Borrowers from closed banks get a big discount on payments
October 3, 2021 | 00h00
MANILA, Philippines – The Philippine Deposit Insurance Corp. (PDIC), run by the state, gave borrowers from closed banks up to 25% discount if they opted to settle their outstanding loans through a lump sum.
Under the Closed Bank Loan Incentive Program (CLIP), borrowers can benefit from discounts and even exemptions from the PDIC when they pay their financial obligations to banks closed by the Bangko Sentral ng Pilipinas.
The program extends the incentives with a total balance of less than 1 million pesos, as long as they pay their debts through a single settlement.
For own loans taken out with banks closed from 2020, CLIP grants a 10% discount on the principal outstanding, including accrued interest, penalties and fees. The program also erases borrowers of all their unrecorded interest and penalties.
In addition, CLIP grants a reduction of 25% on the principal outstanding and the interest, penalties and charges recorded for own loans acquired from banks closed in 2019 and before. Likewise, it waives borrowers all their unrecorded interest and penalties.
On the other hand, the PDIC does not give any discounts on the principal outstanding and the interest, penalties and charges recorded for secured loans.
For the same category, unrecognized interest is reduced to five percent per annum and an exemption is provided for unrecognized penalties.
According to the PDIC, borrowers eligible for CLIP discounts can use the program until September 30, 2022, one year after the start of the program.
PDIC has deployed CLIP to ease the burden on borrowers from closed banks in paying their financial obligations. The agency also wants individuals and businesses to regain their solvency and recover their mortgaged assets through the program.