MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) is proposing more flexible repayment terms for salary-based personal loans, shifting to a principles-based approach that would allow lenders to determine loan tenors based on borrowers’ creditworthiness to help ease debt-servicing burdens.
In a draft circular, the central bank said it aimed to enhance regulations governing salary-based general-purpose consumption loans while ensuring adherence to prudent credit standards.
“Consistent with this objective, the revised regulations move away from a prescriptive prudential limit on loan tenor toward a principles‑based approach,” the central bank said.
Under the proposed framework, BSP-supervised financial institutions (BSFIs) would be expected to set loan tenor and other terms following a thorough assessment of a borrower’s ability to pay, sources of repayment, repayment history, and the purpose of the loan, consistent with sound credit risk management practices.
The repayment period may also be mutually agreed upon by the lender and borrower, subject to prudent credit controls.
