The Credit Card Association of the Philippines, an organization of 17 major credit card companies, acknowledged on Wednesday the decision of the Bangko Sentral ng Pilipinas to maintain the credit card interest rate ceilings amid the lingering global health crisis and rising interest rates.
CCAP said in a statement it was looking forward to the BSP’s comprehensive review of the ceilings by January 2023.
“The review had always included the micro- and macroeconomic factors relevant to the times, especially the rising policy rates as we end the year 2022,” CCAP said.
The Bangko Sentral said Tuesday the ceilings would remain in effect unless revised by the BSP. These include the maximum interest rate or finance charge on the unpaid outstanding credit card balance of a cardholder of 2 percent per month or 24 percent per year; the maximum monthly add-on rate on credit card installment loans of 1 percent: and the maximum processing fee on the availment of credit card cash advances of P200 per transaction.
“The reasonableness of the ceilings shall be subject to further review in January 2023,” the BSP said.
The BSP said it was closely monitoring evolving domestic and external developments that could impact the state of credit card financing, sustainability of credit card operations and viability of banks/credit card issuers.
CCAP said it was optimistic that with the appeal letter it sent in September to the BSP, the latter had considered the factors impacting the entire credit card industry.
“Throughout these pandemic years, the credit card industry has helped not only our members and everyone in the payment ecosystem, but also our fellow Filipinos. Even as we were faced with unprecedented challenges, we have equally rose above these hurdles and built even more strength through helping each other in the true Bayanihan spirit,” CCAP said.
It said with the pandemic spurring the rapid adoption of consumers of new virtual payment technologies, credit cards serve as an effective, safe and convenient payment tool that drives and contributes to the overall digitization goal of the country.
“With market-driven rates, it will help not only boost competition in the industry, but also help in financial inclusion—with everything helping our Filipino consumers as a bottom line,” it said.
CCAP earlier said the new law mandating the registration of subscriber identity module or SIM cards would help curb credit card fraud and expedite digitalization in the country.