The Securities and Exchange Commission (SEC) of the Philippines is advancing plans to overhaul regulations for online lending platforms, focusing on higher capital requirements to curb abusive practices while potentially lifting a moratorium on new entrants.
SEC Chair Francis Lim reported that initial stakeholder feedback has shown broad support for stricter capitalization rules, which are intended to serve as a key safeguard against predatory lending. "I think generally they’re in favor of higher capital so that only the good ones will remain," Lim stated, highlighting that the current minimum capital of P1 million has enabled smaller, undercapitalized lenders to operate aggressively.
The regulator is currently reviewing a substantial volume of public comments following its proposal to reopen the online lending sector. While issues such as lending fees and operational standards have been raised, the proposed increase in capital requirements has faced little resistance.
Lim explained that the initiative aims to filter out firms engaging in questionable practices, including insufficient due diligence and harassment of borrowers. "Our experience is that because the capital requirement is small, they’re so aggressive in lending," he said. "They’re not doing due diligence and when borrowers default, they resort to shaming."
This move represents a calibrated approach to allow legitimate players back into the market while enhancing consumer protection. Although no firm timeline has been set for the release of the final memorandum circular, Lim emphasized the agency's commitment to carefully studying all feedback. "I don’t want to set a target date after comments. I want the department to really study them," he noted, adding that there is urgency to act given persistent complaints.
The SEC chief also underscored the value of public consultations in shaping policy, stating, "We’re not all-knowing. That’s why we’re encouraging people to comment on whatever draft MC that we have." This regulatory push is part of a broader reform agenda at the SEC, which has intensified rulemaking efforts in recent months.