Effect of Lifting of MECQ or ECQ to the 30-day Grace Period on Loans

The Bangko Sentral ng Pilipinas (BSP) clarified through BSP Memorandum No. M-2020-042 that the mandatory 30-day grace period for the payment of all loans falling due within the quarantine period shall remain although several localities have already transitioned to a less restrictive General Community Quarantine (GCQ).

As long as there are areas in the country under a Modified Enhanced Community Quarantine (MECQ) or Enhanced Community Quarantine (ECQ), the 30-day mandatory grace period provided by Section 4 (aa) of the Bayanihan To Heal As One Act shall still apply to all covered financial institutions regardless of their locations. The grace period will only cease when the MECQ or ECQ is lifted in the entire country.

To recall, Section 4 (aa) of the Bayanihan To Heal As One Act (RA 11469) mandates all banks, quasi-banks, financing companies, lending companies, and other financial institutions, public and private, including the Government Service Insurance System, Social Security System and Pag-IBIG fund, to implement a minimum of a thirty (30)-day grace period for the payment of all loans falling due within the period of the ECQ without incurring interests, penalties, fees, or other charges.

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"

Click to the read the related article BSP Memo No. 2020-017 On The 30-day Grace Period On Loan Payments.