BSP Lifts 30-day Mandatory Grace Period On Loans

The Bangko Sentral ng Pilipinas (BSP) in Memorandum No. 45-2020 dated 01 June 2020 clarified that the 30-day mandatory grace period under the Bayanihan Act shall no longer apply effective 01 June 2020 in light of the declaration of the IATF-EID in Resolution No. 40 dated 27 May 2020 that placed majority of provinces and cities under General Community Quarantine (GCQ) and Modified General Community Quarantine (MGCQ) by 01 June 2020.

Consequently, all loan payments with principal and interest falling due from 01 June 2020 onwards shall be due and demandable. The borrower shall only pay the amount of the principal and/or interest that is effectively due in June 2020 or for one (1) month following the application of the 30-day grace period. In effect, the last payment due date of the loan is extended by a period equivalent to the grace period granted for the duration of the ECQ.

With respect to the interests accrued in March, April, and May 2020, the borrower may pay these in lumpsum in June 2020 or on a staggered basis over the remaining term of the loan. Nevertheless, the covered institutions and the borrower may agree to less onerous payment terms such as new payment due dates for interest accrued during the mandatory grace period.

In Notice dated 17 June 2020, the Securities and Exchange Commission reiterated the BSP Memo No. 2020-45 advising financing companies, lending companies and microfinance companies of the lifting of the 30-day grace period.

BSP Memo No. 2020-45 superseded Memorandum No. 2020-042, which previously declared that the mandatory 30-day grace period for the payment of all loans falling due within the quarantine period shall remain as long as there are areas in the country under a Modified Enhanced Community Quarantine (MECQ) or Enhanced Community Quarantine (ECQ). Consequently, the 30-day mandatory grace period shall therefore no longer apply effective 01 June 2020 with the shift of NCR to GCQ despite certain parts of the country remaining under ECQ and MECQ.

Click to read the entire text of the following issuances:

• BSP Memo No. 2020-042 dated 18 May 2020
• BSP Memo No.2020-018 dated 06 April 2020 of the Frequently Asked Questions (FAQ) on the Implementing Rules and Regulations (IRR) of Section 4 (aa) of RA 11469.
• BSP Memo No. 2020-045 dated 01 June 2020 or the Frequently Asked Questions (FAQ) IV on the Implementing Rules and Regulations (IRR) of Section 4(aa) of Republic Act No. 11469, Otherwise Known as the "Bayanihan to Heal As One Act"
• SEC Notice dated 17 June 2020.

This updates the article BSP Memo No. 2020-017 On The 30-day Grace Period On Loan Payments.

This article has been updated by the article Guidelines on the Implementation of a One-Time Mandatory 60-Day Grace Period for All Loans Under the Bayanihan to Recover as One Act (as of 04 October 2020).