NINETEENTH CONGRESS OF THE
)
REPUBLIC OF THE PHILIPPINES
)
First Regular Session
HOUSE OF REPRESENTATIVES
HOUSE BILL NO. ____
Introduced by REPRESENTATIVE VIRGILIO S. LACSON
EXPLANATORY NOTE
One of the most challenging tasks in drafting bills is finding a balance between public good
and private rights. Individual rights and freedoms are never absolute, but state policies and laws are
always construed in favor of said freedom. However, an exemption to this rule is the common good
requirement, such as public safety and public health, or when public interests are involved. 
Over the course of many months, we have seen unsettling news about how money lenders
take advantage of borrowers by requiring them to surrender their ATM payroll cards or their
government benefits cash card as collateral for loans. The practice has become widespread that
various Government agencies express concern.
In fact, on April 18, 2020, Department of Education Secretary Leonor Magtolis Briones
issued a Memorandum order OM-OSEC-2020-006 reminding all DepEd employees to refrain from
using ATM Payroll cards as collateral for loans or engaging in the ATM Sangla Scheme or ATM
Card Pawning. It was reported that countless of our beloved teachers are forced to surrender their
ATMs to money lenders as collateral. 
Similarly, another disturbing news that has been going on recently is the 4Ps Sangla scheme.
In this setup, beneficiaries of 4Ps pawn their cash cards as collateral for loan obligations from
unregulated money lenders. For instance, in Davao City alone, there are 186 reported cases for cash
card pawning for the month of February 2019. Undoubtedly, there are still many unreported cases
all over the country that go unnoticed. 
While the same may be viewed as a purely private transaction between two consenting
parties, the State needs to look into this practice of “ATM Sangla scheme”, which no less than the
Bangko Sentral has described as “a dangerous scheme, for it exposes borrowers to identity theft and
unauthorized use of personal data possibly for unlawful activities.” This scheme has become so
rampant that the public has grown used to it, and sees it as a regular occurrence, without realizing
that many lenders take advantage of the borrower’s vulnerability.
July 27, 2022
2:45 pm
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It is high time that we put a stop to this form of unfair business practice by imposing
penalties against those who engage in the same, and protect the public from these unscrupulous
practices. 
In view of the foregoing, the immediate passage of this house bill is earnestly sought.
HON. VIRGILIO S. LACSON
       Manila Teachers Partylist


NINETEENTH CONGRESS OF THE
)
REPUBLIC OF THE PHILIPPINES
)
First Regular Session
HOUSE OF REPRESENTATIVES
HOUSE BILL NO. ____
Introduced by REPRESENTATIVE VIRGILIO S. LACSON
AN ACT
DEFINING ATM PAWNING SCHEME, AND PRESCRIBING PENALTIES THEREFOR
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 “Anti-ATM Pawning Scheme
Act.”
Section 2.
Declaration of Policy. – It is hereby declared the policy of the State to
promote the protection of each citizen’s right to property and general welfare as an essential part of
enjoyment of the blessings of democracy. To this end, the State shall develop policies and initiate
means to discourage the unauthorized claiming of another person’s benefits, wages, salaries and
remuneration. Further, it shall be the policy of the State to regulate the operation of money lenders
or lending entities, to prevent and mitigate, as far as practicable, practices prejudicial to public
interest; and to impose criminal penalties to those who would undermine existing policies aimed at
protecting the public.
Section 3.
Definition. – As used in this Act, the following terms shall be defined – 
a.
“ATM pawning scheme” refers to the act of pawning the ATM card of an individual as
collateral for payment of loan obligations.
b. “ATM card” refers to an automated teller machine card through which the wages,
salaries, and other remunerations of a person may be deposited or withdrawn.
c.
“Cash card” refers to the card through which identified beneficiaries of Government
programs receive their monetary benefits.
d. “Government benefits” refers to the amount of money received by a qualified beneficiary,
provided by the State through any of its programs, including but not limited to conditional
cash transfers, pensions, scholarships.
e.
“Unfair Trade Practice in Lending” refers to the use of deceptive, fraudulent, or unethical
methods
to
obtain
business
from
borrowers.
This
practice
would
include
misrepresentation, false advertising, deceptive pricing and non-accreditation with any
government regulatory body.
f.
“Issuing Entity” refers to the entity which issues the cash card/ ATM card.
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Section 4. 
Construction. –  This Act shall be liberally construed to promote the
protection and welfare of beneficiaries, employees, and workers. 
Section 5.
Prohibited acts. – Any person who engages in the business of money lending
and profits from the same, by exacting payments for due and demandable obligations, through any
of following means shall be guilty of the violation of this Act:
a.
Claiming any government benefits from the ATM/cash card of a qualified beneficiary
without the latter’s express authority stating cause why he or she cannot claim the
benefit himself or herself;
b. Withdrawing or causing the withdrawal of any amount from the ATM card of a worker,
laborer, or employee, without the latter’s express authority stating cause why he or she
cannot claim the salary or remuneration himself or herself;
c.
Disposing, withholding, transferring, or otherwise possessing of the ATM/cash card
necessary for the claim of a government benefit, to a person other than the intended
government beneficiary;
d. Employing any unfair trade practice in lending, such as, but not limited to,
misrepresentation, false advertising, deceptive pricing and non-accreditation with any
government regulatory body.
Section 6.
Penalties. –  Any person who willfully or knowingly does or who shall aid,
permit, or cause to be done any of the acts declared to be unlawful in Section 5 of this Act, or who
violates the provisions thereof, or of any order issued thereunder, or aids, permits, or causes such
violation shall, upon conviction thereof, be penalized with the imprisonment of not less six (6)
months but not more than one (1) one year, and a fine of not less than one hundred thousand pesos
(P100,000.00).
Section 7.
Prima Facie Evidence. – The possession or custody of 5 or more ATM cards
or cash cards belonging to another shall be prima facie evidence that a violation of this Act has been
committed, and therefore shall be immediately confiscated from said unauthorized person in
possession, control, or custody thereof, by the appropriate law enforcement officer. 
Section 8.
Data Protection. – The apprehending officer, after filing the proper
complaint, shall immediately cause the cancellation of the instrument, informing the owner thereof.
Any data necessary for the prosecution of the offense shall be preserved or retrieved as needed
through subpoena. The apprehending officer shall ensure protection of data and integrity of the
intended payroll holder’s account, cancelling the reported instrument and all other necessary
implements thereof, informing all its branches and the intended payee of such cancellation. 
Section 9.
Duty of Card Issuer. – In cases wherein, the cash card/ATM card has been
surrendered to any person engaged in the business of money lending, who collects the same for the
purpose of exacting payment, the issuing entity has the mandatory duty to issue replacement card,
and cause the cancellation of the surrendered cash card or ATM card, at any time upon the request
of the depositor/ account holder. 
Section 10.
Implementing Rules. – Within sixty (60) days from the effectivity of this
Act, all concerned government agencies and relevant stakeholders shall issue the appropriate
implementing rules and regulations of this Act.


Section 11.
Separability Clause. – If any provision or part of this Act is declared invalid
or unconstitutional, the remaining parts or provisions not affected shall remain in full force and
effect.
Section 12.
Repealing Clause. – All laws, decrees, orders, rules and regulations and
other issuances or parts thereof which are inconsistent with the provisions of this Act are hereby
repealed or amended accordingly.
Section 13.
Effectivity. – This Act shall take effect fifteen (15) days after its publication
in the Official Gazette or in any newspaper of general circulation.
Approved,