SEC Plans Tenfold Increase in Lending Firm Capital Requirements

The Securities and Exchange Commission (SEC) is set to introduce stricter regulations for lending companies to combat predatory practices.

SEC Chair Francis Lim announced plans to increase the minimum capital requirement for these firms by at least tenfold and launch a formal accreditation system for collection agents.

Currently, the Lending Company Regulation Act of 2007 sets the minimum paid-in capital at PHP 1 million.

Lim noted that this low entry barrier has led to a proliferation of small-scale lenders charging high interest rates.

He suggested raising the requirement to PHP 10 million, with additional capital required for each platform operated by a single incorporated entity.

The regulator also aims to curb abusive collection tactics, such as shaming or harassing borrowers who default.

The proposed accreditation system will require third-party agents to qualify for operation, as the SEC aims to stop the harassment of borrowers and their families.

These measures follow a December 2025 order that capped interest rates for loans of PHP 10,000 or less.

Starting 1 April 2026, the SEC will enforce a maximum nominal interest rate of 6% per month or 0.2% per day.

The new regulations also restrict late payment penalties to a maximum of 5% per month on the outstanding balance.

The SEC described these caps as necessary to “uphold consumer protection while ensuring the continued viability and competitiveness” of the industry.

Featured image: Edited by Fintech News Philippines based on an image by the Securities and Exchange Commission Philippines via Facebook.

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