The Bayanihan Act states that the Payment Extension will be granted to borrowers without incurring interests, penalties, fees or other charges.
However, the Bangko Sentral ng Pilipinas (BSP) clarified in the Implementing Rules and Regulations (the “IRR”) of the Bayanihan Act that financial institutions shall not charge interest on interest, fees, and other charges during the Payment Extension, but interest may be accrued and paid by the Borrower either as bullet payment or staggered throughout the life of the loan.
The Securities and Exchange Commission (SEC) made the same interpretation in its issuances. Therefore, as clarified by both BSP and SEC, the law prohibits only interest on interest, late fees,and other charges during the Payment Extension. But simple interest may still be charged andaccrued, payable after the Payment Extension.
Are you allowed to charge interest during the Payment Extension?
