SEC reopens door to new online loan apps under tighter safeguards

Filipinos could soon see more online lending apps in the market after the Securities and Exchange Commission (SEC) lifted its nearly five-year freeze on new digital lenders, but only under stricter rules designed to make borrowing safer and more transparent.

Under SEC Memorandum Circular No. 20, Series of 2026, new online lending platforms will again be allowed to operate starting 1 August, ending a moratorium imposed in 2021 to widen access to digital loans while requiring companies to meet tougher standards.

"The Commission recognizes the need to lift the moratorium imposed under MC 10 in order to promote responsible innovation, stimulate economic activity among financing and lending companies, and ensure that the operation of OLPs is aligned with consumer protection, market integrity, prudential objectives, financial inclusion, ease of market access, and alignment with the global trend of digitalization," the SEC said in the circular.

The new rules mean lending apps must clearly disclose the full cost of a loan—including interest rates, fees, repayment schedules, and the exact amount the borrower will receive—before any loan is approved or released.

Borrowers must also expressly confirm they understand the loan terms before funds can be disbursed.

The SEC also prohibited lenders from automatically releasing loans or renewing them without a borrower's informed consent. Companies that violate the rules may face administrative penalties.

To improve accountability, all online lending platforms must be registered with the SEC and disclose their official websites, mobile applications, and other borrower-facing channels.

The regulator may suspend or remove platforms that fail to comply with the new requirements.

The circular further requires lenders to comply with data privacy and credit information laws, adopt fair debt collection practices, and ensure advertisements accurately reflect loan terms.

It also prohibits companies from treating a borrower's contacts as guarantors unless those individuals have explicitly agreed in writing.

While the moratorium has been lifted, the SEC stressed that new online lending platforms will not be automatically approved.

Companies must first satisfy licensing, capitalization, operational, and consumer protection requirements before they can begin offering loans.