Finance Secretary Carlos Dominguez III said the signing into law of the Personal Property Security Act by President Rodrigo Duterte is vital to the government’s vision of a sustained economic growth and greater financial inclusion.
Duterte signed the Personal Property Security Act to boost access to credit especially of micro, small and medium entrepreneurs and farmers and fisherfolks and improve competitiveness in the country.
The landmark law simplified and harmonized the Chattel Mortgage law of 1906 and other fragmented and outdated financing regulations in the country by enabling borrowers to secure financing using non-traditional collateral such as account receivables, inventory,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.
Republic Act No. 11057 also established a unified, centralized online noticed-based collateral registry that will be lodged in the LRA and clearer priority rules in case of foreclosure. This will provide protection and more confidence to banks and financial institutions in lending to the agriculture sector and MSMEs.
MSMEs comprise 99.6 percent of total businesses in the country, of which 96 percent are micro businesses.
“President Duterte signed this measure into law in sync with his vision for sustained high growth and greater financial inclusion,” Dominguez said in a statement Wednesday.