HOME  ABOUT THE BANK  MONETARY POLICY  BANKING SUPERVISION  PAYMENTS & SETTLEMENTS  STATISTICS  FEEDBACK CORNER
   BSP NOTES & COINS  MONETARY OPERATIONS  LOANS-CREDIT & ASSET MGT  PUBLICATIONS & RESEARCH  REGULATIONS  PROCUREMENT

Feedback Corner

Publications and Research

Media Releases

Banks Start to Avail of Tax Benefits Under SPV Law

01.30.2004

Bangko Sentral ng Pilipinas (BSP) Deputy Governor Alberto V. Reyes disclosed yesterday that BSP has issued nineteen (19) Certificates of Eligibility (COEs) to six (6) banks involving a total amount of P713.339 million of non-performing assets (NPAs) transferred under the Special Purpose Vehicle (SPV) Law of 2002. At the moment, BSP is processing applications from nine (9) banks totalling P6.437 billion of NPAs. The COEs that have been issued and the applications now being processed involve the sale of Real and Other Properties Owned or Acquired (ROPOAs) of banks to individuals and the settlement of non-performing loans (NPLs) by dacion en pago.

It may be recalled that the Special Purpose Vehicle (SPV) Act of 2002 was enacted into law on December 23, 2002 and became effective on April 9, 2003. It is intended to help banks dispose of their NPAs by waiving some of the taxes and reducing fees usually collected in the sale or transfer of assets. The SPV Law waived the documentary stamp tax, capital gains tax and EVAT and reduced the applicable registration and transfer fees by 50%. The COE is the document issued by the BSP to qualify the sale or transfer of NPAs to the tax exemptions and reduced fees.

Although no bank has so far completed a bulk sale of NPAs to an SPV under the SPV Law, banks have been actively pursuing the sale of their acquired assets, particularly, single family residential units to individuals and the settlement of NPLs by dacion of properties. These transactions are also entitled to the same tax relief and reduced fees under the Law.

“We strongly encourage banks to maximize utilization of the SPV Law to clean up their books of NPAs. The procedure is straightforward. For well-documented cash sale transactions, we can complete processing within two weeks. This program is open to all types of banks including thrift and rural banks. But banks have to act now. The tax relief and other benefits under the SPV Law are only available up to April 8, 2005.” Mr. Reyes said.

RSS Subscribe for updates

Archives