“The accrued interest under Bayanihan Acts one (1) and two (2), we would like to clarify that under both laws, the expectation is for the financial institutions to fully disclose and explain to their clients the procedures and implementation of said Laws,” said a reply from Bangko Sentral ng Pilipinas (BSP), Consumer Protection and Market Conduct Office Strategic Communication and Advocacy.
In December last year I wrote an article “Some banks make big business in the name of Bayanihan 1 and 2” and the same concern was emailed to BSP. Some banks did not disclose to their clients the amount that they are going to charge once a borrower availed for the Bayanihan ranging from 14,000 to 15,000 Pesos for 30-day grace period that caused financial burden for many instead of helping them.
PSB added, “Such disclosure and transparency will allow clients to arrive at informed financial decisions on whether to avail or not the mandatory grace period.”
“Borrowers are encouraged to also communicate with their banks regarding the implementation of said Acts and/or negotiate with their bank for a more affordable payment arrangement on their loan account” PSB clarified.
The BSP letter expressed its gratitude for bringing the matter to their attention.
“Thank you for bringing this matter to our attention. The Bangko Sentral ng Pilipinas (BSP) is one with our government in assisting the Filipino people in these trying times, as we manage the impact of the Corona Virus Disease (COVID-19) pandemic to our economy” observed
Explaining further the letter said “We inform that Republic Act No. 11469, otherwise known as the Bayanihan to Heal as One Act or Bayanihan Act 1 (for brevity), enacted on 24 March 2020 due to the Covid-19 pandemic, granted authority to the President to, among others, direct lending institutions to implement a minimum of a thirty (30) day grace period for the payment of types of loans, as well as ensure the availability of credit to the productive sectors of the economy.
To implement the foregoing provision, the Implementing Rules and Regulations (IRR) of Section 4(aa) of RA No. 11469 issued by the Department of Finance on 02 April 2020 provides that, all covered institutions shall implement a mandatory 30-day grace period for all loans, with principal and/or interest falling due within the Enhanced Community Quarantine (ECQ) Period without incurring interest on interest, penalties, fees and other charges (emphasis supplied).
For accrued interest in March, April and May 2020, the borrower may pay it in lumpsum on the next due date or on a staggered basis over the remaining term of the loan.
For additional information on the Bayanihan Act 1, we refer you to the Frequently Asked Questions (FAQs) I, II, III and IV issued by the BSP and the Bayanihan Act and its Implementing Rules and Regulations issued by the Department of Finance. AHMT