Omnibus Security Agreement

The PPSA came into force on 17 August 2018 to strengthen the legal framework for secure transactions in the Philippines. It provides for the creation, perfection, definition of priority, the establishment of a central information register and the application of security interests in personal property (material and immaterial), with the exception of aircraft and ships. The transfer by the borrower of his rights and obligations in a loan agreement is generally authorized with the prior approval of the lender or, in the case of a syndicated loan, of all lenders. A security agreement must be established in writing, defining the security and guaranteed commitment signed by the parties and providing for the language to be used in the agreements and notices.12 A standard security agreement is attached to the PPSA rules.13 According to the PPSA, it is not mandatory for the security agreement to be included in a public instrument, but it is advisable given the practical impact of the location of the documents in a public instrument. , as evidence before the court, without the need to further prove their authenticity and proper execution. For example, a description such as « all personal assets, » « all equipment, » « all inventories » or « all personal assets in a generic category » of the donor must suffice.15 The security agreement may provide for the creation of a security interest in future assets or acquired assets. The security agreement may also provide that a security interest for a physical asset converted to a product extends to the product (but it is limited to the value of the asset taxed before it becomes a part of the product). 18 Given the important nature of a bus and coach contract, it must be written in a very specific and correct language. For this reason, companies often employ qualified business lawyers to assist in the development of their omnibus contracts to ensure that they contain all the necessary information in a way that is not ambiguous. With respect to implementation, there are two ways to enforce the security interest under the PPSA: a secured creditor may sell or sell the assets in public or in private or otherwise sell them; or a secured creditor may propose to the debtor and the grantees to take over all or part of the security in order to fully or partially satisfy the guaranteed commitment, subject to certain notification and consent requirements.6 The debtor is also required to pay any deficiencies.

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