BSP, credit card group to help clients deep in consumer debt

To help ease the debt burden of credit card holders, the Bangko Sentral ng Pilipinas and the Credit Card Association (CCAP) of the Philippines launched the Interbank Debt Restructuring Program (IDRP) on Tuesday.

The program was develop to help financially distressed customers get back on track towards responsible use of credit.

"With the help of BSP, CCAP, and BDO Unibank, the IDRP aims to offer more affordable terms, lower interest rates, and reduce the equal monthly amortization of the customer to enable him to sustain paying the account and prevent further delinquency," said association executive director Alex Ilagan told reporters in a briefing.

With the program in place, the repayment period can be extended to 10 years in cases of severe indebtedness.

Interest rates will be at 1.5 percent a month or lower depending on the debt-to-income profile of the customer.

"Customers who need help must approach any of the credit issuers (banks) in which he or she has an active credit card," said Jesus Angelo Gomez, CCAP president.

The association comprises 15 credit card companies.

A customer must submit documents as proof of capacity to service the amortization.

"This documentary requirement will help us evaluate whether the customer needs financial assistance or debt relief," he added.

The credit cards of a customer will be cancelled once the client is enrolled in the program.

"The spirit behind the IDRP is to rehabilitate and provide a second chance to financially distressed customers," Ilagan said. – VDS, GMA News