Tuesday, December 02, 2008 [ manilatimes.net ]
By Maricel E. Burgonio, Reporter
THE Bangko Sentral ng Pilipinas (BSP) is ruling out the extension of tax perks for the sale of banks’ bad assets after lenders disposed of a significant amount of their soured loans and real and other properties acquired (ROPA).
BSP Governor Amando Tetangco Jr. said banks had sold P148.7-billion worth of bad assets through special purpose vehicles (SPV) over the past four years. Such a sale entitles lenders to a number of tax and other perks, such as exemption from the value-added, documentary stamp and capital gains taxes.
Based on BSP’s preliminary data, lenders disposed of P52-billion worth of bad assets during the two-year extension of the SPV Act, the tax perks for which expired July 14, 2008.
“[The] banking system’s asset quality has improved with non-performing loan and non-performing asset ratios moving much closer to pre-crisis level,” Tetangco told reporters.
Besides the SPV, Tetangco said banks also have more options for unloading bad assets, such as joint ventures with real estate developers and public auctions.
“We don’t believe there is a need for [another] SPV [law extension], since it has achieved its purpose as far as providing a venue for unloading bad assets,” Tetangco said.
Unlike its Asian neighbors, the Philippines undertook no bailout of troubled lenders during the Asian crisis, opting instead to offer tax incentives to banks that trimmed their bad loans and other stranded assets through the SPV Act.
At end-September, banks’ bad loan inched up to 4.04 percent from the previous month’s 3.90-percent ratio, but had fallen from the year ago level.
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