EIGHTEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
Second Regular Session 
)
SENATE
S.B. No.
1594
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Introduced by SENATOR IMEE R. MARCOS
AN ACT ENSURING PHILIPPINE FINANCIAL INDUSTRY RESILIENCY 
AGAINST THE COVID-19 PANDEMIC
EXPLANATORY NOTE
Article II, Section 20 of the 1987 Constitution provides that, " The State 
recognizes the indispensable roie of the private sector, encourages private 
enterprise, and provides incentives to needed investments."
The Philippines incurred a -0.2% contraction of the economy on first quarter 
2020 due to the Coronavirus Disease 2019 (COVID-19) pandemic. The National 
Economic and Development Authority (NEDA) has already projected a -2 to -3.4% 
contraction of the GDP this 2020. As such, most financial institutions are at risk of 
accumulating non-performing assets (NPAs) across all borrower segments. NPAs are 
made up of (1) non-performing loans (NPLs), defined as loans where the borrower is 
behind payment obligations for 90 days or more, and (2) real and other properties 
acquired (ROPAs), or foreclosed assets. High NPA ratios affect the ability of banks to 
provide financial intermediation services through both capital losses (non-payment) and 
management/administration losses associated with loan loss provisions and 
housekeeping expenses.
As of March 2020, the BSP has reported a slow but continuous increase of non­
performing loans, with an NPL ratio of 2.2%, which is slightly higher than 2.1% last
1


year. However, given the lag associated with banking variables and the expiration of 
due date extensions, the NPL ratio can rise quickly. According to the Bankers 
Association of the Philippines, NPA ratios can rise from the expected 5% ratio today to 
as much as 20% in a matter of months.
To respond for this development, there is a need for the State to enact measures 
for banks and other financial institutions to offload their NPAs. This bill proposes to 
encourage financial institutions to sell their NPAs to newly established Financial 
Institution Strategic Transfer Corporations (FISTCs), which can now specialize in the 
resolution of distressed assets. The bill also encourages the private sector, government 
financial institutions (GFIs), and government-owned-or-controlled corporations 
(GOCCs) to invest in RSTCs. The FISTCs will bring new capital and expertise in dealing 
with NPAs, rehabilitating failed businesses, and increasing available lending through 
the financial sector.
For the foregoing reasons, the passage of this bill Is earnestly sought.
IMEE R. MARCOS
Senator


EIGHTEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
Second Regular Session 
)
S.B. No.
SENATE 
1594
Introduced by SENATOR IMEE R. MARCOS
DATE
TJME
SEES
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. Short Title. - This Act shall be known as the "Financial Institutions
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Strategic Transfer (FIST) Act."
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Sec. 2. Declaration of Policy. - The State recognizes the role of banks and other
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financial institutions in mobilizing savings and investments and in providing financial
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system liquidity to keep the economy afloat. The measures that the Philippines adopted
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to contain the Coronavirus Disease 2019 (COVID-19) pandemic have unavoidably
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caused serious economic setbacks and tremendous financial pressure on markets and
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Industries. As such, it is necessary to lay down the appropriate policies to strengthen
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the financial sector so that economic recovery can be achieved faster.
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It is hereby declared the policy of the State:
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(a) to develop and maintain a sound financial sector for the country;
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(b) to address the non-performing asset problems of the financial sector;
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(c) to encourage public and private sector investments in non-performing
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assets;
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(d) to eliminate existing barriers in the acquisition of non-performing assets;


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(e) to help in the rehabilitation of distressed businesses with the end in view of
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their becoming economic value-added contributors; and
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(f) to improve the liquidity of the financial system which can be harnessed to
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propel economic growth and maintain financial stability.
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Sec. 3. Definition of Terms. - As used in this Act:
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(a) Approval Certificate means the Certificate of Permit to Offer Securities for
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Sale issued by the Commission rendering effective the Registration Statement filed by
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a Rnancial Institutions Strategic Transfer Corporation (RSTC) to issue Investment Unit
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Instruments (lUIS), pursuant to the provisions of this Act;
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(b) Approved Plan means an RSTC Plan for which a Certificate of Permit to Offer
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Securities for Sale has been issued by the Commission;
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(c) Commission refers to the Securities and Exchange Commission.
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(d) FinancialInstitutions/ or/7s means credit-granting institutions which shall be
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limited to the following:
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(1) the Bangko Sentral ng Pilipinas (BSP);
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(2) a bank, as defined under Republic Act No. 8791, also known as
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"The General Banking Law of 2000";
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(3) a financing company, as defined under Republic Act No. 8556, also
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known as "The Rnancing Company Act of 1998";
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(4) an investment house, as defined in Presidential Decree No. 129,
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also known as "The Investment Houses Law";
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(5) a lending company, as defined under Republic Act No. 9474, also
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known as "Lending Company Regulation Act of 2007";
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(6) government financial institutions (GHS), which for purposes of this
26 
Act, refer to the Philippine Deposit Insurance Corporation (PDIC), Land
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Bank of the Philippines (LBP), and Development Bank of the Philippines
28 
(DBP), and such other GRS as may be included by the Secretary of
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Rnance;


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(7) government-owned-or-controlled-corporations (GOCCS), which for
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purposes of this Act, refers to the National Home Mortgage Finance
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Corporation (NHMFC), Philippine Guarantee Corporation (PGC), Home
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Development Mutual Fund (HDMF), Social Security System (SSS),
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Government Service Insurance System (GSIS), Small Business
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Corporation (SBC), National Housing Authority (NHA), and such other
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GOCCS as may be included by the Secretary of Rnance;
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(8) other Institutions licensed by the BSP to perform (I) quasi-banking
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functions and (ii) credit-granting activities, including non-stock savings
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and loan associations, pawnshops, and non-bank credit card issuers.
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(e) FISTC Plan refers to the plan submitted to the Securities and Exchange
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Commission for its approval as pre-requisite to the issuance of an Investment Unit
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Instrument;
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(f) Investment Unit Instrument (lUI) refers to a participation certificate, debt
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instrument or simiiar instrument issued by the nSTC and subscribed by Permitted
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Investors as provided in Section 11 hereof, pursuant to an Approved Plan: Provided,
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That these shall not include the instruments to be issued by the RSTC to the selling FIs
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as full or partial settlement of the non- performing assets transferred to the said RSTC:
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Provided, further. That such issuances of the FISTC shall not be considered as deposit
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substitutes: Provided, finally. That these shall not form part of the capital stock of the
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nSTC.
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(g) Non-Performing Assets, or NPAs consist of the non-performing loans and
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real and other properties acquired by Rs;
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(h) Non-Performing Loans, or NPLs refer to secured or unsecured loans,
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receivables, and other financial assets of similar nature, including restructured loans,
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which are to be considered credit-impaired and defined as such in the rules and
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regulations to be issued to implement this Act;
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(i) Rea! and Other Properties Acquired (ROPAs) refers to real and other
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properties, other than those used for operating purposes or held for investment.


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acquired by an FI in settlement of loans and receivables, including real properties,
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shares of stocks, and security Interest which have been acquired by way of dation in
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payment {dacion en pago) or judicial or extra-judicial foreclosure or execution of
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judgment or enforcement of security interest."
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(j) True Sale refers to a sale wherein the selling n transfers or sells its NPAs to
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an nSTC, without recourse to cash or property in exchange for the transfer or sale, and
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without prejudice to the n and RSTC agreeing on sharing of profits in accordance with
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the conditions prescribed in the rules and regulations to be issued to implement this
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Act, and subject to the following results:
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(1) The transferor transfers full legal and beneficial title to and
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relinquishes effective control over the transferred NPAs; and
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(2) The transferred NPAs are legally isolated and put beyond the reach
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of the transferor and its creditors:
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Provided, That the transferring R shall not have direct or indirect control of the
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transferee RSTC: Provided, further. That the selling R does not have legai or beneficial
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ownership of more than ten percent 10% of the transferee FISTC.
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ARTICLE II
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Financial Institutions Strategic Transfer Corporation
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Sec. 4. Financial Institutions Strategic Transfer Corporation. - An RSTC is a
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stock corporation organized in accordance with Republic Act No. 11232, otherwise
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known as "The Revised Corporation Code of the Philippines," and the rules promulgated
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by the Securities and Exchange Commission, for purposes of registering the RSTC:
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Provided, That if the RSTC will acquire land, at least sixty percent (60%) of its
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outstanding capital stock shall be owned by Philippine nationals pursuant to Republic
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Act No. 7042, as amended, otherwise known as the "Foreign Investments Act." The
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BSP, GRs and GOCCs may create an RSTC subject to their respective charters and the
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approval of the Governance Commission for Government Owned or Controlled


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Corporations (GCG): Provided, That the limitations under Section 3(h) of this Act shall
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not apply to BSP and such GRs or GOCCs.
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RSTCs which are not qualified to acquire or hold land In the Philippines shall be
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allowed to bid and take part In foreclosure sales of real property mortgaged to them,
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as well as to avail of enforcement and other proceedings, and accordingly to take
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possession of the mortgaged property, for a period not exceeding five (5)-years from
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actual possession: Provided, That in no event shall the title to the property be
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transferred to such RSTC. In case the RSTC is the winning bidder, it shall, during the
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said five (5)-year period, transfer its rights to a qualified Philippine national, without
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prejudice to a borrower's rights under applicable laws. Should a RSTC be not able to
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transfer such property within the five (5)-year period, the RSTC shall be penalized one
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percent (1%) per annum of the price at which the property was foreclosed, until the
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RSTC Is able to transfer the property to a qualified Philippine national.
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Sec. 5. Powers of an FISTC. - An RSTC shall have the following powers:
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(a) Invest in, or acquire NPAs of Fis;
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(b) Engage third parties to manage, operate, collect and dispose of NPAs
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acquired from an R;
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(c) Rent, lease, hire, pledge, subject to security Interest, mortgage, transfer,
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sell, exchange, usufruct, secure, securitize, collect rents and profits, and other similar
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acts concerning its NPAs acquired from an R;
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(d) in case of NPLs, to restructure debt, condone debt and undertake other
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restructuring reiated activities. In restructuring debt, the FISTC may reduce the principal
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amount, interest earned, interest rates, and the period for calculating the interest,
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extend the time for debt repayment or relax the conditions for debt repayment, agree
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to the conversion of the borrower's debt to equity in the borrower's business, agree to
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a transfer of assets or claims from the borrower to repay the debt or dispose of some
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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
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reorganization or rehabilitation of the borrower, subject to the provisions of the Revised
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Corporation Code of the Philippines In respect to the rights of the shareholders of the
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borrower company, and apply other measures or restructuring techniques with the
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approval of the Commission;
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(f) Enter into dation in payment {dation en pago) arrangements, foreclose
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judicially or extra-judicially and other forms of debt settlement involving NPLs;
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(g) Spend funds to renovate, improve, complete or alter Its NPAs acquired from
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an R;
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(h) Issue equity or participation certificates or other forms of lUIs for the purpose
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of acquiring, managing, improving and disposing of Its NPAs acquired from an R;
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(i) Borrow money and issue other instruments of indebtedness for the purpose
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of paying operational and administrative costs;
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(j) Guarantee credit, and accept, intervene or honor the bills of borrowers;
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(k) Advance funds to borrowers as may be required for an acquired asset or any
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debt restructuring agreement pursuant thereto, or under any court order or
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rehabilitation plan; and
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(I) Engage the services of a third-party asset servicing company for the collection
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and receipt of the debt payments for debts under debt restructuring or business
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reorganization, management and disposition of assets of the RSTC in accordance with
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the rules, procedures and conditions prescribed by the Commission or by the courts.
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Except in the case of ROPAs whose redemption periods have already expired, the RSTC
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shall notify the borrower and all persons holding prior encumbrances upon the
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properties, or a part thereof, or are actually holding the same adversely against the
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borrower, of the appointment of such third-party asset servicing company within fifteen
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(15) days from the date of the appointment.
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Sec. 6. Period for Filing of Applications. - Applications for the establishment and
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registration of an RSTC shall be filed with the Commission within thirty six (36 months


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beginning from the date of effectivity of the rules and regulations of this Act, or
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effectivity of applicable revenue regulations, whichever is later: Provided, That the
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Secretary of Finance may extend the period of application by a maximum of another
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twenty-four (24) months.
5 
Entities created under Republic Act No. 9182, as amended, are qualified to avail
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of the privileges and incentives under this Act, subject to compliance with the
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requirements prescribed in the rules and regulations issued to implement this Act.
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Sec. 7. Capitalization of an FISTC. - A FISTC shall have a minimum authorized
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capital stock of Rve hundred million pesos (P500,000,000.00), with a minimum
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subscribed capital of One hundred twenty five million pesos (P125,000,000.00), and a
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minimum paid-up capital of Thirty-one million two hundred fifty thousand pesos
13 
(P31,250,000.00); Provided, That the Commission can make adjustments on the
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minimum capitalization of FISTC.
15
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Sec. 8. Submission of FISTC Plan. - After the establishment of an FISTC
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pursuant to Section 4 hereof, an nSTC Plan shall be submitted to the Commission for
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approval and shall include the following:
19 
(a) Investment policies of the RSTC;
20 
(b) Contribution plan including the amounts and draft of subscription
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documents;
22 
(c) Features of the lUIS, including the specific amounts issued and to 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 respect
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to the lUIS and the NPLS acquired from an FI;
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(f) Name of the external auditor of the FISTC;
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(g) Roles and responsibilities of the trustees, advisors, loan servicers and
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property managers;
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(h) Draft form of financial reports of the RSTC;


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(i) Details of distribution policies;
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0) Methods for the increase and decrease of future fund contribution;
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(k) Methods for the alteration or modification of the approved RSTC Plan;
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(I) Methods for the liquidation and distribution of assets to the holders of lUIS;
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(m) Details of credit enhancements like guarantees or standby letters of credit
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or advances that may be extended to the RSTC by an entity which shall not be
7 
the selling R, its parent, subsidiaries or affiliates; and
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(n) Such other documents or information as may be required by the
9 
Commission.
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Sec. 9. Approval, Rejection, Suspension or Revocation of HSTC Rian. -
11 
a) Approval- Upon approval of the RSTC Plan, the Commission shall issue an
12 
Approval Certificate stating that the application has been approved and that the lUIS
13 
may be issued.
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b) Amendments to Approved RSTC Rian- If an RSTC Plan becomes on Its face
15 
incomplete or Inaccurate in any material respect, the Commission shall issue an order
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directing the amendment of the RSTC Plan. Upon compliance with such order, the
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amended RSTC Plan shall become effective upon approval of the Commission or
18 
appropriate regulatory authority pursuant to Section 4 of this Act.
19 
c) Rejection, Suspension or Revocation - The Commission may reject a
20 
submitted RSTC Plan if on its face it was not In compliance with the requirements of
21 
this Act or the rules and regulations issued to implement it. It is also authorized to
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suspend or revoke the effectivity of an approved plan after due notice and hearing by
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issuing an order to such effect setting forth its findings in respect thereto, if it finds
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that:
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1. The RSTC has violated any of the provisions of this Act, the rules
26 
and regulations issued to implement it, or any order of the
27 
Commission which the RSTC has notice of ip connection with
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the offering of lUIS for which a RSTC Plan has been filed;


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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 RSTC 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 fece, incomplete or inaccurate in any 
material respect, or includes any untrue statement of a material 
feet, 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 oflUIs. - The RSTC 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 RSTC shall not be authorized 
to acquire the lUIs of another RSTC: Provided, further. That the parent, subsidiaries, 
affiliates or stockholders, directors, officers or any related interest of the selling R 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 RSTC that 
acquired the NPAS of the R.
ARTICLE III
Transfer of Assets to FISTC


1 
Sec. 12. Notice and Manner of Transfer of Assets. - (a) No transfer of NPLs to
2 
a RSTC shall take effect unless the FI concerned shall give prior notice to the borrowers
3 
of the NPLs and all persons holding prior encumbrances upon the assets niortgaged or
4 
subject to security interest. Such notice shall be in writing and made in accordance with
5 
the 1997 Rules of Civil Procedure, as amended, and the rules and regulations issued to
6 
implement this Act, at their last known address or their email address registered and
7 
oh file with the FI. The borrower and the FI shall be given a period of at most ninety
8 
(90) days upon receipt of notice, pursuant to the Rules of Court, to restructure or
9 
renegotiate the loan under such terms and conditions as may be agreed upon by the
10 
borrower and the FIs concerned.
11 
(b) The transfer of NPAs from an FI to an FISTC shail be subject to prior
12 
certification of eligibility as NPA by the appropriate regulatory authority having
13 
jurisdiction over its operations which shall issue its certification within forty-five (45)
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days from the date of application by the n for eligibility.
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(c) After the sale or transfer of the NPLs, the transferring FI shail inform the
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borrower in writing at the last known address of the feet of the sale or transfer of the
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NPLs.
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Sec. 13. Nature of Transfer. - All sales or transfers of NPAs to an RSTC shall
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be in the nature of a true saie after proper notice in accordance with the procedure as
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provided for in Section 12, without need for the borrower's consent: Provided, That
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disposition of assets of a GR and a GOCC shaii be covered by special rules to be
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incorporated in the rules and regulations of this Act: Provided, further. That after the
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sale, the RSTC shall assume all rights and obiigations of the transferring R.
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Sec. 14. Issuance of Injunctive Reiief Against Transfer of Assets. - No court,
27 
other than the Court of Appeals and the Supreme Court, shall issue any temporary
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restraining order, preliminary injunction, preliminary mandatory injunction, status quo
29 
order, stay order, commencement order, or any other issuance of injunctive reiief
10


1 
against the transfer of NPAs from the FI to an RSTC, and from an FISTC to a third
2 
party, or dation in payment by the borrower or by a third party in favor of an FI or in
3 
favor of an RSTC, or judicial or extrajudicial foreclosure sales or execution sales of the
4 
R or RSTC of collateral in settlement of NPLs.
5 
Any restraining order, injunction, status quo order, stay order, commencement
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order, or any other issuance of injunctive relief issued in violation of this Section is void
7 
and of no force and effect.
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The provisions of Rules of Court on injunctions insofar as these are applicable
9 
and not inconsistent with the provisions of this Act shall govern the Issuance and
10 
dissolution of restraining orders. Injunctions, status quo orders or stay orders against
11 
said transfers.
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ARTICLE IV
14 
Incentives and Exemption Privileges
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Sec. 15. Tax Exemptions and Fee Privileges. - Any existing law to the contrary
17 
notwithstanding, the transfer of NPAs from the R to an RSTC, and from an RSTC to a
18 
third party or dation in payment by the borrower or by a third party in favor of an R or
19 
in favor of an RSTC shall be exempt from the following taxes:
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(a) Documentary stamp tax on the abovementioned transfer of NPAS and dation
21 
in payment as may be imposed under Title VII of the National Internal Revenue Code
22 
of 1997, as amended by Republic Act No. 10963, otherwise known as the Tax Reform
23 
for Acceleration and Inclusion (TRAIN) Act;
24 
(b) Capital gains tax imposed on the transfer of lands and/or other assets treated
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as capital assets as defined under Section 39(A)(1) of the National Internal Revenue
26 
Code of 1997, as amended;
27 
(c) Creditable withholding income taxes imposed on the transfer of land and/or
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buildings treated as ordinary assets pursuant to Bureau of Internal Revenue (BIR)
29 
Revenue Regulation No. 2-98, as amended;
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1 
(d) Value-added tax on the transfer of NPAs as may be imposed under Title IV
2 
of the National Internal Revenue Code of 1997, as amended, or gross receipts tax under
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Title V of the same Code, whichever is applicable pursuant to regulations of the BIR.
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The abovementioned transfers shall also be subject to the following, in lieu of
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the appiicable fees:
6 
a) Fifty percent (50%) of the applicable registration and transfer fees on the
7 
transfer of real estate mortgage and security interest to and from the nSTC, as imposed
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in accordance with the existing circulars of the Land Registration Authority (LRA);
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(b) Rfty percent (50%) of the filing fees for any foreclosure initiated by the RSTC
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in relation to any NPA acquired from an R, 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
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circulars of the LRA.
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All sales or transfers of NPAs from the Rs to an RSTC or transfers by way of
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dation in payment {dacion en pago) by the borrower or by a third party to the R shall
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be entitled to the privileges enumerated herein for a period of not more than two (2)
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years from the date of effectivity of the ruies and regulations to be issued to impiement
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this Act or of the applicable revenue regulations, whichever comes later: Provided, That
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the Secretary of Rnance may extend such period by a maximum of two (2) years.
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Transfers from an RSTC to a third party of NPAs acquired by the RSTC within
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such two-year period, or within such extended period, or transfers by way of dation in
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payment by a borrower or by a third party to the RSTC shall enjoy the privileges
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enumerated herein for a period of not more than five (5) years from the date of
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acquisition by the RSTC: Provided, That the Secretary of Finance may extend such five-
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year period by a maximum of five (5) years: Provided, further. That properties acquired
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by an RSTC from GRs or GOCCs which are devoted to socialized or low-cost housing
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shall not be converted to other uses.
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The tax exemptions, incentives, and fee privileges given to FIs and RSTC at the
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various stages of the transactions under this Section shall likewise be extended to any
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(i)
(ii)
individual subject to the conditions prescribed in the rules and regulations: Provided, 
That:
the transaction is limited to a ROPA that is either a single family residential 
unit or an empty lot, or to NPL secured by a real estate mortgage on a 
residential unit or an empty lot;
there shall only be one transaction consisting of one residential unit or 
empty lot per individual;
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 RSTC 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 Carry-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 two-year
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period from the effectivity of the rules and regulations issued to implement the
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provisions of this Section, shall be treated as ordinary loss: Provided, That the accrued
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interest and penalties shall not be included as loss on said loss carry over from
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operations, subject to the provisions of the National Internal Revenue Code of 1997 on
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net operating loss carry-over (NOLCO). Such loss incurred by the R from the transfer
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of NPAs within the two-year period from the effectivity of the rules and regulations
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issued to implement this Act may be carried over for a period of five (5) consecutive
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taxable years immediately following the year of such loss: Provided, further, That for
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purposes of corporate gain or loss, the carry-over shall be subject to pertinent laws:
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Provided, fmaiiy. That the tax savings derived by FIs from the NOLCO shall not be made
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available for dividend declaration but shall be retained as a form of capital build-up. The
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DOF, upon the recommendation of the BIR, shall issue the rules and regulations to
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effectively implement the provisions of this Section.
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(b) The regulatory authority concerned shall promulgate the necessary rules and
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regulations governing the treatment of any loss of the Rs in the books of account as a
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result of the transfer of the NPAs.
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(c) In the case of non-bank GRS and GOCCS enumerated in Section 3 (c) hereof,
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the Department of Rnance (DOF), in consultation with the Commission on Audit (COA),
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shall promulgate the necessary rules and regulations governing the treatment of any
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loss in their books of accounts as a result of the transfer of their NPAs.
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Sec. 18. Abuse of Tax Exemptions and Priviieges. - Any person, natural or
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juridical, who benefits from the tax exemptions and privileges herein granted, when
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such person is not entitled thereto, shall be subject to the penalties provided in Section
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24 hereof. In addition, the offender shall refund to the government double the amount
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of the tax exemptions and privileges availed of under this Act, plus interest of twelve
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percent (12%) per year from the date prescribed for Its payment, until full payment
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thereof.
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ARTICLE V
Enforcement and Protection Provisions
Sec. 19. Consumer Protection Mechanism. - The HSTC 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 RSTC 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 RSTC 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 RSTC and the Rs for the proper 
impiementation of this Act.
ARTICLE VII 
Final Provisions
Sec.23. Primary Implementing 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 GRs 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 any
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of the provisions of this Act, or the rules and regulations promulgated thereunder, or
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any person who, in a notice, certification or plan filed under this Act, makes any
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untruthful statement of a material feet or omits to state any material fact required to
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be stated therein, shall, upon conviction, suffer a fine of not less than One hundred
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thousand pesos (P100,000.00) nor more than Two million pesos (P2,000,000.00) or
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imprisonment of not less than six (6) years nor more than twelve (12) years, or both,
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at the discretion of the court, without prejudice to the penalties provided under Section
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18 hereof. Section 37 of Republic Act No. 7653, as amended, and other applicable laws.
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If the offender is a corporation, association, partnership or any juridical person, the
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penalty shall be imposed upon the responsible officers, as the case may be, who
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participated in the commission of the crime or who shall have knowingly permitted or
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failed to prevent its commission. If the offender is a juridical person, other than a bank
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or financial institution supervised by the BSP, the court may order the suspension or
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revocation of its license. The offender, if an alien, shall, in addition to the penalties
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herein prescribed, be deported without further proceedings after serving the penalties
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herein prescribed. The offender, if a public official or employee, shall, in addition to the
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penalties prescribed herein, suffer absolute or temporary disqualification from
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government or public office, as the case may be.
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If the offender is a juridical person, the Commission may impose the penalties
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upon its officers and order the suspension or revocation of its license. With respect to
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financial institutions under its jurisdiction, the BSP shall impose the sanctions prescribed
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in Section 37 of Republic Act No. 7653, as amended, upon their directors, officers and
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employees. This shall be without prejudice to the appropriate penalties that may be
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imposed by the courts.
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If, after due notice and hearing, the Commission finds that: (a) there is a
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violation of this Act, its rules, or its orders; or (b) any FISTC or other person has, in a
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RSTC plan or in other reports, applications, accounts, records or'documents required
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by iaw or rules to be filed with the Commission, made any untrue statement of a
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material fact, or omits to state a material fact required to be stated, or one which Is 
necessary to obviate any misappreciatlon 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:
i. 
suspension, or revocation of any approved RSTC plan for the offering 
oflUIs;
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fine as may be determined by the Commission; and
iii. 
other penalties within the power of the Commission to impose.
Sec. 25. Applicability Clause. - The provisions of this Act shall be applicable to 
assets that have become non-performing as of October 1, 2020: Provided, That the 
Secretary of Finance may extend the said period by a maximum of two (2) years.
Sec. 26. Conscience Clause. - Nothing in this Act shall be construed to condone 
or exempt from any liability any person responsible for acts or omissions constituting 
unsound business practices or mismanagement.
Sec. 27. Oversight Committee. - There is hereby created a Joint Congressional 
Oversight Committee (JCOC) to oversee, monitor, and evaluate the implementation of 
this Act. The JCOC shall be composed of five (5) members each from the House of 
Representatives and from the Senate. The JCOC shall be co-chaired by the Chairpersons 
of the House Committee on Banks and Rnancial Intermediaries and the Senate 
Committee on Banks, Financial Institutions and Currencies. The Speaker and the Senate
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President shall designate the other four members of the JCOC of the House and the
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Senate from among the members of the House Committee on Banks and Rnancial
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Intermediaries and the Senate Committee on Banks, Financial Institutions, and
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Currencies, at least one member of which shall be from the minority.
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Sec. 28. Implementing Rules and Regulations. - Within thirty (30) days from
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the effectivity of this Act, the Commission, jointly with the BSP, the DOF, and the BIR,
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shall promulgate the necessary rules and regulations for the effective implementation
4 
of this Act: Provided, That within thirty (30) days from the effectivity of this Act, the
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DOF, upon recommendation of the BIR, shall promulgate the revenue regulations
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implementing the fiscai incentives under this Act: Provider further. That the
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Commission, BSP, DOF and BIR may issue separate regulations that wili appiy
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exciusiveiy to the institutions under their respective jurisdiction. In drafting their
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separate regulations, the appropriate reguiatory authorities may grant incentives and
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priviieges as may be aiiowed by their respective charters, this Act and other pertinent
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laws.
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Sec. 29. Separability Clause. - If any provision of this Act is heid
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unconstitutionai or invalid, all other provisions not affected thereby shall remain valid.
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Sec. 30. Repealing Clause. - Republic Act No. 9182, as amended by Republic
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Act No. 9343, otherwise known as "The Special Purpose Vehicle (SPV) Act of 2002," Is
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hereby repealed. All laws, decrees, executive orders, rules and regulations or parts
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thereof, which are inconsistent with this Act, are hereby repealed, amended or modified
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accordingiy.
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Sec. 31. Effectivity. - This Act shali take effect fifteen (15) days after its
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pubiication in the Official Gazette or in a newspaper of general circulation.
Approved,
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