MANILA — The Philippine Deposit Insurance Corporation (PDIC) has announced the indefinite extension and streamlining of its Closed Bank Loan Incentive Program (CLIP), now branded as CLIP 4.0, to provide faster and more accessible assistance to borrowers of closed banks beginning January 1, 2026.

Originally introduced in 2021, CLIP was designed to assist borrowers of shuttered banks in settling long-standing loan obligations, safeguarding their credit records, and preventing foreclosure of mortgaged properties. With the updated version, PDIC aims to widen participation and make the program easier to avail of.

Under CLIP 4.0, borrowers with total outstanding principal balances of up to P10 million may qualify for various incentives, provided they settle their obligations through a one-time cash payment. The incentives will now cover all closed banks regardless of when they were shut down and will be based solely on the type and status of the loan to promote transparency and consistency.

Among the key changes is the uniform 3% per annum interest rate on unbooked interest for loans secured by real estate mortgage (REM). This replaces the previous variable rates ranging from 3% to 5%, which depended on factors such as the bank’s closure date and the loan’s age and condition. The adjustment is expected to provide borrowers with more predictable and affordable settlement terms.

The revised program continues to offer a 50% discount on outstanding principal, booked interest, penalties, and other charges for borrowers with clean loans or those backed by chattel mortgage or pledge. All borrowers, regardless of loan classification, will also retain full waivers on unbooked penalties and related charges.

PDIC said that by simplifying guidelines, enhancing incentives, and extending the program without a set end date, it aims to deliver meaningful financial relief and help borrowers resolve their obligations more efficiently.

As the statutory receiver of closed banks, PDIC collects loan repayments to boost the pool of liquid assets intended to pay creditors’ claims. The continued implementation of CLIP is expected to accelerate loan recovery and improve returns for creditors.

The PDIC was created on June 22, 1963 through Republic Act 3591 to protect depositors and promote financial system stability. It is attached to the Bangko Sentral ng Pilipinas and is a member of the Financial Sector Forum, the Financial Stability Coordination Council, and the Financial Inclusion Steering Committee.