SEVENTEENTH CONGRESS OF THE REPUBLIC
OF THE PHILIPPINES
Third Regular Session

18 AUG 15 P150

5.B.no. 1943

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Introduced by Senator Maria Lourdes Nancy S. Binay

AN ACT
PROHIBITING COURTS FROM ISSUING RESTRAINING ORDERS OR
PRELIMINARY INJUNCTIONS IN CERTAIN CASES INVOLVING EXTRA-
JUDICIAL AND JUDICIAL FORECLOSURE OF REAL ESTATE MORTGAGES,
AND FOR OTHER PURPOSES

EXPLANATORY NOTE
On February 20, 2007, the Supreme Court En Banc on the recommendation of
the Committee on Revision of the Rules of Court issued a Resolution in A.M. No.
99-10-05-0 adopting rules with respect to extra-judicial and judicial foreclosure
of real estate mortgages. The Supreme Court Resolution provided that no
restraining order or writ of preliminary injunction shall be granted in certain
instances unless the applicant presents evidence in support of the application for
the restraining order or the writ. The relevant provisions of the Supreme Court

Resolution reads, thus:

1. No temporary restraining order or writ of preliminary injunction

against the extrajudicial foreclosure of real estate mortgage shall be

issued on the allegation that the loan secured by the mortgage has
been paid or is not delinquent unless the application is verified and

supported by evidence of payment.

2. No temporary restraining order or writ of preliminary injunction

against the extrajudicial foreclosure of real estate mortgage shall be



issued on the allegation that the interest on the loan is
unconscionable, unless the debtor pays the mortgagee at least twelve
percent per annum interest on the principal obligation as stated in the
application for foreclosure sale, which shall be updated monthly while
the case is pending.

3. Where a writ of preliminary injunction has been issued against a
foreclosure of mortgage, the disposition of the case shall be speedily
resolved. To this end, the court concerned shall submit to the
Supreme Court, through the Office of the Court Administrator,
quarterly reports on the progress of the cases involving ten million
pesos and above.

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The intention of the Supreme Court Resolution intends to discourage party-
litigants from delaying foreclosure proceedings by filing applications for
restraining order or writ of preliminary injunction which are groundless and
unjustified. However, despite the specific mandate of the Supreme Court, there
are instances when courts grant the restraining order or writ notwithstanding the
absence of evidence in support of the application. Thus, foreclosure proceedings

are unduly delayed and, consequently, impair legitimate commercial interests.

Public policy dictates that legitimate commercial interests must be protected from
unscrupulous litigants who abuse the judicial system. This is consistent with the
policy of the state enshrined in Section 20, Article II of the 1987 Philippine
Constitution which provides, thus:



Section 20. The State recognizes the indispensable role of the private
sector, encourage private enterprise, and provides incentives to
needed investments.

In view of the foregoing, it is therefore being proposed, consistent with the
provisions of the Supreme Court Resolution, that foreclosure proceedings
involving real estate mortgage, whether extra-judicial or judicial, may not be
restrained or enjoined without the presentation of evidence in support of the

application for the restraining order or writ of preliminary injunction.
In view of the foregoing, the timely passage of this bill is earnestly

recommended.

MARIA LOURDES NANCY S. BINAY
Senator



SEVENTEENTH CONGRESS OF THE REPUBLIC)
OF THE PHILIPPINES
Third Regular Session

‘18 AUG 15 P1 50

S.B. No. 1943

Introduced by Senator Maria Lourdes Nancy S. Binay

AN ACT
PROHIBITING COURTS FROM ISSUING RESTRAINING ORDERS OR
PRELIMINARY INJUNCTIONS IN CERTAIN CASES INVOLVING EXTRA-
JUDICIAL AND JUDICIAL FORECLOSURE OF REAL ESTATE MORTGAGES,
AND FOR OTHER PURPOSES

Be it enacted by the Senate and House of Representatives of the Philippines in
Congress assembled:

Section 1. Short Title. - This Act shall be known as the “Real Estate
Mortgage Foreclosure Proceedings Act of 2018.”

Sec. 2. Declaration of Policy. ~ The state recognizes the indispensable role
of the private sector, encourages private enterprise, and shall provide incentives
to investments. To this end, the state shall promote and protect legitimate

commercial interests to encourage economic development.

Sec. 3. No Restraining Order or Preliminary Injunction. - No court in the
Philippines shall have jurisdiction to issue any temporary restraining order,
preliminary injunction, or preliminary mandatory injunction against extrajudicial
foreclosure of real estate mortgage in the following instances:

1. An allegation that the loan secured by the mortgage has been
paid or is not delinquent, unless the application for the

restraining order and/or preliminary injunction or preliminary

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mandatory injunction is verified and duly supported by
evidence of payment of the loan; and

2. An allegation that the interest on the loan is usurious or
unconscionable, unless the debtor pays the mortgagee at least
twelve percent per annum interest on the principal obligation
as stated in the application for foreclosure sale, which shall be
updated monthly while the case is pending. In case of failure
by the debtor to update payment of the twelve percent per
annum interest, the preliminary injunction or preliminary
mandatory injunction may be lifted.

Sec. 4. Speedy Disposition of Cases, - Where a writ of preliminary
injunction or preliminary mandatory injunction has been issued against a
foreclosure of mortgage, the disposition of the case shall be speedily resolved.

Sec. 5. Separability Clause. - If any portion or provision of this Act is
declared void and unconstitutional, the remaining portions or provisions hereof
shall not be affected by such declaration.

Sec. 6. Repealing Clause. — All laws, decrees, orders, rules and
regulations, other issuances, or parts thereof inconsistent with the provisions of

this Act are hereby repealed or modified accordingly.

Sec. 7. Effectivity Clause. - This Act shall take effect fifteen (15) days
after its complete publication in at least two (2) newspapers of general
circulation.

Approved,