BSP Orders Mandatory 60-Day Moratorium on All Loans

Lenders are asked to implement a mandatory one-time 60-day grace period for all loans falling due on or before 31 December 2020.

The BSP (Bangko Sentral ng Pilipinas) has ordered all supervised financial institutions to immediately implement and comply with a one-time mandatory 60-day grace period for loan payments.

In a memorandum, the central bank directed all supervised lenders to “implement a mandatory one-time 60-day grace period to all loans that are existing, current and outstanding falling due, or any part thereof, on or before 31 December 2020.”

“The mandatory 60-day grace period shall apply to each loan of individuals and entities with multiple loans.”

Lenders are ordered not to charge or apply interest on interest, penalties, fees, or other charges during the mandatory one-time 60-day grace period to future payments or amortisations of borrowers.

The directive is in accordance with Section 4(uu) of the ‘Bayanihan To Recover As One Act’ (Bayanihan 2), or the ‘Republic Act No. 11494’, which took effect on 15 September.

According to the BSP, accrued interest for the one-time 60-day grace period may be paid by the borrower on a staggered basis until 31 December 2020.

“Nonetheless, this shall not preclude the borrower from paying the accrued interest in full on the new due date.”

Lenders and borrowers may also agree to a grace period longer than 60 days and/or payment of accrued interest on a staggered basis beyond 31 December 2020.