The Philippines Investment Forum(October 19, 2018)
The new Personal Property Security Act and its impact on
secured financing
Disclaimer: This slide presentation, which contains a very high level discussion of the new Personal Property Security Act (Republic Act No. 11057), was prepared solely for purposes of a lecture on the same topic given at Euromoney’s Philippines Investment Forum held on October 19, 2018. It may not be relied upon by any person, and neither the speaker nor SyCip Salazar Hernandez & Gatmaitan assumes any liability, warranty or obligation for any information, statement, or conclusion contained in this presentation to any person. By making a copy of this presentation available, we do not enter into any attorney-client relationship with Euromoney or with any other person.
Secured Transactions: A Historical Perspective
• Chattel Mortgage Law (1906)
• Civil Code of the Philippines (1950)
• Pledge• Antichresis
Disclaimer: This slide presentation, which contains a very high level discussion of the new Personal Property Security Act (Republic Act No. 11057), was prepared solely for purposes of a lecture on the same topic given at Euromoney’s Philippines Investment Forum held on October 19, 2018. It may not be relied upon by any person, and neither the speaker nor SyCip Salazar Hernandez & Gatmaitan assumes any liability, warranty or obligation for any information, statement, or conclusion contained in this presentation to any person. By making a copy of this presentation available, we do not enter into any attorney-client relationship with Euromoney or with any other person.
Documentation and Legal Issues
• Chattel Mortgage• Pledge• Assignment
• Receivables• Contract rights• Accounts
Disclaimer: This slide presentation, which contains a very high level discussion of the new Personal Property Security Act (Republic Act No. 11057), was prepared solely for purposes of a lecture on the same topic given at Euromoney’s Philippines Investment Forum held on October 19, 2018. It may not be relied upon by any person, and neither the speaker nor SyCip Salazar Hernandez & Gatmaitan assumes any liability, warranty or obligation for any information, statement, or conclusion contained in this presentation to any person. By making a copy of this presentation available, we do not enter into any attorney-client relationship with Euromoney or with any other person.
Commercial Issues
• MSMEs usually do not own real property.
• Financial institutions prefer real property overchattels as collateral.
Disclaimer: This slide presentation, which contains a very high level discussion of the new Personal Property Security Act (Republic Act No. 11057), was prepared solely for purposes of a lecture on the same topic given at Euromoney’s Philippines Investment Forum held on October 19, 2018. It may not be relied upon by any person, and neither the speaker nor SyCip Salazar Hernandez & Gatmaitan assumes any liability, warranty or obligation for any information, statement, or conclusion contained in this presentation to any person. By making a copy of this presentation available, we do not enter into any attorney-client relationship with Euromoney or with any other person.
Efforts at reform
• Memorandum of Understanding betweenDepartment of Finance and World Bank Group’sInternational Finance Corporation• Regulation of movable assets as collateral• Centralized electronic notice registry
Disclaimer: This slide presentation, which contains a very high level discussion of the new Personal Property Security Act (Republic Act No. 11057), was prepared solely for purposes of a lecture on the same topic given at Euromoney’s Philippines Investment Forum held on October 19, 2018. It may not be relied upon by any person, and neither the speaker nor SyCip Salazar Hernandez & Gatmaitan assumes any liability, warranty or obligation for any information, statement, or conclusion contained in this presentation to any person. By making a copy of this presentation available, we do not enter into any attorney-client relationship with Euromoney or with any other person.
Enter the PPSA• Promote economic activity by increasing access to
least cost credit, particularly for micro, small, andmedium enterprises (“MSMEs”)
• Repealing clause• Coverage: all movables, except:
Disclaimer: This slide presentation, which contains a very high level discussion of the new Personal Property Security Act (Republic Act No. 11057), was prepared solely for purposes of a lecture on the same topic given at Euromoney’s Philippines Investment Forum held on October 19, 2018. It may not be relied upon by any person, and neither the speaker nor SyCip Salazar Hernandez & Gatmaitan assumes any liability, warranty or obligation for any information, statement, or conclusion contained in this presentation to any person. By making a copy of this presentation available, we do not enter into any attorney-client relationship with Euromoney or with any other person.
Key Features of the PPSA• Single type of security arrangement: “security
interest”
• Central concept: Registration
• Unified, publicly-searchable registry
Disclaimer: This slide presentation, which contains a very high level discussion of the new Personal Property Security Act (Republic Act No. 11057), was prepared solely for purposes of a lecture on the same topic given at Euromoney’s Philippines Investment Forum held on October 19, 2018. It may not be relied upon by any person, and neither the speaker nor SyCip Salazar Hernandez & Gatmaitan assumes any liability, warranty or obligation for any information, statement, or conclusion contained in this presentation to any person. By making a copy of this presentation available, we do not enter into any attorney-client relationship with Euromoney or with any other person.
Object
A security agreement mayprovide for the creation of asecurity interest in futureproperty.
Disclaimer: This slide presentation, which contains a very high level discussion of the new Personal Property Security Act (Republic Act No. 11057), was prepared solely for purposes of a lecture on the same topic given at Euromoney’s Philippines Investment Forum held on October 19, 2018. It may not be relied upon by any person, and neither the speaker nor SyCip Salazar Hernandez & Gatmaitan assumes any liability, warranty or obligation for any information, statement, or conclusion contained in this presentation to any person. By making a copy of this presentation available, we do not enter into any attorney-client relationship with Euromoney or with any other person.
• Security Agreement must be
Creation
In writing Signed bythe Parties
English orFilipino
Disclaimer: This slide presentation, which contains a very high level discussion of the new Personal Property Security Act (Republic Act No. 11057), was prepared solely for purposes of a lecture on the same topic given at Euromoney’s Philippines Investment Forum held on October 19, 2018. It may not be relied upon by any person, and neither the speaker nor SyCip Salazar Hernandez & Gatmaitan assumes any liability, warranty or obligation for any information, statement, or conclusion contained in this presentation to any person. By making a copy of this presentation available, we do not enter into any attorney-client relationship with Euromoney or with any other person.
Perfection
Perfected by any of the following:
Registration
Possession
Control
Disclaimer: This slide presentation, which contains a very high level discussion of the new Personal Property Security Act (Republic Act No. 11057), was prepared solely for purposes of a lecture on the same topic given at Euromoney’s Philippines Investment Forum held on October 19, 2018. It may not be relied upon by any person, and neither the speaker nor SyCip Salazar Hernandez & Gatmaitan assumes any liability, warranty or obligation for any information, statement, or conclusion contained in this presentation to any person. By making a copy of this presentation available, we do not enter into any attorney-client relationship with Euromoney or with any other person.
Priority
Purchase MoneySecurity Interest
DepositAccount
ElectronicSecurities
SecurityCertificate
Negotiable DocumentGoods by Providers ofServices and Materials
General Rule: Priority is determined according to time of perfection (without regard to mode of perfection).
Exception: Mode of perfection determinespriority in respect of the certain assets.
Disclaimer: This slide presentation, which contains a very high level discussion of the new Personal Property Security Act (Republic Act No. 11057), was prepared solely for purposes of a lecture on the same topic given at Euromoney’s Philippines Investment Forum held on October 19, 2018. It may not be relied upon by any person, and neither the speaker nor SyCip Salazar Hernandez & Gatmaitan assumes any liability, warranty or obligation for any information, statement, or conclusion contained in this presentation to any person. By making a copy of this presentation available, we do not enter into any attorney-client relationship with Euromoney or with any other person.
The Registry
• Administered by the LRA• Notice-based (not document-based) registry• Electronic registration• Public record; any person may search• Pre-registration• Effectivity of notices
Disclaimer: This slide presentation, which contains a very high level discussion of the new Personal Property Security Act (Republic Act No. 11057), was prepared solely for purposes of a lecture on the same topic given at Euromoney’s Philippines Investment Forum held on October 19, 2018. It may not be relied upon by any person, and neither the speaker nor SyCip Salazar Hernandez & Gatmaitan assumes any liability, warranty or obligation for any information, statement, or conclusion contained in this presentation to any person. By making a copy of this presentation available, we do not enter into any attorney-client relationship with Euromoney or with any other person.
Enforcement – Key Changes
• Key concept under old law: Pactum Commissorium• Public or private sale• “Commercial reasonableness”• Proposal to acquire• Special type of assets
Disclaimer: This slide presentation, which contains a very high level discussion of the new Personal Property Security Act (Republic Act No. 11057), was prepared solely for purposes of a lecture on the same topic given at Euromoney’s Philippines Investment Forum held on October 19, 2018. It may not be relied upon by any person, and neither the speaker nor SyCip Salazar Hernandez & Gatmaitan assumes any liability, warranty or obligation for any information, statement, or conclusion contained in this presentation to any person. By making a copy of this presentation available, we do not enter into any attorney-client relationship with Euromoney or with any other person.
Some observations
Disclaimer: This slide presentation, which contains a very high level discussion of the new Personal Property Security Act (Republic Act No. 11057), was prepared solely for purposes of a lecture on the same topic given at Euromoney’s Philippines Investment Forum held on October 19, 2018. It may not be relied upon by any person, and neither the speaker nor SyCip Salazar Hernandez & Gatmaitan assumes any liability, warranty or obligation for any information, statement, or conclusion contained in this presentation to any person. By making a copy of this presentation available, we do not enter into any attorney-client relationship with Euromoney or with any other person.
Implementation Timeline
Approved:August 17, 2018
Published:August 23, 2018
Took effect:September 7, 2018
• Implementation: Conditioned upon establishment andoperation of Registry
Disclaimer: This slide presentation, which contains a very high level discussion of the new Personal Property Security Act (Republic Act No. 11057), was prepared solely for purposes of a lecture on the same topic given at Euromoney’s Philippines Investment Forum held on October 19, 2018. It may not be relied upon by any person, and neither the speaker nor SyCip Salazar Hernandez & Gatmaitan assumes any liability, warranty or obligation for any information, statement, or conclusion contained in this presentation to any person. By making a copy of this presentation available, we do not enter into any attorney-client relationship with Euromoney or with any other person.
Implementation Timeline
Promulgation of the IRR
Preparation of Model Agreements
Setting Up and Operation of the Registry
Disclaimer: This slide presentation, which contains a very high level discussion of the new Personal Property Security Act (Republic Act No. 11057), was prepared solely for purposes of a lecture on the same topic given at Euromoney’s Philippines Investment Forum held on October 19, 2018. It may not be relied upon by any person, and neither the speaker nor SyCip Salazar Hernandez & Gatmaitan assumes any liability, warranty or obligation for any information, statement, or conclusion contained in this presentation to any person. By making a copy of this presentation available, we do not enter into any attorney-client relationship with Euromoney or with any other person.
Transitional Period
Effectivity Implementation
Security interest
What Lenders and Borrowers Need to Do
Disclaimer: This slide presentation, which contains a very high level discussion of the new Personal Property Security Act (Republic Act No. 11057), was prepared solely for purposes of a lecture on the same topic given at Euromoney’s Philippines Investment Forum held on October 19, 2018. It may not be relied upon by any person, and neither the speaker nor SyCip Salazar Hernandez & Gatmaitan assumes any liability, warranty or obligation for any information, statement, or conclusion contained in this presentation to any person. By making a copy of this presentation available, we do not enter into any attorney-client relationship with Euromoney or with any other person.
Transitional Period
Effectivity Implementation
Security interest
What Lenders and Borrowers Need to Do
Disclaimer: This slide presentation, which contains a very high level discussion of the new Personal Property Security Act (Republic Act No. 11057), was prepared solely for purposes of a lecture on the same topic given at Euromoney’s Philippines Investment Forum held on October 19, 2018. It may not be relied upon by any person, and neither the speaker nor SyCip Salazar Hernandez & Gatmaitan assumes any liability, warranty or obligation for any information, statement, or conclusion contained in this presentation to any person. By making a copy of this presentation available, we do not enter into any attorney-client relationship with Euromoney or with any other person.
Transitional Period
Effectivity Implementation
Security interest
What Lenders and Borrowers Need to Do
Disclaimer: This slide presentation, which contains a very high level discussion of the new Personal Property Security Act (Republic Act No. 11057), was prepared solely for purposes of a lecture on the same topic given at Euromoney’s Philippines Investment Forum held on October 19, 2018. It may not be relied upon by any person, and neither the speaker nor SyCip Salazar Hernandez & Gatmaitan assumes any liability, warranty or obligation for any information, statement, or conclusion contained in this presentation to any person. By making a copy of this presentation available, we do not enter into any attorney-client relationship with Euromoney or with any other person.
Thank you!
Jose Florante M. PamfiloPartner
SyCip Salazar Hernandez & [email protected]
Disclaimer: This slide presentation, which contains a very high level discussion of the new Personal Property Security Act (Republic Act No. 11057), was prepared solely for purposes of a lecture on the same topic given at Euromoney’s Philippines Investment Forum held on October 19, 2018. It may not be relied upon by any person, and neither the speaker nor SyCip Salazar Hernandez & Gatmaitan assumes any liability, warranty or obligation for any information, statement, or conclusion contained in this presentation to any person. By making a copy of this presentation available, we do not enter into any attorney-client relationship with Euromoney or with any other person.
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