The Bangko Sentral ng Pilipinas (BSP) has maintained the 3.0-percent monthly ceiling on finance charges for unpaid credit card balances while raising the limits on installment add-on rates and cash advance processing fees.
Under BSP Circular No. 1242, issued on November 10, 2026, the central bank increased the maximum monthly add-on rate for credit card installment loans from 1.0 percent to 1.5 percent. It also raised the cap on one-time processing fees for cash advances from P200 to P300 per transaction.
For consumers, keeping the 3.0-percent monthly finance charge cap ensures that interest on unpaid regular credit card bills will not increase, offering continued protection against high borrowing costs. However, cardholders who choose to convert purchases into monthly installments or withdraw cash using their credit cards may soon face higher fees, depending on their bank’s pricing. Existing installment loans will not be affected, as the higher limits apply only to new transactions made once the new rules take effect.
The BSP said the adjustments are designed to balance consumer protection with continued access to credit. By raising the fee ceilings, the central bank gives banks and credit card issuers more flexibility to manage rising operating costs while still keeping overall charges regulated.
The central bank first introduced these rate caps in November 2020 as a financial relief measure during the pandemic, initially setting the monthly finance charge limit at 2.0 percent before adjusting it to 3.0 percent in February 2023. The 1.0-percent installment cap and P200 cash advance fee limit had remained unchanged since their 2020 introduction until this latest review, which factored in current economic conditions, the financial health of banks, and broader monetary policy.
All credit card fees and charges remain subject to strict consumer protection, disclosure, and transparency rules, requiring banks to clearly inform cardholders of applicable rates. Circular No. 1242 will take effect 15 calendar days after its publication in the Official Gazette or a newspaper of general circulation, with the exact date to be announced on the BSP website.
