April 7, 2020 – The Securities and Exchange Commission (SEC) instructed all financing companies to delay their payment collection and waive penalty charges while the entire country is under a state of national emergency because of the COVID-19 pandemic. As of April 7, 2020, the Enhanced Community Quarantine (ECQ) is still in effect.
The SEC sent the notice to lending, financing, and microfinance companies and NGOs. The notice is based on the Department of Finance (DOF)-approved implementing rules and regulations (IRR) approved of the Bayanihan to Heal as One Act. The law allows the president of the Philippines to implement a 30-day grace period for all loan payments without penalties and charges. The grace period can be extended if the Enhanced Community Quarantine is extended.
The IRR approved by the DOF instructed all lenders (including those under SEC supervision) to apply the 30-day grace to all loans that are due during the ECQ period from March 17 – April 12.
Check out out our article on what financing institutions are covered by the IRR: BSP Instructs Banks: Banks: No Interest on Interest, Fees, and Charges During Enhanced Community Quarantine
Covered institutions must not impose additional interest, fees, and other charges during the 30-day grace period to the future payments or amortizations of their borrowers.
Covered institutions must also not require the borrower to waive the application of the mandatory grace period. If a waiver is previously executed by the borrowers, they are considered invalid. Borrowers may also choose to pay their loans during the ECQ.
SEC Chairperson Emilio B. Aquino said the compliance of all financing companies of the provisions of the Bayanihan law will hep Filipinos recover from the pandemic.
Even before the Bayanihan to Heal as One Act is enacted, a number of finance and lending companies have already extended their relief to borrowers, including the members of the Philippine Finance Association, and institutions under the Microfinance Council of the Philippines (MCPI) and the Alliance of Philippine Partners in Enterprise Development (APPEND). Both MCPI and APPEND said the grace period would benefit 8 million households.
Read the SEC announcement here
BitPinas received an email from the SEC regarding this announcement.
This article is published on BitPinas: SEC Tells Financing Companies to Implement 30-day Extension for Loan Payments Amid Coronavirus ECQ