SEC issues rules on lifting ban on new lending apps

MANILA, Philippines — The Securities and Exchange Commission (SEC) has revised its planned circular to lift the moratorium on online lending platforms (OLP) and raise the capital requirements for financing and lending companies, in a bid to improve regulatory oversight of the sector and strengthen consumer protection policies.

The SEC last March released a draft of the proposed circular for public consultation and received comments from financing companies, lending companies, industry associations, consumer groups, government agencies and other  stakeholders.

Following a comprehensive review of the comments received, the commission said it substantially revised the draft to address stakeholder concerns, improve regulatory clarity, reduce unnecessary compliance burdens and enhance the overall implementability of the proposed framework.

The SEC said the revised draft introduces significant changes to the definition and classification of OLPs, paid-up capital requirements, annual licensing fees, business plan requirements, operational and disclosure standards, Credit Information Corp. compliance obligations, consumer protection safeguards, transition mechanisms and other prudential measures.

The revised draft likewise adopts a more streamlined, disclosure-based and risk-proportionate regulatory approach compared to the earlier version previously released for consultation.

Under the updated draft rules, the SEC aims to impose a uniform minimum paid-up capital for new financing and lending companies, as well as for existing companies based on the number of OLPs they operate.

The proposed minimum paid-up capital for new financing and lending companies is P15 million and P5 million, respectively.

The SEC is also imposing a cap on the number of OLPs that financing and lending companies may own and operate at up to five platforms to ensure effective supervision, adequate governance and manageable consumer risk exposure.

The proposed minimum paid-up capital for financing companies with one OLP is P20 million, P60 million for three OLPs and P100 million for five OLPs.

Meanwhile, lending companies are proposed to have a minimum paid-up capital of P10 million for one OLP, P30 million for three OLPs, and P50 million for five OLPs.

The proposed guidelines also adopt a single certificate of authority policy, under which each financing and lending company will be issued only one certificate of authority covering its principal office, all branch offices, and OLPs.

The new draft circular also seeks further to strengthen consumer protection standards in the lending industry.

Among others, the proposed guidelines prohibit financing and lending companies from disbursing loan proceeds, whether automated or system-initiated, without a borrower’s explicit and informed confirmation of the final loan terms.

In payment collection, financing, and lending, companies will ensure that collection communications, whether made directly or through any third-party service provider, clearly and reasonably identify the registered name of the company, the specific OLP, or other information as deemed necessary by the commission.

In addition, the commission seeks to raise the penalties under SEC MC 18, Series of 2019, which prohibits unfair debt collection practices.

Under the proposed rule, lending and financing companies that violate MC 18 will be directed to pay P50,000 and P100,000 for the first offense, respectively.

For the third and succeeding offenses, the SEC may impose a fine of up to P1 million, suspend the activities of the financing and lending companies, or revoke their certificate of authority.

“Given the extent of the revisions introduced, the commission deems it appropriate to conduct a second round of stakeholder consultation and to solicit further comments before finalizing the proposed circular,” the SEC said.

“This will ensure that all affected sectors are afforded a meaningful opportunity to review the revised provisions and provide inputs on the proposed regulatory framework,” it said.

The SEC said all interested persons are invited to submit their written comments, recommendations and positions papers on or before June 15, 2026.