GRACE POE ON FIST HEARING

Sen. Grace Poe has called out the Executive department for its lack of cooperation on its own priority bill, the Financial Institutions Strategic Transfer (FIST), that aims to allow banks to offload their soured loans and free up more funds to fuel the economy.

At the hearing of the Senate committee on banks today, bureaus under the Department of Finance, specifically the Bureau of Internal Revenue (BIR) and the Bureau of Treasury (BTr) took opposite sides on the issue, with the BTr expressing full support for FIST and the BIR expressing strong opposition to it. With the economy experiencing its biggest fall in eight decades, the Executive, the Finance department in particular, should heed its own call for unity.

"I'd like to note also that this is a priority measure, and yet it's disappointing to see that the heads of agencies didn't really attend," Poe said. "They're the ones saying that the economy needs it now. So, how will we know for sure that the economy needs it now if we don't even have a commitment, an actual presence from those heads explaining to us in detail what their commitments are also and the safeguards they're willing to accept."

The BTr said only P3 billion to P13 billion in revenues will be waived as part of the incentives under the FIST. With only a low-level bureaucrat of the BIR attending the hearing, Poe doubts the certainty of the opposition expressed by its representative.

"We are now officially in recession. Companies are closing shop, people have lost their jobs, and millions have gone hungry; add to that people dying because of the pandemic including healthcare workers," Poe said.

Banks and financial institutions will play a key role. The Bangko Sentral ng Pilipinas expect the bad loans ratio of banks to double by the end of the year and this will tie up funds that can otherwise be used to fuel the economy.

While the threat to the banking sector is not immediate, Poe said it is best to have the measures in place sooner rather than later for the big corporations and MSMEs to recover and for people to get their livelihoods back.

"This crash precipitated urgent measures from the government," Poe said. "The committee would like to stop playing catch-up with the pandemic and prepare the policy for the worse."