Category Archives: Contracts & Obligations

Expanded Grace Period for Rents in Residential and Commercial Units: DTI Amended Guidelines

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The Department of Trade and Industry (DTI) issued the Supplemental Guidelines on the Concessions on Residential Rents and Commercial Rents (Memorandum Circular No. 20-29) and the Amendment to Supplemental Guidelines on the Concessions on Residential Rents and Commercial Rents (Memorandum Circular No. 20-31). Here is a summary/discussion of the amended supplemental guidelines:

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Amendment to the Supplemental Guidelines on the Concessions on Residential Rents and Commercial Rents (DTI Memorandum Circular No. 20-31): Full Text

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[The complete text of the Amendment to the Supplemental Guidelines on the Concessions on Residential Rents and Commercial Rents, contained in Memorandum Circular No. 20-31 issued by the Department of Trade and Industry (DTI) on 4 June 2020, is reproduced below. See also Summary of the Amended Supplemental Guidelines.]

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Refund of Payments for Events Affected by the Community Quarantine: Force Majeure and DTI Guidelines

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The provisions on force majeure affects contracts and obligations during the community quarantine, as discussed in a previous post. In a welcome move, the Department of Trade and Industry (DTI) issued the guidelines on refund of payments made for events affected by the State of public health emergency. The salient points of DTI Memorandum Circular No. 20-30 are as follows:

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Supplemental Guidelines on the Concessions on Residential Rents and Commercial Rents (DTI Memorandum Circular No. 20-29): Full Text

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[The full text of DTI Memorandum Circular No. 20-29 is reproduced below; but see Amendment to Supplemental Guidelines per DTI Memorandum Circular No. 20-31. See also Summary of Supplemental Guidelines; prior guidelines on rents, DTI Memorandum Circular No. 20-12; complemented by Memorandum Circular No. 20-30 on refund of payments for cancelled events. No extension for loans.]

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Secured Creditors: Common Provisions in Insolvency Proceedings for Individual and Juridical Debtors

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A “secured creditor” refers to s creditor with a secured claim. The Liquidation Order shall not affect the right of a secured creditor to enforce his lien in accordance with the applicable contract or law, unless he waives his right. The provisions cited/discussed below are from Republic Act No. 10142, also known as the “Financial Rehabilitation and Insolvency Act (FRIA) of 2010,“ as fleshed out in the FLSP Rules. These common provisions apply to liquidation of juridical debtors, and voluntary/involuntary liquidation of individual debtors.

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Guidelines for 30-Day Grace Period on Rents: DTI Memorandum Circular 20-12 (Full Text)

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[On 4 April 2020, the Department of Trade and Industry (DTI) issued the “Guidelines of the Concessions on Residential Rents; Commercial Rents of MSMEs,” pursuant to the Bayanihan to Heal as One Act. See the summary of grace periods for rents or loans; updated quarantine classifications; and the supplemental guidelines per DTI Memorandum Circular No. 20-29.]

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Involuntary Liquidation for Individual Debtors: Options for Debtors in Financial Distress

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Involuntary liquidation, as opposed to voluntary liquidation, refers to a proceeding initiated by creditors. Creditors of insolvent individual debtors may file an action for involuntary liquidation of the insolvent debtor. This discussion covers only involuntary liquidation in insolvency under Republic Act No. 10142, also known as the “Financial Rehabilitation and Insolvency Act (FRIA) of 2010“, as threshed out in the FLSP Rules. Moreover, the discussion below on insolvency proceedings applies only to individual debtors.

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Voluntary Liquidation for Individual Debtors: Options for Debtors in Financial Distress

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Voluntary liquidation, as opposed to involuntary liquidation, refers to a proceeding initiated by the debtor. An insolvent individual debtor may ask the court for protection, through an action for suspension of payments or  voluntary liquidation. Creditors of insolvent debtors, on the other hand, have the option of filing a petition for involuntary liquidation of the insolvent individual debtor. This discussion covers only voluntary liquidation in insolvency under Republic Act No. 10142, also known as the “Financial Rehabilitation and Insolvency Act (FRIA) of 2010“, as fleshed out in the FLSP Rules. Moreover, the discussion below on voluntary insolvency proceedings applies only to individual debtors.

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Determination of Claims: Common Provisions in Insolvency Proceedings for Individual and Juridical Debtors

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Insolvency proceedings may refer to voluntary or involuntary proceedings for individual debtors (see Voluntary or involuntary liquidation) or juridical entities (see Liquidation proceedings). The rules on determination of claims are common in all these proceedings, as provided under Republic Act No. 10142, also known as the “Financial Rehabilitation and Insolvency Act (FRIA) of 2010”, and fleshed out in the FLSP Rules. For purposes of these common provisions, the term “debtor” includes individual debtors and other juridical debtors. 

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