Legarda made the call not long after three global investments houses and the World Bank’s International Finance Corp. (IFC) expressed their desire to acquire the non-performing loans (NPLs) of local banks.
It will be recalled that Legarda was the first member of Congress to push for the creation of AMCs that would absorb at a discount some P470-billion worth of NPLs accumulated by local banks over the years.
In March last year, Legarda declared in a statement that government should encourage local banks to liquidate their NPLs.
"While the level of NPLs held by local banks is still manageable, it is nonetheless a cause of concern that could undermine the (banking) sector and erode public confidence (in our banks)," Legarda said.
Legarda further noted that Thailand, via an AMC, succeeded in selling off up to 40 percent of the NPLs held by banks.
"If the administration really wants new legislation allowing AMCs to acquire the NPLs of banks to be in place by March, then the President should waste no time in certifying the bill," Legarda said.
Bangko Sentral ng Pilipinas (BSP) Governor Rafael Buenaventura said earlier that the Philippines is preparing a law that would pave the way for foreign investors to buy the NPLs of local banks.
Buenaventura said the new legislation was needed to make NPLs more attractive to buyers and clear up legal questions over the loans and their collateral. He said the BSP expects Congress to approve the measure by March.
Investment houses Lehman Brothers, Merryll Lynch and Goldman Sachs and the IFC earlier expressed keen interest in investing in the country through AMCs. Lehman Brothers, in particular, had pledged to put up a $1-billion Philippine Recovery Fund through an AMC.