MANILA, Philippines — A lawmaker has passed a resolution “strongly urging” the Bangko Sentral ng Pilipinas (BSP) to retain the two percent maximum interest rates per month on outstanding balances in credit cards to help Filipino consumers cope with the soaring inflation rate.
Makati City Rep. Luis Campos Jr. filed House Resolution 459 urging the BSP to retain the existing limits on credit card charges as the inflation rate hit a four-year high of 6.9 percent in September.
“We want the BSP to keep credit card pricing reasonable and within reach of consumers that are now reeling from the soaring cost of goods and services,” Campos said in a statement.
Inflation averaged 5.1 percent in the first nine months after accelerating to 6.9 percent in September from 6.3 percent in August. It continues to stay above the BSP’s two to four percent target range.
According to Campos, salaried Filipinos who are struggling to make ends meet are “increasingly relying on their credit cards to make essential purchases and to pay bills, including the tuition of their children.”
The resolution urges the BSP to maintain the maximum one percent monthly add-on rate on credit card installment loans and the P200 per transaction ceiling on cash advance processing fees.
“The lifting of the ceilings would only aggravate the financial burden of consumers,” Campos warned.
The statement showed that more than 10.3 million Filipinos have been issued credit cards.
The lawmaker wants the “force and effect” of BSP Circular 1098 series of 2020 kept unchanged.
The circular was issued two years ago, amid the severe economic difficulties, including job losses, caused by the pandemic. The cap is review every six months.
Prior to the imposition of the caps, banks were charging interest rates of up to 42 percent per annum, or 3.5 percent per month, on unpaid outstanding credit card balances.
Banks also collected up to P500 per transaction in cash advance processing fees.
“Keeping the caps on credit card charges unchanged would discourage banks, as enlightened creditors, from unduly profiting from their credit card business and unjustly enriching their shareholders at the expense of consumers,” Campos said.