They will be granted tax incentives to cover transferring costs.
Philippine President Rodrigo Duterte has signed a law that will allow the country’s banks to offload soured loans through asset management companies to help speed up the process of cleaning up their books, reports Reuters.
The new law will help banks reduce bad loans and other non-performing assets, allowing financial institutions to expand credit and help the economy recover.
The law also grants tax incentives to cover the costs of transferring bad loans to so-called Financial Institutions Strategic Transfer Corporations that will manage distressed assets.
Philippine banks’ gross non-performing loan ratio eased to 3.61% in December after surging for 11 consecutive months in 2020, central bank data showed.
Here’s more from Reuters.
Do you know more about this story? Contact us anonymously through this link.