BSP seeks review of pawnshop rules

INQUIRER FILE PHOTO

The Bangko Sentral ng Pilipinas (BSP) is proposing updates to the regulations of pawnshops to add more clarity to the scope of the pawning business and the additional products and services that they are allowed to offer.

The BSP is collecting feedback from stakeholders on a draft circular that would amend certain parts of the Manual of Regulations for Non-Bank Financial Institutions (MORNBFI) that cover pawnshops.

The document said it wants to further define what constitutes a pawnshop business, which generally covers “the sale of goods with a repurchase agreement.”

Such goods, the BSP said, refer to “tangible personal property” that are customarily accepted as collateral in a pawning transaction. These goods may be repurchased by the customer from the pawnshop for a fixed price within a set period.

At the same time, the BSP proposal also seeks to provide clearer regulations on allowable “corollary”—or supplementary— business activities of pawnshops. This is meant to “support their dynamic industry landscape and importance in the delivery of financial services.”

The draft circular said that pawnshops may also act as remittance agent, money changer or foreign exchange dealer, as well as operator of payment system.

Such entities may also engage in gold buying or become partners of accredited traders of the precious metal.

The central bank said pawnshops can likewise help its financial partners in marketing “resilience-bilding tools” such as microinsurance, micro-investment and microfinance products and services.

Consumers can avail of cash-in/cash-out services from pawnshops, which may also serve as bills payment and top-up partners of utility firms and other service providers, the regulator said.

Lastly, pawnshops may serve as corporate payout partners and offer other services “as may be determined by the Monetary Board.”

Pawnshops, however, must not engage in any activity that will facilitate or encourage gambling. This includes, but is not limited to, operating as betting outlets or branches of any game of chance, as well as facilitating the funding of gambling and betting.

The BSP will accept comments on the proposed circular until Dec. 6, 2024. Ian Nicolas P. Cigaral