Solon wants pawnshops to lower interest rates amid pandemic

Cagayan De Oro City Representative Rufus Rodriguez is calling on the Bangko Sentral ng Pilipinas (BSP) to mandate lower interest charges for pawnshops amid the lingering COVID-19 pandemic.

Rodriguez's proposal is covered in his House Resolution 1212, which he filed last week but was only relayed to the media on Monday.

“During this pandemic, it is just proper for the BSP to help our fellow Filipinos and mandate that pawnshops charge lower interest rates," he said.

According to Rodriguez, the health crisis and the associated lockdowns have caused many Filipinos to stop working and lose 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.

Due to lack of income, many of the jobless Filipinos are forced to go to pawnshops to pawn their valuables in exchange of cash, he added, as these are more accessible and impose more lenient requirements than banks.

Recently, there have been long lines of borrowers in pawnshops, Rodriguez said, but unscrupulous pawnshops could use the situation as an "opportunity to take advantage by raising their lending rates.”

Rodriguez then invoked BSP Circular No. 938 to ask the central bank to prescribe lower interest charges for pawnshops.

The circular provides that "[t]he 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," it added.

"Our people are already facing many problems right now, and high interest rates should not be one of them,” Rodriguez said. — BM, GMA News