Biz group: FIST law will hasten recovery
The Management Association of the Philippines (MAP) said the newly signed Financial Institutions Strategic Transfer (FIST) law will enable the banking industry to continue lending to the private sector during the pandemic and hasten economic recovery.
MAP president Aurelio Montinola III applauded the recent passage of Republic Act No. 11523 which improves on an 18-year-old law that helped the Philippines survive the 1997 Asian currency crisis.
Like the Special Purpose Vehicle Act of 2002, the FIST law allows banks to get rid of their nonperforming assets and nonperforming loans (NPLs), clean their balance sheets through asset management companies and enter into new loans without violating central bank regulations.
“The new law is one of the pillars of the government’s national economic recovery program. It lays down an enabling environment for our banking industry to continue lending to the private sector,” Montinola said.
The business leader said the new law, along with the recently passed Corporate Recovery and Tax Incentives for Enterprises (CREATE) bill that cuts corporate taxes and rationalize incentives, will hasten economic recovery.
The CREATE bill is still awaiting President Duterte’s signature.
“With this new law and the recently passed CREATE bill, we are hopeful that our economy will get rehabilitated earlier than expected for the sake of our countrymen,” he said.
Bangko Sentral ng Pilipinas data showed that gross NPLs in the banking system climbed to P391.66 billion, or 3.61 percent of total loans, as of December 2020 from P234.99 billion, or 2.16 percent of total, in January 2020 or before the pandemic struck.
Malacañang agreed that the FIST law is part of the governmen’t strategy to overcome the worst economic recession in decades.
Presidential Spokesperson Harry Roque Jr. said Mr. Duterte signed the FIST law on Tuesday.
“We consider the enactment of RA 11523 timely and thank both Houses of Congress for the passage of this law, which has been certified urgent by the Chief Executive and has been considered by
our economic team as one of the measures that would help us recover in the aftermath of the COVID-19 pandemic,” Roque said in a statement.
He said the law recognizes important role financial institutions as “mobilizers of savings and investments” and in providing the needed financial system liquidity to keep the economy afloat.
“We remain committed to put the economy on a more solid path to recovery through our fiscal and economic reforms, and alongside the rollout of a mass vaccination program,” Roque said.
