This case has been cited 2 times or more.
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2013-04-10 |
VILLARAMA, JR., J. |
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| More recently in Solidbank Corporation v. Permanent Homes, Incorporated,[39] we upheld as valid an escalation clause which required a written notice to and conformity by the borrower to the increased interest rate. Thus: The Usury Law had been rendered legally ineffective by Resolution No. 224 dated 3 December 1982 of the Monetary Board of the Central Bank, and later by Central Bank Circular No. 905 which took effect on 1 January 1983. These circulars removed the ceiling on interest rates for secured and unsecured loans regardless of maturity. The effect of these circulars is to allow the parties to agree on any interest that may be charged on a loan. The virtual repeal of the Usury Law is within the range of judicial notice which courts are bound to take into account. Although interest rates are no longer subject to a ceiling, the lender still does not have an unbridled license to impose increased interest rates. The lender and the borrower should agree on the imposed rate, and such imposed rate should be in writing. | |||||