Solon wants cap on interest rates charged by lending institutions

A House leader has sought the immediate passage of a bill that will regulate the rate
of interest on loans extended by lending institutions to teachers.
Deputy Speaker Giorgidi Aggabao (4
th
District !sabela" said House #ill 4$%& seeks
to put a cap on the interest rates being charged by lending institutions as a modest attempt
to alle'iate the economic plight of public teachers.
()ur teachers are easy prey to shark loans and in this age of electronic banking the
so*called +payday, or +A-., loans is now the common practice where the
borrowers/debtors pledge and surrender their A-.s to their creditors to secure payment of
their loans e'ery pay period until the loan is fully paid0 Aggabao said.
Aggabao said with a family to support and with such meager salaries teachers ha'e
time and again fallen 'ictims to high interest rates and exorbitant fees to make both ends
meet.
(1e ha'e often hailed our teachers as our unsung heroes yet to this day this
recognition remains but an empty accolade. !t is high time that we put our teachers first
and this bill aims to inch towards that direction0 Aggabao stressed.
2nder the measure all acti'ely employed public school teachers whether full time
or part*time in all le'els of education are co'ered by this Act.
-he bill also pro'ides that the rate of interest in consumer loans extended to co'ered
teachers shall not exceed $3 per annum including all fees and charges insurance and
other ancillary products sold in connection with the consumer loan.
4onsumer loans as used in this Act refer to any type of credit or loan extended by
any go'ernment or pri'ate banking and financing institutions except that such loan does
not include a residential mortgage or a loan obtained in the course of purchasing a car or
other personal property when the loan is offered for the express purpose of financing the
purchase and is secured by the car of personal property bought.
2nder the bill all lending institutions extending loans to co'ered teacher shall be
granted additional incenti'es under the de'elopment assistance incenti'e of the Bangko
Sentral ng Pilipinas (#S5" under 6epublic Act 789& or the General #anking :aw of ;%%%.
-he Department of <ducation (Dep<d" the 4ommission on Higher <ducation
(4H<D" and the #S5 shall promulgate the rules and regulations for the effecti'e
implementation of this Act. (=%" lvc
NR # 3510
JUNE 27, 2014