BSP to adjust rate cap on credit card transactions

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) is set to finally adjust the rate cap and other charges imposed on credit card transactions due to the series of aggressive rate hikes to tame inflation and stabilize the peso. 카지노사이트

BSP Governor Felipe Medalla said the regulator is reviewing the interest rate cap on credit card transactions currently pegged at two percent per month or 24 percent per year.

“We are reviewing it. Of course, given the higher interest rates it’s obvious that we have to adjust the cap,” Medalla said.

The central bank imposed a cap on the interest rate on all credit card transactions in Nov. 3, 2022 to ease the burden of Filipino consumers and enterprises affected by the impact of the pandemic.

The interest rates or finance charges on the unpaid outstanding credit card balance of a cardholder were capped at two percent per month or 24 percent per year.

A separate interest rate ceiling was also prescribed for credit card installment loans. For these transactions, credit card issuers may only charge monthly add-on rates up to a maximum of one percent.

Likewise, no other charge or fee could be imposed or collected on credit card cash advances except for a maximum processing fee of P200 per transaction. 안전한카지노사이트

The BSP Monetary Board reviews that cap every six months.

Prior to the imposition of the cap two years ago, the annualized interest rate on credit card receivables averaged 36 percent.

Medalla said the initiative is being undertaken even if there is no request from credit card issuers.

“We, at the central bank when we think something has to be done even if there is no request, we will do it,“ the BSP chief said.

The central bank has maintained the cap for almost two years amid the low interest rate environment and to help Filipino consumers recover from the impact of the global health crisis. 카지노사이트 추천

However, the continued reopening of the economy, as well as the soaring inflation aggravated by the weakening peso, prompted monetary authorities to raise key policy rates aggressively since May.

The Monetary Board has so far raised interest rates by 225 basis points this year, bringing the benchmark interest rate to 4.25 percent from an all-time low of two percent.

Meanwhile, Makati City Rep. Luis Campos Jr. earlier filed a resolution strongly urging the BSP to retain the existing limits on credit card charges to help Filipino consumers cope with soaring inflation.

Latest data from the central bank showed that consumer loans grew at a faster rate of 18.3 percent to P950.79 billion in August from P804.04 billion in the same month last year.

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