LEAD hearing pushes transport loan moratorium amid fuel crisis

A PROPOSAL to suspend or defer transport-sector loan payments during the oil shock gained traction at the House’s 13-panel LEAD hearing on Wednesday, after Landbank and the Bankers Association of the Philippines both said they were prepared to study a moratorium similar to what banks rolled out during the pandemic.

The push came from Quezon City Rep. Franz Pumaren, chair of the House Committee on Transportation, who said operators, bus companies, jeepney groups and haulers have been approaching him as fuel costs continue to squeeze already thin margins.

“As chairman of transportation, maraming lumalapit sa akin na mga operators, mga bus operators, even yung mga jeepneys na nagre-request na baka puwede naman natin, with what’s happening right now, baka magkaroon naman tayo ng suspension, moratorium ng pagbabayad ng ano nila, ng loan payment at saka penalty?” Pumaren said.

He said the request was rooted in the same practical problem that surfaced during the pandemic, when banks and regulators had to step in because normal payment schedules no longer matched the realities on the ground.

“Parang ‘yung nangyari nung time ‘nung pandemic, if I can recall, sinuspend ng konti ‘yung mga loan payments at saka penalty. Sir, baka puwede namang lumapit, na kung puwede nating ma-accommodate,” Pumaren added.

Responding for Landbank, Eden Japitana, head of the bank’s Agriculture and Sustainable Development Group, said the state bank had in fact carried out deferments before and was now trying to adjust an existing relief facility so it can respond to a different kind of crisis.

“Yes sir, tama po ‘yung sinabi ninyo. During the pandemic we made some deferments of the amortizations. Right now po actually nakasalang po ‘yung ano namin, because Landbank has an existing facility to address yung mga borrowers po natin na nasalanta po ng bagyo, lindol,” Japitana said.

She said Landbank is now modifying its CARES Plus program so it can also address crises like the present oil shock, and she made clear that the bank already recognizes the strain now being felt by borrowers.

“But sa ngayon po inaayos po namin, ina-amyendahan namin ‘yung aming CARES Plus program to include kagaya nitong mga crisis na nangyayari ngayon para po ma-address po yung problema ng aming mga borrowers. And Landbank naman po, nare-recognize namin yung problem. So definitely we will touch base to those clients of the bank to address that problem po,” Japitana said.

Japitana, however, also cautioned that any broad payment relief would require support beyond the banks themselves because regulated institutions still have to move within existing rules.

“During the pandemic, nagkaroon po kasi ng dalawang batas na ‘yun din po ‘yung sinundan namin ng pagkakaroon ng mga deferments. I think kailangan din lang po namin ng support kasi as you know, not just Landbank but for all other banks, mayroon po kasi tayong mga reglamentary requirements na kailangan sundan ng mga bangko,” Japitana said.

“So hopefully ma-supportahan din po kami at ma-cover din po ‘yan para po ‘yung aming regulator which is the BSP would also take a look kung ano ‘yung ginagawang remedies para po ma-address ang nararanasan ng ating borrowers,” she added.

The private banking sector then struck a similar tone, with Bankers Association of the Philippines representative Arnel Almaden saying the industry remembers what was done during the pandemic and is open to revisiting the same kind of intervention.

“Yes, Mr. Chair. I second the motion what has been manifested by our colleague from the Landbank of the Philippines. Yes, we remember during the pandemic, we have several initiatives to freeze the interest payments and loan payments of some of our borrowers,” Almaden said.

He said the next step would be to study the proposal and draw up recommendations, but, like Landbank, he stressed that any workable policy would have to be crafted with the central bank.

“We’re going to have to study that and come up with some recommendation. But of course, as also manifested by my colleague from Landbank, we need of course the guidance from our regulator to provide the necessary environment for us to be able to do what needs to be done. So we will have to do this in close coordination with our primary regulator, the Bangko Sentral ng Pilipinas,” Almaden said.

Pumaren then widened the scope of the appeal, saying the problem now reaches beyond buses and jeepneys because truckers and haulers are also carrying loans while seeing trips fall off under punishing fuel costs.

“We’re not only talking about bus operators, jeepneys, pati mga haulers, yung mga trucks, may mga loans ’yan. Eh ngayon halos wala nang bumabyahe sa mga haulers eh because of the cost of fuel, masyadong mataas so wala. At least it’s good to know that you’re open to the idea,” Pumaren said.

LEAD overall chair and Marikina Rep. Miro Quimbo then instructed the committee secretariat to invite the BSP, saying the LEAD panel needed a harder financial picture of the transport sector and other industries now under pressure from the oil price surge.

“What we are saying is that we have done this before, we have done this during the pandemic. In close coordination with the Bangko Sentral, we will consider all,” Almaden said when Quimbo pressed him again on whether the banking sector was open to a moratorium, amortization slide or deferment.

Quimbo told the bankers the panel wanted a more concrete recommendation this time, especially because some lenders had previously felt that parts of Bayanihan 1 and Bayanihan 2 did not always hit the policy objective as cleanly as intended.

“Because while the intention of the Bayanihan 1 and Bayanihan 2 was good, there were some banks that felt like it was unnecessary or in fact, the purpose was not being met. So we’d like to really hear from you. You know what the objectives are. Will the objectives be met by a policy on deferment or postponement of amortization or suspension of payments?” Quimbo said.

Almaden responded that the banking industry is already reviewing a similar measure pending in the Senate, signaling that the policy discussion is now moving on both sides of Congress.

“Yes, Mr. Chair. In fact, we are also in receipt of a Senate Bill No. 2020 with similar provisions. And we have it exposed to our members for their feedback. I think that bill in the Senate is being authored by Senator Legarda. So basically, the same proposal,” Almaden said.

Quimbo closed that portion of the exchange with a blunt reminder of what lenders actually want in a crisis like this, which is repayment over repossession, suggesting there is room to build a practical bridge between borrower relief and bank interest.

“Tama naman ako hindi ba? Banks are not interested in acquiring buses or trucks. You’re interested in repayment?” Quimbo asked.

“Yes, Mr. Chair,” Almaden replied.