BSP issues guidelines for 60-day grace period on loan payments


The Bangko Sentral ng Pilipinas () issued the guidelines on the 60-day on loan payments to help Filipinos and companies strive amid the COVID-19 pandemic.

BSP Governor Benjamin Diokno said the central bank approved the implementing rules and regulations (IRR) of Republic Act 11494 or the Bayanihan to Recover as One Act (Bayanihan 2).


The said measure requires all covered financial institutions to impose a mandatory one-time 60-day grace period to all loans that are existing, current, and outstanding falling due, or any part thereof, on or before December 31, 2020.

“Loans shall include, but is not limited to salary, personal, housing, commercial, and motor vehicle loans, amortizations, financial lease payments, and premium payments, as well as credit card payments,” the BSP said.

BSP clarified that only loans in the current status and not past due are covered by the 60-day grace period.


The law also does not cover interbank loans and bank borrowings.

“The accrued interest for the one-time 60-day grace period may be paid by the borrower on a staggered basis until December 31, 2020. Nonetheless, this shall not preclude the borrower from paying the accrued interest infill on the new due date,” Diokno said.

The BSP chief also said that parties may agree to a grace period longer than 60 days and/or payment of accrued interest on a staggered basis beyond December 31, 2020.

BSP issues guidelines on 60-day grace period on loan payments

“BSFIs (BSP-Supervised Financial Institutions) shall not charge or apply interest on interest, penalties, fees, or other charges during the mandatory one-time 60-day grace period to future payments/amortizations of the borrowers,” Diokno said.

“They are likewise prohibited from requiring their clients to waive the application of the provisions of the ‘Bayanihan to Recover as One Act,’” he said.

In exchange, the BSP is extending the 60-day grace period to banks and non-bank financial institutions that agree to further loan term extension or restructurings under the Bayanihan 2.

The Bayanihan 2 also allows the BSP to lend more to the national government to boost its COVID-19 response.

BSP can give additional direct provisional advances to the government “to finance expenditures authorized by law that will address and respond to the COVID-19 situation.”

The loan, however, should not exceed 10% of the government’s average income for fiscal years 2017 to 2019.