The Bangko Sentral ng Pilipinas (BSP) will maintain its caps on credit card charges in response to a low interest rate environment.
“The Monetary Council’s decision is based on an overall assessment taking into account developments in the macroeconomics, the state of credit card financing as well as the safety and soundness of banks and other credit card issuers,” BSP Governor Benjamin E. Diokno said. a statement Friday.
“It will also continue to help ease the financial burden on consumers through affordable credit card pricing. “
The maximum interest rate on a cardholder’s outstanding card balance at 2% per month or 24% per year.
Meanwhile, the additional monthly rates that credit card users can charge on installment loans are still 1% and the maximum processing fee for credit card cash advances will remain at P200 for each transaction.
BSP said maintaining the existing cap is in line with a low interest rate environment. The Monetary Board had kept its overnight repo facility at 2%.
The cap will remain in effect until revised by the BSP.
“BSP will continue to closely monitor the impact of caps on the state of credit card financing and the sustainability of credit card operations of banks / credit card issuers in the context of the evolving pandemic. COVID-19, the central bank said.
BSP said banks and credit card issuers plan to offer more competitive credit card products and lower operating costs through technology.
“Data shows that credit card business activity improved in 2021, as evidenced by growth in monthly card applications, card billings and cards issued supported by a recovery in economic activity,” the central bank said.
Monthly card requests increased 175.1% year on year to 646,000 requests in June compared to the same month last year. Monthly card billings also increased 29.5% year-on-year to 73 billion pesos in June. – Jenina P. Ibanez