Senate OKs FIST bill on 3rd reading

Voting 18-0, the Senate on Tuesday approved on third and final reading the Financial Institutions Strategic Transfer (FIST) bill, a measure certified urgent by Malacanang amid the COVID-19 pandemic.

Senate Bill No. 1849 seeks to create specialized asset-managing corporations that would acquire "bad loans and stagnant properties" from embattled financial institutions.

Senate committee on banks, financial institutions and currencies chairperson Grace Poe thanked her colleagues after the proposed law was read on second and third reading on the same day.

"This is important for our economy and for the businesses and for our banks to maintain a healthy financial situation in our country... I’m very confident about this bill because this has been scrutinized by the experts among our colleagues, Senator Drilon and Senator Ralph Recto," said Poe who sponsored the measure.

Under the bill, 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.

During one of the hearings for FIST, Bangko Sentral ng Pilipinas Governor Benjamin Diokno said the borrowers' capacity to pay may be weakened by the disruption in their cash flows because of the impact of COVID-19.

He explained that non-performing loans and assets ratios are "lagging indicators" because they build up over time, and urged lawmakers to pass the FIST bill as soon as possible, learning from the country's experience during the 1997 Asian Financial Crisis.

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