BSP keeps ceilings on credit card transactions

MANILA, Philippines — The Bangko Sentral ng Pilipinas has kept existing cap on credit card charges to encourage consumers to borrow money from banks and spur spending in the consumption-reliant Philippine economy.

This means the maximum interest rate or finance charge on the unpaid outstanding credit card balance of a cardholder remains at 3% per month or 36% per year.

Similarly, the monthly add-on rates that credit card issuers can charge on installment loans is maintained at a maximum rate of 1%.

Meanwhile, the maximum processing fee on the availment of credit card cash advances stays at P200.00 per transaction.

The ceilings on credit card transactions are subject to review following a six-month period.

“The BSP’s decision to maintain the current ceilings on credit card transactions strikes a balance between providing consumers with access to credit card financing at steady rates and ensuring long-term viability of banks/credit card issuers so that they can continue to provide quality service to their clients,” BSP Governor Eli Remolona Jr. said.

Credit card receivables posted double-digit growth of 29.0% year-on-year as of end-May 2023, higher than the 17.1% registered a year ago, BSP data showed.