MANILA – The Management Association of the Philippines (MAP) has flagged a provision in the House of Representatives version of Bayanihan 2 as damaging to the banking system, granting a 365-day moratorium on loans.
In a statement Friday, MAP chairman Francis Lim said it would be better to pass the Senate version of the bill, which limits the moratorium on loans to just one month.
“The 365-day loan moratorium under the House version of Bayanihan 2, while seemingly good for our citizens in the short term, may have unintended negative consequences for the country that can potentially exacerbate the negative impact of the pandemic, ”Lim said.
He added that a longer period of suspension of loan repayments “would jeopardize the ability of our banks to process withdrawals from their customers” and affect public confidence in the banking system.
PHP 11 trillion, or about 78% of the total deposits of PHP 14 trillion, have been loaned to the public, Lim said, noting that about 70% of depositors are not borrowers.
“It will also drastically reduce banks’ liquidity, reducing their ability to lend at a time when businesses are in dire need of capital to help them recover from the pandemic,” he said, adding that it would cause serious harm. damage to the economy and would require a lot of time. and resources to recover. (ANP)