FINANCING COMPANIES, lending companies and microfinance nongovernment organizations (NGOs) are required to implement a one-time, 60-day grace period for all loans due within the year.
In a notice dated Sept. 21, the Securities and Exchange Commission (SEC) reminded financing and lending companies and microfinance NGOs to comply with Republic Act No. 11494 or the Bayanihan to Recover As One Act (Bayanihan II), which provides for a one-time, 60-day grace period for all loans falling due on or before Dec. 31, 2020.
The law, signed by President Rodrigo R. Duterte on Sept. 11, includes a provision to help borrowers who may have difficulty repaying loans due to the coronavirus pandemic.
The 60-day grace period will be granted for the payment of all types of loans, regardless if single or multiple.
Lenders cannot charge the borrowers interest on interest, penalties, fees or other charges during the 60-day period. Lenders are also required to invalidate all waivers that may have been signed regarding the implementation of a grace period for covered loans.
“The parties may agree on a grace period longer than 60 days, and/or the payment of accrued interest on a staggered basis beyond Dec. 31, 2020,” the SEC said.
Even with the debt relief, borrowers may choose to pay the accrued interest for the one-time grace period on a staggered basis until the end of the year.
Aside from lenders supervised by the SEC, other financial institutions such as banks, quasi-banks, real estate developers, insurance companies, pre-need companies, in-house financing providers, and asset and liabilities management companies are required to implement the 60-day grace period. Government institutions such as the Government Service Insurance System, the Social Security System and the Pag-IBIG Fund are likewise covered.
Since the start of the widespread lockdown in March, the government has ordered debt relief from lenders multiple times to assist borrowers struggling during the economic slowdown.
Some of the lenders that have rolled out loan repayment grace periods are BDO Unibank, Inc.; Metropolitan Bank & Trust Co.; Bank of the Philippine Islands; Rizal Commercial Banking Corp.; UnionBank of the Philippines; East West Banking Corp.; China Banking Corp.; CIMB Bank Philippines; and Philippine Savings Bank. — Denise A. Valdez