THE growing number of Filipinos struggling to repay loans should force the government to confront an increasingly troubling consumer protection problem: lending companies and online loan applications that profit from borrowers without clearly disclosing the true cost and conditions of their loans.
CONSUMA PH, a consumer-centered policy think tank, urged the government to intensify its crackdown on predatory lending, particularly online loan applications that advertise easy cash but impose excessive interest, hidden fees, misleading repayment schedules and exploitative penalties.
The call follows a November 6 report by the Manila Bulletin on rising Philippine bank bad loans, driven in part by defaults in credit card and personal loan accounts, underscoring the growing financial pressure on Filipino households.
“Borrowers must honor legitimate financial obligations, but lenders must also be held accountable for the terms they impose,” said Atty. Nat Oducado, former Party-list Representative and CONSUMA PH Founder and Spokesperson.
“Kapag hindi malinaw ang tunay na halaga ng uutangin, ang interes, mga singil at mga parusa, hindi patas ang kasunduan sa pagitan ng nagpapautang at nanghihiram (When the actual amount to be borrowed, interest, charges and penalties are not clearly disclosed, the agreement between lender and borrower is not fair),” Oducado said.
He stressed that the problem cannot be reduced to irresponsible borrowing when consumers are often enticed by advertisements promising instant approval and convenient repayment, only to discover additional charges and conditions after accepting the loan.
The Securities and Exchange Commission has repeatedly warned against unauthorized online lending platforms, including applications distributed through legitimate app stores, while government agencies have documented abusive collection practices and the misuse of borrowers’ personal information.
Oducado pointed out that he had already pushed for stronger protection against excessive lending charges when he was in Congress through House Bill No. 6980, or the proposed Credit Cards and Loans Penalties and Surcharges Regulation Act, which seeks to establish uniform rules governing the total cost of credit regardless of the loan amount or type of lender.
“Ang utang ay hindi dapat maging lisensya para pagsamantalahan ang pangangailangan ng isang tao (Debt must never become a license to exploit another person’s needs),” he said, stressing that access to credit must come with transparency, accountability and fair treatment.
CONSUMA PH urged the SEC, Department of Trade and Industry, Bangko Sentral ng Pilipinas and other relevant agencies to coordinate in identifying unauthorized lenders, investigating deceptive loan advertisements, monitoring excessive interest and penalty structures, and shutting down platforms operating without the necessary authority.
It also called for mandatory, prominent disclosure of the actual amount borrowers will receive, the total amount they must repay, the effective interest rate, all fees and penalties, and the consequences of late payment before any loan agreement is accepted.
The government must strengthen enforcement against lenders that use deceptive contracts, obscure corporate identities, unauthorized applications and abusive collection methods, while providing accessible complaint mechanisms and meaningful remedies for affected borrowers.
“Financial inclusion should mean giving Filipinos fair opportunities to access credit, not opening the door for businesses to trap them in debts they cannot reasonably escape,” Oducado said.
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