FIST Act: Strong jab to boost banks' muscle

With the promulgation last week of the implementing rules and regulations of the Financial Institutions Strategic Transfer (FIST) Act (Republic Act No. 11523), the government has delivered a solid jab into the financial muscle of banks as prime movers of business and industrial growth that has taken a nosedive in the wake of the COVID-19 pandemic.

This new law supersedes and repeals Republic Act No. 9182, which granted tax exemptions and other privileges to newly created firms, known as special purpose vehicles, that assume bad loans and invest in banks’ non-performing assets. The FIST companies take on the management of such debts and assets, deploying their expertise in rehabilitating the loans of the banks’ distressed clients.

Securities and Exchange Commission Chairperson Emilio B. Aquino expressed optimism that “the law will serve its purpose of ensuring the resilience and recovery of the financial sector, which in turn will provide the much-needed support for businesses and consumers alike.”