By Eileen A. Mencias

The Chamber of Thrift Banks is seeking the support of Congress to help rationalize the rules on foreclosure and sale of bad assets to facilitate the release of additional liquidity and bring down the cost of banks, chamber president Pascual Garcia III told reporters in a briefing yesterday.

Several thrift banks plan to raise new capital after the central bank approved a policy allowing them to issue foreign currency letters of credit.

Garcia said the industry wanted an enabling law that would reduce the cost of foreclosure and improve the availability of assets for disposal.

Bankers said foreclosing on a property in the Philippines alone would take at least two to five years. Even after a bank gets the deed to a property, it still needs to get a writ of possession from the courts to physically take over it. The issuance of the writ, meanwhile, takes about four to eight months. Former owners of the property also have one year to redeem it before a bank can actually dispose of it.

Garcia said the cost of foreclosing on a P2-million property alone ran up to P150,000 from documentary stamp taxes to fines from the Bangko Sentral, excluding legal fees.

Garcia said a bank had to set aside provisioning for the foreclosed property, which increases significantly after five years.

At the end of November, bad loans of thrift banks amounted to P20.11 billion.

Foreclosed assets, however, hit P27 billion, accounting for about 5 percent of the gross assets of thrift banks at the end of November.