G.R. No. 192986 ; January 15, 2013
ADVOCATES FOR TRUTH IN LENDING, INC. and EDUARDO B. OLAGUER, Petitioners, vs. BANGKO SENTRAL MONETARY BOARD, represented by its Chairman, GOVERNOR ARMANDO M. TETANGCO, JR., and its incumbent members, Respondents.

FACTS

Petitioners Advocates for Truth in Lending, Inc. and Eduardo B. Olaguer filed a Petition for Certiorari directly with the Supreme Court, seeking to declare that the Bangko Sentral Monetary Board (BSP-MB) has no authority to continue enforcing Central Bank Circular No. 905. This 1982 Circular, issued by the then Central Bank Monetary Board (CB-MB), effectively suspended the interest rate ceilings under the Usury Law (Act No. 2655). The petitioners, claiming to raise issues of transcendental importance, argued that the CB-MB exceeded its statutory authority by completely removing all interest ceilings, an act tantamount to an unconstitutional repeal of the Usury Law.
The legal backdrop involves Republic Act No. 265 , which created the Central Bank and empowered its Monetary Board to fix maximum interest rates within the limits of the Usury Law. This authority was later expanded by Presidential Decree No. 1684, which amended the Usury Law to authorize the CB-MB to prescribe and change maximum rates. Relying on this authority, the CB-MB issued Circular No. 905. The petitioners contended that with the enactment of Republic Act No. 7653 (The New Central Bank Act), which replaced the Central Bank with the Bangko Sentral ng Pilipinas, the BSP-MB could no longer enforce Circular No. 905, as the law did not expressly continue its effectivity.

ISSUE

Whether the Bangko Sentral Monetary Board (BSP-MB) has the authority to continue enforcing Central Bank Circular No. 905, which removed all interest rate ceilings.

RULING

The Supreme Court DISMISSED the petition. The Court held that the BSP-MB validly continues to enforce CB Circular No. 905. The legal logic proceeds from the principle of statutory continuity. Republic Act No. 7653 , which created the BSP, contains a saving clause in its repealing clause (Section 135). This clause repeals inconsistent laws but explicitly provides exceptions, indicating that rules and regulations issued pursuant to the old Central Bank Act are not automatically invalidated unless inconsistent with the new law. Circular No. 905, issued under the CB-MB’s explicit authority from P.D. No. 1684 to prescribe maximum interest rates, is a valid exercise of quasi-legislative power. The act of “removing” or “suspending” ceilings is within the scope of “prescribing” rates, as setting a maximum rate of zero or removing a ceiling altogether are both methods of prescription. The BSP, as the successor institution, inherits this regulatory authority. Furthermore, the Court found no merit in the claim of transcendental importance to justify a direct filing, as the issue involved the interpretation of the BSP’s clear statutory mandate, not a constitutional question, and the hierarchy of courts was improperly disregarded. The continued enforcement of the circular promotes a market-oriented policy, a legislative judgment within the BSP’s purview.