What is the maximum interest rate a pawnshop can charge in the Philippines?

Under BSP Circular 1119 (2021), the maximum pawnshop interest rate is 3.5% per month. This applies to all BSP-licensed pawnshops in the Philippines. If a pawnshop charges more than 3.5% per month, it is violating BSP regulations and you can file a complaint.

What is BSP Circular 1119 and how does it protect me?

BSP Circular 1119, issued in 2021, sets the maximum interest rate for pawnshop loans at 3.5% per month. Before this circular, pawnshops could charge higher rates. The circular also requires pawnshops to clearly disclose all fees and charges on the pawn ticket. This protects borrowers from predatory lending practices.

What is BSP Circular 1055 and what does it require on my pawn ticket?

BSP Circular 1055 governs pawn ticket requirements. Your pawn ticket must include: the pawnshop's name and BSP license number, the date of the transaction, a description of the pawned item, the loan amount, the interest rate (maximum 3.5% per month), the maturity date, and the total amount needed to redeem the item. If any of these are missing, the pawnshop may be in violation.

How long do I have to redeem my pawned item?

Under BSP regulations, the minimum maturity period for pawn loans is 30 days. Most pawnshops set the maturity period at 4 months (120 days). You have the right to redeem your item at any time during the maturity period by paying the principal plus accrued interest. The pawnshop cannot refuse your redemption during this period.

What happens to my item if I don't redeem it before the maturity date?

If you do not redeem your item before the maturity date, the pawnshop has the right to auction it. However, under BSP rules, the pawnshop must notify you before the auction. If the auction proceeds exceed the loan amount plus interest, the excess must be returned to you. You also have the right to redeem your item at any time before the actual auction takes place.

Can a pawnshop refuse to give me my item back if I pay the full amount?

No. Under BSP regulations, a pawnshop cannot refuse to return your item if you pay the full loan amount plus accrued interest during the maturity period. If a pawnshop refuses, this is a violation of BSP rules and you can file a complaint with the BSP Consumer Assistance Mechanism at (02) 8708-7087 or consumeraffairs@bsp.gov.ph.

How do I verify if a pawnshop is BSP-licensed?

You can verify a pawnshop's BSP license by: (1) checking the BSP website at bsp.gov.ph for the list of licensed pawnshops, (2) looking for the BSP license certificate displayed at the branch, or (3) calling BSP at (02) 8708-7087. All legitimate pawnshops must display their BSP license number on their signage and pawn tickets.

What should I do if a pawnshop overcharges me?

If a pawnshop charges more than 3.5% per month or adds unauthorized fees, you can: (1) file a complaint with the BSP Consumer Assistance Mechanism at consumeraffairs@bsp.gov.ph or (02) 8708-7087, (2) report to the DTI if the pawnshop is also a retail business, or (3) file a complaint with the local government unit. Keep your pawn ticket as evidence.

Can a pawnshop charge additional fees beyond the interest rate?

Pawnshops may charge a service fee in addition to interest, but this must be disclosed upfront and included in the pawn ticket. Under BSP Circular 1055, all fees must be clearly stated. Hidden fees or charges not disclosed on the pawn ticket are a violation. The total effective cost (interest plus fees) should not exceed what is disclosed.

What are my rights as a pawnshop borrower in the Philippines?

As a pawnshop borrower, you have the right to: (1) a maximum interest rate of 3.5% per month, (2) a clear pawn ticket with all terms disclosed, (3) redeem your item at any time during the maturity period, (4) receive excess auction proceeds if your item is sold for more than the loan amount, (5) file a complaint with BSP if your rights are violated, and (6) know the pawnshop's BSP license number.

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Official BSP Rules — Plain Language

BSP Pawnshop Regulations
Philippines 2026

Your complete guide to BSP Circular 1119 and Circular 1055 — in plain Filipino English. Know your rights as a borrower, understand the maximum rates, and learn what to do if a pawnshop overcharges you.

Max Rate: 3.5%/month

BSP Circular 1119 & 1055

10 Borrower Rights

Maximum Pawnshop Rate: 3.5% per month

Set by BSP Circular 1119 (2021) — applies to ALL BSP-licensed pawnshops in the Philippines

Verify at BSP.gov.ph

BSP Circular 1119 (2021) — Plain Language Explanation

BSP Circular 1119 was issued by the Bangko Sentral ng Pilipinas in 2021. Its main purpose is to protect Filipino borrowers from excessive pawnshop interest rates.

The key rule: No BSP-licensed pawnshop in the Philippines can charge more than 3.5% per month in interest on pawn loans. This is the absolute maximum — there are no exceptions.

Before Circular 1119, some pawnshops charged higher rates. The circular standardized the maximum rate across all BSP-licensed pawnshops, giving borrowers a clear benchmark to compare against.

The circular also requires pawnshops to clearly disclose all fees and charges at the time of the transaction. Hidden fees or charges added after the fact are a violation.

What 3.5% Per Month Means in Pesos

₱5,000₱175/mo₱700 (4mo)₱5,700

₱10,000₱350/mo₱1,400 (4mo)₱11,400

₱20,000₱700/mo₱2,800 (4mo)₱22,800

₱50,000₱1,750/mo₱7,000 (4mo)₱57,000

₱100,000₱3,500/mo₱14,000 (4mo)₱114,000

Loan → Monthly Interest → 4-Month Interest → Total to Redeem

If You're Being Charged More Than 3.5%

This is a BSP violation. Do not pay the excess. File a complaint immediately at consumeraffairs@bsp.gov.ph or call (02) 8708-7087.

Key Provisions of BSP Circular 1119

Maximum Rate: 3.5%/Month

The absolute maximum interest rate for all BSP-licensed pawnshops. No exceptions, no additional interest charges beyond this rate.

Minimum 30-Day Maturity

Pawnshops must give borrowers at least 30 days to redeem their item. Most set 4 months (120 days) as the standard period.

Full Fee Disclosure Required

All fees and charges must be disclosed upfront and included on the pawn ticket. Hidden fees are a violation.

BSP License Required

All pawnshops must be BSP-licensed. Operating without a BSP license is illegal. Verify any pawnshop at bsp.gov.ph.

Auction Rules Apply

Unredeemed items can only be auctioned after the maturity period. Excess proceeds must be returned to the borrower.

Complaint Mechanism

Borrowers can file complaints with BSP if their rights are violated. BSP has authority to sanction non-compliant pawnshops.

BSP Pawnshop Regulations FAQ

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BSP Pawnshop RegulationsPhilippines 2026