The Credit Card Association of the Philippines expressed on Wednesday full support to the decision of the Bangko Sentral ng Pilipinas to retain the existing ceilings on credit card transactions to give consumers continued access to credit card financing.
The maximum interest rate or finance charge on the unpaid outstanding credit card balance of a cardholder remained at 3 percent per month or 36 percent per year. The monthly add-on rates on installment loans were maintained at a maximum of 1 percent.
Meanwhile, the maximum processing fee on the availment of credit card cash advances stayed at P200.00 per transaction. The ceilings on credit card transactions are subject to review following a six-month period.
“We support the BSP’s intention to strike a balance between the interest of cardholders or financial consumers and credit card issuers who are both just starting to recover from the contraction brought about by the COVID-19 global pandemic in the previous years,” CCAP executive director Alex Ilagan said in a statement.
CCAP, the umbrella organization of 17 credit card issuers, said it collaborated with the BSP in assessing the interest rate ceilings.
“CCAP is involved in doing a holistic review based on key drivers and appreciates this collaboration with the BSP,” Ilagan said.
BSP Governor Eli Remolona said the decision took into account a balance between providing consumers with access to credit card financing at steady rates and ensuring long-term viability of banks/credit card issuers so that they can continue to provide quality service to their clients.
Credit card receivables posted a double-digit growth of 29.0 percent year-on-year as of end-May 2023, higher than the 17.1 percent growth a year ago. This was driven by firm demand for credit cards as evidenced by a 34.6-percent year-on-year growth in credit card billings, compared to the 28.5-percent growth in the previous year.