MAP welcomes 60-day debt moratorium compromise

MANILA, Philippines — The Management Association of the Philippines (MAP) yesterday welcomed the move of the bicameral committee to extend a 60-day moratorium on loan payments under the proposed Bayanihan 2 or Bayanihan to Recover As One Act, even as the business group initially pushed for a shorter reprieve of 30 days.

“While the MAP supports the 30-day moratorium under the Senate version, 60 days will be a good compromise if 30 days is not doable, provided that it is a one-time and non-extendible payment moratorium,” MAP president Francis Lim said in a statement.

Bayanihan 2 allocates funds and outlines measures for economic recovery from the coronavirus disease 2019 or COVID-19 crisis.

While MAP sees the 60-day moratorium as an acceptable compromise, Lim said it should not cover insurance and pre-need companies.

He explained that it may be difficult for these firms to service claims, particularly to deaths related to COVID-19.

Lim also said pre-need companies have to cater to medical

and hospitalization claims of COVID patients, as well as tuition fees of children going back to school.

“This is not even to mention that the moratorium may adversely affect the financial viability of the smaller enterprises, most of which are Filipino companies,” he said.

Earlier, Lim said the MAP is supporting the Senate version which limits the moratorium to one month as the longer one-year grace period could lead to adverse consequences and worsen the impact of the health crisis.

He said it could affect the banks’ ability to service the withdrawals, as well as the confidence in the banking system.

For its part, the Bankers Association of the Philippines (BAP) said earlier, it is open to having a shorter grace period of one year on debt payments instead of a one-year moratorium.

Similar to the concerns raised by Bangko Sentral ng Pilipinas Governor Benjamin Diokno, the BAP said the one-year moratorium would put banks at risk and affect liquidity.

Meawnhile, the Department of Finance (DOF) is proposing a 45-day grace period on debt payments under the Bayanihan 2 bill, while warning that a one-year debt moratorium could negatively impact the economy.