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Loan moratorium pushed anew

The Davao City Chamber of Commerce and Industry Inc. (DCCCII) has urged banks to declare a 60-day payment moratorium on all loan payments and that these loans be restructured.

In a press release, DCCCII said the moratorium should cover loan payments including credit card payments and that penalties and surcharges be waived and suspended.

This would enable businesses and borrowers to adjust to the losses or setbacks caused by the coronavirus disease 2019 (COVID-19) pandemic and provide relief to them.

The call was based on the Bangko Sentral ng Pilipinas (BSP) Memorandum no. M-2020-008 where all BSP-Supervised Financial Institutions (BSFI) are granted regulatory and rediscounting relief measures.

Under the memorandum, these are the regulatory relief measures by BSFIs affected by COVID-19:

• BSFIs, through its officers, may receive financial assistance in the form of loans, advances, or any other forms of credit accommodations.

• They may also be excluded for one year from the computation of past due ratio of the loans of borrowers in affected areas which should have been reclassified as past due. Bangko Sentral documentary requirements for restructuring of loans may also be waived as long as the BSFI will adopt appropriate and prudent operational control measures.

• Monetary penalties for delayed submission of all supervisory reports may also be suspended for six months.

• Staggered booking of allowance for credit losses over a maximum period of five years for all types of credits extended to individuals and businesses directly affected by COVID-19 may also be allowed depending on the approval of BSP.

• Moratorium, without penalty, on monthly payments due to the Bangko Sentral, for a period of six months from March 8, 2020 for BSFIs with ongoing rehabilitation upon filing of application for extension/rescheduling with the Department of Loans and Credit.

• Depending on the approval of BSP, penalties on legal reserve deficiencies may also not be imposed starting from reserve week following March 8, 2020 to six months.

For rediscounting banks, they may be given 60-day grace period to settle the outstanding rediscounting obligations with the Bangko Sentral as of March 8, the day President Rodrigo R. Duterte placed the country under the state of public health emergency, granted that they don’t have serious violations or findings as may be determined by BSP and there would a charged interest but no penalty during the grace period.

Aside from that, outstanding rediscounted loans as of March 8 may be allowed to restructure with the Bangko Sentral, depending on its case; and the criteria on reserve requirement for the renewal of rediscounting line and for the availment of rediscounting loans as part of the eligibility requirements may be excluded from March 8.

BSFIs may avail the regulatory relief measure by submitting a letter-notification stating its intention to avail the said package and the specific relief measures to be availed and the affected offices of the BSFI, signed by the BSFI’s President or officer of equivalent rank; and the resolution of the Board of Directors authorizing the BSFI to avail of the regulatory relief package.

Once approved, the BSFIs are strongly encouraged to temporarily suspend all fees and charges imposed on the use of online banking platforms or electronic money, including those imposed on the use of Instapay or PesoNet electronic fund transfer.

The following measures were done considering the incurred losses of both the banks and the consumers brought by the COVID-19 pandemic and it is also a precautionary measure to avoid exposure to risks during operation.

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