DOF releases draft IRR for Personal Property Security Act

ahead of public hearing

THE Department of Finance (DOF) has released the draft implementing rules and regulations (IRR) for Republic Act 11057 or the “Personal Property Security Act” (PPSA) on its website, where stakeholders and interested parties may review and download the proposed IRR and provide online comments and suggestions.

The draft was posted online ahead of the public hearing that is scheduled on Wednesday, July 17, 2019 at the University of the Philippines Law Center in Diliman, Quezon City.

PPSA was signed into law in 2018 by President Rodrigo Duterte “in sync with his vision for sustained high growth and greater financial inclusion,” said Finance Secretary Carlos Dominguez III.

The PPSA aims to promote economic activity by increasing access to least-cost credit, particularly for micro, small and medium enterprises (MSMEs), by establishing a unified and modern legal framework for securing obligations with personal property.

It also seeks to increase access to credit of MSMEs, as well as farmers and fisherfolk.

MSMEs comprise 99.6 percent of total businesses in the country, of which 96 percent are micro businesses.


Under the PPSA, MSMEs, farmers and fisherfolks can now secure their borrowings by using non-traditional collateral such as account receivables, inventory, negotiable instruments, electronic securities, crops, livestock, consumer goods, machinery, equipment as well as intellectual property rights.

The PPSA also provides that future property can now secure a borrower’s financial needs through the creation of a security interest in the security agreement. However, the security interest in that property is created only when the borrower acquires rights in it or the power to encumber it.

Moreover, this new law has simplified the process as security interest may be perfected by registration of a notice with the Registry, possession of the collateral by the secured creditor or by control of investment property and deposit account. On perfection, a security interest becomes effective against third parties.

The centralized notice Registry established under the PPSA will provide electronic means for registration and searching of notices. The electronic records will be considered as public record.

There will also be no fee for electronic searches of the Registry records or for the registration of termination notices.

The draft IRR was prepared by the DOF Legal Services Group in consultation with experts, practitioners and professors in commercial laws and credit transactions of the UP Law Center.

The microsite on the draft IRR can be accessed at

It contains the full text of the law, the draft IRR, including invites and notices regarding the upcoming public consultation on PPSA’s implementing rules.

Big milestone

The PPSA supports President Duterte’s 10-point socioeconomic agenda, particularly increasing competitiveness in the country. The passage of the law is expected to strengthen the country’s position in the “Getting Credit Indicator” of the Ease of Doing Business ranking.

“This law is indeed a big milestone in increasing access to finance for MSMEs and farmers in the Philippines and a true collaborative effort from the public and private sectors to promote the growth of MSMEs and agribusiness,” said Yuan Xu, International Finance Corp. country manager for the Philippines. “This is only the first step, and more work will be needed to support financial institutions to lend more to MSMEs and farmers.”

“With a sustained effort and ownership from all partners including the private sector, and leadership from key government agencies especially DOF and Land Registration Authority, the country can achieve a more competitive and sustainable growth,” the IFC manager added. PR


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