Pawnshop owners should be ready for stricter BSP regulation enforcement

1995 BSP data shows the total number of pawnshops in the Philippines was 4,173. More recent BSP data shows that the total number of pawnshops in the Philippines rose to 14,800 in the fourth quarter of 2009 from 13,493 [1] in the first quarter of 2008. That is a spectacular rise.

But with growth comes attention. In the case of pawnshops, that attention is now coming from regulatory agencies of the Philippine Government. To put the rise in pawnshops in between the first-quarter of 2008 and the end of 2009 in perspective we may have to look beyond the numbers.

As this January 2009 philstar.com article points out, The BSP began a mapping operation of pawnshops a couple of years ago to determine the number of unregistered pawnshops in the Philippines. These BSP inspections suggested that 26 percent of all pawnshops were unregistered. So in reality, about one-quarter of the pawnshops that registered with the BSP in 2008 and 2009 may have been pawnshops that were in existence but not registered. Once the BSP inspections began many unregistered pawnshops rushed to register to avoid BSP sanctions. That may account for a portion of the rise in pawnshops in the official BSP numbers for 2009.

In addition to finding unregistered pawnshops, The BSP inspections also suggested that about one- third of pawnshops inspected “were found to have violated rules and regulations such as failure to require signature of customers in the pawnshops’ registers, which could abet fencing; failure to attend…”

Pawnshops owners would be well-advised to consider this regulatory action by the BSP as a permanent drive to not only gets fly-by-night pawnshops registered but to begin stricter enforcement of all pawnshop regulations. The BSP will now use an integrated approach with the help of other government agencies and local governments.

The Bangko Sentral ng Pilipinas (BSP) and the Department of Interior and Local Governments as well as local government units would monitor thousands of pawnshops nationwide to prevent fencing, money laundering and other criminal activities, officials said yesterday.

Pawnshop owners have now been put on notice by the BSP that stricter regulation is coming. Do not be caught unaware. Ultimately, it is the responsibility of pawnshop owners to know what the laws are that govern pawnshops and to comply with them.

Resources

  1. Report on Economic and Financial Developments. Bangko Sentral ng Pilipinas. Fourth Quarter 2009
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