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PRESIDENTIAL DECREE NO. 1684
PRESIDENTIAL DECREE NO. 1684 -
AMENDING FURTHER ACT NUMBERED TWO THOUSAND SIX HUNDRED FIFTY-FIVE, AS
AMENDED, OTHERWISE KNOWN AS "THE USURY LAW"
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WHEREAS,
while the interest rate is an important monetary and credit policy
instrument, changes in interest rate ceilings should not cause undue
hardships on the various sectors of the economy; chanroblesvirtualawlibrary
WHEREAS, there may be a need under certain circumstances to effect
changes in interest rate ceilings on a staggered basis;chanroblesvirtualawlibrary
WHEREAS, contractual stipulations providing for adjustments in the
interest rate agreed upon in the event that there is a change in the
legal rate of interest should benefit both the creditor and the debtor.
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 or rates whenever warranted by prevailing economic and
social conditions: Provided, That changes in such rate or rates may be
effected gradually on scheduled dates announced in advance. 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
prescribed 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 a
new section after Section 7, to read as follows: chanroblesvirtualawlibrary
"Sec. 7-a. Parties to an agreement pertaining to a
loan or forbearance of money, goods or credits may stipulate that the
rate of interest agreed upon may be increased in the event that the
applicable maximum rate of interest is increased by law or by the
Monetary Board: Provided, That such stipulation shall be valid only if
there is also a stipulation in the agreement that the rate of interest
agreed upon shall be reduced in the event that the applicable maximum
rate of interest is reduced by law or by the Monetary Board: Provided,
further, That the adjustment in the rate of interest agreed upon shall
take effect on or after the effectivity of the increase or decrease in
the maximum rate of interest.
Section 3. All Acts and part of Acts inconsistent
with the provisions of this Decree are hereby repealed or modified
accordingly. chanroblesvirtualawlibrary
Section 4. This Decree shall take effect immediately.
DONE in the City of Manila,
this 17th day of March, in the year of Our Lord, nineteen hundred and
eighty.
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