REGULATORY FRAMEWORK AND BUSINESS Field Personnel

TRANSACTIONS FINALS REVIEWER

è Regularly performs their duties away
LABOR STANDARDS from the principal place of business (or
branch office) of the employer; and
General Working Conditions
è Their actual hours of work cannot be
Coverage:
determined with reasonable certainty
The provisions of this Title shall apply to
employees in all establishments and
• these kind of employees work away from
undertaking, whether for profit or not, but not
the employer’s place of business, and
to:
therefore, not subject to the personal
supervision of the employer, hence, the
Government Employees
employer has no way of knowing the
è Employees employed by the National
number of hours they work in a day
Government or any of its political
subdivisions;
Employees of Electric Companies (PECO, MORE)
è Employees employed by government-
- checks the electric posts in assigned
owned and controlled corporations with
locations
special charters;
- not field personnel because they are
è For the purpose of this Law (Labor
required to return to the office before a
Code), employees employed by
certain period expires with all the
government-owned and controlled
electric posts checked in their assigned
corporations organized under the
locations checked
Corporation Law are NOT considered
government employees
Members of the Family of the employer who
è Government employees are not
are dependent on him for support
covered by the Labor Code because
they are covered by the Civil Service
Family members - to husband and wife, parents
Law and other laws regulating the
and children, other ascendants and
working conditions of government
descendants, brothers and sisters (whether full
employees
or half-blood)
Managerial Employees
è The employer already takes care of the
sustenance, dwelling, clothing, medical
Managerial if:
attendance or education of that
è He or she primarily manages the
particular member of the family
establishment or
department/subdivision;
Domestic Helpers/Workers
è He or she directs the work of two or
è person engaged to work for a
more employees customarily and
household within an employment
regularly; or
relationship.
è He or she has authority to hire or fire
è covered by the Kasambahay Act of the
other employees of lower rank or
Philippines which provide them with
effectively recommend hiring, firing,
weekly rest day, service incentive leave,
promotion and other personnel
and 13th month pay.
movements
Persons in Personal Service of Another
• Not covered because it is not feasible to
è those who minister to the personal
provide maximum hours of labor for them,
comfort, convenience or safety of the
considering that managerial employees are
employer as well as the members of the
usually engaged by reason of their special
employer’s household
training, experience or knowledge which
è the nature of their work and their
requires the exercise of discretion and
peculiar relationship with their
independent judgment.
employer necessitates that they be
• Officers and members of the managerial freed from certain legal restrictions
staff are also excluded from the provisions applicable to employers engaged in a
of the Labor Code on general working business undertaking.
conditions
Workers Paid by Results
è These are workers paid per unit
accomplished or service performed. It
 includes “pakyaw” workers, FLEXIBLE WORK SCHEDULE FOR SOLO PARENTS
seamstresses, massage therapists,
barbers and the like. Flexible work schedule
è Compensation is paid depending on the - situation where the employer allows an
work done and not hours worked, hence employee to vary his arrival and
the exemption departure time without affecting the
core work hours as defined by the
Hours of work employer
• The maximum hours of work that can be
required of an employee under normal Solo Parents Welfare Act of 2000
conditions is eight (8) hours a day and è solo parents are entitled to flexible
forty-eight hours (48) per week. work schedule, provided that such
schedule does not affect individual and
• The term “day” refers to the 24-hour company productivity
period reckoned from the time the
employee regularly starts work NIGHT SHIFT DIFFERENTIAL
- additional compensation given to
NO WORK NO PAY covered employees who work between
• The Philippines follow the age-old rule of 10:00 PM and 6:00 AM
“a fair day’s wage for a fair day’s labor”.
This principle applies not only to daily- • Every employee shall be paid a night shift
paid employees but also to monthly-paid differential of not less than ten percent
employees. (10%) of his wage for each hour of work
• Hours shall include all the time during performed between ten o clock in the
which an employee is required to be on evening and six o’clock in the morning
duty or to be at a prescribed workplace,
and all time during which an employee is OVERTIME PAY
suffered or permitted to work - Additional compensation given to
covered employees who work for more
WAITING TIME than eight hours a day
- Time spent by an employee for waiting is
considered work if he was engaged to • The rate of overtime is 25% of the
wait or if waiting is an integral part of regular wage on ordinary days and 30%
this work during holidays or rest days

TRAVEL TIME • If your daily work hours per day does

- Home-to-work travel and vice versa are not exceed 8 hours, work done beyond
not considered as hours worked because that daily work will be considered
it is a normal incident of employment. overtime work

If the employer requires the employee to deviate IS UNAUTHORIZED OVERTIME WORK

from his normal travel, the time spent for such COMPENSABLE?
deviation is considered as hours worked
Compensable when:
REST PERIOD, COFFEE BREAK, MEAL PERIOD è Overtime work was necessary
- kinds of non-work activities are è Benefited the company
considered compensable working time è Employee could not abandon his work
if they run from 5 to 20 minutes at the end of this 8 hour work because
there was no substitute ready and upon
It is the duty of every employer to give his order of his superior
employees not less than 60 minutes time-off
for their regular meals (Article 85, Labor Code) o Hold true even if there is a standing
except when circular prohibiting overtime work
1) the work is non-manual or does not without approval of the department
involve strenuous physical exertion head
2) the establishment regularly operates
not less than 16 hours a day COMPRESSED WORKWEEK
3) there is an actual or impending è Exemption to the overtime pay principle
emergency
4) it is necessary to prevent serious loss of Arrangement whereby the normal workweek is
perishable goods reduced to:
ð less than 6 days
 ð normal hours of work per day is o Preservation of Perishable Goods
increased to more than 8 hours è When the work is necessary to prevent
ð without corresponding overtime pay loss or damage to perishable goods
ð total number of normal work hours
remain at 48 hours o Completion of Work
è When the completion or continuation
• Construction industry of work started before the eighth hour
• Health services is necessary to prevent serious
• Occupation requiring heavy manual obstruction or prejudice to the business
labor or operations of the employer.
• Occupations exposing workers to
airborne contaminants, human o Take Advantage of Favorable Weather
carcinogens and substances that exceed Conditions
the threshold limit values cannot adopt è When overtime work is necessary to
a compressed workweek avail of favorable weather or
environmental weather conditions
CAN OVERTIME WORK ON ONE DAY BE USED where performance or quality of work is
TO COMPENSATE HIS UNDERTIME ON dependent thereon.
ANOTHER DAY?
WEEKLY REST DAY
o Employer cannot evade payment of
overtime by offsetting the overtime • duty of every employer, whether
work for one day with the undertime operating for profit or not, to provide
work each of his employees a rest period of
not less than twenty-four (24)
o Employer can require the employee to consecutive hours after every six (6)
exceed his normal working time to consecutive normal work days
make up for his undertime on that same
day • employer chooses the rest day but the
employee can choose his rest day on
Example: religious grounds
An employee arrived to work one hour late. If
normal work operations stop at 5 PM, the • Health personnel working (1) in cities or
employer can require him to work until 6 PM to municipalities with a population of at
make up for his undertime that day lease 1,000,000 or (2) in hospitals or
clinics with a bed capacity of at least
GROUNDS TO COMPEL THE EMPLOYEE TO 100 shall have a weekly rest day of
RENDER OVERTIME WORK? forty-eight (48) hours

o War/Emergency Situation Exigencies of Service

è When the country is at war or when any - Where the exigencies of the services so
other national or local emergency has require as determined by the employer,
been declared by Congress or the Chief health personnel in cities or
Executive municipalities with a population of at
least 1,000,000 or those employed in
o Disaster/Calamity hospitals or clinics with a bed capacity
è When overtime work is necessary to of at least 100, may be required to work
prevent loss of life or property, or in for more than five (5) days a week
case of imminent damage to public
safety due to actual or impending WHEN CAN THE EMPLOYER COMPLE THE
emergency in the locality caused by EMPLOYEE TO WORK ON HIS REST DAY?
serious accident, fire, flood, typhoon,
earthquake, epidemic or other disaster o Disaster/Calamity
or calamity. è When overtime work is necessary to
prevent loss of life or property, or in
o Urgent Repairs case of imminent damage to public
è When there is urgent work to be safety due to actual or impending
performed on machines, installation or emergency in the locality caused by
equipment in order to avoid serious loss serious accident, fire, flood, typhoon,
or damage to the employer or some earthquake, epidemic or other disaster
other causes of similar nature. or calamity
o Urgent Repairs ð covered employee is generally entitled
è When there is urgent work to be to this even if he does not work during
performed on machines, installation or the regular holiday
equipment in order to avoid serious loss
or damage to the employer or some 200% - of daily wage, if covered person works
other causes of similar nature. during a regular holiday

o Abnormal Pressure of Work HOLIDAY PAY (TWO SUCCESSIVE REGULAR

è In the event of abnormal pressure of HOLIDAYS)
work due to special circumstances • If there are two (2) successive regular
where the employer cannot be holidays, like Holy Thursday and Good
ordinarily expected to resort to other Friday, the covered employees will be
measures entitled to holiday pay for both holidays
only if he worked on the same day
o Preservation or Perishable Goods immediately preceding the first holiday
è When the work is necessary to prevent
loss or damage to perishable goods • If two regular holidays fall on the same
date, such as Good Friday falling on
o Nature of Work April 9 which happens to be Araw ng
è Where the nature of work is such that Kagitingan, the employees are entitled
the employees have to work to their holiday pay for both holidays
continuously for seven (7) days in a
week, as in the case of the crew WHO ARE NOT ENTITLED TO HOLIDAY PAY?
members of a vessel to complete a è employees of retail or service
voyage and in other similar cases establishments regularly employing less
than 10 workers are not entitled to
o Take Advantage of Favorable Weather holiday pay
Conditions
è When overtime work is necessary to PART 2: STATUTORY LEAVES AND 13TH MONTH
avail of favorable weather or PAY
environmental weather conditions
where performance or quality of work is SERVICE INCENTIVE LEAVE
dependent
• Every employee who has rendered at
PREMIUM PAY least one year of service shall be
- additional compensation given to a entitled to a yearly service incentive
covered employee for working on a leave of five (5) days with pay
special day or rest day
• If not used or exhausted at the end of
30% - regular wage for working on a rest day or the year, the service incentive leave
special holiday shall be commuted to its money
equivalent
50% - regular wage for working on a special
holiday falling on a rest day Employees not Entitled to Service Incentive
Leave
Special Holidays fixed by law: ð Employees mentioned in Article 82 of
è Ninoy Aquino Day (Monday nearest the Labor Code;
August 21)
è All Saints Day (November 1) ð Employees of establishment regularly
è Last Day of the Year (December 31) employing less than ten (10) employees;

HOLIDAY PAY ð Employees already enjoying vacation

- additional compensation given to an leave with pay of at least five (5) days;
employee during regular holidays, the ð Employees of establishments exempted
purpose of which is to prevent the by the Secretary of Labor after
diminution of monthly income of considering the viability or financial
employees on account of work condition of such establishments
interruptions

100% - regular daily wage

MATERNITY LEAVE AND OTHER BENEFITS (RA • Duration of the paid leave is seven (7)
11210) working days, non-cumulative

• 105 days paid leave for live childbirth WHO PAYS THE MATERNITY LEAVE BENEFIT?
and 60 days paid leave for miscarriage
and emergency termination of The Employer - the employer may pay the
pregnancy. maternity leave benefit in full subject to 100%
reimbursement by the SSS
• An additional 15 days paid leave if the
female worker qualifies as a solo parent The SSS - pay the maternity leave benefit in full.
under R.A. 8972, but only in cases of live
childbirth. ð If the SSS can only pay a partial amount
to the female worker, the employer
• An option to extend leave without pay
must pay the said female worker the
for an additional 30 days in case of live
difference of her entitled benefit and
childbirth.
that given by the SSS.
• Healthcare services for pre-natal, ð The amount paid by the employer is
delivery, postpartum and pregnancy subject to 100% reimbursement by the
related conditions as governed by SSS
existing rules of PhilHealth
CONDITIONS FOR ENTITLEMENT OF PATERNITY
CONDITIONS FOR ENTITLEMENT (PRIVATE LEAVE
SECTOR) o The lawful wife of the employee has given
birth or has suffered a miscarriage or
ð She must have at least three (3) monthly abortion;
contributions to the Social Security System o The employee must be cohabiting with his
(SSS) in the twelve-month period wife at the time of childbirth, miscarriage
immediately preceding the semester of or abortion;
childbirth, miscarriage, or emergency
termination of pregnancy. o Notice to employer about the pregnancy
and expected date of delivery;
ð She shall have notified her employer of her
pregnancy and the probable date of her o Submission of proof of marriage;
childbirth, which notice shall be
transmitted to the SSS in accordance with o Can be availed for the first four (4)
the rules and regulations it may provide deliveries;

ALLOCATION OF MATERNITY LEAVE CREDITS o Can be availed of before, during, or after

childbirth, miscarriage or abortion, but not
• Female worker can allocated up to later than sixty (60) days after the date of
seven days of said benefit to a child’s such childbirth, miscarriage, or abortion
father or an alternative caregiver (4th
civil degree of consanguinity or current PARENTAL LEAVE FOR SOLO PARENTS
partner)
Conditions
• Chooses to allocate, not entitled to any è At least 1 year of service (continuous or
benefit for the number of days she broken)
allocated to the child’s father or è Notice of availment given to employer
alternate caregiver within a reasonable time period
è Solo Parent ID presented to employer
• The allocation given will be on top of
the seven days paternity leave that the
Duration: Seven working days non-cumulative
latter may enjoy under RA 8187
WHO ARE ENTITLED TO PARENTAL LEAVE FOR
SOLO PARENTS?
PATERNITY LEAVE
• Only married male employees whose Persons, male or female, who are left alone with
lawful wife he is cohabiting with, gave birth the responsibility of parenthood because of:
or suffered miscarriage or abortion are ð Giving birth as a result of rape or crimes
entitled to paternity leave. against chastity;
ð Detention or imprisonment of spouse
for at least one (1) year;
 ð Abandonment of spouse for at least one • By law, only rank and file employees are
(1) year; entitled to this benefit, provided they have
ð Physical or mental incapacity of spouse worked for at least one (1) month during the
as certified by a public medical calendar year.
practitioner;
ð Legal separation or de facto separation • The benefit should be given to the employee
from spouse for at least one (1) year, as on or before December 24 of every year
long as he or she is entrusted with the
custody of the children; WHO ARE NOT ENTITLED TO 13TH MONTH PAY?
ð Declaration of nullity or annulment of ð Employees who have not yet rendered
marriage as decreed by a court or by a service for one (1) month during the
church, as long as he or she is entrusted calendar year;
with the custody of the children
ð Employees who are paid purely on
commission, boundary or task basis;
An unmarried mother or father who preferred to
keep and rear her/his child or children instead of ð Employees who are paid a fixed amount for
having others care for them or give them up to a performing specific work, irrespective of the
welfare institution; time consumed in the performance thereof,
except piece-rate workers;
A foster parent duly licensed by the DSWD or
legal guardian appointed by the court, who
ð Employees already receiving the equivalent
solely provides parental care and support to a
of 13th month pay (Christmas bonus, mid-
child or children;
year bonus, year-end productivity bonus,
A family member who assumes the responsibility and the like)
of head of family as a result of the death,
abandonment, disappearance, or prolonged
absence of the parents or solo parent, provided,
that such abandonment, disappearance, or
absence lasts for at least one (1) year

LEAVE FOR VICTIMS OF VIOLENCE AGAINST

WOMEN AND THEIR CHILDREN

• Available to female employees, or her child,

whether legitimate or illegitimate, who
have suffered from or has been threatened
with violence by her husband, former
husband, a person whom she has or had
sexual or dating relationship, or a person
with whom she had a common child.

Duration: Ten (10) days, not convertible to cash

and not cumulative, and is only available when
the woman-employee has too attend to medical
and legal concerns

SPECIAL LEAVE FOR WOMEN EMPLOYEES

o Only female employees who undergo
surgery because of gynecological
disorders are entitled to special leave.

Duration: Two (2) months with full pay based on

grossed monthly compensation

13TH MONTH PAY

- extra renumeration given to employees
who have rendered at least one (1)
month of service, the amount of which is
equivalent to at least 1/12 of the basic
salary earned during the calendar year
FINANCIAL REHABILITATION AND INSOLVENCY Insolvent
ACT OF 2010 - the financial condition of a debtor that
is generally unable to pay its or his
Policies: liabilities as they fall due in the ordinary
ð FRIA expresses the policy of the State to course of business or has liabilities that
encourage debtors, both juridical and are greater than its or his assets
natural persons, and their creditors to
collectively and realistically resolve and Liabilities
adjust competing claims and property - monetary claims against the debtor,
rights including stockholder’s advances that
ð State ensure a timely, fair, transparent, have been recorded in the debtor’s
effective and efficient rehabilitation or audited financial statements as
liquidation of debtors advances for future subscriptions

Rehabilitation or liquidation shall be made with Ordinary Course of Business

the following factors: - transactions in the pursuit of the
è Ensure or maintain certainty and individual debtor’s or debtor’s business
predictability in commercial affairs operations prior to rehabilitation or
è Preserve and maximize the value of insolvency proceedings and on ordinary
assets of these debtors business terms
è Recognize creditors rights
è Respect priority of claims Creditor
è Ensure equitable treatment of creditors - natural or juridical person which has a
who are similarly situated claim against the debtor that arose on
or before the commencement date
• Not feasible, it is in the interest of the
State to facilitate a speedy and orderly Commencement Date
liquidation of the debtor’s assets and - date on which the court issues the
the settlement of their obligation Commencement Order, which shall be
retroactive to the date of filing of the
DEFINITIONS: petition for voluntary or involuntary
proceedings
Debtor
- a sole proprietorship duly registered General Unsecured Creditor
with the Department of Trade and - a creditor whose claim or a portion
Industry (DTI) thereof is neither secured, preferred
- a partnership duly registered with the nor subordinated under the FRIA
Securities and Exchange Commission
(SEC) Secured Creditor
- a corporation duly organized and - creditor with a secured claim
existing under Philippine laws
- an individual debtor who has become Secured Claim
insolvent - claim that is already secured by a lien

Individual Debtor Lien

- a natural person who is a resident and - a statutory or contractual claim or
citizen of the Philippines that has judicial charge on real or personal
become insolvent property that legally entitles a creditor
to resort to said property for payment
Group of Debtors of the claim or debt secured by such
- refer to and can cover only: claim

(1) corporations that are financially related PROCEEDINGS COVERED BY FRIA

to one another as parent corporations,
subsidiaries or affiliates
(2) partnerships that are owned more than
50% by the same person
(3) single proprietorships that are owned
by the same person
 Involuntary Rehabilitation

A creditor or group of creditors may initiate

involuntary proceedings against the debtor by
filing a petition for rehabilitation with the court
if:

• There is no genuine issue of fact or law on

the claim/s of the petitioner, and that the
due and demandable payments thereon
have not been made for at least (60) days or
that the debtor has failed generally to meet
its liabilities as they fall due; and

• A creditor, other than the petitioner/s, has

initiated foreclosure proceedings against the
debtor that will prevent the debtor from
paying its debts as they become due or will
render it insolvent

Rehabilitation Plan
- a plan by which the financial well-being
and viability of an insolvent debtor can
be restored using various means
including but not limited to
EXCLUDED DEBTORS
ð debt forgiveness
Debtors which are: ð debt rescheduling
ð reorganization or quasi-reorganization
(1) banks ð dacion en pago
(2) pre-need companies ð debt-equity conversion and sale of
(3) insurance companies business (or parts of it) as a going
(4) national and local government agencies concern
or units ð setting up of new business entity
ð other similar arrangements as may be
• Rehabilitation of banks, pre-need approved by the court or creditors
companies, and insurance companies is still
governed by their respective governing - if attached to the petition for
special laws (Central Bank Act, Pre-Need rehabilitation, it is indispensable
Code of the Philippines, Insurance Code of
the Philippines, etc.) Rehabilitation plan may be
(1) approved by creditors (50% of the total
REHABILITATION claims)
- restoration of the debtor to a condition (2) confirmed by the court after approval
of successful operation and solvency, if of the creditors or even without such
it is shown that its continuance of approval or even with the objection of
operation is economically feasible and the creditors
its creditors can recover by way of the
present value of payments projected in Cram Down Rule
the plan, more if the debtor continues - The rehabilitation plan (including pre-
as a going concern than if it is negotiated plans) confirmed by the court
immediately liquidated shall be binding upon the debtor and all
persons who may be affected by it,
Rehabilitation of Sole Proprietorship, including creditors, whether or not such
Partnership and Corporation persons have participated in the
proceedings, opposed the plan or whether
Voluntary Rehabilitation or not their claims have been scheduled
(1) insolvency of the debtor
(2) viability of its rehabilitation
STAY ORDER (2) to enable the management committee or
The court having jurisdiction over the the rehabilitation receiver to substitute the
rehabilitation case shall issue a Commencement defendant in any pending action against it
Order which shall include a Stay Order. before any court, tribunal, board, or body

The Stay or Suspension Order shall; Secured Credits

è Suspend all actions or proceedings, in • The Stay Order covers all creditors,
court or otherwise, for the enforcement secured or unsecured. The preferred
of claims against the debtor; status over the unsecured relative to
è Suspend all actions to enforce any the mortgage liens is retained, but the
judgment, attachment or other enforcement of such preference is
provisional remedies against the debtor suspended
è Prohibit the debtor from selling,
encumbering, transferring or disposing EXCEPTIONS TO THE STAY OR SUSPENSION
in any manner any of its properties ORDER
except in the ordinary course of
business Shall not apply:
è Prohibit the debtor from making any è To cases already pending appeal in the
payment of its liabilities outstanding as Supreme Court as of commencement
of the commencement date except as date. Any final and executory judgment
may be provided by FRIA arising from such appeal shall be
referred to the rehabilitation court for
• Be effective for the entire duration of the appropriate action
rehabilitation proceedings
• The order may be lifted if there is no è Subject to the discretion of the court, to
substantial likelihood for the debtor to be cases pending or filed at a specialized
successfully rehabilitated court or quasi-judicial agency which,
upon determination by the court is
SUSPENDED CLAIMS capable of resolving the claim more
quickly, fairly, and efficiently than the
Claim court. Any final and executory judgment
- all claims or demands of whatever nature of such court or agency shall be
or character against the debtor or its referred to the rehabilitation court and
property, whether for money or otherwise, shall be treated as a non-disputed claim
liquidated or unliquidated, fixed or
contingent, matured or unmatured, è To the enforcement of claims against
disputed or undisputed, including but not sureties and other persons solidarily
limited to: liable with the debtor, and third party
or accommodation mortgagors as well
(1) all claims of the government, whether as issuers of letters of credit, unless the
national or local, including taxes, tariffs, property subject of the third party or
and customs duties accommodation mortgage is necessary
(2) claims against directors and officers of the for the rehabilitation of the debtor as
debtor arising from acts done in the determined by the court upon
discharge of their functions falling within recommendation by the rehabilitation
the scope of their authority receiver;

• The creditors or third parties are not è To any form of action of customers or
prohibited from filing cases against the clients of a securities market participant
directors and officers acting in their to recover or otherwise claim moneys
personal capacities and securities entrusted to the latter in
the ordinary course of the latter’s
Rationale of Suspension of Claims: business as well as any action of such
securities market participant or the
(1) To enable the rehabilitation receiver to appropriate regulatory agency or self-
effectively exercise its/his powers free regulatory organization to pay or settle
from or unburdened by any judicial or such claims or liabilities
extrajudicial interference that might unduly
hinder or prevent the “rescue” of the è To the actions of a licensed broker or
debtor company (time, resources, and dealer to sell pledged securities of a
effort will be used to litigate) debtor pursuant to a securities pledge
or margin agreement for the settlement
 of securities transactions in accordance rehabilitation plan that meets the
with the provisions of the Securities minimum requirements is recognized
Regulation Code and its implementing under the FRIA
rules and regulations.
Minimum Requirements:
è The clearing and settlement of financial • The debtor must agree to the out-of-
transactions through the facilities of a court or informal restructuring / workout
clearing agency or similar entities duly agreement or rehabilitation plan
authorized, registered and/or
recognized by the appropriate • It must be approved by creditors
regulatory agency like the Bangko representing at least sixty-seven percent
Sentral ng Pilipinas (BSP) and the SEC as (67%) of the secured obligations of the
well as any form of actions of such debtor;
agencies or entities to reimburse
themselves for any transactions settled • It must be approved by creditors
for the debtor representing at least seventy-five (75%)
of the unsecured obligations of the
è Any criminal action against individual debtor; and
debtor or owner, partner, director, or
officer of a debtor shall not be affected • It must be approved by creditors holding
by any proceeding commenced under at least eighty-five percent (85%) of the
the FRIA total liabilities, secured and unsecured, of
the debtor
WHO WILL MANAGE?
STANDSTILL PERIOD
o Existing Board/Management of the - refer to the period agreed upon by the
debtor shall continue, but can be debtor and its creditors to enable them
replaced to negotiate and enter into an out-of-
court or informal restructuring/workout
Upon motion, the Court may appoint either a agreement or rehabilitation plan
rehabilitation receiver or a management pursuant to Rule 4 of these Rules
committee to undertake the management of
the debtor in the following cases: Minimum Requirements:
(1) Actual or eminent danger of dissipation, • Agreement is approved by creditors
loss, wastage, or destruction of the representing more than 50% of the total
debtor’s assets or properties liabilities of the debtor;
(2) paralyzation of the business operations
of the debtor • Notice thereof is published in a
(3) gross mismanagement of the debtor, or newspaper of general circulation in the
fraud or other wrongful conduct on the Philippines once a week for two (2)
part of , or gross or willful violation of consecutive weeks; and
the FRIA by existing management of the
debtor, owner, partner, director, • The standstill period does not exceed
officer, or representative/s in the one hundred twenty (120) days from the
management of the debtor date of effectivity

COURT ACTION ON PETITION FOR The Cram Down Rule applies upon publication
REHABILITATION of the notice of the out-of-court approved
rehabilitation plan

SUSPENSION OF PAYMENTS

Only an INDIVIDUAL DEBTOR may file a petition

for suspension of payments.

ð The debtor has sufficient properties to

cover all his debts but he foresees the
impossibility of meeting his debts when
OUT-OF-COURT REHABILITATION they respectively fall due
• Rehabilitation is not necessarily court
supervised. An out-of-court or informal ð The purpose is to suspend or delay the
restructuring agreement or payment of debts
 Prohibited Acts
ð The amount of indebtedness is not The individual debtor is prohibited from:
affected (not reduced or discharged);
è Selling, transferring, encumbering, or
ð The number of creditors is immaterial disposing in any manner of his property,
except those used in the ordinary
operations of commerce or industry in
which the petitioning individual debtor is
engaged, so long as the proceedings relative
to the suspension of payments are pending.

è Making any payment outside of the

necessary or legitimate expenses of his
business or industry, so long as the
proceedings relative to the suspension of
payments are pending

Creditors’ Meeting
The individual debtor shall attach to the petition
for suspension of payment a proposed
SUSPENSION ORDER agreement with the creditors:
• Upon motion filed by the individual debtor,
the court may issue an order suspending è The proposed agreement shall be approved
any pending execution against the or rejected in the creditors’ meeting. The
individual debtor. presence of creditors holding claims
amounting to at least 3/5 of the liabilities
of the debtor is necessary for the meeting.
• Properties held as security by secured
creditors shall not be the subject of such
è A creditor has no right to vote if he
suspension order
incurred his credit within 90 days prior to
the filing of the petition for suspension
• The suspension order shall lapse when
three (3) months shall have passed without
Double Majority
the proposed agreement being accepted
Necessary for the approval of proposed
by the creditors or as soon as such
agreement with the creditors to wit:
agreement is denied
è 2/3 of the creditors voting unite upon
• No creditor shall sue or institute
the same proposition
proceedings to collect his claim from the
debtor from the time of the filing for
è The claims represented by said majority
suspension of payments and for as long as
vote amount to at least 3/5 of the total
proceedings remain pending
liabilities of the debtor mentioned in the
petition
Exceptions:
ð Those creditors having claims for personal
Effect of Disapproval by Creditors
labor, maintenance, expense of last illness
• If there is no approval of the double
and funeral of wife or children of the
majority, the suspension of payments
debtor incurred in the sixty (60) days
proceedings will be terminated and the
immediately prior to the filing of the
creditors shall be at liberty to enforce
petition
their rights which corresponds to them
ð Secured creditors
PETITION FOR LIQUIDATION
These excepted creditors are not affected by
the proposed agreement with the debtor unless
they participated and voted in the creditors
meeting
 A secured creditor may:

• Waive his right under the security or lien,

prove his claim in the liquidation
proceedings and share in the distribution
of assets of the debtor;

LIQUIDATION PROCESS • Maintain his right under the security or lien

ð This is the proceeding where claims are
filed and the assets of the insolvent If the secured creditor maintains his rights under
debtor are disposed and the proceeds the security or lien:
are divided among the creditors
ð Rules apply to individual debtors, sole • The value of the property may be fixed in a
proprietorships, partnerships and manner agreed upon by the creditor and
corporations liquidator. When the value of the property
is less than the claim it secures, the
LIQUIDATION ORDER liquidator may convey the property to the
secured creditor and the latter will be
Inclusions: admitted in the liquidation proceeding as a
(1) declaring that the debtor is insolvent creditor for the balance. If its value exceeds
(2) ordering the liquidation of the debtor the claim secured, the liquidator may
(3) in case of juridical persons, declaring it convey the property to the creditor and
as dissolved waive the debtor’s right of redemption
(4) prohibiting payments and / or transfer upon receiving the excess from the creditor.
of property by the debtor
(5) directing all claims to be filed with the • The liquidator may sell the property and
liquidator satisfy the secured creditor’s entire claim
from the proceeds of the sale.
Effects of Liquidation Order
• The juridical debtor shall be deemed • The secured creditor may enforce the lien or
dissolved and its corporate or juridical foreclosure on the property pursuant to
existence terminated; applicable laws

• Legal title to and control of all the assets Even if a secured creditor will maintain his
of the debtor, except those that may be rights over the security or lien
exempt from execution, shall be deemed è the right is subject to the temporary
vested in the liquidator or, pending his stay of foreclosure proceedings for a
election or appointment, with the court; period of 180 days, upon the issuance
by the court of the Liquidation Order
• All contracts of the debtor shall be
deemed terminated and/or breached, DISTRIBUTION OF ASSETS
unless the liquidator, within ninety (90) o Be divided among the creditors in
days from the date of his assumption of accordance with the Liquidation Plan
office, declares otherwise submitted by the liquidator and
approved by the court.
• No separate action for the collection of an o The rules on concurrence and
unsecured claim shall be allowed. Actions preference of credits under the Civil
already pending in court will be Code and other relevant laws shall be
transferred to the liquidator for him to observed in the liquidation plan.
accept and settle or contest

• No foreclosure proceeding shall be

allowed for a period of one hundred and
eighty (180) days

RIGHTS OF SECURED CREDITORS

è The Liquidation Order shall not affect
the right of a secured creditor to enforce
his lien in accordance with the applicable
contract or law.
GOVERNMENT PROCUREMENT REFORM ACT 9. Opening of Bids
(RA No. 9184) 10. Preliminary Examination (Technical
Component)
Governing Principle: 11. Ceiling for Bid Prices
ð Transparency; 12. Post-Qualification
ð Competitiveness; 13. Award
ð Streamlined Procurement Process;
ð System of Accountability; ALTERNATIVE METHODS OF PROCUREMENT
ð Public Monitoring.
1. Limited Source Bidding (Selective Bidding)
Scope of Application: - a method of Procurement that involves
ð Infrastructure Principle direct invitation to bid by the Procuring
ð Goods Entity from a set of preselected
ð Consulting Services suppliers or consultants with known
experience and proven capability
PROCUREMENT PLANNING AND BUDGETING relative to the requirements of a
LINKAGE particular contract.
• All procurement should be within the
approved budget of the Procuring Entity 2. Direct Contracting (Single Source
and should be meticulously and judiciously Procurement)
planned by the Procuring Entity concerned. - a method of Procurement that does not
• Consistent with government fiscal require elaborate Bidding Documents
discipline measures, only those considered because the supplier is simply asked to
crucial to the efficient discharge of submit a price quotation or a pro-forma
governmental functions shall be included in invoice together with the conditions of
the Annual Procurement Plan to be sale, which offer may be accepted
specified in the IRR immediately or after some negotiations.

Procurement By Electronic Means 3. Repeat Order

è To promote transparency and - a method of Procurement that involves
efficiency, information and a direct Procurement of Goods from the
communications technology shall be previous winning bidder, whenever
utilized in the conduct of procurement there is a need to replenish Goods
procedures. Accordingly, there shall be procured under a contract previously
a single portal that shall serve as the awarded through Competitive Bidding
primary source of information on all
government procurement 4. Shopping
- a method of Procurement whereby the
Security, Integrity and Confidentiality Procuring Entity simply requests for the
• The G-EPS shall ensure the security, submission of price quotations for
integrity and confidentiality of readily available off-the-shelf Goods or
documents submitted through the ordinary/regular equipment to be
system. It shall include a feature that procured directly from suppliers of
provides for an audit trail for on-line known qualification.
transactions and allow the Commission
on Audit to verify the security and 5. Negotiated Procurement
integrity of the systems at any time - a method of Procurement that may be
resorted under the extraordinary
Competitive Bidding circumstances provided for in Section
• All procurement shall be done through 53 of this Act and other instances that
Competitive bidding except as provided shall be specified in the IRR, whereby
for in Article XVI of this Act the Procuring Entity directly negotiates
a contract with a technically, legally and
BIDDING PROCESS financially capable supplier, contractor
1. Pre-Procurement Conference or consultant
2. Invitation to Bid
3. Pre-Bid Conference
4. Submission of Eligibility Requirements
5. Shortlisting of Bidders
6. Submission and Receipt of Bids
7. Modification/Withdrawal (if any)
8. Deadline of Submission
EASE OF DOING BUSINESS AND EFFICIENT • Once the Department of Information and
GOVERNMENT SERVICE DELIVERY ACT OF 2018 Communications Technology (DICT) has
(RA No. 11032) completed a web-based software enabled
business registration system that is
This Act shall apply to all government offices acceptable to the public as mandated
and agencies including local government units under Section 26 of this Act, all
(LGUs), government-owned or controlled transactions shall be coursed through such
corporations and other government system.
instrumentalities, whether located in the
Philippines or abroad, that provide services All government agencies including LGUs shall
covering business and nonbusiness related adopt a zero-contact policy
transactions as defined in this Act
ACCOUNTABILITY OF HEADS OF OFFICES AND
Reengineering of Systems and Procedures AGENCIES
• All offices and agencies which provide ð be primarily responsible for the
government services are hereby implementation of this Act and shall be
mandated to regularly undertake cost held accountable to the public in rendering
compliance analysis, time and motion fast, efficient, convenient and reliable
studies, undergo evaluation and service.
improvement of their transaction systems
and procedures and reengineer the same All transactions and processes are deemed to
if deemed necessary to reduce have been made with the permission or
bureaucratic red tape and processing clearance from the highest authority having
time jurisdiction over the government office or
agency concerned
CITIZEN’S CHARTER
All government agencies including departments, ACCESSING OF GOVERNMENT SERVICES
bureaus, offices, instrumentalities, or
government-owned and/or –controlled Acceptance of Applications or Requests:
corporations, or LGUs shall set up their è acceptance
respective most current and updated service è assessment
standards to be known as the Citizen’s Charter è assigning of unique identification
in the form of information billboards which shall number
be posted at the main entrance of offices or at è acknowledgment receipt
the most conspicuous place, in their respective
websites and in the form of published materials Action of Offices:
written either in English, Filipino, or in the local è 3 or 7 days max processing time
dialect, that detail: è 20 days max processing time involving
dangerous activities
ð A comprehensive and uniform checklist è No application or request shall be
of requirements for each type of returned without appropriate action
application or request;
ð The procedure to obtain a particular Denial of Application or Requests:
service; è Fully explained in writing (name of the
ð The person/s responsible for each step; person making the denial and grounds
ð The maximum time to conclude the of denial)
process;
ð The document/s to be presented by the AUTOMATIC APPROVAL OR EXTENSION
applicant or requesting party, if o If a government office or agency fails to
necessary; approve or disapprove an original
ð The amount of fees, if necessary; and application or request for issuance of
ð The procedure for filing complaints license, clearance, permit, certification or
authorization within the prescribed
ZERO CONTACT POLICY processing time, said application or request
• Except during the preliminary assessment shall be deemed approved:
of the request and evaluation of sufficiency
of submitted requirements, no government Provided, That all required documents have
officer or employee shall have any contact, been submitted and all required fees and
in any manner, unless strictly necessary charges have been paid.
with any applicant or requesting party
concerning an application or request The acknowledgment receipt together with the
official receipt for payment of all required fees
issued to the applicant or requesting party shall
be enough proof or has the same force and
effect of a license, clearance, permit,
certification or authorization under this
automatic approval mechanism

Steamlined Procedures:
è Single or unified business application
form
è One-stop business facilitation
service/business one-stop shop (Boss)
è System automation
è Anti-red Tape Approach
CONSUMER PROTECTION ACT OF THE transaction of any consumer product or
PHILIPPINES (RA No. 7394) service

Consumer Product Quality and Safety UNFAIR OR UNCONSCIONABLE SALES ACT OR

ð To develop and provide safety and PRACTICE
quality standards for consumer products,
including performance or use-oriented • An unfair or unconscionable sales act or
standards, codes of practice and practice by a seller or supplier in
methods of tests; connection with a consumer transaction
violates this Chapter whether it occurs
ð To assist the consumer in evaluating the before, during or after the consumer
quality, including safety, performance transaction.
and comparative utility of consumer • An act or practice shall be deemed unfair
products; or unconscionable whenever the producer,
ð To protect the public against manufacturer, distributor, supplier or
unreasonable risks of injury associated seller, by taking advantage of the
with consumer products; consumer’s physical or mental infirmity,
ignorance, illiteracy, lack of time or the
ð To undertake research on quality general conditions of the environment or
improvement of products and surroundings, induces the consumer to
investigation into causes and prevention enter into a sales or lease transaction
of product related deaths, illness and grossly inimical to the interests of the
injuries; consumer or grossly one-sided in favor of
the producer, manufacturer, distributor,
ð To assure the public of the consistency supplier or seller
of standardized products
BADGES OF UNFAIR PRACTICE
Injurious, Dangerous and Unsafe Products • That the producer, manufacturer,
distributor, supplier or seller took
Whenever the departments find that a advantage of the inability of the consumer
consumer product is found to be injurious, to reasonably protect his interest because
unsafe or dangerous, it shall, after due notice of his inability to understand the language
and hearing, make the appropriate order for its of an agreement, or similar factors;
recall, prohibition or seizure from public sale or
distribution • That when the consumer transaction was
entered into, the price grossly exceeded
è Provided in the sound discretion of the the price at which similar products or
department it may declare a consumer services were readily obtainable in similar
product to be imminently injurious, transaction by like consumers;
unsafe or dangerous, and order is
immediate recall, ban or seizure from • That when the consumer transaction was
public sale or distribution, in which entered into, the consumer was unable to
case, the seller, distributor, receive a substantial benefit from the
manufacturer or producer thereof shall subject of the transaction;
be afforded a hearing within forty- • That when the consumer transaction was
eight (48) hours from such order entered into, the seller or supplier was
aware that there was no reasonable
PROHIBITION AGAINST DECEPTIVE SALES ACTS probability or payment of the obligation in
OR PRACTICES full by the consumer; and

• A deceptive act or practice by a seller or • That the transaction that the seller or
supplier in connection with a consumer supplier induced the consumer to enter
transaction violates this Act whether it into was excessively one-sided in favor of
occurs before, during or after the the seller or supplier
transaction.
• An act or practice shall be deemed Chain Distribution Plans or Pyramid Sales
deceptive whenever the producer, Schemes: Not be employed In the sale of
manufacturer, supplier or seller, through consumer products
concealment, false representation or
fraudulent manipulation, induces a
consumer to enter into a sales or lease
LABELLING AND FAIR PACKAGING
ð Flammable or inflammable;
ð Directions for use, if necessary;
ð Warning of toxicity;
ð Wattage, voltage or amperes; or
ð Process of manufacture used if necessary.
ð Expiration Date;
ð Nutritive Value;
ð Natural or Synthetic;
ð Others

PRICE TAG REQUIREMENT

• be unlawful to offer any consumer
product for retail sale to the public
without an appropriate price tag, label or
marking publicly displayed to indicate the
price of each article and said products
shall not be sold at a price higher than
that stated therein and without
discrimination to all buyers
PHILIPPINE LEMON LAW (RA No. 10642) dealer or retailer. It shall also clearly state
the responsibility of the consumer under
Declaration of Policy this section
è to promote full protection to the rights of
consumers in the sale of motor vehicles AVAILMENT OF LEMON LAW RIGHTS
against business and trade practices ð Subsequent to filing the notice of
which are deceptive, unfair or otherwise availment, the consumer shall bring the
inimical to consumers and the public vehicle to the manufacturer, distributor,
interest authorized dealer or retailer from where
the vehicle was purchased for a final
Coverage: attempt to address the complaint of the
consumer to his or her satisfaction.
Cover brand new motor vehicles purchased in
the Philippines reported by a consumer to be in ð It shall be the duty of the manufacturer,
nonconformity with the vehicle’s manufacturer distributor, authorized dealer or retailer,
or distributor’s standards or specifications upon receipt of the motor vehicle and the
within twelve (12) months from the date of notice of nonconformity to attend to the
original delivery to the consumer, or up to complaints of the consumer including, as
twenty thousand (20,000) kilometers of may be necessary, making the repairs and
operation after such delivery, whichever comes undertaking such actions to make the
first. vehicle conform to the standards or
specifications of the manufacturer,
The following causes of nonconformity shall be distributor, authorized dealer or retailer for
excluded: such vehicle.
ð Noncompliance by the consumer of the
obligations under the warranty ð In case the nonconformity issue remains
ð Modifications not authorized by the unresolved despite the manufacturer,
manufacturer, distributor, authorized distributor, authorized dealer or retailer’s
dealer or retailer efforts to repair the vehicle, pursuant to
ð Abuse or neglect of the brand new the consumer’s availment of his or her
motor vehicle Lemon Law rights, the consumer may file a
ð Damage to the vehicle due to accident complaint before the DTI as provided for
or force majeure under this Act

REPAIR ATTEMPTS ð To compensate for the non-usage of the

• At any time within the Lemon Law rights vehicle while under repair and during the
period, and after at least four (4) period of availment of the Lemon Law
separate repair attempts by the same rights, the consumer shall be provided a
manufacturer, distributor, authorized reasonable daily transportation allowance,
dealer or retailer for the same complaint, an amount which covers the transportation
and the nonconformity issue remains of the consumer from his or her residence
unresolved, the consumer may invoke his to his or her regular workplace or
or her rights under this Act. destination and vice versa, equivalent to
air-conditioned taxi fare, as evidenced by
• The repair may include replacement of official receipt, or in such amount to be
parts components, or assemblies agreed upon by the parties, or a service
vehicle at the option of the manufacturer,
NOTICE OF AVAILMENT OF LEMON LAW distributor, authorized dealer or retailer.
RIGHTS Any disagreement on this matter shall be
ð The consumer shall, in writing, notify the resolved by the DTI
manufacturer, distributor, authorized
dealer or retailer of the unresolved REMEDIES FOR DISPUTE RESOLUTION BY DTI
complaint, and the consumer’s intention • Mediation
to invoke his or her rights under this Act • Arbitration
within the Lemon Law rights period. • Adjudication

ð The warranty booklet issued by the

manufacturer, distributor, authorized
dealer or retailer shall clearly state the
manner and form of such notice to
constitute a valid and legal notice to the
manufacturer, distributor, authorized