No loan moratorium during ECQ — BSP

THERE WILL BE no mandatory loan moratorium despite the reimposition of stricter lockdown measures, the Bangko Sentral ng Pilipinas (BSP) said, even as it urged banks to provide relief measures to borrowers amid the situation.

The central bank said in a statement shared by BSP Governor Benjamin E. Diokno to reporters through Viber that the mandatory 30-day grace period mandated by the Republic Act No. 11469 or the Bayanihan to Heal as One Act is not applicable despite the reimposition of the enhanced community quarantine (ECQ) in Manila as the law was only effective until June 1, 2020.

Following this, another 60-day loan moratorium under Republic Act No. 11494 or the Bayanihan to Recover as One Act was also granted, which expired on Dec. 31.

“The BSP strongly encourages BSP-supervised financial institutions to continue to provide relief measures to its clients by renewing, restructuring, or extending the terms of the loans, among others, based on their continuing assessment of their cash flows,” the central bank said.

Latest data from the BSP showed the nonperforming loan (NPL) ratio of big banks stood at 3.7% in January, inching up from the 3.61% in December and the 2.16% a year earlier. This was equivalent to P392.256 billion in bad loans, climbing 67% from the P234.987 billion seen in January 2020.

“The BSP will continue to closely monitor the impact of the pandemic on the financial industry to promptly address any emerging risk and to support a sustainable economic recovery,” it said.

Metro Manila and surrounding provinces Cavite, Laguna, Rizal, and Bulacan are placed under the tightest restriction measures from March 29 to April 4 in an effort to prevent further virus spread as cases surge. — L.W.T. Noble