Cagayan de Oro City Rep. Rufus Rodriguez on Monday proposed a middle ground of three months in the grace period for loan payments in the House of Representatives and Senate versions of the Bayanihan to Recover as One bill.
“I am proposing three months, instead of one year as suggested by the House or one month as contained in the Senate version of the bill,” Rodriguez said.
He floated his suggestion on the day that congressmen and senators began bicameral conference committee hearings to reconcile the two chambers’ divergent versions of the proposed stimulus package, which is designed to help the country recover from the COVID-19 pandemic.
The House bill allocates P162 billion in total stimulus funds while the Senate version sets aside P140 billion.
The bicam panel is considering a loan payment moratorium of two months. A grace period will be a big relief for businesses, especially small and medium enterprises, which are reeling from the crisis.
However, Rodriguez believes that a one or two-month grace period will be too short for small entrepreneurs and borrowers who continue to suffer business reverses because of the prolonged pandemic.
“The microfinance industry should be treated separately from banks. The MFIs had not collected interests from small clients from March 17 to June 30 because of the ECQ and GCQ. A one year moratorium will result in the collapse of the MFI industry. A one month moratorium or exemption for MFIs will help them recover its businesses reverses,” he said.
The House proposal of one year, Rodriguez said, is “too long and might cripple banks and other lenders.”
“I agree with the Bangko Sentral ng Pilipinas (BSP) and the Bankers Association of the Philippines that a one-year grace period will be disastrous to our banking industry and to our economy,” he said, adding that it would be the small borrowers and depositors who would suffer if the banking system is affected.
“We do not want that to happen as an unintended consequence of the proposed We Recover as One Law. That would be another crisis that we might have to face.”
The BSP has warned lawmakers that a one-year loan payment moratorium could affect the liquidity or supply of money of banks. Any sign of lack of liquidity could lead to a bank run, which would be dangerous for the entire banking system, the BSP said.
The House and the Senate hope to agree on a final version of the so-called Bayanihan 2 this week.