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THIRTEENTH CONGRESS OF THE REPUBLIC 
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1 . I  a '  
OF THE PHlLIPPINES 
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First Regular Session 
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Introduced by Senator Miriam Defensor Santiago 
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EXPLANATORY NOTE 
R.A. No. 7394, Title 4, Article 141 provides that before opening an account under an 
open-end-credit plan, the creditor shall disclose, to the extent applicable, the following 
information: 
a) the conditions under which a finance charge may be imposed, 
including the time period, if any, within which any credit extended may 
be repaid without incurring a finance charge; 
b) the method of determining the balance upon which a finance charge 
may be imposed; 
c) the method of determining the amount of the finance charges, 
including any minimum or fixed amount imposed as a finance charge; 
d) where one or more periodic rates may be used to compute a finance 
charge, each such rate, the range of balances to which it is applicable, 
and the corresponding simple annual rate; and 
e) the conditions under which the creditor may impose a security lien and 
a description of the goods to which such lien may attach. 
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The bill complements the law by requiring a 90-day notice before changing the annual 
percentage rate of interest applicable on any credit card account or before changing the index 
used to determine such rate. It further seeks to freeze the interest rate terms and fees on canceled 
credit card accounts before the 90-day period ends. 


THIRTEENTH CONGRESS OF THE REPUBLIC 
) 
I :- 
OF THE PHILIPPINES 
1 
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*_, 
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L’..! i 
I . ,  
First Regular Session 
1 
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Introduced by Senator Miriam Defensor Santiago 
AN ACT TO REQUIRE 90 DAYS NOTICE BEFORE CHANGING 
THE ANNUAL CREDIT PERCENTAGE RATE OF INTEREST APPLICABLE ON ANY 
CREDIT CARD ACCOUNT OR BEFORE CHANGING THE INDEX USED 
TO DETERMINE SUCH RATE 
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Be if enacted by the Senate andHouse ofRepresentatives of the Philippines in Congress 
assembled: 
SECTION 1. Short Title.-This Act shall be known as the “Credit Card Interest Rate 
Change Disclosnre Act.” 
SECTION 2. Declaration of Policy.-The 
State shall simplify, clarify and 
laws governing credit transactions and encourage the development of fair and 
sound consumer credit practices. The State shall assure the full disclosure of 
credit to protect the consumer from lack of awareness of the true cost of credit to the user. 
SECTION 3. DeJnitSon of Terms.-As 
used in this Act: 
(1) “Credit Card” means any card, plate, coupon book or other credit card device existing 
for the purpose of obtaining money, property, labor or services on credit; and 
(2) “Open-End-Credit Plan” means a consumer credit extended on an account pursuant to 
a plan under which: 
a) the creditor may permit the person to make purchases or obtain loans, from time to 
time, directly from the creditor or indirectly by the use of credit card, check or other 
device; 
b) the person has the privilege of paying the balance; 
c) a finance charge may be computed by the creditor from time to time on an outstanding 
unpaid balance. 
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SECTION 4.Advance Notice of Increase in Interest Required.-In 
the case of any credit 
card account under an open-end-credit plan- 


(1) no increase in any annual percentage rate of interest (other than an increase dues 
solely to a change in another rate of interest to which such rate is indexed or an increase due to 
the expiration of any introductoty percentage rate of interest) applicable to any outstanding 
balance of credit under such plan; and 
(2) no change in the index used to determine any such annual percentage rate of interest, 
may take effect before the end of the 90-day period beginning on the date of notice of such 
increase or change in index is first provided to the consumer. 
SECTION 5. Freeze on Interest Rate Terms and Fees on Canceled Cards.- 
(1) INCREASE NOT EFFECTIVE FOR CANCELED ACCOUNTS-If, 
after receiving 
a notice pursuant to Section 3 with respect to any credit card account under an open-end-credit 
plan, a cofismer cancels the credit card account before the end of the 90-day period referred to in 
such Section-- 
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(a) an annual percentage rate of interest applicable after the cancellation with respect to 
the outstanding balance on such account as of the date of cancellation may not exceed any annual 
percentage rate or interest applicable with respect to such balance under the terms and conditions 
in effect before the cancellation; and 
(b) the repayment of such outstanding balance after the cancellation shall be subj ct to all 
other terms and conditions applicable with respect to such account before the cancellatio . 1 
(2) NOTICE OF RIGHT TO CANCEL-The notice referred to in Section 3 with respect 
to an increase in any annual percentage rate of interest or any change in an index shall be made in 
a clear and conspicuous manner and shall contain a brief statement of the right of the consumer- 
(a) to cancel the account before the effective date ofthe increase or change in index; and 
(b) 
after such cancellation, to pay any balance outstanding on such account at the 
time of the cancellation in accordance with the terms and conditions in effect before the 
cancellation. 
SECTION 6. Penalties.-Any 
creditor who in connection with any credit card 
transaction fails to disclose to any person any information in violation of this Act shall he liable 
to such person in the amount of One Thousand pesos (P1,OOO.OO) or in the amount equal to twice 
the finance charge required by the creditor in connection with such transaction, whichever is 


greater. Action to recover such penalty may be brought by such person within one (1) ye r from 
the date of the occurrence of the violation in any court of competent jurisdiction. I 
SECTION 7. 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. 
SECTION 8. 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. 
SECTION 9. Eflectivity Clazue.-This 
Act shall take effect fifteen (15) days after its 
publication in at least two (2) newspapers of general circulation. 
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AFproved. 
FN: 1818