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PRESIDENTIAL DECREE NO. 1454
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PRESIDENTIAL DECREE NO. 1454 -
AMENDING Section 5 OF REPUBLIC ACT NUMBERED FIVE THOUSAND NINE HUNDRED
EIGHTY, OTHERWISE KNOWN AS THE "FINANCING COMPANY ACT"
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WHEREAS,
the limitations of the purchase discount rates of finance companies on
transactions involving the assignment of credit or the purchase of
installment papers, accounts receivable and other evidence of
indebtedness, are fixed by law under Section 5 of the financing Company
Act; chanroblesvirtualawlibrary
WHEREAS, there us a need to adopt a more flexible policy on the
purchase discounts, fees, and other charges of financing companies that
would be more responsive to the requirements of changing economic and
social conditions;chanroblesvirtualawlibrary
WHEREAS, it is desirable and necessary that the Central Bank of the
Philippines, as the government agency charged with the
responsibility of fostering monetary, credit and exchange condition
conductive to a balanced and sustainable growth of the economy, be
vested with the power to regulate change or modify, in coordination
with the Securities and Exchange Commission, the purchase discount
rates, fees and other charges of finance companies in the same manner
that it has legal authority to regulate the interest rate and other
charges that may be collected by banks and other financial
intermediaries.
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines,
by virtue of the powers vested in me by the Constitution, do hereby
decree and order the amendment of Republic Act No. 5980, as
follows: chanroblesvirtualawlibrary
Section 1. Section 5 of Republic Act No. 5980 is
hereby amended to read as follows:cralaw:red
"Sec. 5. Limitation on purchase discount, fees,
service and other charges. —chanroblesvirtualawlibrary
"The Monetary Board of the Central Bank of the Philippines is hereby
empowered to prescribe, in consultation with the Securities and
Exchange Commission, the maximum rate or rates of purchase
discounts, fees, service and other charges of financing companies, and
to change such rate(s) whenever warranted by prevailing economic and
social conditions.
"In the case of assignment of credit or the buying of installment
papers, accounts receivable and other evidences of indebtedness by
financing companies, the purchase discount, exclusive of interest
and other charges, shall be limited to fourteen per cent (14%), or such
percentage as may be prescribed by the Monetary Board, of the value of
the credit assigned or the value of the installment papers, accounts
receivable and other evidences of indebtedness purchased based on a
period of twelve months or less, and to one and one-sixth per cent
1-1/6%, or such percentage as may be prescribed by the Monetary Board,
for each additional month or fraction thereof in excess of twelve
months, regardless of the terms and conditions of the assignment or
purchase.
"In the case of assignment of credit or the buying of installment
papers, accounts receivable, and other evidences of indebtedness
pertaining to appliances, furniture, and office equipment, the purchase
discount exclusive of interest charges shall be limited to eighteen per
cent (18%), or such percentage as may be prescribed by the Monetary
Board, of the value at maturity of the credit assigned or receivable
purchased, based on a period of twelve months or less, and to one and
one-half per cent (1-1/2%), or such percentage as may be prescribed by
the Monetary Board, for each additional month or fraction thereof in
excess of twelve months, regardless of the terms and conditions of
the assignment or purchase.
"In case of factoring of accounts receivables or other evidences of
indebtedness, the discounting rate that can be charged, exclusive of
interest and other charges shall be limited to two per cent (2%), or
such percentage as may be prescribed by the Monetary Board, of the
value of the credit assigned or receivable purchased for every thirty
(30) days, regardless of the terms and conditions of the factoring
agreement."
Section 2. This Decree shall take effect immediately.
Done in the City of Manila,
this 11th day of June, in the year of Our Lord, nineteen hundred and
seventy-eight.
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Since 19.07.98
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