Dennis Gaviola

Logo of the Securities and Exchange Commission (SEC)  in this photo taken on June 22, 2023. Jonathan Cellona, ABS-CBN News

Article (news)

SEC ANNIVERSARY

Raine Musñgi

ABS-CBN News

MANILA—Securities and Exchange Commission Chairman Francis Lim is standing by the decision to cut the effective interest-rate cap on certain small, unsecured loans to 12 percent per month, despite what he describes as lobbying pressure, including from foreign interests.“There were lobbyists, even foreign lobbyists,” Lim said, recalling how he defended the policy to an ambassador. The new 12 percent cap, down from 15 percent, took effect April 1, 2026 for unsecured, general-purpose loans of up to P10,000 with terms of up to four months. The SEC also capped nominal interest at 6 percent per month, late-payment penalties at 5 percent, and total costs at 100 percent of the amount borrowed.<div><iframe width="640" height="360" src="https://www.youtube.com/embed/Y2QHBuBy2bc?&amp;wmode=opaque&amp;rel=0" frameBorder="0" allowfullscreen="" class="fr-draggable"></iframe> </div>Lim said the SEC&#x27;s concern was not simply high interest rates. He questioned how some online lenders could approve loans almost immediately after a borrower makes an inquiry.“You cannot lend recklessly.”<div>SEC wants bigger players, smaller lenders could be crowded out</div>Lim also revealed a more controversial strategy: the SEC wants to raise the industry&#x27;s capital and compliance bar, even if smaller lenders are pushed out.The SEC&#x27;s revised online-lending framework now requires lending companies operating one online lending platform to maintain at least P10 million in paid-up capital, with higher thresholds as the number of platforms increases. The regulator lifted its moratorium on new online lending platforms in July.Lim said the objective is to attract “bona fide players” and let larger companies “crowd out” smaller lenders. That is already a major reshaping of the market. In 2025, the SEC revoked the registrations and lending licenses of 401 companies for failing to meet reporting requirements.The bigger question is whether tougher rules will produce safer digital credit, or leave borrowers with fewer legitimate choices.Lim also revealed other changes that could reshape online borrowing, from one-page loan disclosures to stronger financial-literacy rules and the possible use of alternative data in assessing creditworthiness.Those reforms could determine not just how much Filipinos pay to borrow, but who gets approved for a loan in the first place.

The new 12 percent cap, down from 15 percent, took effect April 1, 2026 for unsecured, general-purpose loans of up to P10,000 with terms of up to four months.

The new 12 percent cap, down from 15 percent, took effect April 1, 2026 for unsecured, general-purpose loans of up to P10,000 with terms of up to four months.

SEC Chief defends 12 percent online loan cap despite foreign lobbying

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SEC Chief defends 12 percent online loan cap despite foreign lobbying

Raine Musñgi,

ABS-CBN News

Published August 19, 2026 02:24 PM PHT

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SEC

Francis Lim

online lending

interest rate

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