Duterte signs FIST bill into law

President Rodrigo Duterte signed into law the Financial Institutions Strategic Transfer (FIST) bill, a measure that seeks to create specialized asset-managing corporations.

“That’s great news! FIST law will allow banks to easily dispose bad assets through Asset Management Companies. The new law will help keep the banking system stable despite the effects of the COVID-19 pandemic,” Bangko Sentral ng Pilipinas Governor Benjamin Diokno said in a tweet.

The FIST bill seeks to create specialized asset-managing corporations that would acquire "bad loans and stagnant properties" from embattled financial institutions.

Under the measure, a FIST corporation may invest in, or acquire non-performing assets (NPAs) from financial institutions; and engage third parties to manage, operate, collect, and dispose of acquired NPAs.

“It will ease the NPL ratios of banks moving forward. FIST is expected to reduce the NPL ratio by about 0.63 to 7.0 percentage point,” Diokno said.

“Anticipating the signing of the FIST bill into law, the draft IRR is already with SEC (with inputs from BSP) as the lead agency. The said IRR is being circulated to the industry for comments,” he added.

Diokno previously pushed for the bill, saying that borrowers' capacity to pay may be weakened by a disruption in their cash flows by the end of 2020. 

It was also certified urgent by Malacañang amid the coronavirus disease 2019 (COVID-19) pandemic. — DVM, GMA News