EIGHTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES 
)
First Regular Session 
)
o( tbf ^eiTflarp
20 
FEB 10 
P 6 :1 0
S E N A T E
Senate Bill No. 1329
REC
Introduced by SENATOR SONNY ANGARA
AN ACT
PROVIDING FOR THE PROTECTION OF FINANCIAL CONSUMERS AND FOR 
OTHER PURPOSES
EXPLANATORY NOTE
Consumer confidence and trust in the financial system promotes stability, 
growth, efficiency and innovation. However, with the rapid development of complex 
financial products coupled with the use of advanced technologies, consumer fraud, 
abuse and misconduct have increased. Time and again, we hear stories of consumers 
putting their lifelong savings in investment scams or suffering from or facing collection 
cases due to over indebtedness. These are just some of the travails experienced by 
financial consumers.
Thus, recognizing the role of regulators in ensuring that the rights of each and 
every consumer are protected, this bill provides, among others, financial regulators 
such as the Bangko Sentral ng Pilipinas, Insurance Commission, and the Securities 
and 
Exchange Commission, 
rulemaking, 
surveillance and 
inspection, 
market 
monitoring, enforcement and adjudication powers relative to consumer protection.
Globally, the G20, in February 2011, called on the Organization for Economic 
Cooperation and Development (OECD), the Financial Stability Board (FSB) and other 
relevant international organizations to develop common principles on consumer 
protection in the field of financial services. Foremost of these principles is that financial 
consumer protection should be an integral part of the legal, regulatory, and 
supervisory framework.


It is in this light that the passage of this bill is earnestly sought in order to 
have a comprehensive financial consumer protection regime where financial inclusion, 
financial education, good governance and effective supervision converge given that 
consumer protection is a shared responsibility among regulators, consumers, and 
other stakeholders.
SONNY ANGARA


EIGHTEENTH CONGRESS OF THE 
) 
REPUBLIC OF THE PHILIPPINES 
)
First Regular Session 
)
;^cnniv
0( t!jf fe rn  ftflijp
20 
FEB 10 
P6 :10
S E N A T E
Senate Bill No. 1329
p,EC-
Introduced by SENATOR SONNY ANGARA
AN ACT
PROVIDING FOR THE PROTECTION OF FINANCIAL CONSUMERS AND FOR 
OTHER PURPOSES
Be it enacted by the Senate and the House o f Representatives o f the Philippines in 
Congress assembled:
1 
SECTION 1. Title. — This Act shall be known as the "Financial Consumer
2 
Protection Act of 2020".
3 
SEC. 2. Declaration o f 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 Financial Consumers
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under the conditions of transparency, fair and sound market conduct, and fair,
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reasonable and effective handling of Financial Consumer disputes, which are aligned
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with global best practices. These mechanisms reinforce their confidence in the
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financial market and foster the stability of the Philippine financial system. Towards
9 
this end, the State shall implement measures to protect the following rights of
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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 Sen/ices;
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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;
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e. Right to complaints handling and redress.
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SEC. 3. 
Definition o f Terms. -  As used in this Act, the following terms
17 
shall mean or be understood as follows:


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a. "Financial Consum er"- a person or entity who is a purchaser, lessee,
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recipient or prospective purchaser, lessor or recipient of Financial
3 
Products or Services. It shall also refer to any natural person or micro,
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small or medium-sized enterprise that had or has current or prospective
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financial transaction with financial entities pertaining to Financial
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Products or Services.
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b. "Financial Consumer Com plaint" -  an expression of dissatisfaction
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filed by a 
Financial Consumers against a Financial Service Provider
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relative to a financial product or service in which a response or
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resolution is expected.
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c. "Financial Products or Serviced' — financial products or services
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which are developed or marketed by a Financial Service Provider which
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may include, 
but are not limited to savings, credit, 
insurance,
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investments, payments, remittances and other similar products and
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services. This also includes digital financial services which pertain to the
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broad range of financial services accessed and delivered through digital
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channels.
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d. "/7/75/7c
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e
 implementing government agencies of
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this Act, namely, the Bangko Sentral ng Pilipinas (BSP), Securities and
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Exchange Commission (SEC), Insurance Commission (IC) and the
21 
Cooperative Development Authority (CDA).
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e. "Financial Service Provider" -  a person, natural or juridical entity
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which provides financial products or services and are being supervised or
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regulated by any of the 
Financial Regulators enumerated in this Act.
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This term shall include Investment Advisers as defined under Section 7
26 
of this Act.
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f. 
"Marketing" -  The act of communicating, offering, 
promoting,
28 
advertising or delivering of Financial Products and Services by Financial
29 
Service Providers.
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g. "Micro, Small or Medium-sized Enterprise (M SM E)"- any business
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activity or enterprise engaged in industry, agri-business and/or services
32 
whether single proprietorship, cooperative, partnership or corporation as


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defined under R.A. No. 9501, as amended or the Magna Carta for Micro,
2 
Small or Medium-sized Enterprise . Such definition shall be subject to
3 
review and adjustment by the Magna Carta for Micro, Small or Medium-
4 
sized Enterprise (MSMED) Council.
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SEC. 4. Scope and Coverage. -  This Act applies to all Financial Products
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and Services offered or marketed by any Financial Sen/ice Provider.
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SEC. 5. Financial Regulators. -  The BSP, SEC and IC shall enforce the
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provisions of this Act on all Financial Service Providers they supervise or regulate by
9 
virtue of their respective charters, special laws and amendments thereto. The CDA
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shall be considered an implementing government agency of this Act only with
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respect to cooperatives offering financial services such as but not limited to savings
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and credit except insurance cooperatives which shall be under the jurisdiction of the
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IC for purposes of this Act.
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SEC. 6. Powers o f the Financial Regulators. -  Financial Regulators shall
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have the following powers:
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a. Rulemaking -  Financial Regulators shall have the authority to
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formulate their own standard and rules for the application of the
18 
provisions of this Act to the specific Financial Products or Services
19 
within their jurisdiction guided by internationally accepted standards
20 
and practices. 
Financial 
Regulators 
may 
also 
determine
21 
reasonableness of charges or fees which a Financial Service Provider
22 
may demand, collect or receive for any service or product offered to
23 
consumers, except interest rates which shall be governed by the
24 
Usury 
Law. Likewise, they may issue their respective rules of
25 
procedure 
concerning 
administrative 
actions 
arising 
from 
the
26 
implementation of this Act.
27 
b. Surveillance and Examination -  Financial Regulators may
28 
conduct off-site surveillance and on-site examination on their
29 
respective supervised Financial Service Providers to ascertain that the
30 
provisions of this Act are complied with. The examination for
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Financial 
Consumer protection 
compliance 
may 
be conducted
32 
separately from examination of prudential regulations compliance.


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The provisions on the conduct of examination and surveiilance 
provided in the respective charters of Financial Regulators, and 
pertinent special laws shall be made applicable in the examination 
and surveillance under this Act.
The department heads and 
the examiners of the 
Financial 
Regulators shall be authorized to administer oaths to any director, 
officer, or employee of the supervised Financial Service Providers 
subject to their examination, and to compel the presentation of all 
books, documents, papers, or records necessary in their Judgment to 
ascertain the facts relative to the compliance of Financial Service 
Providers to this Act.
The supervised Financial Service Provider shall afford to its 
respective Financial Regulator full opportunity to examine its 
records, and review its systems and procedures at any time during 
business hours when requested to do so by the Financial Regulator.
c. M arket M onitoring -  Financial Regulators shall have the 
authority to require their respective supervised Financial Service 
Providers and their third party agents/service providers to submit 
reports or documents, as needed, and to access relevant data about 
financial products, services and markets from other government 
agencies in connection with market monitoring.
d. Enforcem ent- th e  Financial Regulators shall have the authority 
to impose enforcement actions on their respective supervised 
Financial Service Providers for non-compliance with this Act. Such 
enforcement actions may include, but are not limited to, the 
following:
1. Restriction on the ability of the supervised Financial Service 
Provider to continue to collect fees or charges in cases of 
excessive fees or charges imposed by the Financial Service 
Provider, except interest rates which shall be governed by the 
Usury Law;


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2. Disqualification and/or suspension of directors, officers or 
employees 
of the 
supervised 
Financial 
Service 
Provider 
responsible for violations of the provisions of this Act, its 
implementing regulations, or orders of the Financial Service 
Providers;
3. Imposition of fines, suspension, or penalties for any non- 
compliance with or breach of this Act, its implementing 
regulations, or orders of the Financial Service Providers;
4. Issuance of a cease and desist order to the Financial Service 
Provider without the necessity of a prior hearing if in the 
Financial Regulator's 
judgment, the act or practice, unless 
restrained, amounts to fraud or a violation the provisions of this 
Act and its IRR or may unjustly cause grave or irreparable injury 
or prejudice to Financial Consumers.
The Financial Service Provider shall be afforded an opportunity 
to defend its act or practice in a summary hearing before the 
Financial Regulator or its designated body, upon request made 
by the Financial Service Provider within five (5) calendar days 
from its receipt of the order. If no such hearing is requested 
within said period, the order shall be final. If a hearing is 
requested by the Financial Service Provider, the proceedings 
shall be conducted summarily without adhering to the technical 
rules of evidence, and all issues shall be determined primarily 
on the basis of records, after which the Financial Regulator may 
either reconsider or make final its order;
5. Suspension of operation of any supervised Financial Service 
Provider in relation to a particular Financial Product or Service 
when in the Financial Regulator's judgment based on findings, 
the Financial Service Provider is operating in violation of the 
provisions of this Act and its implementing regulations.


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e. Adjudication -  Financial Regulators shall have the authority to 
adjudicate all actions arising from or in connection with financial 
transactions that are purely civil in nature and the claim or relief 
prayed for by the Financial Consumer is solely for payment or 
reimbursement of sum of money not exceeding the amount of One 
Hundred Thousand Pesos (P100,000.00) or as may be prescribed by 
the 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 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. The 
adjudicatory power shall be exercised by the Head of the concerned 
Financial Regulator or a duly authorized officer or body: Provided, 
That in case of BSP, the decision of the authorized officer or body is 
not appealable to the Monetary Board.
Financial Regulators may order the payment or reimbursement of 
money which is subject of the action filed before them. The Financial 
Regulators, in the exercise of their adjudicatory powers, shall have 
the power to issue subpoena duces tecum and summon witnesses to 
appear in its proceedings and in appropriate cases, 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, Financial Regulators shall have the authority to punish for 
contempt, both direct and indirect, in accordance with the pertinent 
provisions of and penalties prescribed by the Rules of Court.
f. 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 the


1 
Financial Regulators to achieve the objectives and purposes of these
2 
laws.
3 
SEC. 7. Investm ent Adviser. -  Investment Advisers shall be subject to the
4 
rules and regulation to be issued by the SEC.
5 
Investment Adviser shall mean any person who, for compensation, engages in
6 
the business of advising others, either directly or through publications or writings, as
7 
to the value of investment products or as to the advisability of investing in,
8 
purchasing, or selling investment products, or who, for compensation and as part of
9 
a regular business, issues or promulgates analyses or reports concerning investment
10 
products; but does not include the following:
11 
a. Trust Department/Unit of Banks;
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b. Lawyer, accountant, engineer, or teacher whose performance of such
13 
services is solely incidental to the practice of his profession;
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c. Any investment banker or broker dealer whose performance of such
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services is solely incidental to the conduct of his business as such
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investment banker or 
broker dealer and who receives no special
17 
compensation therefor;
18 
d. The publisher of any bona fide newspaper, news magazine or business or
19 
financial publication of general and regular circulation;
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e. Such other persons as the SEC may designate by rules and regulations or
21 
order.
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SEC. 8. Duties and responsibilities o f Financial Service Providers. -
23 
a. Board and Senior Management Oversight -  The Board of Directors
24 
(BOD) and Senior Management of Financial Service Providers shall
25 
oversee the implementation of the Compliance Management System
26 
(CMS) of Financial Service Providers that effectively ensures conformity
27 
with this Act and shall provide the means by which 
Financial Service
28 
Providers shall identify, measure, monitor and control consumer protection
29 
risks inherent in its operations.
30 
b. Appropriate product design and delivery -  Financial 
Service
31 
Providers shall continuously evaluate their Financial Products and Services
32 
to 
ensure 
that 
they 
are 
appropriately 
targeted 
to 
the 
needs.


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understanding and capacity of both their markets and their clients. This
shall include, among others, the following:
1. A ffordability and suitability assessments -  Financial Service 
Providers 
should 
have written 
procedures for determining 
whether a particular Financial Consumer product or service is 
suitable 
and 
affordable 
for 
a 
client. 
This 
shall 
include 
determination of whether the amount and terms of the offered 
financial product or service allow a client, in terms of the 
individual ability, to meet the obligations with a low probability of 
a serious hardship and reasonable prospect that the Financial 
Product or Service will provide value to its client. For the purpose 
of extending credit, this assessment will include measures to 
prevent over-indebtedness.
2. CooUng-off period -  Financial Service Providers are expected to 
adopt a clear cooling-off policy, as may be prescribed by law or 
by rules and regulations issued by the relevant Financial 
Regulator upon its determination that a cooling-off period is 
necessary for a particular product subject of regulation by such 
Financial Regulator. Such policy should, among others, provide a 
client with a cooling-off period that will allow a client to consider 
the costs and risks of a Financial Product or Service, free from the 
pressure of the sales team of the Financial Service Provider. The 
length of the cooling-off period should be individually determined 
by Financial Service Providers based on reasonable expectation of 
the time required for a client to fully evaluate all the terms and 
risks of the Financial Products or Service and contact concerned 
parties who may be affected by its terms and conditions, unless a 
minimum or fixed period is required by the Financial Regulator for 
compliance by the Financial Service Provider or to be incorporated 
in the terms of the Financial Product or Service. 
Short period 
transaction or contracts may be allowed to have no cooling-off


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C.
period which shall be provided in the regulation by the Financial 
Regulators.
During the cooling-off period, the Financial Consumer may cancel 
or return the contract without penalty; however, nothing herein 
prevents the Financial Service Providers from recovering the 
processing fees incurred. 
The Financial Service Providers are 
prohibited from engaging in practices that unreasonably burden 
the Financial Consumer in the exercise of the right of cancellation 
during the cooling-off period. 
If the financial product is a 
contract of insurance, the right of return cannot be exercised 
after the Financial Consumer has made a claim under the contract 
of insurance.
3. Prepayment o f loans and other credit accommodations -  a
borrower may, at any time prior to the agreed maturity date 
prepay, in whole or in part: Provided, That any cost or fees 
charged to the borrower for such pre-payment shall be disclosed 
as required under the succeeding provision of this Section on 
transparency, disclosure and responsible pricing.
Transparency, disclosure and responsible pricing -  Financial Service 
Providers must ensure that they adopt disclosure principles in their 
communications with Financial Consumers that will include the use of 
clear and concise language understood by the target clients. This must 
also include updated and accurate disclosure of information such as, 
pricing or any cost associated with the product or service that should be 
made in a consistent manner to facilitate comparison between similar 
Financial Products and Services across the industry.
Sufficient product disclosure must be provided before the contracting of 
the product or service to give the client enough basis and time for review. 
Any change in the terms of conditions of a product or service shall be 
provided to the client.


1
In their advertising materials, Financial Service Providers shall disclose the
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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 made
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in the marketing and sales materials that they produce related to their
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products. Disclosure of information on Financial Products or Services shall
9
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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d.
Responsible pricing -  in addition to the requirements of R.A. No. 3765
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or The Truth In Lending Act, 
Financial Service Provides are required to
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document the reasons for setting the price of each financial product or
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service. Where the pricing procedures of a Financial Service Provider are
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inadequate or unreasonably high, the concerned Financial Regulator shall
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impose appropriate corrective actions.
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e.
Fair and respectful treatm ent o f clients -  Financial Service Providers
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shall have the right to select their clients: Provided, That the selection and
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treatment of their clients shall not involve discrimination on the basis of a
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person's race, ethnicity, origin, gender, disability, 
sexual orientation.
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religious affiliation or political affiliation: Provided further, That Financial
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Service Providers are not precluded from instituting the necessary risk
23
mitigating measures.
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f.
Privacy and protection o f client data -  each Financial Service Provider
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must respect the privacy and protect the data of their clients. Consistent
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with the provisions of the Data Privacy Act, the Financial Regulators shall
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issue regulations governing the disclosure of client data to a third party.
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Clients have the right to review their client data to ensure that inaccurate
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or deficient data is corrected or amended.
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g-
Financial consumer protection assistance mechanism -  Each
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Financial Service Provider must establish a single consumer assistance
32
unit to render free assistance to Financial Consumers on financial
10


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transactions concerns. This shall include handling of complaints, inquiries
2 
and requests.
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Financial Consumers who are unsatisfied with the Financial Service
4 
Provider's handling of their complaints, inquiries and requests, may
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elevate their concerns to the Financial Regulator that supervises the
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Financial Service Provider concerned.
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SEC. 9. Bundling o f Products. -  When a borrower is obliged by the
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Financial Service Provider to purchase any product, including an insurance policy, as
9 
a pre-condition for receiving a loan from the Financial Service Provider, the borrower
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should be free to choose the provider of the product and this information should be
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known to the borrower.
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SEC. 10. Training. -  Staff of Financial Service Providers who deal directly
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with Financial Consumers must receive adequate training, suitable for the complexity
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of the products or services they sell. Financial Service Providers must be qualified as
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appropriate for the complexity of the financial product or service they sell.
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SEC. 11. No waiver o f rights. -  No provision of a contract for a Financial
17 
Product or Service 
shall be lawful or enforceable if such provision waives or
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otherwise deprives a client of a legal right to sue the Financial Service Provider,
19 
receive information, have their complaints addressed and resolved, have their non-
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public client data protected or cancel the use of the Financial Product or Service
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without an unreasonable penalty.
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SEC. 12. Non-exemption from compliance. -  Notwithstanding any prior
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stipulation in a contract, financial entities shall not be exempted from compliance
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with the provisions of this Act, or deprive Financial Consumers of their rights under
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this act.
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SEC. 13. 
Liability O f A Financial Service Provider on the Acts or
27 
Omissions o f its Authorized Representatives. -  The Financial Service Provider
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shall be responsible for the acts or omissions of its directors, officers, employees or
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agents, in marketing and transacting with Financial Consumers of its Financial
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Products and Services.
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SEC. 14. Prescription. -  All actions or claims accruing under the provisions
32 
of this Act and the rules and regulations issued pursuant thereto shall prescribe
11


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within five (5) years from the time the Financial Consumer transaction was
2 
consummated, or within five (5) years from the discovery of deceit or non-disclosure
3 
of material facts. 
For insurance contracts, the prescriptive period for the
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commencement of action provided under the Insurance Code shall apply.
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SEC. 15. Penalty fo r Violation o f this A ct -  
Whenever a Financial
6 
Service Provider willfully violates any provision of this Act or any related rules,
7 
regulations, orders or instructions, issued by the Financial Regulators, the person or
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persons responsible for such violation shall be punished by imprisonment of not less
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than one (1) year but not more than five (5) years, or by a fine of not less than Fifty
10 
Thousand Pesos (P50,000.00) but not more than Two Million Pesos (P2,000,000.00),
11 
or both, at the discretion of the court. In addition, in case profit is gained or loss is
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avoided as a result of the violation, a fine of no more than three (3) times the profit
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gained or loss avoided may also be imposed.
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SEC. 16. Adm inistrative Sanctions. -  The provisions on administrative
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sanctions of the respective charters of the Financial Regulators shall be made
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applicable to any Financial Service Provider, its directors, officers, employees or
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agents without prejudice to the enforcement actions provided under Section 6 (D) of
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this Act and the criminal sanctions provided under Section 15 of this Act, for any
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willful violation of this Act or any related rules, regulations, orders or instructions of
20 
the Financial Regulators: Provided, That in addition to the administrative sanctions
21 
that may be imposed, the authority of the Financial Service Provider to operate in
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relation to a particular Financial Products or Services may be suspended or cancelled
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by the Financial Regulator.
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SEC. 17. Separability Clause. -  If any portion or provision of this Act is
25 
subsequently declared invalid or unconstitutional, other provisions hereof which are
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not affected thereby shall remain in full force and effect.
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SEC. 18. Repealing Clause. -  Articles 131 to 147 of Title IV of Republic
28 
Act No. 7394 are hereby repealed.
29 
Moreover, all other laws, acts, presidential decrees, executive orders,
30 
presidential proclamations, issuances, rules and regulations, or parts thereof which
31 
are contrary to or inconsistent with any of the provisions of this Act are hereby
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repealed, amended, or modified accordingly.
12


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SEC. 19. Transitory Provision. -  The Financial Regulators shall prepare the
2 
necessary rules and regulations to implement the provisions of this Act within one
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(1) year from its effectivity.
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SEC. 20. Effectivity. -  This Act shall take effect fifteen (15) days after its
5 
publication in the Official Gazette or in at least two (2) national newspapers of
6 
general circulation.
Approved,
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