More and more banks and other financial loan institutions are seeking approvals from the Bangko Sentral ng Pilipinas to sell off at a discount, their non performing loans (NPLs) whose assets include vacant lots, house and lots, town houses, condominiums and other assets that banks are unable to sell off which are acquired when clients are unable to pay off their debts like housing loans, home equity loans, home construction loan and are unable to refinance it via another loan, are to avail of the tax privileges and other perks under the sunset provisions of the Special Purpose Vehicle (SPV) Law.
In the coming months, it is expected more transactions will be completed as an estimated P51 billion of applications are in the pipeline. Market sources intimated that included in the P51 billion up for grabs are Land Bank of the Philippines loans that have turned sour amounting to P3.5 billion worth of bad loans.
Cleaning the balance sheet of bank and financial institutions peppered with non performing loans in recent years is one of the major thrusts of the BSP in the medium-term with the end in view of strengthening the local banking system as well as financial loan institutions. The banking system will have a superior asset quality and will have much enhanced service to the general public with the unloading of these non performing loans that has dragged the ability of the financial loan institutions to loan actively to more productive business endeavors.
With the deceleration in the levels non performing loans, banks will be able better meet the demands of their clients and be more competitive in the world market as well as helping the economy by unloading non performing loans.