MANUAL OF REGULATIONS FOR NON-BANK FINANCIAL INSTITUTIONS – PAWNSHOPS
Pawnshops who transact with any pawner for the first time shall require the pawner to present the original and submit a clear copy of at least one (1) valid photo bearing identification document (ID) issued by an official authority.
The valid ID should indicate the address where the pawner resides, otherwise, pawner shall be required to present, together with the valid ID, a barangay certification or a copy of a billing statement that indicates the address where the pawner resides.
For this purpose, the term “official authority” shall refer to any of the following:
- Government of the Republic of the Philippines;
- Its political subdivisions and instrumentalities;
- Government-owned and/or controlled corporations (GOCCs); and
- Private entities or institutions registered with or supervised or regulated either by the BSP or the SEC or the Insurance Commission (IC).
Valid IDs include the following:
- Passport; inlcuding those issued by foreign governments
- Driver’s License
- Professional Regulation Commission (PRC) ID
- National Bureau of Investigation (NBI) Clearance
- Police Clearance
- Postal ID
- Voter’s ID
- Barangay Certification
- Government Service Insurance System (GSIS) e- Card
- Social Security System (SSS) Card
- Senior Citizen Card
- Overseas Workers Welfare Administration (OWWA) ID
- OFW ID
- Seaman’s Book
- Alien Certification of Registration/ Immigrant Certificate of Registration
- Government Office and GOCC ID, e.g., Armed Forces of the Philippines (AFP ID), Home Development Mutual Fund (HDMF ID)
- Certification from the National Council for the Welfare of Disabled Persons (NCWDP)
- Department of Social Welfare and Development (DSWD) Certification
- Integrated Bar of the Philippines ID
- Company IDs issued by private entities or institutions registered with or supervised or regulated either by the BSP, SEC or IC
- Passports issued by foreign governments
The foregoing shall be in addition to the customer identification requirements under Rule 9.1.c of the Revised Implementing Rules and Regulations (RIRRs) of R.A. No. 9160, as amended (Anti-Money Laundering Act), which requires pawnshop to obtain the following minimum information / documents from pawners:
- Present address;
- Permanent address;
- Date and place of birth;
- Nature of work and name of employer or nature of self-employment/business;
- Contact numbers; and
- Specimen signature.
A copy of the ID, barangay certificate and/or billing statement shall be kept by pawnshops for convenience of the pawner who continues to transact with the pawnshop but said documents should be updated at least every three (3) years. Pawnshops shall post excerpts of the above requirements conspicuously in its principal place of business and branches. The poster (shown as Appendix 7) shall not be smaller than 8.5 x 11 inches.
Loan Limit. Pawnshops may grant such amount of loans as may be agreed upon between the parties. The amount of loan shall in no case be less than thirty percent (30%) of the appraised value of the security offered, unless the pawner manifests in writing that he is applying for a lesser amount. Pawnshops shall not underappraise the security offered for the loan to circumvent the restriction prescribed by this Section.
Interest and Surcharges. The rate of interest including surcharges on any loan or forbearance of money extended by a pawnshop shall not be subject to any ceiling. However, pursuant to a decision of the Supreme Court (case of Medel, et al vs Court of Appeals, GR No. 131622 dated 27 November 1998) the interest rate shall not be iniquitous, unconscionable, or contrary to morals, if not against the law as may be determined by the Court. No pawnshop shall collect interest on loans in advance for a period of more than one (1) year.
(Circular No. 656 dated 02 June 2009)
Rate of interest in the absence of stipulation. The rate of interest for a loan or forbearance of money in the absence of an expressed contract as to such rate of interest, shall be twelve percent (12%) per annum.
(Circular No. 656 dated 02 June 2009)
Other charges. In addition to interest, pawnshops may impose a maximum service charge of five pesos (P5.00), but in no case to exceed one percent (1%) of the principal loan. No other charges, such as but not limited to insurance premium for the safekeeping and conservation of the pawned item, shall be collected.
Past Due Accounts; Renewal
A loan may be renewed for such amount and period as may be agreed upon between the pawnshop and the pawner, subject to the same conditions provided in this Part for new loans. No loan shall be renewed or its maturity date extended unless a new pawn ticket as defined in Sec. 4102P shall be issued indicating the new term of the loan agreed upon by the pawnshop and the pawner.
Right of pawner to redeem pawn within ninety (90) days from maturity
A pawner who fails to pay or renew his loan with a pawnshop on the date it falls due shall have ninety (90) days from the date of maturity of the loan within which to redeem the pawn by paying the principal amount of the loan plus the amount of interest that shall have accrued thereon. The amount of interest due and payable after the maturity date of the loan shall be computed upon redemption based on the sum of the principal loan and interest earned as of the date of maturity. The procedures to be followed in case the pawner fails to redeem his pawn are prescribed in Sec. 4324P.
If the maturity date of the loan or expiry date of redemption period falls on the pawnshop’s non-business day, a regular holiday or a special non-working holiday in the locality, then the maturity date of the loan or expiry date of redemption period shall be on the next business day.
If the pawnshop is closed on the maturity date of the loan or expiry of the redemption period, with or without prior notice to the pawner, then the maturity date of the loan or expiry of redemption period shall be on the next business day and the pawnshop shall not charge additional interest or surcharge to the pawner. If the pawnshop is closed due to a robbery, then the maturity date of the pledge or expiry of redemption period shall be on the next business day when the pawnshop opens for business and the pawnshop shall not charge additional interest or surcharge to the pawners.
Redemption of Pawns.
A pawnshop shall not release any pawn without first requiring the pawner to present and surrender the corresponding pawn ticket. If the pawn ticket was lost and could not be presented or surrendered, the pawnshop shall require the owner-pawner to execute and submit an affidavit of loss and shall ascertain the identity of the pawner, to ensure that the pawned item is released only to the owner-pawner.
The pawnshop shall return the pawn in the same condition when they were first pawned by pawner, upon full settlement of the loan.
(Circular No. 656 dated 02 June 2009)
Notices to the Pawner and to the Public
ON OR BEFORE THE EXPIRATION OF THE NINETY (90)-DAY GRACE PERIOD, A PAWNSHOP SHALL NOTIFY A PAWNER IN WRITING THAT THE PAWN SHALL BE SOLD OR OTHERWISE be DISPOSED OF, lN THE EVENT THE PAWNER FAILS TO REDEEM THE PAWN WITHIN THE NINETY (90)-DAY GRACE PERIOD, SPECIFYING IN THE SAME NOTIFICATION THE DATE, HOUR, AND PLACE WHERE THE SALE SHALL TAKE PLACE. The notice shall be sent through the mode of notification AGREED UPON BY THE PAWNER AND THE PAWNSHOP AS indicated AT THE BACK OF the pawn ticket at the time the loan was granted which may be through text/SMS message, electronic mail, FAX or by mail to the residential address. lf sent through text/SMS, the pawnshop shall obtain a report from the appropriate Telecommunications Company (TELCO) indicating that a text/SMS message was sent to the mobile phone number given by the pawner. The report of the TELCO shall be made available to BSP upon request.
IN CASE NO SPECIFIC MODE OF NOTIFICATION IS AGREED UPON AND INDICATED AT THE BACK OF THE PAWN TICKET, THE MODE OF NOTIFICATION SHALL BE BY ORDINARY MAIL. PAWNSHOPS SHALL EXERT REASONABLE EFFORT TO NOTIFY THE PAWNER AND PUT ON RECORD IF IT IS UNABLE TO DO SO. PAWNSHOPS SHALL MAINTAIN PROOF OF THE NOTICE TO PAWNER.
If upon the expiration of the ninety (90)-day grace period, the pawner fails to redeem his pawn, the pawnshop may sell or dispose of the pawn only after it has published a notice of public auction of unredeemed articles held as security for loans in at least two (2) newspapers circulated in the city or municipality where the pawnshop has its place of business, six (6) days prior to the date set for the public auction.
The notice shall be in English, and in either Filipino or the local dialect and shall contain the following:
- Name and address of the owner of the pawnshop; and
- Date, hour and place of the auction sale.
In remote areas where newspapers are neither published nor circulated, the publication requirement shall be complied with by posting notices at the city hall or municipal building of the city or municipality and in two (2) other conspicuous public places where the pawnshop has its place of business.