Question & AnswerQ&A (Republic Act No. 205)
Republic Act No. 205 is titled 'An Act to Remit the Interest Which Accrued from January 1, 1942, to June 30, 1946, on All Obligations Contracted by Provincial, City and Municipal Governments in Favor of the National Government or of Any of the Government-Owned or Controlled Corporations, and to Extend for a Period of Four Years and Six Months the Payment of Such Obligations.' Its main purpose is to remit accrued interests on certain government obligations and extend the payment period to help stabilize local government finances.
The Act covers all obligations contracted by provincial, city, and municipal governments in favor of the National Government or any government-owned or controlled corporations.
The interest remission covers interest accrued from January 1, 1942, to June 30, 1946.
The Act extends the payment period for the amortization of these obligations by four years and six months starting from the due date of the respective obligations.
The beneficiaries are the provincial, city, and municipal governments that contracted obligations with the National Government or government-owned or controlled corporations.
No. The Act specifically applies only to obligations owed to the National Government or government-owned or controlled corporations.
The Act took effect upon its approval on May 28, 1948.
It was enacted by the Senate and House of Representatives of the Philippines in Congress assembled.
The remission means that provincial, city, and municipal governments are no longer liable to pay the interest that accrued within the specified period on their obligations to the National Government or government corporations, easing their financial burden.
By remitting accrued interest and extending the payment period for principal amortization, the Act reduces immediate financial liabilities and provides local governments with more time to manage repayments, thus contributing to financial stability.