A Mindanaoan solon has urged the Bangko Sentral ng Pilipinas (BSP) to mandate lower interest charges for pawnshops during the COVID-19 pandemic.
In Resolution No. 1212, Cagayan de Oro City Rep. Rufus Rodriguez said the health crisis and lockdowns imposed by the government have prevented millions of Filipinos from working and tens of thousands have lost their jobs.
“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.
The jobless and those without income are thus forced to go to pawnshops to obtain funds by pawning their valuables, he said.
He added that people prefer these lenders because they are more accessible and they impose lesser and more lenient requirements than banks.
Rodriguez noted that in recent months, there were long lines of borrowers in pawnshops.
He pointed out that this situation gives unscrupulous pawnshops the “opportunity to take advantage by raising their lending rates.”
He invoked BSP Circular No. 938 in asking the regulator to prescribe lower interest charges.
The circular provides: “The rate of interest including surcharges on any loan or forbearance of money extended by a pawnshop shall be in accordance with market conditions. However, such interest rate shall not be iniquitous, unconscionable or contrary to morals, if not against the law as may be determined by the court. These shall also be properly declared in accordance with the Truth in Lending Act.”
“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,” Rodriguez stressed.