Article 147Supplement v1, p. 147

COMMERCIAL LAWS SUPPLEMENT

the provisions of Republic Act No. 7653 with respect to

financing companies licensed to perform quasi-banking

functions,

and

insofar

as

the

Monetary

Board

has

authority

to

prescribe financing company rates and

charges under section 5 hereof. (Financing Company Act

of 1998, Republic Act No. 8556, [February 26, 1998])

Section

5.

Limitation

on

Purchase

Discount,

Lease

Rentals, Fees, Service and Other Charges. The Monetary

Board of the Bangko Sentral ng Pilipinas is hereby

empowered to prescribe, in consultation with financing

companies

and

the

Securities

and

Exchange

Commission, the maximum rate or rates of purchase

discounts, lease rentals, fees, service and other charges of

financing companies, and to change, eliminate or grant

exemptions from or suspend the effectivity of such rules

whenever warranted by prevailing economic and social

conditions. (Financing Company Act of 1998, Republic Act

No. 8556, [February 26, 1998])

Section

6.

Form

of

Organization

and

Capital

Requirements. Financing companies shall be organized

in the form of stock corporations, may be owned up to

one hundred percent (100%) by foreign nationals, and

shall have a paid-up capital of not less than ten million

pesos (P10,000,000.00) in case the financing company is

located in Metro Manila and other first class cities, five

million pesos (P5,000,000.00) in other classes of cities and

two million five hundred thousand pesos (P2,500,000.00)

in

municipalities:

Provided ,

That

the

Securities

and

Exchange

Commission

may

adjust

said

minimum

paid-up levels as it deems warranted by its prudential

oversight

requirements

and

consistent

with

the

objectives of this Act: Provided, however , That financing

companies duly existing and in operation before the

effectivity of this Act shall comply with the minimum

capital requirement within one (1) year from the date of

the said effectivity: and Provided, further , That where land

is concerned, the financing company shall comply with

the constitutional provision on foreign ownership of land.

(as amended by RA Nos 8556, 10881)

Section 7. Requirement for Registration. Aside from

requiring

compliance

with

the

provisions

of

the

Corporation

Code,

the

Securities

and

Exchange

Commission shall not register the articles of incorporation

of any financing company unless its office is satisfied on

the evidence submitted to it, that: prcd

(a) All the requirements of existing laws to engage in the

business for which the applicant is proposed to be

incorporated or organized have been complied with;

(b) The organization, direction and administration, as well

as the integrity and responsibility of the organizers and

administrators reasonably assure the protection of the

interest of the general public;

(c) All the requirements of this Act have been complied

with:

Provided,

That

financing

companies

duly

incorporated or registered prior to the approval of this

Act, and which are actually existing and operating as

such, shall file an information sheet with the Securities

and Exchange Commission in the form to be prescribed

by the Securities and Exchange Commission within sixty

(60) days after notice from the said Commission. No

person, association, partnership, or corporation shall hold

itself out as doing business as a 'financing company' or

'finance and investment company' or any other title or

name tending to give the public the impression that it is

engaged in the operations and activities of a financing

company, unless so authorized under this Act.

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

[February 26, 1998])

Section 8. Citizenship Requirement of the Board of

Directors.

Section 8. Revocation and Suspension of Registration.

The Securities and Exchange Commission may revoke or

suspend the registration of any financing company by

entering an order to this effect together with its findings

in respect thereto, if upon investigation into the affairs of

said financing company or complaint by any person, it

shall appear that:

(a) it is insolvent; or

(b) it has violated any provision of this Act. (9a)

Section 9. Rights and Powers . — Financing companies

shall have the following powers, in addition to those

granted by this Act and by other laws:

(a)

Engage

in

quasi-banking

and

money

market

operations with the prior approval of the Bangko Sentral

ng Pilipinas;

(b) Engage in trust operations subject to the provisions of

the General Banking Act upon prior approval by the

Bangko Sentral ng Pilipinas;

(c) Issue bonds and other capital instruments subject to

pertinent rules and regulations of the Bangko Sentral ng

Pilipinas;

(d) Rediscount their paper with government financial

institutions subject to relevant laws, rules and regulation;

(e)

Participate

in

special

loan

or

credit

programs

sponsored by or made available through government

financial institutions; and

(f)

Provide

foreign

currency

loans

and

leases

to

enterprises who earn foreign currency by exports or other

means, subject to existing laws and rules and regulations

promulgated by the Bangko Sentral ng Pilipinas.

Nothing in this section shall be construed as precluding a

financing company from performing such services or

exercising such powers as may be granted by the Bangko

Sentral ng Pilipinas or the Securities and Exchange

Commission or as may be incidental to its activities as a

corporation.

Section 10. Applicability of Incentives and Exemptions to

Financial Leases . — Any incentive, exemption or benefit,

including tax credits and investment incentives granted

by law or regulation to any purchaser, importer, borrower

or other eligible person in connection with any purchase,

importation, acquisition, or other transaction shall not be

lost,

diminished

or

impaired

when

the

associated

financing is through a financial lease rather than through

borrowing or other conventional method of financing.

Financing companies providing the financial lease in

such cases shall be entitled to any incentive, exemption,

benefit

or

privilege

available

to

lenders,

importers,

purchasers or other eligible person in such transactions

under the applicable law or regulation.

Section 11. Parity Clause . — When providing medium and

long-term

credit

to

small

and

medium

enterprises,

financing

companies

shall

enjoy

such

other

rights,

powers, benefits and privileges as may be granted by the

law or regulation to other non-bank financial institutions

when they provide similar credit to such enterprises.

Section 12. Liability of Lessors . — Financing companies

shall not be liable for loss, damage or injury caused by a

motor vehicle, aircraft, vessel, equipment, machinery or

other property leased to a third person or entity except

when the motor vehicle, aircraft, vessel, equipment or

other property is operated by the financing company, its

employees or agents at the time of the loss, damage or

injury.

Section 13. Registry of Financial Lease . — The Register of

Deeds shall open and maintain a register of financial

leases, as an adjunct to the chattel mortgage registry.

Said lease register shall contain the following particulars:

(1) Name or description of property, including:

(a) Brand name or name of manufacturer;

(b) Name of model, if any;

(c) Year of model, or manufacture, if available; and

(d) Serial number, if any.

(2) Acquisition cost;

(3) Name of owner or finance company lessor;

© Compiled by RGL

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