MANILA - The Senate on Tuesday ratified the bicameral conference committee report on the proposed Financial Institutions Strategic Transfer (FIST) Act, which would allow "banks and other financial institutions to dispose and transfer non-performing assets and loans."

The measure, among those cited as President Rodrigo Duterte's priorities, seeks to help banks and other financial insitutions stay liquid, especially during the COVID-19 pandemic, Senate Committee on Banks, Financial Institutions and Currencies chair Grace Poe said in plenary.

"Pinoprotektahan nito ang kapital para mas maraming mapautang ang bangko. Pero binibigyan din ng batas na ito ng pagkakataon ang mga nakautang na makuha ulit ang kanilang mga ari-arian na marahil ay na-ilit ng bangko," she said.

(This protects capital to ensure that banks can lend money to more people. But it also gives borrowers a chance to reclaim their properties that have been confiscated by the bank.)

Under the final version of the bill, foreign financial institutions are "not allowed in the bidding and foreclosure of real property," the senator said.

Government banks will be banned from forming FIST corporations, she added.

The measure also exempts all non-performing assets sold to FIST corporations from documentary stamp tax, capital gains tax, creditable withholding income taxes, and value-added tax.

While the government is expected to lose between P3.3 and P13.2 billion for 5 years after the FIST Act's implementation, the Bangko Sentral ng Pilipinas (BSP) backed the bill, saying it is important for banks to minimize, if not remove, non-performing assets from their balance sheets.

The measure will be trasmitted to Malacañang for the President's signature as soon as the House of Representatives ratifies the bicameral report, Poe said.

• Senate approves on final reading FIST bill to cushion banks from bad loans

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