Connect with us

Hi, what are you looking for?


FIST oversight panel wary of incentives abuse

THE TWO chambers of the legislature will form a Joint Congressional Oversight Committee (JCOC) to monitor the implementation of the Financial Institutions Strategic Transfer (FIST) Law, with its co-chairs saying that the panel will ensure that FIST incentives are not abused by parties availing of its tax-light asset-transfer rules.

“(The JCOC) will particularly ensure that the provisions on the FIST corporation applications and plans, transfer of assets, and availment of incentives and privileges are followed,” Senator Grace S. Poe-Llamanzares, who chairs the Committee on Banks, Financial Institutions and Currencies, said in a text message.

Ms. Poe-Llamanzares will co-chair the joint committee along with her House counterpart alongside Quirino Representative Junie E. Cua, who heads the House Committee on Banks and Financial Intermediaries.

The JCOC is authorized by Section 27 of the FIST Law, which went into the books as Republic Act No. 15523 after it was signed in February.

The law facilitates the transfer of non-performing loans and their underlying collateral assets to FIST corporations, which are known as FISTCs under the law. Unburdened by bad assets, banks are thus expected to resume their focus on lending growth to help the economy recover. The FISTCs will then specialize in managing the transferred assets, disposing of them or restructuring as necessary. They will also be allowed to sell shares to large investors to raise capital and allow investors to benefit from any returns generated.

“There should be a periodic evaluation of the incentives provided in Sections 15-17 as this is the portion of the law that can be abused,” Mr. Cua said in a text message.

The FIST Law allows financial institutions to sell their non-performing assets to FISTCs. The transfer rules apply to assets that become non-performing until Dec. 31, 2022.

The law provides for tax exemptions and fee privileges for transactions related to the transfer of non-performing assets from banks to FISTCs. These exemptions include documentary stamp tax, capital gains tax imposed on land transfers, value-added tax and creditable withholding tax in relation to the transfer of the assets.

It also gives additional tax exemptions and fee privileges for FIST corporations by excluding them from income tax on net interest income and documentary stamp tax.

“There should be a careful analysis of the transfer of assets from the financial institution to a FISTC and to a third party to ensure that there is no circumvention of the law,” Mr. Cua said.

“Ultimately, the Oversight Committee will ensure that all of the parties’ rights are respected,” Ms. Poe said.

The Bangko Sentral ng Pilipinas estimated the industry’s bad loan ratio at 3.7% in January, against 3.61% in December and 2.16% a year earlier.

In January, non-performing loan volume rose 0.15% month on month to P392.256 billion and rose 67% year on year. — Luz Wendy T. Noble

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!



British Airways has begun cancelling flights to America over concerns signals from 5G mobile phone masts could endanger the lives of passengers. The UK...


The unstoppable rise of the online marketplace model – operated by the likes of Amazon, Expedia and eBay – is driving the largest fundamental...


Boris Johnson has declared the end of coronavirus restrictions today as officials step up plans for post-pandemic Britain. Working-from-home guidance and Covid passes will...


Social media stars including Jodie Marsh and five ex-Love Islanders including Francesca Allen are to be subjected to a name and shame Instagram campaign...


Private details of hundreds of debit and credit cards in the UK are being leaked on the dark web every week for as little...


Inflation has risen to its highest level in nearly three decades because of a spike in the cost of a range of goods and...

You May Also Like


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


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...


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


As a traditionally rigid insurance industry becomes bogged down by antiquated processes and operations, a handful of industry leaders are seeking to shake things...

Disclaimer:, 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.