THE Bangko Sentral ng Pilipinas (BSP) on Tuesday announced that there will be no changes to ceilings on credit card transactions and interest rates on unpaid bills.
In a statement, the BSP said its Monetary Board decided to maintain the ceilings on credit card transactions under Circular 1098 dated September 24, 2020.
This means that the maximum interest rate or finance charge on the unpaid outstanding credit card balance of a cardholder remains at 2 percent per month or 24 percent per year.
Similarly, the monthly add-on rates that credit card issuers can charge on installment loans is retained at a maximum rate of 1 percent. The maximum processing fee on the availment of credit card cash advances also stays at P200 per transaction.
“The decision of the Monetary Board will continue to help ease the financial burden of consumers through affordable credit card pricing amid the ongoing Covid-19 pandemic,” BSP Governor Benjamin E. Diokno said. “It will also allow the BSP to assess the impact of the improvement in macroeconomic fundamentals and easing of mobility restrictions on the performance of the credit card industry.”
The BSP also reported that latest credit card business activity data show that the demand for credit cards moderated in the second half of 2021 as customers shifted towards “alternative digital products.”
The number of credit cards that were issued and outstanding grew by 0.3 percent to 10.3 million while monthly card billings increased by 33.9 percent to P100.6 billion in December 2021.
“Moving forward, the credit card industry intends to further reduce operating costs through digital transformation and process improvements as well as maintain prudent lending standards,” Diokno said.
The governor also said that ceilings on credit card transactions remain in effect unless revised by the BSP.
“The BSP, however, will closely monitor evolving domestic and external developments that will impact the state of credit card financing, sustainability of credit card operations and viability of banks/credit card issuers,” Diokno added.
Image credits: CNN Philippiness