Scope of Debt Moratorium Suspension and Debt Obligations Covered
- The moratorium lifting applies to all debts and monetary obligations contracted before December 8, 1941, that remain unpaid.
- Such prewar debts payable by private parties within the Philippines will not be due or demandable for eight years following the settlement of the debtor’s war damage claim with the United States Philippine War Damage Commission.
- This suspension applies regardless of any contract provisions or subsequent agreements stating otherwise.
- Voluntary agreements for settling debts after the Act’s approval remain valid.
Amendments to the Existing Debt Moratorium Executive Orders
- The law amends Title III, Debt Moratorium, under Executive Order No. 25 and its amendment EO No. 32, to lift the moratorium concerning prewar obligations except where Section 2 conditions apply.
- If Section 2’s provisions are invalidated, the original moratorium under the cited Executive Orders continue to apply until legislative repeal or further amendment.
- This guarantees continuing protection for prewar debts of war sufferers if the new conditions cannot be enforced.
Effectivity of the Law
- The Act took effect immediately upon its approval on July 26, 1948.