Promissory Note Template Philippines Download

PROMISSORY NOTE (UNSECURED / SECURED)

Document ID: PN-[YEAR]-[SERIAL NUMBER]
Effective Date: [Date of Execution]
Version: 1.0
Governing Jurisdiction: Republic of the Philippines

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LEGAL DISCLAIMER

This document is provided for informational purposes as a template. It constitutes a legal instrument governed by the laws of the Republic of the Philippines, specifically the Civil Code of the Philippines and relevant provisions of the Negotiable Instruments Law (Act No. 2031). This template does not constitute attorney-client privilege. Users are strongly advised to consult with Philippine legal counsel to ensure compliance with specific tax obligations (e.g., Documentary Stamp Tax) and regulatory requirements applicable to their specific transaction.

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1. PARTIES

This Promissory Note (the "Note") is made and entered into by and between:

THE BORROWER: [Full Legal Name of Borrower], with principal address at [Complete Registered Address], hereinafter referred to as the "Maker."

THE LENDER: [Full Legal Name of Lender], with principal address at [Complete Registered Address], hereinafter referred to as the "Payee."

2. PRINCIPAL AMOUNT AND INTEREST

For value received, the Maker promises to pay to the order of the Payee the principal sum of PHP [Amount in Numbers] ([Amount in Words] Philippine Pesos), together with interest on the unpaid principal balance at the rate of [Rate]% per annum, calculated on a [360/365]-day year basis.

3. PAYMENT TERMS

The principal and accrued interest shall be payable as follows:

• Installment Schedule: Payments shall be made in [Number] installments of [Amount] each, commencing on [Start Date] and continuing on the [Day] of each [Month/Quarter] thereafter until [Maturity Date].
• Method of Payment: All payments shall be made in Philippine Pesos via [Bank Transfer/Manager’s Check/Wire Transfer] to the account designated by the Payee.
• Application of Payments: All payments shall be applied first to the payment of accrued interest, and the remainder shall be applied to the reduction of the principal balance.

4. MATURITY AND DEFAULT

The entire unpaid principal balance, together with all accrued and unpaid interest, shall become due and payable on [Maturity Date] (the "Maturity Date").

• Event of Default: The occurrence of any of the following shall constitute an "Event of Default": (a) Failure to pay any installment within [Number] days of the due date; (b) Insolvency or bankruptcy of the Maker; (c) Material breach of any covenant herein.
• Acceleration: Upon the occurrence of an Event of Default, the Payee may, at its option, declare the entire outstanding balance immediately due and payable.

5. LATE CHARGES AND COLLECTION COSTS

If any payment is not received by the Payee within [Number] days after the due date, the Maker shall pay a late fee equal to [Percentage]% of the overdue amount. In the event this Note is placed in the hands of an attorney for collection, the Maker agrees to pay all reasonable attorney’s fees and costs of collection incurred by the Payee, which shall not be less than [Percentage]% of the total amount due.

6. PREPAYMENT

The Maker reserves the right to prepay the principal balance of this Note, in whole or in part, at any time without penalty or premium. Any partial prepayment shall not postpone the due date of any subsequent installments unless otherwise agreed in writing by the Payee.

7. WAIVER

The Maker and all sureties, endorsers, and guarantors of this Note waive presentment, protest, notice of dishonor, and notice of acceleration. No delay or omission on the part of the Payee in exercising any right hereunder shall operate as a waiver of such right or any other right.

8. GOVERNING LAW AND VENUE

This Note shall be governed by and construed in accordance with the laws of the Republic of the Philippines. Any legal action or proceeding arising out of or relating to this Note shall be instituted exclusively in the proper courts of [City/Municipality], Philippines, to the exclusion of all other venues.

9. SEVERABILITY

If any provision of this Note is held to be invalid or unenforceable, such provision shall be severed, and the remaining provisions shall continue in full force and effect.

10. ENTIRE AGREEMENT

This Note constitutes the entire agreement between the Maker and the Payee regarding the subject matter hereof and supersedes all prior discussions or understandings.

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EXECUTION AND SIGNATURE BLOCKS

FOR THE MAKER (BORROWER): Signature: _____________________________________ Printed Name: [Authorized Signatory Name] Title: [Title / Role] Date: [Date] Witness/Notarized by: __________________________

FOR THE PAYEE (LENDER): Signature: _____________________________________ Printed Name: [Authorized Signatory Name] Title: [Title / Role] Date: [Date]

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STEP-BY-STEP EXECUTION AND FILING GUIDE

1. Drafting: Replace all bracketed information [ ] with accurate data. Ensure the "Amount in Words" matches the numerical figure exactly to avoid interpretation errors.
2. Documentary Stamp Tax (DST): Under Philippine tax laws (TRAIN Law), Promissory Notes may be subject to Documentary Stamp Tax (typically PHP 1.50 for every PHP 200 of the issue price). Consult with an accountant to determine if you must file BIR Form 2000 and pay the DST at an Authorized Agent Bank (AAB).
3. Notarization: While not strictly required for the validity of the contract between parties, notarization is highly recommended in the Philippines. It converts the document into a "public document," which provides higher evidentiary value in court proceedings and assists in filing summary judgment motions in case of default.
4. Execution: Ensure authorized signatories possess a Secretary's Certificate or Board Resolution (for corporations) authorizing them to sign debt instruments.
5. Digital Execution: If using DocuSign or Adobe Sign, ensure the platform complies with the Electronic Commerce Act of 2000 (Republic Act No. 8792).
6. Record Retention: The Payee must retain the original "wet ink" copy (if notarized) or the cryptographically signed digital original for at least 10 years for tax and audit purposes.