THE Securities and Exchange Commission (SEC) is ordering lending and financing companies to extend the deadline for loan payments amid the coronavirus disease 2019 (COVID-19) pandemic.
The SEC issued a notice on Thursday to remind financing companies, lending companies and microfinance non-government organizations to implement a 30-day grace period for all loans, whether principal or interest, falling due within the enhanced community quarantine (ECQ) from March 17 to April 12.
This is in compliance with Republic Act No. 11469, or the Bayanihan to Heal as One Act, which calls for a minimum 30-day grace period for loan payments during quarantine.
“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 Chairperson Emilio B. Aquino said in a statement.
The guidelines for the Bayanihan to Heal as One Act was issued by the Department of Finance on Apr. 1. Aside from SEC-regulated institutions, the rules also cover public and private banks, quasi-banks, non-stock savings and loan associations, credit card issuers, pawnshops and other credit granting financial institutions under the supervision of the central bank and the Cooperative Development Authority.
It requires that during the 30-day grace period, covered institutions may not impose additional interest, fees and other charges to the future payments or amortizations of their borrowers.
It also prohibits any waiving of the 30-day grace period, and invalidates any previously executed waiver that covers payments due within the quarantine period.
Borrowers are allowed to pay the interest accrued during the 30 days on a staggered basis throughout the life of their loans. But if they are able to pay during quarantine period, they also have the option to do so.
Should the quarantine over Luzon be extended by President Rodrigo R. Duterte beyond Apr. 13, the grace period must also be extended accordingly.
Prior to the release of the guidelines, several banks have already announced extended loan payment deadlines during quarantine. These are BDO Unibank Inc.; Metropolitan Bank & Trust Co.; Bank of the Philippine Islands; Rizal Commercial Banking Corp.; Union Bank of the Philippines; East West Banking Corp.; China Banking Corp.; CIMB Bank Philippines; and Philippine Savings Bank. — Denise A. Valdez