EIGHTEENTH CONGRESS OF THE) 
REPUBLIC OF THE PHILIPPINES ) 
Second Regular Session 
)
SENATE
S. No. 1596
rlLtU
UDtc
Introduced by Senator Manuel "Lito" M. Lapid
AN ACT
ENSURING PHILIPPINE FINANCIAL INDUSTRY RESILIENCY 
AGAINST THE COVID-19 PANDEMIC
EXPLANATORY NOTE
The Coronavirus Disease 2019 (COVID-19) pandemic posed numerous chalienges 
to our country. In response, our government has been continuously and consistently 
addressing and providing soiutions for the same through various measures to contain the 
outbreak which include the community quarantine, among others. These measures, 
however, have its costs in our economy which caused serious economic setbacks.
One of the factors that affects not only the performance, efficiency and credibility 
of banks, but also of the financial sector and the whole economy are the non-performing 
assets (NPAs), which consists of the non-performing loans (NPLs) and real and other 
properties acquired (ROPAs). According to the study done by the Bankers Association of 
the Philippines, there is an expected increase in non-performing loans (NPL) from 5% 
today to 20% or higher in a matter of months, which would translate to Php 240-300 
billion of NPLs wherein 50-80% thereof may have to be written off.
As the State recognizes the crucial role of banks and other financial institutions as


mobilizers of savings and investments and in the provision of the needed financial system 
liquidity to keep the economy afloat, this bill seeks to lay down the policies to strengthen 
the financial sector.
This bill also aims to create the Financial Institutions Strategic Transfer Corporation 
which will help the financial institutions in the management of their NPAs by encouraging 
investments and by eliminating the existing barriers in the acquisition of the same, in the 
rehabilitation of distressed businesses, and in the improvement of the liquidity of the 
financial system for economic growth and financial stability.
In view of the foregoing, the immediate passage of this bill is earnestly sought.
MA
"LITO"rM. LAP]
Senator


EIGHTEENTH CONGRESS OF THE) 
REPUBLIC OF THE PHILIPPINES ) 
Second Regular Session 
)
SENATE
S. No. 1596
KECEIVEO
FILED
NDt X
Introduced by Senator Manuel "Lito" M. Lapid
AN ACT
ENSURING PHILIPPINE FINANCIAL INDUSTRY RESILIENCY 
AGAINST THE COVID-19 PANDEMIC
Be it enacted by the Senate and House of Representatives of the Philippines 
in Congress assembled:
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SECTION 1. Tide. - This Act shall be known as '‘'Financial Institutions 
Strategic Transfer (FIST) Act"
Sec. 2. Declaration of Policy. - The Coronavirus Disease 2019 (COVID-19) 
pandemic has greatly affected nations worldwide, including the Philippines, and the 
measures adopted by the government to contain the outbreak have unavoidably 
caused serious economic setbacks and tremendous financial pressure on markets 
and industries. Because of the unpredictability of the course and outcome of the 
health crisis, it is necessary to lay down the appropriate policies not only to marshal 
available resources towards the most affected and vulnerable sectors but more 
importantly, to strengthen the financial sector so that economic recovery can be 
achieved faster, and with more lasting positive effects.
The State recognizes the role of banks and other financial institutions as 
mobilizers of savings and investments and in providing the needed financiai system


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liquidity to keep the economy afloat. Thus, it is essential that banks and other 
financial institutions are able to maintain their financial health in order to cushion the 
adverse economic impact of this pandemic. It is hereby declared the policy of the 
State:
(a) to develop and maintain a sound financiai sector for the country;
(b) to address the non-performing asset problems of the financial 
sector;
(c) to encourage public and private sector investments in non­
performing assets;
(d) to eliminate existing barriers in the acquisition of non-performing 
assets;
(e) to help in the rehabilitation of distressed businesses with the end in 
view of their becoming economic value-added contributors; and
(f) to improve the liquidity of the financiai system which can be 
harnessed to propel economic growth and maintain financial 
stability.
Sec. 3. Definition of Terms. - As used in this Act:
(a) Approval Certificate means the certificate of approval or authority Issued 
by the Commission to an application by a Financial Institutions Strategic Transfer 
Corporation (RSTC) to issue Investment Unit Instruments (lUIs), pursuant to the 
provisions of this Act;
(b) Approved Plan means an FISTC Plan for which an Approval Certificate has 
been issued by the Commission;
(c) Commission refers to the Securities and Exchange Commission;
(d) Financial Institutions, or FIs means credit-granting institutions which shall 
be limited to the following:


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(1) the Bangko Sentral ng Pilipinas (BSP);
(2) a bank, as defined under Republic Act No. 8791, also known as 
"The General Banking Law of 2000";
(3) a financing company, as defined under Republic Act No. 8556, 
also known as "The Financing Company Act of 1998";
(4) an investment house, as defined in Presidential Decree No. 129, 
also known as "The Investment Houses Law";
(5) a lending company, as defined under Republic Act No. 9474, 
also known as "Lending Company Regulation Act of 2007";
(6) government financial institutions (GFIs), which for purposes of 
this Act, refer to the Philippine Deposit Insurance Corporation 
(PDIC), Land Bank of the Philippines (LBP), and Development Bank 
of the Philippines (DBP), and such other GRs as may be included 
by the Secretary of Finance;
(7) government-owned-or-controlled-corporations (GOCCs), which 
for purposes of this Act, refers to the National Home Mortgage 
Finance Corporation (NHMFC), Philippine Guarantee Corporation 
(PGC), Home Development Mutual Fund (HDMF), Social Security 
System (SSS), Government Service Insurance System (GSIS), Small 
Business Corporation (SBC), National Housing Authority (NHA), and 
such other GOCCs as may be included by the Secretary of Finance; 
and
(8) other institutions licensed by the BSP to perform (I) quasi­
banking functions and (ii) credit-granting activities, including non-


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stock savings and loan associations, pawnshops, and non-bank 
credit card issuers;
(e) RSTC Plan refers to the plan submitted to the Commission for its approval 
as pre-requisite to the Issuance of an Investment Unit Instrument;
(f) Investment Unit Instrument (lUI) refers to a participation certificate, debt 
instrument or similar instrument issued by the FISTC and subscribed by Permitted 
Investors as provided in Section 11 hereof, pursuant to an Approved Plan: Provided, 
That these shall not include the instruments to be issued by the FISTC to the selling 
Hs as full or partial settlement of the non-performing assets transferred to the said 
RSTC: Provided, further, That such issuances of the FISTC shall not be considered 
as deposit substitutes: Provided, finally. That these shall not form part of the capital 
stock of the FISTC;
(g) Non-Performing Assets, or NPAs consist of the non-performing loans and 
real and other properties acquired by Rs;
(h) Non-Performing Loans, or NPLs refer to secured or unsecured loans, 
receivables, and other financial assets of similar nature, including restructured loans, 
which are to be considered credit-impaired and defined as such in the rules and 
regulations to be issued to implement this Act;
(i) Real and Other Properties Acquired (ROPAs) refer to real and other 
properties, other than those used for operating purposes or held for investment, 
acquired by an R in settlement of loans and receivables, including real properties, 
shares of stocks, and security interest which have been acquired by way of dation in 
payment {dacion en pago) or judicial or extra-judicial foreclosure or execution of 
judgment or enforcement of security interest;
(j) True Sale refers to a sale wherein the selling R transfers or sells its NPAs 
to an RSTC, without recourse to cash or property in exchange for the transfer or


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sale, and without prejudice to the FI and FISTC agreeing on sharing of profits in 
accordance with the conditions prescribed in the rules and regulations to be issued 
to implement this Act, and subject to the following results:
(1) The transferor transfers full legal and beneficial title to and 
relinquishes effective control over the transferred NPAs; and
(2) The transferred NPAs are legally isolated and put beyond the 
reach of the transferor and its creditors:
Provided, That the transferring FI shall not have direct or indirect control of the 
transferee FISTC: Provided, further. That the selling FI does not have legal or 
beneficial ownership of more than ten percent 10% of the transferee FISTC.
ARTICLE II
Financial Institutions Strategic Transfer Corporation
Sec. 4. Financial Institutions Strategic Transfer Corporation. — An FISTC is a 
stock corporation organized in accordance with Republic Act No. 11232, otherwise 
known as "The Revised Corporation Code of the Philippines," and the rules 
promulgated by the Commission, for purposes of registering the FISTC: Provided, 
That if the FISTC will acquire land, at least sixty percent (60%) of its outstanding 
capital stock shall be owned by Philippine nationals pursuant to Republic Act No. 
7042, as amended, otherwise known as the "Foreign Investments Act." The BSP, 
GFIs and GOCCs may create an FISTC subject to their respective charters and the 
approval of the Governance Commission for Government Owned or Controlled 
Corporations (GCG): Provided, That the limitations under Section 3(h) of this Act 
shall not apply to BSP and such GFIs or GOCCs.
FISTCs which are not qualified to acquire or hold land in the Philippines shall 
be allowed to bid and take part in foreclosure sales of real property mortgaged to


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them, as well as to avail of enforcement and other proceedings, and accordingiy to 
take possession of the mortgaged property, for a period not exceeding five (5)-years 
from actual possession: Provided, That in no event shall the title to the property be 
transferred to such RSTC. In case the RSTC is the winning bidder, it shall, during 
the said five (5)-year period, transfer its rights to a qualified Phiiippine national, 
without prejudice to a borrower's rights under applicable laws. Should a FISTC be 
not able to transfer such property within the five (5)-year period, the FISTC shall be 
penalized one haif of one percent (Vz of 1% ) per annum of the price at which the 
property was foreciosed, untii the FISTC is able to transfer the property to a 
qualified Phiiippine national.
Sec. 5. Powers of an RSTC. - An RSTC shall have the following powers:
(a) Invest in, or acquire NPAs of FIs;
(b) Engage third parties to manage, operate, coliect and dispose of NPAs 
acquired from an R;
(c) Rent, lease, hire, subject to security interest, mortgage, transfer, sell, 
exchange, usufruct, secure, securitize, coilect rents and profits, and other simiiar 
acts concerning its NPAs acquired from an R;
(d) in case of NPLs, to restructure debt, condone debt and undertake other 
restructuring related activities. In restructuring debt, the RSTC may reduce the 
principal amount, interest earned, interest rates, and the period for calcuiating the 
interest, extend the time for debt repayment or relax the conditions for debt 
repayment, agree to the conversion of the borrower's debt to equity in the 
borrower's business, agree to a transfer of assets or claims from the borrower to 
repay the debt or dispose of some of the borrower's property or claims to third 
persons;


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(e) Buy or transfer shares issued by the borrower for the purpose of business 
reorganization or rehabiiitation of the borrower, subject to the provisions of the 
Revised Corporation Code of the Phiiippines in respect to the rights of the 
shareholders of the borrower company, and apply other measures or restructuring 
techniques with the approval of the Commission;
(f) Enter into dation in payment arrangements, foreclose judicially or extra- 
judicially and other forms of debt settlement involving NPLs;
(g) Spend funds to renovate, improve, complete or alter its NPAs acquired 
from an R;
(h) Issue equity or participation certificates or other forms of lUIs for the 
purpose of acquiring, managing, improving and disposing of its NPAs acquired from 
an R;
(i) Borrow money and issue other instruments of indebtedness for the 
purpose of paying operational and administrative costs;
0) Guarantee credit, and accept, intervene or honor the bills of borrowers;
(k) Advance funds to borrowers as may be required for an acquired asset or 
any debt restructuring agreement pursuant thereto, or under any court order or 
rehabilitation plan; and
(l) Engage the services of a third-party asset servicing company for the 
collection and receipt of the debt payments for debts under debt restructuring or 
business reorganization, management and disposition of assets of the FISTC in 
accordance with the rules, procedures and conditions prescribed by the Commission 
or by the courts. Except in the case of ROPAs whose redemption periods have 
already expired, the FISTC shall notify the borrower and all persons holding prior 
encumbrances upon the properties, or a part thereof, or are actually holding the


same adversely against the borrower, of the appointment of such third-party asset 
servicing company within fifteen (15) days from the date of the appointment.
Sec. 6. Period for Filing of Applications. - Applications for the establishment 
and registration of an FISTC shaii be filed with the Commission within twenty-four 
(24) months beginning from the date of effectivity of the rules and regulations of 
this Act, or effectivity of applicable revenue regulations, whichever is later: Provided,
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That the Secretary of Finance may extend the period of appiication by a maximum of
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another twenty-four (24) months.
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Entities created under Republic Act No. 9182, as amended, are qualified to 
avail of the privileges and incentives under this Act, subject to compliance with the 
requirements prescribed in the rules and regulations issued to implement this Act.
Sec. 7. Capitalization of an FISTC. - An FISTC shall have adequate minimum 
capitalization in such amount as may be prescribed by the Commission or by the 
appropriate regulatory agency of the FISTC.
Sec. 8. Submission of FISTC Plan. - After the establishment of an RSTC 
pursuant to Section 4 hereof, an FISTC Plan shall be submitted to the Commission
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for approval and shall include the following:
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(a) Investment policies of the RSTC;
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(b) Contribution plan including the amounts and draft of subscription
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documents;
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(c) Features of the lUIs, including the specific amounts issued and to
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be issued;
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(d) Rights of the holders of the lUIs;
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(e) Draft agreements for the appointment of trustees and agents with
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respect to the lUIs and the NPLs acquired from an FI;
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(f) Name of the external auditor of the RSTC;


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(g) Roles and responsibilities of the trustees, advisors, loan servicers 
and property managers;
(h) Draft form of financial reports of the RSTC;
(i) Details of distribution policies;
(j) Methods for the increase and decrease of future fund contribution;
(k) Methods for the alteration or modification of the approved FISTC 
Plan;
(l) Methods for the liquidation and distribution of assets to the holders 
oflUIs;
(m) Details of credit enhancements like guarantees or standby letters 
of credit or advances that may be extended to the FISTC by an 
entity which shall not be the selling R, its parent, subsidiaries or 
affiiiates; and
(n) Such other documents or information as may be required by the 
Commission.
Sec. 9. Approval, Rejection, Suspension or Revocation of FISTC Plan.
a) Approval- Upon approval of the RSTC Plan, the Commission shall issue an 
Approval Certificate stating that the application has been approved and that 
the lUIs may be issued.
b) Amendments to Approved FISTC Plan - If an RSTC Plan becomes on its face 
incomplete or inaccurate in any material respect, the Commission shall issue 
an order directing the amendment of the FISTC Plan. Upon compliance with 
such order, the amended FISTC Plan shall become effective upon approval of 
the Commission or appropriate regulatory authority pursuant to Section 4 of 
this Act.
c) Rejection, Suspension or Revocation -The Commission may reject a 
submitted RSTC Plan if on its face it was not in compliance with the 
requirements of this Act or the rules and regulations issued to implement it. It


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is also authorized to suspend or revoke the effectivity of an approved plan 
after due notice and hearing by issuing an order to such effect setting forth 
its findings in respect thereto, if it finds that:
1. The RSTC has violated any of the provisions of this Act, the rules and 
regulations issued to implement it, or any order of the Commission 
which the RSTC has notice of in connection with the offering of lUIs 
for which a RSTC Plan has been filed;
2. The RSTC has been, or is engaged, or is about to engage in fraudulent 
transactions;
3. The RSTC has made any false or misleading representation of material 
facts in any approved plan concerning the FISTC or its lUIs;
4. The RSTC has failed to comply with any requirement that the 
Commission may impose as a condition for the issuance of lUI for 
which a RSTC Plan has been filed; or
5. The RSTC Plan is, on its face, incomplete or inaccurate in any material 
respect, or includes any untrue statement of a material fact, or omits 
to state a material fact required to be stated, or one which is necessary 
to obviate any misappreciation of the statements therein.
Sec. 10. Issuance of lUIs. - The FISTC may be allowed to issue lUIs subject 
to the rules and regulations the Commission is herein mandated to promulgate.
Sec. 11. Permitted Investors. - Any qualified buyer, as defined in Section 10 
(1) of Republic Act No. 8799, may acquire or hold lUIs in an RSTC in the minimum 
amount of Ten million pesos (P10,000,000.00): Provided, That an FISTC shall not be 
authorized to acquire the lUIs of another FISTC: Provided, further, That the parent, 
subsidiaries, affiliates or stockholders, directors, officers or any related interest of


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the selling FI or the parent's subsidiaries, affiliates or stockholders, directors, officers 
or any related interest shall not acquire or hold, directly or indirectly, the lUIs of the 
FISTC that acquired the NPAs of the R.
ARTICLE III
Transfer of Assets to FISTC
Sec. 12. Notice and Manner of Transfer of Assets. - (a) No transfer of NPLs to 
an FISTC shall take effect unless the FI concerned shall give prior notice to the 
borrowers of the NPLs and all persons holding prior encumbrances upon the assets 
mortgaged or subject to security interest. Such notice shall be in writing and made 
in accordance with the 1997 Rules of Civil Procedure, as amended, and the rules and 
regulations issued to implement this Act, at their last known address or their email 
address registered and on fiie with the FI.
(b) The transfer of NPAs from an FI to an FISTC shall be subject to prior 
certification of eiigibility as NPA by the appropriate reguiatory authority having 
jurisdiction over its operations which shaii issue its certification within forty-five (45) 
days from the date of application by the FI for eligibility.
(c) After the sale or transfer of the NPLs, the transferring FI shaii inform the 
borrower in writing at the iast known address of the fact of the sale or transfer of 
the NPLs.
Sec. 13. Nature of Transfer. - All sales or transfers of NPAs to an FISTC shall 
be in the nature of a true sale after proper notice in accordance with the procedure 
as provided for in Section 12, without need for the borrower's consent: Provided, 
That disposition of assets of a GFI and a GOCC shall be covered by special rules to 
be incorporated in the ruies and regulations of this Act: Provided, further, That after 
the sale, the FISTC shall assume all rights and obiigations of the transferring FI.


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In the transfer of NPAs, the parties shall exercise the requisite due diligence 
and any fraud, collusion and irregularity shall be subject to penalties in Sec. 24 of 
this Act, as well as other pertinent laws, rules and regulations.
Sec. 14. Issuance of Injunctive Relief Against Transfer of Assets. - No court, 
other than the Court of Appeals and the Supreme Court, shall issue any temporary 
restraining order, preliminary injunction, preliminary mandatory injunction, status 
quo order, stay order, commencement order, or any other issuance of injunctive 
relief against the transfer of NPAs from the FI to an FISTC, and from an RSTC to a 
third party, or dation in payment by the borrower or by a third party in favor of an 
FI or in favor of an FISTC, or judicial or extrajudicial foreclosure sales or execution 
sales of the FI or FISTC of collateral in settlement of NPLs.
Any restraining order, injunction, status quo order, stay order, 
commencement order, or any other issuance of injunctive relief issued in violation of 
this Section is void and of no force and effect.
The provisions of Rules of Court on injunctions insofar as these are applicable 
and not inconsistent with the provisions of this Act shall govern the issuance and 
dissolution of restraining orders, injunctions, status quo orders or stay orders against 
said transfers.
ARTICLE IV
Incentives and Exemption Privileges
Sec. 15. Tax Exemptions and Fee Privileges. - Any existing law to the 
contrary notwithstanding, the transfer of NPAs from the FI to an FISTC, and from an 
FISTC to a third party or dation in payment by the borrower or by a third party in 
favor of an FI or in favor of an FISTC shall be exempt from the following taxes:


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(a) Documentary stamp tax on the abovementioned transfer of 
NPAs and dation in payment as may be imposed under Title VII of the 
National Internal Revenue Code of 1997, as amended by Republic Act 
No. 10963, otherwise known as the Tax Reform for Acceleration and 
Inclusion (TRAIN) Act;
(b) Capital gains tax imposed on the transfer of lands and/or 
other assets treated as capital assets as defined under Section 
39(A)(1) of the National Internal Revenue Code of 1997, as amended;
(c) Creditable withholding income taxes imposed on the transfer 
of land and/or buildings treated as ordinary assets pursuant to Bureau 
of Internal Revenue (BIR) Revenue Regulation No. 2-98, as amended;
(d) Value-added tax on the transfer of NPAs as may be imposed 
under Title IV of the National Internal Revenue Code of 1997, as 
amended, or gross receipts tax under Title V of the same Code, 
whichever is applicable pursuant to regulations of the BIR.
The abovementioned transfers shall also be subject to the 
following. In lieu of the applicable fees:
a) Fifty percent (50%) of the applicable registration and transfer 
fees on the transfer of real estate mortgage and security interest to 
and from the FISTC, as imposed in accordance with the existing 
circulars of the Land Registration Authority (LRA);
(b) Fifty percent (50%) of the filing fees for any foreclosure 
initiated by the FISTC in relation to any NPA acquired from an FI, as 
prescribed by the Rules of Court; and


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(c) Fifty percent (50%) of the land registration fees prescribed 
under the existing circulars of the LRA.
All sales or transfers of NPAs from the FIs to an HSTC or 
transfers by way of dation in payment by the borrower or by a third 
party to the R shall be entitled to the privileges enumerated herein for 
a period of not more than two (2) years from the date of effectivity of 
the rules and regulations to be issued to implement this Act or of the 
applicable revenue regulations, whichever comes later: Provided, That 
the Secretary of Finance may extend such period by a maximum of two 
(2) years.
Transfers from an FISTC to a third party of NPAs acquired by 
the HSTC within such two-year period, or within such extended period, 
or transfers by way of dation in payment by a borrower or by a third 
party to the RSTC shall enjoy the privileges enumerated herein for a 
period of not more than five (5) years from the date of acquisition by 
the RSTC: Provided, That the Secretary of Finance may extend such 
five-year period by a maximum of five (5) years: Provided, further, 
That properties acquired by an RSTC from GFIs or GOCCs which are 
devoted to socialized or low-cost housing shall not be converted to 
other uses.
The tax exemptions, incentives, and fee privileges given to Rs 
and FISTC at the various stages of the transactions under this Section 
shall likewise be extended to any individual subject to the conditions 
prescribed in the rules and regulations issued to implement this Act: 
Provided, That:
(i) the transaction is limited to a ROPA that is either a
single family residential unit or an empty lot, or to NPL


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secured by a real estate mortgage on a residential unit or 
an empty lot;
(ii) there shall only be one transaction consisting of one 
residential unit or empty lot per Individual;
(lii) the two-year transfer period, including its extension, 
and the five-year entitlement period granted to NPA, as 
may be extended by the Secretary of Finance, shall also 
apply to said single family residential unit or empty lot.
Sec. 16. Additional Tax Exemptions and Fee Privileges. - To encourage the 
infusion of capital and financial assistance by the FISTC for the purpose of 
rehabilitating the borrower's business, the following additional tax exemptions and 
privileges shall be enjoyed:
(a) The FISTC shall be exempt from income tax on net interest income, 
documentary stamp tax and mortgage registration fees on new loans in excess of 
existing loans extended to borrowers with NPLs which have been acquired by the 
RSTC;
(b) In case of capital infusion by the RSTC to the borrower with NPLs, the 
FISTC shall also be exempt from the documentary stamp tax;
Provided, That the tax exemptions and fee privileges granted under this 
Section shall apply for a period of not more than five (5) years from the date of 
acquisition of NPLs by the FISTC: Provided, further. That the Secretary of Finance 
may extend the period for the enjoyment of such tax exemption and fee privileges 
by a maximum of five (5) years.
Sec. 17. Net Operating Loss Cany-Over (NOLCO) of Participating FIs. - (a) 
Any loss that is incurred by an FI as a result of the transfer of an NPA within the


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two-year period from the effectivity of the rules and regulations issued to implement 
the provisions of this Section, shall be treated as ordinary loss: Provided, That the 
accrued interest and penalties shall not be included as loss on said loss carry over 
from operations, subject to the provisions of the National Internal Revenue Code of 
1997 on net operating loss carry-over (NOLCO). Such loss incurred by the FI from 
the transfer of NPAs within the two-year period from the effectivity of the rules and 
regulations issued to implement this Act may be carried over for a period of five (5) 
consecutive taxable years immediately following the year of such loss: Provided, 
further, That for purposes of corporate gain or loss, the carry-over shall be subject 
to pertinent laws: Provided, finally. That the tax savings derived by FIs from the 
NOLCO shall not be made available for dividend declaration but shall be retained as 
a form of capital build-up. The DOF, upon the recommendation of the BIR, shall 
issue the rules and regulations to effectively implement the provisions of this 
Section.
(b) The regulatory authority concerned shall promulgate the necessary rules 
and regulations governing the treatment of any loss of the FIs in the books of 
account as a result of the transfer of the NPAs.
(c) In the case of non-bank GRs and GOCCs enumerated in Section 3 (d) 
hereof, the Department of Finance (DOF), in consultation with the Commission on 
Audit (COA), shall promulgate the necessary rules and regulations governing the 
treatment of any loss in their books of accounts as a result of the transfer of their 
NPAs.
Sec. 18. Abuse of Tax Exemptions and Privileges. - Any person, natural or 
juridical, who benefits from the tax exemptions and privileges herein granted, when 
such person is not entitled thereto, shall be subject to the penalties provided in 
Section 24 hereof. In addition, the offender shall refund to the government double 
the amount of the tax exemptions and privileges availed of under this Act, plus 
interest of twelve percent (12%) per year from the date prescribed for its payment, 
until full payment thereof.


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ARTICLE V
Enforcement and Protection Provisions
Sec. 19. Consumer Protection Mechanism. The FISTC shall set up an 
appropriate consumer protection mechanism as may be prescribed in the rules and 
regulations to be issued by the appropriate regulatory authority.
Sec. 20. Redemption Periods. - The redemption periods allowed to borrowers 
of banks under Section 47 of "The General Banking Law of 2000" the Rules of 
Court, as well as other relevant laws for non-bank borrowers shall be applicable.
ARTICLE VI
Accounting and Reporting Provisions
Sec. 21. Books of Accounts and Records. - The FISTC shall set and keep 
accurate accounts and internal financial controls and shall appoint an external 
auditor that is acceptable to the Commission. The Commission, the BSP, and the BIR 
may look into the books of accounts and records of the FISTC at any time during 
office hours, after due notice.
Sec. 22. Reports.- The Commission, the regulatory authorities, and the BIR 
shall prescribe the submission of reports from the FISTC and the FIs for the proper 
implementation of this Act.
ARTICLE VII 
Final Provisions
Sec.23. Primary Impiementing Agency.- The Commission shall be the 
primary implementing agency of this Act. It shall have the authority to enlist the 
assistance of any branch, department, bureau, office, agency or instrumentality of 
the government, including GOCCs and GFIs which may include the use and transfer 
of its personnel, facilities and resources.


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Sec. 24. Penalties and administrative sanctions. - Any person who violates
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any of the provisions of this Act, or the rules and regulations promulgated
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thereunder, or any person who, in a notice, certification or plan filed under this Act,
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makes any untruthful statement of a material fact or omits to state any material fact
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required to be stated therein, shall, upon conviction, suffer a fine of not less than
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One hundred thousand pesos (P100,000.00) nor more than Two million pesos
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(P2,000,000.00) or imprisonment of not less than six (6) years nor more than twelve
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(12) years, or both, at the discretion of the court, without prejudice to the penalties
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provided under Section 18 hereof. Section 37 of Republic Act No. 7653, as amended,
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and other applicable laws. If the offender is a corporation, association, partnership
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or any juridical person, the penalty shall be imposed upon the responsible officers,
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as the case may be, who participated in the commission of the crime or who shall
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have knowingly permitted or failed to prevent its commission. If the offender is a
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juridical person, other than a bank or financial institution supervised by the BSP, the
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court may order the suspension or revocation of its license. The offender, if an alien,
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shall, in addition to the penalties herein prescribed, be deported without further
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proceedings after serving the penalties herein prescribed. The offender, if a public
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official or employee, shall, in addition to the penalties prescribed herein, suffer
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absolute or temporary disqualification from government or public office, as the case
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may be.
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If the offender is a juridical person, the Commission may impose penalties 
such as fines upon institutions under its jurisdiction and its officers and order the 
suspension or revocation of its license. With respect to financial institutions under its
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jurisdiction, the BSP shall impose upon them the sanctions prescribed under Section
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37 of Republic Act No. 7653, as amended, as well as upon their directors, officers 
and employees. This shall be without prejudice to the appropriate penalties that may 
be imposed by the courts.
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If, after due notice and hearing, the Commission finds that: (a) there is a 
violation of this Act, its rules, or its orders; or (b) any FISTC or other person has, in


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a RSTC plan or in other reports, applications, accounts, records or documents 
required by law or rules to be filed with the Commission, made any untrue 
statement of a material fact, or omitted to state a material fact required to be 
stated, or one which is necessary to obviate any misappreciation of the statements 
therein; the Commission shall, in its discretion, impose any or all of the following 
sanctions as may be appropriate in light of the facts and circumstances:
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suspension, or revocation of any approved RSTC plan for the offering of 
lUIs;
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fine as may be determined by the Commission; and
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other penalties within the power of the Commission to impose.
Sec. 25. Applicability Clause. - The provisions of this Act shall be applicable to
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assets that have become non-performing as of December 31, 2020: Provided, That
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the Secretary of Finance may extend the said period by a maximum of two (2)
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years.
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Sec. 26. Conscience Clause.- Nothing in this Act shall be construed to
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condone or exempt from any liability any person responsible for acts or omissions
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constituting unsound business practices or mismanagement.
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Sec. 27. Oversight Committee. - There is hereby created a Joint
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Congressional Oversight Committee (JCOC) to oversee, monitor, and evaluate the
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implementation of this Act. The JCOC shall be composed of five (5) members each
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from the House of Representatives and from the Senate. The JCOC shall be co-
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chaired by the Chairpersons of the House Committee on Banks and Financial
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Intermediaries and the Senate Committee on Banks, Financial Institutions and
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Currencies. The Speaker and the Senate President shall designate the other four
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members of the JCOC of the House and the Senate from among the members of the
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House Committee on Banks and Financial Intermediaries and the Senate Committee
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on Banks, Financial Institutions, and Currencies, at least one member of which shall
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be from the minority.


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Sec. 28. Use of Registration Fees. - To carry out the purposes of this Act, the 
Commission shall retain and use all fees paid to it relative to the establishment of an 
HSTC in addition to its annual budget and to what is provided for under Section 75, 
on partial use of income, of Republic Act No. 8799 or the Securities Regulation Code.
Sec. 29. Impiementing Ruies and Regulations. — Within thirty (30) days from 
the effectivity of this Act, the Commission, jointly with the BSP, the DOF, and the 
BIR, shall promulgate the necessary rules and regulations for the effective 
implementation of this Act: Provided, That within thirty (30) days from the effectivity 
of this Act, the DOF, upon recommendation of the BIR, shall promulgate the revenue 
regulations implementing the fiscal incentives under this Act: Provider further, That 
the Commission, BSP, DOF and BIR may issue separate regulations that will apply 
exclusively to the institutions under their respective jurisdiction. In drafting their 
separate regulations, the appropriate regulatory authorities may grant incentives and 
privileges as may be allowed by their respective charters, this Act and other 
pertinent laws.
Sec. 30. Separability Clause.- If any provision of this Act is held 
unconstitutional or invalid, all other provisions not affected thereby shall remain 
valid.
Sec. 31. Repealing Clause. - Republic Act No. 9182, as amended by Republic 
Act No. 9343, otherwise known as "The Special Purpose Vehicle (SPV) Act of 2002," 
is hereby repealed. All laws, decrees, executive orders, rules and regulations or parts 
thereof, which are inconsistent with this Act, are hereby repealed, amended or 
modified accordingly.
Sec. 32. Effectivity. - This Act shall take effect fifteen (15) days after its 
publication in the Official Gazette or in a newspaper of general circulation.
Approved,