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MANILA – The ceiling for the annual interest rate for credit card transactions has been set at 24 percent or a maximum of 2 percent per month, effective November 3, 2020.
In a virtual briefing on Thursday, Bangko Sentral ng Pilipinas (BSP) Governor Benjamin Diokno said that credit card companies cannot impose other charges, except the processing fee, which should be a maximum amount of PHP200 per transaction.
He said that single-type credit card transactions, or those that are paid in installments, will have an additional monthly fee of up to a maximum of 1 percent.
“The imposition of a ceiling on interest or financial charges on credit card transactions is also in line with the current environment of low interest rates in the country,” he added.
Diokno said that these new policies are in line with the Credit Card Industry Regulation Act and promote responsible credit card lending due to the rise in electronic payments due to the pandemic.
“The issuance (of new policies) will allow credit card holders to settle financial transactions under more affordable price conditions,” he added.
Meanwhile, Veronica Bayangos, director of BSP’s Oversight Policy and Research Department, said that central bank data shows that the annual interest rate on credit card receivables in the first half of this year ranged from 18 and 58 percent.
Based on credit card business activity reports as of the end of June 2020, the average annualized interest rate for all types of cardholders is around 26 percent, it said.
Bayangos said members of the Bankers Association of the Philippines (BAP) and the Credit Card Association of the Philippines (CCAP) supported the move toward imposing a ceiling on credit card interest rates, “for so we do not expect any breach of this policy. ” (PNA)
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