When the obligation,
PAYMENT OF A SUM OF MONEY,
i.e., a loan or forbearance of money,
goods, credits or judgments,
IS BREACHED
INTEREST: (on the principal)
1. As STIPULATED by the parties in writing,
provided it is not excessive and unconscionable; or
2. In the absence of stipulated interest, at the
PREVAILING LEGAL INTEREST prescribed by
the Bangko Sentral ng Pilipinas.
(6% per annum, BSP Circular No. 799, S. 2013,
which took effect on July 1, 2013 (Nacar vs.
Gallery Frames, Inc., G.R. No. 189871, 8-13-2013)
RECKNONING DATE:
1. As STIPULATED; or
2. In the absence of stipulated reckoning date, shall
be computed from DEFAULT, i.e., from
extrajudicial or judicial demand in accordance with
Article 1169 of the Civil Code.
DURATION:
UNTIL FULL PAYMENT
NO COMPOUNDING OF INTEREST
UNLESS compounded interest is expressly
stipulated by the parties, by law or regulation.
ADDITIONAL/SEPARATE INTEREST: (on the
interest due on the principal)
1. at the PREVAILING LEGAL INTEREST
prescribed by the Bangko Sentral ng Pilipinas.
RECKNONING DATE:
1. Shall begin to run from the time of judicial
demand.
DURATION:
UNTIL FULL PAYMENT
Lara’s Gifts & Decors, Inc. vs. Midtown Industrial Sales, Inc., G.R. No. 225433, August 28, 2019
When the obligation,
NOT LOAN OR FORBEARANCE OF
MONEY,
GOODS, CREDITS OR JUDGMENTS,
IS BREACHED
Articles 2210 (breach of contract)
and 2211 (crimes and quasi-delicts), CC
INTEREST: (on the amount of damages awarded)
1. May be imposed in the DISCRETION OF THE
COURT,
2. At the PREVAILING LEGAL INTEREST
prescribed by the Bangko Sentral ng Pilipinas.
3. No interest, however, shall be adjudged on
unliquidated claims or damages until the DEMAND
can be ESTABLISHED WITH REASONABLE
CERTAINTY.
RECKNONING DATE:
*Where the amount of the claim or damages is
established with reasonable certainty:
1. The prevailing legal interest shall begin to run
from the time the claim is made extrajudicially or
judicially (Art. 1169, Civil Code)
DURATION:
UNTIL FULL PAYMENT
*When such certainty cannot be so reasonably
established at the time the demand is made:
2. The interest shall begin to run only from the date
of the judgment of the trial court (at which time the
quantification of damages may be deemed to have
been reasonably ascertained)
DURATION:
UNTIL FULL PAYMENT
NO COMPOUNDING OF INTEREST
UNLESS compounded interest is expressly
stipulated by the parties, by law or regulation.
The actual base for the computation of the interest
shall, in any case, be on the principal amount finally
adjudged.