BSP urged to mandate lower interest charges for pawnshops amid pandemic

MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) should mandate lower interest charges for pawnshops during the coronavirus pandemic, Cagayan de Oro 2nd District Rep. Rufus Rodriguez said Monday.

Under House Resolution No. 1212, Rodriguez said the health crisis and lockdowns imposed by the government have prevented millions of Filipinos from working, and thousands of Filipinos have already lost their jobs.

This has forced some to go to pawnshops to pawn their valuables to get funds to pay bills and other expenses since many Filipinos see pawnshops as being “more accessible” compared to banks mainly due to fewer requirements, Rodriguez said.

“An opportunity arises for unscrupulous pawnshops to take advantage and raise interest rates being charged,” Rodriguez said in the resolution.

With this, Rodriguez urged the BSP to prescribe lower interest charges, saying that Filipinos should not worry about high interest rates amid this pandemic.

“During this pandemic, it is just proper for the BSP to help our fellow Filipinos and mandate that pawnshops charge lower interest rates,” Rodriguez said.

Rodriguez cited BSP Circular No. 938, which states that “[t]he rate of interest including surcharges on any loan or forbearance of money extended by a pawnshop shall be in accordance with market conditions.”

“However, such interest rates shall not be iniquitous, unconscionable or contrary to morals, if not against the law as may be determined by the court. These shall also be properly declared in accordance with the Truth in Lending Act,” the circular further states.

JE