Financial Institutions

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PHILIPPINES: BSP and SEC Issue Guidelines to Implement Mandatory Grace Period for all Loans Pursuant to Bayanihan to Recover as One Act

Republic Act No. 11494, otherwise known as the “Bayanihan to Recover as One Act”, prescribes a mandatory one-time 60-day grace period for the payment of all existing, current, and outstanding loans falling due, or any part thereof, on or before December 31, 2020, in order to mitigate the effects of the COVID-19 situation. 

In this regard, both the Bangko Sentral ng Pilipinas (“BSP”) and the Securities and Exchange Commission (“SEC”) released guidelines to implement this measure.  The guidelines are addressed to all BSP-supervised financial institutions, as well as financing companies, lending companies, and microfinance non-governmental organizations under the SEC Corporate Governance and Finance Department’s jurisdiction (collectively, the “financial institutions”). These guidelines provide that the grace period shall apply to each loan, whether the borrower has a single loan or multiple loans with the institution.

PHILIPPINES: BSP Grants Relief Measures to Manage the Financial Impact of COVID-19, Temporarily Suspends Administrative Proceedings, and Issues Guidelines for the Implementation of the Bayanihan to Heal As One Act

The Bangko Sentral ng Pilipinas (“BSP”) Monetary Board has approved the granting of relief measures to BSP-supervised financial institutions (“BSFIs”) to enable them to extend the same relief measures to their clients, borrowers, and employers in view of the Enhanced Community Quarantine (“ECQ”) imposed by the Philippine government in response to the COVID-19 outbreak in the Philippines. The BSP also temporarily suspended proceedings of administrative cases at the BSP’s Office of the General Counsel and Legal Services-Investigation and Prosecution Group due to the Luzon-wide ECQ. It likewise directed all BSFIs to comply with Section 4(aa) of the Bayanihan to Heal As One Act.

On April 24, 2020, President Rodrigo Duterte announced another extension of the ECQ in high-risk areas which include Metro Manila, Central Luzon (except Aurora), the CALABARZON Region (Cavite, Laguna, Batangas, Rizal and Quezon), the island of Cebu, the provinces of Davao del Norte, Davao de Oro, and Davao City, among other areas until May 15, 2020.