THE Bangko Sentral ng Pilipinas (BSP) is considering changes to its rules on salary-based loans to give borrowers, particularly public school teachers, more payment flexibility.
In a statement, the BSP said it was reviewing regulations governing salary-based general-purpose consumption loans (SBGPCLs) following an initial assessment of banks’ loan programs.
“The BSP is considering possible amendments to the regulations... particularly the lifting of the existing tenor limit,” it said.
Education Secretary Sonny Angara has asked BSP Governor Eli Remolona Jr. to review the repayment terms of salary loans for public school teachers.
SBGPCLs are presently capped at an original loan term of up to three years. Extensions are allowed only in meritorious cases but even then, the total loan maturity cannot exceed five years.
The BSP said this limit may be revisited to allow banks to offer longer repayment periods when appropriate.
“The proposed approach is intended to provide greater repayment flexibility to borrowers, including teachers, by allowing banks to set longer and more appropriate repayment periods,” the central bank said.
This will “better align with borrowers’ cash‑flow capacity and help ease monthly debt servicing, while remaining subject to prudent credit standards such as the borrower’s ability to pay, stability of income and payment track record.”