REPUBLIC ACT No. 3765 Section 5.

The Board shall prescribe such rules and regulations as may be

necessary or proper in carrying out the provisions of this Act. Any rule or
AN ACT TO REQUIRE THE DISCLOSURE OF FINANCE CHARGES IN regulation prescribed hereunder may contain such classifications and
CONNECTION WITH EXTENSIONS OF CREDIT. differentiations as in the judgment of the Board are necessary or proper
to effectuate the purposes of this Act or to prevent circumvention or
Section 1. This Act shall be known as the "Truth in Lending Act." evasion, or to facilitate the enforcement of this Act, or any rule or
regulation issued thereunder.
Section 2. Declaration of Policy. It is hereby declared to be the policy of
the State to protect its citizens from a lack of awareness of the true cost Section 6. (a) Any creditor who in connection with any credit transaction
of credit to the user by assuring a full disclosure of such cost with a view fails to disclose to any person any information in violation of
of preventing the uninformed use of credit to the detriment of the this Act or any regulation issued thereunder shall be liable to
national economy. such person in the amount of P100 or in an amount equal to
twice the finance charged required by such creditor in
Section 3. As used in this Act, the term connection with such transaction, whichever is the greater,
(1) "Board" means the Monetary Board of the Central Bank of except that such liability shall not exceed P2,000 on any credit
the Philippines. transaction. Action to recover such penalty may be brought by
(2) "Credit" means any loan, mortgage, deed of trust, advance, such person within one year from the date of the occurrence
or discount; any conditional sales contract; any contract to sell, of the violation, in any court of competent jurisdiction. In any
or sale or contract of sale of property or services, either for action under this subsection in which any person is entitled to
present or future delivery, under which part or all of the price a recovery, the creditor shall be liable for reasonable attorney's
is payable subsequent to the making of such sale or contract; fees and court costs as determined by the court.
any rental-purchase contract; any contract or arrangement for (b) Except as specified in subsection (a) of this section, nothing
the hire, bailment, or leasing of property; any option, demand, contained in this Act or any regulation contained in this Act or
lien, pledge, or other claim against, or for the delivery of, any regulation thereunder shall affect the validity or
property or money; any purchase, or other acquisition of, or enforceability of any contract or transactions.
any credit upon the security of, any obligation of claim arising (c) Any person who willfully violates any provision of this Act
out of any of the foregoing; and any transaction or series of or any regulation issued thereunder shall be fined by not less
transactions having a similar purpose or effect. than P1,00 or more than P5,000 or imprisonment for not less
(3) "Finance charge" includes interest, fees, service charges, than 6 months, nor more than one year or both.
discounts, and such other charges incident to the extension of (d) No punishment or penalty provided by this Act shall apply
credit as the Board may be regulation prescribe. to the Philippine Government or any agency or any political
(4) "Creditor" means any person engaged in the business of subdivision thereof.
extending credit (including any person who as a regular (e) A final judgment hereafter rendered in any criminal
business practice make loans or sells or rents property or proceeding under this Act to the effect that a defendant has
services on a time, credit, or installment basis, either as willfully violated this Act shall be prima facie evidence against
principal or as agent) who requires as an incident to the such defendant in an action or proceeding brought by any
extension of credit, the payment of a finance charge. other party against such defendant under this Act as to all
(5) "Person" means any individual, corporation, partnership, matters respecting which said judgment would be an estoppel
association, or other organized group of persons, or the legal as between the parties thereto.
successor or representative of the foregoing, and includes the
Philippine Government or any agency thereof, or any other Section 7. This Act shall become effective upon approval.
government, or of any of its political subdivisions, or any Approved: June 22, 1963
agency of the foregoing.

Section 4. Any creditor shall furnish to each person to whom credit is

extended, prior to the consummation of the transaction, a clear
statement in writing setting forth, to the extent applicable and in
accordance with rules and regulations prescribed by the Board, the
following information:
(1) the cash price or delivered price of the property or service
to be acquired;
(2) the amounts, if any, to be credited as down payment
and/or trade-in;
(3) the difference between the amounts set forth under
clauses (1) and (2);
(4) the charges, individually itemized, which are paid or to be
paid by such person in connection with the transaction but
which are not incident to the extension of credit;
(5) the total amount to be financed;
(6) the finance charge expressed in terms of pesos and
centavos; and
(7) the percentage that the finance bears to the total amount
to be financed expressed as a simple annual rate on the
outstanding unpaid balance of the obligation.