December 10, 1982 CBP CIRCULAR NO. 905-82 The Monetary Board, in its Resolution No.

2224 dated December 3, 1982, a ro!ed the "ollo#in$ re$ulations $o!ernin$ interest rates on loans or "orbearance o" money, $oods or credit and the amendment o" Boo%s & to &' o" the Manual o" Re$ulations "or Ban%s and (ther )inancial &ntermediaries* General Pro !"!on" +,-T&(N 1. The rate o" interest, includin$ commissions, remiums, "ees and other char$es, on a loan or "orbearance o" any money, $oods, or credits, re$ardless o" maturity and #hether secured or unsecured, that may be char$ed or collected by any erson, #hether natural or .uridical, shall not be sub.ect to any ceilin$ rescribed under or ursuant to the /sury 0a#, as amended. +,-T&(N 2. The rate o" interest "or the loan or "orbearance o" any money, $oods or credits and the rate allo#ed in .ud$ments, in the absence o" e1 ress contract as to such rate o" interest, shall continue to be t#el!e er cent 21234 er annum. +,-T&(N 3. 0oans denominated or ayable in a "orei$n currency shall continue to be sub.ect to -entral Ban% re$ulations on "orei$n borro#in$s. BOO# I Commerc!al Ban$" +,-T&(N 4. +,-T&(N 5. +ubsection 1254.3 o" the Manual o" Re$ulations is hereby deleted. +ection 1363 o" the Manual o" Re$ulations is hereby amended to read as "ollo#s*

7+,-T&(N 1363. &nterest and (ther -har$es. 8 The rate o" interest, includin$ commissions, remiums, "ees and other char$es, on any loan, or "orbearance o" any money, $oods or credits, re$ardless o" maturity and #hether secured or unsecured, shall not be sub.ect to any ceilin$ rescribed under or ursuant to the /sury 0a#, as amended.9 +,-T&(N :. +,-T&(N ;. "ollo#s* +ubsection 1363.3 o" the Manual o" Re$ulations is hereby deleted. The "irst ara$ra h o" +ubsection 1363.4 o" the Manual o" Re$ulations is hereby amended to read as

7The rate o" interest on a "loatin$ rate loan durin$ each interest eriod shall be stated on the basis o" a re"erence rate lus a mar$in as may be a$reed u on by the arties.9 +,-T&(N 8. +ubsection 1363.: o" the Manual o" Re$ulations is hereby amended to read as "ollo#s*

7+ubsection 1363.:. +hort<term rate.8 ,1 anded commercial ban%s, commercial ban%s and s eciali=ed $o!ernment ban%s shall ost their res ecti!e short<term rime rates in a cons icuous lace in their rinci al o""ices, branches and other ban%in$ o""ices. ,1 anded commercial ban%s and the 0and Ban% o" the >hili ines shall ublish e!ery other Monday their res ecti!e re!ailin$ short<term rime rates in at least one daily ne#s a er o" $eneral circulation throu$hout the >hili ines and on the e""ecti!e date o" any chan$e o" at least one<hal" er cent 2?34 er annum "rom the last ublished rate, in at least one daily ne#s a er o" $eneral circulation throu$hout the >hili ines. )or ur oses o" this subsection, the short<term rime rate shall be the lo#est e""ecti!e rate #hich a ban% #ill char$e on a!ailments o" >566,666.66 and abo!e #ith a maturity o" 96 days, more o" less , a$ainst credit lines o" the ban%@s more established clients, ro!ided that such a!ailments are not eli$ible "or rediscountin$ #ith the -entral Ban% at re"erential rates and that the borro#ers are not directors, o""icers and stoc%holders, includin$ their related interest, o" the lendin$ ban%.

0i%e#ise, "or ur oses o" this subsection, 7more established clients9 is de"ined as client #ho has been a!ailin$ himsel" o" the "acilities o" the ban% "or number o" years, by maintainin$ substantial de osit balances, utili=in$ "orei$n e1chan$e "acilities such as e1 orts, im orts and remittances on a re$ular basis, or a!ailin$ himsel" o" other "ee<based ser!ices. 7)or statistical and monitorin$ ur oses, ban%s shall re ort these rates monthly to the De artment o" ,conomic Research, Domestic, -entral Ban% o" the >hili ines. -han$es in these rates shall also be re orted to said De artment on the day the chan$es are to be e""ecti!e. 7Ban%s shall re ort monthly to the De artment o" ,conomic Research<Domestic the !olume and interest o" a!ailments o" >566,666.66 and abo!e #ith a maturity o" 96 days, more or less, a$ainst credit lines o" their clients.9 +,-T&(N 9. &tem 7d9 o" +ection 1349 o" the Manual o" Re$ulations is hereby amended to read as "ollo#s*

7d. Terms, interest and char$es. 8 The ma1imum term o" loans money sho s may $rant shall in no case e1ceed 186 days and the rate o" interest on such loans, inclusi!e o" commissions, remiums, "ees and other char$es, shall not be sub.ect to any ceilin$s rescribed under or ursuant to the /sury 0a#s, as amended.9 +,-T&(N 16. +ubsection 1388.1 o" the Manual o" Re$ulations is hereby amended to read as "ollo#s*

7The rate o" yield, includin$ commissions, remiums, "ees, and other char$es, "rom the urchase o" recei!ables and other obli$ations, re$ardless o" maturity, that may be char$ed or recei!ed by ban%s authori=ed to en$a$e in Auasi<ban%in$ "unctions or by non<ban% "inancial intermediaries authori=ed to en$a$e in Auasi<ban%in$ "unctions, shall not be sub.ect to any re$ulatory ceilin$. 7Data on the !olume and interest rates o" domestic loans and discounts #ith ori$inal maturities o" more than 3:5 days shall be re orted by e1 anded commercial ban%s and commercial ban%s to the De artment o" ,conomic Research, Domestic, -entral Ban% o" the >hili ines, not later than the 15th ban%in$ day a"ter end o" re"erence month.9 BOO# II %&r!'( Ban$" +,-T&(N 11. +,-T&(N 12. +ubsection 2254.3 o" the Manual o" Re$ulations is hereby deleted. +ection 2363 o" the Manual o" Re$ulations is hereby amended to read as "ollo#s*

7+,-T&(N 2363. &nterest and other -har$es. 8 The rate o" interest, includin$ commissions, remiums, "ees and other char$es, on a loan or "orbearance o" any money, $oods or credits, re$ardless o" maturity, and #hether secured or unsecured, shall not be sub.ect to any ceilin$ rescribed under or ursuant to the /sury 0a#, as amended.9 +,-T&(N 13. +,-T&(N 14. "ollo#s* +ubsection 2363.3 o" the Manual o" Re$ulations is hereby deleted. The "irst ara$ra h o" +ubsection 2363.4 o" the Manual o" Re$ulations is hereby amended to read as

7The rate o" interest on a "loatin$ rate loan durin$ each interest eriod shall be stated on the basis o" a re"erence rate lus a mar$in as may be a$reed u on by the arties.* +,-T&(N 15. "ollo#s* The last ara$ra h o" +ubsection 2363.4 o" the Manual o" Re$ulations is hereby amended to read as

7Bhere the loan a$reement ro!ides "or a "loatin$ interest rate, the interest eriod, #hich shall be such eriod o" time "or #hich the rate o" interest is "i1ed, shall be such eriod as may be a$reed u on by the arties.9 +,-T&(N 1:. +,-T&(N 1;. The "irst ara$ra h o" +ubsection 2363.: o" the Manual o" Re$ulations is hereby deleted. &tem 7c9 o" +ection 2349 o" the Manual o" Re$ulations is hereby amended to read as "ollo#s*

7-. Terms, interest and char$es. 8 The ma1imum term o" loans money sho s may $rant shall in no case e1ceed 186 days and the rate o" interest on such loans, inclusi!e o" commission, remiums, "ees and other char$es, shall not be sub.ect to any ceilin$ rescribed under or ursuant to the /sury 0a#, as amended.9 +,-T&(N 18. +ubsection 2388.1 o" the Manual o" Re$ulations is hereby ended to read as "ollo#s*

7+ubsection 2388.1. Cields on urchases o" recei!ables. 8 The rate o" yield, includin$ commissions, remiums, "ees and other char$es, "rom the urchase o" recei!ables and other obli$ations, re$ardless o" maturity, that may be char$ed or recei!ed by ban%s authori=ed to en$a$e in Auasi<ban%in$ "unctions or by non<ban% "inancial intermediaries authori=ed to en$a$e in Auasi<ban%in$ "unctions, shall not be sub.ect to any re$ulatory ceilin$.9 BOO# III R)ral Ban$" +,-T&(N 19. &tem 7c9 o" +ubsection 3152.3 o" the Manual o" Re$ulations is hereby amended to read as "ollo#s*

7c. Terms, interest and char$es. 8 The ma1imum term o" loans money sho s may $rant shall in no case e1ceed 186 days and the rate o" interest on such loans, inclusi!e o" commissions, remiums, "ees and other char$es, shall not be sub.ect to any ceilin$ rescribed under or ursuant to the /sury 0a#, as amended.9 +,-T&(N 26. +,-T&(N 21. +ubsection 3254.2 o" the Manual o" Re$ulations is hereby deleted. >ara$ra h 7a9 o" +ubsection 3363.1 o" the Manual o" Re$ulations is hereby amended to read as "ollo#s*

7a. &nterest rate. 8 The rate o" interest, includin$ commissions, remiums, "ees and other char$es, on a loan or "orbearance o" any money, $oods, or credits, re$ardless o" maturity and #hether secured or unsecured, shall not be sub.ect to any ceilin$ rescribed under or ursuant to the /sury 0a#, as amended.9 +,-T&(N 22. &tem 7b9 o" +ubsection 3363.1 o" the Manual o" Re$ulations is hereby deleted and items 7c9, 7d9, 7"9 and 7$9 o" the same +ubsection are hereby relettered as items 7b9, 7c9, 7d9 and 7e9, res ecti!ely. +,-T&(N 23. +,-T&(N 24. The "irst ara$ra h o" +ubsection 3363.2 o" the Manual o" Re$ulations is hereby deleted. +ubsection 3363.5 o" the Manual o" Re$ulations is hereby amended to read as "ollo#s*

7+ubsection 3363.5. )loatin$ rates o" interest. 8 The rate o" interest on a "loatin$ rate loan durin$ each interest eriod shall be stated on the basis o" a re"erence rate lus a mar$in as may be a$reed u on by the arties. 7Re"erence rates "or !arious interest eriods shall be determined and announced by the -entral Ban% e!ery #ee% and shall be based on the #ei$hted a!era$e o" the interest rates aid durin$ the immediately recedin$ #ee% by the ten 2164 commercial ban%s #ith the hi$hest le!els o" outstandin$ de osit substitutes on romissory notes issued by such ban%s, #ith maturities corres ondin$ to the interest eriods "or #hich such re"erence rates are bein$ determined. The commercial ban%s to be included "or ur oses o" com utin$ the re"erence rates shall be re!ie#ed and determined at the be$innin$ o" e!ery calendar semester on the basis o" the le!els o" their outstandin$ de osit substitutes as o" May 31 or No!ember 36, as the case may be. 7The rate o" interest on "loatin$ rate loans, e1istin$ and outstandin$ as o" D ril 2, 1982 shall continue to be determined on the basis o" the re"erence rate obtained "rom the #ei$hted a!era$e o" the interest rates aid by the "i!e ban%s #ith the lar$est !olume o" business transacted durin$ the immediately recedin$ thirty 2364 days, on time de osits #ith maturities o" more than se!en hundred thirty 2;364 days, #hich shall be announced by the -entral Ban% e!ery month "or as lon$ as such loans are e1istin$ and outstandin$* >ro!ided, ho#e!er, That the arties to such e1istin$ "loatin$ rate loans a$reements are not recluded "rom amendin$ or modi"yin$ their loan a$reements by ado tin$ a "loatin$ rate o" interest determined on the basis o" the re"erence rate mentioned in the recedin$ ara$ra h. 7Bhere the loan a$reement ro!ides "or a "loatin$ interest rate, the interest eriod, #hich shall be such eriod o" time "or #hich the rate o" interest is "i1ed, shall be such eriod as may be a$reed u on by the arties.9

BOO# I* Non-Ban$ +!nanc!al In(erme,!ar!e" +,-T&(N 25. "ollo#s* The last ara$ra h o" +ubsection 4283E.1 o" the Manual o" Re$ulations is hereby amended to read as

7>rocedures "or demand de osits o" NBEBs #ith the -entral Ban% as ro!ided in D endi1 14 shall be "ollo#ed.9 +,-T&(N 2:. +ubsection 4363E.1 to 4363E.9 o" the Manual o" Re$ulations are hereby amended to read as "ollo#s*

7+ubsection 4363E.1. >urchase o" Recei!ables. 8 The rate o" yield, includin$ commissions, remiums, "ees and other char$es, "rom the urchase o" recei!ables and other obli$ations, re$ardless o" maturity, that may be char$ed or recei!ed by NBEBs shall not be sub.ect to any re$ulatory ceilin$. 7Recei!ables and other obli$ations shall include claims collectible in money o" any amount and maturity "rom domestic and "orei$n sources. The Monetary Board shall determine in doubt"ul cases #hether a articular claim is included #ithin said hrase.9 7+ubsection 4363E.2. 0oans. 8 The rate o" interest, includin$ commissions, remiums, "ees and other char$es, on loan transactions, re$ardless o" maturity and #hether secured or unsecured, shall not be sub.ect to any ceilin$ rescribed under or ursuant to the /sury 0a#, as amended.9 7+ubsection 4363E.3. )loatin$ rate o" interest. 8 The rate o" interest on a "loatin$ rate loan durin$ each interest eriod shall be stated on the basis o" a re"erence rate lus a mar$in as may be a$reed u on by the arties. 7Re"erence rates "or !arious interest eriods shall be determined and announced by the -entral Ban% e!ery #ee% and shall be based on the #ei$hted a!era$e o" the interest rates aid durin$ the immediately recedin$ #ee% by the ten 2164 commercial ban%s #ith the hi$hest le!els o" outstandin$ de osit substitutes on romissory notes issued by such ban%s, #ith maturities corres ondin$ to the interest eriods "or #hich such re"erences rates are bein$ determined. The commercial ban%s to be included "or ur oses o" com utin$ the re"erence rates shall be re!ie#ed and determined at the be$innin$ o" e!ery calendar semester on the basis o" the le!els o" their outstandin$ de osit substitutes as o" May 31 or No!ember 36, as the case may be.9 7The rate o" interest on "loatin$ rate loans, e1istin$ and outstandin$ as o" D ril 2, 1982 shall continue to be determined on the basis o" the re"erence rate obtained "rom the #ei$hted a!era$e o" the interest rates aid by the "i!e ban%s #ith the lar$est !olume o" business transacted durin$ the immediately recedin$ thirty 2364 days, on time de osits #ith maturities o" more than se!en hundred thirty 2;364 days, #hich shall be announced by the -entral Ban% e!ery month "or as lon$ as such loans are e1istin$ and outstandin$* >ro!ided, ho#e!er, That the arties to such e1istin$ "loatin$ rate loan a$reements are not recluded "rom amendin$ or modi"yin$ their loan a$reements by ado tin$ a "loatin$ rate o" interest determined on the basis o" the re"erence rate mentioned in the ne1t recedin$ ara$ra h. 7Bhere the loan a$reement ro!ides "or a "loatin$ interest rate, the interest eriod, #hich shall be such eriod o" time "or #hich the rate o" interest is "i1ed, shall be such eriod as may be a$reed u on by the arties.9 7+ubsection 4363E.4. ,""ect o" re ayment. 8&" there is no a$reement on the rebate o" interest in the e!ent o" re ayment o" the loan, the creditor is not under any le$al obli$ation to return the interest corres ondin$ to the eriod "rom date o" re ayment to the sti ulated maturity date o" the loan. Dny re ayment made by the debtor should not, there"ore, a""ect the com utation o" the e""ecti!e rate sti ulated in the loan contract.9 +,-T&(N 2;. +ubsections 4363E.16 and 4363E.11 o" the Manual o" Re$ulations are hereby renumbered as +ubsections 4363E.5. and 4363E.:, res ecti!ely. +,-T&(N 28. +ubsection 4363N.1 o" the Manual o" Re$ulations is hereby amended to read as "ollo#s*

7+ubsection 4363N.1. &nterest Rates. 8 The rate o" interest includin$ commissions, remiums, "ees and other char$es on loans and "orbearance o" money, re$ardless o" maturity and #hether secured or unsecured, shall not be sub.ect to any ceilin$s rescribed under or ursuant to the /sury 0a#, as amended.9 +,-T&(N 29. +ubsections 4363N.2, 4363N.4 and 4363N.5 o" the Manual o" Re$ulations are hereby deleted, and +ubsections 4363N.3, 4363N.:, and 4363N.; thereo" are hereby renumbered as +ubsections 4363N.2, 4363N.3 and 4363N.4, res ecti!ely. +,-T&(N 36. +ection 4363> o" the Manual o" Re$ulations is hereby amended to read as "ollo#s*

7+,-T&(N 4363>. &nterest, )ees and (ther -har$es. 8 The rate o" interest includin$ commissions, remiums, "ees and other char$es on any loan or "orbearance o" money e1tended by a a#nsho , a#nbro%er or a#nbro%er@s a$ent, re$ardless o" maturity, shall not be sub.ect to any ceilin$ rescribed under or ursuant to the /sury 0a#, as amended. 7No a#nsho shall collect interest on loans in ad!ance "or a eriod o" more than a year.9 +,-T&(N 31. +ubsection 4363>.1 o" the Manual o" Re$ulations is hereby deleted.

+,-T&(N 32. Bhene!er any erson or entity !iolated any o" the ro!isions o" this -ircular, the erson or entity res onsible "or such !iolation shall be sub.ect to the enalties rescribed in the "irst ara$ra h o" +ection 34 o" Re ublic Dct No. 2:5, as amended, andFor the enalties rescribed in +ection 16 o" Dct No. 2:55, #ithout re.udice to the im osition o" administrati!e sanctions under +ections 34<D and 34<B o" Re ublic Dct No. 2:5, as amended. +,-T&(N 33. This -ircular shall ta%e e""ect on Ganuary 1, 1983.

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