THE BANGKO SENTRAL ng Pilipinas’ (BSP) policy-setting Monetary Board has retained the ceiling rates for credit card charges to help consumers as the pandemic continues.

“The retention of the ceilings is in keeping with the low interest rate environment,” BSP Governor Benjamin E. Diokno said in a briefing on Thursday.

“The decision is based on a holistic assessment of developments in the macroeconomy, the state of credit card financing as well as the safety and soundness of banks and other credit card issuers. It will also continue to help ease financial burden of consumers through affordable credit card pricing,” he said in a separate statement.

The annual interest rate cap of 24% or an applicable monthly rate of up to 2% on unpaid outstanding credit card balances. The BSP also set the limit for monthly add-on rates for credit card installment loans at one percent.

Credit card issuers also cannot impose other charges on credit card cash advances except for a maximum processing fee of P200 per transaction

The key policy rate has been at 2% since November last year following cuts worth 200 basis points amid the crisis.

Under the Republic Act. No. 10870 or the Philippine Credit Card Industry Regulation Law, the BSP has supervisory authority over all credit card issuers.

The BSP said data show that the ceilings on credit card transactions has not affected availability of financing to households.

It said credit card receivables grew 13.5% year-on-year as of end-December 2020, with applications and billings also growing last year despite the pandemic.

“These positive outcomes were noted even when banks and other credit card issuers became more selective in their credit card approval process on account of the COVID-19 (coronavirus disease 2019) outbreak and its impact on paying capacity of financial consumers,” the central bank said.

“The credit card industry also remains safe and sound. Based on results of a survey conducted by the BSP, banks and other credit card issuers were able to post net income on their credit card business as of end-December 2020 from increased credit card usage and streamlined operations resulting in lower administrative costs. Credit card companies also adopted a more prudent stance by increasing provisions for credit losses on credit card loan accounts in anticipation of rise in non-performing credit card loans,” it added.

“The BSP will continue to closely monitor the impact of the ceilings on credit card financing and sustainability of credit card operations of credit card issuers, especially against the backdrop of the evolving COVID-19  pandemic,” Mr. Diokno said, adding the central bank will review the ceilings again after six months.

Meanwhile, the acquirer-based automated teller machine (ATM) fees took effect on April 7. Mr. Diokno said the new scheme is expected to encourage financial institutions to set up more terminals in provinces and drive inclusion.

“By allowing ATM owners to set the fee, they can be encouraged to place ATM terminals in the provinces since they will now be adequately compensated,” Mr. Diokno said in the same briefing.

He said cardholders who will use ATM machines owned by their banks will continue to enjoy free withdrawal and balance inquiry services.

“There are ways to avoid paying high ATM fees. Note that the ATM card can function as a debit card, and this very same card can be used in stores or e-shops to pay for your purchases,” Mr. Diokno said.

At present, ATM terminals are mostly concentrated in the National Capital Region and CALABARZON (Cavite, Laguna, Batangas, Rizal, Quezon).

The central bank allows lenders to charge up to P18 per transaction and P2 for balance inquiry for interbank engagements. — LWTN