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Memorandum - Legal Research 2019
Memorandum - Legal Research 2019
MEMORANDUM
COME NOW PLAINTIFF, through the undersigned counsel, unto this Honorable
Supreme Court most respectfully submit and present this Memorandum in the above-
titled case and aver that:
I. STATEMENT OF FACTS
1. On May 30, 2018 complainant MOLINA wrote BSP Governor a letter dated May
30, 2018 regarding the legality of monthly interest of 3.5%.
2. In a letter dated August 10, 2018 respondent BSP Officer PIA BERNADETTE
ROMAN TAYAG replied that respondent BSP under Sections X305 and X305-1
(MORB) lifted interest rates imposed by financial institutions.
3. In a letter September 10, 2018 MOLINA wrote BSP Governor a letter disputing
the position of BSP Officer TAYAG.
4. In a letter dated October 4, 2018 MOLINA wrote all the respondents requesting
to abrogate Sec. X305 of the Manual of Regulations for Banks for being contrary
to public interest.
III. DISCUSSION
1. Whether or not BSP is authorized to lift interest rate ceiling.
“While C.B. Circular No. 90582, which took effect on January 1, 1983,
effectively removed the ceiling on interest rate for both secured and
unsecured loans, regardless of maturity, nothing in the said circular
could possibly be read as granting carte blanche authority to lenders to
raise interest rate to levels which would either enslave their borrowers
or lead to a hemorrhaging of their assets.
Stipulated interest rates are illegal if they are unconscionable and the
Court is allowed to temper interest rates when necessary. In exercising
this vested power to determine what is iniquitous and unconscionable, the
Court must consider the circumstances of each case. What may be
iniquitous and unconscionable in one case, may be just in another.
The BSP mission and vision of continuing and unending quest to become
an excellent monetary authority committed to improve the quality of
life of Filipinos.
The BSP aims to be recognized globally as the monetary authority and
primary financial system supervisor that supports a strong economy and
promotes a high quality of life for all Filipinos.
BSP Values of Patriotism is selfless commitment to the service of the
Filipino people and the country.
For public interest of Filipino people, lifting of the ceiling on interest rates
is prejudicial to public interest. It is contrary to the mission and vision of
BSP to improve the quality of life of Filipinos.
2. Whether or not BSP Monetary Board is liable under (e) Sec. 3 RA 3019.
BSP Monetary Board was charged with the crime of violation of Section
3(e) of R.A. No. 3019, which states that:
(e) Causing any undue injury to any party, including the Government, or
giving any private party any unwarranted benefits, advantage or
preference in the discharge of his official administrative or judicial
functions through manifest partiality, evident bad faith or gross
inexcusable negligence. This provision shall apply to officers and
employees of offices or government corporations charged with the grant of
licenses or permits or other concessions.
Section 3(e) of R.A. No. 3019 which has the following essential elements:
It is irrefutable that the first element is present. The accused are the
members of the Monetary Board that comprise of the following:
Nestor Espenilla Jr., Governor of the Bangko Sentral ng Pilipinas -
Chariman, Carlos Dominguez III, Secretary of the Department of Finance -
Member, Felipe M. Medalla - Member, Juan D. De Zuñiga, Jr. - Member,
Peter B. Favila - Member, Antonio S. Abacan, Jr. - Member, and Bruce J.
Tolentino - Member.
As to the second element, the accused clearly showed that they have
acted with manifest partiality, since the suspension of the Usury Law by
Central Bank Circular No. 905 s. 1982; BSP allowed banks to set their
own rates and deliberately ignore to regulate the interest rates charged by
banks, giving financial institutions unwarranted benefits, advantage and
preference.
The accused also manifested an act of evident bad faith and gross
inexcusable negligence, their mere act of not abrogating Sec. X305 of
MORB, despite awareness of the undue injury that such regulation may
cause to a countless numbers of credit card holders.
"Bad faith does not simply connote bad judgment or negligence; it imputes
a dishonest purpose or some moral obliquity and conscious doing of a
wrong; a breach of sworn duty through some motive or intent or ill will; it
partakes of the nature of fraud.
IV. RELIEF
WHEREFORE, for reasons stated, it is respectfully prayed for this Honorable
Court that judgment be rendered finding the Accused Nestor Espenilla Jr.,
Governor of the Bangko Sentral ng Pilipinas - Chariman, Carlos Dominguez III,
Secretary of the Department of Finance - Member, Felipe M. Medalla - Member,
Juan D. De Zuñiga, Jr. - Member, Peter B. Favila - Member, Antonio S. Abacan,
Jr. - Member, and Bruce J. Tolentino – Member guilty beyond reasonable doubt
for the crime of violation of Section 3(e) of R.A. No. 3019.
Plaintiff likewise prays for costs and for such other and further relief as this
honorable court may deem just and equitable in the premises.
Respectfully Submitted
EVER E. ALCAZAR
Counsel for the Plaintiff
Unit 903 Liberty Center Building, H.V. Dela Costa St., Makati City
IBP No. 000000/05-05-19/MAKATI
PTR No. 000000/5-05-13/Makati City
Roll of Atty.’s No.
00000 April 12, 2000