DISCUSSION OF SECTION 4(UU) OF R.A. No.

11494 OR THE BAYANIHAN TO

RECOVER AS ONE ACT (BARO ACT)
Date of Effectivity: September 15, 2020

Republic Act No. 11494, or the Bayanihan to Recover as One Act, directs all banks,
financing companies, lending companies, real estate developers, insurance
companies, pre-need companies, and other public and private financial institutions to
grant such grace period for the payment of loans falling due on or before December 31,
2020 without interests, penalties and other charges. 
Specifically, Section 4(uu) provides the following:
PROVISION FOR MANDATORY GRACE PERIOD (BSP Memorandum No. M-2020-
074):
1. Payment for principal or interest, including amortizations, that fall due
between Sept. 15 and Dec. 31, 2020 may be paid after 60 days,
without incurring interest on interests, penalties, fees or other
charges.

2. The 60-day mandatory grace period can only be availed once and is
non-extendible.

HOW SECTION 4 (UU) OF THE BARO ACT WILL BE APPLIED:

 The mandatory grace period will cover all existing, current and outstanding
loans with principal and/or interest including amortizations, falling due from
the effectivity of the BARO Act which is September 15 until December 31,
2020 without incurring interest on interests, penalties, fees, or other charges
(IPFO).
 Does not apply to all loan accounts but only to existing, current and
outstanding loans as of September 15, 2020.
 Loans that are considered past due as of Sept. 15, 2020 are not eligible for the
mandatory grace period.
 The non-extendible mandatory one-time sixty (60)-day grace period is not
applicable to past due loans falling between 15 September 2020 and 31
December 2020. It is only applicable to all loans that are
existing, current and outstanding falling due, or any part thereof, on or before
31 December 2020.

BORROWER / BUYER’S OPTION:

  Borrower may pay the principal and accrued interest falling due on September
15, 2020 to December 31,2020, in full at the end of grace period; or
 The parties may agree installment from due date till December 31, 2020, without
IPFO.

EFFECT OF GRACE PERIOD:

The application of the mandatory 60-day grace period, in effect, moves the
payment due dates of the entire loan, thereby extending the loan maturity.

APPLICATION ON MULTIPLE LOANS:

Application is per individual loan. Meaning, 60-day grace period applies to each
account or unit even if buyer is one and the same.