/ 
Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City, Metro Manila 
NINETEENTH CONGRESS 
First Regular Session 
HOUSE BILL NO. ---
Introduced by Representative Irwin C. Tieng 
EXPLANATORY NOTE 
The Financial Institutions Strategic Transfer (FIST) Act of 2021 (Republic Act No. 11523) was 
intended importantly to strengthen the financial sector so that economic recovery can be 
achieved faster, and with more lasting positive effects because of the COVID 19 pandemic 
which has greatly affected the Philippines, as well the nations worldwide. The FIST Act was 
expected to strengthen the balance sheets of the financial institutions and restore their capability 
to perform their role as mobilizers of savings and investment and in providing the needed 
financial system liquidity to keep the economy afloat. Thus, it is essential that banks and other 
financial institutions are able to maintain their financial health to cushion the adverse economic 
impact of the COVID-19 pandemic for the country growth and development. 
To date, however, the benefits under the FIST Act have not been maximized. 
The 
implementation of the FIST Act comes at a time when the operation and manpower of the 
financial institutions and participants for the FIST Act, including government regulatory 
bodies, were not in full capacity because of the effect of the existing pandemic and its working 
protocol. It is of public knowledge, not only in the Philippines, but worldwide that economic 
activity was at a standstill since the early part of 2020 up to early part of 2022 because of the 
pandemic which, unfortunately, is still a health threat issue even at this time. Given this 
predicament, all of the participants carried additional burden over and above the normal 
obstacles faced by the FIST Law. 
The urgent concern of the participating financial institutions is that the deferral of the losses 
arising from the sale/transfer of Non-Performing Assets (NPAs) under the Act up to a 
maximum period of only five (5) years is too short for bank and other financial institutions to 
maintain their financial health. It will be recalled that with the antecedent SPV Law, the period 
of deferral was 1 O years, which 10-year period was availed of by all SPV Law bank sellers. 
This very significant change in the actual implementation of the FIST Act - from an initial 
capital deferral period of 10 years, down to 5 years - has been the most significant challenge 
for many of the financial institutions, as their balance sheets, hammered by the effects of the 
COVID 19 pandemic, have been severely weakened. 
January 16, 2023
12:13 pm
6773


With the period for the availment of the benefits under the FIST Act coming to an end on 
February 18, 2023, participants under the FIST Act are very concerned about the impending 
deadline, even if they have already put in much resources towards the completion of their 
respective FIST transactions. 
It is also worth considering the degree of negotiation, 
documentation and processes involved in finalizing the sale/transfer of NP As from Fis to 
FISTC. Given this predicament, all of the participants carried additional burden over and above 
the normal obstacles faced by the FIST Law. 
If the operation of the SPV Law highly requires an amendatory act for it to meet its target, it is 
submitted that the FIST Law should likewise be given the same treatment. It is, therefore, 
crucial in helping the participating Fis and FISTC concerned that the period for the validity of 
the sale/transfer of NP As under the FIST Act be appropriately extended for another two years 
from the effectivity of the intended amendatory act. 
This bill proposes: 
1. to extend period of validity for the sale/transfer of NP As for another two (2) from the 
effectivity of the intended amendatory act; 
2. to extend for three (3) more years the deadlines for the establishment of a FIST 
Corporation; 
3. that losses of financial institutions arising from the sale/transfer of their NP As be 
carried over for a period of ten (10) years, the same treatment of losses on non-
performing assets ofFJs accorded to them under the SPV Act of2002; and 
4. to extend the validity of the transfer of NPAs from financial institutions to FIST 
Corporations and from FIST Corporations to third parties, as well as the extension of 
the Tax Exemptions, incentives and Fee Privileges accorded on said transactions, in the 
same manner that SPV Law (RA 9182) was extended for the said p 
In view hereof, the immediate passage of this bill is earnestly sought. 
G 
·1a 


Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City, Metro Manila 
NINETEENTH CONGRESS 
First Regular Session 
HOUSE BILL NO. ---
Introduced by Representative Irwin C. Tieng 
AN ACT AMENDING REPUBLIC ACT NO. 11523, OTHERWISE KNOWN AS AN 
ACT ENSURING PIIlLIPPINE FINANCIAL INDUSTRY RESILIENCY AGAINST 
THE COVID-19 
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled: 
SECTION 1. Section 6 of Republic Act No. 11523 is hereby amended to read as follows: 
"SEC. 6. Period for filing of Applications. - Applications for the establishment and 
registration of a FISTC shall be filed with the Commission within thirty-six (36) 
months from the date of effectivity of this AMENDATORY Act." 
SECTION 2. Section 15 of the same Act is hereby amended to read as follows: 
"SEC. 15. Tax Exemptions and Fee Privileges. - Any existing law to the contrary 
notwithstanding the transfer ofNPAs from the FI to a FISTC, and from a 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 a FISTC shall be exempt from the following taxes: 
"(a) Documentary stamp tax on the abovementioned transfer of NP As 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 oflands and/or other assets treated 
as capital assets as defined under Section 39 (A)(l) of the National Internal 
Revenue Code of l 997, as amended; 
6773


"( 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 NP As 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 FIS TC, 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 
FIS TC in relation to any NP A acquired from an Fl, as prescribed by the Rules 
of Court; and 
"(c) Fifty percent (50%) of the land registration fees prescribed under the 
existing circulars of the LRA. 
All sales or transfers ofNPAs from the Fis to a FISTC or transfers by way of 
dation in payment by the borrower or by a third party to the FI shall be entitled to the 
privileges enumerated herein for a period of not more than two (2) years from the date 
of effectivity of this AMEND A TORY Act: 
Transfers from a FIS TC to a third party of NP As acquired by the FIS TC 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 FISTC shall enjoy the privileges 
enumerated herein for a period of not more than five (5) years from the date of 
acquisition by the FIS TC: Provided, further, That properties acquired by a FISTC 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 Fis and FISTC at 
the various stages of the transactions under this section shall likewise be extended to 
any individual; Provided, That: 
(a) The transaction is limited to a ROPA that is either a single family residential 
unit or an empty lot, or to NPL secured by real estate mortgage on a residential 
unit or an empty lot; 
(b) There shall only be one (1) transaction consisting of one (1) residential unit 
or empty lot per individual; 
( c) The two-year transfer period, including its extension, and the five (5)-year 
entitlement period granted to NP A shall also apply to said single family 
residential unit or empty lot. 


To prevent inordinate delay in the grant of incentives and exemption privileges, 
the Certificate of Eligibility duly issued by the appropriate regulatory agency is 
sufficient proof of the entity's entitlement thereto. 
SECTION 3. Section 17 of the same Act is hereby amended to read as follows: 
"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 NP A within 
the two (2) year period from the effectivity of this Act or within such extended period 
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 NOLCO. Such loss incurred by the 
FI from the transfer ofNPAs within the two (2)-year period from the effectivity of this 
AMENDATORY Act may be carried over for a period of TEN (10) 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 FURTHER, THAT THE BOOKING OF SUCH LOSSES 
OVER THE TEN (10) YEAR PERIOD BE CONSISTENT WITH THE 
BOOKING 
OF SUCH LOSSES ALLOWED 
TO THE FIS UNDER THE 
ANTECEDENT SPV LAW. Provided, finally, That the tax savings derived by Fis 
from the NOLCO shall not be made available for dividend declaration but shall be 
retained a s a form of capital build-up. The Department of Finance (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 accounts as a 
result of the transfer of the NP As. 
(c) In the case ofGFis and GOCCs enumerated in Section 3(3) hereof, the 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." 
SECTION 4. Separability Clause-If any provision of this Act shall be held invalid or 
unconstitutional, the remaining provisions not affected thereby shall continue to be in full force 
and effect. 
SECTION 5. Repealing Clause-All laws, decrees, executive orders, proclamations, rules 
and regulations, and other issuances, or parts thereof which are inconsistent with the provisions 
of this Act are hereby repealed, amended or modified accordingly. 
SECTION 6. Effectivity-This Act shall take effect fifteen (15) days after its publication in 
the Official Gazette or in a newspaper of general circulation. 
Approved,