Presidential Decree No. 858 (PD 858) — Amending Further Act Numbered Two Thousand Six Hundred Fifty-Five, as Amended, Otherwise Known as the "Usury Law"
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-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."
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."
SEC. 3. Section 4-a of the same Act is hereby renumbered as
SEC. 4. All Acts and parts of Acts inconsistent with the
provisions of this Decree are hereby repealed.
Sec. 4-b.
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
Source: Supreme Court E-Library, Republic of the Philippines. Philippine laws are public documents (works of the government).
