BSP maintains 3% a month interest rate cap on credit card transactions - GMA Network

The Bangko Sentral ng Pilipinas (BSP) on Thursday announced it has retained the 3% interest rate per month ceiling on credit card transactions as part of efforts to provide relief to Filipino borrowers.

In a statement, the BSP said it has kept 3% monthly on interest charges for credit card loans “to continue protecting credit-card customers.”

To recall, the central bank, as a relief measure during the pandemic, placed a cap on finance charges for credit card loans at 2% per month, effective November 2020.

The cap was adjusted to 3% per month, effective February 2023.

The BSP noted that “no cap was observed prior to the pandemic.”

The central bank, however, raised the monthly add-on rate ceiling for credit card installment loans from 1% to 1.5%.

The BSP said it has also increased the maximum one-time cash-advance processing fee from P200 to P300 per transaction.

“These adjustments aim to balance consumer protection with access to credit. They also provide credit card issuers more flexibility in setting charges as operating costs rise,” it said.

The BSP first introduced the ceilings in 2020 and partially made adjustments in 2023.

In particular, the central bank, in November 2020, set a cap of 1% per month for installment payments for credit card loans and a cap of P200 for processing fees for cash advances per transaction as a relief measure during the pandemic.

“The latest changes are covered by BSP Circular No. 1242 issued on 10 November 2026,” it said.

BSP Circular No. 1242 shall take effect 15 calendar days following its publication either in the Official Gazette or in any newspaper of general circulation.

The BSP said it regularly reviews the caps on credit card fees and charges.

“It takes into account overall economic conditions, the soundness of banks and other financial institutions, and consistency with the BSP’s monetary policy settings, among other factors,” the central bank added.

The BSP noted that the adjusted ceilings “will apply only to new transactions starting on the effectivity date of the said Circular.”

“Credit card installment loans entered into before this date will remain subject to their agreed terms and conditions. All credit card fees and charges remain subject to existing consumer protection, disclosure, and transparency requirements,” the central bank said. —AOL, GMA News