiness of closed bank borrowers while ensuring optimal recovery for closed banks for the benefit of its creditors including uninsured depositors.
As the statutory receiver of closed banks, the PDIC collects loan payments from borrowers and resolves loan accounts.
Under the extended program, closed bank borrowers who owe up to P5 million in principal balances can apply for incentives based on when their banks were closed and whether their loans are clean or secured.
Borrowers with clean loans from banks closed in 2023 and 2024 have until Dec. 31, 2024, or one year from receipt of PDIC’s Notice to Borrowers, whichever comes later, to avail themselves of the incentives under the extended program.
For borrowers whose banks were closed in 2022 and prior years and have not yet availed of the incentives under the program, they may still do so until Dec. 31, regardless of whether their loans are clean or secured.