Only about 30 borrowers have so far approached the Commonwealth Development Authority to avail themselves of the agency's existing debt relief program.
“Well over 30 borrowers have requested [to avail themselves of the program]. We have only started this debt relief program recently and are now gathering interests and working on details of the individual loans,” said CDA acting chief executive officer Oscar Camacho.
He expressed confidence that the program “will make a big difference on both sides of the equation: the borrower and CDA.”
As of June 2006, CDA cited a total of 216 borrowers. About 131 of them are considered delinquent borrowers, reflecting a 60-percent delinquency rate. These delinquent loans amount to $13.7 million.
CDA said that about 80 percent of the delinquent cases have been referred for court litigation.
To avoid more litigation, the CDA adopted earlier this year a resolution providing for debt relief to borrowers.
CDA reduced its interest rate to 2 percent and offered its borrowers a package to pay off their outstanding loans based on the principal amount over a longer period of time-up to 30 years.
Based on the new relief program, CDA would take out the interest, set it aside, and allow the borrowers to pay only the principal amount, with a 2-percent interest rate. Each loan is subject to review every three years.
The CDA used to implement a 9-percent interest rate for commercial loans and 5 percent for agricultural loans.
In May 2005, the CDA board of directors lifted a five-year moratorium on direct loans and lowered loan interest rates from 9 percent to 7 percent for commercial purposes, while that for fishing and farming loans was cut from 5 percent to 4.5 percent.
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