(>:Ed 
:: 
~ 
‘ < ‘ . A : ;  
, ’ , { <  
FOURTEENTH CONGRESS OF THE REPUBLIC ) 
Second Regular Session 
OF THE PHILIPPINES 
c: @; 2:s: i ,  , . 
~ , . I  . 
, 
~ 
, ‘-3 
SENATE 
- 
~ 
Introduced by Senator Miriam Defensor Santiago 
EXPLANATORY NOTE 
The issue of credit card debt is one that affects many Filipinos. More young 
people arc getting themselves into situations where they find themselves unable to meet 
their unsecured credit commitments. A major issue with credit cards is that it is very easy 
to spend beyond ones means. 
These days, college students are big targets by credit card companies, since many 
are young and so more likely to be irresponsible spenders. Many students are over the 
age of 18, so they don’t need their parents’ signature to get a card. However, it is 
common for a parent to help pay off their child‘s debt at that age (once the student admits 
exactly how much money they spent). Nevertheless, the majority of adults own credit 
cards. 
The growing trend for young people to get into these amounts of problem debt is 
a concern and Congress should play in addressing this matter. Bankruptcy figures are 
soaring, and this rise may be accounted for by the young who are without assets and who 
have overspent on credit cards and personal loans These trends arc a natural consequence 
of the desensitization of borrowing - credit cards have blurred the distinction between 
borrowing and spending for many young people. 
The proposed Bill seeks to regulate the issuance of credit cards to young adults 
and prevent credit card companies from taking unfair advantage of young adults and their 
parents. 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
FOURTEENTH CONGRESS OF THE REPUBLIC) 
g: 
!fib,$ z:, ~. . 
~,'.>,~ 
~ 
. : :3 
OF THE PHILIPPINES 
1 
Second Regular Session 
) 
/" 
Introduced by Senator Miriam Defensor Santiago 
AN ACT 
TO PREVENT CREDIT CARD ISSUERS 
FROM TAKING UNFAIR ADVANTAGE OF COLLEGE STUDENTS 
AND THEIR PARENTS AND FOR OTHER PURPOSES. 
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled: 
SECTION 1. Short Title. - This Act may be known as the "Student Credit Card 
Protection Act." 
SECTION 2. Definitions. - For purposes of this Act, the following definitions 
shall apply: 
(A) COLLEGE STUDENT CREDIT CARD ACCOUNT - means a credit card 
account under an open end consumer credit plan established or maintained for or on 
behalf of any college student. 
(B) COLLEGE STUDENT - means an individual: 
(i) who is a full-time student attending an institution of higher education; and 
(ii) who has not yet attained the age of 21. 
(C) INSTITUTION OF HIGHER EDUCATION - means institutions offering 
tertiary degree programs and post secondary programs. 
(D) TERTIARY DEGREE PROGRAMS - refer to courses of study leading to 
master's, doctor's or similar degrees. It also includes courses of study which by 
themselves may be only for one-two- or three- year courses of study leading to less than a 
bachelor's degree program, but which can subsequently be credited in full bachelor's 
degrees. 
SECTION 3. Maximum Amount Limitation as a Percentage of Gross Income. - 
Unless a parent, legal guardian, or spouse of a college student assumes joint liability for 
debts incurred by the student in connection with a college student credit card account: 
1 


34 
35 
36 
37 
38 
39 
40 
41 
42 
43 
44 
45 
46 
47 
48 
49 
50 
51 
52 
53 
54 
55 
56 
57 
58 
59 
60 
61 
62 
63 
64 
65 
66 
67 
68 
69 
70 
(A) No creditor shall grant a college student a credit card account where the credit 
limit for that account exceeds, during a full calendar year, the greater of: 
(i) Twenty percent (20%) percent of the annual gross income 
of the student; or 
(ii) Fifteen Thousand Pesos (Pl5,OOO.OO); and 
(B) No creditor shall grant a student a credit card account, if the credit limit for 
that credit card account, combined with the credit limits of any other credit card 
accounts held by the student, would exceed thirty percent (30%) of the annual 
gross income of the student in the most recently completed calendar year. 
SECTION 4. Parental Approval Required To Increase Credit Lines For Accounts 
For Which Parent Is Jointly Liable. - No increase may be made in the amount of credit 
authorized to be extended under a college student credit card account for which a parent, 
legal guardian, or spouse of the consumer has assumed joint liability for debts incurred 
by the consumer in connection with the account, before the consumer attains the age of 
21, with respect to such consumer, unless the parent, guardian, or spouse of the 
consumer, as applicable, approves in writing, and assumes joint liability for, such 
increase. 
SECTION 5. Income Ve'erijkation - For purposes of this Act, a creditor shall 
require adequate proof of income, income history, and credit history, subject to the rules 
of the Monetary Board of the Central Bank of the Philippines, before any college student 
credit card account may be opened by or on behalf of a student. 
SECTION 6. Prohibition On More Than 1 Credit Card Account For Any College 
Student. - No creditor may open a credit card account for, or issue any credit card to, any 
college student who: 
A) Has no verifiable annual gross income; and 
B) Already maintains a credit card account under an open end consumer 
credit plan with that creditor, or any affiliate thereof. 
SECTION 7. Exemption Authority - The Monetary Board of the Central Bank of 
the Philippines may, by rule, provide for exemptions to the provisions of this subsection, 
as deemed necessary or appropriate and consistent with the purposes of this Act. 
2 


71 
72 
73 
74 
75 
76 
77 
78 
79 
80 
81 
82 
83 
84 
85 
86 
87 
88 
89 
90 
91 
92 
93 
94 
95 
96 
97 
SECTION. 8. Regulations Required - Not later than 180 days after the date of 
enactment of this Act, Monetary Board of the Central Bank of the Philippines shall issue 
such rules as may be necessary to carry out the provisions of this Act. 
SECTION. 9. Penalties - Any creditor who shall violate any provision of this Act 
shall upon conviction, he subject to a fine of not less than fifty thousand pesos 
(P50,OOO.OO) hut not more than One thousand pesos (P100,OOO.OO). 
Any director, officer or agent of a corporation who shall authorize, order or 
perform any of the acts or practices constituting in whole or in part a violation of Article 
18, and who has knowledge or notice of noncompliance received by the corporation from 
the concerned department, shall be subject to penalties to which that corporation may he 
subject. 
In case the violation is committed by, or in the interest of a foreign juridical 
person duly licensed to engage in business in the Philippines, such license to engage in 
business in the Philippines shall immediately be revoked. 
SECTION 10. Separability Clause - If any provision or part thereof, is held 
invalid or unconstitutional, the remainder of the law or the provision not otherwise 
affected shall remain valid and subsisting. 
SECTION 11. Repealing Clause - Any law, presidential decree or issuance, 
executive order, letter of instruction, administrative order, rule or regulation contrary to, 
or inconsistent with the provisions of this Act is hereby repealed, modified or amended 
accordingly. 
SECTION 12. Effectivity Clause - This Act shall take effect fifteen (15) days 
after its publication in at least two (2) newspapers of general circulation. 
Approved. 
3