The earliest set of rules governing the establishment and operation of a financing company in the Philippines — Republic Act No. 5980, otherwise known as “The Financing Company Act” — dates back to the ’70s. Since then, the law, including its rules and regulations, went through several amendments in a span of almost five decades.
The first instance occurred during the late ’70s through Presidential Decree (PD) No. 1454 and the second was during the early ’80s via PD No. 1793. The two decrees amended only a single provision, which is Section 5 of the law. PD No. 1454 replaced the Securities and Exchange Commission (SEC) with the Central Bank’s Monetary Board (CB-MB) as the government agency empowered to prescribe the maximum rate of purchase discounts, fees, service and other charges of a financing company, while PD No. 1793 expanded such power by authorizing the CB-MB to eliminate, grant exemptions from or suspend the effectivity of prevailing rates whenever warranted by economic or social conditions.
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