The Bangko Sentral ng Pilipinas (BSP) will maintain its ceilings for credit card charges in response to a low-interest rate environment.
“The decision of the Monetary Board is based on a holistic assessment considering the developments in the macroeconomy, 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 in a statement on Friday.
“It will also continue to help ease financial burden of consumers through affordable credit card pricing.”
The maximum interest rate on unpaid outstanding card balance of a cardholder at 2% per month or 24% per year.
Meanwhile, monthly add-on rates credit card users can charge on installment loans is still at one percent and the maximum processing fee for credit card cash advances will stay at P200 for each transaction.
BSP said maintaining the existing ceiling is line with a low-interest rate environment. The Monetary Board had retained its overnight reverse repurchase facility at 2%.
The ceiling will remain in effect until revised by the BSP.
“The BSP will continue to closely monitor the impact of the ceilings on the state of credit card financing and sustainability of credit card operations of banks/credit card issuers against the backdrop of the evolving COVID-19 pandemic, the central bank said.
BSP said that banks and credit card issuers plan to offer more competitive credit card products and reduce operating costs through technology.
“Data show that credit card business activity improved in 2021 as demonstrated by the growth in monthly card applications, card billings and issued cards buoyed by an uptick in economic activity,” the central bank said.
Monthly card applications went up 175.1% year on year to 646,000 applications in June compared to the same month last year. Monthly card billings also rose 29.5% year on year to P73 billion in June. — Jenina P.Ibanez