Credit rates

CREDIT RATES: Concerned consumers, meanwhile, are asking the House committee on banks and financial institutions to focus on making the terms more equitable for credit cardholders reeling from high prices and costly credit.

On several occasions, consumers have expressed also their desire for the committee to look into interest charges prevailing in the alternative credit market such as pawnshops, small investor lending companies, and informal lenders engaged in “five-six” operation.

Deputy Gov. Nestor Espenilla of the Bangko Sentral told a House committee recently that the amended Usury Law has removed the ceiling on interest rates, effectively leaving the setting of the rates to competing market forces.

He said the Usury Law’s suspension has resulted in the expansion of credit, meaning that more people can now borrow. This indicates that interest rates have been reasonable and generally acceptable to credit cardholders since the law was amended.

Espenilla cited data showing that out of 3 million credit cardholders, only .01 percent has complained to the Bangko Sentral about excessive interest and other charges.–Federico D. Pascual Jr. (The Philippine Star)