Lending rules: Philippines
What the published rules require for unsecured consumer loans in Philippines, in the order a loan is made, and how TS LMS handles each step.
Last reviewed 22 October 2026 · Email me when these rules change
Lender type covered Lending company under the Lending Company Regulation Act of 2007 (RA 9474), supervised by the Securities and Exchange Commission (SEC); financing companies (RA 8556) are subject to the same SEC rules on rate caps, collection and AML cited here.
- 01
What licence do you need to lend in Philippines?
Licence and conduct
What the rules require
A lending company may operate only with a Certificate of Authority issued by the SEC; lending without a subsisting authority to operate is an offence. The minimum paid-up capital is PHP 1,000,000, and the SEC may require more. Before the loan is consummated, the lender must give the borrower a disclosure statement under the Truth in Lending Act.
Effective: being checked against the official text · Rules as of 23 August 2007 · Source: 2007 Implementing Rules and Regulations of the Lending Company Regulation Act of 2007 (RA 9474)
How TS LMS handles it
Products, credit rules and limits are set up for each lender and country. Changes to credit policy and to products need a second person's approval, and every change is kept in the audit log.
- 02
Is there an interest rate cap in Philippines?
Interest rate cap
What the rules require
For unsecured, general-purpose loans of up to PHP 10,000 with a tenor of up to four months, entered into, restructured or renewed from 1 April 2026, SEC Memorandum Circular No. 14 (2025) sets four ceilings: a nominal interest rate of 6% per month (about 0.20% per day); an effective interest rate of 12% per month (about 0.40% per day), covering interest and all other fees and charges but excluding late-payment penalties; penalties for late payment or non-payment of 5% per month on the outstanding scheduled amount due; and a total cost cap of 100% of the amount borrowed, whatever the time outstanding. Outside that scope, the implementing rules of RA 9474 let loans be granted at rates and charges agreed between lender and borrower.
Effective 1 April 2026 · Rules as of 10 December 2025 · Source: SEC Memorandum Circular No. 14, Series of 2025 — Recalibrated Ceilings on Interest Rates and Other Fees Charged by Financing Companies and Lending Companies · 2007 Implementing Rules and Regulations of the Lending Company Regulation Act of 2007 (RA 9474)
How TS LMS handles it
Each product can carry an annual rate ceiling and always carries a ceiling on the total cost of credit; a quote above either is refused.
- 03
How are loan fees regulated in Philippines?
Fees, penalties and cost disclosure
What the rules require
Under the Truth in Lending Act (RA 3765), the lender must disclose in writing before the transaction the finance charge in pesos and as a simple annual rate.
Effective 22 June 1963 · Rules as of 22 June 1963 · Source: Republic Act No. 3765 (Truth in Lending Act)
How TS LMS handles it
Every charge on a product counts towards the rate check, each product carries a ceiling on the total cost of credit, and staff cannot set a charge above the product's.
- 04
What affordability checks are required in Philippines?
Affordability assessment
What the rules require
The Financial Products and Services Consumer Protection Act (RA 11765), which the SEC enforces for providers under its jurisdiction, requires financial service providers to have written procedures to determine whether a product is suitable and affordable for the client. The assessment considers whether the amount and terms let the client meet obligations with a low probability of serious hardship and, for credit, includes measures to prevent over-indebtedness.
Effective: being checked against the official text · Rules as of 6 May 2022 · Source: Republic Act No. 11765 (Financial Products and Services Consumer Protection Act)
How TS LMS handles it
Income and the debt-to-income ratio are assessed and kept with the credit decision; a limit above the suggested amount needs a written reason.
- 05
Can loan contracts be signed electronically in Philippines?
Loan agreement and e-signature
What the rules require
How TS LMS handles it
Where loans are signed electronically, the agreement is stored unchanged and signed only after approval, and the signature record keeps who signed, when, the agreement's fingerprint and the device. Money is released by a second staff member who is not the approver, and not if the payout account differs from the one approved.
- 06
What identity checks and anti-money laundering duties apply in Philippines?
KYC and AML/CFT
What the rules require
How TS LMS handles it
ID document and face checks, and sanctions and PEP screening, are built in. A sanctions match blocks approval and release until compliance clears it with a second officer's confirmation, and a PEP match needs a written enhanced due-diligence note before staff approval.
- 07
What are the data protection and credit bureau rules in Philippines?
Personal data and credit bureau
What the rules require
How TS LMS handles it
Personal data is kept for set periods by type and then removed, and a borrower's request to access their data can be answered from the system. Contacting a borrower's emergency contact requires the borrower's recorded consent.
- 08
How is debt collection regulated in Philippines?
Debt collection
What the rules require
How TS LMS handles it
Calls and messages are limited to set hours, and calls to a set number a day. Contact with third parties can be switched off entirely, or allowed only as an exception with the borrower's consent and, where set, compliance approval, using a script that never mentions the debt. Every contact is logged.
This page summarises published rules for general information; it is not legal advice. Rules change: check the current text with the authority before acting.