SEC Issues Rules To Implement BSP Ceilings On Interest Rates And Other Fees

Last March 1, 2022, the Securities and Exchange Commission ("SEC") issued its Memorandum Circular No. 3 to implement the ceilings previously imposed by the Bangko Sentral ng Pilipinas (the Philippine Central Bank or "BSP") via BSP Circular No. 1133, series of 2021 on interest rates and other fees imposed by financing companies, lending companies, and their online lending platforms.

1. Which institutions are covered by the ceilings on interest rates and other fees?

The policy covers financing companies, lending companies, and their "online lending platforms." In general terms, "financing companies" extend credit facilities to consumers and the industrial, commercial or agricultural enterprises, whereas "lending companies" are engaged in granting loans from their own capital funds (or from funds sourced from not more than 19 persons). (For more detailed definitions, see the Financing Company Act and Lending Company Regulation Act). In turn, "online lending