Article 146Supplement v1, p. 146

COMMERCIAL LAWS SUPPLEMENT

After

the

Oversight

Committee

approved

the

implementing rules and regulations, it shall thereafter

become functus officio , and therefore cease to exist:

Provided , That the Congress may revive the Congressional

Oversight Committee in case of a need for any major

revision/s in the implementing rules and regulations.

Section 10. Indemnity in Favor of the Corporation, its

Officers and Employees . - Unless the Corporation or any

of its officers and employees is found liable for any willful

violation

of

this Act, bad faith, malice and/or gross

negligence, the Submitting Entities, Accessing Entities,

Special Accessing Entities, Outsource Entities and duly

authorized

non-accessing

entities

shall

hold

the

Corporation, its directors, officers and employees free and

harmless to the fullest extent permitted by law and shall

indemnify them from any and all liabilities, losses, claims,

demands, damages, deficiencies, costs and expenses of

whatsoever kind and nature that may arise in connection

with the performance of their functions without prejudice

to any criminal liability under existing laws.

Section 11. Penalties . - Any person who willfully violates

any

of

the

provisions of this Act or the rules and

regulations promulgated by the SEC in coordination with

the relevant government agencies shall, upon conviction,

suffer a fine of not less than Fifty thousand pesos

(PhP50,000.00).

nor

more

than

One

million

pesos

(PhP1,000,000.00) or imprisonment of not less than one

(1) year nor more than five (5) years, or both, at the

discretion of the court.

Section 12. Inviolable Nature of the Secrecy of Bank

Deposits and/or Client Funds . -Pursuant to Republic Act

No. 1405 (Law on Secrecy of Bank Deposits), Republic Act

No. 6426 (The Foreign Currency Deposit Act), Republic

Act No. 8791 (The General Banking Law of 2000), Republic

Act No. 9160 (Anti-Money Laundering Law) and their

amendatory laws, nothing in this Act shall impair the

secrecy of bank deposits and and/or client funds and

investments in government securities or funds.

Section 13. Annual Report . - The SEC shall submit an

annual

report

to

Congress

on

the

status

of

the

implementation of this Act.

Sec. 14. Principal Government Agency. - The SEC shall

be the lead government agency to implement and

enforce this Act. As lead agency, the SEC shall consult and

coordinate with other relevant government agencies in

the adoption of all rules and regulations for the full and

effective implementation and enforecement of this Act,

taking into account the policy objectives contained in

Section 2 hereof.

Section 15. Separability Clause . - Should any provision of

this Act or the application thereof to any person or

circumstance be held invalid, the other provisions or

sections of this Act shall not be affected thereby.

Section

16.

Repealing

Clause .

-

This

Act

repeals

Presidential Decree No. 1941 in its entirety. All laws,

decrees, executive orders, rules and regulations or parts

thereof which are inconsistent with this Act are hereby

repealed, amended or modified accordingly.

Section 17. Effectivity Clause . - This Act shall take effect

fifteen (15) days following its publication in the Official

Gazette or in at least two (2) newspapers of general

circulation.

RA No 5980 | Financing Company Act of

1998

As amended by RA No 8556, 10881

AN ACT REGULATING THE ORGANIZATION AND

OPERATION OF FINANCING COMPANIES.

Section 1. This Act shall be known as the "Financing

Company Act of 1998."

Section 2. Declaration of Policy. It is hereby declared to

be the policy of the State to regulate and promote the

activities of financing and leasing companies to place

their operations on a sound, competitive, stable and

efficient basis as other financial institutions, to recognize

and strengthen their critical role in providing medium

and long-term credit for investments in capital goods and

equipment especially by small and medium enterprises

particularly in the countryside and to curtail and prevent

acts or practices prejudicial to the public interest so that

they may be in a better position to extend efficient

service in a fair manner to the general public and to

industry, commerce and agriculture and thereby more

fully contribute to the sound development of the national

economy. (Financing Company Act of 1998, Republic Act

No. 8556, [February 26, 1998])

Section 3. Definition of Terms. As used in this Act, the

term:

(a) 'Financing companies' hereinafter called companies,

are

corporations,

except

banks,

investments

houses,

savings

and

loan

associations,

insurance companies,

cooperatives, and other financial institutions organized or

operating under other special laws, which are primarily

organized for the purpose of extending credit facilities to

consumers and to industrial, commercial, or agricultural

enterprises,

by

direct

lending

or

by

discounting

or

factoring commercial papers or accounts receivable, or by

buying and selling contracts, leases, chattel mortgages, or

other evidences of indebtedness, or by financial leasing of

movable as well as immovable property;

(b) 'Securities and Exchange Commission' shall mean the

office of the Securities and Exchange Commission of the

Philippines;

(c) 'Credit' shall mean any loan, mortgage, financial lease,

deed of trust, advance or discount, any conditional sales

contract, contract to sell, or sale or contract of sale of

property or service, either for present or future delivery,

under which, part of all or the price is payable subsequent

to the making of such sale or contract; any contract, any

option, demand, lien or pledge, or to the other claims

against, or for the delivery of, property or money, any

purchase, or other acquisition of or any credit upon the

security of, any obligation or claim arising out of the

foregoing, and any transaction or series of transactions

having similar purpose or effect; and

(d) 'Financial leasing' is a mode of extending credit

through a non-cancelable lease contract under which the

lessor purchases or acquires, at the instance of the lessee,

machinery,

equipment,

motor

vehicles,

appliances,

business and office machines, and other movable or

immovable property in consideration of the periodic

payment by the lessee of a fixed amount of money

sufficient

to

amortize at least seventy (70%) of the

purchase

price

or

acquisition

cost,

including

any

incidental expenses and a margin of profit over an

obligatory period of not less than two (2) years during

which the lessee has the right to hold and use the leased

property with the right to expense the lease rentals paid

to the lessor and bears the cost of repairs, maintenance,

insurance

and

preservation

thereof,

but

with

no

obligation or option on his part to purchase the leased

property from the owner-lessor at the end of the lease

contract.

(e) 'Purchase discount' is the difference between the

value of the receivable purchased or credit assigned, and

the net amount paid by the finance company for such

purchases

or

assignment, exclusive of fees, services,

charges,

interest and other charges incident to the

extension of credit.

(f) 'Lease rentals' shall refer to the periodic payments

made by the lessee to the lessor under Section 3(d),

above.

(Financing Company Act of 1998, Republic Act No. 8556,

[February 26, 1998])

Section 4. Grant of Authority to the Securities and

Exchange Commission. The Securities and Exchange

Commission

is

hereby

empowered

to

enforce

the

provisions implementing regulations except insofar as

the Bangko Sentral may have supervisory authority under

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