BSP Extends Loan Repayment Period for Salary-Based Loans
The Bangko Sentral ng Pilipinas (BSP) has extended the maximum repayment period for salary-based general-purpose consumption loans (SBGPCLs) to seven years from three years under Circular 1239, issued on Thursday, June 18, 2026.
SBGPCLs are unsecured loans used for short-term personal needs such as education, healthcare, emergencies, travel and household expenses, typically repaid through salary, pension or other stable income. The BSP clarified that the seven-year period is only the maximum allowable tenor and not a fixed repayment term.
Impact on Borrowers and Financial Institutions
Banks and other BSP-supervised financial institutions must still determine loan terms based on a borrower's capacity to pay, including income sources, employment status, credit history and loan purpose. The central bank also clarified that housing, motor vehicle and credit card loans are not covered by the new limit.
According to the BSP, “The longer repayment period makes payments more manageable. At the same time, the seven-year limit serves as a safeguard against excessive borrowing.”
