AMENDING FURTHER ACT NUMBERED TWO THOUSAND SIX HUNDRED FIFTY-FIVE, AS AMENDED, OTHERWISE KNOWN AS THE "USURY LAW"

• Number: Presidential Decree No. 858
• Sections: 7

Preamble

WHEREAS, there are transactions, which, although involving

lending of funds, offer returns on investment higher than the maximum

ceilings prescribed in the Usury Law;

WHEREAS, the higher return of investment in the money

market, among other facts, has drawn money supply away from desirable

areas of investment to the detriment of national interest;

WHEREAS, the interest rate, together with other monetary and

credit policy instruments, plays a vital role in directing domestic

savings and capital resources to economic activities where they are

needed most;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the

Philippines, by virtue of the powers vested in me by the Constitution,

do hereby declare and order the amendment of Act No. 2655, as amended,

as follows:

Section 1

SECTION 1. Section 1-a of Act No. 2655, as amended, is

hereby amended to read as follows:

"SEC. 1-a. The Monetary Board is hereby authorized to

prescribe the maximum rate or rates of interest for the loan or renewal

thereof or the forbearance of any money, goods or credits, and to change

such rate or rates whenever warranted by prevailing economic and social

conditions.

"In the exercise of the authority herein granted, the Monetary

Board may prescribe higher maximum rates for loans of low priority, such

as consumer loans or renewals thereof as well as such loans made by

pawnshops, finance companies and other similar credit institutions

although the rates prescribed for these institutions need not

necessarily be uniform. The Monetary Board is also authorized to

prescribe different maximum rate or rates for different types of

borrowings, including deposits and deposit substitutes, or loans of

financial intermediaries."

Section 2

SEC. 2. The same Act is hereby amended by adding the

following section immediately after Section 4 thereof, which reads as

follows:

"SEC. 4-a. The Monetary Board may eliminate, exempt from,

or suspend the effectivity of, interest rate ceilings on certain types

of loans or renewals thereof or forbearances of money, goods, or credit,

whenever warranted by prevailing economic and social conditions."

Section 3

SEC. 3. Section 4-a of the same Act is hereby renumbered as

Section 4

SEC. 4. All Acts and parts of Acts inconsistent with the

provisions of this Decree are hereby repealed.

Section 4-B

Sec. 4-b.

Section 5

SEC. 5. This Decree shall take effect immediately.

Done in the City of Manila, this 31st day of December, in the

year of Our Lord, nineteen hundred and seventy-five.

(Sgd.)

FERDINAND E. MARCOS

President

Republic of the Philippines

By the President:

(Sgd.)

JUAN C. TUVERA

Presidential Assistant