BSP pushed to keep Capson’s credit card fees

A senior lawmaker has tabled a House resolution “strongly urging” the Bangko Sentral ng Pilipinas (BSP) to maintain existing limits on credit card fees to help Filipino consumers deal with inflation that hit September hit a 4-year high of 6.9 percent.

In House Resolution 459, Makati City Assemblyman Luis N. Campos Jr. asked the central bank to maintain the 2 percent maximum monthly interest rate on unpaid outstanding credit card balances.

The BSP will review all three thresholds next month. In three previous semi-annual reviews, the banking regulator had decided to keep the caps

“We want the BSP to keep credit card prices reasonable and within reach of consumers who are now reeling from the rising cost of goods and services,” Campos was quoted as saying in an Oct. 6 statement from his office.

“Employed Filipinos are struggling to make ends meet,” Campos said. “They are increasingly relying on their credit cards to make essential purchases and pay bills, including their children’s college tuition.”

In his resolution, Campos also called on the BSP to maintain the maximum 1 percent monthly mark-up rate for credit card installment loans and the cap of 200 pesos per transaction for cash advance processing fees.

“Removing the caps would only add to the financial burden on consumers,” Campos warned.

More than 10.3 million Filipinos have been issued credit cards. As of June 30, the banking system’s credit card claims totaled 478.4 billion pesos, according to BSP.

The Campos resolution essentially wants the force and impact of GNP Circular 1098 (2020 series) to be maintained.

The circular was issued two years ago amid the severe economic difficulties, including job losses, caused by the lockdown measures to curb Covid-19 infection.

Campos said that before the caps were introduced, banks charged interest rates of up to 42 percent per year (or 3.5 percent per month) on unpaid outstanding credit card balances.

Banks also charged up to P500 per transaction in cash advance processing fees.

In his resolution, Campos referred to the mandate of the Consumer Act 1992 (Republic Act 7394). The law states that “it is the policy of the state to protect the interests of the consumer, to promote his general well-being and to establish standards of business conduct.”

“Keeping credit card fee caps in place would deter banks, as informed creditors, from improperly profiting from their credit card business and unjustly enriching their shareholders at the expense of consumers,” Campos said.

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