*This column aims to expound on legal concepts and laws which may easily be relatable to the general public. How will it directly affect their lives? Law is not reserved for the rich and powerful and ought to be followed, enjoyed and be a source of protection for everyone, especially the masses. The popular will may not be legally right and/but morally correct. The column seeks to harmonize these precepts while being apolitical.
Grasping at straws with what should be the appropriate column name to be used, the three seemingly interrelated words are innately supportive of justice and equality with which our laws and decided cases emanate from; this may, on certain instances, be invariably conflicting and a source of debate and objectionable points of view subject to scrutiny and of interpretation by the power of the sword, or by the power of the purse, or by the power of the pen.
Let my first article talk about what had affected our lives for the most of 2020, Covid. In more ways than one, we have been besieged by its ill effects and in all probabilities, even changed our lives moving forward. What are the laws which our government passed to help us get through and move on from this pandemic? We have Republic Act 11469, otherwise known as Bayanihan to Heal as One Act and Republic Act 11494, otherwise known as Bayanihan to Recover as One Act. The first law aims to authorize the President to exercise powers necessary in a declared national emergency while the second law wishes to provide mechanisms to accelerate the recovery of the Philippine economy.
A special point of consideration which we may not have given enough attention was the provision on Bayanihan 1 that directed a grace period for the payment of all loans without incurring interests, penalties, fees or other charges.
This is a very good provision as it gives temporary relief on our countrymen who have loans whether it be with banks, quasi-banks, financing or lending companies, GSIS, SSS, Pag-IBIG, cooperatives, pawnshops or credit card companies. The phrase, “fees or other charges” meant that no documentary stamp tax (DST) shall be imposed on credit extensions and restructuring. DST may seem negligible in value but has since increased by 50 percent by virtue of the passage of the TRAIN law. The bigger loan extension or restructuring, the bigger DST. On some accounts, this may mean hundreds of thousand if not millions. You may now ask your banks, pawnshops, coops, credit card companies, SSS or Pag-ibig loan officers to recompute your statement of accounts without the DST.
Going back to the same provision on grace period, Bayanihan 1 provided for a 30-day period while Bayanihan 2 provided for another 60-day period. This seems fair and shows the collective effort of the government and lending institutions to help the borrowing public. However, Section 4 (aa) of Bayanihan 1 provides, in part, to implement a 30-day minimum grace period for the payment of all loans without incurring interests, penalties, fees or other charges. This may be interpreted by a majority of the masses to either waive the interest for 30 days or move the payment of interest (for that 30-day period) at the end of the loan term. This would have given a much greater impact on borrowers. Is this the will of the people?
Several days after the passage of Bayanihan 1, the Implementing Rules on Section 4 (aa) came out which states: Section 5.01. Relief for loans. Borrowers whose loan/s with principal and/or interest falling due within the ECQ Period shall be entitled to avail of the 30-day grace period without incurring interest on interest, penalties, fees and other charges. The insertion of the phrase, “on interest”, virtually changed the meaning of the law. This interpretation seems to align with creditors’ interests (pun intended) but is it compassionate for the borrowing public? This led to, “amo man ni gyapon. Te, natipon lang!”
The law (Bayanihan 2), rightly or wrongly, seems to be clear as its nomenclature already uses interest on interest in both the law passed by Congress and its Implementing Rules thereafter issued.
Kudos to our lawmakers and officials, who keep on innovating rules with systemic balancing acts addressing the concerns of all stakeholders. Our laws keep on evolving as it wishes to address the present and immediate future of our kababayans. Let us hope and pray that a Bayanihan 3 is forthcoming.
Should you have queries or issues or laws you wish to discuss (as long as it will not violate the subjudice rule), feel free to email at email@example.com.
The contributing writer is currently an in-house counsel for several establishments and a partner at Velasco De Guzman Brillantes Dilag & Ocampo Law Firm. He is also a financial advisor, taught corporate law at De La Salle University, and was a legal consultant for business enterprises, government corporations and local government units. He is a graduate of De La Salle University and San Beda College of Law. Although bearing an Ilonggo surname, he is actually “ilonggated” and traces his roots to Zambales and had relocated to the City of Smiles for more than a decade since.*