The Securities and Exchange Commission (SEC) is moving to reopen the gates to new online lending platforms after more than four years of regulatory freeze, proposing to lift its moratorium on registrations as early as April 1, 2026. The draft rules, released for public comment on March 12, would allow new entrants into the digital lending market under tighter capital requirements, stricter disclosure standards and enhanced consumer protections.
The proposal signals a shift in regulatory posture — from containment to calibrated expansion — as authorities seek to widen access to credit while curbing the abusive collection practices and data exploitation that prompted the moratorium in 2021.
Moratorium Imposed to Curb Abuse
The SEC first halted the registration of new online lending platforms (OLPs) in November 2021 through Memorandum Circular No. 10, Series of 2021. The freeze followed a surge in complaints involving harassment, excessive interest rates and the misuse of borrowers’ personal data.
Since then, digital lending has remained under heightened scrutiny. In December 2025, the regulator issued Memorandum Circular No. 14, which imposed a 12 percent monthly interest cap — equivalent to 0.4 percent per day — for loans above PHP 10,000 with terms of up to four months. The cap takes effect on April 1.
At the same time, the SEC has publicly flagged unauthorized applications operating outside regulatory oversight, including Sofi Loan, Masaya Cash, Napaka Tala, Peso Funny, MoneyAccess, Cash Ease and PesoMate.
Stricter Capital and Operating Limits
The draft circular that would lift the moratorium introduces a more demanding regulatory framework designed to filter out undercapitalized and high-risk operators.
- Tiered minimum paid-up capital requirements: PHP 10 million to PHP 50 million for lending companies operating up to 10 OLPs; PHP 20 million to PHP 100 million for financing companies.
- Platform cap: Each firm may operate a maximum of 10 online lending platforms.
- Transition period: Existing firms will have three years to comply, with a detailed compliance plan due within 60 days from effectivity.
- New licensing fees: Beginning January 1, 2027, annual fees will shift to an asset-based model ranging from 0.10 percent to 0.35 percent of total assets.
The proposed circular would supersede the 2021 moratorium and apply nationwide.
Consumer Safeguards Tightened
At the core of the proposal are reinforced safeguards aimed at ending the predatory tactics that tarnished parts of the industry.
The SEC emphasized: “The proposal strictly prohibits FLCs from accessing or scraping borrower contact lists, social media contacts, or messaging records from mobile devices.”
The draft rules also ban the outsourcing of core lending functions and the use of automated coercive collection messages, allowing only neutral payment reminders. Companies must comply with the Truth in Lending Act (R.A. No. 3765), the Financial Products and Services Consumer Protection Act (R.A. No. 11765), the Data Privacy Act (R.A. No. 10173), and the Credit Information System Act (R.A. No. 9510), including mandatory reporting to the Credit Information Corporation.
The measures aim to replace what critics once described as a “wild west” digital lending space with a rule-bound marketplace where competition can thrive without eroding borrower rights.
SEC: Expansion With Guardrails
The regulator framed the proposed lifting as part of a broader push to align with digital finance trends while restoring consumer trust.
“The planned lifting of the moratorium on new OLPs and FLCs forms part of efforts to improve the public’s access to credit under stronger consumer protection measures to ensure responsible practices in the lending industry,” the SEC said.
SEC Commissioner Rogelio Quevedo added: “The Securities and Exchange Commission will timely lift the moratorium on online platforms. Thus, we are optimistic that by April 1, the SEC can permit new entrants into the market.”
He underscored the role of competition in moderating borrowing costs: “The intention behind lifting the moratorium is to encourage more lenders and enhance access for borrowers. We believe that increased competition will contribute to lowering interest rates.”
What It Means for Borrowers
For many Filipinos — particularly the unbanked and underbanked — digital lenders serve as a financial first responder. Small loans often fund urgent medical bills, replenish inventory for neighborhood stores, or repair a tricycle that keeps daily income flowing.
By permitting new players to enter the market, regulators hope to widen access to formal credit and reduce reliance on informal loan sharks. The 12 percent monthly interest cap, effective April 1, could ease repayment burdens that previously spiraled under higher rates and penalty structures.
At the same time, the ban on contact scraping and abusive messaging directly addresses the harassment that pushed some borrowers into public shaming and privacy violations.
Yet risks remain. Illegal and unregistered applications continue to target vulnerable borrowers across the archipelago, often operating outside official channels.
Public Comment Window Open
The SEC has opened the draft memorandum circular for public comment until March 25, 2026. If finalized on schedule, the lifting of the moratorium and the interest rate cap will take effect on April 1, marking a pivotal moment for the country’s fast-evolving digital lending sector.
The decision could reshape a market frozen since 2021 — reopening it not as it was, but under tighter guardrails built to balance financial inclusion with consumer protection. Whether the new framework succeeds will depend on enforcement as much as on policy design, as regulators attempt to transform a troubled space into a more transparent and competitive engine of credit access.
