Personal Property Security Act (Republic Act No. 11057): Fact Sheet of House Bill No. 6907

[The Personal Property Security Act, or Republic Act No. 11057, is the result of House Bill No. 6907 under Committee Report No. 550 and Senate Bill. No. 1459 under Committee Report No. 86. Here is the Fact Sheet for House Bill No. 6907:]

OBJECTIVES:

* To increase competitiveness and the ease of doing business.

* To broaden the utilization of movable assets as collateral for micro, small and medium enterprises.

* To strengthen the credit infrastructure of the Philippines by equipping the financial institutions with a modern centralized registry on personal property to enable them to make more informed decisions in lending.

KEY PROVISIONS:

* Creates a modern centralized registry for personal assets. A security interest is created by a security agreement.

* Simplifies procedure for the registration of personal assets. The priority of security interests and liens in the same collateral shall be determined according to time of registration of a notice or perfection by other means, without regard to the order of creation of the security interests and liens.

* Expedites extrajudicial foreclosure of rapidly deteriorating assets. The Registry shall be established in and administered by the Land Registration Authority. The Registry shall provide electronic means for registration and for searching for notices.

* Enforces security interest in personal properties.

* Allows private sales to maximize proceeds from personal assets.

* Repeal other laws relating to the registration of personal property.

RELATED LAWS:

* Sections 1 to 16 of Act 1508, otherwise known as the Chattel Mortgage Law;

* Articles 1484-1486, 2085-2123, 2127, 2140-2141, 2241, 2243, and 2246-2247 of Republic Act No. 386, otherwise known as the Civil Code of the Philippines;

* Section 13 of Republic Act No. 5980, as amended by Republic Act No. 8556, otherwise known as the Financing Company Act of 1998;

* Section 10 and Sections 114 to 116 of Presidential Decree No. 1529, otherwise known as the Property Registration Decree; and

* Section 5(e) of Republic Act No. 4136, otherwise known as Land Transportation and Traffic Code.

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