Amendments to the Usury Law on Interest Rates

No person or corporation may take or receive interest exceeding 12% per annum or the maximum rate prescribed for loans secured wholly or partly by duly registered real estate mortgages or similar documents.
The Monetary Board may specify other types of securities to which this maximum rate limit applies.

For loans or forbearance without security as described above, the maximum allowable interest rate is 14% per annum or the current maximum rate set by the Monetary Board.

Pawnbrokers or their agents are limited to charging:
- 2.5% per month on loans under Php100
- 2% per month on loans from Php100 to Php500
- 14% per annum on loans exceeding Php500
These rates may be adjusted by the Monetary Board’s maximum rates.
Pawnbrokers must be licensed and have a public establishment to be covered.
It is unlawful to split pawns into fractions to circumvent interest limits.
Additional charges labeled as insurance premiums for pawned items are prohibited.

In setting maximum rates, the Monetary Board must consider:
1. Current economic conditions and national economic needs
2. Credit supply and demand
3. Inflation or price level increases
4. Other relevant factors as deemed appropriate

Compound interest is not allowed unless agreed upon explicitly.
Agreed compound interest must not exceed the equivalent of the maximum prescribed rate.
Interest paid in advance must not cover more than one year, and the effective rate must not exceed the maximum allowable.

Any contract stipulating interest or sums exceeding legal limits is void.
Clerical errors in interest computation without intent to evade the law do not void contracts.
Parties may stipulate that the interest rate agreed initially applies throughout the term regardless of later changes in maximum rates.
Innocent purchasers of negotiable instruments acquired before maturity and without evasion intent are protected.
The debtor has a right to recover excessive interest paid, including litigation costs and attorney's fees.

The Monetary Board is empowered to promulgate rules and regulations necessary to implement the Act effectively.

Violations may lead to a criminal fine between Php50 and Php500, imprisonment from 30 days to 1 year, or both.
The offender must return all interest collected to the aggrieved party.
Failure to pay may result in subsidiary imprisonment (1 day per Php2 unpaid).
In corporations or similar entities, the manager or person in charge is criminally liable for violations.