Drilon ‘disappointed’ by BIR’s opposition to FIST bill, unpreparedness at hearing

Senate Minority Leader Franklin Drilon on Wednesday became irked with the Bureau of Internal Revenue's (BIR) “cavalier attitude” towards the proposed Financial Institutions Strategic Transfer Act (FIST).

Senate Bill No. 1594 or FIST aims to create specialized asset-managing corporations that would acquire "bad loans and stagnant properties" from embattled financial institutions.

Under the proposed measure, a FIST corporation may invest in, or acquire, non-performing assets (NPAs) from financial institutions; and engage third parties to manage, operate, collect and dispose of acquired NPAs.

To foster the creation of these corporations, tax incentives and fee exemptions will be given.

During the Senate committee on banks, financial institutions and currencies’ hearing on the proposed measure, BIR representative Mariesol Girang said the taxman is not in favor of the tax exemption provision under the FIST bill as it will have “an adverse impact on our collection.”

Pressed by Senator Ralph Recto for more details to explain the agency’s position, such as how much tax subsidies were provided under the Special Purpose Asset Vehicle (SPAV) law, the BIR representative said they do not have the data.

“I am disappointed by the cavalier attitude taken by the Bureau of Internal Revenue on the passage of this measure,” Drilon said.

“I wish they would send somebody more ranking. We would request better participation from the BIR,” the senator said.

For his part, Recto emphasized that the BIR representative is not even prepared to discuss the measure.

“It appears that the committee and the Senate is more interested in the passage of this measure in support of the Bangko Sentral. The BIR has taken a cavalier attitude and is not even prepared to explain its position,” Drilon said.

The Senate minority leader said that even Finance Secretary Carlos Dominguez III is in support of the bill.

Senator Imee Marcos, chair of the committee on economic affairs and the bill's author, underscored that NPAs of financial firms would likely pile up due to the repercussions of the COVID-19 pandemic.

Citing a projection made by the Bankers Association of the Philippines, Marcos said the amount of non-performing loans in banks alone may increase from the present 5% to as high as 20% of total loans in the coming months.

The counterpart FIST bill in the House of Representatives has already been approved on third and final reading. — BM, GMA News