Makati City Rep. Luis Campos Jr. has lauded the decision of the Bangko Sentral ng Pilipinas (BSP) to keep the current 2 percent per month or 24 percent per annum limit to credit card interest rates, calling it “a highly positive move to safeguard the welfare of Filipino consumers” reeling from uncontrolled increases in the cost of goods and services.
“We are counting on the banking regulator to retain the caps on credit card charges for a longer period to help middle class families cope with the severe economic difficulties brought on by widespread inflation,” Campos said.
The lawmaker noted that most of the country’s 10.3 million credit cardholders are salaried employees struggling to make ends meet.
Campos had previously filed House Resolution No. 459, “strongly urging” the BSP to preserve the two-year-old ceilings on credit card charges amid raging inflation that hit 7.7 percent in October – the highest in 14 years.
The BSP recently resolved to maintain the existing ceilings on credit card transactions under Circular No. 1098 dated Sept. 24, 2020. As such, the following ceilings remain in effect unless revised by the BSP:
- The maximum interest rate or finance charge on the unpaid outstanding credit card balance of a cardholder of 2 percent per month or 24 percent per year.
- The maximum monthly add-on rate on credit card installment loans of 1 percent.
- The maximum processing fee on the availment of credit card cash advances of Php200.00 per transaction.
The BSP also said it would review “the reasonableness of the ceilings” in January 2023.
Campos is not the only member of Congress that wants the BSP to keep the thresholds.
Albay Rep. Joey Salceda had said that the lifting of the cap on credit card interest rates would merely boost the profits of the country’s biggest banks, while hurting the middle class.
“It’s just going to pad bank profits. Why would we want to adjust the 24 percent per-annum interest rates upward, as if that’s not high enough is beyond me,” Salceda said in a previous interview with the state-run Philippine News Agency.
“In Thailand, the cap is 18 percent per annum. It’s 17.5 percent in Malaysia. It’s 28 percent in Singapore. And Indonesia has the same cap as we do. Our current average interest rate on credit cards is already for subprime customers in the US. Why inflict pain on ourselves?” Salceda said.