Republic of the Philippines
HOUSE OF REPRESENTATIVES
Constitution Hills, Quezon City

SEVENTEENTH (177) CONGRESS
First Regular Session

House Bill No._5409

Introduced by: REPRESENTATIVE ERIC L. OLIVAREZ

EXPLANATORY NOTE

Disasters whether attributed to natural causes or fortuitous events,
the most recent of which is the killer typhoon “Ondoy”, result in great
damage to property both public and private including loss of lives
which bring untold sufferings to the people living in the areas affected
in various magnitudes. Undoubtedly, these disasters trigger temporary
suspension of commercial activities and bring about ‘economic
stagnation for some time in the areas affected, not to mention the
emotional stress by those families who lost their relatives.

This economic dislocation and stagnation and the emotional stress
and mental anguish cause extreme difficulties on the part of borrowers
from financial institutions and other private persons to meet payments
falling due during this period of calamity. Consequently, these loans are
subjected to harsh and onerous penalties and surcharges including the
interests which accrue during the period of commercial inactivity when
all efforts are exerted to relief operations, rehabilitation and restoration
of facilities, thereby resulting, in closure of business and/or foreclosures
of collaterals.

In effect, the borrowers are being penalized for acts beyond their
control instead of giving them the chance to resume their business or
professional/occupation, when under Article 1174 of the New Civil


Code, XXX, “no person shall be responsible for those events which could
not be forseen, or which through forseen, were inevitable.”

It is for the foregoing reasons that this bill is being proposed to
impose a compulsory moratorium on the accrual and collection of
interests, penalties and surcharges, by financing institutions both public
and private, including natural or juridical persons, within a period of six
(6) months from the time the areas are declared by the President of the
Philippines as calamity areas.

Considering its practical merits, humanitarian value and
aforeqouted legal and factual basis, support for the enactment of this bill
is earnestly solicited.

eu 6. ON,

ERIC L. OLIVAREZ


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Constitution Hills, Quezon City

SEVENTEENTH (177) CONGRESS
First Regular Session

House Bill No® 409

Introduced by: REPRESENTATIVE ERIC L. OLIVAREZ

AN ACT IMPOSING A MANDATORY MORATORIUM ON
THE ACCRUAL AND COLLECTION OF PRINCIPAL INTERESTS,
PENALTIES AND SURCHARGES ON ALL LOANS FROM PUBLIC
AND PRIVATE FINANCIAL INSTITUTIONS PERSONS FOR A
PERIOD OF SIX MONTHS FROM THE TIME ANY AREA WITHIN
THE TERRITORIAL JURISDICTION OF THE REPUBLIC OF THE
PHILIPPINES IS DECLARED A CALAMITY AREA BY THE
PRESIDENT OF THE PHILIPPINES AND FOR OTHER PURPOSES.

Be it enacted by Congress in Session assembled:

Section 1. This act shall be otherwise known as the Moratorium
in“Calamity Act of 2013”.

Section 2. A moratorium is hereby imposed on the principal

payments, accrual and collection of interests, penalties and surcharges
on all loans, credit accommodations or financial obligations of any kind


from public or private financial institutions for a period of six months
from the time the area is declared a calamity area by the President of the
Philippines due to natural calamities or disasters.

Section 3. However, payments for principal and interest thereto
may be made by the borrower during the six (6) month, which voluntary
intention shall be made in writing.

Section 4. Any violation of this act shall subject the erring financial
institution or private lender to a fine equivalent to five (5) times the
interests, penalties and surcharges collected in violation of the
provisions of this act for the first offense; then (10) times the amounts in
interests, penalties and surcharges collected for the second offense and
suspension of the license to operate for the third and subsequent offense.

Section 5. The fines imposed under this Act will be automatically
applied/offset against the principal loan of the borrower, upon final
conviction by the appropriate court.

Section 6. The Banko Sentral ng Pilipinas is hereby mandated to
enforce the provisions of this act and to issue such implementing rules
and regulations as may be necessary to enforce the provisions of this act.

Section 7. All existing laws, rules, regulations inconsistent with
this act are hereby deemed modified, amended, supplemented or
repealed.

Section 8. This act shall become effective after publication once a

week for two consecutive weeks in three newspapers of general
circulation.

Approved,