BSP requires banks, financial firms to offer 60-day grace period for loan payments

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(FILE PHOTO)

Metro Manila (CNN Philippines, September 18) — Banks and other financial institutions cannot charge additional fees on due loans for two months with the passage of the Bayanihan to Recover as One Act, the Bangko Sentral ng Pilipinas said Friday.

BSP Governor Benjamin Diokno signed a memorandum requiring all supervised financial firms to comply with the provisions of the economic stimulus measure meant to boost economic recovery.

A section of the new law requires a 60-day grace period for all existing loans, which will fall due between now and December 31.

"The mandatory one-time 60-day grace period shall apply to each loan of individuals and entities with multiple loans," Diokno said. Charges on overdue loans were earlier put on holdwhen the country was placed under the strictest form of lockdown due to the COVID-19 outbreak.

This means that banks cannot charge late payment penalties, other fees, or additional incurred interest on the amortizations during the two-month period, even if the loans are due.

The principal amount as well as the original accrued interest for the covered months may be settled at a later due date or loans may be restructured.

The Bayanihan 2, now known as Republic Act 11494, sets aside P165.5 billion for additional health spending as well as assistance to sectors hard hit by the global COVID-19 crisis. The law took effect September 15 and is valid until yearend.

The law also provides a loan payment moratorium for lending companies, property developers, insurance firms, and state-run corporations Government Service Insurance System, Social Security System, and Pag-IBIG Fund. Meanwhile, utility companies are required to hold off fee collections for at least a month, which may be settled in tranches later on.

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