EIGHTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
Second Regular Session
SENATE
S.B. No. 2287
FILED
Introduced by SEN. WIN GATCHALIAN
AN ACT
AFFORDING MORE PROTECTION TO 
CONSUMERS OF FINANCIAL PRODUCTS AND SERVICES
EXPLANATORY NOTE
The use of financial services has become more prevalent during this time when 
its continued provision to consumers is seen to help offset the detrimental effects of 
the disruption brought about by the COVID-19 pandemic. Innovations in financial 
products and services has enabled commerce in the country to continue and has 
provided the needed support to individuals and entities struggling with lost income. 
While a lot of industries have become vulnerable during this time, financial products 
and services proved to be robust and even contributory in helping institutions in 
getting back to their feet.
With this critical role comes an opportunity for financial products and service 
providers to deal with more consumers by offering to them a wider array of financial 
products and services. Inevitably, this opportunity also caused the emergence of 
unscrupulous individuals, groups or entities who prey upon financial consumers in 
need, making them vulnerable to the risk of being taken advantage of. Amid the 
implementation of prolonged lockdown measures to curb the pandemic and the 
increase in digital payments. It is becoming apparent that fraudsters have become


more creative and sophisticated - lurking in the digital space and even attempting to 
hijack personal information found in both physical devices and online accounts which 
make financial consumers even more vulnerable.
The Consumer Empowerment Group of the Bangko Sentral ng Pilipinas (BSP) 
reported that it processed 15,105 new complaints from the 1st to 3rd quarter of 2020. 
This 9-month data for 2020 is 63.3% higher than 2019 annual data of only 9,250 
complaints. Despite this increasing number of complaints, this does not still take into 
account all fraudulent activities as some individuals and businesses do not report the 
fraud because banks immediately void bogus charges while some report it but do not 
pursue it due to insufficient action on the part of the bank, regulatory agency or law 
enforcement, which discourages them to make further claims and just make 
themselves shoulder the burden.
The impact of the COVID-19 pandemic to the global economy and increasing 
availment of financial services only proves the need for more effective financial 
consumer protection mechanisms as consumers are confronted with more complicated 
financial services available in the market. The availability of information has developed 
drastically due to unprecedented financial product developments, innovations and 
technological advances which may leave Filipino consumers who are not digitally adept 
overwhelmed and susceptible to become victims of fraudulent activities by exploitative 
individuals and entities.
While the BSP Manual on Consumer Protection is already In place to provide 
the guidelines on financial consumer protection, the same Is limited to BSP regulating 
BSP-supervised financial institutions and does not cover other financial regulators and 
pertinent covered institutions which also provides financial services. With the view of 
ensuring access to these financial services that Is safe and secure for the Filipino 
financial consumers, there is a need to provide for a framework that will safeguard all 
financial consumers and prevent them from being unduly prejudiced and taken 
advantaged of by unethical conduct of business of some financial service providers or 
their agents and by fraudulent schemes concocted by unscrupulous individuals or 
entities.


This bill aims to institutionalize proper mechanisms to protect the interest of 
consumers while balancing the same with the furtherance of conduct of business of 
financial service providers. It covers financial regulators such as the BSP, the Securities 
and Exchange Commission, the Insurance Commission, and the Cooperative 
Development Authority. It empowers them to perform acts necessary for the 
protection of financial consumers, such as market conduct surveillance and 
examination, market monitoring, enforcement, provision of complaints handling 
mechanism, adjudication and rule-making, among others. The bill also mandates the 
duties and responsibilities of financial service providers to ensure transparency, 
disclosure and responsible pricing requirements, privacy and protection of client data, 
and financial consumer protection assistance mechanism, among others, to amply 
protect financial consumers.
Harmful practices of taking advantage of financial consumers can give rise to 
risks, affecting not only the businesses of financial service providers, but more 
importantly the stability of the entire financial sector, that may eventually cause 
reduced public trust and confidence on the financial system, thus, we cannot 
overemphasize the urgent need for this bill.
In view of the foregoing, passage of this bill is earnestly sought.
GATCHALIAN


EIGHTEENTH CONGRESS OF THE ] 
REPUBLIC OF THE PHILIPPINES ] 
Second Regular Session 
]
SENATE
S.B. No. 22S7
DATE
TJME
NDEX
Introduced by SEN. WIN GATCHALIAN
AN ACT
AFFORDING MORE PROTECTION TO 
CONSUMERS OF FINANCIAL PRODUCTS AND SERVICES
Be it enacted by the Senate and the House of Representatives of the Phiiippines in 
Congress assembled:
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SECTION 1. Short 77if/e — This Act shall be known as the "Financial Products
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and Services Consumer Protection Act".
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SEC. 2. Declaration of Policy - It is the policy of the State to ensure that
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appropriate mechanisms are in place to protect the interest of consumers of financial
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products and services under conditions of transparency, fair and sound market
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conduct, and fair, reasonable, and effective handling of financial consumer disputes.
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When aligned with international best practices, these mechanisms reinforce
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confidence in the financial market and foster the stability of the Philippine financial
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system. Towards this end, the State shall implement measures to protect the following
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rights of financial consumers:
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a) Right to equitable and fair treatment;
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b) Right to disclosure and transparency of Financial Products and Services;


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c) Right to protection of consumer assets against fraud and misuse;
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d) Right to data privacy and protection; and
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e) Right to timely handling and redress of complaints.
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SEC. 3. Definition of Terms - As used in this Act:
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, a) Financial consumer refers to a person or entity, or their duly-appointed
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representative, who is a purchaser, lessee, recipient, or prospective purchaser,
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lessor or recipient of Finandai Products or Services. It shaii also refer to any
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person, natural or juridical, who had or has current or prospective financial
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transaction with a Financial Service Provider pertaining to Financial Products or
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Services;
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b) Financial consumer complaint refers to an expression of dissatisfaction
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submitted by a financial consumer against a financial service provider relative
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to a financial product or service on which a response or resolution is expected;
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c) Hnancia!product or service refers to financial products or services which are
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developed or marketed by a financial service provider which may include
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savings, credit, insurance, pre-need and health maintenance organization
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(HMO) products. Investments, payments, remittances and other similar
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products and services. This also includes digital financial products and services
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which pertain to the broad range of financial services accessed and delivered
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through digital channels;
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d) Financial regulators refer to the Bangko Sentral ng Pilipinas (BSP), Securities
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and Exchange Commission (SEC), Insurance Commission (IC), and the
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Cooperative Development Authority (CDA);
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e) Financial service provider refers to a person, natural or juridical, which provides
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financial products or services that are under the jurisdiction of financial
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regulators as defined In this Act. This term shall include investment advisers as
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defined under Section 7 of this Act;
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f) Investment fraud refers to any form of deceptive solicitation of Investments
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from the public. This includes Ponzi schemes and such other schemes involving


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the promise or offer of profits or returns which are sourced from the 
investments or contributions made by the investors themseives, boiiing room 
operations, and the offering or seiiing of investment schemes to the pubiic 
without a iicense or permit from the SEC, uniess such offering or seiiing involves 
exempt securities or exempt transactions as provided for under existing laws;
g) Market conduct refers to the manner by which a financial service provider 
designs and delivers its financial products and services and manages its 
relationships with its clients and the public;
h) Marketing refers to the act of communicating, offering, promoting, advertising, 
or delivering of financial products and services by financial service providers;
i) Responsible pricing refers to the pricing, terms, and conditions of financial 
products and/or services that are set in a way that Is both affordable to clients 
and sustainable for financial institutions by taking into account, among others, 
client needs and the pricing schemes of competitors.
SEC. 4. Scope and Coverage - This Act applies to all financial products and 
services offered or marketed by any financial service provider.
SEC. 5. Financial Regulators - The BSP, SEC, and IC shall enforce the 
provisions of this Act on all financial service providers under their jurisdiction by virtue 
of their respective charters, special laws and amendments thereto. The CDA shall be 
considered an implementing government agency of this Act only with respect to 
cooperatives offering financial products and services, such as savings and credit, 
except insurance cooperatives which shall be under the jurisdiction of the IC for 
purposes of this Act.
SEC. 6. Powers of the Financial Regulators. - Financial regulators under this 
Act shall have the following powers:
a) Rule-making - Financial regulators shall have the authority to formulate their 
own standard and rules for the application of the provisions of this Act to the


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specific financial products or services within their jurisdiction guided by
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internationally accepted standards and practices. Financial regulators may also
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determine reasonableness of interest, charges or fees which a financial service
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provider may demand, collect, or receive for any service or product offered to
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consumer. Likewise, they may issue their respective rules of procedure
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concerning administrative actions arising from the implementation of this Act.
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b) Market Conduct Surveillance and Examination - Financial regulators may
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conduct surveillance and examination, on-site or off-site, on their respective
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supervised financial service providers, consistent with their respective rlsk-
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based supervision policies, to ascertain that the provisions of this Act are
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complied with. The examination for financial consumer protection compliance
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may be conducted separately from examination of prudential regulations
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compliance. The provisions on the conduct of examination and surveillance
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provided in the respective charters of financial regulators, and pertinent special
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laws shall be made applicable in examination and surveillance activities
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authorized under this Act.
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The department heads and the examiners of the financial regulators
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shall be authorized to administer oaths to any director, officer, or employee of
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the supervised financial service providers subject to the examination of their
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market conduct and compliance with this Act, and to compel the presentation
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of all books, documents, papers, or records in any form necessary in their
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judgment to ascertain compliance of financial service providers to this Act.
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The supervised financial service provider shall afford to its financial
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regulator full opportunity to examine Its records, and review its systems and
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procedures at any time during business hours when requested to do so by the
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financial regulator.
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c) Market Monitoring - Financial regulators shall have the authority to require their
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respective supervised financial service providers and their third-party agents or
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service providers to submit reports or documents, as needed.


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For purposes of market monitoring, the financial regulators may obtain
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relevant data about financial products, services and markets from other
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government agencies, which shall be duty-bound to furnish the same.
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d) Enforcement - Financial regulators shall have the authority to Impose
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enforcement actions on their respective supervised financial service providers
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for non-compliance with this Act and other existing laws pertinent to the
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jurisdiction and authority of the respective financial regulators. Such
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enforcement actions may Include the following:
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1. Restriction on the ability of the supervised financial service provider to
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continue to collect excessive or unreasonable interests, fees or charges
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Including all other interests, fees and charges covered under Republic
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Act No. 10870, otherwise known as the "Philippine Credit Card Industry
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Regulation Law";
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2. Disqualification and/or suspension of directors, trustees, officers, or
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employees of the supervised financial service provider responsible for
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violations of the provisions of this Act, its implementing regulations, or
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orders of the financial regulators;
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3. Imposition of fines, suspension, or penalties for any non-compliance with
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or breach of this Act, its implementing rules and regulations (IRR), or
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the orders of the financial regulators;
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4. Issuance of a cease and desist order to the financial service provider
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without the necessity of a prior hearing if in the financial service
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regulator's judgment, the act or practice, unless restrained, amounts to
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fraud or a violation of the provisions of this Act, or may unjustly cause
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grave or irreparable injury or prejudice to financial consumers. The
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financial service provider shall be afforded an opportunity to defend its
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act or practice in a summary hearing before the financial regulator or its
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designated body, upon request made by the financial service 
provider
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within five (5) calendar days from its receipt of the order. If no such
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hearing is requested within the said period, the order shall be final. If a


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hearing is requested by the financial service provider, the proceedings
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shall be conducted summarily without adhering to the technical rules of
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evidence, and all issues shall be determined primarily on the basis of
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records, after which the financial regulator may either reconsider or
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finalize and execute its order;
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5. Suspension of the operation of any supervised financial service provider
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in relation to a particular financial product or service when in the financial
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regulator's judgment based on findings, the financial service provider is
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operating in violation of the provisions of this Act and its implementing
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rules and regulations.
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6. In any proceeding in which the financial regulators may impose a penalty
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for non-compliance with or breach of this Act and other existing laws
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under their jurisdiction, the financial regulators. In addition to the
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imposed fine, may enter an order requiring accounting and
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disgorgement of profits obtained, or losses avoided, as a result of a
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violation of this Act and other existing laws, including reasonable
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Interest. The financial regulators are .authorized to adopt rules,
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regulations, and orders concerning the creation and operation of a
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disgorgement fund, payments to financial consumers, rate of interest,
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period of accrual, and such other matters as deemed appropriate to
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implement this provision.
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e) Consumer Redress or Complaints Handling Mechanism - Financial regulators
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shall provide an efficient and effective consumer redress or complaints handling
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mechanism to address conflict/dissatisfaction from financial consumers arising
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from financial products or services. The financial consumer may avail of the
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mechanism prior to adjudication.
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f) Adjudication - Financial regulators shall have the authority to adjudicate all
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actions as provided under existing laws.
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The BSP and SEC shall have the authority to adjudicate actions arising from
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or in connection with financial transactions that are purely civil in nature, and


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the claim or relief prayed for by the financial consumer is solely for payment or 
reimbursement of a sum of money not exceeding the amount that may be 
prescribed by the concerned financial regulators. The decision of the financial 
regulators in the adjudication shall be final and executory, and may not be 
restrained or set aside by the court except on petition for certiorari on the 
ground of grave abuse of discretion, or lack or excess of jurisdiction of the 
financial regulators. The petition for certiorari may only be filed within ten (10) 
days from receipt by the aggrieved party of the decision: Provided/ That In the 
case of BSP and SEC, the aggrieved party may file the petition with the Court 
of Appeals. The adjudicatory power shall be exercised by the Head of the 
concerned financial regulator or a duly authorized officer or body: Provided, 
That in the case of BSP and SEC, the decision of the authorized officer or body 
is not appealable to the Monetary Board or the Commission en banc, 
respectively.
The BSP and SEC may order the payment or reimbursement of money which 
is subject of the action filed before them. In the exercise of their adjudicatory 
powers, they shall have the power to issue subpoena duces tecum anA summon 
witnesses to appear In their proceedings and when appropriate, order the 
examination, search and seizure of all documents, and books of accounts of 
any entity or person under investigation as may be necessary for the proper 
disposition of the cases before them. Further, the BSP and SEC shall have the 
authority to punish for contempt, both directly and indirectly, in accordance 
with the pertinent provisions of and penalties prescribed by the Rules of Court, 
g) Other Powers - Financial regulators may exercise such other powers as may be 
provided by their enabling laws or charters as well as those which may be 
implied from, or which are necessary or incidental to the carrying out of the 
express powers granted to the financial regulators to achieve the objectives 
and purposes of these laws.


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SEC. 7. Investment Adviser. - Investment advisers shall be subject to the rules and
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regulations to be issued by the SEC.
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The term "investment adviser" shall mean any person who, for compensation,
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engages in the business of advising others, either directly or through publications or
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writings, as to the value of investment products or as to the advisability of investing
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in, purchasing, or selling investment products, or who, for compensation and as part
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of a regular business, issues or promulgates analyses or reports concerning investment
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products; but does not include the following:
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a) Trust Department/Unit of Banks;
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b) Stand-alone Trust Entities;
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c) A lawyer, accountant, engineer, or teacher whose performance of such services
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is solely Incidental to the practice of the profession;
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d) An insurance agent whose performance of such services is solely incidental to
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the practice of profession;
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e) Any Investment banker or broker dealer whose performance of such services is
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solely Incidental to the conduct of the business as such investment banker or
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broker dealer, and who receives no special compensation therefor;
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f) The publisher of any bona fide newspaper, news magazine, or business or
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financial publication of general and regular circulation;
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g) Such other persons as the SEC may designate by rules and regulations, or
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appropriate order.
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SEC. 8. Duties and Responsibiiities of FinanciaiService Providers -
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a) Board and Senior Management Oversight - The Board of Directors and the
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members of senior management of financial service providers shall ensure
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conformity with this Act and shall provide the means by which they shall
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identify, measure, monitor, control, and manage consumer protection risks
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inherent in their operations, in accordance with their respective rules and
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regulations of their financial regulators.


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b) Appropriate product design and delivery - Financial service providers shall
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continuously evaluate their financial products and services to ensure that they
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are appropriately targeted to the needs, understanding and capacity of both
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their markets and their clients. This shall Include, among others, the following:
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1. Affordability and suitability assessment - Financial service providers
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should have written procedures for determining whether a particular
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financial product or service is suitable and affordable for their clients.
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This shall include the determination of whether or not the amount and
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terms of the offered financial product or service allow various clients to
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meet their respective obligations with a low probability of serious
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hardship, and that there is a reasonable prospect that the financial
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product or service will provide value to its client. For the purpose of
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extending credit, this assessment will include measures to prevent over-
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indebtedness.
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2. Cooling-off period -Financial service providers are expected to adopt a
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clear cooling-off policy as may be prescribed by law or by rules and
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regulations issued by the relevant financial regulator upon its
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determination that a cooling-off period is necessary for a product that Is
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subject to its regulation. Such policy should, among others, provide a
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cooling-off period that will allow a client to consider the costs and risks
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of a financial product or service, free from the pressure of the sales team
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of the financial service provider. The length of the cooling-off period
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should be Individually determined by financial service providers based
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on reasonable expectation of the time required for a client to fully
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evaluate all the terms and risks of the financial products or service and
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contact concerned parties who may be afferted by its terms and
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conditions, unless a minimum or fixed period is prescribed by the
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financial regulator for the compliance of a financial service provider or
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when stipulated In the terms of the offer for such a financial product or


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service. Financial regulators may opt not to provide for a cooling-off
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period for short term transactions or contracts.
3- ‘. 
During the cooling-off period, the financial consumer may cancel
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or return the contract without penalty; however, nothing herein shall
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prevent financial service providers from recovering the processing costs
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incurred, as may be approved by the financial regulators. Financial
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service providers are prohibited from engaging in practices that
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unreasonably burden the financial consumer in the exercise of the right
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of cancellation during the cooling-off period. If the financial product is
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a contract of insurance, a pre-need or a health maintenance organization
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(HMO) product, the right of return cannot be exercised after the financial
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consumer has made a claim.
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3. Pre-payment of loans and other credit accommodations - A borrower
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may, at any time prior to the agreed maturity date, prepay a loan or
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other credit transactions In whole or in part: Provided, That costs or fees
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charged to the borrower for such pre-payment, if any, shall be disclosed
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to ensure transparency, disclosure, and responsible pricing as required
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under this Section.
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c) Transparency, disclosure, and responsible pricing - Financial service providers
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must ensure that they adopt disclosure principles in their communications and
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their contracts with financial consumers, including the use of clear and concise
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language, to ensure that all information concerning the financial service is
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understood by target clients. This shall also include updated and accurate
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disclosure of information, such as on pricing or any cost associated with the
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product or service, and should be made in a consistent manner to facilitate a
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comparison between similar financial products and services across the Industry.
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Sufficient product disclosure must be provided before the contracting of
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the product or service to give the client enough basis and time for review. Any
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change in the terms or conditions of a product or service shall be provided to
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the client.
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In their advertising materials, financial service providers shall disclose
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the contact information of their consumer assistance unit providing consumer
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assistance and handling financial consumer complaints. Financial service
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providers shall also disclose that they are regulated and the advertising
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materials must identify the relevant financial regulator.
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Financial service providers are legally responsible for all statements
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made in the marketing and sales materials that they produce relative to their
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products or services. Disclosure of information on financial products or services
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shall be made available to the public by the financial service provider through
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printed materials, mass media, websites or digital platforms.
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Financial service providers must have internal policies and procedures
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on setting prices for their products and services that take Into consideration,
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among others, the principle of responsible pricing.
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d) Fair and respectful treatment of clients - Financial service providers shall have
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the right to select their clients: Provided, That they shall not discriminate
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against clients on the basis of race, age, financial capacity, ethnicity, origin,
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gender, disability, health condition, sexual orientation, religious affiliation, or
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political affiliation: Provided, further. That financial service providers may
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provide distinction, as necessary, when making a risk assessment on a specific
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financial product or service.
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Financial service providers are prohibited from employing abusive
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collection or debt recovery practices against their financial consumers.
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e) Privacy and protection of client data - Each financial service provider must
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respect the privacy and protect the data of their clients. Consistent with the
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provisions of Republic Act No. 10173, otherwise known as the Data Privacy Act,
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the financial regulators shall issue regulations in coordination with the National
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Privacy Commission, governing the disclosure of client data to a third party.
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Clients shall have the right to review their data to ensure that inaccurate
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. or deficient data is corrected or amended.
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f) Financial consumer protection assistance mechanism - Each financial service 
provider must establish a single consumer assistance mechanism for free 
assistance to financial consumers on financial transactions concerns. This shall 
include handling of complaints, inquiries and requests.
Financial consumers who are unsatisfied with the financial service 
provider's handling of their complaints, Inquiries and requests, may elevate 
their concerns to the financial regulator which has jurisdiction over the financial 
service provider concerned.
SEC. 9. Bundling of Products - When a financial consumer is obliged by the 
financial service provider to purchase any product, including an insurance policy, as a 
pre-condition for availing a financial product or service, the financial consumer shall 
have the option to choose the provider of such product subject to reasonable 
standards set by the financial service provider, and this information shall be made 
available to the financial consumer.
SEC. 10. Training - Staff members of financial service providers who deal 
directly with financial consumers. Including those who are involved In financial 
consumer protection assistance mechanism, must receive adequate training suitable 
to the complexity of the financial products or services they offer. Financial service 
providers must be qualified as appropriate for the complexity of the financial product 
or service they offer.
SEC. 11. Investment Fraud. - It shall be unlawful for any person or persons to 
commit investment fraud as defined in this Act.
SEC. 12. No waiver of rights. - No provision of a contract for a financial product 
or service shall be lawful or enforceable If such provision waives or otherwise deprives 
a client of a legal right to sue the financial service provider, receive information, have
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their complaints addressed and resolved, have their non-public client data protected, 
or cancel the use of the financial product or service without an unreasonable penalty.
SEC. 13. LiabiHly of a Financial Service Provider For Acts or Omissions of Its 
Authorized Representatives. - The financial service provider shall be responsible for 
the acts or omissions of its directors, trustees, officers, employees, or agents, in 
marketing and transacting with financial consumers for its financial products and 
services.
SEC. 14. Prescription. - All actions or claims accruing under the provisions of 
this Act, and the rules and regulations issued pursuant thereto, shall prescribe after 
five (5) years from the time the financial consumer transaction was consummated, or 
after five (5) years from the discovery of deceit or non-disclosure of material facts: 
Provided, That such actions shall, in any event, prescribe after ten (10) years from the 
commission of the violation: Provided, further. That for insurance contracts, the 
prescriptive period for the commencement of action provided under the Insurance 
Code shall apply.
SEC. 15. Penalties. - Any person who willfully violates any provision of this Act 
or any related rules, regulations, orders, or Instructions issued by financial regulators, 
shall be punished by Imprisonment of not less than one (1) year, but not more than 
five (5) years, or by a fine of not less than Fifty thousand pesos (P50,000.00) but not 
more than Two million pesos (P2,000,000.00), or both at the discretion of the court: 
Provided, That if the violation is committed by a corporation or a juridical entity, the 
directors, officers, employees, or other officers who are directly responsible for such 
violation shall be held liable thereto.
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SEC. 16. Administrative Sanctions. - The administrative sanctions of the 
respective charters of the financial regulators shall be made applicable to financial 
se-vice provider, its directors, trustees, officers, employees or agents without
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prejudice to the eriforcement actions prescribed under Section 6(D) of this Act for 
willful violation of this Act or any related rules, regulations, orders or instructions of 
financial regulators: Provided, That in case profit is gained or loss is avoided as a result 
of the violation, a fine not more than three (3) times the profit gained or loss avoided 
may also be Imposed by the Financial Regulator: Provided, further. That in addition 
to the administrative sanctions that may be imposed, the authority of the Financial 
Service Provider to operate in relation to a particular Financial Product or Service may 
be suspended or cancelled by the Financial Regulator.
SEC. 17. Independent QvHAction. - A financial regulator, consistent with public 
interest and the protection of financial consumers, is authorized to institute an 
independent civil action on behalf of aggrieved financial consumers for violations of 
this Act and its implementing rules and regulations.
If In any of these proceedings, the financial regulators obtain a civil penalty 
against any person or entity, or such person or entity agrees to settle such civil 
penalty, the amount of the penalty shall, upon the motion of the financial regulators, 
be added to and become part of a disgorgement fund or another fund established for 
the benefit of the aggrieved financial consumer.
SEC. 18. Transitory provision. - The financial regulators shall prepare the 
necessary rules and regulations to implement the provisions of this Act within one (1) 
year from its effectivity.
SEC. 19. Separabiiity Ciause. - If any provision of this Act Is held 
unconstitutional or invalid, all other provisions not affected thereby shall remain valid.
Sec. 20. Repealing Clause - All laws, executive orders, rules and regulations or 
parts thereof which are inconsistent with this Act are hereby repealed or amended 
accordingly. Articles 131 to 147 of Title IV of Republic Act No. 7394 are hereby 
repealed.
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SEC. 20. Effectivity clause. - This Act shall take effect fifteen (15) days after its 
publication in the Official Gazette or in a national newspaper of general circulation.
Approved.
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