The Securities and Exchange Commission (SEC) has renewed its call to lending entities, including those into microfinance, to extend the relief periods they have provided to their clients.
The agency on Thursday issued the call even as the economic activities have started tor resume. The agency, in its notice, said it was “strongly” encouraging lending entities to extend their relief measures either through “lowering of interest rates, waiver or reduction of penalties, charges and other fees, payment holiday, debt consolidation, extension of loan terms, and provision of flexible payment schedules.”
It added that these lending entities may implement their programs to help their borrowers, aside from the one specified under Section 4 of the Bayanihan to Heal As One Act. Under Section 49a) of the law, a grace period of a month is implemented for all loans that its implementing rules and regulations issued in April orders lenders, including those under the supervision of SEC, to implement the moratorium under the enhanced community quarantine period.
The IRR also specifies that the grace period can be extended should the President extend the protocol, which has resulted in the extension of the relief period between March 17 and May 13.
Aside from the moratorium of payment of loans, the same law also prohibits these entities from imposing interest on interest, fees and other charges to future payments or amortizations as it also gives borrowers the option to pay the interests accrued during the period on a staggered basis over the remaining life of the loans.
The agency warned that lending companies must comply with the provisions of the law and applicable laws or they will face penalties for violating these laws.