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House passes bill on assistance for banks to cushion pandemic effects

The House of Representatives approved on final reading a bill that would provide assistance to banks and other financial institutions hit by the coronavirus pandemic. 

On Tuesday, June 2, lawmakers passed on 3rd reading House Bill (HB) No. 6816 or the proposed Financial Institutions Strategic Transfer (FIST) Act, with a vote of 202-6-1.

HB 6816 would assist banks and other financial institutions with offloading their debts and managing their non-performing assets (NPAs) affected by the pandemic. 

If passed into law, the bill would provide incentives to banks and financial institutions to sell their NPAs to asset management companies or financial institutions strategic transfer corporations (FISTCs) that specialize in the resolution of distressed assets.

They would be exempted from paying documentary stamp tax, capital gains tax, creditable withholding income taxes imposed on the transfer of buildings, and value-added tax.  

"It encourages the private sector, government financial institutions, and government-owned or controlled corporations to incorporate and invest in FISTCs and help in the rehabilitation of distressed businesses with the end view of contributing to economic growth," House committee on banks and financial intermediaries chairman Junie Cua previously said. 

The Bangko Sentral ng Pilipinas said in April that bank lending standards remained broadly steady for the 1st quarter of 2020, but more banks have reported tightening amid the economic uncertainties during the coronavirus crisis. 

On Tuesday, the House also approved on 3rd reading a bill penalizing discrimination against coronavirus frontliners, patients, and repatriates. 

The country has so far recorded a total of 18,997 coronavirus cases, with 966 deaths and 4,063 recoveries. Rappler.com

Mara Cepeda

Mara Cepeda writes about politics and women’s rights for Rappler. She covers the House of Representatives and the Office of the Vice President. Got tips? Send her an email at mara.cepeda@rappler.com or shoot her a tweet @maracepeda.

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