# 1 MACALINAO V.

BPI, 600 SCRA 67

FACTS:
Petitioner Ileana Macalinao defaulted on the payment of her BPI credit card dues.
There was a stipulation in a contract that the charges and/or balance shall earn 3%
per month and additional penalty fee of another 3% per month. The Regional Trial
Court reduced the 3%monthly interest to 2%. On appeal of the case, the Court of
Appeals reversed the decision of the RTC holding that petitioner Macalinao freely
availed herself of the credit card facility offered by respondent Bank of the
Philippine Islands to general public; contracts of adhesion are not invalid per se.
Petitioner assailed the appellate courts decision alleging that the interest rate and
penalty charges are unconscionable and iniquitous at 36% per annum.
ISSUE:
Whether or not the interest rate and penalty charges are unconscionable and
iniquitous at 36% per annum.
HELD:
The interest rate and penalty charges are unconscionable and iniquitous at 36% per
annum. The Supreme Court held that the interest rate and penalty charge of 3% per
month or the36% per annum should be reduced to 2% per month or 24% per
annum. In a long line of cased decided by the Supreme Court, it considered the 36%
per annum to be excessive and unconscionable. Citing Article1229, in exercising
this power to determine what is iniquitous and unconscionable; courts must
consider the circumstances of each case since what maybe iniquitous and
unconscionable in one maybe totally just and equitable in another. In the instant
case, Macalinao made partial payments to BPI .Therefore, the interest rate and
penalty charge of 3% per month or 36% per annum should be reduced to 2% per
month or 24% per annum.