The Philippine Deposit Insurance Corporation (PDIC) has significantly enhanced and extended its Closed Bank Loan Incentive Program (CLIP) into 2025, now dubbed CLIP 3.0, offering greater opportunities for borrowers of closed banks to manage their outstanding debts.
Launched in 2021, the program aims to support the financial well-being of borrowers from closed financial institutions by providing pathways to settle their obligations through substantial discounts and waivers. This initiative not only helps borrowers maintain their creditworthiness and avoid potential foreclosure of mortgaged assets but also enables the PDIC, as the statutory receiver of closed banks, to efficiently collect loan payments. These collections contribute to the liquid funds necessary for settling claims of the closed banks’ creditors.
A key enhancement in CLIP 3.0 is the increased qualifying principal balance threshold, now raised from P5.0 million to P10.0 million. This expansion broadens the program’s reach, making its benefits accessible to a larger pool of closed bank borrowers.
The discounts and waivers available under CLIP 3.0 are structured based on two primary factors: the year the bank was closed and the type of loan security (clean, chattel mortgage/pledge, or real estate mortgage – REM).
For borrowers of banks closed in 2023 and prior years:
Those with clean loans or loans secured by a chattel mortgage or pledge can benefit from a discount of up to 50% on their outstanding principal balance. Additionally, all unbooked interest, penalties, and other charges will be fully waived.
Borrowers with loans secured by a real estate mortgage (REM) can avail of a reduced unbooked interest rate, potentially as low as 3% per annum, depending on the loan’s age and status. They will also receive a full waiver of unbooked penalties and other charges.
Previously, under CLIP 2.0, clean loans for this group were subject to a maximum discount of only 30%, and the unbooked interest on REM-secured loans could only be reduced to 5% per annum.
For borrowers of banks closed in 2024 and 2025:
Those with clean loans or loans secured by a chattel mortgage or pledge are entitled to a 50% discount on their outstanding principal balance, along with a full waiver of unbooked interest, penalties, and other charges.
Borrowers with obligations secured by a real estate mortgage (REM) will see a reduction in the unbooked interest rate to 5% per annum and a full waiver of unbooked penalties and other charges.
Notably, CLIP 2.0 offered only a 15% discount on clean loans for this group and did not extend discounts or waivers on unbooked interest, penalties, or other charges to borrowers with REM-secured loans.
To take advantage of the incentives under CLIP 3.0, qualified borrowers must settle their reduced or discounted loans in full through a one-time cash settlement. The deadline for borrowers of banks closed in 2023 and prior years is December 31, 2025. Borrowers of banks closed in 2024 and 2025 have one year from the receipt of PDIC’s notice about the program to avail of these benefits.
