President Rodrigo Duterte signed into law a measure that would allow financial institutions to offload their souring loans, to help the Philippine banking system remain strong and ready to extend loans to sectors hit by the coronavirus pandemic.
Finance Secretary Carlos Dominguez said the Financial Institutions Strategic Transfer bill was signed by President Duterte last week on Februay 16.
Earlier, the Department of Finance said the FIST bill would allow Philippine banks to dispose of non-performing loans and assets through asset management companies.
This, according to Secretary Dominguez, would allow them to extend more credit to local businesses in need of assistance to recover from the impact of the coronavirus pandemic.
This would also preserve the asset quality of banks, thus ensuring the continued strength of the financial sector and helping the local economy recover from the damage caused by the COVID-19 health crisis.