President Duterte has certified as urgent the measure seeking to allow banks and other financial institutions to offload soured loans amid the COVID-19 pandemic.
Based on the copy of the letter to the Senate signed by Executive Secretary Salvador Medialdea, Duterte sought the immediate enactment of Senate Bill No. 1849 or the Act Ensuring Philippine Financial Industry Resiliency Against the COVID-19 Pandemic on Oct. 16.
Based on the Senate website, the bill, also known as the Financial Institutions Strategic Transfer (FIST) Act, remains pending on second reading.
The bill recognizes the role of banks and other financial institutions as mobilizers of savings and investments and in providing the needed financial system liquidity to keep the economy afloat.
“It is essential that banks and other financial institutions are able to maintain their financial health in order to cushion the adverse economic impact of the COVID-10 pandemic,” it stated.
Sen. Grace Poe, the sponsor of the bill, said last month that the proposed measure may free up P1.19 trillion worth of loans from the sale of non-performing assets to FIST corporations.
It will cover banks and other lending companies licensed by the Bangko Sentral ng Pilipinas (BSP).
“When we get to the bottom of it, this law’s primary objective is really to keep the banking sector above water during this crisis,” she said.
“Before the banks can help MSMEs (micro, small, and medium enterprises), we must help the banks first,” she added.
According to Poe, the said bill may also help around 600,000 MSMEs and save more than 3.5 million jobs.