12% interest (Cir. 416) on forbearance of money

The rate 12% interest referred to in Cir. 416 applies only to: "[L]oan or forbearance of money, or to cases where money is transferred from one person to another and the obligation to return the same or a portion thereof is adjudged. Any other monetary judgment which does not fall within its coverage for such imposition is not within the ambit of the authority granted to the Central Bank. When an obligation not constituting a loan or forbearance of money is breached then an interest on the amount of damages awarded may be imposed at the discretion of the court at the rate of 6% per annum in accordance with Art. 2209 of the Civil Code. Indeed, the monetary judgment in favor of private respondent does not involve a loan of forbearance of money, hence the proper imposable rate of interest is (6%) per cent." [G.R. No. 123643. October 30, 1996]