SIXTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES 
First Regular Session 
) 
) 
) 
"13 
JUl -8 A8 :56 
SENATE 
Senate Bill No. 54 9 
INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA 
EXPLANATORY NOTE 
flvf· 
Under Article II, Section 18 of the Constitution, "The State affirms labor as 
a primary social economic force. It shall protect the rights of workers and 
promote their welfare. " It is also provided in Article 19 of the New Civil Code that 
"Every person must in the exercise of his rights and in the performance of his 
duties, act with justice, give everyone his due, and observe honesty and good 
faith. "In view of the above-stated provisions, it is a well-settled policy of the State 
to afford protection to labor and promote the rights of workers, which for the 
purpose of this bill, refers to a just wage. 
. 
A just wage includes the intrinsic right to a full wage in accordance with 
contract-stipulations between employer and employee, the extent of service 
rendered by the latter, the criterion of credentials, competence or ability, and 
deductions as provided by law. However, it is now becoming a prevalentj if not a 
rampant practice,. whether in public or private establishments, for. salary-
disbursing officers to lend money before the actual payment of salary becomes 
due, most especially to workers who, in dire need or in cases of emergency, are 
forced to borrow from the former to be paid when the salary falls due, usually at 
usurious 
interest~. Given this scenario, workers fall prey to the greed of 
disbursing officers, the effect of which is detrimental to the well-being of the 
workers. Hence, there is a need to curb this practice. This bill is designed to 
address such wrong. 
In consideration of the foregoing, support for this bill is eamestly 
requested. 
GOY EJERCITO ESTRADA 
Senator 


SIXTEENTH CONGRESS OF THE REPUBLIC 
OF THE PHILIPPINES 
First Regular Session 
SENATE 
Senate Bill No.
5 4 9 
) 
) 
) 
INTRODUCED BY SEN. JINGGOY EJERCITO ESTRADA 
AN ACT 
,iel'WTl" 
, (tVtll(t l)f th .. ~ijTfT{lt,l')~'ll 
'13 
JUL -8 
,~8 :56 
PENALIZING THE ACT OF MONEYLENDING WITH INTEREST BY SALARY-
DISBURSING OfFICERS IN PUBLIC OR PRIVATE ENTITIES, PROVIDING 
PENALTIES FOR VIOLATIONS THEREFOR, AND FOR OTHER PURPOSES 
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled: 
SECTION 1. Declaration of Policy. - It is the policy of the State to afford 
protection to labor and to protect the rights of workers. Pursuant to this policy, the 
right of the worker to receive his full wage is hereby affirmed and protected. 
SEC. 2. Definition of Terms. - As defined in this Act: -
a) Full-Wage - means the net take-home pay of the worker after the 
deduction of such charges authorized by law; 
b) Salary-Disbursing Officer - refers to a treasurer, finance officer, 
accountant, cashier, paymaster and their subordinates or any other 
person who has direct or indirect control of the salary of an employee. 
SEC. 3. Prohibited Acts; Penalties. - The following acts are prohibited: 
a) any private individual or independent money lending activity made by 
the salary-disbursing officer with interest or any other consideration; 
b) any deduction privately, individually or independently made by the 
salary-disbursing officer from the salary of an employee in connection 
with a loan; 
i 
c) the unauthorized withholding of salary by the salary-disbursing officer 
because of a loan; and 
d) the "buying" of salary or giving or advancing to the employee an 
amount less than the full wage. 


Any salary-disbursing officer who shall commit any of the prohibited acts 
mentioned in this Section shall suffer a fine of thrice the amount of the salary due 
the employee and imprisonment for not less than six (6) months. 
Any other person who commits similar acts in anyway whatsoever or who 
acts in behalf of the salary-disbursing officer shall suffer the same fine and 
penalty as provided in the preceding paragraph. 
Loans offered by the government and private entities, including bank and 
company loans and cooperative credit facilities, and credit assistance by 
associations, are exempted from the coverage of this Act. 
SEC. 4. Separability Clause. - If any provision, or part hereof, is held 
invalid or unconstitutional, the remainder of the law or the provision not otherwise 
affected shall remain valid and subsisting. 
SEC. 5. Repealing Clause. - Any law, presidential decree or issuance, 
executive order, letter of instruction, administrative order, rule or regulation 
contrary to or inconsistent with, the provisions of this Act is hereby repealed, 
modified or amended accordingly. 
SEC. 6. Effectivity Clause. - This Act shall take effect fifteen (1i5) days 
after its publication in at least two (2) newspapers of general circulation. I 
Approved,