The Philippine Deposit Insurance Corp. (PDIC) is enacting a new payment relief measure following the mandate of the grace period was in accordance with Republic Act 11494 or the Bayanihan to Heal as One Nation Act.
In a recent statement, PDIC said that the application of a grace period covers payment for loans and acquired properties falling due on September 15 to December 31 this year for corporate and closed bank accounts.
Borrowers and property buyers are given one-time 60-day extension on loan payments, the PDIC said. No additional interest, penalties and other charges will be incurred during the 2-month debt moratorium.
The payments—for amortizations or down payments—made prior to the effectivity of debt moratorium will be considered as advanced payment. Succeeding due dates will be moved by two months.
“In addition, all undeposited post-dated checks issued by borrowers and property buyers shall be processed according to the terms of the payment relief unless otherwise requested to be deposited on the respective due dates,” the 57-year-old government instrumentality explained.
The PDIC said it first implemented a debt moratorium for corporate and closed bank clients in March this year when the country was placed under enhanced community quarantine or severe lockdown.
The government has mandated grace periods on loan payments to provide relief to borrowers who are struggling to settle payment on time amid the ongoing economic and health crises.
As of end-October, the Philippine banking system has provided loans amounting to P10.61 trillion, which is 1.24 percent higher than P10.48 trillion last year for the same period.
Of this amount, P391.42 billion represents nonperforming loans (NPLs). This is nearly 70 percent more than last year’s P230.40 billion.
NPL ratio stood at 3.69 percent as of end-October, which is the highest in recent years.
Earlier, economists said they expect bad loans to go even higher after the debt moratorium lapses.