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Filipinos warned not to use passports as collateral
Published on: Thursday, May 25, 2023
By: Philstar
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Filipinos warned not to use passports as collateral
Authorities emphasise penalties for borrowers and creditors violating the law.
MANILA: The Philippine Embassy in Singapore issued an advisory reminding Filipinos to refrain from using their passports or any other identification cards as loan collaterals as this is against the law.Some borrowers usually provide assets to lenders when borrowing money, which lenders or banks could liquidate or seize if they fail to return the money. Authorities have warned the public against loan sharks or informal lenders who have abusive or illegal practices. “Penalties will be imposed on any individual who uses his Philippine passport as collateral for loan or money owed, in accordance with the rules and regulations of the Philippine government,” the embassy said in an advisory Tuesday evening. “Creditors who demand surrender of one’s Philippine passport as guarantee for loan will also be penalized.”

Using passports as a loan collateral violates Section 11 of the Philippine Passport Act of 1996, which details that the passport is a property of the government and the passport holder is only a “mere possessor.” The law specifically states that the passport should “not be surrendered to any person or entity other than the government or its representative.”

Rules detailed under a DFA Foreign Service Circular No. 020-2019 or the “Guidelines for Philippine Passports Used as Collaterals will also apply. has reached out to the Philippine Embassy in Singapore for more details on what’s happening on ground.

The foreign service post’s advisory comes just a few days after the Bangko Sentral ng Pilipinas also warned the public against using their ATM cards as loan collaterals amid the “Sangla ATM” scheme’s popularity. Under the scheme, borrowers provide lenders their ATM cards and their personal identification numbers as collateral. The BSP said this may expose the borrowers into having unauthorized withdrawals.

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