BSP notes low number of bank clients seeking debt restructuring

The Bangko Sentral ng Pilipinas (BSP) said it noted a relatively low number of bank clients seeking debt restructuring for the first half of this year.

In a virtual briefing on Friday, BSP Governor Benjamin Diokno said the central bank handled around 12,000 consumer complaints in the first half of 2021 through its regular complaint channels and its chatbot.

Debt collection and/or debt restructuring for loans and credit card accounts accounted for only 3 percent or 358 of the total.

According to Diokno, the Bangko Sentral chatbot processed around 31 percent of debt restructuring and affordable payment arrangement requests in 2021 in favor of the consumer.

Another 32 percent is still being assessed in collaboration with a client, and 21 percent is still waiting for a response or action from the financial institution in question. Complaints that were not handled in the client’s favor, on the other hand, account for only 13 percent of the total.

“So based on the given numbers, it is apparent that generally consumers and financial institutions do their direct coordination find common ground in negotiating their obligations,” Diokno said.

He went on to explain that the “relatively low cases” of debt restructuring petitions reaching the central bank are reassuring.

“Even in the cases escalated to the BSP where we provide an additional platform and opportunity for the parties to further communicate with each other, we find that banks are largely open to consideration given the current difficulties experienced by their clients.”

Banks, Diokno said, provide concessions to their customers by waiving or reducing fees, interests, or penalties; implementing a more favorable payment scheme; providing options, particularly for payments made through post-dated checks and auto-debit or auto-deduct arrangements; and extending or adjusting long maturities.

Bangko Sentral data showed that banks’ gross non-performing loans climbed by 83 percent to P479.48 billion at the end of May this year, up from P262 billion a year earlier.