Invest Mentors, Inc.

January 18, 1984 Invest Mentors, Inc. c/o Mr. Augusto S. Baltazar Diesel Kiki Building Highway, Mandaue City Sir : This refers to your letter dated September 26, 1983 addressed to the Central Bank which was referred to this Commission, inquiring as to whether a general financing company can extend direct loans. Republic Act 5980, otherwise known as "An Act Regulating the Organization and Operation of Financing Companies" defines "financing companies" as follows: "(a) "Financing Companies", hereinafter called companies, are corporations or partnerships, except, those regulated by the Central Bank of the Philippines, the Insurance Commissioner and the Cooperatives Administration Office which are primarily organized for the purpose of extending credit facilities to consumers and to industrial, commercial or agricultural enterprises, either by discounting or factoring commercial papers or accounts receivables, or by buying and selling contracts, leases, chattel mortgages, or other evidences of indebtedness, or by leasing of motor vehicles, heavy equipment and industrial machinery, business and office machines, equipments, appliances and other movable property." (emphasis supplied) The aforecited definition does not include "direct lending" as one of the activities which can be undertaken by a financing company. Applying the principle of "Expressio Unius Est Exclusio Alterius" "direct lending", therefore, would not be included as a financing activity within the purview of R. A. 5980. The foregoing ruling, however, is without prejudice to the power of the corporation to engage in direct lending if so authorized in the secondary purposes of its articles of incorporation. LibLex Please be advised accordingly. Very truly yours, (SGD.) MANUEL G. ABELLO Chairman