President Rodrigo Duterte has recently signed Republic Act No. 11494, also known as the “Bayanihan to Recover as One Act.” The law includes loan and relief measures that would help cushion the impact of the pandemic on all Filipinos, here in the Philippines and abroad.
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Among these measures is a 60-day grace period on loan payments, including housing loans, salary loans, motor vehicle loans, and even credit card payments. The law also includes a 30-day grace period for commercial as well as residential rental payments.
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Republic Act. No. 11494 directs all banks, financing companies, lending companies, real estate developers, insurance companies, and other financial institutions to grant a grace period for loan payments due on or before December 31, 2020. These payments should be made without any interest, penalties, and other additional charges.
The law also covers the Government Service Insurance System (GSIS), Home Development Mutual Fund (Pag-IBIG Fund), and Social Security System (SSS), the Manila Bulletin reported.
According to the law, all loans may be settled on a staggered basis without interest, penalties, and other charges on or before December 31, 2020, or as agreed upon by the parties involved. This applies to housing loans, salary loans, personal loans, motor vehicle loans, amortizations, financial lease payments, and credit card payments, among others.
Banks Entitled to Relief Measures
Consequently, the new law also states that banks and other financial institutions that agree to loan term extensions will be granted relief measures, to be determined by the Bangko Sentral ng Pilipinas (BSP). These measures may include staggered booking of allowances for credit losses, along with exemptions from loan-loss provisioning, limits of real estate loans upon application, and related party transaction restrictions.
The law clarifies, however, that this provision does not apply to bank borrowings and interbank loans.
Grace Period for Utilities, Rent
Notably, the law also provides a 30-day grace period for the payment of utilities such as electricity, water, and telecommunications — specifically to areas covered by Enhanced Community Quarantine (ECQ) and Modified Enhanced Community Quarantine (MECQ).
Likewise, a 30-day grace period is provided for residential as well as commercial rents covered within the community quarantine period. The amount shall be amortized in equal monthly installments until December 31, 2020, without interest, penalties, and other charges.
The law also states that there shall be no increase in rent imposed during the quarantine period.
These provisions covered by Republic Act. No. 11494 would certainly help ease the burden of all Filipinos, including overseas Filipino workers (OFWs), as they struggle to make ends meet amid the current pandemic. Indeed, let us all hope that soon, the entire country — and the world — shall “recover as one.”