The Department of Finance (DOF) has posted the draft implementing rules and regulations (IRR) for Republic Act (RA) No. 11057, otherwise known as 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 the DOF will hold this Wednesday (July 17) from 2:00 to 4:30 PM at the University of the Philippines (UP) Law Center in Diliman, Quezon City to discuss the proposed IRR.

The microsite on the draft IRR for RA 11057 can be accessed at https://www.dof.gov.ph/index.php/advocacies/personal-property-security-act/.

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

Pursuant to the thrust of the DOF to maximize the use information and communications technology to ensure widespread dissemination of government policies and interaction with stakeholders, the site will organize online queries, comments and recommendations on the draft IRR by encouraging stakeholders and interested parties to submit their comments, queries and recommendations online or through email, and register in the upcoming events.

For inquiries, comments, and suggestions on the draft IRR for the PPSA, one can email the DOF-Legal Services Group at [email protected].

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 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.

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 likewise 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.

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 shall provide electronic means for registration and searching of notices. The electronic records shall be considered as public record.

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

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