SENATOR Grace L. Poe said regulators should prod banks in providing relief to their customers amid the enhanced community quarantine (ECQ).
“Ask banks to give consumers breathing room in ECQ,” Poe, chairman of the Senate Committee on Banks, Financial Institutions and Currencies, said.
The Senator suggested the Bangko Sentral ng Pilipinas (BSP) flex its persuasive powers on banks to provide relief to consumers during the lockdown that began August 6.
Recalling that the BSP has lowered interest rates and provided banks regulatory relief, Poe proposed that “in the same way, it can encourage banks to provide their clients relief during these difficult times,” reminding that “banks are expected to share the same breathing room with consumers.”
Poe explained it is well within the BSP’s authority to ask banks to pass on such relief. She cited an assessment of the Philippine economy released by the International Monetary Fund last week noted the amount of bad loans has not risen as much as initially expected.
She acknowledged the BSP for laying down the groundwork for banks to strengthen their capital years ago, citing test results for this year showed that banks’ solvency and liquidity are relatively resilient.
The senator suggested that “providing consumers payment flexibility during the ECQ may just be what they need to stave off financial ruin.”
“We are a consumer-driven economy and helping them get back on their feet is crucial in sustaining economic recovery,” Poe said.
At the same time, she cited the BSP’s latest data noting total loans of commercial and universal banks amounted to P9.8 trillion as of end-June 2021. Consumer loans, dubbed by BSP as loans for household consumption, amounted to only P817.4 billion, which is barely a tenth of total loans.
She pointed out that “big companies can call their banks and ask for lower interest and an extension of the payment period.” But “for small borrowers, it is never that easy.”
“Without any relief or loan restructuring, they can easily lose a home or livelihood. For TNVS drivers, they will be deprived of their vehicle and source of income,” Poe said. “If we will only think long-term, we will extend a helping hand to consumers.”
She said that for pushing passage of the Financial Institutions Strategic Transfer Law embodied in Republic Act 11523, banks are now allowed to “offload their nonperforming loans to FIST corporations to enable banks to bankroll activities that will fuel the country’s economic recovery.”