On 10 December 2025 the Securities and Exchange Commission issued Memorandum Circular No. 14, Series of 2025, and from 1 April 2026 it applies to every new, renewed or restructured loan that fits its scope. It is the first hard price ceiling on small online loans in the Philippines, and it lowers the previous 15% monthly ceiling.
What the cap says
| Item | Ceiling |
|---|---|
| Effective interest rate (all-in) | 12% per month, about 0.40% per day |
| Nominal interest rate | 6% per month, about 0.20% per day |
| Late-payment penalty | 5% per month on the amount due |
| Applies to | Unsecured, general-purpose loans of ₱10,000 or less with terms of four months or less, from SEC-supervised lending and financing companies |
| First violation | ₱50,000 fine |
| Second violation | ₱1,000,000 fine and a 60-day suspension |
What it means in pesos
Take a ₱10,000 loan over 60 days. Under the cap, the most it can cost you in interest and fees is about ₱2,400, so you repay at most around ₱12,400.
Now look at a lender that publishes a daily rate. At 1.99% per day, ₱10,000 over 60 days works out to roughly ₱10,500 in interest, plus any issuance fee. That is more than four times the ceiling. The lender's own site is not wrong to publish the rate; the cap simply means that rate cannot lawfully be charged on a loan of this size and length.
What the cap does not cover
- Loans above ₱10,000, even by one peso.
- Terms longer than four months. Several apps only offer 180 days or more, which keeps them outside the cap entirely.
- Banks. The circular binds SEC-supervised lending and financing companies. Banks and digital banks answer to the Bangko Sentral ng Pilipinas.
- Secured loans and loans for a specific purchase.
How to use it when you borrow
The cap is only useful if you know the all-in effective rate, and that number is on the Disclosure Statement every lender must give you before you sign. Ask for it, find the effective rate, and if the loan is ₱10,000 or less over four months or less, it should not be above 12% a month. If it is, you have a complaint to make, and the SEC now has a fine schedule to back it.