Lenders urged to help borrowers get through pandemic

MANILA, Philippines — Sen. Bong Go has again appealed to banks and other financial institutions to provide restructuring programs for corporate and individual borrowers amid uncertainties due to the coronavirus disease (COVID-19) pandemic.

“Just because it is already general community quarantine in several areas doesn’t mean it is back to normal for many of our businesses,” he said in Tagalog.

As the country gradually reopens its economy, Go urged banks and other financial institutions to assist debtors get through this tough time. According to him, this will also help the economy regain its momentum by providing wider space for borrowers to maneuver as they slowly resume business and work after some quarantine restrictions are relaxed by authorities.

The senator reiterated his appeal to banks, quasi-banks and other financial institutions, both public and private, to provide a grace period and impose no increase in interest rates on consumer and corporate loans to assist the Filipino middle class in recovering from the unprecedented challenges brought by COVID-19 crisis.

“There are many Filipinos not among the poorest of the poor but still need help. Let us not abandon them,” he said.

Go added that Republic Act No. 11469 or the Bayanihan to Heal as One Act gives the President the necessary authority to implement the provision on payment of loans.

Under RA 11469, President Duterte is authorized to direct all public and private banks, quasi-banks, financing companies, lending companies, and other financial institutions, including the Government Service Insurance System, Social Security System and Pag-IBIG Fund, to implement a minimum 30-day grace period for the payment of all loans without incurring interests, penalties, fees and other charges.

The covered loans include salary, personal, housing and motor vehicle loans, as well as credit card payments, falling due within the period of the enhanced community quarantine. Interests, penalties, fees or other charges can be waived, and persons with multiple loans may also be given the minimum 30-day grace period for every loan.

Earlier on, the Philippine Chamber of Commerce and Industry, Inc., the largest business organization in the country, repeated its call on banks and other concerned institutions “to grant temporary but indispensable relief to borrowers hardest hit by the pandemic through voluntary and negotiated loan term extension or restructuring.”

While commending the Bangko Sentral ng Pilipinas for heeding its earlier call, the PCCII also suggested to incentivize lenders to defer or restructure loans principal repayments for both corporate and individual borrowers burdened by the pandemic.