With respect to implementation, there are two ways to enforce the security interest under the PPSA: a secured creditor may sell or sell the assets in public or in private or otherwise sell them; or a secured creditor may propose to the debtor and the grantees to take over all or part of the security in order to fully or partially satisfy the guaranteed commitment, subject to certain notification and consent requirements.6 The debtor is also required to pay any deficiencies. Under previous deposit services laws, a secured creditor is no longer entitled to recover a default after a forced sale. The PPSA came into force on 17 August 2018 to strengthen the legal framework for secure transactions in the Philippines. It provides for the creation, perfection, definition of priority, the establishment of a central information register and the application of security interests in personal property (material and immaterial), with the exception of aircraft and ships. A security agreement must be established in writing, defining the security and guaranteed commitment signed by the parties and providing for the language to be used in the agreements and notices.12 A standard security agreement is attached to the PPSA rules.13 According to the PPSA, it is not mandatory for the security agreement to be included in a public instrument, but it is advisable given the practical impact of the location of the documents in a public instrument. , as evidence before the court, without the need to further prove their authenticity and proper execution. For example, a description such as “all personal assets,” “all equipment,” “all inventories” or “all personal assets in a generic category” of the donor must suffice.15 The security agreement may provide for the creation of a security interest in future assets or acquired assets. The security agreement may also provide that a security interest for a physical asset converted to a product extends to the product (but it is limited to the value of the asset taxed before it becomes a part of the product). 18 The transfer by the borrower of its rights and obligations in a loan agreement is generally authorized with the prior approval of the lender or, in the case of a syndicated loan, of all lenders. For electronic securities that are not held by an intermediary, the priority is: (1) rating in books held by the issuer or on behalf of the issuer; (2) the conclusion of a control agreement (based on the closing date); (3) Registration24 In practice, the contractual provisions of the loan agreement defer or “redistribute” the TRM to borrowers, despite the fact that bank and non-bank financial intermediaries performing quasi-bank functions are directly responsible for the BRT under the NIRC.
In the case of a deposit account or investment property whose secured creditor is the deposit establishment, the order of priority is: (1) the right of the deposit-taking institution to reward the deposit account; 2) the creation of a securities interest in favour of the deposit-taking or intermediary; (3) the conclusion of a control agreement; (4) Registration.22 According to the SPA, the creation of “anticipated interest rates” is determined by the prior law and prior interest is effective between the parties, notwithstanding that its creation does not meet the requirements of the PPSA.31 In this sense, “pre-interest” is defined as a security interest created or provided for by an agreement for another transaction concluded or concluded prior to the implementation of the PPSA. and which had not been terminated prior to the implementation of the PPSA, however, excludes any security interest through a security agreement or any other transaction that: