On Feb.y 16, 2021, President Rodrigo Duterte signed into law Republic Act (RA) 11523, or the “Financial Institutions Strategic Transfer Act” (FIST), which seeks to aid banks and other credit-granting financial institutions (FIs) to cushion the impact of the coronavirus disease 2019 (Covid-19) pandemic by allowing them to offload bad loans. Under the FIST Act, covered FIs are allowed to clean up their books by selling or transferring their bad loans or assets to financial strategic transfer corporations (FISTCs). This law is seen as an enhancement of the “Special Vehicle (SPV) Act of 2002” (RA 9182), which was enacted in 2002 to alleviate the impact of the Asian financial crisis.

Financial institutions strategic transfer corporations (FISTC)