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PRESIDENTIAL DECREE NO. 858
PRESIDENTIAL DECREE NO. 858 -
AMENDING FURTHER ACT NUMBERED TWO THOUSAND SIX HUNDRED FIFTY-FIVE, AS
AMENDED, OTHERWISE KNOWN AS THE "USURY LAW"
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WHEREAS,
there are transactions, which, although involving lending of funds,
offer returns on investment higher than the maximum ceilings prescribed
in the Usury Law;chanroblesvirtualawlibrary
WHEREAS, the higher return of investment in the money market, among
other factors, has drawn money supply away from desirable areas of
investment to the detriment of national interest;chanroblesvirtualawlibrary
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;chanroblesvirtualawlibrary
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:cralaw:red
Section 1. Section 1-a of Act No. 2655, as amended,
is hereby amended to read as follows;chanroblesvirtualawlibrary
"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 of rates whenever warranted by prevailing economic and
social conditions. chanroblesvirtualawlibrary
"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. The same Act is hereby amended by adding
the following section immediately after Section 4 thereof, which reads
as follows:cralaw:red
"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 forbearance of money, goods, or
credit, whenever warranted by prevailing economic and social
conditions."
Section 3. Section 4-a of the same Act is hereby
renumbered as Sec. 4-b.
Section 4. All Acts and parts of Acts inconsistent
with the provisions of this Decree are hereby repealed.
Section 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.
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