MANILA – The House of Representatives on Tuesday night approved on third and final reading a bill seeking to strengthen the financial sector by helping banks and other financial institutions withstand the economic downturn due to the coronavirus disease 2019 (Covid-19) pandemic.
With 202 affirmative votes, six negative votes, and one abstention, the lower chamber passed on third reading House Bill 6816, or the proposed Financial Institutions Strategic Transfer Act, which aims to help banks and other financial institutions in their bad debt resolution and management of their non-performing assets (NPAs) to mitigate the economic impact of Covid-19 on their operations.
House committee on banks and financial intermediaries chairman Junie Cua, sponsor of the bill, said most financial institutions are facing a period of delayed loan collections and are at risk of recording higher NPAs across all borrower segments as a result of the disruption in economic activities.
NPAs are financial institutions' non-performing loans (NPLs) and real and other properties acquired (ROPAs) in settlement of loans and receivables, which prevent banks and financial institutions from effectively performing their role of financial intermediation.
Cua argued that the increase in the NPLs and NPAs would affect the financial liquidity of the banking industry.
He said the proposed measure would help banks and other financial institutions offload their NPAs, induce economic activity, and improve the liquidity of the financial system to propel economic growth.
The bill seeks to encourage financial Institutions to sell NPAs to asset management companies, created as Financial Institutions Strategic Transfer Corporations (FISTC), which specializes in the resolution of distressed assets.
“The banking sector must continue to provide credit. It has to be liquid all the time to be able to meet the continuous flow of credit to the economy, the very lifeblood of economic activity,” Cua said.
House Bill 6817, or the proposed Covid-19 Related Anti-Discrimination Act, was also approved on third reading with 204 affirmative votes, zero negative votes, and one abstention.
The bill seeks to prohibit discrimination against persons who are declared confirmed, suspect, probable, and recovered cases of Covid-19, as well as health care workers, repatriated Filipinos, and service providers.
Among the punishable discriminatory acts are failure of a public official, health care worker, and institution to assist persons afflicted with Covid-19; verbal, physical, or psychological assault; stigmatization; and unlawful refusal to honor valid contracts.
The bill seeks to penalize a person who commits harassment or assault with imprisonment of not less than one year but not more than 10 years or a fine of not less than PHP200,000 but not more than PHP1 million.
The other discriminatory acts will be penalized with imprisonment of not less than six months but not more than five years and/or a fine of not less than PHP50,000 but not more than PHP500,000.
Meanwhile, the chamber approved on second reading House Bill 6920, or the proposed Covid-19 Unemployment Reduction Economic Stimulus (CURES) Act, which seeks to establish a special fund amounting to PHP1.5 trillion to finance infrastructure projects across these priority areas -- health, education, agriculture, and local roads/infrastructure and livelihood (HEAL). (PNA)
