23 May2017
SPONSORSHIP SPEECH: COMMITTEE REPORT NO 86

 

     
 



Mr. President, as Chairman of the Committee on Banks, Financial Institutions and Currencies, this representation humbly submits to this chamber Senate Bill No. 1459 under Committee Report No. 86, entitled "AN ACT STRENGTHENING THE SECURED TRANSACTIONS LEGAL FRAMEWORK IN THE PHILIPPINES, WHICH SHALL PROVIDE FOR THE CREATION, PERFECTION, DETERMINATION OF PRIORITY, ESTABLISHMENT OF A CENTRALIZED NOTICE REGISTRY, AND ENFORCEMENT OF SECURITY INTERESTS IN PERSONAL PROPERTY, AND FOR OTHER PURPOSES".

According to 2015 Philippine Statistics Authority data, there are 896,839 micro, small, and medium enterprise ("MSME") establishments in the Philippines. These MSMEs generated a total of 4,784,870 jobs in 2015 versus 2,981,819 for the large enterprises. This indicates that MSMEs contributed almost 61.6% of the total jobs generated by all types of business establishments.

The MSME industry has been termed as an "engine of growth" of developing countries. In our country, this growth is challenged by the lack of funding and of an effective system to secure these funds. It must be noted that banks are wary of lending to MSMEs because of the operational costs and risks of agreements secured by personal property. Further, MSMEs usually do not own real property needed as security in bank loans when these financial institutions prefer real property over chattels.

It is, therefore, the objective of this bill to increase access by MSMEs to more credit at the least cost through the establishment of a unified and modern legal framework for securing obligations with personal property. Under this proposed measure, an obligation may be secured by:
a) Any type of personal property;
b) Parts of property and undivided rights in personal property;
c) Generic categories of personal property;
d) All of grantor's personal property.

Further, this measure shall provide protection for both lenders and borrowers by bringing about a streamlined and simplified process of registering security interests over personal property and the subsequent disposal of these properties after default. The proposed measure comes at a perfect time when investment demand is growing and the desire for self-sufficiency by Filipinos is strong.
With this overriding objective of promoting economic growth, I humbly implore all my colleagues to immediately pass this bill so that we, in one concerted action, unequivocally declare our support to create more jobs, raise more money, enhance technologies, and promote a sustainable economic environment for all Filipinos.

Thank you very much, Mr. President and my dear colleagues.

 

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