Senate Bill No.

1180: AN ACT REGULATING THE ESTABLISHMENT AND OPERATION OF LENDING COMPANIES IN THE PEILIPPINES AND FOR OTHER PURPOSES

This is a Bill that was passed on June 30, 2004 and introduced by Senator Ramon Magsaysay, Jr. It is a bill that seeks to enhance the countrys economic development pursuant to the mandate given by the constitution which recognizes the role of the private sector with regards to private investments to enhance the economy. This bill introduced in the senate gives the right of Lending companies under Republic Act 3765 or the Truth in Lending act to operate under the supervision of the BangkoSentralngPilipinas and grants special powers and privileges as prescribed by the BangkoSentral. The performance of these Lending Companies are now recognized and regulated pursuant to various laws and the Constitution itself. Lending Investor (LI) or lending company, as others would call it, is a form of an institution which had its beginnings in the country in the mid-70s. It emerged to address the needs of individuals left unserved by the more sophisticated form of credit institutions. Lending investors are no different from institutions engaged in microfinance. Micro-finance, as recognized by the Bangko Sentral ng Pilipinas, is the provision of a broad range of financial services such as - deposit, loans, payment of services, money transfers and insurance products - to the poor and low income households, for their micro-enterprises and small businesses, to enable them to raise their income levels and improve their living standards. The 1972 banking reforms gave the then Central Bank authority over the entire credit system and not merely over the banking in credit operations without obtaining bonds from the public were subjected to regulation by the BSP. Consequently, LIS, because of their primary hnction of extending credit, were included under the regulatory umbrella of the BangkoSentral. In fine, this bill is a commendable government initiative and a more vigorous approach to develop and promote a sound financial environment capable of catering various needs of different business organizations and associations whether small scale, as in the case microfinancing of small enterprises and macro financing with respect to the extending of capital to large scale industries. It recognizes and enhances the functions of Lending Companies by placing them under the supervision of the Bangko Sentral, the primary governments arm in bank regulations, which will provide the guidelines for the implementation of this law to be passed pursuant to R.A. 3765 and R.A. 7653 (Central Bank act) and to provide for various financial services throughout the country. Significantly, this legislative measure will further boost and accelerate growth in various business industries by extending loans which will be utilized as capital to undertake a business. This will, however , be done effectively by putting into place effective and timely policies implemented by a competent governmental authority having in mind the protection of the rights

of the borrowing public and at the same time encouraging those potential players in this industry especially those who have financial surpluses. In closing, human activities involving business trades and commercial activities are now far more sophisticated than before considering that community of nations has shrunk into a village where policies affecting business activities in the West has something to do in the East. In essence, it is of great importance that a government like the Philippine Government as in our case at hand, takes a resolute and a more active role in the promoting and developing the business lending sector, and in so doing it thereby likewise promotes and contributes to national development at large.

JPT..

Pakicheck nalang pare.... thanks...