Malacañang on Tuesday said a new law should be passed to give borrowers another grace period to pay loans amid the COVID-19 pandemic.
Presidential spokesman Harry Roque made the statement after the Bangko Sentral ng Pilipinas said the Bayanihan 1 law granting a mandatory grace period for borrowers lapsed on June 1, 2020.
“The BSP is right. There is a need for a new law that would provide assistance for borrowers. A new law is needed for that,” Roque said in a virtual press conference.
The central bank, however, encouraged local banks to continue to provide relief measures to its clients by renewing, restructuring, or extending the terms of the loans, among others, based on their continuing assessment of their cash flows.
“The BSP has granted prudential relief measures to BSFIs to enable them to continue to provide financial services and support households and business amid the crisis,” it said.
BSP Governor Benjamin Diokno also encouraged banks to take advantage
of the time-bound tax exemptions and fee privileges under RA 11523 or the Financial Institutions Strategic Transfer (FIST) Act.
President Rodrigo Duterte signed the FIST Act in February to help the economy recover from the pandemic shock.
The FIST Act allows banks and financial institutions to outsource the management of their non-performing assets (NPAs) and non-performing loans (NPLs) to asset management firms that are similar to special purpose vehicles (SPV).