By LEE C. CHIPONGIAN
Bangko Sentral ng Pilipinas (BSP) Governor Benjamin E. Diokno has issued a memo to all its supervised financial institutions reminding them that the 30-day grace period to all loans is mandatory while on COVID-19 enhanced community quarantine (ECQ).
The BSP Memorandum Order M-2020-017 said that all BSP supervised financial institutions (BSFIs) are required to comply with Section 4 (aa) of Republic Act No. 11469 or the “Bayanihan to Heal As One Act” and its Implementing Rules and Regulations (IRR) which was released last April 1.
“(The IRR) mandates all covered institutions to implement a 30-day grace period to all loans with principal and/or interest falling due within the ECQ period, without incurring interest on interest, penalties, fees and other charges.
The 30-day grace period shall apply to each loan of individuals and entities with multiple loans,” the memo reminded banks and non-banks.
The IRR also specified that covered institutions such as quasi-banks, non-stock savings and loan associations, credit card issuers, pawnshops and other credit granting financial institutions under the BSP, the Securities and Exchange Commission and Cooperative Development Authority, are prohibited from requiring their clients to waive the application of the provisions of RA No. 11469.
“No waiver previously executed by borrowers covering payments falling due during the ECQ period shall be valid,” said the BSP, and this also applied to Government Service Insurance System, Social Security System and Pag-ibig Fund.
The provisions of the emergency law included non-charging or application of interest on interest, fees and charges during the 30-day grace period to future payments/amortizations of the borrowers.
“The accrued interest for the 30-day grace period may be paid by the borrower on staggered basis over the remaining life of the loan. Nonetheless, this shall not preclude the borrower from paying the accrued interest in full on the new due date,” said the BSP, quoting the law.
President Duterte on March 8 through Presidential Proclamation No. 922 declared a public health emergency and placed Metro Manila, and then later the entire Lu¬zon and other regions, under ECQ from March 17 until April 12.