Manila:The Bangko Sentral ng Pilipinas (BSP) has decided to maintain the 3-percent monthly cap on finance charges for credit card loans. This decision was announced in a statement by the BSP on Thursday.
According to Philippines News agency, the BSP has increased the monthly add-on rate ceiling for credit card installment loans to 1.5 percent from the previous 1 percent. Additionally, the maximum one-time cash-advance processing fee has been raised to PHP300 from PHP200. These changes are outlined in BSP Circular No. 1242, which was issued on November 10.
The new regulations will take effect 15 calendar days after their publication in the Official Gazette or any newspaper of general circulation. These adjusted ceilings will only apply to new transactions starting from the effective date of the circular. Credit card installment loans agreed upon before this date will adhere to their existing terms and conditions.
The BSP explained that these adjustments are intended to strike a balance between consumer protection and granting credit card issuers greater flexibility in setting charges amidst rising operating costs. The central bank initially introduced these ceilings in 2020 and partially adjusted them in 2023.
The BSP regularly reviews the caps on credit card fees and charges, considering overall economic conditions, the soundness of banks and other financial institutions, and consistency with its monetary policy settings, among other factors, as stated by the BSP.
