RESEARCH ON HOW TO DISPOSE COLLATERAL

BASIS: REPUBLIC ACT NO. 11057 - Personal Property Security Act (PPSA).

The PPSA covers all movable securities used in all transactions of any form that secure an
obligation with movable collateral (whether tangible or intangible), except interest in aircraft
subject to the Civil Aviation Authority Act of 2008 and interest in ships subject to the Ship
Mortgage Decree of 1978.

The PPSA creates a single set of rules that will govern the perfection and enforceability of
security interests in movable property. The parties to agreements only need to observe the
following formalities (Section 12):

 Written security agreement signed by the parties

 A description of the collateral, whether specific or general, that reasonably identifies the
same

 Perfection of the security interest by registration of a notice with the electronic registry
and either possession of the object (if the collateral is tangible property) or control of the
account (if the collateral is investment property or deposit account).

Thus prior to the enforcement of the security, a notice should be first registered with the
Philippines Personal Property Security Registry (PPSR) under the Land Registration Authority
(LRA).

In case of enforcement of the security, under the PPSA, the secured creditor may take possession
of the property without need of judicial process (Section 47) and proceed to dispose the collateral
in a public or private sale upon notice to the debtor (Section 49).