TWENTIETH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
)
r.;;] :49
SENATE
S. No.
Introduced by Senator Francis G. Escudero
AN ACT
EXEMPTING THE PLEDGE OF PERSONAL PROPERTY COVERING A LOAN OF 
MONEY NOT EXCEEDING TEN THOUSAND PESOS (PIO,000.00) FROM 
DOCUMENTARY STAMP TAX, AMENDING FOR THE PURPOSE SECTION 199 
TITLE VII 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 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 have consistently pushed for legislative measures that aim to provide relief 
to taxpayers, recognizing that taxation is not solely about raising revenues, but also 
about accomplishing 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 situations, they resort to pledging their 
personal properties in order to borrow money from individuals and/or lending 
institutions. But 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
:isgTeswdero


TWENTIETH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
)
/:j .ILIL 14 /liO 'A':)
SENATE
S. No.
483
Introduced by Senator Francis G. Escudero
AN ACT
EXEMPTING THE PLEDGE OF PERSONAL PROPERTY COVERING A LOAN OF 
MONEY NOT EXCEEDING TEN THOUSAND PESOS (PIO^OOO.OO) FROM 
DOCUMENTARY STAMP TAX, AMENDING FOR THE PURPOSE SECTION 199 
TITLE VII OF THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS 
AMENDED
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assemble
1 
Section 1. Section 199 of the National Internal Revenue Code of 1997 is hereby
2 
amended to read as follows:
3 
"Sec. 199. Documents and Papers Not Subject to Stamp Tax. -
4 
The provisions of Section 173 to the contrary notwithstanding, the
5 
following instruments, documents and papers shall be exempt from the
6 
documentary stamp tax:
7 
"(a) X X x;
8 
"x X x;
9 
"(O) DOCUMENTS OR OTHER PAPERS EVIDENCING THE
10 
RECEIPT OF PERSONAL PROPERTY AS SECURITY FOR THE
11 
PAYMENT OF ANY DEFINITE AND CERTAIN SUM OF MONEY
12 
WHERE THE PRINCIPAL AMOUNT LOANED DOES NOT EXCEED
13 
TEN THOUSAND PESOS (P10,000.00)."


1 
Sec. 2. Repealing Clause. - All laws, presidential decrees, executive orders,
2 
rules and regulations, or parts thereof which are inconsistent with the provisions of
3 
this Act are hereby repeaied, amended, or modified accordingly.
4 
Sec. 3. Effectivity. - This Act shail take effect fifteen (15) days after its
5 
publication in the Official Gazette or at least two (2) newspapers of general circulation.
Approved,