Alma Jane C.

Agliam
Credit Transactions

Pres. Decree No. 114

PAWNSHOP REGULATION ACT

SECTION 1. Short Title.
This decree may be cited as the Pawnshop Regulation Act.

SECTION 2. Declaration of Policy. --- It is hereby declared the policy of the State
to:

Regulate the establishment of pawnshops;

Place their operation on a sound and stable basis;
Prevent and mitigate practices prejudicial to public interest; and
To lay down the minimum requirements and standards for establishment and
operation

SECTION 3. Definitions.
Pawnshop person or entity engaged in the business of lending money on
personal property delivered as security for loans
- Pawnbroker; pawn-brokerage
Pawner borrower from a pawnshop
Pawn personal property delivered by the pawner to the pawnee as security
for loan
Pawn ticket pawnbrokers receipt for a pawn
Property only such personal property as may actually be delivered to the
control and possession of pawnshop
SECTION 4. Form of organization. --- A pawnshop may be established as a:
Single Proprietorship;
Partnership; or
Corporation

SECTION 5. Registration and licensing. --- Any person or entity desiring to engage
in pawnshop business shall:
a) Register with the:
Bureau of Commerce (now, Bureau of Trade Regulation and Consumer
Protection) ---> for Single Proprietorship
Securities and Exchange Commission ---> Partnership or Corporation
b) Secure a license from city or municipality having territorial jurisdiction over
the place of establishment and operation
SECTION 6. Requirement of registration with the Central Bank.
Shall file an information sheet under oath with the Central Bank before
commencement of actual operations
Those operating before the approval of this Decree shall register with the
Central Bank within six months
SECTION 7. Capital
P 100,000.00
SECTION 8. Citizenship requirement.
Single Proprietorship only Filipino citizens
Partnership at least 70% of its capital shall be owned by Filipino citizens
Corporation at least 70% of the voting capital stock shall be owned by
Filipino citizens; in lieu of capital stock, 70% of the members entitled to vote
shall be Filipino citizens
SECTION 9. Amount of loan.
Upon agreement between the parties
In no case be less than than 30% of the appraised value of the pawn
*** Unless the pawner manifests in writing the desire to borrow a
lesser amount

SECTION 10. Rates of interest.

Only the rate allowed by the Usury Law
In addition to interest charges, pawnshops may impose a maximum service
charge of P5.00, but in no case to exceed 1% of the principal loan
SECTION 11.
Maintenance of records. --- Every pawn broker shall keep a
memorandum book in which shall be entered, in ink, at the time of each loan or
pledge, an accurate account and description, in Filipino or English:

The amount of money loaned

The date of pawning
The rate of interest
Name and residence of pawner
Particular description of pawner including nationality, sex, general
appearance

SECTION 12. Pawn ticket.

To be delivered to the pawner at the time of loan or pledge
Shall contain the substance of the record in Sec. 11 excluding the description
of pawner
SECTION 13. Redemption. --- The pawner who fails to pay his obligation on the date
it falls due may, within 90 days from the date of maturity of the obligation, redeem
the pawn by payment of the principal of the debt with interest.
SECTION 14. Disposition of pawn on default of pawner. --- Failure to redeem in
accordance with the preceding section,
The pawn broker may sell or dispose the pawn upon pawners notification of
such sale on or before the 90-day period, stating the date, hour and place of
sale.
SECTION 15. Public auction of pawned articles. --- No pawn broker shall sell or
otherwise dispose of any pawned article except at:
His place of business within the territorial limits of the municipality or city
where his pawnshop is located;
Under the control and direction of a duly licensed auctioneer
3

 After one publication in at least two newspapers printed in the city or

municipality during the week preceding the sale
In remote areas, newspaper publication shall be substituted by posting
notices in conspicuous places within the territorial limits
Published or posted notices shall be in English AND either Pilipino or
local dialect
Shall contain the name of pawnshop, owner, address of establishment,
hour and the date of the auction sale.
SECTION 16. Closing and removal of business period. --- No pawn broker shall close
or transfer his place of business:
within three months after the expiration of the period for which any article or
thing shall have been taken or received by him in pawn; or
before any such article shall have been sold or disposed of in accordance with
this Decree
Provided, however, that removal or transfer of pawn brokers place of
business from one place to another within the territorial limits may be
authorized on condition of:
Publication of notice of such removal in two local daily papers, one in
English and one in Pilipino or local dialect, for a period of not less than
three days before removal (stating the date of removal, the address to
be vacated and transferred)
And post notices in conspicuous places within both premises during the
period of publication
SECTION 17. Grant of authority to the Central Bank. --- The Central Bank is hereby
authorized:
To issue rules and regulations to implement the provisions contained herein;
To require from pawnshops reports of condition and such other reports
necessary to determine compliance with this Decree;
To exercise visitorial powers whenever deemed necessary; and
To impose such administrative sanctions including the imposition of fines for
violations

SECTION 18. Penalties.

A fine of not less than one hundred pesos P100.00 and not more than one
thousand pesos P1,000.00; or
Imprisonment for not less than 30 days and not more than one year; or
Both
SECTION 19. Matters not covered by this Decree. --- The provisions of existing laws,
insofar as they are not in conflict with any provision of this Decree, shall apply in
matters not otherwise specifically provided for in this Decree.
SECTION 20. Separability clause. --- If any provision or section of this Decree, or the
application thereof to any person or circumstances, is held invalid, the other
provisions or sections of this Decree, and the application of such provisions or
sections to other persons or circumstances, shall not be affected thereby.
SECTION 21. Effectivity. --- This Decree shall take effect immediately.
ISSUED: January 29, 1973.