Senator Joel Villanueva has expressed support for the Bangko Sentral ng Pilipinas’ (BSP) proposal to adopt a principles-based framework for salary-based personal loans, describing it as a timely reform that prioritizes a borrower's actual ability to pay.

He noted that the proposed shift is a fair approach, allowing lenders to properly assess financial situations, repayment capacity, and the potential need for loan restructuring.

“Ganitong diskarte po ang inaasahan natin mula sa pamunuan ng Bangko Sentral na nag-uutos sa ating mga bangko na aralin ang kasalukuyang estado ng mga may-utang, alamin ang kakayahan nilang magbayad, at saka ipatupad ang pag-restructure ng kanilang utang," said Villanueva, chairman of the Senate committee on banks. "Masasabi po natin na patas ang ganitong hakbang, at matagal na rin po ang ating hinintay para ipatupad ito ng BSP."

The BSP proposal moves away from fixed and prescriptive loan term limits, allowing supervised financial institutions to determine repayment terms based on creditworthiness, repayment history, and loan purpose.

Under this proposal, terms will be agreed upon by both the borrower and the lender, provided that sound credit risk management standards are observed.

The draft policy would remove existing rules that set standard loan terms of up to three years—extendable to five years in certain cases—for personal loans used for education, hospitalization, emergencies, travel, household needs, and other consumption purposes.

Villanueva noted that this reform is consistent with legislative efforts to protect borrowers from repayment arrangements that do not reflect their actual financial conditions.

He also stated that the Senate committee on banks is prepared to exercise oversight to ensure the proper rollout of the policy once implemented.

The senator highlighted developments involving government financial institutions as indicators of growing financial strain among Filipinos, citing the ongoing GSIS loan moratorium and the Social Security System’s (SSS) review of possible loan relief measures.

“We are seeing the same distress signal coming from multiple directions at once. The BSP is proposing flexibility for private borrowers. The GSIS moratorium is now in effect for government workers. And now the SSS is saying it is studying a loan moratorium and penalty condonation for its own members and employers,” Villanueva said.

“These are not isolated decisions. They are all pointing to the same reality on the ground," he added.

Villanueva welcomed the recent move by the Social Security System (SSS) but urged the agency to act swiftly. He warned that any delays could prolong the financial burden on millions of members.

“We are seeing the same distress signal coming from multiple directions at once. The BSP is proposing flexibility for private borrowers. The GSIS moratorium is now in effect for government workers. And now the SSS is saying it is studying a loan moratorium and penalty condonation for its own members and employers,” Villanueva said.

“These are not isolated decisions. They are all pointing to the same reality on the ground," he added.

Villanueva welcomed the SSS move but urged the agency to act swiftly, warning against delays that could prolong the burden on millions of members.

"Tiwala po tayong gagawing prayoridad ng SSS ang pagbalangkas sa kanilang mga panuntunan. Ngunit nakikiusap po tayo sa SSS na huwag pag-antayin nang matagal ang 40 milyong miyembro nito. Lubhang napakabigat ng suliranin ng ating mga manggagawa at mga employer. Hindi po kathang-isip ang problema natin ngayon, kaya dapat ramdam kaagad ang solusyong ihahain sa mga manggagawa at employer," Villanueva said.

He urged the Home Development Mutual Fund to consider offering relief measures or a reprieve on existing loans for qualified borrowers.

-Paraluman News