Business organizations lauded the enactment of Financial Institutions Strategic Transfer (FIST) Act into law as timely stating the new law would further aid in the recovery of the Philippine economy, which has been battered by long lockdowns and quarantines due to the pandemic.

The Philippine Chamber of Commerce and Industry (PCCI), the Bankers Association of the Philippines (BAP), and the Management Association of the Philippines (MAP) issued separate statements of support to the signing of the FIST Act by President Duterte and its passage by Congress.

BAP said the passage and signing of the FIST Act into law is timely and will further strengthen the role of the financial industry in the economic recovery of the country.

“With this measure, banks can gradually recover from non-performing loans (NPLs) that have increased due to the pandemic. As financial institutions utilize the special purpose vehicles, banks may now continue to increase lending activities to help spur economic activity,” BAP said in a statement.

BAP is looking forward to the issuance of the Implementing Rules and Regulations that will cover all NPAs and NPLs as of December 31, 2021 as provided by the law.

PCCI, the country’s largest business organization, said the law is a key component of the government’s economic recovery effort.

“The pandemic has affected businesses across all sizes and economic sectors, including banks with higher-than-expected credit losses. The FIST law will not only clear banks of bad loans but also improve their liquidity, enabling them to help rehabilitate distressed businesses and support the economic recovery,” said PCCI President Amb. Benedicto V. Yujuico.

Yujuico added that while the measure could benefit small and medium enterprises (SMEs), he shared the call of the National Economic Development Authority (NEDA), to transition to Modified General Community Quarantine to stem further economic decline and help businesses regain lost grounds.

“The assurance of a steady source of credit for businesses will only sustain to their recovery if establishments and public transport are allowed to operate at higher capacity, if restrictions on the movement of people is lifted and consumer confidence is boosted,” Yujuico explained.

The Philippines’ economic growth has been sustained by a strong domestic consumption. Economic recovery must be geared towards rebuilding consumer confidence to ensure that the cycle of consumption will continue. Improved consumer confidence stimulates demand which in turn protects existing jobs and leads to the creation of new jobs.

Meantime, MAP cited the FIST Law as “one of the pillars under the government’s national economic recovery program as it lays down an enabling environment for the banking industry to continue lending to the private sector.

“With this new law and the recently passed CREATE bill, we are hopeful that our economy will get rehabilitated earlier than expected for the sake of our countrymen,” said MAP President Aurelio R. Montinola III.