NINETEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
)
Senate
of the ^rcicinip
*22 JUL n P6 46
SENATE
s. No. 294
RECEIVED Bt:
Introduced by Senator FRANCIS G. ESCUDERO
AN ACT
EXEMPTING PLEDGE OF PERSONAL PROPERTY COVERING A LOAN OF 
MONEY NOT EXCEEDING TEN THOUSAND PESOS FROM DOCUMENTARY 
STAMP TAX, AMENDING FOR THE PURPOSE SECTION 199 OF THE 
NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED
EXPLANATORY NOTE
The Constitutional mandate that taxation shall be just, fair, equitable, and 
reasonable cannot be more profound than when It is taken in the context of today's 
looming economic reality. Faced with the current situation of the economy, any tax 
reform effort and revenue scheme should not only be Judged according to its fiscal 
adequacy, equity, and administrative feasibility, but more importantly its impact on 
poverty, income distribution, and economic growth.
Recent amendments to the National Internal Revenue Code as amended, are 
manifestations that the legislature has, in fact, taken this stance. Both Houses of 
Congress are pushing for legislative measures that will provide relief to the taxpayers, 
recognizing that taxation is not solely about raising revenues, but is also to accomplish 
some desirable non-revenue or social objectives.
This bill proposes that documents evidencing the receipt of personal property 
as security for the payment of a certain sum of money, i.e. a contract of pledge, where 
the loaned amount does not exceed ten thousand pesos (PhP 10,000.00) be exempt 
from payment of the documentary stamp tax (DST).
Passage of this bill is justified by the reality that the transactions of this value 
ordinarily and regularly occur among those belonging to the marginalized sectors of 
our society. Finding themselves in dire financial situation, they resort to pledging their 
personal properties in order to borrow money from individuals and/or lending 
institutions. Because the Tax Code is indifferent on whose liability the payment of DST 
falls, it is often absorbed by the one making the pledge as part of the cost of the loan


transaction. This is ironic because while the pledge is the one pressed for cash, he still 
has to cut a share of the proceeds of the loan to pay for the DST.
In this context, the urgent approval of this bill is earnestly recommended.
FRANCIS G. ESCUDERO


of tljf I'lnrp
NINETEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
)
SENATE
s. No. 294
•22 JUL 11 P6-47
RECEIVED BY;
Introduced by Senator FRANCIS G. ESCUDERO
AN ACT
EXEMPTING PLEDGE OF PERSONAL PROPERTY COVERING A LOAN OF 
MONEY NOT EXCEEDING TEN THOUSAND PESOS FROM DOCUMENTARY 
STAMP TAX, AMENDING FOR THE PURPOSE SECTION 199 OF THE 
NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED
1
2
3
4
5
6
7
8 
9
10
11
12
13
14
15
16 
17
Be it enacted by the Senate and the House of Representatives of the Republic 
of the Philippines in Congress assembled:
Section 1. Section 199 of the National Internal Revenue Code of 1997, as 
amended, is hereby furiher amended to read as follows:
"xxx.
"SEC. 199. Documents and papers Not Subject to Stamp Tax -
"xxx.
(0) DOCUMENTS OR OTHER PAPERS EVIDENCING THE 
RECEIPT OF PERSONAL PROPERTY AS SECURITY FOR THE 
PAYMENT OF ANY DEFINITE AND CERTAIN SUM OF MONEY 
WHERE THE PRINCIPAL AMOUNT LOANED DOES NOT 
EXCEED TEN THOUSAND PESOS (Php 10,000.00)."
Sec. 2. Implementing Rules and Regulations - The Secretary of Finance shall, 
upon the recommendation of the Commissioner of Internal Revenue, promulgate 
and publish the necessary rules and regulations for the effective implementation of 
this Act.


Sec. 3. Repealing Clause - All laws, decrees, executive orders, rules and 
regulations or parts thereof which are inconsistent with this Act, are hereby 
repealed, amended or modified accordingly.
Sec, 4. Effectivity - This Act shall take effect fifteen (15) days after its 
publication in the Official Gazette or in any two (2) newspapers of general 
circulation.
Approved,