Laws on interest rates to loans, forbearance of money
In Sec. of the Dep't. of Public Works and Highways v. Sps. Tecson (758 Phil. 604, 634 2015, at 639), the Supreme Court summarized the applicable rates of interest to loans or forbearance of money in the absence of an express contract as to such rate of interest, for the period of 1940 to present as follows:| Law, Rule and Regulations, BSP Issuances |
Date of Effectivity |
Interest Rate |
| Act No. 2655 | May 1, 1916 | 6% |
| Central Bank (CB) Circular No. 416 | July 29, 1974 | 12% |
| CB Circular No. 905 | December 22, 1982 | 12% |
| BSP Circular No. 799 | July 1, 2013 | 6% |
The twelve percent (12%) per annum rate of legal interest is only applicable until June 30, 2013. Thereafter, legal interest shall be at six percent (6%) p.a. in line with BSP-MB Circular No. 799, Series of 2013.
Prevailing jurisprudence[1] has upheld the applicability of BSP-MB Circular No. 799, Series of 2013 to forbearances of money in expropriation cases. The cases of Sy v. Local Government of Quezon City[2] and Land Bank of the Philippines v. Wycoco[3] were all decided prior to the effectivity of BSP-MB Circular No. 799, Series of 2013 on July 1, 2013.[1] See Evergreen Manufacturing Corp. v. Republic, supra note 30; Land Bank of the Philippines v. Omengan, G.R. No. 196412, July 19, 2017; Republic v. Cebuan, supra note 30; National Power Corporation v. Heirs of Ramoran, G.R. No. 193455, June 13, 2016, 793 SCRA 211; and Republic v. Mupas.
[2] 710 Phil. 549 (2013).
[3] 464 Phil. 83 (2004).
Prevailing jurisprudence[1] has upheld the applicability of BSP-MB Circular No. 799, Series of 2013 to forbearances of money in expropriation cases. The cases of Sy v. Local Government of Quezon City[2] and Land Bank of the Philippines v. Wycoco[3] were all decided prior to the effectivity of BSP-MB Circular No. 799, Series of 2013 on July 1, 2013.[1] See Evergreen Manufacturing Corp. v. Republic, supra note 30; Land Bank of the Philippines v. Omengan, G.R. No. 196412, July 19, 2017; Republic v. Cebuan, supra note 30; National Power Corporation v. Heirs of Ramoran, G.R. No. 193455, June 13, 2016, 793 SCRA 211; and Republic v. Mupas.
[2] 710 Phil. 549 (2013).
[3] 464 Phil. 83 (2004).
