A BILL has been filed in the House of Representatives creating a loan program run by government banks to finance rent payments.
Representative Jose Ma. Clemente S. Salceda of the second district of Albay, who chairs the House Ways and Means committee, filed House Bill No. 7665, or the proposed Rent Relief Act of 2020, which also seeks to impose an eviction moratorium.
The measure hopes to provide financing for about 2 million renters.
In its 2015 Census of Population and Housing, The Philippine Statistics Authority estimated that around 2.7 million households occupy rented housing.
“We estimate the number to have increased to 3.1 million in 2020. Our analysis of the newly unemployed shows that up to 3% of these households, or some 93,000 households, may be in danger of eviction due to nonpayment of rents even with the Bayanihan measures to provide rent relief,” Mr. Salceda said in a statement Monday.
HB 7665 requires the Social Security System, the Government Service Insurance System, and the Pag-IBIG Fund to offer rent financing to their members “at favorable rates,” while also directing the Land Bank of the Philippines (LANDBANK) and the Development Bank of the Philippines (DBP) to offer rent loans “at rates not higher than their lowest-yielding loans.”
The scheme calls for banks to pay the rent for a pre-determined period, while allowing the tenant a longer repayment period.
Citing the effects of the pandemic on the livelihood and incomes of families, HB7665 also allows government institutions to discount promissory notes issued by the renter in exchange for non-eviction, while providing a three-month window for renters to find new jobs.
The bill also tasks the Department of Human Settlements and Urban Development with establishing rental assistance centers to help tenants and lessors negotiate terms of lease and find other assistance programs to stave off eviction.
Asked to clarify if the bill might be revised in the future to include private banks, Mr. Salceda told BusinessWorld that it is only possible under consultation with government agencies. He said if private banks are included in the measure, it “will probably be to co-share the risks or costs with them instead of requiring them to take up loans that might not align with their risk appetite, without some burden-sharing on government’s part.”
“We do not want to significantly compromise asset quality of banks during a crisis. That could have some unintended consequences for the rest of the economy,” he said. — Kyle Aristiophere T. Atienza