PRESIDENTIAL

DECREE No. 858 December 31, 1975

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 factors, 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 of 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. 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. 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 All Acts and parts of Acts inconsistent with the provisions of this Decree are hereby repealed.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.

PRESIDENTIAL DECREE No. 1684 September 18, 1980

AMENDING THE NATIONAL INTERNAL REVENUE CODE OF 1977, AS AMENDED, BY ADDING NEW SECTIONS
TO TITLE VII AND TITLE VIII THEREOF
WHEREAS, mineral and forest products have been greatly affected by changes in international market conditions;
and
WHEREAS, in order to provide a mechanism which is responsive to such changes in international market
conditions, and which could also be a tool for economic and industrial policies, it is necessary that the National
Internal Revenue Code of 1977, as amended, be further amended accordingly.
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:
Section 1. A new Section 259-A is hereby added to Title VII of the National Internal Revenue Code of 1977, as
amended, which shall read as follows:
"Sec. 259(a). Flexibility Clause. In the interest of the national economy and general welfare, the President, upon
recommendation of the Minister of both the Ministries of Finance and Natural Resources, is hereby empowered to
revise the rates of tax on and classification of mineral products, as well as to prescribe the rates of tax in cases of
marginal mines requiring protection, assistance or incentives.
"The foregoing authority may be exercised by the President if any of the following conditions exist:
"(a) Where, in the interest of economic development, it is necessary to redirect expenditures or
consumption patterns;
"(b) Whenever by reason of fluctuation of currency values and/or inflation or deflation, the existing
taxable base and rate levels are no longer realistic or consistent with the current price levels;
"(c) When it is necessary to counter adverse action on the part of another country or adverse
international market conditions; or
"(d) When there is need to obviate unemployment and economic and social dislocation.
"Before any recommendation is submitted to the President by the Minister of Finance and the Minister of Natural
Resources pursuant to the provisions of this section, a public hearing shall, whenever practicable, be held and
interested parties afforded a reasonable opportunity to be heard."
Section 2. A new Section 281-A is hereby added to Title VIII of the same Code which shall read as follows:
"Sec. 281(a) Flexibility Clause. In the interest of the national economy and general welfare, the President, upon
recommendation of the Minister of both the Ministries of Finance and Natural Resources, is hereby empowered to
revise the rates of tax on and classification of forest products.
"The foregoing authorities may be exercised by the President if any of the following conditions exist:
"(a) Where, in the interest of economic development, it is necessary to redirect expenditures or
consumption patterns;
"(b) Whenever by reason of fluctuation of currency values and/or inflation or deflation, the existing
taxable base and rate levels are no longer realistic or consistent with the current price levels;

"(c) When it is necessary to counter adverse action on the part of another country or adverse
international market conditions; or
"(d) When there is need to obviate unemployment and economic and social dislocation.
"Before any recommendation is submitted to the President by the Minister of Finance and the Minister of Natural
Resources pursuant to the provision of this section, a public hearing shall, whenever practicable, be held and
interested parties afforded a reasonable opportunity to be heard."
Section 3. This Decree shall take effect immediately.
Done in the City of Manila, this 18th day of September, in the year of Our Lord, nineteen hundred and eighty.

CIRCULAR NO. 416 Series of 2004

Pursuant to Monetary Board Resolution No. 1843 dated 18 December 2003, approving the amendment to the
guidelines on the adoption of the risk-based capital adequacy framework under Circular No. 280 dated 29 March
2001, as amended, the provisions of the Manual of Regulations for Banks are hereby amended as follows:
1. Subsection X116.2 is amended to reflect (1) the reduction in the risk weight of multilateral development banks
from 20% to 0%; and (2) to remove loans to exporters to the extent guaranteed by the Guarantee Fund for Small
and Medium Enterprises (GFSME) from the list of 0% risk weighted assets, as follows:
x x x
0% risk weight
(1) Cash on hand;
(2) Claims on or portions of claims guaranteed by or collateralized by securities issued by -
i. Philippine national government and BSP; and
ii. Central governments and central banks of foreign countries with the highest credit quality as defined in Subsec.
X116.3;
(3) Claims on or portions of claims guaranteed by or collateralized by securities issued by multilateral
development banks;
(4) Loans to the extent covered by hold-out on, or assignment of deposits/deposit substitutes maintained with the
lending bank;
(5) Loans or acceptances under letters of credit to the extent covered by margin deposits;
(6) Portions of special time deposit loans covered by Industrial Guarantee and Loan Fund (IGLF) guarantee;
(7) Real estate mortgage loans to the extent guaranteed by the Home Guaranty Corporation (HGC);
(8) Loans to the extent guaranteed by the Trade and Investment Development Corporation of the Philippines
(TIDCORP);
(9) Foreign currency notes and coins on hand acceptable as international reserves; and
(10) Gold bullion held either in own vaults, or in anothers vaults on an allocated basis, to the extent it is offset by
gold bullion liabilities;
20% risk weight
(1) Checks and other cash items;
(2) Claims on or portions of claims guaranteed by or collateralized by securities issued by non-central government
public sector entities of foreign countries with the highest credit quality as defined in Subsec. X116.3;
(3) Claims on or portions of claims guaranteed by Philippine incorporated banks/quasi-banks with the highest
credit quality as defined in Subsec. X116.3;

(4) Claims on or portions of claims guaranteed by foreign incorporated banks with the highest credit quality as
defined in Subsec. X116.3;
(5) Loans to exporters to the extent guaranteed by Small Business Guarantee and Finance Corporation
(SBGFC): Provided, That loans to exporters to the extent guaranteed by the Guarantee Fund for Small and
Medium Enterprises (GFSME) outstanding as of the date of the effectivity of the merger of the SBGFC and
the GFSME shall continue to have a zero percent risk weight: Provided, further, That the zero percent risk
weight shall not apply to loans renewed after the merger of the SBGFC and the GFSME.
(6) Foreign currency checks and other cash items denominated in currencies acceptable as international reserves;
and
(7) Claims on Philippine incorporated banks, which claims obtain and maintain credit ratings of at least equal to
that of the Philippine national government from a BSP recognized international credit rating agency;
x x x.
2. Subsection X116.3 is amended to expand the list of multilateral development banks assigned a zero percent risk
weight, as follows:
x x x
u. Multilateral development banks. These refer to the World Bank Group comprised of the International Bank for
Reconstruction and Development (IBRD) and the International Finance Corporation (IFC), the Asian
Development Bank (ADB), the African Development Bank (AfDB), the European Bank for Reconstruction and
Development (EBRD), the Inter-American Development Bank (IADB), the European Investment Bank (EIB); the
Nordic Investment Bank (NIB); the Caribbean Development Bank (CDB), the Council of Europe
Development Bank (CEDB) and such others as may be recognized by the BSP.
x x x
This Circular shall take effect fifteen (15) days after its publication either in the Official Gazette or in a newspaper
of general circulation.
FOR THE MONETARY BOARD:
RAFAEL B. BUENAVENTURA
Governor

CBP CIRCULAR NO. 905-82

The Monetary Board, in its Resolution No. 2224 dated December 3, 1982, approved the following regulations
governing interest rates on loans or forbearance of money, goods or credit and the amendment of Books I to IV of
the Manual of Regulations for Banks and Other Financial Intermediaries:
General Provisions
SECTION 1. The rate of interest, including commissions, premiums, fees and other charges, on a loan or
forbearance of any money, goods, or credits, regardless of maturity and whether secured or unsecured, that may be
charged or collected by any person, whether natural or juridical, shall not be subject to any ceiling prescribed
under or pursuant to the Usury Law, as amended.
SECTION 2. The rate of interest for the loan or forbearance of any money, goods or credits and the rate
allowed in judgments, in the absence of express contract as to such rate of interest, shall continue to be twelve per
cent (12%) per annum.
SECTION 3. Loans denominated or payable in a foreign currency shall continue to be subject to Central Bank
regulations on foreign borrowings.
BOOK I
Commercial Banks
SECTION 4. Subsection 1254.3 of the Manual of Regulations is hereby deleted.
SECTION 5. Section 1303 of the Manual of Regulations is hereby amended to read as follows:
SECTION 1303. Interest and Other Charges. The rate of interest, including commissions, premiums, fees and
other charges, on any loan, or forbearance of any money, goods or credits, regardless of maturity and whether
secured or unsecured, shall not be subject to any ceiling prescribed under or pursuant to the Usury Law, as
amended.
SECTION 6. Subsection 1303.3 of the Manual of Regulations is hereby deleted.
SECTION 7. The first paragraph of Subsection 1303.4 of the Manual of Regulations is hereby amended to read
as follows:
The rate of interest on a floating rate loan during each interest period shall be stated on the basis of a reference
rate plus a margin as may be agreed upon by the parties.
SECTION 8. Subsection 1303.6 of the Manual of Regulations is hereby amended to read as follows:
Subsection 1303.6. Short-term rate. Expanded commercial banks, commercial banks and specialized
government banks shall post their respective short-term prime rates in a conspicuous place in their principal
offices, branches and other banking offices. Expanded commercial banks and the Land Bank of the Philippines shall
publish every other Monday their respective prevailing short-term prime rates in at least one daily newspaper of
general circulation throughout the Philippines and on the effective date of any change of at least one-half per cent
(%) per annum from the last published rate, in at least one daily newspaper of general circulation throughout the
Philippines. For purposes of this subsection, the short-term prime rate shall be the lowest effective rate which a
bank will charge on availments of P500,000.00 and above with a maturity of 90 days, more of less , against credit
lines of the banks more established clients, provided that such availments are not eligible for rediscounting with
the Central Bank at preferential rates and that the borrowers are not directors, officers and stockholders, including
their related interest, of the lending bank.

Likewise, for purposes of this subsection, more established clients is defined as client who has been availing
himself of the facilities of the bank for number of years, by maintaining substantial deposit balances, utilizing
foreign exchange facilities such as exports, imports and remittances on a regular basis, or availing himself of other
fee-based services.
For statistical and monitoring purposes, banks shall report these rates monthly to the Department of Economic
Research, Domestic, Central Bank of the Philippines. Changes in these rates shall also be reported to said
Department on the day the changes are to be effective.
Banks shall report monthly to the Department of Economic Research-Domestic the volume and interest of
availments of P500,000.00 and above with a maturity of 90 days, more or less, against credit lines of their clients.
SECTION 9. Item d of Section 1349 of the Manual of Regulations is hereby amended to read as follows:
d. Terms, interest and charges. The maximum term of loans money shops may grant shall in no case exceed 180
days and the rate of interest on such loans, inclusive of commissions, premiums, fees and other charges, shall not
be subject to any ceilings prescribed under or pursuant to the Usury Laws, as amended.
SECTION 10. Subsection 1388.1 of the Manual of Regulations is hereby amended to read as follows:
The rate of yield, including commissions, premiums, fees, and other charges, from the purchase of receivables and
other obligations, regardless of maturity, that may be charged or received by banks authorized to engage in quasibanking functions or by non-bank financial intermediaries authorized to engage in quasi-banking functions, shall
not be subject to any regulatory ceiling.
Data on the volume and interest rates of domestic loans and discounts with original maturities of more than 365
days shall be reported by expanded commercial banks and commercial banks to the Department of Economic
Research, Domestic, Central Bank of the Philippines, not later than the 15th banking day after end of reference
month.
BOOK II
Thrift Banks
SECTION 11. Subsection 2254.3 of the Manual of Regulations is hereby deleted.
SECTION 12. Section 2303 of the Manual of Regulations is hereby amended to read as follows:
SECTION 2303. Interest and other Charges. The rate of interest, including commissions, premiums, fees and
other charges, on a loan or forbearance of any money, goods or credits, regardless of maturity, and whether
secured or unsecured, shall not be subject to any ceiling prescribed under or pursuant to the Usury Law, as
amended.
SECTION 13. Subsection 2303.3 of the Manual of Regulations is hereby deleted.
SECTION 14. The first paragraph of Subsection 2303.4 of the Manual of Regulations is hereby amended to read
as follows:
The rate of interest on a floating rate loan during each interest period shall be stated on the basis of a reference
rate plus a margin as may be agreed upon by the parties.:
SECTION 15. The last paragraph of Subsection 2303.4 of the Manual of Regulations is hereby amended to read
as follows:
Where the loan agreement provides for a floating interest rate, the interest period, which shall be such period of
time for which the rate of interest is fixed, shall be such period as may be agreed upon by the parties.

SECTION 16. The first paragraph of Subsection 2303.6 of the Manual of Regulations is hereby deleted.
SECTION 17. Item c of Section 2349 of the Manual of Regulations is hereby amended to read as follows:
C. Terms, interest and charges. The maximum term of loans money shops may grant shall in no case
exceed 180 days and the rate of interest on such loans, inclusive of commission, premiums, fees and other charges,
shall not be subject to any ceiling prescribed under or pursuant to the Usury Law, as amended.
SECTION 18. Subsection 2388.1 of the Manual of Regulations is hereby ended to read as follows:
Subsection 2388.1. Yields on purchases of receivables. The rate of yield, including commissions,
premiums, fees and other charges, from the purchase of receivables and other obligations, regardless of maturity,
that may be charged or received by banks authorized to engage in quasi-banking functions or by non-bank
financial intermediaries authorized to engage in quasi-banking functions, shall not be subject to any regulatory
ceiling.
BOOK III
Rural Banks
SECTION 19. Item c of Subsection 3152.3 of the Manual of Regulations is hereby amended to read as follows:
c. Terms, interest and charges. The maximum term of loans money shops may grant shall in no case exceed 180
days and the rate of interest on such loans, inclusive of commissions, premiums, fees and other charges, shall not
be subject to any ceiling prescribed under or pursuant to the Usury Law, as amended.
SECTION 20. Subsection 3254.2 of the Manual of Regulations is hereby deleted.
SECTION 21. Paragraph a of Subsection 3303.1 of the Manual of Regulations is hereby amended to read as
follows:
a. Interest rate. The rate of interest, including commissions, premiums, fees and other charges, on a loan or
forbearance of any money, goods, or credits, regardless of maturity and whether secured or unsecured, shall not be
subject to any ceiling prescribed under or pursuant to the Usury Law, as amended.
SECTION 22. Item b of Subsection 3303.1 of the Manual of Regulations is hereby deleted and items c, d, f
and g of the same Subsection are hereby relettered as items b, c, d and e, respectively.
SECTION 23. The first paragraph of Subsection 3303.2 of the Manual of Regulations is hereby deleted.
SECTION 24. Subsection 3303.5 of the Manual of Regulations is hereby amended to read as follows:
Subsection 3303.5. Floating rates of interest. The rate of interest on a floating rate loan during each interest
period shall be stated on the basis of a reference rate plus a margin as may be agreed upon by the parties.
Reference rates for various interest periods shall be determined and announced by the Central Bank every week
and shall be based on the weighted average of the interest rates paid during the immediately preceding week by
the ten (10) commercial banks with the highest levels of outstanding deposit substitutes on promissory notes
issued by such banks, with maturities corresponding to the interest periods for which such reference rates are
being determined. The commercial banks to be included for purposes of computing the reference rates shall be
reviewed and determined at the beginning of every calendar semester on the basis of the levels of their
outstanding deposit substitutes as of May 31 or November 30, as the case may be.
The rate of interest on floating rate loans, existing and outstanding as of April 2, 1982 shall continue to be
determined on the basis of the reference rate obtained from the weighted average of the interest rates paid by the
five banks with the largest volume of business transacted during the immediately preceding thirty (30) days, on
time deposits with maturities of more than seven hundred thirty (730) days, which shall be announced by the

Central Bank every month for as long as such loans are existing and outstanding: Provided, however, That the
parties to such existing floating rate loans agreements are not precluded from amending or modifying their loan
agreements by adopting a floating rate of interest determined on the basis of the reference rate mentioned in the
preceding paragraph.
Where the loan agreement provides for a floating interest rate, the interest period, which shall be such period of
time for which the rate of interest is fixed, shall be such period as may be agreed upon by the parties.
BOOK IV
Non-Bank Financial Intermediaries
SECTION 25. The last paragraph of Subsection 4283Q.1 of the Manual of Regulations is hereby amended to read
as follows:
Procedures for demand deposits of NBQBs with the Central Bank as provided in Appendix 14 shall be followed.
SECTION 26. Subsection 4303Q.1 to 4303Q.9 of the Manual of Regulations are hereby amended to read as
follows:
Subsection 4303Q.1. Purchase of Receivables. The rate of yield, including commissions, premiums, fees and
other charges, from the purchase of receivables and other obligations, regardless of maturity, that may be charged
or received by NBQBs shall not be subject to any regulatory ceiling.
Receivables and other obligations shall include claims collectible in money of any amount and maturity from
domestic and foreign sources. The Monetary Board shall determine in doubtful cases whether a particular claim is
included within said phrase.
Subsection 4303Q.2. Loans. The rate of interest, including commissions, premiums, fees and other charges, on
loan transactions, regardless of maturity and whether secured or unsecured, shall not be subject to any ceiling
prescribed under or pursuant to the Usury Law, as amended.
Subsection 4303Q.3. Floating rate of interest. The rate of interest on a floating rate loan during each interest
period shall be stated on the basis of a reference rate plus a margin as may be agreed upon by the parties.
Reference rates for various interest periods shall be determined and announced by the Central Bank every week
and shall be based on the weighted average of the interest rates paid during the immediately preceding week by
the ten (10) commercial banks with the highest levels of outstanding deposit substitutes on promissory notes
issued by such banks, with maturities corresponding to the interest periods for which such references rates are
being determined. The commercial banks to be included for purposes of computing the reference rates shall be
reviewed and determined at the beginning of every calendar semester on the basis of the levels of their
outstanding deposit substitutes as of May 31 or November 30, as the case may be.
The rate of interest on floating rate loans, existing and outstanding as of April 2, 1982 shall continue to be
determined on the basis of the reference rate obtained from the weighted average of the interest rates paid by the
five banks with the largest volume of business transacted during the immediately preceding thirty (30) days, on
time deposits with maturities of more than seven hundred thirty (730) days, which shall be announced by the
Central Bank every month for as long as such loans are existing and outstanding: Provided, however, That the
parties to such existing floating rate loan agreements are not precluded from amending or modifying their loan
agreements by adopting a floating rate of interest determined on the basis of the reference rate mentioned in the
next preceding paragraph.
Where the loan agreement provides for a floating interest rate, the interest period, which shall be such period of
time for which the rate of interest is fixed, shall be such period as may be agreed upon by the parties.

Subsection 4303Q.4. Effect of prepayment. If there is no agreement on the rebate of interest in the event of
prepayment of the loan, the creditor is not under any legal obligation to return the interest corresponding to the
period from date of prepayment to the stipulated maturity date of the loan. Any prepayment made by the debtor
should not, therefore, affect the computation of the effective rate stipulated in the loan contract.
SECTION 27. Subsections 4303Q.10 and 4303Q.11 of the Manual of Regulations are hereby renumbered as
Subsections 4303Q.5. and 4303Q.6, respectively.
SECTION 28. Subsection 4303N.1 of the Manual of Regulations is hereby amended to read as follows:
Subsection 4303N.1. Interest Rates. The rate of interest including commissions, premiums, fees and other
charges on loans and forbearance of money, regardless of maturity and whether secured or unsecured, shall not be
subject to any ceilings prescribed under or pursuant to the Usury Law, as amended.
SECTION 29. Subsections 4303N.2, 4303N.4 and 4303N.5 of the Manual of Regulations are hereby deleted, and
Subsections 4303N.3, 4303N.6, and 4303N.7 thereof are hereby renumbered as Subsections 4303N.2, 4303N.3 and
4303N.4, respectively.
SECTION 30. Section 4303P of the Manual of Regulations is hereby amended to read as follows:
SECTION 4303P. Interest, Fees and Other Charges. The rate of interest including commissions, premiums, fees
and other charges on any loan or forbearance of money extended by a pawnshop, pawnbroker or pawnbrokers
agent, regardless of maturity, shall not be subject to any ceiling prescribed under or pursuant to the Usury Law, as
amended.
No pawnshop shall collect interest on loans in advance for a period of more than a year.
SECTION 31. Subsection 4303P.1 of the Manual of Regulations is hereby deleted.
SECTION 32. Whenever any person or entity violated any of the provisions of this Circular, the person or entity
responsible for such violation shall be subject to the penalties prescribed in the first paragraph of Section 34 of
Republic Act No. 265, as amended, and/or the penalties prescribed in Section 10 of Act No. 2655, without prejudice
to the imposition of administrative sanctions under Sections 34-A and 34-B of Republic Act No. 265, as amended.
SECTION 33. This Circular shall take effect on January 1, 1983.
FOR THE MONETARY BOARD:
(SGD.) JAIME C. LAYA

CIRCULAR NO. 799 Series of 2013

Subject: Rate of interest in the absence of stipulation


The Monetary Board, in its Resolution No. 796 dated 16 May 2013, approved the following revisions
governing the rate of interest in the absence of stipulation in loan contracts, thereby amending Section 2 of Circular
No. 905, Series of 1982:


Section 1. The rate of interest for the loan or forbearance of any money, goods or credits and the rate
allowed in judgments, in the absence of an express contract as to such rate of interest, shall be six percent (6%) per
annum.


Section 2. In view of the above, Subsection X305.1 of the Manual of Regulations for Banks and Sections
4305Q.1, 43055.3 and 4303P.1 of the Manual of Regulations for Non-Bank Financial Institutions are hereby
amended accordingly.


This Circular shall take effect on 1 July 2013.












FOR THE MONETARY BOARD:











DIWA C. GUINIGUNDO









Officer-In-Charge