On July 30, 2026, the Akbayan Partylist Representatives Chel Diokno, Perci Cendaña, Dadah Ismula, and Dinagat Islands Rep. Kaka Bag-ao, filed a bill against online loan sharks. The bill aims to protect Filipinos who has reported to experience collection harassment and misleading loan terms from online lending companies. Representative Diokno stressed that the proposed bill addresses the growing number of complaints received from borrowers and keeps growing at a rapid pace.
This statement is backed with news report from reporter Jason Sigales on March 2026, which showed data of received complaints from victims of malicious online lending companies. The reports show that the Presidential Anti-Organized Crime Commission (PAOCC) has received an outstanding 47,446 complaints from August 2024 to January 2026.
A heartbreaking statement made by PAOCC Executive Director Benjamin Acorda Jr. “What is painful about this is that there are reports that many of our fellow Filipinos are suffering from depression. They don’t know how to pay off their debts,” shows true problems of Filipino victims falling from further depression due to inability to settling their debts.
Beyond the numbers, unless the growing issues are addressed, more people are likely to fall to the predacious advertisements of these online lending companies, especially those who are advertised through applications which are accessible for most.
The Cycle of Debt
It can be argued that life is a cycle of payments; whether it be paying bills, debts, and expenses, the cycle does not end for as long humans live. For ordinary workers, these routine payments come naturally, although experience, job, and age can come into play, but sometimes it can also be challenging.
Filipinos who are working from paycheck-to-paycheck with almost no left money saved for emergency purposes are only one sickness away from poverty and debt. To add, with the rise in living costs, staying afloat is hard for many.
These reasons dominate why it is easy for people who are experiencing hard times and recession to fall into borrowing loans from online lending companies.
Enticing marketing from online lending companies usually consist of fast approval of loan application and with less conduct of KYC (Know Your Customer) than that of traditional banks, which can sometimes take up to days depending on the loan application amount.
Following the Law
By law, online lending platforms are required to conduct proper and extensive KYC. Especially lending companies who are licensed by Bangko Sentral ng Pilipinas (BSP). Numerous circulars and regulatory manuals regarding proper conduct of KYC are also implemented by Securities and Exchange Commission (SEC) and the National Privacy Commission (NPC) should be strictly followed to avoid threats of money laundering and prevent forms of financial fraud.
These strict protocols can be observed in traditional banks which offer loans; a set of usual requirements are valid I.D., proof of residency for Filipinos residing in the country, proof of employment, and checking of employment stability, and many more. For the banks, these sets of controls are beneficial as this helps to verify the identity of borrowers, ensuring that the identity is legit and not fraudulent, and help in assessing the borrower’s capacity to pay.
For borrowers, however, especially for those who are in urgent need of money for payment, the processing time for applying for a loan in traditional banks can be too long. The processing time is dependent for the type of loan requested but for personal loans, the waiting time can be around 5 to 15 banking days (applicable for unsecured personal loans), for auto loans it may take 3 to 7 banking days, and for housing loans, which require lengthy paperwork requirement and personal bank visit, the processing time can take up to 2 to 6 weeks.
Online lending platforms which market its services in an enticing way emphasize quicker loan approval time. Some say, “approved within less than X days!” but it is important for borrowers to stay cautious. SEC and NPC have released advisories for everyone to stay vigilant for online lending platforms which are not registered to any regulatory bodies, specifically SEC and BSP as they are more prone for conducting problematic collections for payment and purposely design marketing strategies to mislead borrowers and set debt traps.
The House Bill 10366
The House Bill 10366, also known as the “Anti-Online Lending Abuse Act”, is a legislative law passed in the House of Representatives to protect borrowers from malicious and predatory online lending platforms. Few of the bill’s key legislature is that it bans the abusive debt collection of online lending platforms, a common complaint from borrowers. The use of abusive or profane language with severe harassment, public shaming, and threats for prosecution for debt collection is now banned by the bill.
In addition, the bill has set interest and fee caps to prevent borrowers from falling into debt traps and requires online lending platforms to remove hidden fees and auto-rollovers. Moreover, the bill has added the Data Privacy Protection provision to protect the consumer’s sensitive information from data leakage. Finally, the bill has added a provision for SEC to have the regulatory power to block applications from online lending platforms who are unregistered, illegal, and non-compliant in the digital space.
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