By Melissa Luz T. Lopez, Senior Reporter
THE BANGKO SENTRAL ng Pilipinas (BSP) will allow new credit card issuers to enter the Philippine market, as part of new rules released to implement a new law regulating the industry.
In a statement, the central bank said they have completed implementing rules and regulations (IRR) for Republic Act (RA) No. 10870 or the Philippine Credit Card Industry Regulation Law.
“The IRR provides the framework for the entry of new players in the credit card business beyond just the banks, their affiliates and subsidiaries,” the BSP said in a statement on Friday. “Opening up the market to a wide range of players can lead to more transparent and competitive interest rates, innovative products and improved services.”
Former President Benigno S.C. Aquino III signed the credit card industry law on July 27, 2015, which officially places credit card issuers under the central bank’s watch.
The BSP said there are over eight million credit cards issued in the Philippines, with expectations that the roster will grow amid robust economic growth and a shift towards digital payments.
The rules drafted by the BSP seek to address “key customer concerns,” including the disclosure on the amount and the computation of fees and charges. These also provide for safeguards against unfair collection practices, immediate posting of payments, confidentiality of consumer data, and the expeditious resolution of complaints.
In particular, all finance charges and card-related fees are required to be placed on application forms, contracts and billing statements. Card issuers are also mandated to give “ample notification” to clients before fees are changed, the BSP said.
“The rules likewise clarify that the finance charges shall be computed based on the unpaid amount of the outstanding balance as of statement cut-off date and shall not include current and deferred charges,” the central bank added.
The new rules also require collection agents to observe “good faith” in demanding payments from card holders, saying that they shall observe “fair and reasonable conduct” for customers including those in default.
Crediting payments using cash, check or debit cards made via accredited payment centers should also be posted on the same day by card issuers. The rules also make permanent the rule that requires due dates falling on weekends or holidays to be moved to the next business day.
On data privacy, customer information can only be shared to third parties only if the cardholder has given consent.
Debts incurred via credit cards stood at P299.196 billion in 2017, representing 3.5% of total loans granted by the banking system, according to latest available BSP data. Of the amount, P14.242 billion is at risk of default.