The Securities and Exchange Commission (SEC) has urged lending and financing companies to comply with the Bayanihan to Heal As One Act, which makes a nationwide 30-day moratorium on loan payments mandatory rather than voluntary.
In a statement, the SEC directed these entities to defer the collection of payments and charging of penalties amid the state of national emergency due to the coronavirus disease (COVID-19) pandemic.
In an April 2 notice to lending firms, financing companies and microfinance nongovernmental organizations, the SEC reiterated the provisions of the implementing rules and regulations (IRR) of Section 4 (aa) of the Bayanihan Law or Republic Act No. 11469.
Under the IRR issued by the Department of Finance on April 1, all lenders, including those under the supervision of the SEC, must apply the 30-day grace period to all loans with principal and/or interest falling due during the enhanced community quarantine (ECQ) from March 17 to April 12.
“In these trying times, the compliance of lending and financing companies with the mandatory grace period and other emergency measures being implemented would greatly help our fellow Filipinos recover from the pandemic,” SEC Chair Emilio Aquino said.
The IRR also covers banks, quasi-banks, nonstock savings and loan associations, credit card issuers, pawnshops and other credit granting financial institutions under the supervision of the Bangko Sentral ng Pilipinas and Cooperative Development Authority, including the Government Service Insurance System, Social Security System and Pag-Ibig Fund.
All covered institutions are not allowed to impose additional interest, fees and other charges during the 30-day grace period on payments or amortizations of their borrowers in the future.
Borrowers may also pay the interest accrued during the 30-day grace period on a staggered basis over the remaining life of the loan.
All covered institutions are further prohibited from requiring their borrowers to waive the application of the mandatory grace period. Any waiver previously executed by borrowers for payments falling due during the ECQ will be nullified.
Nonetheless, borrowers may still choose to pay their obligations during the ECQ period.
Prior to the enactment of the Bayanihan to Heal as One Act and the issuance of the IRR, a number of financing and lending companies have voluntarily extended relief to their borrowers.
These include members of the Philippine Finance Association, microfinance institutions under the Microfinance Council of the Philippines and the Alliance of Philippine Partners in Enterprise Development Inc. —DORIS DUMLAO-ABADILLA
Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.