Summary
An overview of Article 1175 regarding usurious transactions, the governing laws, and the legal requirements for recovering interest in the Philippines.
Highlights
Understanding Usurious Transactions00:00:03
Article 1175 dictates that usurious transactions—loans with excessively high interest rates—are not covered by the Civil Code but are governed by special laws, specifically the Usury Law (Republic Act No. 2655).
Interest Rates and Judicial Oversight00:00:35
While the Bangko Sentral ng Pilipinas removed the specific interest rate ceilings originally set by the Usury Law, lenders do not have absolute freedom. Courts retain the power to void or reduce interest rates if they are deemed unfair or oppressive to the borrower.
Requisites for Interest Recovery00:01:15
For a lender to legally recover interest, three conditions must be met: the interest must be expressly stipulated in the agreement, the agreement must be in writing, and the interest rate must be lawful.