REPUBLIC OF THE PHILIPPINES

OFFICE OF THE OMBUDSMAN

QUEZON CITY

JOSE TEODORICO V. MOLINA,

Plaintiff,

-versus- CASE NO. _____________

FOR: Violation of letter (e) Sec. 3 of
RA 3019

BANGKO SENRAL NG
PILIPINAS (BSP), BSP
GOVERNOR CARLOS G.
DOMINGUEZ III, FELIPE M.
MEDALLA, JUAN DE ZUNIGA,
JR., PETER V. FAVILA,
ANTONIOS. ABACAN, JR.,
AND V. BRUCE J. TOLENTINO,
Respondents,
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ANSWER

RESPONDENTS, thru counsel, and by way of ANSWER to plaintiff’s

complaint to this Honorable Court, respectfully allege:

ADMISSIONS AND DENIALS

1. That the respondents ADMIT the personal circumstances of plaintiff

Molina under paragraphs 1 of the plaintiff;

2. That the respondents ADMIT paragraphs 2 and 3;

3. That the respondents DENY the allegation in paragraph 4 for lack of

knowledge sufficient to form a belief as to the truth and falsity of the same;

4. That the respondents ADMIT paragraphs 5.a, 5.c, 5.d and 5.f as to the fact
that plaintiff wrote a letter to BSP regarding the legality of monthly interest
of 3.5%, and that plaintiff wrote a letter disputing the position of BSP
Officer Tayag, but the rest of the allegations is DENIED, the truth being
that stated in the affirmative and special defenses hereunder;

5. That respondents ADMIT paragraphs 5.b and 5.e as to the contents of the
letters regarding interest rate imposed on the plaintiff’s credit card, and as
to the legality of the interest rate imposed on credit card;

6.  That respondents DENY the allegations in paragraph 5.g, 5.h and 5.i as the
same are erroneous conclusion of the plaintiff, however, subject to special
defenses hereunder;
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 AFFIRMATIVE AND SPECIAL DEFENSES

By way of AFFIRMATIVE AND SPECIAL DEFENSES, herein respondents

to this Honorable Court respectfully allege:

7. That they adopt the foregoing allegations in so far as they are material,
relevant and pertinent to the following Affirmative and Special Defenses;

8. That plaintiff’ has no cause of action against herein respondents for the
following reasons:

a. The Supreme Court has ruled that 3% interest monthly is excessive,

iniquitous, unconscionable and exorbitant in the case of Imperial vs
Jaucian (2004 case), Chua vs Timan (2008 case) and Macalinao vs BPI
(2009 case). However, all previous ceilings on interest rates were
removed with the passage of Central Bank Circular No. 905-82, which
took effect on 1 January 1983. Notwithstanding the absence of limits on
interest rates, nevertheless, the Supreme Court has ruled that excessive,
iniquitous, unconscionable and exorbitant interest rates are still not
allowed, as these are deemed contrary to morals, if not against law;

b. In relation to the statement of Ms. Tayag on her reply-letter to the

plaintiff that “If a party to a loan contract finds the stipulated interest
on charges unconscionable, his remedy is to seek redress in court”. –
With the suspension of the Usury Law and the removal of interest
ceilings, the parties are generally free to stipulate the interest rates to be
imposed on monetary obligations. As a rule, the interest rate agreed by
the creditor and the debtor is binding upon them. In case the stipulated
interest is unconscionable, a party can file a case before the court to act
upon it. In exercising this power to determine what is iniquitous and
unconscionable, courts must consider the circumstances of each case.
What may be iniquitous and unconscionable in one may be totally just
and equitable in another;

c. In relation to the plaintiff’s request to abrogate Sec. X305 of the Manual

of Regulations for Banks (MORB) for being contrary to public interest -
The aforementioned cases may also not be interpreted as inconsistent
with Sec. X305 of the Manual of Regulations for Banks (“MORB”),
which lifts the ceiling for interest rates. The authority of BSP to lift the
interest rate ceiling and the authority of the courts to reduce interest
rates, if found to be unjust, co-exist with each other. As exemplified in
the Macalinao case, the aggrieved borrowers, after having been imposed
an excessive interest, can go to the court for relief; and

d. In relation to the allegation of the plaintiff that the respondents are in

violation of Section 3(e) of RA 3019 – The plaintiff lacks proof to prove
the same. The fact that respondents did not comply to the plaintiff’s
request to abrogate Sec. X305 of the MORB cannot held the respondents
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 in violation of Sec. 3(e) of RA 3019. BSP does not cause undue injury to
any party, or giving any private party any unwarranted benefits,
advantage or preference in the discharge of his official administrative or
judicial functions through manifest partiality, evident bad faith or gross
inexcusable negligence with respect to not abrogating Sec. X305 of the
MORB.

PRAYER

WHEREFORE, premises considered, it is respectfully prayed:

1. That the complaint for Violation of Sec. 3(e) of RA 3019 be dismissed; and

2. Other reliefs just and equitable are likewise prayed for.

Manila, March 8, 2019.

By:

ATTY. MYRA J. ANACAY

Counsel for the Respondents
Roll No. 98765
IBP No, 12345/1-3-2012/Manila
PTR No. 34567/1-3-2012/Manila

Copy furnished:

  ATTY. JOSE TEODORICO V. MOLINA

  Block 65, Lot 01, Kudyapi St.,
  Cor. Ascension Ave., Lagro Subd.
Novaliches, Quezon city, 1118

EXPLANATION

  Copy of the foregoing ANSWER was served to plaintiff by registered mail due
to time and distance constraints and for lack of the undersigned’s staff who can serve
the same in person.

ATTY. MYRA J. ANACAY