PPSA law to expand MSMEs, farmers access to credit

PPSA law to expand MSMEs, farmers access to credit

MANILA – The Department of Finance (DOF) has set in motion the Personal Property Security Act (PPSA) with its recent issuance of the rates for the fees on the use of the electronic registry mandated to be established under the law.

Republic Act (RA) No. 11057 or the PPSA aims 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 allows MSMEs and small farmers and fisherfolk to offer movable properties as loan security collateral to encourage lenders to extend more credit to these sectors.

“This law will benefit MSMEs along with small farmers and fisherfolk as the establishment of a modern and unified legal framework for personal property security will now let them use their movable properties as collateral for their loans, in keeping with President (Rodrigo) Duterte’s goal of expanding the ordinary Filipinos access to easy credit and promoting financial inclusion on his watch,” Finance Secretary Carlos Dominguez III said.

On Sept. 17, 2021, the DOF issued Administrative Order (AO) No. 001-2021, which set the fees to be imposed in connection with the use of the Personal Property Security Registry (PPSR).

To allow the recovery of the cost of establishing and operating the PPSR, a single rate structure of fee is adopted for the PPSR services fees.

Under the AO, the registration of new notices will be charged PHP380 each, while the registration of amendment notices, access to certified true copies and other certifications will incur a PHP30 fee.

The AO also specifies that there shall be no fee for electronic searches of the PPSR records or for the registration of termination notices as mandated by Section 38 of the PPSA.

As specified in the AO, the fee regarding the re-registration of security interests is also based on the cost-recovery principle.

This fee structure allows users to have the same cost of service regardless of the amount of security interest being registered and/or certified.

More importantly, the said fee structure will ensure that the fees to be imposed shall not be burdensome to either lender or grantor, the DOF said.

DOF Undersecretary for legal affairs Bayani Agabin said the AO provides for a periodic review and adjustment of the rates after three years, or sooner as may be necessary, to check whether the fees remain appropriate or relevant.

The AO shall take effect 15 days following its complete publication in the Official Gazette or in one newspaper of general circulation, Agabin said.

Section 38 of the PPSA mandates, he said, that the fees for registering a notice and for requesting a certified search report shall be by regulation issued by the DOF for the recovery of reasonable costs of establishing and operating the PPSR.

The PPSR was set up by the Land Registration Authority (LRA) as mandated under the law.

The LRA announced the soft launch of the PPSR last March 25. (PNA)

Leave a Reply