November 25, 2024 | 12:00am
MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) is looking to amend the regulations governing pawnshops and expand allowable corollary activities as part of its efforts to boost financial inclusion.
The central bank has released a draft circular proposing the amendments. Stakeholders have until Dec. 6 to submit their feedback on the proposed amended guidelines.
“Cognizant of the critical role of pawnshops in promoting financial inclusion, the amendments contained herein shall define the scope of pawning business and the allowable corollary business activities of pawnshops to support their dynamic industry landscape and importance in the delivery of financial services,” the BSP said.
Under the draft rules, pawnshops may engage in activities such as performing as remittance agents, money changers, payment system operators and as gold traders.
Pawnshops may act as financial access touch points for the delivery of financial services. This includes acting as remittance sub-agents, serving as cash agents of banks, serving as cash-in/cash-out touch points and acting as gold buying stations or partners of accredited gold traders.
Pawnshops could also market and facilitate tools such as microinsurance, microinvestment as well as microfinance products and services for its partners. It could also act as stations for bills payments, conduct cash collection services and other services as may be determined by the Monetary Board.
“A pawnshop may engage in corollary businesses: Provided, that such pawnshop shall maintain records of such business and institute appropriate internal control measures and mechanisms that allows distinction from the pawnshop operation and protect its financial consumers,” the BSP said.
However, pawnshops should not engage in any activity that will facilitate and encourage gambling of any form, the central bank said.
Once finalized, pawnshops will have one year to reassess their business activities and unwind any activities that are contrary or inconsistent with the new circular.
The Philippine pawn broking industry continues to grow in terms of assets, network and capitalization as it expands the range of products and services it offers to the public.
As of June, there were a total of 16,219 pawnshop offices, including 1,169 head offices and 15,050 branches, recorded by the BSP.
Most pawnshops offer corollary remittance activities. In June, there were 12,664 pawnshop offices (or 78.1 percent of the total pawnshop offices) operating under the type “C” license, which are authorized to engage in remittance activities.
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