Lawmaker Urges Philguarantee to Halt Collections Amid Pandemic

Lawmaker Calls for Suspension of Loan Collections

A lawmaker has urged the Philippine Guarantee Corp. (Philguarantee) to pause all collections and enforcement actions against delinquent borrowers affected by the COVID-19 pandemic. This appeal comes as Congress debates a bill seeking to condone accumulated penalties, interests, and surcharges on loans. The call for relief highlights the urgent need to support borrowers struggling to meet financial obligations during these challenging times.

Philguarantee, a government-owned and controlled corporation, plays a crucial role in providing credit guarantees that sustain trade, investments, and priority sectors of the economy. Its mandate includes offering programs that ease the burden on borrowers, especially those impacted by economic disruptions like the pandemic.

Existing Condonation Program and Proposed Expansion

Under Republic Act (RA) 9507, known as the Socialized and Low-Cost Housing Loan Restructuring Act of 2008, Philguarantee permits a one-time condonation of penalties and surcharges once a borrower’s full settlement or restructuring application is approved. However, this existing program does not cover interests or repeated relief measures.

Pasig City Representative Roman Romulo has filed House Bill (HB) No. 484 to amend Sections 3, 4, and 5 of RA 9507. The bill aims to broaden the condonation program for socialized and low-cost housing loans, including interest and surcharges, to provide greater relief for affected borrowers.

Assurances Sought During House Committee Hearing

During a House committee hearing on housing and urban development, Rep. Romulo asked Philguarantee for assurances that it would allow legislators to pass the bill into law before taking further collection actions. He emphasized the importance of halting enforcement measures, noting that many borrowers defaulted due to the pandemic’s hardships.

“Don’t take action—do what is within your power. At the end of the day, maybe COVID was really the reason they couldn’t pay. There was no such measure in the previous Congress; it only came to my attention this year, so now you know there is a pending bill. Can Philguarantee wait first to give due course to this measure?” Romulo said.

Philguarantee’s Response and Committee Support

Philguarantee representative Chona Lazaro responded by requesting a formal letter from affected borrowers addressed to Philguarantee’s board of directors. This procedural step would allow the corporation to consider a temporary suspension of collections.

Quezon City 6th District Representative Ma. Victoria Co-Pilar, chair of the committee, pledged to send a letter advising Philguarantee to stay any decisions or evictions pending the bill’s progress. She encouraged discussions with the board, suggesting the bill’s provisions could be seriously considered given the previous condonation of penalties.

“Our office will write you a letter asking you to stay the decision or whatever actions and evictions that you will do, pending due course of this measure,” Co-Pilar said. “And then you could discuss with the board of Philguarantee—you might take into consideration this bill, tutal napagbigayan niyo na na-condone na yung penalty, but ito baka mapag-usapan niyo sa board through our letter.”

Concerns Over Ballooning Penalties and Clarifications

Rep. Romulo shared reports indicating that some borrowers’ penalties, interests, and surcharges had grown to amounts exceeding their original loan principals. In response, Lazaro clarified that Philguarantee only condones penalties under current regulations and has no authority to waive interests or surcharges.

When asked if any laws authorize Philguarantee to waive these additional charges, Lazaro confirmed there are none and that the board has not approved such measures. This gap underscores the need for legislative amendments.

Bill’s Purpose: Offering Borrowers a Second Chance

According to Romulo, HB No. 484 aims to provide a “second chance to borrowers who, despite setbacks, have remained committed to fulfilling their responsibilities.” The bill proposes restructuring delinquent loans by condoning interests and penalties, lowering interest rates, and extending payment terms.

“By restructuring delinquent loans—condoning interests and penalties, lowering rates, and extending payment terms—the State supports recovery, protects public investment, keeps families intact within the homes built for them, and allows them to rebuild their lives with dignity,” the lawmaker said in the bill.

For more news and updates on loan restructuring, visit Filipinokami.com.

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