SEC urged to monitor impact of interest cap on small loans

The Securities and Exchange Commission should closely monitor how lending companies comply with its new memorandum circular on interest rate caps, warning that the real test of the policy will be whether small loans remain accessible to ordinary borrowers in the months ahead, a consumer advocacy group said.

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CitizenWatch Philippines said the newly issued cap on interest and fees for loans of up to P10,000 raises important implementation questions that regulators must track carefully, particularly whether formal lenders respond by tightening credit, withdrawing products, or shifting away from small borrowers altogether.

"Regulation does not end with issuance. It begins there," said Orlando Oxales, lead convenor of Citizen-Watch. "The critical question now is how the industry adjusts, and whether borrowers on the margins will still be able to access small, short-term loans through formal channels."