MANILA, Philippines — In a significant regulatory development, the Securities and Exchange Commission (SEC) is seeking to transfer its oversight authority over financing and lending companies to the Bangko Sentral ng Pilipinas (BSP). This proposed shift aims to bring more robust supervision to a rapidly expanding sector of consumer finance that has faced criticism for aggressive practices.
SEC Commissioner Rogelio Quevedo revealed at a symposium hosted by the Consumer Lending Association of the Philippines that he has submitted a formal position paper to Congress advocating for the "entire" transfer of regulatory responsibilities. Currently, the SEC governs these entities under the Lending Company Regulation Act of 2007 and the Financing Company Act of 1998.
"That is now pending at the committee [level] in Congress," Quevedo stated, describing the supervision of these firms as a "one big headache" for the SEC.
In response, the BSP has expressed openness to the proposal. BSP General Counsel Roberto Figueroa indicated that discussions between the two agencies are already underway, with joint regulation being considered as a potential compromise.
"It is not like they (SEC) will just totally leave these entities to us. It’s really more like joint regulation where the SEC agrees to defer to BSP since we have the expertise, the resources to regulate them," Figueroa explained. "What we don’t have, as I said, are just the specific rules on how we’re going to discharge this additional function."
The move comes as online lending apps have proliferated, offering credit access to millions but also drawing scrutiny for exorbitant interest rates and harsh debt collection methods, including harassment and public shaming of borrowers.
To combat these abuses, the SEC has already implemented measures such as capping nominal interest rates at 6% per month (or 0.2% daily) for loans under P10,000. Additionally, the regulator plans to lift a moratorium on new industry players imposed in 2021 and introduce stricter capital requirements.
Under the proposed changes, regulated firms would face higher minimum paid-up capital thresholds based on the number of online lending platforms they operate. The SEC has criticized the current P1 million requirement as insufficient to prevent undercapitalized lenders from engaging in aggressive tactics.