BSP urged to retain Capson credit card charges
A senior lawmaker has tabled a House resolution “strongly urging” the Bangko Sentral ng Pilipinas (BSP) to maintain existing limits on credit card fees to help Filipino consumers cope with inflation, which hit a 4-year high of 6.9% in September. .
In House Resolution 459, Makati City Representative Luis N. Campos Jr. called on the central bank to maintain the maximum monthly interest rate of 2% on outstanding credit card balances.
PASB is expected to review the three thresholds next month. In three previous semi-annual reviews, the banking regulator decided to maintain the ceilings
“We want the BSP to keep credit card prices reasonable and within reach of consumers who are currently reeling from soaring prices for goods and services,” Campos said in a statement released by his office on October 6.
“Sailing Filipinos are struggling to make ends meet,” Campos said. “They are increasingly relying on their credit cards for essential purchases and to pay their bills, including their children’s school fees.”
In its resolution, Campos also urged the BSP to maintain the maximum monthly rate of 1% on credit card installment loans and the cap of P200 per transaction on cash advance processing fees.
“Removing the caps would only add to the financial burden on consumers,” Campos warned.
Over 10.3 million Filipinos have received credit cards. Banking system credit card receivables stood at 478.4 billion pesos as of June 30, according to the BSP.
Campos’ resolution essentially wants the strength and effect of BSP Circular 1098 (series of 2020) to be maintained.
The circular was issued two years ago amid severe economic hardship, including job losses, caused by lockdown measures to stem Covid-19 infection.
Campos said that before the caps were imposed, banks were charging interest rates of up to 42% per year (or 3.5% per month) on outstanding credit card balances.
Banks have also collected up to P500 per transaction in cash advance processing fees.
In his resolution, Campos invoked the mandate of the Consumer Act of 1992 (Republic Act 7394). The law states that “it is the policy of the State to protect the interest of the consumer, to promote his general welfare, and to establish standards of conduct of business.”
“Keeping caps on credit card fees unchanged would discourage banks, as informed creditors, from unfairly profiting from their credit card business and unfairly enriching their shareholders at the expense of consumers,” Campos said.