Cap on credit card charges now up for review, BSP says

The Bangko Sentral ng Pilipinas (BSP) is likely to decide within the month if it will keep or adjust the current interest rate cap on credit card transactions, a senior official said.

BSP Deputy Governor Chuchi G. Fonacier told reporters on May 9 that the central bank is still reviewing data on the matter.

“We actually submitted an initial report to the Monetary Board. They required some additional information, and that’s what we are gathering currently. We intend to resubmit again to the Monetary Board,” she said.

“When we submit it, say within the month, the Monetary Board will decide in a meeting once they are satisfied with the requested data,” she added.

Ms. Fonacier noted the BSP will remain data-dependent regarding its recommendations and decisions on the ceiling on card charges

The BSP in August 2023 kept the maximum interest rate on unpaid outstanding card balance at 3% per month or 36% a year. The existing ceiling on the monthly add-on rate that credit card issuers can charge on installment loans was also maintained at 1%.

The maximum processing fee on the availment of credit card cash advances was likewise retained at PHP 200 per transaction.

The BSP last hiked the cap by 100 basis points in January 2023 from 2% previously following cumulative rate hikes implemented by the Monetary Board amid elevated inflation.

The higher cap was also meant to mitigate the impact of inflation on banks and credit card issuers.

The BSP reviews the interest rate ceilings on credit card transactions every six months. — A.M.C. Sy