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. 

At the outset, it is important to note that the emergency powers is valid throughout the country and effective for a period of three (3) months, unless extended by Congress, or withdraw sooner either by Congress or the President. 

[Update: See Grace Period for Loans Already in Effect: Implementing Rules and Regulations Issued by DOF and Grace Period for Rents (Residential and MSMEs) during the Enhanced Community Quarantine]

RENTS. The President has directed the Secretary of of Trade and Industry (DTI) to enforce the suspension of rental payments for all residential units falling due within the period of the enhanced community quarantine.The minimum grace period is thirty (30) days, which means the DTI has the authority to extend the grace period for the entire duration of the emergency powers, which is 3 months. 

The grace period is only for residential units. The Presidential directive does not include rentals for offices or business units. It is interesting to note, however, that R.A. 11332 also authorizes the President, in the same provision granting a grace period for residential rents, to “undertake such other measures as may be reasonable and necessary to enable the President to carry out the declared national policy subject to the Bill of Rights and other constitutional guarantees.” We need to wait if the government will also provide a grace period for office or other business space rentals. [Update: The DTI Memorandum Circular covers rental payments for both residential and commercial units.]

The grant is for a grace period. It does not mean that the tenant will no longer pay the rent for that particular month. It is not condonation. The grace period simply means that the payment deadline is extended, without incurring interests, penalties, fees, and other charges. 

LOANS. The Secretary of the Department of Finance (DOF), in partnership with the Bangko Sentral ng Pilipinas (BSP), is mandated to direct the grant of a minimum of a 30-day grace period for the payment of ALL loans falling due within the period of the enhanced community quarantine, without incurring interests, penalties, fees, or other charges. The covered loans include, but not limited to:

  • salary
  • personal
  • housing
  • motor vehicle loans
  • credit card payments
  • others

The grace period covers the Government Service Insurance System, Social Security System, Pag-ibig Fund, and all the following, public or private:

  • banks
  • quasi-banks
  • financing companies
  • lending companies
  • other financial institutions

Persons with multiple loans are given the minimum 30-day grace period for EVERY loan.

[Update: See Grace Period for Loans Already in Effect: Implementing Rules and Regulations Issued by DOF]

Incidentally, the standard practice for rents and loans is the issuance of post-dated checks. The grace period constitutes a valid defense in a Bouncing Check (BP 22) case, should the landlord or lender decide to deposit the check corresponding to the rent for the period covered by the community quarantine (and the check bounces for insufficiency of funds).

Atty.Fred

9 thoughts on “Suspension of Rents and Loan Payments During the Covid-19 Lockdown

  1. AvatarGlenda E. Saligan

    Sir/Madam:

    I am Glenda E. Saligan, a government employee here in Arakan, Cotabato. We are on pre-emptive community quarantine. We are not allowed to stay outside the home. We are not allowed to go out from the municipality boundaries. One person is only allowed to go out to buy food and other supplies a limited number of times in a week.

    My query is that, are we government employees this part of the country can avail of the 30-day grace period for our loan payments to the lending institutions mentioned?

    Thank you very much po.

    Reply
    1. AvatarElsa

      Hello po,

      Eh paano po yun loan sa bangko na 2005 pa tapos eh akala nun me utang eh kinaltas na sa kanyang separation pay nun mag resign siya kase wala siyang nakuha kahit singko sa gobyerno after almost 10 years ng serbisyo.

      Bigla nun last year ay me “law firm” na collection agent daw po ng bangko na naghahabol at yun natitira sa Php68k na utang ay naging Php1.7 million at pag di daw po nabayaran ay ide deport ang me utang kase yun law firm daw po ay me right na ipa deport at kung anu ano pa panakot. Tapos po panay ang send ng mga messages sa madaming FB connections nung debtor.

      Ano po ang statute of limitation ng mga bank loans. Wala pong contact ang bangko for many years.

      Maraming salamat po.

  2. AvatarAntonio Panlilio

    Ang galing ng law na yan. Pano kung yung rent na yun ang tanging pinagkukunan ng pangbili ng pagkain ng nag papa rent? Yung tenant free and clear for 3 months tapos yung rentor magugutom nalang? Di tama yun.

    Reply
  3. AvatarEbuth

    Sir/Mam,

    My son’s contract in dormitory at dapitan sampaloc is up to april30 2020, we already issued pdc for rental fee until april30, 2020 and additional 2months deposit for unpaid electricity and water. However due to ecq my son’s clothes and other valuable things are left inside the dorm as of today may 14, 2020, my son went back home here in cabanatuan last march 13 due to cancellation of review classes; in that case my question is; are we oblige to pay the rental fee for May2020 considering our contract is until april 30 only, and its not anyone’s liking not much ours not to get my son’s things and vacate the dormitory due to ecq or gcq, we cannot travel from cabanatuan city to manila due to ecq and gcq coz we reside here in cabanatuan. Am just afraid the dorm owner might used the pdc we issued for 2 months deposit.
    Thank you.

    Reply
    1. pnlpnl

      Hi Ebuth. It is best that you coordinate this directly with the dormitory, explaining the situation. Good luck.

  4. Avatarfranciso

    may loan po ako na 200k sa isang nagpapautang dito sa amin. sa 200k na loan 180k lang ibibigay.may outright na 10%. matagal na po ako nangugutang renew na lang ng renew. payable in 4 mos magiging 280k. bale 80k po ang interst sa 4 mos. nagkarun lang po ng problema sa.check ko ng mag ecq ng march. kaya tumalbog.ang checks ko kahit ipinakiusap ko na wag ipasok ang checks kasi wala pong fund. grab driver po ako. ng maglockdown nawalan kami ng byaje mag asawa. gusto ng lender magbayad ako daily para sa.interst lang. kahit hindi pa din po kami nakakabyaje na.mag asawa. kung idedemanda po nya kami ng bp22 maari ko po ba ipakiusap sa korte na.ang ihuhulog namin araw araw ay ibawas na sa principal? sobra po kasi gipit pa ngayon since hindi pa din kami.nakakbyae.mag asawa sa grab. salamat po

    Reply
  5. AvatarEya

    Hi Atty,
    May I know where can I file a complain for violation of the Bayanihan Act 2. I understand that the 60-day grace period for loans is mandatory, i didnt make any payment for my car loan for the months of Oct and Nov 2020. Just today, I got a call from their legal office that my account has been forwarded to them as i failed to make any payments for the mentioned months during the grace period. I was never a delinquent customer. As if being wrongfully charged as such is not stressful enough, I was handled “roughly” by their representative from the legal office. May I seek your advice on how to report this kind of violation. Thank you in advance.

    Reply

Leave a Reply

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

This site uses Akismet to reduce spam. Learn how your comment data is processed.