November 17, 2022 | 00:00
MANILA, Philippines — Credit card issuers are eagerly awaiting a review of the credit card transaction cap to be conducted by the Bangko Sentral ng Pilipinas (BSP) in January.
The Credit Card Association of the Philippines (CCAP) released the statement after the BSP decided to keep the cap on interest rates and fees on credit card transactions until the end of December before revisiting them. in January next year.
“CCAP acknowledges BSP’s decision to maintain the current cap on credit card interest rates. We are confident and look forward to our regulator’s full review by January 2023. The review has always included micro and macro factors relevant to the times, in particular the rise in policy rates at the end of the year 2022,” he said in a statement.
With the appeal letter sent to the BSP in September, CCAP is optimistic that the regulator has considered the factors impacting the credit card industry as a whole.
“Throughout these pandemic years, the credit card industry has helped not only our members and all players in the payment ecosystem, but also our fellow Filipinos. Even though we faced unprecedented challenges, we also overcame these obstacles and built even more strength by helping each other in the true Bayanihan spirit,” CCSI said.
He noted that with the pandemic spurring the rapid adoption of new virtual payment technologies by consumers, credit cards are an efficient, secure and convenient payment tool that drives and contributes to the country’s overall digitalization goal. .
“With market-driven tariffs, this will not only help drive competition in the industry, but also drive financial inclusion – all of which helps our Filipino consumers as a bottom line,” CCAP said.
Consumers should continue to enjoy low interest rates and fees on their credit card transactions at least through the Christmas holidays after the central bank decided to keep the current cap until the end of the year .
“No big reason. Just the timing of the cap adjustment,” BSP Governor Felipe Medalla told The STAR earlier.
Medalla, who chairs the seven-member Monetary Council, said the regulator was finally adjusting the rate cap and other charges after a series of aggressive rate hikes imposed by the BSP to tame inflation and stabilize the peso.
The interest rate or finance charge cap of 2% per month and 24% per annum on the outstanding credit card balance was imposed in November 2020 to help ease the burden on Filipino consumers under the COVID-19 pandemic.
Before the cap was imposed at the height of the global health crisis, the annualized interest rate on credit card receivables averaged 36%.
Similarly, the additional monthly rate that credit card issuers could charge on installment loans was maintained at a maximum rate of 1%, as well as the maximum processing fee of P200 per transaction on the use of advances funds on credit card.
The maximum rates and charges are subject to review by BSP every six months and a new rate was expected to be in place by early November.