Lapses in regulation of online lending deplored
SENATOR Raffy Tulfo exposed several lapses in the Securities and Exchange Commission (SEC) regarding the regulation of financial and lending companies operating online lending applications (OLAs).
According to him, his office has received numerous complaints from netizens who borrowed from OLAs and were alarmed to discover that their personal information was being shared with third parties.
During the Senate Subcommittee on Banks and Financial Institutions hearing , Tulfo revealed that he discovered the SEC allows lending companies to share borrowers’ confidential information with third-party service providers, as stated in Section 2 of Circular No. 18, s. 2019.
Atty. Kenneth Joy Quimio, OIC Director of the Financing and Lending Companies Department of the SEC, explained that these third-party providers act as agents for the OLAs.
Tulfo, however, opposed this explanation, saying it clearly violates the Data Privacy Act of 2012 (Republic Act No. 10173), which protects sensitive personal information.
He argued that OLAs and third-party service providers are separate entities and should not be given such data.
As a solution, Tulfo suggested that OLAs should set up their own collection units to handle debt collection, so victims could take legal action in cases of harassment. He also recommended the complete removal of the provision in the SEC Circular and its review to establish a new policy, which Atty. Quimio agreed with.
Tulfo further criticized the SEC’s confusing list, which included 117 registered financial and lending corporations operating over 181 online lending platforms—a list released only on March 18, 2025.
He questioned why, despite the SEC’s imposition of a moratorium on new online lending platforms on November 2, 2021, the SEC seemingly permitted the registration of new companies, increasing the number of platforms by about 40 in 2025.
Atty. Quimio explained that some companies had over-declared websites used only for marketing and advertising. He added that the SEC continues to monitor OLAs.
Tulfo rejected this explanation, citing a company named Sun Prime Incorporated that did not apply for an OLA license before the 2021 moratorium but was allowed by the SEC to operate as Salmon Finance in 2025.
In response, Atty. Quimio promised to investigate the matter and submit an official response report to Tulfo.
Tulfo also recommended that the SEC actively clean up its list of registered financial and lending companies to better inform the public about legitimate and accredited institutions and discourage consumers from dealing with bogus and exploitative online lending companies.
