MANILA – A lawmaker at the House of Representatives on Monday urged the Bangko Sentral ng Pilipinas (BSP) to mandate lower interest charges for pawnshops during the coronavirus disease (Covid-19) pandemic.
In filing House Resolution No. 1212, Cagayan de Oro City Rep. Rufus Rodriguez invoked BSP Circular No. 938 in asking the regulator to prescribe lower interest charges.
According to the circular, “the rate of interest including surcharges on any loan or forbearance of money extended by a pawnshop shall be in accordance with market conditions”.
The circular stated that such interest rate shall not be “iniquitous, unconscionable or contrary to morals, if not against the law as may be determined by the court”.
Rodriguez said the health crisis and lockdowns imposed by the government have prevented millions of Filipinos from working, and have rendered tens of thousands jobless.
“Because of this, many are deprived of their opportunity to earn, resulting in them being unable to pay their bills, including rent and utilities,” he said.
He noted that the jobless and those without income are forced to go to pawnshops to obtain funds by pawning their valuables, arguing that people prefer these lenders because they are more accessible and they impose lesser and more lenient requirements than banks.
“During this pandemic, it is just proper for the BSP to help our fellow Filipinos and mandate that pawnshops charge lower interest rates. Our people are already facing many problems right now, and high interest rates should not be one of them,” he added.
He said that there were long lines of borrowers in pawnshops in recent months, pointing out that this situation gives unscrupulous pawnshops the “opportunity to take advantage by raising their lending rates.” (PNA)