Makati City Mayor and senatorial aspirant Abigail Binay proposed the implementation of an automatic loan moratorium in areas severely affected by natural disasters.
Since October, six tropical cyclones have caused extensive agricultural damage and destruction of homes and small businesses in the Philippines, according to Binay.
“Granting automatic moratorium on government loan repayments in calamity-hit areas would provide much-needed respite to affected residents, especially farmers and fisherfolk whose sources of livelihood have been wiped out,” she said.
Binay said government agencies and banks and financial institutions can make it a policy to automatically suspend loan repayments from borrowers located in areas officially declared in a state of calamity.
“It is a reasonable and humane response to the plight of many of our fellow Filipinos,” she said.
“By giving them reprieve from their financial obligation, they can focus on the day-to-day needs of their families and rebuilding their homes,” Binay added.
Through a loan moratorium, the bank or lending institution makes a temporary agreement with the borrower to stop making loan payments for a certain period. This way, the borrower can avoid penalties and stabilize finances before resuming regular repayments to the creditor.
Binay also said the moratorium can also include local government units (LGUs) severely affected by calamities. She said the focus should be helping LGUs recover from the impact of these calamities on the local economy and public services.
The loan moratorium can be extended by institutions such as Land Bank, Development Bank of the Philippines (DBP), Department of Agriculture (DA), PAG-IBIG Fund, the Government Service Insurance System (GSIS) and Social Security System (SSS).
“During these trying times, our citizens need all the help they can get in order to survive and recover from the devastating impacts of calamities. The government, through its financial institutions, is in the best position to alleviate their conditions,” Binay said.
