Zubiri wants stricter rules on online lending apps amid predatory rates

Senate Majority Leader Juan Miguel "Migz" Zubiri is calling for stricter regulations on online lending applications in the Philippines due to predatory interest rates.

The Securities and Exchange Commission (SEC) confirmed that there are currently no interest rate caps on online lending applications.

SEC counsel Atty. Romarie Abrazaldo explained that loan transactions are governed by civil law, and the terms agreed upon in the contract between the lender and borrower are what is followed.

Zubiri expressed concern that without a cap, some platforms could charge up to 20% interest weekly, noting that many borrowers do not understand the fine print of contracts.

He recalled that the Supreme Court has previously deemed a 3% monthly interest rate as unconscionable.

However, Abrazaldo stated that borrowers must present their loan documents to a court for a ruling on unconscionability or high interest rates.

Zubiri is advocating for the Bangko Sentral ng Pilipinas (BSP) to be given regulatory authority over these lending practices.