What is the maximum legal interest rate in the Philippines?
Last updated: 2026-05-04 · Educational content; not legal advice.
Short answer
BSP Circular 1133 (2021), as extended by Circular 1165 (2023), caps consumer-loan effective interest at 6% per month nominal (24% per annum) and total cost (including penalties) at 15% per month for short-term, low-value loans. The Usury Law's ceilings were suspended by Central Bank Circular 905 (1982), but courts may still strike unconscionable rates under Article 1306 of the Civil Code (Medel v. CA, G.R. 131622, 1998).
Primary sources
Frequently asked
Does the cap apply to BNPL?
BSP Circular 1133 covers general-purpose, unsecured consumer loans up to ₱10,000 with tenors of ≤4 months. BNPL providers regulated by BSP are bound by the same cap; SEC-only BNPLs are governed by SEC MC 3 (2022) and disclosure rules but not yet a hard ceiling.
What if the lender charges 30% per month?
That exceeds Circular 1133's 6% nominal monthly cap and is a documentable violation. File simultaneously with the SEC (for SEC-registered lenders) or BSP (for bank-affiliated lenders) and request refund of overcollected amounts.
Are pawnshop interest rates capped?
Pawnshops are regulated under PD 114; the BSP's pawnshop rules require posted interest rates and a maximum service charge of 1% of the principal per month, separate from the interest.
Take action
More questions
Does the cap apply to BNPL?
BSP Circular 1133 covers general-purpose unsecured consumer loans up to ₱10,000 with tenors of ≤4 months. BNPL providers regulated by BSP are bound by the same cap; SEC-only BNPLs follow SEC MC 3 (2022) disclosure rules.
Can courts strike rates above the cap?
Yes. Civil Code Art. 1306 lets courts void unconscionable rates; Medel v. CA (1998) and subsequent cases have struck 5%–10% per-month rates as void.
Related companies
Got a similar problem?
File a complaint and we'll pre-fill BSP, SEC, DTI, and small-claims letters for you.