FIFTEENTH CONGRESS 
) 
CONGRESS OF THE PHILIPPINES ) 
Second Regular Session 
) 
Senate Bill No. 3088 
Introduced by Senator Edgardo J. Angara 
EXPLANATORY NOTE 
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This bill seeks to amend RA 133 to make the Philippine national economy more 
attractive and hospitable to foreign investment, an indispensable part of economic and financial 
stimulation and which will boost the country's international competitiveness. 
The existing RA 133 bars foreign banks from participating and bidding in the foreclosure 
sale of real estate properties mortgaged to them. This provision, while seeking to uphold the 
principle of an economy effectively controlled by Filipinos, also results in numerous failed 
auctions and poor maintenance of property, and deprives the country of greater credit through 
foreign investmcnt in real estate lending. 
In addition, Filipino borrowers, most of whom have only real estate properties as 
security, have a difficult time obtaining loans from foreign banks and thus do not receive credit 
that will serve to jumpstart their economic participation. 
This bill aims to amend RA 133 to create a mechanism that will uphold the purpose of 
real estate security arrangements, stimulate lending and commercial activity, increase foreign 
participation, and provide greater credit accommodation for Filipino borrowers, while at the 
same time respecting the Constitutional mandate for a Filipino-controlled economy. 
In view of the foregoing, the passage of this bill is earnestly sought. 


FlI1TEENTH CONGRESS 
) 
CONGRESS OF THE PHILIPPINES ) 
Second Regular Session 
) 
Senate Bill No.3 0 8 8 
Introduced by Senator Edgardo J. Angara 
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AN ACT AMENDING SECTION ONE OF REPUBLIC ACT NUMBERED ONE 
HlJNDRED THIRTY THREE, ENTITLED "AN ACT TO AUTHORIZE THE 
MORTGAGE OF PRIVATE REAL PROPERTY IN 
FAVOR OF ANY 
INDIVIDUAL, CORPORATION, OR ASSOCIATION SUBJECT TO CERTAIN 
CONDITIONS", AS AMENDED BY REPUBLIC ACTS NUMBERED FORTY-
THREE HUNDRED EIGHTY-ONE AND FORTY-EIGHT HUNDRED EIGHTY-
TWO, 
Be if cnacfed by fhe Senate and the House oj' Representatives of the Philippines in 
Congress assembled 
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SECTION I. Section 1 of Republic Act No. 133, also known as an Act to Authorize 
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Mortgage of Private Real Property in Favor of Any Individual, Corporation, or 
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Association Subject to Certain Conditions, is hereby amended as follows: 
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"Sec. I. 
Any provision of law to the contrary notwithstanding, private real 
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property may be mortgaged in favor of any individual, corporation, or association, but the 
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mortgagee or his successor in interest, if disqualified to acquire or hold lands of the 
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public domain in the Philippines, shall not take possession of the mortgaged property 
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during the cxistence of the mOligage and shall not take possession of mortgaged property 
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except aftcr default and for the sole purpose or foreclosure, receivership, enforcement or 
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other proceedings and in no case for a period of more than five years from actual 
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possession and shall not bid or take part in any sale of sueh real property in case of 
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foreclosure: Providect that said mortgagee or successor in interest may take possession of 
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said property after dcCault in accordance with the prescribed judicial procedures for 
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foreclosure and receivership and in no case exceeding five years from actual possession; 
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"PROVIDED, 
FURTHER, 
THAT 
IN 
CASE 
THE 
MORTGAGEE 
OR 
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SUCCESSOR-IN-INTEREST IS A FOREIGN BANK DULY AUTHORIZED TO 
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OPI£RATE IN TIm I'IIIL1PPINES BY TIlE BANGKO SENTRAL NG PILIPINAS 
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(BSP), SAID FOREIGN BANK SHALL BE ALLOWED TO BID OR TAKE PART 
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IN ANY SALE OF THE MORTGAGED PROPERTY IN CASE OF JUDICIAL OR 
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EXTRA.HJDICIAL 
FORECLOSURE, 
AVAIL 
OF 
RECEIVERSHIP, 
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ENFORCEMENT AND OTHER PROCEEDINGS AND TAKE POSSESSION OF 
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THE MORTGAGED PROPERTY, AFTI<:R DEI<'AULT, AND FOR A PERIOD 
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NOT 
EXCEEDING 
FIVE (5) 
YEARS 
FROM 
ACTUAL 
POSSESSION. 
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1>IWVIDED, FINALLY, THAT IN NO EVENT SHALL TITLE TO THE REAL 
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PROPERTY BE TRANSFERRED TO SUCH FOREIGN BANK, WHICH SHALL 
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BE IU:QlIlRED TO TRANSFER ITS RIGHTS TO A QUALIFIED FILIPINO 
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NATIONAL DURING THE SAID FIVE (5) YEAR PERIOD, WITHOUT 
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PREJUDICE TO TIlE MORTGAGOR'S RIGHTS UNDER APPLICABLE 
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LAWS," 
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