Connect with us

Hi, what are you looking for?

Economy

Congress ratifies FIST bill

Congress has ratified the bicameral conference committee report on the bill allowing financial institutions to sell off their non-performing assets (NPAs) to asset management companies, as these are expected to increase during the coronavirus pandemic.

House Bill No. 6816 and Senate Bill No. 1849, or the Financial Institutions Strategic Transfer Act, is one of the measures certified as urgent by President Rodrigo R. Duterte to assist financial institutions affected by the coronavirus pandemic.

The proposed legislation covers lending companies and other institutions licensed by the Bangko Sentral ng Pilipinas to perform credit-granting companies.

The Senate ratified the report on Tuesday while the House gave its approval on Wednesday. This puts the measure a step away from enactment.

Senator Grace S. Poe-Llamanzares said the measure will keep banks and lending firms healthy, allowing them to extend assistance to businesses.

“The FIST Act is seen to help cushion the adverse impact of the pandemic to our financial sector,” she said during Tuesday’s session.

“If passed into law, financial institutions will be able to offload non-performing assets which will then promote investor and depositor confidence, and mitigate the effects of the crisis.”

The measure provides for the creation of FIST corporations, which will be authorized to invest or acquire nonperforming assets (NPA), or engage third parties for its management, operation, collection and disposal.

The reconciled version of the House and Senate bills noted that only the private sector may be allowed to form FIST corporations.

“It would be financially risky for the government to be involved in acquiring non-performing assets as government revenue is down due to the pandemic,” Ms. Poe-Llamanzares said.

It also prevents foreign FIST corporations from taking part in the bidding and foreclosure of real properties. It also removed the consultation requirement with the Philippine Competition Commission.

“Specific periods were lowered to prevent delay in offloading of assets,” she added. “In the old SPV (Special Purpose Vehicle) law, banks found it difficult to immediately offload non-performing assets due to long settlement periods between the borrower and the bank, as well as due cases being filed in court.”

The proposed FIST Act is an improved version of the SPV Law of 2002, enacted to help banks recover in the wake of the Asian Financial Crisis. — Charmaine A. Tadalan and Kyle Aristophere T. Atienza

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.
Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

Latest

Economy

By Diego Gabriel C. Robles THE Philippine economy expanded by 7.4% in the second quarter — slower than expected — as rising inflation weighed...

Economy

By Abigail Marie P. Yraola, Researcher THE Philippines’ merchandise trade deficit hit another record in June as imports continued to outpace exports despite a...

Economy

THE National Government’s (NG) outstanding debt as a share of the gross domestic product (GDP) eased to 62.1% at the end of June. Data...

Economy

By Keisha B. Ta-asan SOURED LOANS held by Philippine banks fell for a fourth straight month in June, bringing the nonperforming loan (NPL) ratio...

Economy

Smart says third telco player’s PCC complaint meant to avoid liability By Arjay L. Balinbin, Senior Reporter GLOBE Telecom, Inc. on Tuesday said it...

Economy

DMCI Holdings, Inc. reported on Tuesday that its second-quarter consolidated net income went up by 73% to P9.03 billion from P5.23 billion, driven by...

You May Also Like

Investing

Having a good Instagram marketing agency to back up your Instagram account is an absolute must going into the new year. With competition stronger...

Economy

Ivermectin, an existing drug against parasites including head lice, has had a checkered history when it comes to treating COVID-19. The bulk of studies...

Investing

Insomnia is the most common sleep disorder in the global population. Therefore, it is a problem that many people suffer or have suffered throughout...

Investing

Instagram still holds the top spot for social media in terms of building brand reputation and expanding business potential. Every day, more and more...

Disclaimer: SmartRetirementReport.com, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2021 SmartRetirementReport. All Rights Reserved.