QuestionsQuestions (PRESIDENTIAL DECREE NO. 116)
It is six percent (6%) per annum, or such rate as may be prescribed by the Monetary Board of the Central Bank of the Philippines for that purpose.
The Monetary Board is authorized to prescribe the maximum rate or rates of interest for the loan/renewal/forbearance of any money, goods, or credits and to change such rates whenever warranted by prevailing economic and social conditions, but changes cannot be made oftener than once every twelve months.
No person or corporation may take or receive a higher rate than twelve percent (12%) per annum or the maximum rate prescribed by the Monetary Board and in force at the time the loan/renewal/forbearance is granted.
Yes. The interest ceiling or maximum rate may also apply to loans secured by other types of security as may be specified by the Monetary Board.
It is fourteen percent (14%) per annum or the maximum rate or rates prescribed by the Monetary Board and in force at the time the loan or forbearance is granted.
When the sum lent is less than P100: 2.5% per month; P100 to not exceeding P500: 2% per month; more than P500: 14% per annum; or the maximum rates prescribed by the Monetary Board and in force.
He must be duly licensed and must have an establishment open to the public.
It is unlawful to divide the pawn offered into two or more fractions to collect greater interest than that permitted by the pawnbroker provisions.
It is unlawful to require the pawner to pay an additional charge as an insurance premium for the safekeeping and conservation of the article pawned.
Compound interest shall not be reckoned except by agreement.
The effective rate of interest charged must not exceed the equivalent of the maximum rate prescribed by the Monetary Board.
In default of the maximum rate requirement, the debt draws six percent (6%) per annum interest (or such rate as may be prescribed by the Monetary Board) when judicially claimed.
No person or corporation shall require interest to be paid in advance for a period of more than one year. If interest is paid in advance, the effective rate charged must not exceed the equivalent of the maximum rate prescribed by the Monetary Board.
They are void.
A merely clerical error in the computation of interest, made without intent to evade the provisions of the Act, does not render the contract void.
Yes. If the loan proceeds may be availed of partially or fully at some future time, the parties may stipulate that the interest rate agreed upon at the time of entering the loan agreement—so long as it does not exceed the maximum allowed by law—shall prevail notwithstanding subsequent changes in maximum rates made by the Monetary Board.
Nothing prevents the purchase by an innocent purchaser of a negotiable mercantile paper (usurious or otherwise) for valuable consideration before maturity when there is no intention to evade the Act and the purchase is not part of the original usurious transaction.
The maker may recover from the original holder the whole interest paid by him thereon, and in case of litigation, also costs and attorney’s fees as allowed by the court.
Upon conviction: a fine not less than P50 nor more than P500, or imprisonment not less than 30 days nor more than one year, or both; plus return of the entire sum received as interest. If non-payment, subsidiary imprisonment of one day for every two pesos.
The manager, administrator (gerente), or the person in charge of management or administration of the business.