July 7, 2020
Dear Grace A. Graciadas,
Greetings!
Thank you for your request dated Jun 30, 2020 12:58:36 PM under Executive Order No. 2 (s. 2016) on Freedom of Information in the Executive Branch.
Your Request
You asked for SEC Investigation Into Prosperity and Success Lending Investor Corporation.
Response to Request
This refers to your requests filed under the Freedom of Information (FOI) Program of the Securities and Exchange Commission on 30 June 2020.
At the outset, please be informed that the FOI Program is the government’s response to the call for transparency and full public disclosure of information. FOI is a government mechanism, which allows Filipino citizens to request any information about government transactions and operations, provided that it shall not put into jeopardy – privacy and matters of national security.
Section 3 of Executive Order No. 2, Series of 2016 provides that:
SECTION 3. Access to information. Every Filipino shall have access to information, official records, public records and to documents and papers pertaining to official acts, transactions or decisions, as well as to government research data used as basis for policy development.
However, the call for transparency is not without limits. The right to access information is limited to the abovementioned matters and does not extend to matters that are discretionary in nature and/or that encroach upon privacy rights.
With this in mind, this office will address the requests for information dated 30 June 2020, as follows:
SEC Investigation Into Prosperity and Success Lending Investor Corporation
According to the SEC's website (http://www.sec.gov.ph/lending-companies-and-financing-companies/list-of-lending-companies/), Prosperity is only allowed to grant loans with an interest rate of 2% per month. However, the loans granted by Prosperity regularly charge interest fees amounting to over 100% interest per year. Thus, I would like the following information:
1) An explanation as to why Prosperity is allowed to exceeding its approved interest rate;
Please be informed that the terms and conditions of the loan contract are governed by the agreements of the lender and borrower. With respect to interest rates and charges, there is currently no ceiling on interest rates on loans, pursuant to Central Bank of the Philippines Circular No. 905-82. Thus, the parties are free to agree on the terms and conditions of the loan contract, including interest rates and charges.
However, should you wish to file a formal complaint against the Company for possible violation of the Lending Company Regulation Act, Truth in Lending Act, and SEC Memorandum Circular No. 18, series of 2019 on the Prohibition on Unfair Debt Collection Practices, kindly follow this link for your guidance: http://www.sec.gov.ph/lending-companies-and-financing-companies/complaints/. Please read and follow the instructions carefully to avoid the outright dismissal of your complaint.
In sending the complaint form to
[email protected] via e-mail, kindly use the following format in the subject head of the e-mail: FULL NAME_COMPANY COMPLAINED OF_SUBJECT OF COMPLAINT (ex: JUAN DELA CRUZ_ABC LENDING_DISCLOSURE STATEMENT VIOLATION).
2) An update on the investigation into Prosperity
Please be informed that all complaints against Prosperity are already under evaluation and investigation, the proceedings of which are confidential in nature under Sec. 2-4, Part II, Rule II of the 2016 Rules of Procedure of the Securities and Exchange Commission. As such, details as to the investigation and proceedings appurtenant thereto are exempted from the coverage of FOI program.
3) An explanation as to why Prosperity primarily grants loans to pay agency fees.
The SEC has no information on the subject. You may communicate directly with the company to obtain this information.
Finally, it was noted that most of the above-cited request for information do not fall under the definition of “information”, “official record/records”, or “public record/records” as defined under E.O. No. 02, series of 2016, and which may be the subject of an FOI request, viz:
"Information" shall mean any records, documents, papers, reports, letters, contracts, minutes of official meetings, maps, books, photographs, data, research materials, films, sound and video recording, magnetic or other tapes, electronic data computer stored data, any other like or similar data or materials recorded, stored or archived in whatever format, whether offline or online, which are made, received, or kept in or under the control and custody of the Commission pursuant to law, executive order, and rules and regulations or in connection with the performance or transaction of official business of the Commission
"Official record/records" shall refer to information produced or received by the Commission in an official capacity or pursuant to a public function or duty
"Public record/records" shall include information required by laws, executive orders, rules, or regulations to be entered, kept and made publicly available by the Commission
For your information and guidance.
Your right to request a review
If you are unhappy with this response to your FOI request, you may ask us to carry out an internal review of the response by writing to Commission Secretary and
[email protected]. Your review request should explain why you are dissatisfied with this response, and should be made within 15 calendar days from the date when you received this letter. We will complete the review and tell you the result within 30 calendar days from the date when we receive your review request.
If you are not satisfied with the result of the review, you then have the right to appeal to the Office of the President under Administrative Order No. 22 (s. 2011).
Thank you.
Respectfully,
Atty. Rachel Esther Gumtang- Remalante
FOI Receiving Officer
