Lending, financing firms told to defer payments collection

MANILA, Philippines — The Securities and Exchange Commission (SEC) has ordered lending and financing companies to defer the collection of payments and the imposition of penalties while the country remains under a state of national emergency due to the coronavirus disease 2019 or COVID-19.

Under the Bayanihan to Heal as One Act, the President can implement a minimum 30-day grace period for the payment of all loans, the SEC said in a notice to lending companies dated April 2.

Thus, the SEC said lending institutions shall not impose additional interest, fees and other charges during the 30-day grace period to the future payments or amortizations of their borrowers.

Borrowers may also pay the interest accrued during the 30-day grace period on a staggered basis over the remaining life of the loan, the SEC said.

All covered institutions are further prohibited from requiring their borrowers to waive the application of the mandatory grace period.

In relation to this, no waiver previously executed by borrowers for payments falling due during the enhanced community quarantine shall be valid, the SEC said.

Nonetheless, borrowers may still choose to pay their obligations during the enhanced community quarantine.

Under the law, all lenders, including those under the supervision of the SEC, shall apply the 30-day grace period to all loans with principal and interest falling due during the enhanced community quarantine from March 17 to April 12.

Violators shall be subject to the appropriate penalties as well as existing laws, rules and regulations.

SEC chairperson Emilio Aquino said the compliance of lending and financing companies with the mandatory grace period and other emergency measures being implemented would greatly help Filipinos recover from the pandemic.