The Department of Finance (DOF) is set to release the implementing rules and regulations (IRR) on the Personal Property Security Act (PPSA) sometime in August and stakeholders are given until tomorrow, July 31 to submit comments on the same.
Aside from conducting a public consultation last July 25, the DOF had also asked stakeholders and other interested parties to help review the draft IRR uploaded on the Department’s website by posting their inputs and comments online.
DOF Assistant Secretary Danielle Marie Rieza Culangen said the recent public consultation on the draft IRR for the PPSA (Republic Act (RA) No. 11057), held at the University of the Philippines (UP) Law Center, highlighted concerns about transactions involving accounts receivables as collateral in securing loans from banks.
RA 11057 is meant to expand the access to credit of such groups as micro, small and medium enterprises (MSMEs) along with farmers and fisherfolk, in keeping with President Duterte’s goal, as stated in his 4th State of the Nation Address (SONA), of improving the lives of all Filipinos.
Culangen explained that the law covers transactions involving different personal properties. All of these types of assets would have their own nuances, and the DOF should consider addressing them in the IRR, she said.
RA 11057 is considered a landmark law as it simplified and harmonized the Chattel Mortgage law of 1906 and other fragmented and outdated financing regulations in the country by enabling borrowers to secure financing using non-traditional collateral such as account receivables, inventory, warehouse receipts, crops, livestock, machinery and equipment.
The PPSA’s goal is to open access to credit for MSMEs, farmers and fisherfolks to use other collaterals than the usual real estate or vehicles. “Now, they have more options,” Culangen said.
This law is expected to help boost economic expansion because access to financing is critical to higher productivity of MSMEs and the agriculture and fisheries sector.
RA 11057 is expected to strengthen the country’s position in the ‘Getting Credit Indicator’ of the Ease of Doing Business Survey of the World Bank, where the Philippines was ranked 142 among 190 countries in 2017.
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