By Katherine K. Chan, Reporter
DEMAND for buy now, pay later (BNPL) services in the Philippines is expected to grow as more Filipinos turn cashless alongside the continued rise of e-commerce, the Bangko Sentral ng Pilipinas (BSP) said.
In an e-mailed response to questions, the central bank said the BNPL industry’s growth will be supported by the continued expansion of e-commerce, wider adoption of digital payments and banking services, and consumers seeking flexible payment options.
“Based on the available industry data, the BNPL adoption in the Philippines is expected to continue expanding over the medium term, supported by growth of e-commerce, increasing adoption of digital payments and banking services, and evolving consumer preferences for flexible payment options,” the BSP told BusinessWorld.
A study cited by the BSP showed the local BNPL industry is projected to jump by 20.7% year on year to hit $8.9 billion in total value this year.
The industry is expected to reach a compound annual growth rate of 16.1% to $18.8 billion by the end of 2031.
BNPL, also known as “paylater,” refers to a payment arrangement that allows consumers to pay for purchases in installments over a specified, often short-term, period.
It serves as an alternative for credit cards as BNPL providers offer customers similar financing without requiring the traditional cards, usually through online shopping platforms.
Most BNPLs in the country are regulated by the Securities and Exchange Commission (SEC), although the BSP also supervises nonbank credit card issuers offering card-based or card-like products.
Among the known paylater channels in the Philippines include Billease, Atome Philippines, e-wallet GCash through its “GGives” feature, and those integrated in e-commerce apps such as SPayLater and LazPayLater.
As BNPL adoption continues to grow, the central bank affirmed that it has mechanisms in place to promote robust consumer protection, sound credit assessment, and responsible lending practices.
“In this context, the BSP’s priority is to ensure that, within its supervisory parameter, growth in digital credit is accompanied by strong consumer protection, sound credit underwriting, and responsible lending practices,” the BSP said.
These measures are intended to protect consumers from predatory collection practices and potential over-indebtedness from BNPL and other forms of digital credit, it added.
The regulator noted that BNPL providers, alongside other lenders, have access to the Credit Information Corp.’s centralized credit registry, which allows them to prevent excessive borrowing by evaluating borrowers’ loan exposure across institutions.
“The BSP also monitors the Consumer Protection Risk Management Systems of BSFIs (BSP-supervised financial institutions), including the use of automated credit decision tools, to ensure these remain fair, transparent, and do not disproportionately target vulnerable segments,” it added.
According to the central bank, all BNPL providers in the country are subject to the Financial Consumer Protection Act (FCPA), with those operating under the BSP also bound to relevant central bank regulations on nonbank financial institutions.
“The BSP implements a comprehensive consumer protection framework for BSFIs offering BNPL-type products, anchored on RA No. 11765 (or the FCPA),” the BSP said.
“The FCPA establishes core standards on fair treatment, transparency, data privacy, and effective redress mechanics, which apply across the entire credit lifecycle — from product design and marketing to servicing and collections,” it added.
BNPL products offered by institutions under the SEC’s oversight are likewise subject to the BSP’s caps on interest rates and fees to prevent overcharging, the central bank noted.
Under BSP Circular No. 1133 issued in December 2021, unsecured general-purpose loans worth up to P10,000 with a four-month maximum tenor offered by lending companies, financing companies, and their respective online lending platforms, have a 6% monthly nominal interest limit and a 15% effective monthly rate.
The regulation also caps late payment or nonpayment penalties at 5% per month on the outstanding scheduled amount due and imposes a cumulative total cost cap of 100% of the total amount borrowed across all interest, fees, and penalties.
Meanwhile, the BSP noted that it is working closely with other financial regulators through the Financial Sector Forum (FSF) and the Financial Inclusion Steering Committee (FISC) to coordinate oversight of the broader digital credit ecosystem and strengthen consumers’ financial well-being.
The BSP, SEC, Insurance Commission, and the Philippine Deposit Insurance Corp. work under the FSF on regulatory initiatives on crosscutting issues. Meanwhile, the FISC brings together 20 government agencies to implement financial inclusion programs.
“Part of our monitoring efforts will be strengthened further by the upcoming Financial Health Survey in 2026, which will provide deeper insights into borrowing behavior, debt stress, and financial resilience of Filipino consumers,” the BSP added.
Based on the BSP’s 2025 Consumer Finance and Inclusion Survey released earlier this year, the number of Filipino adults with bank, e-wallet, and other types of transaction accounts fell to 50% from 56% in 2021. It cited electronic money as the main driver of account ownership among individuals and households.
Still, the BSP hit its digital payments target for the first time last year, with the 2025 Status of Digital Payments in the Philippines report showing online payments accounted for 64.7% of the volume of the country’s total retail transactions. This was up from 57.5% in 2024.
The central bank wants digital payments to make up 60%-70% of the total volume of retail payments by 2028 in line with the Philippine Development Plan.
