FIST bill pushed in Senate to ease sale of non-performing assets

A bill seeking to facilitate the sale of non-performing assets (NPAs) of public and private financial institutions amid the COVID-19  pandemic has been filed in the Senate.

Senate Bill No. 1594 or the proposed Financial Institutions Strategic Transfer Act (FIST) aims to create specialized asset-managing corporations that would acquire "bad loans and stagnant properties" from embattled financial institutions.

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.

If these can be turned into revenues, financial liquidity would be made more possible, according to the senator.

"Greater liquidity means banks and other financial institutions will be able to lend more to keep businesses in operation," she said.

"Also, we need more than the P140 billion that our economic managers have allotted for the government’s second stimulus package. Creating FIST corporations will help government raise revenue to respond to the pandemic," she added.

Under the proposed measure, a FIST corporation may invest in, or acquire 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.

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