Development Bank of the Philippines v. Felipe Arcilla, G.R. No.

161397, 161436, June

30, 2005 Case Digest

Gerardo, Desmund A.

FACTS:

Arcilla, a DBP employee, is the debtor in this situation. The Individual Housing Project
being undertaken by DBP. 1000 pesos each month for the next 25 years. As a result of
Arcilla's departure from DBP, the loan was restructured to become a conventional
housing loan. Arcilla fell behind in his payments and defaulted. DBP held an auction for
the property and advertised it. Arcilla went to the RTC Antipolo with a complaint, stating
that he was not fully informed about his obligations as a debtor in accordance with the
Truth in Lending Act.

ISSUE:

Was DBP compliant with R.A. No. 3765 and CB Circular No. 158?

RULING:

Yes, DBP complied in a significant way with R.A. No. 3765 and CB Circular No. 158.
The Court determined that DBP did not provide the necessary information in the
disclosure, including the total amount to be financed, the finance charges expressed in
pesos and centavos, and the percentage that the finance charge represents as a simple
annual rate on the total amount to be financed.

It is true that the creditor cannot demand payment from the borrower if the required
information has not been provided to the creditor by the borrower. In this particular
instance, however, it is merely an afterthought. Being a lawyer, he ought to have been
aware of the consequences that could have been incurred legally. He was briefed on
the modifications that were necessary for the terms of the loan.