A COVIDiot’s guide to protecting property interest

“There is no governing structure for a pandemic,” said Laurie Garrett, a Pulitzer Prize-winning journalist. “And little more than vague political pressure to ensure limited access to life-sparing tools and medicines for more than half the world population.”

As you may know, the new coronavirus (COVID-19) is an infectious disease first detected in Wuhan, China, last year. It was found to affect a person’s respiratory system, such that common symptoms include fever, dry cough, exhaustion, and in more severe cases, shortness of breath, chest pain and loss of speech or movement.

Besides affecting almost five million worldwide, of which 327,000 died, COVID-19 and the ensuing lockdowns resulted in mass unemployment, bankrupt companies, shortage of healthcare workers and medical supplies, and disruption of supply chain management. The World Trade Organization estimates that the decline in global trade this year may surpass the slump brought on by the global financial crisis in 2008 and 2009, while recovery in 2021 remains uncertain.

These past few months saw all nations navigating their way to conquer and obliterate COVID-19. In this regard, the Philippine government found it fitting to declare a state of national emergency and enact Republic Act No. 11469, known as the Bayanihan to Heal as One Act.

Under the Act, the President is authorized to, among others, direct public and privately-owned financial institutions to implement a minimum 30-day grace period for the payment of all loans, including those for housing, falling due within the period of the enhanced community quarantine (ECQ), without incurring interests, penalties, fees or other charges.Accordingly, the Department of Finance (DOF) issued the Implementing Rules and Regulations (IRR) of Section 4 (aa) of the Act. Besides not incurring compounded interest, penalties, fees and other charges during the 30-day grace period for the payment of loans with principal and/or interest falling due within the ECQ period, borrowers shall not likewise be liable for additional documentary stamps tax as a consequence of this relief, and on credit extensions, credit restructuring and microlending activities under the IRR.

This grace period shall also apply to multiple loans, as well as future payments or amortizations of individuals, households, micro, small and medium enterprises (MSMEs), and corporate borrowers. It shall automatically extend if the ECQ period will be extended.

Institutions covered by the IRR are prohibited from requiring their clients to execute a waiver on the application of the provisions of the Act, including the 30-day grace period. Previously executed waivers are deemed void. Nevertheless, borrowers are not precluded from paying their obligations as they fall due during the ECQ period, should they so desire.

Meanwhile, the Department of Trade and Industry (DTI) issued Memorandum Circular No. 20-12 imposing a minimum 30-day grace period on rent falling due within the ECQ period, without incurring interests, penalties, fees or other charges. It declared that the grace period shall apply on residential and commercial rents, and consist of 30 calendar days following the last due date of the rent falling due within the ECQ period. Further, lessees may not be evicted for failing to pay the residential or commercial rents within the 30-day period after the lifting of the ECQ.

Lessors of commercial rents for MSMEs who wish to extend greater generosity may: (a) totally or partially waive the rents falling due within the ECQ period; (b) grant reprieve or discounted amount of commercial rents due after the ECQ; (c) open for renegotiation the lease term agreements with their lessees; or (d) use other recourse to mitigate the impact of ECQ to the MSMEs. In this regard, MSMEs shall signify to their respective lessors their request for assistance by providing supporting documents, such as, but not limited to, financial statements as proof of enterprise size, and/or lease contract as proof of tenancy. Lessors, however, are not obligated to refund residential and commercial rents paid by lessees during the ECQ period.