The Philippine Deposit Insurance Corporation (PDIC) is reaching out to 124,788 accounts or borrowers with outstanding loans from 20 banks that have ceased operations in Western Visayas to avail of its incentive program to settle their debts.

Freddy S. Galosmos, Assistant Vice President for Loan Management Department I, on Thursday, July 20, said of the 20 banks that closed in Western Visayas, the collectibles stand at over P2.23 billion as of December 2022.

Six banks are in Iloilo City with 87,094 accounts with over P910 million collectibles.

“It doesn’t mean na pag nagsarado na po ang bangko (It doesn’t mean that when the bank is already closed), the loan obligation of the borrower is extinguished,” he said in a press conference held in a hotel in Iloilo City.

The press conference was held simultaneously with a roadshow focusing on their enhanced Closed Bank Loan Incentive Program (CLIP 2.0)

Instead, debtors should continue paying to earn a good credit standing and to support paying those uninsured depositors, Galosmos added.

He urged borrowers to avail of CLIP 2.0 for borrowers who will pay in full.

Borrowers with up to PHP5 million outstanding principal balances are eligible to apply.

The incentive program is for clean loans or those with no collateral for banks that stopped operations from 2022 onwards, while it is available to both clean and secured loans or those with collateral for banks that shut down as of 2021.

A 15 percent discount on the principal balance is offered for clean loans from 2022 onwards, while clean loans availed until 2021 will have a 30 percent discount.

Penalty and interest payments have been waived for clean loans.

Those with secured loans can avail of the waiver for penalties and charges and a 5 percent discount on interest.

Borrowers only need to fill-out the CLIP 2.0 form and be ready with their valid identification card to be submitted to the PDIC through email or messenger.

“We wanted to maximize collection. Based on historical performances, collection up to liquidation of banks reaches 75 to 80 percent. So we are hoping that we can achieve that or even more,” Galosmos said, adding that the program will end this December.

Galosmos was joined by PDIC Vice President for Corporate Affairs Group Jose G. Villaret Jr., who urged the public to continue saving in banks as part of their advocacy.Perla Lena/PNA