Tuesday, October 20, 2020

FIST Bill To Protect Banks While Economy Recovers From Pandemic

Senator Grace Poe on Sunday said banks could expect protection from bad loans while the economy is on its way to recovery from the impact of the COVID-19 pandemic. With the proposed Financial Institutions Strategic Transfer (FIST) Act certified as urgent.

 

Poe, the bill’s sponsor, said in a statement, “Banks play a critical role as they could throw a lifeline to businesses and their workers amid the pandemic. Providing the local banking system with the support it needs will insulate it from a buildup of bad loans, which could impose costs on the poor.”

She also went on, “We want to be better prepared for the economic impact of COVID-19 that has no end yet in sight.”

The FIST bill attempt to aid banks and financial institutions by allowing them to offload bad loans, deal with the surge in non-performing assets (NPAs) and rehabilitate struggling businesses.

The proposed measure has so far reached the Senate floor for deliberations.

The bill could potentially free up P1.19 trillion worth of loans from the sale of NPAs to FIST corporations, Poe had previously said.

She added, “Before the banks can help MSMEs [micro, small and medium enterprises], we must help the banks first.”

This will protect the financial industry from lasting damage and help the economy recover faster from the pandemic, Finance Secretary Carlos Dominguez III had also backed the said measure.

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