Senate Majority Leader Migz Zubiri sounded the alarm on the absence of any law that caps interest rates on online lending applications, warning that the gap leaves millions of Filipinos exposed to predatory practices.
At the hearing of the Senate Committee on Games and Amusement, Zub questioned why the Securities and Exchange Commission (SEC) – and not the Bangko Sentral ng Pilipinas (BSP) – oversees these digital lenders despite the central bank’s long reputation for strict financial supervision.
The veteran legislator said this discovery raised troubling questions about the government’s ability to protect borrowers, particularly minimum wage earners and other vulnerable groups, from crushing debt and harassment.
“Ibig mong sabihin wala po tayong cap? So kung meron po kayong lending app application, na-grant po, pwede po silang magcharge up to 20% a week? Wala po pala tayong batas para po diyan?” the seasoned lawmaker asked the SEC.
“Unfortunately, your Honor, yes po,” SEC lawyer Romarie Abrazaldo answered, confirming that the Usury Law has been suspended and that no substitute regulation currently limits interest rates on these platforms.
The senator’s disbelief was evident as he reflected on the consequences of this policy gap for ordinary Filipinos who often sign contracts without understanding their hidden risks.
“Oh my, so mas grabe pa sa Mafia ito, sa Yakuza.”
“Oh my, so mas grabe pa sa Mafia ito, sa Yakuza,” he said.
“Unfortunately, ang problema diyan, marami sa ating mga kababayan lalo na yung mga minimum wage earners, hindi po nila naiintindihan ang fine print ng kontrata. Kaya nga yung mga bangko, napaka-thorough … grabe yung due diligence na dapat gawin nyo. Yung online lending applications, parang bangko yan eh,” Zubiri noted.
“Tapos kung di ka pa makabayad, grabe yung papahiyain ka. At tatanungin ko din sa Privacy Commission and other government agencies: pwede bang gawin yun na papahiyain yung tao? Kasi as part of your loan agreement with the lending app, magbibigay ka ng sampung tao hanggang dalawampung tao pati celfone nila. It is a shame campaign,” he added.
By invoking a 2024 Supreme Court ruling that called a 3 percent monthly interest rate unconscionable, Zubiri underscored that even modest caps had been deemed abusive in the past.
Yet, as Abrazaldo pointed out, borrowers seeking relief must still bring cases to court, an explanation that left Zubiri unsatisfied and sharpened his critique of the regulator’s limited reach.
“What you’re trying to tell me, as regulator, is wala na po tayong magagawa? Parang sa pangungurakot, let’s drop the mic and magnakaw na lang? Wala na tayong magagawa?” he asked, warning that the absence of administrative remedies renders consumer protection meaningless.
Abrazaldo said the SEC is still reviewing possible actions, but Zubiri countered with a grim reminder of the human cost of bureaucratic delay.
“Every time you spend studying it, there’s a person hanging himself from the ceiling. Because of these abusive online lending apps … maybe you should do a review, an audit, sa mga kumpanyang ito na binigyan nyo ng permit,” he lamented.
Before this exchange, Zubiri had already laid out why he believes the BSP, not the SEC, should oversee lending platforms, drawing on his experience as a former chairman of the Senate Cooperatives Committee.
He illustrated the BSP’s diligence by recalling how cooperative banks complain of stringent requirements but benefit from the discipline those rules enforce.
“The BSP is probably one of the best-run branches of government.”
“The BSP is probably one of the best-run branches of government,” he declared.
Zubiri laid out a clear remedy: reassign the job of regulating online lending to the BSP.
“Bottom line, pag hindi po maba-ban at ang gusto po ng gobyerno ay highly regulated, ayaw naman po nating ma-veto ito, I would suggest that we give it to the BSP. Let’s transfer the responsibility from the SEC,” he said.
“Maybe what we should do is let the SEC concentrate on corporations and let’s give the lending regulation to the BSP kasi sila talaga ang expert tsaka mabilis gumalaw ang BSP,” Zubiri concluded.
