May 10, 2019
SEC ADVISORY
ON RESPONSIBLE BORROWING AND LOAN INTEREST
The SECURITIES AND EXCHANGE COMMISSION ("Commission") advises the public to observe responsible borrowing and to be mindful of the imposable interest, penalties and other charges before entering into a loan/financing contract or other credit arrangement. This Advisory is issued in view of the complaints received by the Commission against lending and financing companies for the allegedly high interest, penalties and other charges imposed by such companies.
The public is cautioned to transact only with legitimate lending and financing companies which have been issued Certificates of Authority to operate as such by the Commission.
Furthermore, the public is apprised that pursuant to Central Bank ("CB") Circular No. 905, series of 1982, interest rates are currently not regulated, hence, are subject to the agreement of the lender and borrower. The said circular lifted the ceiling on interests, fees and other charges on loans and other forbearance of money previously prescribed under the Usury Law. The parties to a loan agreement are therefore bound by the interest and other charges they...
