Bayanihan 2 law grants 60-day grace period for paying loans

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By: Manila Bulletin

A one-time 60-day grace period for paying loans, including credit card payments, will be allowed under the Bayanihan 2 law to ease the burden of the public amid the coronavirus pandemic.

Republic Act No. 11494, or the Bayanihan to Recover as One Act, directs all banks, financing companies, lending companies, real estate developers, insurance companies, pre-need companies, and other public and private financial institutions to grant such grace period for the payment of loans falling due on or before December 31, 2020 without interests, penalties and other charges.

The Government Service Insurance System, Social Security System, and Home Development Mutual Fund (Pag-ibig Fund) are also covered by the law signed by President Duterte last Friday.

The new law allows the extension of the maturity of the existing, current and outstanding loans, including but not limited to salary, personal, housing, commercial, and motor vehicle loans, amortizations, financial lease payments, and credit card payments.

Under Bayanihan 2 law, banks and other non-bank financial institutions that agree to loan term extensions or restructuring will be entitled to regulatory relief as may be determined by the Bangko Sentral ng Pilipinas (BSP).

The relief measures may include staggered booking of allowances for credit losses, exemption from loan-loss provisioning, exemption from the limits of real estate loans when application, exemption from related party transaction restrictions, and non-inclusion in the institution’s reporting on non-performing loans.

As for residential and commercial rents covered within the period of the community quarantine, a 30-day grace period will also be provided without incurring interests, penalties and other charges. The amount will be amortized in equal monthly installments until December 31, 2020.

“No increase in rent shall be imposed during the same period,” the law added.

 

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