BANGKO Sentral ng Pilipinas (BSP) Gov. Benjamin Diokno on Tuesday reminded the public that the cap or ceilings on interest rate, finance charges and fees on all credit card transactions has took effect on Tuesday, Nov. 3, 2020.
“Starting on this date, interest or finance charges on unpaid outstanding credit card balance should not exceed 24 percent annually or two percent per month; the monthly add-on rate for credit card installment loans should not exceed one percent per month; and the processing fee on the availment of credit card cash advances should not exceed P200 per transaction,” Diokno said in a statement.
In September, the BSP’s policy-setting Monetary Board set the limit on the annual interest rate on all credit card transactions at 24 percent.
The interest rate cap on credit card receivables aims to ease the financial burden of consumers and micro, small, and medium enterprises amid a difficult economic environment caused by the COVID-19 pandemic, according to Diokno.
The BSP also mandates financial services providers to provide customers with illustrative examples on the calculation of interest, finance charges and fees under its Circular No. 1098.
“The policy initiative, which is pursuant to the BSP’s supervisory authority over credit card issuers under the Credit Card Industry Regulation Law, is seen to foster responsible credit card lending in the country,” Diokno said.
The central bank chief said the rates and fees provided under the circular are subject to review by the BSP every six months.
“Adjustments or changes, if any, on the ceilings will be carried out based on the said review,” he said.(GMA News)
