Case Digest (G.R. No. 129988)
Facts:
In Advocates for Truth in Lending, Inc. (AFTIL) and Eduardo B. Olaguer v. Bangko Sentral Monetary Board (G.R. No. 192986, January 15, 2013), AFTIL, a non-stock, non-profit corporation incorporated on July 9, 2010, and its president Eduardo Olaguer filed on August 2010 a petition directly with the Supreme Court under Rule 65, seeking to annul Central Bank Circular No. 905 (Series of 1982). Circular No. 905, issued by the Central Bank Monetary Board (CB-MB) on December 3, 1982, became effective January 1, 1983 and “suspended” Act No. 2655 (the Usury Law of 1916) by removing all statutory ceilings on interest, fees, commissions and other charges. AFTIL contended that the CB-MB lacked authority under Republic Act (R.A.) No. 265 (as amended) and Presidential Decree No. 1684 to lift or suspend the ceilings prescribed by the Usury Law and that Bangko Sentral Monetary Board (BSP-MB), which replaced CB-MB under R.A. No. 7653 (1993), could no longer enforce Circular 905 in view of SectionCase Digest (G.R. No. 129988)
Facts:
- Parties and Petition
- Petitioners: Advocates for Truth in Lending, Inc. (AFTIL), non-profit corporation formed July 9, 2010, and its president Eduardo B. Olaguer, suing as taxpayer and citizen.
- Respondents: Bangko Sentral Monetary Board (BSP-MB), Governor and incumbent members.
- Statutory Background
- R.A. No. 265 (1948): Created Central Bank (CB) and empowered its Monetary Board (CB-MB) to fix maximum bank interest rates within Usury Law limits (Sec. 109).
- P.D. No. 1684 (1980): Amended Usury Law (Act No. 2655) authorizing CB-MB to prescribe and change maximum interest rates, effect changes gradually.
- CB Circular No. 905 (Dec. 3, 1982; eff. Jan. 1, 1983): Suspended all Usury Law ceilings on interest and related charges for all lenders; amended CB Manual of Regulations for various bank types.
- R.A. No. 7653 (1993): Abolished CB, created BSP; repealed inconsistent provisions of R.A. 265 but did not expressly reenact Sec. 109 or P.D. 1684 interest-setting powers (Sec. 135).
- Petition’s Assertions
- CB-MB lacked authority under R.A. 265/P.D. 1684 to lift all interest ceilings; Circular 905 void for exceeding statutory power and violating due process, equal protection, and New Civil Code Art. 5.
- BSP-MB no longer empowered to enforce Circular 905 post-R.A. 7653.
- Supporting materials: Senate bills/resolutions calling for investigation or amendment of Usury Law (1995–1998) and news clippings showing 1998 prime lending rates at 26%–31% and 91-day T-bills at 40%.
Issues:
- Procedural Issues
- Whether certiorari under Rule 65 is the proper remedy against an executive act.
- Whether petitioners have locus standi as taxpayers/citizens.
- Whether issues are of transcendental importance or moot after delay.
- Substantive Issues
- Whether CB-MB had statutory authority to suspend the Usury Law via Circular 905.
- Whether BSP-MB retained authority to enforce Circular 905 under R.A. 7653.
- Whether Circular 905 permits unconscionable or iniquitous interest rates.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)