Makati Mayor and senatorial aspirant Abby Binay today proposed the implementation of automatic loan moratorium in areas devastated by typhoons and other natural calamities.
Binay said the country has been battered by six successive tropical cyclones since October, which have caused extensive agricultural damage in many areas and destroyed homes and small businesses.
“Granting automatic moratorium on government loan repayments in calamity-hit areas would provide much-needed respite to affected residents, especially farmers and fisherfolk whose sources of livelihood have been wiped out,” she said.
Binay said government agencies and banks and financial institutions can make it a policy to automatically suspend loan repayments from borrowers located in areas officially declared in a state of calamity.
“It is a reasonable and humane response to the plight of many of our fellow Filipinos,”she said. “By giving them reprieve from their financial obligation, they can focus on the day-to-day needs of their families and rebuilding their homes."
Through a loan moratorium, the bank or lending institution makes a temporary agreement with the borrower to stop making loan payments for a certain period. In this way, the borrower can avoid penalties and stabilize finances before resuming regular repayments to the creditor.
Binay also said the moratorium can also include local government units severely affected by calamities.
The loan moratorium can be extended by institutions such as Land Bank, Development Bank of the Philippines (DBP), Department of Agriculture (DA), PAG-IBIG Fund, the Government Service Insurance System (GSIS) and Social Security System (SSS).