The Central Bank of the Philippines has raised the maximum repayment period for salary-based general-purpose consumption loans to seven years from a general limit of three years, with the measure applying to all borrowers, including teachers and other employees. The change covers unsecured salary-based consumption loans used for immediate to short-term personal needs, such as education, healthcare, emergencies, travel and household expenses, and is aimed at making repayments more manageable while keeping a cap on borrowing. The seven-year period is a maximum allowable tenor rather than a standard loan term. Banks and other BSP-supervised financial institutions must continue to set actual repayment terms based on the borrower’s capacity to pay, including repayment sources, employment and credit history, and the nature and purpose of the loan. Previously, these loans could generally run for up to three years and be extended to five years only in meritorious cases. Longer-term or non-consumption borrowing, including housing, motor vehicle and credit card loans, remains outside the scope of this policy and is not subject to the seven-year limit even if repayments are made through salary deduction or similar arrangements.
Central Bank of the Philippines2026-06-19
Central Bank of the Philippines raises maximum tenor for salary-based consumption loans to seven years for all borrowers
The Central Bank of the Philippines has increased the maximum repayment period for salary-based general-purpose consumption loans to seven years for all borrowers, up from a general three-year limit. The cap applies only to unsecured salary-based consumption loans, while banks and other BSP-supervised institutions must still set actual terms based on each borrower’s capacity to pay. Other loan types, such as housing, motor vehicle and credit card loans, are outside the measure’s scope.