Bangko Sentral ng Pilipinas (BSP) released a Memorandum Order No. M-2020-074 on Monday, September 28, 2020 that your bank or lending facility should have informed you by now. It requires all its supervised financial institutions (BSFIs) to “post additional rules and clarifications about the 60-day grace period on loans."
According to BSP governor Benjamin E. Diokno, who signed the memo, banks and non-banks are mandated to “clearly communicate details of the BSFIs implementation of the grace period.”
The one-time non-extendable 60-day grace period is part of the new law, Bayanihan To Recover As One (BARO) act, which President Rodrigo Duterte signed early in September. The law took effect on September 15, 2020.
How to qualify for the 60-day grace period on loans
The BARO Act’s non-extendable one-time 60-day grace period covers all existing, current, and outstanding loans with principal and/or interest. These include amortizations, purchases, credit card advances, balance transfers, or transactions via credit cards.
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To qualify, the loans should have payments falling due from the BARO Act’s effectivity, which is September 15, 2020, until December 31, 2020.
During the grace period, the loan will not incur any interest on interests, penalties, fees, or other charges. It “effectively moves the payment due dates of the entire loan,” the BSP memo stated.
The 60-day grace period, however, does not apply to interbank loans and bank borrowings. Past due accounts and credit card transactions made on and after September 15 are also not covered. These may continue to incur interest or finance charges if not fully paid on or before its original due date.
How to make sure you get the grace period
Banks, quasi-banks, credit card issuers, non-stock savings and loan institutions, trust departments of banks and trust corporations, and pawnshops should inform its clients about the 60-day grace period and ask for their consent to move due payments.
If you want to avail of the grace period, communicate this to your bank or lending facility within the given time after they inform you about it. If you don’t express consent after the allotted time, the bank or lending facility will proceed with the arrangement.
If you already paid your due amount because you were not informed of the 60-day grace period, your bank or lending facility “shall return the payment received to the borrower without charging interest on interests, penalties, fees, and charges,” the memo read. Your bank or lending facility should then reach out to you and secure a new due date for your loan payment.