Bangko Sentral ng Pilipinas. (File photo / Philippine Daily Inquirer)
The Bangko Sentral ng Pilipinas (BSP) has decided to retain the interest rate caps on credit card transactions, citing the “reasonableness” of current fees even with accelerating inflation.
With this, the maximum interest rate or finance charge for unpaid outstanding credit card balances is still 2 percent per month or 24 percent annually, as stipulated under Circular No. 1098 dated Sept. 24, 2020, which provides details about the fees collected by banks and other issuers from credit card users.
Meanwhile, the maximum add-on charge for installment loans is 1 percent per month, while the transaction fee for credit card cash advances is capped at P200 per transaction.
“The reasonableness of the ceilings shall be subject to further review in January 2023,” the BSP said, adding that it will continue to closely monitor domestic and external developments that impact credit card financing, the sustainability of credit card operations and the viability of banks and credit card issuers.
The country’s inflation accelerated to its fastest pace in nearly 14 years in October, with the rate seen rising further even as the central bank scrambles to temper its ascent.
The consumer price index climbed 7.7 percent in October compared to last year—the fastest rise since December 2008—driven by price gains in key commodity groups, specifically food and nonalcoholic beverages.
On Nov. 17, the BSP is expected to announce a rate hike of 0.75 percentage point, matching that of the United States’ Federal Reserve, thereby bringing it to 5 percent.