Category Archives: Banking/Lending

COVID-19 Lockdown: Fortuitous Event or Force Majeure Exemption from Obligations

The entire Luzon has been placed under enhanced community quarantine (ECQ), also called a lockdown, by the President. On 8 March 2020, the President issued Proclamation No. 922, declaring a State of Public Health Emergency throughout the Philippines due to the Corona Virus Disease 2019 (Covid-19). A lockdown was declared on 14 March 2020 over the National Capital Region (NCR), expanded to the entire Luzon effective 17 March 2020. The ECQ has been extended to 30 April 2020; further extended to May 15 in high-risk areas. Local Government Units (LGUs) throughout the Philippines also declared a lockdown in their respective territorial jurisdictions.

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Grace Period for Loans: FAQ from BSP (Memorandum No. M-2020-018; full text)

[The Bangko Sentral ng Pilipinas (BSP) issued Memorandum No. M-2020-018 dated 6 April 2020 (“Frequently-Asked Questions  on the Implementing Rules and Regulations (IRR) on Section 4(aa) of Republic Act (R.A.) No. 11469, Otherwise Known as the “Bayanihan to Heal As One Act“). This clarifies some of the points discussed in our previous post. We are reproducing the full text of the BSP FAQs for educational purposes and to help in the dissemination of the information.]

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Grace Period for Loans Already in Effect: Implementing Rules and Regulations Issued by DOF

The grant of grace period for all loans, which is part of the emergency powers granted by Congress to the President, is now set for implementation. On 1 April 2020, the Department of Finance (DOF) issued the Implementing Rules and Regulations (IRR) of Section 4(aa) of Republic Act No. 11469, Otherwise Known as the “Bayanihan to Heal as One Act”. The salient points of the IRR are as follows: 

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Grace Period for Loans: Implementing Rules and Regulations of Section 4(aa) of the “Bayanihan to Heal as One Act”

[On 1 April 2020, the Department of Finance (DOF) issued the Implementing Rules and Regulations of Section 4 (aa) of Republic Act No. 11469, otherwise known as the “Bayanihan to Heal as One Act”. Refer to the extended discussion or the BSP FAQ. Note the important changes introduced by IATF Resolution No. 33. Here is the full text of the IRR.]

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Suspension of Rents and Loan Payments During the Covid-19 Lockdown

To help address the national crisis brought about by the Coronavirus Disease 2019 (COVID-19), Congress granted temporary emergency powers to the President, through the “Bayanihan to Heal As One Act” (Republic Act No. 11469). This law already took effect but not self-executory, which is why on 28 March 2020, the President, through the Executive Secretary, issued a directive to implement the emergency powers. Among the matters covered by the temporary emergency powers is the suspension of rent and loan payments. 

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Electronic Clearing of Checks in the Philippines, Starting January 2017

[The Bangko Sentral ng Pilipinas (BSP) has approved the implementation of the electronic clearing of checks, starting January 2017. This will speed up the clearing of checks from 3 to 5 banking days, down to 1 day. Issuers must consider the faster clearing of checks to avoid bouncing checks. To assist in the dissemination of this information, we are reproducing the media release of the BSP.] Continue reading

No One can be Imprisoned for Non-Payment of Debt

Perhaps you’ve heard someone making threats to file criminal cases against debtors who fail to pay. On the other hand, perhaps you’ve heard about the rule that no one can be imprisoned simply because of a debt in the Philippines. The prohibition against imprisonment for a debt is a basic right enshrined in no less than the Philippine Constitution. Article III of the Constitution reads:

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