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The PPSA legislation will increase MSMEs’ and farmers’ access to finance

With the recent release of the rates for the fees on the use of the electronic register required by the legislation, the Department of Finance (DOF) has put the Personal Property Security Act (PPSA) in action.

The purpose of Republic Act (RA) No. 11057, also known as the Personal Property Security Act (PPSA), is to promote economic activity among micro, small, and medium enterprises (MSMEs), as well as farmers and fisherfolk, by establishing a unified modern legal framework for securing obligations with personal property.
It enables MSMEs, small farmers, and fishermen to provide moveable property as loan security collateral in order to persuade lenders to give more credit to these sectors.
“The establishment of a modern and unified legal framework for personal property security will now allow them to use their movable properties as collateral for their loans, in keeping with President (Rodrigo) Duterte’s goal of expanding ordinary Filipinos’ access to easy credit and promoting financial inclusion on his watch,” Finance Secretary Carlos Dominguez III said.

The DOF published Administrative Order (AO) No. 001-2021 on September 17, 2021, establishing the fees to be levied in connection with the usage of the Personal Property Security Registry (PPSR).

The PPSR services fees have a single rate structure to enable the recovery of the costs of creating and running the PPSR.

According to the AO, registration of new notifications will cost PHP380, while registration of modification notices, access to certified genuine copies, and other certificates would cost PHP30.

The AO further states that there would be no fees for electronic searches of PPSR data or registration of termination notifications, as required by Section 38 of the PPSA.

The price for re-registration of security interests, as stated in the AO, is likewise based on the cost-recovery concept.

This pricing structure ensures that customers pay the same service fee regardless of the amount of security interest registered and/or certified.

More significantly, the fee structure will guarantee that the costs imposed are not onerous to either the lender or the grantor, according to the DOF.

According to DOF Undersecretary for Legal Affairs Bayani Agabin, the AO calls for a three-year review and modification of the rates, or sooner if required, to determine whether the fees are still suitable or relevant.

The AO will take effect 15 days after its full publication in the Official Gazette or in one general circulation newspaper, according to Agabin.

According to Section 38 of the PPSA, fees for registering a notice and obtaining a certified search report must be set by regulation issued by the DOF to pay the fair expenses of creating and running the PPSR.

The Land Registration Authority (LRA) established the PPSR as required by legislation.

Last March 25, the LRA announced the soft launch of the PPSR.

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