Borrowers of closed banks get payment discounts
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MANILA, Philippines — The Philippine Deposit Insurance Corp. (PDIC) will provide borrowers of shuttered banks discounts and waivers to settle their outstanding loans until the end of the year.
The PDIC has expanded the implementation of its Closed Bank Loan Incentive Program via CLIP 2.0 that allow borrowers to avail of discounts as they pay off their financial obligations to banks previously shut down by the central bank.
Initially rolled out in July 2021, the program aims to make loan settlement lighter for borrowers through incentives.
CLIP 2.0 increased the loan amount threshold from the previous P1 million to cover more borrowers.
With the enhanced program, borrowers with up to P5 million in outstanding principal balances are eligible to apply for loan incentives. This will be based on the year their bank was closed and whether their loans are clean or secured.
Borrowers with clean loans in banks closed starting in 2022 may avail of the CLIP 2.0 incentives within one year Dec. 21 or from their receipt of the notice from the PDIC, whichever comes later.
On the other hand, borrowers, either with clean loans or secured loans in banks closed in 2021 and prior years, who were not able to avail of the incentives under the original CLIP program, may still do so until year end.
The PDIC said it remains committed to help borrowers affected by bank closures to maintain their creditworthiness or regain legal possession of their mortgaged assets, if any.
PDIC also aims to optimize loan collections from borrowers of closed banks and maximize recovery from liquidations so that claims of more closed bank creditors and uninsured depositors can be paid.
As the statutory receiver of closed banks, the PDIC collects loan obligations in closed banks. Loan payments collected from borrowers are used to settle the claims of closed banks’ creditors.
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