MANILA – Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno on Tuesday pitched a measure similar to the Special Purpose Vehicle (SVP) Act of 2002 to help companies hit by coronavirus disease (Covid-19) pandemic.
In an online meeting with members of the House of Representatives and government officials Tuesday, Diokno said the government has extended support to micro, small and medium enterprises (MSMEs) that are affected by the pandemic but there are other sectors that are also suffering.
“I think we have to confront also the problems faced by the airlines industry, the hotel industry and related industries. So we would like to propose the enactment of a law similar to Republic Act No. 9182 or the Special Purpose Vehicle Act or SPV of 2002, which grants tax exemption in fee privileges to SPVs which acquire or invest in non-performing assets of banks,” he said during the meeting which was shown live via the Facebook page of House Speaker Alan Peter Cayetano.
The SPV Act of 2002 paved the way for financial institutions (FIs) to dispose their bad loans and non-performing assets and help the sector ensure that it remains strong and to contribute to the growth of the domestic economy.
Under the law, the SVP, which is a stock corporation, should be 60% owned by Filipinos.
The SPV should either invest in the ailing FIs like a bank or acquire the FIs’ non-performing assets (NPAs).
It can tap third parties to, among others, manage, operate, collect and dispose FI’s NPAs.
Diokno’s proposal was made as the government continues to formulate programs that will help businesses address their losses from the pandemic and save the domestic economy as well.
Economic managers forecast a zero negative 1% growth for the Philippine economy this year, a big drop from the 5.9% expansion in 2019 and the 6% level output in recent years. (PNA)