The Philippine Securities and Exchange Commission (SEC) has urged Filipinos to borrow only from registered lenders, warning that illegal operators may charge exorbitant interest rates and resort to unfair collection practices.
The corporate regulator said consumers should use safe, transparent and regulated loan products, including credit services offered through digital applications, and carefully assess the actual cost of borrowing and their ability to repay.
Borrowers should also understand their rights and review loan terms before accepting credit, the SEC said, as digital lending becomes increasingly accessible across the country.
The warning forms part of a financial literacy campaign aimed at helping consumers identify unlicensed lenders, avoid predatory lending and make informed borrowing decisions.
The campaign includes SEC-approved educational videos that explain financial concepts in simpler terms and provide guidance on recognising legitimate lenders and regulated credit options.
The SEC said borrowing-related stigma can sometimes discourage Filipinos from seeking formal credit and push them toward unlicensed lenders when they need financial assistance.
It added that consumer education was necessary alongside regulatory enforcement as illegal lenders may use misleading loan terms, excessive charges and abusive debt collection methods.
“The SEC shall continue to exercise its regulatory and enforcement powers against violators. We must also empower the public with knowledge, awareness, and critical thinking,” SEC Commissioner McJill Bryant Fernandez Quevedo said.
“An informed citizen is the first line of defense against fraud,” Quevedo added.
The regulator said responsible borrowing required consumers to deal only with licensed providers, understand interest rates and other charges, evaluate repayment capacity and report suspicious lending activities.
The campaign also seeks to improve awareness of data security risks linked to unregulated lending applications, which may collect or misuse borrowers’ personal information.
The SEC said wider access to digital credit must be accompanied by stronger consumer protection and financial education to ensure that borrowers can use formal lending services without falling into debt traps.
The campaign is being carried out with Fuse Financing Inc., the lending arm of mobile wallet operator GCash.