Following the orders of Finance Secretary Ralph G. Recto, the Securities and Exchange Commission (SEC) will impose stricter measures on lending and financing companies to safeguard the public from abusive and exploitative lending practices.
“Kailangan nating mas pagtibayin pa ang proteksyon para sa ating mga kababayan, lalo’t dumarami ang mga online lending platforms kung saan madalas mabiktima ang mga tao ng sobrang taas na interest rates at mabaon sa utang. Tutulungan ng DOF ang SEC para higpitan ang pag-regulate sa mga ito,” Secretary Recto said.
Under the supervision of the Department of Finance (DOF), the SEC is now finalizing a memorandum circular that will set caps on interest rates and other fees imposed by lending and financing firms. The Commission is seeking public input on the proposed guidelines until November 14, 2025.
Republic Act No. 11765, or the Financial Products and Services Consumer Protection Act, empowers the SEC to determine reasonable interest rates and fees that financial service providers may demand, collect, or receive for any service or product offered to consumers.
“Through responsive policies and stronger enforcement actions, the SEC will ensure that lending practices remain fair, transparent, and aligned with consumer protection standards, while promoting the continued viability and competitiveness of legitimate financing and lending companies,” SEC Chair Francis Lim said.
Under the proposed rules, the ceiling on interest rates and other fees will apply to unsecured general-purpose loans with a maximum amount of PHP 20,000 and loan terms of up to six months.
The guidelines propose a maximum nominal interest rate of 6% per month (about 0.2% per day) and an effective interest rate—including all other costs and fees—capped at 10% per month (around 0.33% per day).
Late payment or nonpayment penalties would be limited to 5% per month on the outstanding amount. The SEC also intends to limit the total charges to the amount borrowed.
Credit providers that fail to comply with the interest rate caps would face a fine ranging from PHP 25,000 to PHP 100,000 for the first and second offenses. Heavier penalties, including suspension and revocation of permits, may also be slapped on noncompliant companies.
DOF HEARTS Series
This series showcases how the DOF is funding the nation’s HEARTS (H-health, E-education, A-agriculture and environment, R-roads and infrastructure, T-technology, and S– security and social protection) to bring us to Bagong Pilipinas.
