Republic Act No.

11057 or the Personal Property Security Act, was signed by the President
on August 17, 2018

Giving micro, small and medium enterprises (MSMEs) improved access to financing
from banks and lending institutions which provides creation, perfection and determination of
priority, establishment and centralized notice registry and enforcement of security interests in
personal property.

Republic Act No. 11057 provides that collateral shall be considered sufficient whether it is
specific or general if it reasonably identifies the collateral.

The new law stated that “a description such as all personal property, all equipment, all
inventory or all personal property within a generic category of the grantor is sufficient.”

Financial institutions and formal lending firms prefer real estate, like most banks and other
immovable assets as collateral, this makes it difficult for small-scale entrepreneurs to apply
for loans for their businesses.

The registry will contain information on personal valuables that were used as collateral as an
assurance for banks and lenders that any collateral being offered them has not yet been used
for another loan.

Republic Act No. 11057 author in the Senate, Sen. Bam Aquino said, improving access to
financing for small businesses would “broaden the use of ‘movable assets,’ like bank
accounts receivable, inventory, equipment, vehicles, agricultural products and even
intellectual property rights.”