Senate Deputy Minority Leader Joel Villanueva on Friday voiced support for the Bangko Sentral ng Pilipinas (BSP) proposal to adopt a principles-based framework for salary-based personal loans, saying it would ensure lending decisions better reflect a borrower’s capacity to pay.
Villanueva said the BSP’s draft circular, which highlights the need to assess a borrower’s financial standing, repayment ability, and potential restructuring options, aligns with long-standing expectations from lawmakers.
“Masasabi po natin na patas ang ganitong hakbang, at matagal na rin po ang ating hinintay para ipatupad ito ng BSP,” Villanueva noted, emphasizing that the measure promotes fairness in evaluating creditworthiness.
Under the proposed policy, BSP-supervised financial institutions would move away from rigid loan tenor limits and instead determine repayment terms based on factors such as credit history, payment behavior, and the purpose of the loan.
This would replace the current rule that caps personal loans for expenses like education, hospitalization, emergencies, travel, and household needs at three years, with possible extensions of up to five years under certain conditions.
Villanueva, who chairs the Senate Committee on Banks, Financial Institutions and Currencies, said the reform complements efforts in Congress to shield borrowers from inflexible repayment structures that may not reflect their actual financial situations.
He added that the committee stands ready to exercise oversight to ensure the policy is properly carried out.
“We are seeing the same distress signal coming from multiple directions at once. The BSP is proposing flexibility for private borrowers. The GSIS moratorium is now in effect for government workers. And now the SSS is saying it is studying a loan moratorium and penalty condonation for its own members and employers,” Villanueva said.
“These are not isolated decisions. They are all pointing to the same reality on the ground,” he added.