FINANCING and lending companies will no longer be required to offer a grace period for loans that fall due this month as strict lockdown measures eased around the country, the Securities and Exchange Commission (SEC) said.
“Please be advised that the mandatory grace period shall no longer be applied to loans falling due during the general community quarantine (GCQ) or modified general community quarantine (MGCQ) throughout the Philippines beginning June 1,” the corporate regulator said in a notice on its website.
The SEC cited the central bank memo that requires the mandatory grace period to be applied only in areas under an enhanced community quarantine or modified enhanced community quarantine.
Since June 1, Metro Manila, Central Luzon, Cagayan Valley, Calabarzon, Central Visayas, Pangasinan, Zamboanga City, and Davao City are now under GCQ, while the rest of the country is under MGCQ.
To recall, the SEC ordered financing companies, lending companies and microfinance nongovernment organizations (NGOs) since mid-March to offer a minimum 30-day grace period for loans that fall due during the strict quarantine period, in order to help borrowers affected by the coronavirus crisis.
This was in line with Republic Act No. 11469 or the Bayanihan to Heal As One Act which requires a mandatory grace period for all loans with principal and/or interest due within the ECQ period.
But the SEC noted the mandatory grace period will once again be applied in any area that will be placed under an enhanced community quarantine or modified ECQ.
Aside from the extended period for loan payment, the SEC also ordered lenders not to impose interest on interest, fees and other charges to future payments or amortizations. Interest accrued during the grace period may also be paid on a staggered basis over the remaining life of the loan.
Violators may be punished with two months of imprisonment, a fine of between P10,000 and P1 million, or both. — Denise A. Valdez