Warehouse Receipts Act of 2025

TWENTIETH CONGRESS OF THE ) REPUBLIC OF THE PHILIPPINES First Regular Session JUL 21 AIO:24 SENATE RECEIL t. S. No. Introduced by Senator FRANCIS N. PANGILINAN AN ACT MODERNIZING THE WAREHOUSE RECEIPTS LAW IN ORDER TO PROVIDE A LEGAL FRAMEWORK THAT SHALL FACILITATE TRADE AND COMMERCE CREATING THE WAREHOUSE ACCREDITATION COUNCIL, APPROPRIATING FUNDS THEREFOR, AND FOR OTHER PURPOSES EXPLANATORY NOTE A warehouse receipt is a commercial document that serves as proof of ownership or possession of goods stored in a warehouse. Its primary purpose is to facilitate trade and commerce, particularly benefitting the agricultural sector by allowing farmers to use their harvest as collateral for securing credit from financial institutions. The current Warehouse receipts Law (Act No. 2137), however, is over a century old and does not consider modern technological advancements that can provide a secure system that is transparent, efficient and promotes the ease of doing business. The proposed measure: (1) Establishes an online warehouse receipts registry for warehouse receipts, warehouse operators, and warehouses. This will allow the public, especially banks and other financial institutions, to easily verify the quantity and quality of goods, enhancing the credibility of warehouse receipts; (2) Enables farmers to use their harvest, evidenced by these more credible warehouse receipts, as collateral for loans, thus maximizing their profits and access to credit; (3) Creates

the Warehousing Accreditation Council to ensure the competency and reliability of warehouses and warehouse operators; and (b) Establishes a warehouse receipts assurance fund to cover losses from registry-based failures. In view of the foregoing, the passage of this measure is earnestly sought. FRANCIS N. RANGILINAN Senato

TWENTIETH CONGRESS OF THE ) REPUBLIC OF THE PHILIPPINES First Regular Session 25 JUL 21 A10:24 SENATE S. No. - Introduced by Senator FRANCIS N. PANGILINAN AN ACT MODERNIZING THE WAREHOUSE RECEIPTS LAW IN ORDER TO PROVIDE A LEGAL FRAMEWORK THAT SHALL FACILITATE TRADE AND COMMERCE, CREATING THE WAREHOUSE ACCREDITATION COUNCIL, APPROPRIATING FUNDS THEREFOR, AND FOR OTHER PURPOSES Be it enacted by the Senate and the House of Representatives of the Philippines in Congress assembled: CHAPTER I GENERAL PROVISIONS

SECTION 1. Short Title. - This Act shall be known as the "Warehouse Receipts

4 Act of 2025."

Sec. 2. Declaration of Policy. - It is the policy of the State to promote economic

6 activity by increasing access, particularly for entities engaged in agricultural 7 businesses, to low cost credit by establishing a simplified, unified, and modern framework for the storage of goods in warehouses and the transacting of interests therein.

Sec. 3. Definition of Terms. - As used in this Act:

(a) "Buyer in Good Faith' shall refer to a person who buys goods in good faith without personal knowledge of any defect in the title of the seller. (b) "Default' shall refer to the failure or refusal of a debtor to pay in accordance with or perform an obligation under a warehouse receipt. (c) "Deposit' shall refer to the act of transferring actual possession of goods to 16 a warehouse operator.

(d) "Fungible Goods" shall refer to goods of which any unit is, from its nature by mercantile custom, treated as the equivalent of any other unit. (e) "Goods" shall refer to chattel or merchandise in storage or are about to be stored, except those that are meant for direct import or export. The term shall not 5 include living objects. (f) "Holder" shall refer to a person who has both actual possession of a warehouse receipt and a right over the goods covered by such warehouse receipt. (g) "Issuer" shall refer to the holder or his agent who issued the release order. 9 An agent or employee of the holder may be considered an issuer provided he issued the release order with real or apparent authority, regardless if the goods were not actually released or wrongly described, or if he acted in violation of the holder's instructions. (h) "Notice" shall refer to a statement of information that is registered in the Registry relating to goods stored in a warehouse covered by a warehouse receipt. (i) "Person shall refer to both natural and juridical persons. (i) "Person entitled under a warehouse receipt" shall refer to the valid holder of the warehouse receipt or the person to whom the release of goods is proper. (k) "Purchase" shall refer to a voluntary transaction where one party obligates himself to transfer ownership over the warehouse receipt, including the goods it covers, to another party in exchange a price certain in money or its equivalent. (I) "Record' shall refer to information inscribed on a tangible medium or stored in an electronic or other platform, which is retrievable in perceivable form. (m) "Registry" shall refer to the electronic Warehouse Receipts Registry. (n) "Register" shall refer to the act of registration in the Registry. (o) "Release" shall refer to the warehouse operator's voluntary transfer of actual possession of goods deposited in a warehouse to a person entitled under a warehouse receipt. (p) "Release Order" shall refer to a record containing an order directing a warehouse operator to release the goods covered by a warehouse receipt to a specified person. (q) "Sigri' shall refer to the intentional adoption or ratification of a record through a tangible or electronic symbol associated with the party making the sign.

(r) "Sub-Registry' shall refer to registry maintained by a warehouse containing information on goods deposited in its custody. (s) "Transferee' shall refer to a person to whom a warehouse receipt has been transferred for value. (t) "Transferor" shall refer to a person transferring a warehouse receipt to another for value. (u) "Warehouse" shall refer to a place for storing goods for profit within the territory of the Philippines. (v) " Warehouse Receipt' shall refer to a receipt, whether electronic or otherwise, issued by a warehouse operator, evidencing title over goods stored at a warehouse. (w) "Warehouse Operator" shall refer to a person lawfully engaged in the business of storing goods for profit. CHAPTER II WAREHOUSE RECEIPTS

Sec. 4. Warehouse Receipts Registry. - The Securities and Exchange Commission

(SEC) is hereby tasked with creating an online and uniform Registry where all electronic warehouse receipts can be registered and accessed. The SEC is authorized to engage the services of third parties in creating and maintaining the Registry.

Sec. 5. Local Sub-Registry. - In addition to the Registry, all warehouses must

maintain a Sub-Registry specifically for goods deposited in their custody. Failure of a warehouse to keep a Sub-Registry, as well as any fraud committed thereon, shall be grounds for revocation of a warehouse's accreditation.

Sec. 6. Creation of Warehouse Receipts. - Only duly registered and accredited

warehouse operators operating duly registered and accredited warehouses may validly create an entry in the Registry for which an electronic warehouse receipt shall be issued.

Sec. 7. Nature of Warehouse Receipts. - All warehouse receipts, regardless of

what is stated upon their face, are negotiable at the option of the holder.

Sec. 8. Original Warehouse Receipts. - The electronic copy of a warehouse

receipt shall be considered as an original. Any physical copy of the electronic warehouse receipt that is a certified true copy of the same shall be valid. However,

1 in case of discrepancy between the electronic warehouse receipt and a certified true 2 copy of the same, the electronic warehouse receipt shall be controlling. A certified true copy of the electronic warehouse receipt is a representation and warranty that such receipt is an accurate copy of an original electronic warehouse 5 receipt properly registered and not cancelled at the date of the issue of the copy.

Sec. 9. Transactions Involving Physical Copies of Receipts. - All transactions

involving certified true copies of warehouse receipts are valid provided they comply with existing Philippine laws regarding the form and substance of the mode of transfer. 9 The transferee is charged with the duty to have the electronic warehouse receipt amended to reflect his interests therein. In case there are several contesting parties, the buyer in good faith who had the electronic warehouse receipt amended in his favor 12 first shall be presumed to be the valid owner of the same.

Sec. 10. Notification Requirement. - Whenever an amendment to the electronic

warehouse receipt is sought by a party, the other party to the transaction must be notified of the impending amendment. Such notified party shall be given three (3) working days from receipt of the notification to contest the amendment, otherwise it shall be ministerial on the part of the warehouse operator to effect such amendment to the Registry.

Sec. 11. Required Content of a Warehouse Receipt. - Warehouse receipts must

contain the following information: (a) A description of the goods covered by the warehouse receipt; (b) The date and time when such goods were deposited with the warehouse operator; (c) The location of the warehouse where such goods are stored; (d) The date and time when the warehouse receipt was issued; (e) The consecutive warehouse receipt number; (t) The rate of storage charges; (g) The signature of the warehouse operator which may be made by his authorized agent; (h) If the receipt was issued for goods of which the warehouse operator is the owner, either solely or jointly or in common with others, the fact of such ownership;

(i) A statement of the amount of advances made and of liabilities incurred for 2 which the warehouse operator claims a lien. If such amount was unknown at the time 3 of issuance, a statement of the fact that advances have been made or liabilities incurred, and the purpose thereof is sufficient; and () A statement of any interests on the warehouse receipt or goods covered thereof, as well as the dates when such interests were registered.

Sec. 12. Required Content of Certified True Copies of Warehouse Receipts. - In

addition to the information mentioned in the immediately preceding section, all certified true copies of warehouse receipts must contain the following: (a) A statement that the copy is a mere copy and that in case of any discrepancy, the original shall be controlling; and (b) The date and time when the copy was issued.

Sec. 13. Arbitration Clause. - With the express conformity of the warehouse

operator, the holder may cause to be written into the electronic warehouse receipt a clause which states that the civil aspect of any liability arising from the warehouse receipt shall be subject to arbitration. CHAPTER III WAREHOUSE ACCREDITATION COUNCIL

Sec. 14. Establishment of the Warehousing Accreditation Council. - There is

hereby established an accrediting body for warehouses and warehouse operators to be known as the Warehousing Accreditation Council, hereinafter referred to as the "Council". The Council shall be composed of four (4) permanent members and three (3) members who are experts on warehousing. The permanent members of the Council shall be composed of the following: (a) The Chairperson of the SEC or his/her designated representative; (b) The Secretary of the Department of Trade and Industry (DTI) or his/her designated representative; (c) The Secretary of the Department of Finance (DOF) or his/her designated representative; and (d) The Secretary of the Department of Agriculture (DA) or his/her designated representative.

The Chairperson of the SEC and the Secretary of the DA shall be the Chairperson and the Vice-Chairperson of the Council, respectively. The three (3) members who are warehousing experts shall be appointed by at least majority of the permanent members of the Council from a list of nominees 5 coming from the warehousing industry prepared by the SEC. They shall serve one (1) 6 year terms and shall not be disqualified from being re-appointed by the permanent 7 members of the Council. All members of the Council are entitled to one (1) vote each in the conduct of its business. The Council shall be assisted by a secretariat to be lodged in the SEC which shall coordinate the activities involved in the accreditation process.

Sec. 15. Functions and Responsibilities of the Council. - As the accrediting entity,

the Council shall have the following functions and responsibilities: (a) Institute and operationalize a system of accreditation and registration for warehouse operators; Provided, that the criteria for accreditation shall include sound and measurable standards relating to the ability and capacity to handle the storage of goods; (b) Institute and operationalize a system of accreditation and registration for warehouses; Provided, that the criteria for accreditation shall include sound and measurable standards relating to sanitation, storage, and safety of goods stored in warehouses; (c) Issue certificates of accreditation to qualified warehouse operators and warehouses; Provided, that the certificates of accreditation shall be valid only for such period as may be prescribed under the implementing rules and regulations of this Act; (d) Promulgate rules and regulations for the orderly and expedient issuance of certified true copies of electronic warehouse receipts. (e) Promulgate rules and regulations concerning warehouse operator bonds; (f) Monitor the performance of warehouse operators and warehouses to ensure continuing compliance with the provisions of this Act and its implementing rules and regulations;

(g) Place under probation, suspend, or revoke any certificate of accreditation 2 upon due determination that a warehouse operator or warehouse no longer meets the 3 criteria for accreditation; (h) Require regular submission of reports by warehouse operators and warehouses; (0) Collect reasonable accreditation and monitoring fees from warehouse 7 operators and warehouses which shall be used for the accrediting entity's operational requirements; 0) Submit an annual report to the President of the Philippines and the concerned committees of both houses of Congress; (k) Facilitate the orderly and expedient access to information regarding 12 warehouse operators and warehouses by the public, in accordance with existing 13 standards under Philippine law; (1) Grant licenses to inspectors, graders, and weighers who shall assist in ensuring the good quality of warehouses; and (m) Perform such other functions as may be necessary to accomplish the purposes and objectives of this Act in relation to warehouse operators and warehouses.

Sec. 16. Warehousing Experts. - Warehousing experts must be persons actually

knowledgeable in running and maintaining warehouses in accordance with globally 21 accepted best practices in warehousing. CHAPTER IV WAREHOUSE OPERATORS

Sec. 17. Registration of Warehouse Operators. - All warehouse operators using

warehouse receipts are required to register and obtain accreditation with the Council. All warehouse operators who are not registered and accredited with the Council are prohibited from issuing warehouse receipts.

Sec. 18. Screening Process for Warehouse Operators. - To ensure the quality of

warehouse operators, the Council is hereby authorized to create a screening process for warehouse operators which may include the adoption of written examinations. The Council may coordinate with other governmental bodies in order to create a viable screening process for warehouse operators.

Sec. 19. Warehouse Operator's Bond. - Prior to its operation, a warehouse

2 operator must post a bond to answer for any liabilities he may incur during the 3 effectivity of his accreditation.

Sec. 20. Duty to Create Electronic Warehouse Receipts. - When goods are

5 deposited with the warehouse operator, the warehouse operator has the duty to 6 create an electronic warehouse receipt in the Registry to reflect the deposit of such 7 goods. Likewise, a warehouse operator has the duty to cause the amendment of the 8 electronic warehouse receipt when he is informed by a valid holder of any change in 9 the details found on the electronic warehouse receipt, including but not limited to 10 changes in interest.

Sec. 21. Liability for Omission of Required Content. - A warehouse operator shall

12 be liable for all damages caused by his omission of any details required to be placed 13 on a warehouse receipt under this Act.

Sec. 22. Permissible Insertions. - A warehouse operator may insert in a

warehouse receipt issued by him any other terms and conditions provided that such terms and conditions shall not be contrary to the provisions of this Act, and shall not 17 in any way impair his obligation to exercise that degree of care in the safe-keeping of 18 the goods entrusted to him which a reasonable careful man would exercise in regard to similar goods of his own.

Sec. 23. Obligation of Warehouse Operators to Release Goods. - A warehouse

21 operator, in the absence of some lawful excuse provided by this Act, is bound to 22 release the goods upon a written demand from the party registered under the electronic warehouse receipt; Provided, that such demand is accompanied with: (a) An attached certified true copy of the electronic warehouse receipt clearly showing that the demanding party is the registered owner of the electronic receipt; (b) An offer to satisfy the warehouse operator's lien coupled with the subsequent satisfaction thereof; and (c) An offer to sign, when the goods are released, an acknowledgement that the party causing the release is lawfully entitled to the goods, and that such goods have been released to them. When the warehouse operator receives a valid written demand, it is ministerial upon him to release the goods absent the existence of a lawful excuse for such refusal

1 as found in this Act. The warehouse operator shall be liable for all damages stemming 2 from his failure or refusal to release the goods.

Sec. 24. Valid Excuses for Non-Release of Goods. - A warehouse operator can

validly refuse to release goods when: (a) The party asking for the release of goods fails to deliver a valid written demand, as contemplated in this Act; (b) There is a court order prohibiting him from releasing the goods; (c) Despite the offer to satisfy the same, the warehouse operator's lien was not fully satisfied; or (d) The demanding party reneges on its offer to sign an acknowledgement that 11 the party causing the release is lawfully entitled to the goods, and that such goods 12 have been released to them.

Sec. 25. Release of Goods to Agent. - A warehouse operator may release the

goods to an agent of a party entitled to the goods under the electronic warehouse receipt only if such agent had apparent or real authority from his principal to cause the release of the goods. Where the warehouse operator released the goods to an agent absent any showing of real or apparent authority from the principal, both the 18 warehouse operator and the agent shall be liable for all damages stemming from such 19 unlawful release.

Sec. 26. Obligation to Cancel Electronic Warehouse Receipt upon Release. - A

warehouse operator has the duty to mark the electronic warehouse receipt "cancelled" 22 once he has validly released the goods, regardless if the release was in full or merely partial. When a warehouse operator fails to have the electronic warehouse receipt cancelled after releasing the goods, he shall be liable to anyone who purchases in good faith and for value such warehouse receipt, on account of his inability to release the goods to him, whether such purchaser acquired title to the receipt before or after the release of the goods by the warehouse operator.

Sec. 27. Effect of Partial Release of Goods. - If the party causing the partial

release of goods wishes to keep the remaining goods stored in the same warehouse, he shall inform the warehouse operator of his intention and have a new warehouse receipt created in his favor over the remaining goods. Otherwise, it is incumbent upon

1 the warehouse operator to remove goods which are no longer covered by a valid 2 warehouse receipt from his warehouse.

Sec. 28. Fraudulent Alterations of Warehouse Receipts, - Any fraudulent

4 alteration made by the warehouse operator on the electronic warehouse receipt or 5 any copy thereof shall make him liable for all damages stemming from such unlawful 6 alteration. If the fraudulent alteration was caused by any party other than the 7 warehouse operator, and without the warehouse operator's knowledge that the same 8 was fraudulent, the warehouse operator shall only be liable according to the tenor of 9 the warehouse receipt prior to its fraudulent alteration.

Sec. 29. Innocent Purchaser of Fraudulently Altered Warehouse Receipt. - Any

11 purchaser of the receipt for value who had no knowledge that the same had been fraudulently altered by the warehouse operator at the time of purchase shall acquire the same rights against the warehouse operator which such purchaser would have acquired if the warehouse receipt had not been altered at the time of purchase. In the event the fraudulent alteration was caused by any party other than the warehouse operator, and without the warehouse operator's knowledge that the same was fraudulent, both the warehouse operator and the party causing the alteration shall be held liable to the innocent purchaser according to the tenor of the altered warehouse receipt, but the liability of the warehouse operator shall not go beyond what he would have been liable for according to the tenor of the warehouse receipt prior to its fraudulent alteration.

Sec. 30. Irretrievable Loss of Electronic Warehouse Receipts. - The SEC is hereby

authorized to settle claims and disputes stemming from the irretrievable loss of electronic warehouse receipts in the Registry. In such cases, the claimant must adequately show he had a valid and existing electronic warehouse receipt in the Registry, and that such electronic warehouse receipt was, in fact, lost, destroyed, or corrupted through no fault of his. The ruling of the SEC shall be appealable to the Court of Appeals under Rule 43 of the Revised Rules of Court.

Sec. 31. Liability for Non-Existence or False Description of Goods. - A warehouse

operator shall be liable to the holder of a warehouse receipt for damages caused by the non-existence of the goods or by the failure of the goods to correspond with the description thereof in the receipt at the time of its issue.

If, however, the goods are described in a warehouse receipt merely by marks or 2 labels upon them or upon packages containing them, or by a statement that the goods are said to be goods of a certain kind or that the packages containing the goods are said to contain goods of a certain kind, or by words of like purport on the goods themselves or on their packages or containers, such statements, if true, shall not render liable the warehouse operator issuing the warehouse receipt, even if the goods are not of the kind which the marks or labels upon them indicate, or of the kind they were claimed to be by the depositor.

Sec. 32. Liability for Damage or Loss to Goods. - A warehouse operator shall be

liable for any loss or damage to the goods caused by his failure to exercise such care in regard to them as reasonably careful owner of similar goods would exercise, but he shall not be liable, in the absence of an agreement to the contrary, for any loss or injury to the goods which could not have been avoided by the exercise of such care.

Sec. 33. General Prohibition on Co-Mingling of Goods. - Except where expressly

allowed by this Act, a warehouse operator shall keep the goods under his care reasonably separated from the goods of other depositors, and from other goods of the same depositor for which a separate receipt has been created, as to permit at all times the identification and redelivery of the goods deposited.

Sec. 34. When Co-Mingling of Goods Allowed. - If authorized by agreement or

20 by custom, a warehouse operator may mingle fungible goods with other goods of the same kind and grade. In such case, the various depositors of the mingled goods shall 22 own the entire mass in common and each depositor shall be entitled to such portion 23 thereof as the amount deposited by him bears to the whole.

Sec. 35. Liability of Warehouse Operator for Unauthorized Co-Mingling. - The

warehouse operator shall be severally liable to each depositor for the care and redelivery of his share of such mass to the same extent and under the same circumstances as if the goods had been kept separate. CHAPTER V WAREHOUSES

Sec. 36. Registration with the Council. - All warehouses must be registered with

and accredited by the Council. Warehouses that are not registered with and

1 accredited by the Council are prohibited from being used by warehouse operators in 2 storing goods covered by warehouse receipts.

Sec. 37. Insurance. - All warehouses must be insured in accordance with the

4 value and types of goods kept in them. The Council is hereby empowered to close 5 down any warehouse that stores goods covered by warehouse receipts which were 6 not insured.

Sec. 38. Initiative to Examine Warehouses. - The SEC, or any permanent

member of the Council, may request the Council to examine the operations of 9 warehouses for the purpose of determining that such warehouses are not engaged in 10 unauthorized activities. In case of a finding that an accredited warehouse is engaged in unauthorized activities, the Council may place the subject warehouse on probation, suspend or revoke its accreditation based on such ground, as may be appropriate under the circumstances. CHAPTER VI RIGHTS OF HOLDERS AND CLAIMANTS

Sec. 39. Rights of a Transferee. - A transferee acquires thereby:

(a) Such title to the goods as the transferor had or had the ability to convey to a purchaser in good faith for value; (b) The right to have the electronic warehouse receipt amended to reflect his ownership over the goods; (c) The direct obligation of the warehouse operator to hold possession of the goods for him according to the terms of the receipt as if the warehouse operator contracted directly with him.

Sec. 40. Warranties of a Transferor. - Unless a contrary intention appears, a

transferor warrants that: (a) The warehouse receipt is genuine; (b) He has a legal right to transfer the warehouse receipt; and (c) He does not have knowledge of any fact which would impair the validity or worth of the warehouse receipt.

Sec. 41. Transferor Not a Guarantor. - The transferor shall not be liable for any

failure on the part of the warehouse operator or previous transferors of the receipt to fulfill their respective obligations.

Sec. 42. When Transfer Not Impaired by Fraud, Mistake, or Duress. - The validity

2 of the transfer of a warehouse receipt is not impaired by the fact that such transfer 3 was a breach of duty on the part of the transferor, or by the fact that the owner of 4 the receipt was induced by fraud, mistake, or duress to entrust the possession or 5 custody of the receipt to such person, if the transferee or subsequent transferees paid 6 value therefor, without notice of the breach of duty, fraud, mistake, or duress.

Sec. 43. Enforcement of Security Interest. - In any transaction where the

8 warehouse receipt or the goods covered thereby are treated as security to a 9 transaction, the same shall be governed by the Personal Property Security Act of 2018.

Sec. 44. Attachment or Levy. - If goods are delivered to a warehouse operator

11 by the owner, or by a person whose act in conveying the title over the goods to a 12 purchaser in good faith for value would bind the owner, and a warehouse receipt was issued for them, such goods cannot thereafter, while in the possession of the 14 warehouse operator, be attached by garnishment or otherwise, or be levied upon 15 under an execution, unless the receipt be first cancelled. The warehouse operator 16 shall in no case be compelled to deliver up the actual possession of the goods until 17 the receipt is cancelled or he is otherwise ordered by the court.

Sec. 45. Creditor's Remedies. - A creditor whose debtor is the registered owner

19 of an electronic warehouse receipt shall be entitled to such aid from courts of appropriate jurisdiction, by injunction and otherwise, in attaching such receipt or in satisfying the claim by means thereof as is allowed by law.

Sec. 46. Conflicting Claims Over Warehouse Receipts. - The SEC is hereby

empowered to settle any conflicts relating to title and ownership over warehouse receipts. The decision of the SEC shall be appealable to the Court of Appeals under Rule 43 of the Revised Rules of Court. CHAPTER VII WAREHOUSE RECEIPTS ASSURANCE FUND

Sec. 47. Establishment of a Warehouse Receipts Assurance Fund. - A Warehouse

Receipts Assurance Fund, hereinafter referred to as the "Fund", is hereby established to cover for losses involving warehouse receipts stemming from Registry based failures including but not limited to the irretrievable destruction of the Registry or any of the entries therein. The SEC shall be in charge of the Fund and is hereby ordered and

1 authorized to create rules and regulations for the creation, management, and 2 disbursement thereof. The SEC is likewise authorized to seek third party assistance 3 for the creation and maintenance of the Fund

Sec. 48. Contribution to the Fund. - Upon the issuance or amendment of an

5 electronic warehouse receipt, as well as the issuance of a certified true copy of an 6 electronic warehouse receipt, there shall be paid to the SEC one-fourth of one percent 7 of the assessed value of the goods covered by the warehouse receipt, as contribution to the Fund. The SEC shall coordinate with the DTI, as well as other government 9 agencies, to come up with a proper and just valuation for any and all goods that may 10 be covered by a warehouse receipt. Nothing in this section shall in any way preclude the court from increasing or 12 decreasing the valuation of the goods should it appear during the hearing that the 13 value stated is either too small or too large.

Sec. 49. Recovery of Losses from Fund. - A person who, without negligence on

his part, sustains loss or damage, or is deprived of any goods covered by an electronic warehouse receipt or any interest therein as a consequence of Registry based failures shall file a claim before the SEC. The SEC is hereby authorized to settie claims and disputes involving a party's right to recover from the Fund. The SEC is likewise ordered and authorized to create rules and regulations regarding the procedure that must be followed by parties seeking to claim against the Fund. Any decision by the SEC involving such matter shall be appealable to the Court of Appeals under Rule 43 of the Revised Rules of Court.

Sec. 50. Maximum Recoverable Claim. - A party may only claim a maximum of

Five Hundred Thousand Pesos (P500,000.00) for every electronic warehouse receipt. In case the damage was caused by fraud, the claimant is not precluded from pursuing a claim for damages against such liable persons for the amount of the goods covered by the electronic warehouse receipt less any amount recovered from the Fund.

Sec. 51. Losses Not Recoverable. - The Fund shall not be liable for any loss,

damage, or deprivation that is not caused by a Registry based failure. Any losses stemming from Sub-Registry based failures are not recoverable from the Fund.

Sec. 52. Release of Funds. - Any money obtained by the SEC in relation to the

Fund shall be placed in a special fund and shall be treated as part of the savings of

1 the SEC which shall be deposited with the National Treasury. Once the SEC makes a request from the National Treasury or the Department of Budget and Management 3 (DBM) for the release of such funds in relation to a lawful purpose primarily related to the Fund, the release of the funds is immediate and ministerial. CHAPTER VIII WAREHOUSE OPERATOR'S LIEN

Sec. 53. Claims Included in the Warehouse Operator's Lien. - Subject to the

provisions of this Act, a warehouse operator shall have a lien on the goods deposited, 9 or on the proceeds thereof, in his hands, for the following: (a) lawful charges for storage and preservation of the goods; (b) lawful claims for money advanced, interest, insurance, transportation, labor, weighing, coopering, and other charges and 12 expenses in relation to such goods; and (c) reasonable charges and expenses for 13 notice, and advertisements of sale and for sale of the goods where default had been 14 made in satisfying the warehouse operator's lien.

Sec. 54. Enforcement of the Lien. - A warehouse operator's lien may be enforced

against any and all goods stored in his warehouse and covered by a valid warehouse receipt.

Sec. 55. Statement of Charges for which the Lien is Claimed. - The warehouse

operator shall have no lien on a warehouse receipt except for charges for storage of goods subsequent to the date of the receipt, unless the receipt expressly enumerated other charges for which a lien is claimed. In such cases, there shall be a lien for the 22 charges enumerated so far as they are consistent with this Act provided the amount or rate of the charges so enumerated is stated in the receipt.

Sec. 56. Release Goods Only After Lien is Satisfied. - A warehouse operator

having a lien valid against the person demanding the goods may refuse to release the goods to him until the lien is satisfied. A warehouse operator who voluntarily releases the goods despite his lien not being fully satisfied waives his lien over the same.

Sec. 57. Other Remedies Not Precluded. - A warehouse operator is entitled to

all remedies allowed by law to a creditor against a debtor for the collection from the depositor of all charges and advances which the depositor has expressly or impliedly contracted with the warehouse operator to pay.

Sec. 58. Notice of Warehouse Operator's Lien. - The warehouse operator must

2 provide the following notices to the person who validly offered to satisfy his lien: (a) An itemized statement of the warehouse operator's claim, showing the sum 4 due at the time of the notice and the date or dates when it becomes due; (b) A brief description of the goods against which the lien exists; (c) A demand that the amount of the claim shall be paid on or before a day mentioned, not less than ten days from the delivery of the notice if it is personally delivered, or from the time when the notice shall reach its destination, according to the due course of post, if the notice is sent by mail; and (d) A statement that unless the claim is paid within the time specified, the goods 11 will be advertised for sale and sold by auction at a specified time and place.

Sec. 59. Procedure for Auction Sale to Satisfy Warehouse Operator's Lien. - In

relation to the immediately preceding provision, if the warehouse operator's lien is not satisfied within the time specified, he may satisfy his lien over the goods by selling the same through auction. The auction sale shall be had in the place where the lien was acquired, or, if such place is manifestly unsuitable for such purpose, in the nearest 17 city or municipality where such a sale may be suitably conducted. Prior to the auction sale, the warehouse operator must advertise the sale, 19 describing the goods to be sold, and stating the name of the owner or person on whose account the goods are held, and time and place of the sale. Such advertisement shall be published once a week for two consecutive weeks in a newspaper published in the place where such sale is to be held. The sale shall not be held less than fifteen days from the time of the first publication. If there is no newspaper published in such place, the advertisement shall be posted at least ten days before such sale in not less than six conspicuous places therein, including the city or municipal hall where the warehouse is located. From the proceeds of such sale, the warehouse operator shall satisfy his lien including the reasonable charges of notice, advertisement, and sale. The balance, if any, of such proceeds shall be held by the warehouse operator and delivered on demand to the person to whom he would have been bound to release or justified in releasing goods.

At any time before the goods are so sold, the registered owner may pay the 2 warehouse operator the amount necessary to satisfy his lien and to pay the reasonable 3 expenses and liabilities incurred in serving notices and advertising and preparing for 4 the sale up to the time of such payment. Once the registered owner has satisfied the 5 warehouse operator's lien, he must release the goods absent any lawful cause as 6 provided under this Act.

Sec. 60. Perishable and Hazardous Goods. - If goods are of a perishable nature,

8 or by keeping them will deteriorate greatly in value, or, by their order, leakage, 9 inflammability, or explosive nature, will be liable to injure other property, the 10 warehouse operator may give such notice to the owner or to the person in whose names the goods are stored, as is reasonable and possible under the circumstances, to satisfy the lien upon such goods and to remove them from the warehouse. In the event of the failure of such person to satisfy the lien and to remove the goods within the time so specified, the warehouse operator may sell the goods at public or private sale without advertising. If the warehouse operator, after a reasonable effort, is unable to sell such goods, he may dispose of them in any lawful manner and shall incur no liability by reason thereof. The proceeds of any sale made under the terms of this section shall be disposed of in the same way as the proceeds of the sales made under the terms of the preceding section.

Sec. 61. Other Methods of Lien Enforcement. - The remedy for enforcing a lien

herein provided does not preclude any other remedy allowed by law for the enforcement of a lien against personal property nor bar the right to recover so much of the warehouse operator's claim as shall not be paid by the proceeds of the sale of the property.

Sec. 62. Effect of Sale. - After goods have been lawfully sold to satisfy a

warehouse operator's lien, or have been lawfully sold or disposed of because of their perishable or hazardous nature, the warehouse operator shall not thereafter be liable for failure to deliver the goods to the registered owner of the goods. CHAPTER IX PENALTIES

Sec. 63. Issuance of Warehouse Receipt for Goods Not Received. - A warehouse

2 operator, or an officer, agent, or employee of a warehouse operator who issues or 3 aids in issuing a receipt knowing that the goods for which such receipt is issued have 4 not been actually received by such warehouse operator, or are not under his actual 5 control at the time of issuing such warehouse receipt, shall be subject to imprisonment 6 of ten (10) years, or a fine equal to triple the value of the goods involved, or both. If the warehouse operator himself is liable, his accreditation shall likewise be revoked.

Sec. 64. Issuance of Warehouse Receipt Containing False Statement. - A

9 warehouse operator, or any officer, agent, or employee of a warehouse operator who 10 fraudulently issues or aids in fraudulently issuing a warehouse receipt for goods knowing that it contains any false statement, shall be subject to imprisonment of ten 12 (10) years, or a fine equal to triple the value of the goods involved, or both. If the warehouse operator himself is liable, his accreditation shall likewise be revoked.

Sec. 65. Issuance of Fraudulent Duplicate Warehouse Receipt. - A warehouse

operator, or any officer, agent, or employee of a warehouse operator who issues or aids in issuing a second electronic warehouse receipt for goods knowing that there is an existing prior electronic warehouse receipt for the same goods or any part of them, except in the case of a court order following an irretrievably lost receipt as provided for in this Act, shall be subject to imprisonment of ten (10) years, or a fine equal to triple the value of the goods involved, or both. If the warehouse operator himself is liable, his accreditation shall likewise be revoked.

Sec. 66. Unlawful Release of Goods Covered by Warehouse Receipt. - A

warehouse operator, or any officer, agent, or employee of a warehouse operator, who releases goods covered by an electronic warehouse receipt without any legal basis shall be subject to imprisonment of ten (10) years, or a fine equal to triple the value of the goods involved, or both. If the warehouse operator himself is liable, his accreditation shall likewise be revoked.

Sec. 67. Fraudulent Deposit of Goods. - Any person who, with fraud, deposits

29 goods to which he has no title, or upon which there is a lien or mortgage, and who obtains an electronic warehouse receipt for the same, shall be subject to imprisonment 31 of ten (10) years, or a fine equal to triple the value of the goods involved, or both.

Any warehouse operator or his agent who knowingly facilitates the issuance of 2 an electronic warehouse receipt for such goods shall be subject to imprisonment of 3 ten (10) years, or a fine equal to triple the value of the goods involved, or both.

Sec. 68. Issuance of Warehouse Receipts by Unregistered Warehouse Operator.

- Any warehouse operator who issues a warehouse receipt despite not being 6 registered with the Council shall be subject to imprisonment of ten (10) years, or a 7 fine equal to triple the value of the goods involved, or both.

Sec. 69. Willful Operation of an Unregistered or Un-Accredited Warehouse. - Any

warehouse operator who issues a warehouse receipt for goods stored in a warehouse 10 that is not registered or accredited by the Council, or whose registration or 11 accreditation has been revoked or suspended under the provisions of this Act shall be 12 subject to imprisonment of ten (10) years, or a fine equal to triple the value of the goods involved, or both. CHAPTER X TRANSITORY PROVISIONS

Sec. 70. Role of the SEC and Other Agencies. - The SEC shall be the primary

17 regulatory body in charge of all matters related to warehouse receipts. While the SEC 18 may consult with other regulatory bodies, as well as other organizations representative 19 of a particular sector, the SEC shall, at all times, be the lead agency in ensuring the successful implementation of this Act except as otherwise provided in this Act.

Sec. 71. Inter-Connected Registry Information. - Where feasible, the SEC is

22 ordered and authorized to engage in concerted activity with other government 23 agencies for the linking of the Registry provided under this Act with other registries in order to be able to come up with an inter-connected registry.

Sec. 72. Public Information. - All entries in the Registry of electronic warehouse

receipts shall be available to the public. Likewise, the list of accredited warehouse operators and warehouses, as well as the list of warehouse operators and warehouses whose accreditation have been revoked, shall be available to the public.

Sec. 73. Dispute Resolution. - Except in cases specifically placed under the

jurisdiction of the SEC under this Act, as well as cases where the electronic warehouse receipt inciudes a valid arbitration clause, all actions arising from this Act shall fall under the jurisdiction of the Regional Trial Courts.

Sec. 74. Transition Period. - All existing warehouse operators and warehouses

must be compliant with the provisions of this Act relating to registration and accreditation within three (3) years from the effectivity of this Act. All physical warehouse receipts must be converted to electronic warehouse receipts within three 5 (3) years from the opening of the system of registry for warehouse receipts to be made by the SEC.

Sec. 75. Appropriations. - The amount necessary to carry out the initial

8 implementation of this Act shall be included in the General Appropriations Act.

Sec. 76. Implementing Rules and Regulations. - Within ninety (90) days after

10 the effectivity of this Act, the SEC, in coordination with the DA, DTI, DOF, and other relevant organizations, shall promulgate rules and regulations for the implementation 12 of this Act and/or for the public interest or for the protection of warehouse operators 13 and warehouses accredited or regulated pursuant to the authority granted under this Act.

Sec. 77. Separability Clause. - If any provision of this Act is declared invalid or

unconstitutional, the other provisions not affected by such declaration shall remain in full force and effect.

Sec. 78. Repealing Clause. - All laws, executive orders, administrative orders,

and rules and regulations inconsistent with this Act are hereby repealed or amended accordingly.

Sec. 79. Effectivity Clause. - This Act shall take effect fifteen (15) days after its

complete publication in the Official Gazette or in two (2) newspapers of general circulation. Approved,