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    Ra 11057 Ppsa

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    Dianne Salto
    This document defines key terms and outlines important provisions of the Personal Property Security Act. It establishes an electronic registry for registering notices of security interests in personal property. A security interest is created through a security agreement between parties and can be perfected, or made effective against third parties, by registration in the registry or through other means like possession. The priority of conflicting security interests is determined by the time of registration or perfection. The act also provides rights to debtors including redemption of collateral.

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    Ra 11057 Ppsa

    Uploaded by

    Dianne Salto
    51 views4 pages
    This document defines key terms and outlines important provisions of the Personal Property Security Act. It establishes an electronic registry for registering notices of security interests in personal property. A security interest is created through a security agreement between parties and can be perfected, or made effective against third parties, by registration in the registry or through other means like possession. The priority of conflicting security interests is determined by the time of registration or perfection. The act also provides rights to debtors including redemption of collateral.

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    RA-11057-PPSA

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    This document defines key terms and outlines important provisions of the Personal Property Security Act. It establishes an electronic registry for registering notices of security interests in personal property. A security interest is created through a security agreement between parties and can be perfected, or made effective against third parties, by registration in the registry or through other means like possession. The priority of conflicting security interests is determined by the time of registration or perfection. The act also provides rights to debtors including redemption of collateral.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    51 views4 pages

    Ra 11057 Ppsa

    Uploaded by

    Dianne Salto
    This document defines key terms and outlines important provisions of the Personal Property Security Act. It establishes an electronic registry for registering notices of security interests in personal property. A security interest is created through a security agreement between parties and can be perfected, or made effective against third parties, by registration in the registry or through other means like possession. The priority of conflicting security interests is determined by the time of registration or perfection. The act also provides rights to debtors including redemption of collateral.

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    of 4

    R.A. No.

    11057 - Personal Property Security Act

    Important definition of terms (Sec. 3):

    (c) Grantor –

    (1) The person who grants a security interest in collateral to secure its own obligation or
    that of another person;

    (2) A buyer or other transferee of a collateral that acquires its right subject to a security
    interest;

    (3) A transferor in an outright transfer of an accounts receivable; or

    (4) A lessee of goods;

    (e) Notice – a statement of information that is registered in the Registry relating to a security


    interest or lien. The term includes an initial notice, amendment notice, and termination notice;

    (h) Registry – the centralized and nationwide electronic registry established in the Land
    Registration Authority (LRA) where notice of a security interest and a lien in personal property
    may be registered;

    (i) Secured creditor – a person that has a security interest. For the purposes of registration and
    priority only, it includes a buyer of account receivable and a lessor of goods under an operating
    lease for not less than one (1) year;

    (j) Security interest – a property right in collateral that secures payment or other performance of
    an obligation, regardless of whether the parties have denominated it as a security interest, and
    regardless of the type of asset, the status of the grantor or secured creditor, or the nature of the
    secured obligation; including the right of a buyer of accounts receivable and a lessor under an
    operating lease for not less than one (1) year.

    Section 4. Scope of the Act.— This Act shall apply to all transactions of any form that secure an
    obligation with movable collateral, except interests in aircrafts subject to Republic Act No. 9497,
    or the "Civil Aviation Authority Act of 2008", and interests in ships subject to Presidential
    Decree No. 1521, or the "Ship Mortgage Decree of 1978".

    Section 5. Creation of a Security Interest.—

    (a) A security interest shall be created by a security agreement,

    (b) A security agreement may provide for the creation of a security interest in a future
    property, but the security interest in that property is created only when the grantor
    acquires rights in it or the power to encumber it.
    Section 6. Security Agreement.— A security agreement must be contained in a written contract
    signed by the parties. It may consist of one or more writings that, taken together, establish the
    intent of the parties to create a security interest.

    The security agreement shall likewise provide for the language to be used in agreements and
    notices. The grantor shall be given the option to have the agreement and notices in Filipino. The
    Department of Finance (DOF) shall prepare model agreements in plain English and Filipino.

    Section 7. Description of Collateral.— A description of collateral shall be considered sufficient,


    whether it is specific or general, if it reasonably identifies the collateral. A description such as
    "all personal property", "all equipment", "all inventory", or "all personal property within a
    generic category" of the grantor shall be sufficient.

    Section 9. Continuity of Security Interest.— A security interest shall continue in collateral


    notwithstanding sale, lease, license, exchange, or other disposition of the collateral, except as
    otherwise provided in Section 21 of this Act, or agreed upon by the parties.

    [Section 21. Transferee Exceptions. -Any party who obtains, in the ordinary course of business,
    any movable property containing a security interest shall take the same free of such security
    interest provided he was in good faith. No such good faith shall exist if the security interest in the
    movable property was registered prior to his obtaining the property.]

    Section 11. Perfection of Security Interest.—

    (a) A security interest shall be perfected when it has been created and the secured creditor
    has taken one of the actions in accordance with Section 12.

    (b) On perfection, a security interest becomes effective against third parties.

    Section 12. Means of Perfection.— A security interest may be perfected by:

    (a) Registration of a notice with the Registry;

    (b) Possession of the collateral by the secured creditor; and

    (c) Control of investment property and deposit account.

    A security interest in any tangible asset may be perfected by registration or possession. A


    security interest in investment property and deposit account may be perfected by registration or
    control.

    Section 13. Perfection by Control.—

    (a) A security interest in a deposit account or investment property may be perfected by


    control through:
    (1) The creation of the security interest in favor of the deposit-taking institution or
    the intermediary;

    (2) The conclusion of a control agreement; or

    (3) For an investment property that is an electronic security not held with an
    intermediary, the notation of the security interest in the books maintained by or on
    behalf of the issuer for the purpose of recording the name of the holder of the
    securities.(b) Nothing in this Act shall require a deposit-taking institution or an
    intermediary to enter into a control agreement, even if the grantor so requests. A
    deposit-taking institution or an intermediary that has entered into such an
    agreement shall not be required to confirm the existence of the agreement to
    another person unless requested to do so by the grantor.

    Section 14. Perfection in Proceeds.—

    (a) Upon disposition of collateral, a security interest shall extend to proceeds of the
    collateral without further act and be continuously perfected, if the proceeds are in the
    form of money, accounts receivable, negotiable instruments or deposit accounts.

    (b) Upon disposition of the collateral, if the proceeds are in a form different from money,
    accounts receivable, negotiable instruments or deposit accounts, the security interest in
    such proceeds must be perfected by one of the means applicable to the relevant type of
    collateral within fifteen (15) days after the grantor receives such proceeds; otherwise, the
    security interest in such proceeds shall not be effective against third parties.

    Section 17. Priority Rules.— 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.

    Section 26. Establishment of Electronic Registry.—

    (a) The Registry shall be established in and administered by the LRA.

    (b) The Registry shall provide electronic means for registration and searching of notices.

    Section 27. Public Record.—

    (a) Information contained in a registered notice shall be considered as a public record.

    (b) Any person may search notices registered in the Registry.

    (c) The electronic records of the Registry shall be the official records.

    Section 45. Right of Redemption.—


    (a) Any person who is entitled to receive a notification of disposition in accordance with
    this Chapter is entitled to redeem the collateral by paying or otherwise performing the
    secured obligation in full, including the reasonable cost of enforcement.

    (b) The right of redemption may be exercised, unless:

    (1) The person entitled to redeem has not, after the default, waived in writing the
    right to redeem;

    (2) The collateral is sold or otherwise disposed of, acquired or collected by the
    secured creditor or until the conclusion of an agreement by the secured creditor
    for that purpose; and

    (3) The secured creditor has retained the collateral.

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