You can file complaints against lenders in the Philippines for excessive interest and daily penalties—but where, how, and on what basis depends on (1) who the lender is, (2) what kind of charges they imposed, and (3) how they enforced collection.

Below is a structured, Philippine-context legal article on the subject.

I. Basic Rule: Interest Is Largely Deregulated, But Not Unlimited

1. No more fixed usury ceiling, but not a free-for-all

The old Usury Law (Act No. 2655) used to set specific maximum interest rates. That ceiling was effectively lifted by Central Bank Circular No. 905 (1982), which allowed parties to agree freely on interest rates.

However:

Freedom to stipulate interest is not absolute. Contract stipulations must not be contrary to law, morals, good customs, public order, or public policy (Civil Code, Art. 1306).
Courts regularly strike down or reduce excessive, iniquitous, or unconscionable rates of interest and penalties.

So even if the lender says, “You signed, therefore you agreed,” the law and the courts can still step in.

2. Written stipulation is required

Under Article 1956 of the Civil Code:

No interest shall be due unless it has been expressly stipulated in writing.

Key implications:

If interest was never clearly written and agreed to, you can contest any interest charges.
Vague or hidden interest/penalties that were never disclosed may be questioned as violations of Truth in Lending rules and as unfair/deceptive practices.

3. Legal interest benchmark (for comparison)

The Supreme Court has held that, starting July 1, 2013, the legal interest rate (in the absence of valid stipulation) is 6% per annum for all kinds of monetary obligations.

This 6% per year is often used by courts as a benchmark to gauge what is reasonable compared to stipulated rates like "4% per day" or "20% per month," which are often found unconscionable.

II. When Are Interest Rates and Daily Penalties Considered “Excessive”?

There is no fixed numeric cap anymore—but jurisprudence gives guidance. Courts look at:

Magnitude of the rate
- Example: 3–6% per month (36–72% per year) and especially “per day” penalties are often viewed as grossly excessive.
- “1–5% per day” is almost always indefensible if challenged.
Nature of the loan
- Small, short-term loans to ordinary consumers or employees, especially those in financial distress, are more strictly scrutinized.
- Sophisticated commercial loans are given a bit more leeway, but not unlimited.
Bargaining power
- Did the borrower really understand the terms?
- Was there any meaningful choice, or was it “take it or leave it” under desperate circumstances?
Disclosure and transparency
- Were the effective interest rate and all penalties and charges clearly disclosed at the outset?
- Hidden charges and “surprise” penalties weigh heavily against the lender.
Penalty vs. compensation
- Penalty interest and late charges are supposed to encourage payment, not to serve as a tool for oppression or unjust enrichment.
- Under Articles 1229–1230 of the Civil Code, courts can reduce a penalty clause if it is iniquitous or unconscionable.

In many decided cases, the Supreme Court:

Declared the stipulated rate void for being unconscionable, and
Substituted it with a “reasonable” rate (often 12% per annum before 2013, then 6% per annum thereafter).

That same reasoning can be invoked against lenders who impose daily penalties that explode the total amount due.

III. Legal Framework Protecting Borrowers

Several overlapping laws and regulations may be invoked:

1. Civil Code of the Philippines

Key provisions:

Art. 1306 – Freedom to contract is limited by law, morals, and public policy.
Art. 1956 – Interest requires written stipulation.
Arts. 1226–1230 – Courts may reduce iniquitous or unconscionable penalty clauses.
Arts. 19–21 – Parties must act with justice, give everyone his due, and observe honesty and good faith; abuse of rights can give rise to damages.

You can use these provisions in civil suits to:

Annul or reform the contract,
Reduce interest and penalties,
Claim damages for abuse of rights and bad faith.

2. Truth in Lending Act (R.A. No. 3765)

This law requires lenders to fully disclose the true cost of borrowing, including:

Interest rate,
All charges and fees,
Method of computation.

Non-disclosure or misleading disclosure of daily penalties and skyrocketing interest may be a ground for administrative sanction and support a civil claim for damages.

3. Lending Company Regulation Act (R.A. No. 9474)

Applies to lending companies (non-banks) engaged in granting loans from their own funds for profit.

Key points:

Lending companies must be registered with the SEC.
They must disclose the true cost of borrowing.
They are subject to SEC rules on unfair collection practices and abusive terms.
Operating without SEC authority is penalized.

4. Financing Company Act (R.A. No. 8556)

Similar to R.A. 9474 but applies to financing companies, which usually finance purchases on installment or extend credit facilities.

They are also under SEC supervision, including regulation of abusive practices and misleading charges.

5. Financial Products and Services Consumer Protection Act (R.A. No. 11765)

This is a newer, broad law that:

Recognizes the rights of financial consumers, including the right to:
- equitable treatment,
- truthful and transparent information,
- protection against fraudulent, abusive, or unethical practices,
- fair and effective recourse and redress.
Gives BSP, SEC, and Insurance Commission stronger powers to:
- Investigate,
- Issue cease and desist orders,
- Impose fines,
- Order restitution to injured consumers.

Excessive interest and daily penalties, especially when coupled with harassment in collection, can fall under abusive or unethical practices.

6. Data Privacy and Anti-Harassment Laws (often relevant to online lenders)

For lenders that:

Access your phone contacts without real consent,
Send threatening or shaming messages to your contacts,
Post your photos or messages online to shame you,

the following may come into play:

Data Privacy Act (R.A. 10173) – for unauthorized or excessive data processing.
Revised Penal Code – grave threats, grave coercion, unjust vexation, libel.
Cybercrime Prevention Act (R.A. 10175) – if done online.
Safe Spaces Act (R.A. 11313) – for gender-based online harassment.

These do not directly regulate interest rates, but they provide grounds to complain about collection tactics, which often accompany abusive interest and penalty schemes.

IV. Who Can You File a Complaint Against?

You can complain against:

Banks and quasi-banks
- Supervised by the Bangko Sentral ng Pilipinas (BSP).
- Examples: commercial banks, thrift banks, rural banks, some digital banks.
Lending and financing companies
- Supervised by the Securities and Exchange Commission (SEC).
- Includes many app-based “online lending” platforms registered as lending/financing companies.
Insurance companies, pre-need, HMOs
- Supervised by the Insurance Commission (IC), if the excessive charges relate to financial products in those sectors.
Cooperatives
- Supervised by the Cooperative Development Authority (CDA).
Informal / unregistered lenders (5–6, underground online lenders)
- May be violating:
  - R.A. 9474 (operating as lending company without registration),
  - Local ordinances,
  - Criminal laws when they harass or threaten you.

For informal, unregistered lenders, regulators may still act (e.g., SEC crackdown on illegal online lending apps), but filing with law enforcement (PNP, NBI) or directly in court often becomes more important.

V. Where and How to File a Complaint

1. Against banks and BSP-regulated entities

Step 1 – Complain to the bank first

Most regulators require you to first exhaust the lender’s internal complaint mechanism:

File a written complaint (email or letter) describing:
- The loan,
- Interest and penalties charged,
- Why you consider them excessive or unconscionable,
- Any abusive collection behavior.

Keep proof of submission (receipts, email acknowledgments).

Step 2 – Escalate to BSP

If the bank’s response is unsatisfactory:

File a complaint with BSP’s consumer protection office (formerly CAM/CPMO).
Attach:
- Your IDs
- Loan documents
- Statement of account
- Screenshots of communications (especially about daily penalties)
- Your written complaint to the bank and their reply (or lack of reply).

The BSP can:

Conduct an investigation,
Direct the bank to correct or explain its practices,
Impose sanctions if rules are breached.

BSP may not calculate your exact refund, but a finding of regulatory violation can help your civil case.

2. Against lending/financing companies and online lending apps (SEC-regulated)

Step 1 – Internal complaint

Again, start with a written complaint directly to the company or app support, so you have a paper trail.

Step 2 – Complain to the SEC

You may file with the SEC’s relevant department (often the division handling financing and lending companies and/or their investor/consumer assistance unit). Your complaint should include:

Your full name and contact details,
Name of the lender/app and, if known, its SEC registration number,
Description of the loan and how interest and daily penalties are computed,
Copies of:
- Promissory note or e-contract,
- Screenshots of the app showing the interest and daily penalties,
- Statements of account,
- Harassing or threatening messages, if any.

The SEC can:

Investigate,
Issue public warnings,
Suspend or revoke the company’s license,
Impose fines and other sanctions.

The SEC has previously acted against online lenders imposing exorbitant interest and abusive collection methods, including app takedowns and license revocations.

3. Against cooperatives (CDA) or other entities

If your lender is a cooperative, you can:

Complain internally through its grievance mechanism, and
Escalate to the Cooperative Development Authority (CDA) when cooperative rules or member rights are violated.

If the lender is an insurance or pre-need company, bring the matter to the Insurance Commission.

4. Administrative vs. Civil vs. Criminal Remedies

Administrative complaints (BSP, SEC, IC, CDA)
- Aim: discipline the institution, correct practices, possibly order restitution.
- Advantage: cheaper, often more accessible, systemic effect.
Civil actions in court
- Aim: reduce or strike down interest and penalties, adjust the contract, and/or claim damages.
- You can ask the court to:
  - Declare the interest and penalties unconscionable and therefore void or reduced;
  - Apply a reasonable interest rate (often the legal interest);
  - Declare certain charges invalid;
  - Award moral and exemplary damages plus attorney’s fees in proper cases.
Criminal complaints
- Aim: penalize harassment, threats, extortion, data privacy violations, defamation, etc.
- Filed with the PNP, NBI, or the Prosecutor’s Office (for preliminary investigation).

These remedies can be used simultaneously, e.g.:

File an SEC complaint for abusive online lending practices;
File a civil case to reduce interest and penalties;
File criminal complaints for grave threats and cyber harassment.

VI. Practical Grounds for Complaints on Excessive Interest and Daily Penalties

Here are common legal angles you can invoke:

Unconscionable interest rate
- Rates that are grossly out of proportion (e.g., “4% per day” or similar) can be challenged as iniquitous.
- Courts can void or reduce them to reasonable levels.
Unconscionable penalty and daily charges
- Piling penalties that snowball the debt beyond any reasonable amount can be struck down or reduced under the Civil Code.
Lack of proper disclosure
- Failure to clearly disclose the true cost of borrowing and the method of computing daily penalties violates Truth in Lending principles and consumer protection standards.
Unauthorized compounding of interest
- Charging interest on unpaid interest (“interest upon interest”) is not presumed; it must be explicitly and validly stipulated.
- Even if stipulated, if the total effect is oppressive, courts may still declare it unconscionable.
Violation of consumer protection standards
- Under R.A. 11765 and related regulations, practices that are unfair, deceptive, or abusive—including hidden charges or oppressive penalties—can be sanctioned.
Abusive collection practices
- Harassment, threats, public shaming, or accessing your contacts to embarrass you can support:
  - Administrative complaints (SEC/BSP),
  - Civil actions for damages,
  - Criminal complaints (grave threats, coercion, libel, data privacy breaches, etc.).

VII. Evidence You Should Gather

To support a complaint against excessive interest and daily penalties, keep:

Loan documents: application form, contract, promissory note, amortization schedule.
Receipts and transaction records: proof of payments already made.
Screenshots:
- App screens showing loan terms, interest, penalties.
- Chats, SMS, emails from the lender or collection agents.
Statements of account: breakdown of principal, interest, penalties, and fees.
Your written complaints to the lender and their replies (or proof they ignored you).
Any harassment evidence:
- Messages to you or your contacts,
- Social media posts,
- Call logs and recordings (if legally obtained).

The stronger your documentation, the more likely regulators and courts will act in your favor.

VIII. Sample Legal Approaches (High-Level)

1. Defensive stance (when sued by the lender)

If the lender sues you for collection:

You (through a lawyer) can file an Answer arguing:
- The interest and daily penalties are unconscionable and void;
- Only the principal plus reasonable interest (e.g., legal interest) should be due;
- Any abusive collection practice entitles you to damages and attorney’s fees.

Courts often recompute the obligation, stripping away illegal or unconscionable charges.

2. Offensive stance (you initiate the case)

Even if you haven’t been sued, you may file a civil case to:

Annul or reform the contract,
Declare certain interest and penalties void,
Ask for recomputation and refund of overpayments,
Claim moral and exemplary damages for harassment.

This is more complex and usually requires formal legal representation.

IX. Special Note on Small/Informal Lenders (“5–6”, Underground Apps)

For informal moneylenders:

They may not be registered with SEC or BSP, but you still have rights.
If they harass, threaten, or shame you, you can:
- File barangay complaints (for local disputes),
- File police or NBI reports for threats, extortion, harassment, and cybercrimes,
- File civil actions for damages and to question the validity of the unconscionable charges.

If the operation appears to be a business of lending to the public, you may also tip off the SEC for operating without a license.

X. Limitations and Practical Realities

While the law offers strong protections, there are practical factors:

Time and cost of litigation Civil cases and criminal complaints can take time and resources. Sometimes administrative complaints (BSP, SEC, IC, CDA) are a more practical first step.
Enforcement Even if a regulator sanctions a lender, recovering your personal losses may still require a civil case or settlement.
Negotiation leverage Many borrowers use their potential legal complaints (e.g., “your daily penalties are excessive and illegal”) as leverage to negotiate a realistic settlement.

XI. Key Takeaways

Yes, you can file complaints in the Philippines against lenders for excessive interest and daily penalties.
There is no fixed usury ceiling, but interest and penalties can be struck down or reduced if they are unconscionable.
You can complain to:
- BSP – for banks and BSP-supervised institutions;
- SEC – for lending/financing companies and many online lending apps;
- IC or CDA – for insurers and cooperatives;
- Courts – via civil actions to reduce or void abusive charges;
- PNP/NBI/Prosecutor – for harassment and related crimes.
Daily penalties that cause the debt to balloon absurdly (especially “per day” interest) are strong candidates for being declared unconscionable.
Proper documentation and early written complaints greatly strengthen your case.
While you can begin by understanding your rights, consulting a Philippine lawyer is highly advisable if you plan to file cases or if your exposure is significant.

If you’d like, you can share a hypothetical or anonymized version of the loan terms (principal amount, stated interest, and the daily penalty scheme), and I can help you analyze which parts are most vulnerable to legal challenge and how they might be framed in a complaint.