(Fighting New Coronary Pneumonia) Duterte signs bill to allow financial institutions to outsource bad assets to promote recovery
China News Service, Manila, February 18 (Reporter Guan Xiangdong) On February 17, local time, the spokesperson of the President of the Philippines Harry Rock announced that President Duterte signed the "Strategic Transfer of Financial Institutions Act" of the Republic of the Philippines on February 16. FIST) (TheFinancialInstitutionsStrategicTransferAct)", allowing financial institutions to outsource non-performing assets, aims to stabilize the country's financial sector and stimulate the economy to recover from the new crown virus pandemic.
The new law allows banks and financial institutions to outsource the management of their non-performing assets and non-performing loans to asset management companies established for special purposes.
According to the Act, an asset management company is registered and established with a minimum authorized share capital of 500 million pesos, a minimum subscribed capital of 125 million pesos, and a minimum paid-in capital of 31.25 million pesos. The plan must be submitted and approved by the financial authority .
According to the Act, asset management companies will have the right to invest in or purchase non-performing assets of financial institutions, and hire a third party to manage, operate, collect, and dispose of non-performing assets acquired from financial institutions; to lease the non-performing assets acquired from financial institutions , Mortgage, transfer, sale, exchange, guarantee, securitization, rent collection and profit, etc.
According to data from the Central Bank of the Philippines (BSP), as of December 2020, the total non-performing loans in the country’s banking system has climbed to 391.557 billion Philippines, accounting for 3.61% of total loans; this is an increase from 224.1 billion pesos in 2019 That's 74.8%.
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