Validity of interest rate
Credit to Author: PERSIDA ACOSTA| Date: Wed, 23 Oct 2019 16:39:29 +0000
Dear PAO,
I want to question the 24-percent interest rate applied to my obligations with a company that supplied my inventory since 2000, for being excessive. I felt like I was misled into agreeing with it. I think I lose profits because of it. Can I question the incurrence of such rate?
Ludy
Dear Ludy,
No. The Supreme Court in the fairly recent case of Lara’s Gifts and Decors, Inc. vs. Midtown Industrial Sales, Inc. et al. (GR 225433, Aug. 28, 2019, Ponente: Honorable Associate Justice Antonio Carpio) clearly stated:
“In the present case, petitioner, which has been doing business since 1990 and has been purchasing various materials from respondent since 2004, cannot claim to have been misled into agreeing to the 24% interest rate which was expressly stated in the sales invoices. Besides, this Court has already ruled in several cases that an interest rate of 24% per annum agreed upon between the parties is valid and binding and not excessive and unconscionable. Thus, the stipulated 24% interest per annum is binding on petitioner.” (Emphasis and underscoring supplied, citations omitted.)
Clearly and simply stated, the high court has ruled several times that an interest rate of 24 percent per annum agreed upon between the parties is valid and binding and not excessive and unconscionable.
This opinion is solely based on the facts you have narrated and our appreciation of the same. Thus, the opinion may vary when the facts are changed or further elaborated. We hope that we were able to enlighten you on the matter.
Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to dearpao@manilatimes.net