Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City, Metro Manila 
NINETEENTH CONGRESS 
First Regular Session 
House Bill No.______________ 
Introduced by Hon. Faustino Michael T. Dy III 
EXPLANATORY NOTE 
While the amendments to the Anti-Usury Act opened the way for bankers and 
businessmen, and juridical and natural persons to enter into contracts of loans freely 
stipulating on the rates of interest, and thus stimulated the growth of commerce in 
the country, its effects vary among the different kinds of parties to such contracts. 
Doubtless, there are those who have benefited from this development. It is 
not, however, difficult to imagine the various situations that may force a lowly 
individual, especially the less than highly educated, to enter into contracts that are 
disadvantageous to themselves. Sudden financial need brought about by life events 
both happy and sad, natural catastrophes, opportunities, etc., may push such a 
person to accept almost any terms offered or made available to him. 
The humble farmer is no stranger to such situations. He finds himself not 
infrequently with his back against the wall especially when nature ruthlessly 
punishes his toil to naught; sometimes, when his fellow men commit acts that enrich 
themselves at the expense of others. He then finds himself at the mercy of loan 
sharks, and often resorts to using his land as collateral. Sometimes, sadly, he loses 
it; and with it go his dreams of a better life. 
A piece of land, hard-won over many years of struggle against the prevailing 
class, lost for any reason is one piece too many.  
Where the government can help to prevent this from happening, it should do 
so as a matter of duty. Among others, legislation or lack thereof that serve to do 
injustice to our farmers should be accordingly addressed.  
The Filipino farmer, for centuries the symbol of industry in our country, 
belongs to a class all his own. To him belong accolades for making possible the 
growth and success of this nation’s youth while sacrificing his own welfare. To him 
belong our overdue gratitude for enabling us to be nourished while he languishes in 
misery and many a time goes hungry. 
It is therefore a travesty of justice when this hero becomes victim to the 
effects of fluctuating, usually high, interest rates, a situation that this government 
has permitted and continues to permit. While on the one hand it appears to be 
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extending compassion to this sector, on the other it allows others to oppress it. Such 
is the effect of the removal of interest rate ceilings, prescribed by the Anti Usury 
Law, on our farmers. 
Admission and evidence of the less than positive – nay, nefarious, effects of 
such act are statements by our learned Supreme Court justices in landmark cases, 
with words describing the interest rates in such agreements as: “unconscionable,” 
“onerous,” “immoral,” etc. While the law left the determination of what was usurious 
to our judges, such admission of the nature of interest rates and agreements clearly 
leave a bad taste in the mouth – that we have left our people vulnerable to the whims 
of the strong. 
This bill seeks to impose a cap on interest rates that may be imposed on 
small farmers’ loans – they who have very little t their name, who cannot to prevent 
the loss of his property, to prevent the deterioration of his situation, to help him 
survive and enable him to live decently. 
Through this measure, it is hoped that concrete, measurable changes in our 
farmers’ lives may become apparent and felt. And with prayers that it is not yet too 
late for most of those for whom this measure is meant. 
This bill was first filed in the 18th Congress by this representation. In view of 
this representation’s burning desire to correct the neglect of this sector and restore 
their dignity, immediate approval of this bill is earnestly sought. 
FAUSTINO MICHAEL T. DY III 
5th District, Isabela 


Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City, Metro Manila 
NINETEENTH CONGRESS 
First Regular Session 
House Bill No.____________ 
INTRODUCED BY REP. FAUSTINO MICHAEL T. DY III 
AN ACT 
 TO PROHIBIT USURIOUS LENDING TO FARMERS, APPROPRIATING FUNDS 
THEREFOR AND FOR OTHER PURPOSES 
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled: 
SECTION 1. Title. – This Act shall be known as “Anti-Usury Against Farmers Act.” 
SECTION 2. Declaration of Policy. – Article II, Sec. 9 of the 1987 Constitution 
states, “The State shall promote a just and dynamic social order that will ensure the 
prosperity and independence of the nation and free the people from poverty through 
policies that provide adequate social services, promote full employment, a rising standard 
of living, and an improved quality of life for all.” In support of this policy, the State further 
shall ensure that our farmers shall not become victims of usurious lenders and practices. 
SECTION 3.   Interest on loans to farmers whose landholding does not exceed 
seven (7) hectares, whether with collateral or without, shall not exceed an effective 
interest rate of six per cent (6%) per annum. The same rate shall likewise apply to 
forbearance of any money, good or credit, and in judgments. Any figure above this shall 
be considered usurious and illegal. 
SECTION 4. The balance of existing loans shall automatically be restructured 
applying an interest rate not exceeding an EIR of 6% per annum, effective upon 
effectivity of this Act.  
SECTION 5.  The Bangko Sentral ng Pilipinas and the Monetary Board shall 
determine the amount, or the percentage of loanable amounts to farmers in the portfolio 
of banks, public or private. 
SECTION 6. Implementing Rules and Regulations. – The Department of Finance 
shall formulate the rules and regulations of this Act within ninety (90) days of its 
effectivity. 
SECTION 7. Penal Provision. – Any natural person, not a government official or 
employee, who violates any provision of this Act shall be punished with imprisonment of 
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one (1) year and/or a fine not exceeding PhP 100,000.00.  
 
Any government employee or official who violates any provision of this Act shall 
be punished with imprisonment of two (2) years and/or a fine not exceeding PhP 
200,000.00. 
 
Any juridical person who violates any provision of this Act shall be punished with 
a fine of PhP 500,000.00.  Its directors and/or officers may also be punished with 
imprisonment of six (6) months to one (1) year if found liable of a violation under this 
Act. 
 
SECTION 8.  Repealing Clause. – All acts, decrees, letters of instruction, issuances, 
orders, or parts thereof inconsistent with any provision of this Act are hereby deemed 
repealed or modified accordingly. 
 
SECTION 9.  Separability Clause. – If any part of this Act is declared 
unconstitutional, the rest of the provisions shall remain in force and effect. 
 
SECTION 10. Effectivity. – This Act shall take effect 15 days after its publication 
in two newspapers of general circulation or in the Official Gazette. 
 
APPROVED.