Regulator eyes lifting ban on new online lenders

By Alexandria Grace C. Magno

THE SECURITIES and Exchange Commission (SEC) is studying a possible lifting of the moratorium on registering new online lending platforms.

“The moratorium is already long — it’s already long, so I said it’s about time to study [whether] to lift it,” SEC Chairperson Francisco Ed. Lim told reporters on the sidelines of an event on Monday.

In November 2021, the SEC imposed a moratorium on the registration of new online lending platforms run by financing and lending companies as it worked on rules to curb predatory lending and abusive debt collection practices.

“We want to open up the moratorium — to lift the moratorium to enable bigger companies to come,” Mr. Lim added.

According to a 2025 report by leading global digital payments firm Visa, the Philippines faces a $206-billion (around 12.2 trillion) funding gap for small and medium enterprises (SMEs), the second largest in the Asia-Pacific, due to financial barriers hindering their growth.

The corporate regulator said it is reviewing the P1-million minimum capital requirement for online lenders, and noted that it may be increased. “It can be P5 million, or it can be P10 million,” Mr. Lim said.

He said lenders were drawn to high effective interest rates, prompting them to aggressively lend out limited funds. If payments faltered, they sometimes resorted to aggressive or abusive debt collection tactics. “We want to weed out those companies,” Mr. Lim noted.

He added that the SEC targets releasing draft rules by the first quarter of 2026. “Liberalizing the rules. That’s my focus this year,” Mr. Lim said.

From January to Sept. 15 last year, the SEC handled 5,415 public complaints involving financing and lending companies and their online platforms. Of these, 3,570 complaints, or 66%, involved unfair debt collection practices or collection harassment. Among them, 3,315 complaints were filed against unregistered financing companies, lending companies, and online lending platforms (OLPs), while 435 complaints targeted unregistered entities or unrecorded OLPs.

The commission has said that unregistered online platforms are among the key concerns that need to be addressed by law enforcement agencies.

Financial sector experts welcomed the SEC’s move to expand online lending platforms, citing the potential for greater competition, innovation, and improved credit access — particularly for underserved MSMEs and individual borrowers — through better pricing, data-driven risk assessment, and consumer-friendly products.

Philippine Institute for Development Studies senior research fellow John Paolo R. Rivera, however, cautioned about risks such as a resurgence of abusive practices, including hidden fees, harassment, and weak data privacy, if licensing, supervision, and enforcement lag behind market entry.

“Any reopening should be phased and conditional, with tighter fit-and-proper rules, caps on abusive fees, real-time reporting, and strong coordination with the Bangko Sentral ng Pilipinas, National Privacy Commission, and law enforcement to ensure consumer protection keeps pace with growth,” Mr. Rivera said.

Juan Paolo E. Colet, managing director at China Bank Capital Corp., stressed the need to issue licenses only to well-capitalized companies that uphold ethical business practices.

“The regulatory goal should be to not only expand the credit market, but to also make it equitable for all stakeholders,” he said.

Last year, the SEC issued Memorandum Circular No. 14, which imposed recalibrated ceilings on interest rates and fees for small consumer loans by financing and lending companies.

It set a 6% per month cap on nominal interest rates and a 12% monthly cap on effective interest rates for loans up to P10,000 with terms of up to four months, down from the previous 15% monthly effective rate cap allowed by the Monetary Board and SEC.