A decision on revising the 2% cap on credit card interest is expected before the end of the month, a senior Bangko Sentral ng Pilipinas (BSP) official said.
According to BSP Deputy Governor Chuchi Fonacier, the review of the 2% interest cap should be raised for review and decision by the Monetary Board (MB).
“We are aiming to raise it within the month…it will be decided once raised in MB,” she said in a mobile message on Thursday.
In September 2020, the MB set an annual interest rate cap of 24% on all credit card transactions, equivalent to 2% monthly interest, in an effort to ease the financial burden on the middle of the COVID-19 pandemic.
Under the policy, credit card issuers can only charge a maximum monthly rate of 1% for credit card installment loans, and no other fees or charges can be imposed on cash advances, except for a maximum processing of P200 per transaction.
The rates are subject to review by the BSP every six months, in accordance with the central bank’s supervisory authority. This was last held back in May.
The latest available data from the BSP shows that degraded loans held by banks fell for the sixth consecutive month in August, dragging the non-performing loan (NPL) ratio to a 23-month low.
The gross NPL ratio for the banking sector stood at 3.53% at the end of August, the lowest since 3.51% in September 2020. This compares to 3.57% in July and 4.51% the same month last year.
The banking sector’s gross loan portfolio stood at 11.84 trillion pesos in August, reflecting an 8.72% growth from the 10.89 trillion pesos in the same month last year and 0.5 % more than the 11.77 trillion pesos recorded in July. — News VBL, GMA