Duterte signs RA 11057 allowing Filipinos to use personal properties as bank collateral

President Rodrigo Duterte has signed a new law that will allow Filipinos to use other personal properties, such as inventory and equipment, as collateral for bank loans.

Micro, small, and medium enterprises (MSMEs) are expected to benefit from Republic Act No. 11057, otherwise known as the Personal Property Security Act, as the new law aims to give them better access to financing.

Signed on August 17, RA 11057 expands the list of assets acceptable to banks and other financial institutions as collateral.

According to the law, “a description such as ‘all personal property,’ ‘all equipment,’ ‘all inventory,’ or ‘all personal property within a generic category’ of the grantor is sufficient.

Currently, some financial institutions prefer land and other real property assets as collateral making it difficult for small entrepreneurs to have their loans approved.

Apart from allowing Filipinos to use other personal properties, the new law also mandates the creation of an electronic national registry with the Land Registration Authority (LRA) in order to reduce the risk in accepting movable collateral such as bank accounts, inventory, equipment, vehicles, intellectual property rights, and others.

via Manila Bulletin / Genalyn Kabiling