The Bangko Sentral ng Pilipinas (BSP) has extended the maximum repayment period for salary-based consumption loans to seven years, according to a report by Philstar Biz. The move is intended to make amortizations more manageable for borrowers while maintaining safeguards against excessive debt.
Previously, salary-based loans carried shorter repayment terms, which often led to higher monthly payments. The extension to seven years is expected to ease the burden on borrowers, particularly those in the middle-income bracket, by allowing them to spread out payments over a longer period. The BSP emphasized that the new policy includes measures to prevent over-leveraging, such as stricter credit evaluation requirements.
The central bank's decision comes amid a broader push to support consumer spending and financial inclusion in the Philippines. By extending repayment periods, the BSP aims to balance credit access with responsible lending practices. Industry observers say the adjustment could boost loan uptake while helping borrowers avoid default, though some caution that longer terms may increase total interest costs.