House banking committee approves bill amending FIST law
A BILL proposing amendments to the Financial Institutions Strategic Transfer (FIST) Act of 2021 has cleared the House banking committee.
The committee approved House Bill No. 6773, an amendment to Republic Act No. 11523, also known as the FIST Act.
FIST authorizes the transfer of bad assets held by financial institutions to asset management companies, also known as FIST corporations (FISTCs), clearing the institutions’ portfolios of troubled loans and freeing them up to lend more.
The amendment seeks to allow a two-year extension for transferring nonperforming assets (NPAs); an additional three-year period for organizing FISTCs; a 10-year loss carryover period for financial institutions that book losses as a result of the asset transfers; an extension of the period for transferring assets from FISTCs to third parties; and a corresponding extension of tax exemptions and fee waivers on such transfers.
“Banks remain sensitive to shocks given the behavior of the US. The NPL (nonperforming loan) and NPA ratios have not recovered to pre-pandemic levels,” Albay Rep. Jose Ma. Clemente S. Salceda said.
The measure seeks to “extend the positive efforts of getting rid of our banks’ nonperforming assets, so they can free up more capital to lend to our pandemic-hit borrowers,” Committee Chair Irwin C. Tieng, the bill’s author, told the panel.
Philippine Investment Companies (PIC) legal counsel Allan Bugayon said that the FIST law must be extended because “there’s an urgent equal request for the write down period on losses arising from sales.”
He added that “these transactions become far less attractive to financial institutions so the deferral of losses on sale transfer of NPAs for a maximum of period of only five years is too short for banks and other financial institutions to maintain their financial health.”
The banks panel also approved bills pushing for the adoption of digital payments for financial transactions of the government as well as of merchants.
Undersecretary David L. Almirol of the Department of Information and Communications Technology said that the measure will help streamline processes in more than 450 bureaus and agencies it assists.
“Most of the government (and private) agencies are using online payments but no one issues an official receipt… at the same time, there is no ledgering system of the Bureau of the Treasury including the government banks,” Mr. Almirol told the committee.
The bill was approved on 3rd reading in the 18th Congress but was not acted on by the Senate.
Meanwhile, the Trade and industry committee approved on Tuesday bills seeking to strengthen intellectual property laws.
The committee passed House Bill No. 7028, which seeks to amend Chapter XVII of Republic Act No. 8293 or the Intellectual Property Code of the Philippines, adding a new section on preventing online infringement.
Mr. Salceda said that online content piracy cases increased during the pandemic, estimating the potential revenue loss at P1 billion, citing studies by Media Partners Asia.
“As content has become more easily transmissible in the digital space, infringement has become more prevalent in the online space,” Mr. Salceda said in his explanatory note.
In the proposed measure, the Intellectual Property Office (IPO) has “the power to disable access to an online location” to prevent online infringement.
An “online location” is defined as any single or collection of webpages accessible by a user through a domain, Internet Protocol (IP) address, or uniform resource locator.
The panel also approved the consolidation of five bills amending RA 8293, by specifying procedures for patent registration, and noting functions and organizational structure of the IPO.
Neil Gane of the Alliance for Creativity & Entertainment said site blocking could be an effective anti-piracy tool because it “is not just effective of blocking access to those particular piracy sites, but it also reduces traffic to other infringing sites and migrates consumers to legal services within that country. — Beatriz Marie D. Cruz