MANILA – The Securities and Exchange Commission on Monday said it was urging the Bangko Sentral ng Pilipinas to consider putting a cap on interest rates on consumer loans to prevent exorbitant charges.
Predatory lending, which results in abusive, unethical and unfair means of collecting debt payments, remains as one of the major public complaints to the SEC, chairperson Emilio Aquino said in a statement.
"The Commission respectfully requests the BSP to consider putting a ceiling on the interest rates, charges, and other fees that may be imposed by LCs [Lending companies] and FCs [Financial companies]," Aquino said, citing his letter to BSP Gov. Benjamin Diokno.
"The proposed ceiling rates shall not apply to the whole financial sector, but solely to consumer loans and payday loans that are offered by the said companies,” he added.
Under Section 7 of Republic Act No. 9474, the BSP’s Monetary Board, in consultation with the SEC, has the authority to prescribe interest rate “warranted by prevailing economic and social conditions,” the SEC said.
Maximum rates for discounts, lease rentals, fees, service and other charges can also be imposed by the Monetary Board, in consultation with financing companies and the SEC, under Section 5 of the Republic Act No. 8556 or the Financing Company Act of 1998, the agency said.
The SEC has revoked the primary registration of 2,081 companies for engaging in lending and financing activities without its authority. It has also issued cease and desist order against 42 online lending applications.
-- with a report from Warren De Guzman, ABS-CBN News