“We consider the enactment of RA 11523 timely and thank both Houses of Congress for the passage of this law, which has been certified urgent by the Chief Executive, and has been considered by our Economic Team as one of the measures that would help us recover in the aftermath of the COVID-19 pandemic,” Roque said.
He added that as part of the economic recovery program of the Duterte Administration, FIST will strengthen the financial sector by enabling banks to efficiently dispose of their non-performing loans (NPL) and assets, clean up their balance sheets, and extend credit to more sectors in need.
RA 11523 creates specialized asset management firms that would acquire non-performing assets from distressed financial institutions.
"FIST law will allow banks to easily dispose bad assets through Asset Management Companies. The new law will help keep the banking system stable despite the effects of the COVID-19 pandemic," said Bangko Sentral ng Pilipinas Governor Benjamin Diokno in his Twitter post Tuesday.
He added that FIST is expected to reduce the NPL ratio by about 0.63 to 7.0 percentage point.
With FIST expected to extend access of borrowers to credit and financial services, the more they can spend to boost the economy. (MACV with info from OPS)
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