1. What Counts as “Usury” Today?

Concept	Current Legal Position	Key Authorities
Statutory rate-ceiling	Suspended. Interest ceilings under the Usury Law (Act No. 2655, 1916) were “lifted”—not repealed—by Central Bank Circular No. 905 (17 Dec 1982, effective 1 Jan 1983).	Act 2655; CB Circ. 905
Judicial control	Courts may invalidate or reduce rates that are “unconscionable,” “iniquitous,” or “contrary to morals.”	Medel v. CA (G.R. 131622, 27 Nov 1998); Spouses Abella v. Erasquin (G.R. 195166, 22 Jun 2015); Nacar v. Gallery Frames (G.R. 189871, 13 Aug 2013)
Legal interest rate	6 % p.a. on loans/forbearance when the parties or the law specify “interest” but not the rate.	BSP Circular 799 (2013); Civil Code Art. 2209
Credit-card cap	2 % per month (24 % p.a.) on unpaid balances; 1 % per month add-on for instalments; subject to periodic BSP review.	BSP Circ. 1098 (2020) & amendments
Pay-day/Salary-based loans (≤ ₱10 000, ≤ 4 months)	Effective‐interest cap: 15 % per month; penalties capped at 5 % per month.	BSP MB Res. No. 1729 (2021) interim measure

Bottom line: There is no fixed statutory ceiling, but an interest clause can be struck down if it “shocks the conscience.” Loan-shark rates—typically 20 % per month (“5-6” schemes)—almost always fall.

2. Regulatory Landscape for Lenders

Regulator	Who They Supervise	Typical Sanctions
Bangko Sentral ng Pilipinas (BSP)	Banks, non-bank credit card issuers, e-money & BNPL operators	Caps, fines, restitution, suspension of authority
Securities & Exchange Commission (SEC)	Lending/Financing companies (RA 9474 & RA 8556); online-lending apps	Cease-and-desist, revocation, ₱25 000–₱1 000 000 fines, criminal action
Local Government Units (LGU)	5-6/mercantile money lenders via business permits	Closure, mayor’s-permit denial
National Privacy Commission (NPC)	Any lender processing personal data	Stop-processing orders, fines, criminal liability (RA 10173)
Department of Justice & PNP/NTC	Harassment, threat, libel, cyber-libel, SIM-swap texts	Criminal prosecution

Key Statutes & Circulars

RA 9474 – Lending Company Regulation Act, 2007
RA 8556 / RA 10870 – Financing Companies; Credit Card Industry Regulation
RA 11765 – Financial Products & Services Consumer Protection Act (2022) – first law to outlaw “abusive collection” across the entire financial sector
RA 3765 – Truth in Lending Act (disclosure)
Data Privacy Act 2012, Cybercrime Prevention Act 2012 – used against doxxing, “contact-list” harassment, fake obituary texts, etc.

3. Civil & Criminal Remedies Against Usurious or Abusive Lenders

A. Civil Actions

Annulment or Reformation of Contract
Ground: Interest “unconscionable” (Art. 1306, 1409 Civil Code)
Relief: Court sets aside the rate and imposes the 6 % legal rate, or orders restitution of excess interest already paid.
Small Claims (A.M. 08-8-7-SC, last amended 29 Mar 2022)
Ceiling: ₱1 000 000; no lawyers; decision within 30 days—ideal where the lender sues you or where you seek to recover overpayments.
Damages for Abusive Collection
Moral, exemplary, attorney’s fees when lender shames, threatens, or illegally discloses debtor data (Art. 19–21 Civil Code; RA 10173).
Injunction / Cease-and-Desist
When: Ongoing harassment, SMS spam, threats of wrongful repossession.
Venue: RTC, or file a complaint with SEC for app-based lenders.

B. Criminal Avenues

Provision	Typical Loan-Shark Act	Penalty
Art. 287 RPC (Grave Coercion)	Threatening bodily harm if borrower misses payment	Arresto Mayor + fine
Art. 355 RPC (Libel) / RA 10175 §4(c)(4) (Cyber-Libel)	Public “shaming” posts or group-chat blasts	Prisión Correccional + fine
RA 10173 §§25–34	Unauthorized contact-list scraping, doxxing	1–7 years + ₱500 k–₱5 m
Art. 315 RPC (Estafa)	Misappropriating collateral; outright fraud	Prisión Mayor & restitution

Note: No criminal usury exists after 1982; the crime is committed through collateral acts (threats, violence, data crimes), not through charging a high rate per se.

4. Debt-Relief Options for Individual Borrowers

Mechanism	Who May Avail	Core Features
Out-of-court negotiation/mediation (Barangay Justice System or SEC conciliation)	Any borrower < ₱200 k disputes require barangay conciliation first	Informal rescheduling, partial condonation, no filing fees
Voluntary Liquidation (Title IV, FRIA 2010, RA 10142)	Individuals owing > ₱500 k & hopelessly insolvent	Court appoints liquidator; unsecured debts discharged after liquidation
Suspension of Payments (Civil Code Art. 110, FRIA Chap. II)	Debtor with sufficient assets but illiquid	Court-approved repayment plan; stops collections
Debt-relief programs for farmers & fishers	Agrarian or agri-agra borrowers	RA 10000 (Agri-Agra), DA/DBP/Quedancor condonation programs
Credit Information System “Data Repair”	Erroneous delinquency tags from illegal lenders	File dispute under RA 9510 (CIC) to clean credit record

Practical Tips

Document Everything – keep screenshots of harassment; preserve receipts.
Compute the Effective Interest (EIR) – courts look at actual cost; hidden fees can push the rate past 240 % p.a.
Offer a Reasonable Restructuring Plan – many sharks accept lump-sum principal if faced with potential lawsuit.
File Administrative Complaints Early – SEC hotlines quickly suspend abusive apps; NPC can issue stop-processing orders within days.
Consider Small Claims or Barangay Mediation – inexpensive, speedy leverage.
Avoid “Rolling Over” – refinancing 5-6 loans with new 5-6 loans compounds the interest; explore accredited micro-finance (e.g., CARD MRI, ASA, government’s P3 Program).

5. Emerging Issues (2023–2025)

Fin-fluencer Liability. SEC Advisory Jan 2024 warns influencers who promote unregistered lending apps of potential civil and criminal liability.
SIM Registration Act 2022 now enables faster tracing of harassment texts/calls; first convictions in 2024.
Draft BSP Circular on Algorithmic Credit Scoring (exposed March 2025) will require explainability and prohibit “blacklist” sharing without consent.
House Bill 10315 (filed Nov 2023) seeks to restore a 36 % p.a. ceiling on all consumer loans ≤ ₱50 000; still pending at the Senate Committee on Banks.
SEC Memorandum Circular 5-2024 lengthens the lifetime ban on erring directors/officers of lending companies from 5 years to 10 years.

6. Checklist for Borrowers Facing Loan-Shark Debt

Gather the papers – promissory note, ID pictures taken by the lender, screencaps of chats.
Calculate total payments vs. principal; determine excess.
Send a demand letter (or reply) citing Medel v. CA and proposing: principal + 6 % p.a.
Complain to SEC FEO (if a lending/financing company) or BSP Consumer Affairs (if bank/e-money).
File barangay mediation; if it fails, file a Small Claims case seeking:
- annulment or reformation of the contract, and
- return of excess interest, plus damages for harassment.
If insolvent, consult counsel about voluntary liquidation (FRIA) or a suspension-of-payments petition.

7. Conclusion

Although the statutory Usury Law remains on the books, its rate-ceilings have been “suspended” for over four decades. The legal shield against loan-shark rates now rests on judicial notions of fairness and a mesh of consumer-protection statutes. Courts routinely strike down 3 %–20 % monthly rates as unconscionable and roll them back to the 6 % legal rate. Borrowers are not helpless: swift administrative complaints, small-claims actions, and even insolvency proceedings provide real, practical relief—and, increasingly, regulators are cracking down on abusive collection practices both offline and in cyberspace. As legislative proposals to restore explicit caps gather steam, the direction of Philippine law is clear: exploitative lending is running out of room to hide.

Disclaimer: This overview is for educational purposes only and does not constitute legal advice. For personal situations, consult a lawyer or accredited financial counsellor.