BSP memo details 60-day loan payment moratorium under Bayanihan 2 | Inquirer Business
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BSP memo details 60-day loan payment moratorium under Bayanihan 2

By: - Reporter / @daxinq
/ 04:33 PM October 08, 2020

MANILA, Philippines—The head of the Bangko Sentral ng Pilipinas (BSP) said on Thursday (Oct. 8) that the regulator was committed to ensuring that consumers and businesses are able to take full advantage of the temporary loan payment relief under the government’s latest stimulus package.

In line with this, the central bank recently issued a memorandum which provides a more detailed guidance for BSP-supervised financial institutions on the implementation of the mandatory and non-extendable 60-day grace period on loan payments under the “Bayanihan to Recover as One Act”.

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According to BSP Governor Benjamin Diokno, “the 60-day loan payment moratorium provides much-needed relief to consumers and businesses as they rebuild their way out of this crisis.” “The BSP supports bold measures meant to steer the country towards inclusive economic recovery,” he said.

In relation to this, the central bank’s consumer assistance mechanism enables the public to readily get in touch with the BSP for queries or complaints against financial institutions. The BSP also stands ready to deploy its full range of supervisory tools and enforcement actions to ensure adherence to the law.

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Under the stimulus law, loan payment for principal or interest, including amortizations, that fall due between Sept. 15 and Dec. 31 this year may be paid after 60 days, without these incurring interest on interests, penalties, fees or other charges.

Interest to be charged per installment period, which is based on the outstanding principal balance of the loan, shall continue to accrue during the grace period and shall be payable on the new due date following the 60-day grace period.

The application of the mandatory 60-day grace period, in effect, moves the payment due dates of the entire loan, thereby extending the loan maturity.

Borrowings like salary, real estate, motor vehicle, business and credit card loans are covered by the mandatory grace period as long as they are existing and outstanding as of Sept. 15 this year, the date of effectivity of the law.

However, loans that are considered past due as of Sept. 15, 2020 are not eligible for the mandatory grace period.

Under the central bank memorandum, financial institutions are also prohibited from requiring clients to waive the application of the provisions of the Bayanihan 2 law, which aims to provide multiple stimulus packages to various sectors of the economy reeling from the COVID-19 pandemic.

Accrued interest for this onetime grace period may be paid by the borrower on a staggered basis until the end of this year.

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Additionally, lending financial institutions and borrowers may agree to a grace period longer than the mandated 60-day period, or the staggered payment of accrued interest beyond the end of the year, he said.

Edited by TSB
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TAGS: Bayanihan 2, BSP, Business, Diokno, economy, interest, Loans, stimulus
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