{"id":121420,"date":"2025-12-10T13:36:41","date_gmt":"2025-12-10T13:36:41","guid":{"rendered":"https:\/\/my.legal500.com\/guides\/?post_type=comparative_guide&#038;p=121420"},"modified":"2025-12-10T13:36:41","modified_gmt":"2025-12-10T13:36:41","slug":"philippines-aviation-finance-leasing","status":"publish","type":"comparative_guide","link":"https:\/\/my.legal500.com\/guides\/chapter\/philippines-aviation-finance-leasing\/","title":{"rendered":"Philippines: Aviation Finance &amp; Leasing"},"content":{"rendered":"","protected":false},"template":"","class_list":["post-121420","comparative_guide","type-comparative_guide","status-publish","hentry","guides-aviation-finance-leasing","jurisdictions-philippines"],"acf":[],"appp":{"post_list":{"below_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">SyCip Salazar Hernandez &amp; Gatmaitan<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2022\/07\/SyCipLaw-80th-logo_colored_JPG.jpg\"\/><\/span><\/div>"},"post_detail":{"above_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">SyCip Salazar Hernandez &amp; Gatmaitan<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2022\/07\/SyCipLaw-80th-logo_colored_JPG.jpg\"\/><\/span><\/div>","below_title":"<span class=\"guide-intro\">This country specific Q&amp;A provides an overview of Aviation Finance &amp; Leasing laws and regulations applicable in Philippines<\/span><div class=\"guide-content\"><div class=\"filter\">\r\n\r\n\t\t\t\t<input type=\"text\" placeholder=\"Search questions and answers...\" class=\"filter-container__search-field\">\r\n\t\t\t<\/div>\r\n\r\n\t\t\t\r\n\r\n\r\n\t\t\t<ol class=\"custom-counter\">\r\n\r\n\t\t\t\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What international aviation conventions has your jurisdiction signed and\/or ratified?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The Philippines is a signatory to, and has ratified, (a) the 1921 Warsaw Convention on Unification of Certain Rules for International Carriage by Air, (b) the 1944 Chicago Convention on International Civil Aviation, (c) the 1948Geneva Convention on International Recognition of Rights in Aircraft, (d) the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards, (e) the 1963 Tokyo Convention on Offences and Certain Other Acts Committed on Board Aircraft, (f) the 1970 Hague Convention on the Suppression of Unlawful Seizure of Aircraft The Hague, (g) the 1971 Montreal Convention on the Suppression of Unlawful Acts against the Safety of Civil Aviation, and (h) the 1999 Montreal Convention on Unification of Certain Rules for International Carriage by Air.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">If your jurisdiction has signed and ratified the Cape Town Convention: a. Which qualifying declarations (opt-in and opt-out) has your jurisdiction made under the Cape Town Convention? b. Does the Cape Town Convention take priority over conflicting national law?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The Philippines is not a member of the Cape Town Convention. Thus, items 2a and 2b are not applicable.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Will a court uphold the choice of a foreign governing law in respect of the following contracts and if so, please also state any conditions or formality requirements to this recognition a. Lease and b. Security document (for example, mortgage)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes. Philippine law generally recognizes the freedom of the contracting parties to select the governing law applicable to their contract when it is a <em>bona fide<\/em> and genuine choice that is not against law, morals, good customs, public order or public policy and not designed to evade some provisions of the law of another jurisdiction having a closer connection with the transactions contemplated therein. The law chosen to govern the contract must have a substantial relationship to the transaction.<\/p>\n<p>As Philippine courts will not take judicial notice of the foreign law, foreign law must be pleaded and proven in an action before Philippine courts by the party seeking to have foreign law applied. In order to prove foreign law, the party invoking such would generally need to present the official publication of the law or a publication attested to by the officer having legal custody of the record and include a certificate made by the a foreign service agent of the Philippines stationed in the foreign country in which the record is kept and authenticated by the seal of his office.<\/p>\n<p>In the event of failure to plead or prove foreign law, Philippine courts will presume that the foreign law is the same as the laws of the Philippines on the matter, in accordance with the doctrine of processual presumption.<\/p>\n<p>While the choice of foreign law as the governing law of the contract will be recognized by the courts of the Philippines, such courts may, in disregard of any provision of foreign law, apply the laws of the Philippines (i) with respect to matters bearing upon the capacity of the party who is a Philippine national to enter into and perform its obligations under the contract, and (ii) in determining compliance with all the requirements of governmental authorizations (if any) under the laws of the Philippines, (iii) in determining compliance of the document with the formalities required under Philippine law for the conveyance of and the creation of security interests in property situated in the Philippines, and (iv) insofar as Philippine law may have a closer connection to the transactions contemplated therein.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Please confirm whether it is (i) customary and (ii) necessary to also take a local law mortgage and if so, why?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>It is not necessary to also take a local law security interest if there is an existing foreign law mortgage. However, parties would usually opt to enter into a local law mortgage for different reasons such as avoiding the nuances of having a foreign law governed contract, e.g., pleading and proving foreign law before Philippine courts and issue of which jurisdiction would have a closer nexus to the transaction. Thus, it may be advisable to also have a local law security interest over the aircraft.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are foreign judgments recognized and enforceable by courts of your jurisdiction and if so, please also state any conditions or formality requirements to this recognition (for example, do you require a local court order confirming such recognition)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, the judgment of a foreign court may be recognized and enforced by Philippine courts, subject to the procedure for recognition of foreign judgments under the Rules of Court of the Philippines. To be enforceable, the foreign judgment must first be recognized by Philippine courts. Any action for the enforce mentor recognition of foreign judgments must be filed with the courts in accordance with the Rules of Court of the Philippines, please refer to our response to question 3a on the requirement of proving foreign law.<\/p>\n<p>A judgment rendered against a party by a foreign court may be enforced before a Philippine court without a rehearing on the merits, but such judgment may be repelled by evidence that {a) such foreign court did not have jurisdiction in accordance with the jurisdictional rules of such court, {b) the party against whom the judgment was rendered had no notice of the proceedings, or {c) the judgment of such foreign court was obtained through collusion or fraud or was based on clear mistake of law or fact, {d) the foreign judgment was not valid under the laws of the court that rendered it, {e) the foreign judgment is not yet final and executory, {f) the state where the foreign judgment was obtained does not allow recognition or enforcement of Philippine judgments, {g) the foreign judgment is contrary to good customs, public order, or public policy of the Philippines.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is your aircraft registry an owner-register (registering ownership interests) or an operator-register (registering interests as operator)? Please also state any conditions, procedural steps or formality requirements for such registration and explain how this is evidenced (for example, the issuance of a Certificate of Registration)<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>There is an Aircraft Registry in the Philippines, which is maintained by the Civil Aviation Authority of the Philippines {the &#8220;CAAP&#8221;). The CAAP was created by Republic Act No. 9497 {the &#8220;CAAP Law&#8221;) in 2008 and has a broad range of powers and functions, including a duty to operate as the sole and exclusive registry for aircraft, aircraft engines, and liens and security interests on aircraft and aircraft engines. In particular, the Aircraft Registry is handled by the Airworthiness Department of the Flight Standard Inspectorate Service Division of the CAAP {the &#8220;Airworthiness Department&#8221;).<\/p>\n<p>The CAAP is an operator registry in the sense that the name of the operator {whether owner or lessee) is reflected in the Certificate of Registration. Previously, under the CAAP Law, no aircraft is eligible for registration in the Philippines unless it is owned by or leased to a citizen of the Philippines or to corporations or associations organized under the laws of the Philippines, at least sixty per centum {60%) of whose capital is owned by Filipino citizens.<\/p>\n<p>However the Republic Act No.11659, the act amending the Public Service Act provides that, &#8220;the provisions on limitations on foreign ownership in the following laws are hereby amended and modified: xxx {c) Republic Act No. 9497, otherwise known as the &#8220;Civil Aviation Authority Act of 2008&#8221;, as amended; {d) Republic Act No. 776, otherwise known as &#8220;The Civil Aeronautics Act of the Philippines&#8221;, as amended.&#8221; To implement this amendment, the CAAP issued Memorandum Circular No. 14-2025 on the registration eligibility of a foreign-owned aircraft.<\/p>\n<p><strong>For partially foreign-owned aircrafts:<\/strong><\/p>\n<p>{i) It must be owned by or leased to Philippine citizen\/s or corporations or associations organized under Philippine law whose capital is at least 60% owned by Philippine citizens or a government entity of the Republic of the Philippines, and<\/p>\n<p>{ii) It is not registered under the laws of any foreign country; or<\/p>\n<p><strong>For fully foreign-owned aircrafts:<\/strong><\/p>\n<p>{i)It must not be registered under the laws of any foreign country, and<br \/>\n{ii) It is:<br \/>\na. Utilized by members of aero clubs organized for recreation, sport or the development of flying skills as a prerequisite to any aeronautical activities of such clubs within the Philippine airspace, and if so authorized by the CAAP, or<br \/>\nb. Used exclusively for commercial air transport.<\/p>\n<p>For original registration in the CAAP, a certificate or notice of de-registration has to be issued by the former registry, if any. The de-registration certificate must be received by the CAAP directly from the former registry.<\/p>\n<p>A proper application should be made in writing and signed and sworn to by the eligible owner or the lessee (i.e., notarized, and consularized or apostilled, as applicable, if executed abroad). The application shall state the date and place of filing, specification, construction, and technical description of the aircraft and such other information that may be required.<\/p>\n<p>The application for registration undergoes two phases. In the first phase, the application must be lodged with the Airworthiness Department for examination of the application form and payment of registration fees and charges. After payment, the applicant can proceed to the second phase and submit the complete application page (i.e., the application form and its supporting documents) to the Flight Standards Inspectorate Service, which in turn will forward the documents to the Engineering and Registration Division and the Airworthiness Department for review.<\/p>\n<p>The supporting documents that must be attached to the notarized initial Certificate of Registration application form (CAAP Form 1028-1) are the following:<\/p>\n<ul>\n<li>(i) Documentary evidence of ownership (or for leased aircraft, notarized duplicate signed copy of the aircraft lease agreement). If the aircraft lease agreement is signed outside the Philippines, it must be notarized, and consularized or apostilled (as applicable). The lease agreement must be approved by CAAP. If the aircraft for registration was not purchased from the last registered owner, the applicant must submit a comprehensive history of ownership, starting from the first registered owner to the last registered owner;<\/li>\n<li>(ii) Special power of attorney or equivalent document such as a board resolution authorizing the applicant to sign on behalf of the applicant corporation and specifying the particular document\/s to be signed;<\/li>\n<li>(iii) Customs Clearance and\/or tax exemption, if applicable, and\/or a Customs Release\/Payment;<\/li>\n<li>(iv) Certificate of Non-Registration, if the aircraft is factory-new ora deregistration fax and email, if the aircraft is previously registered in another jurisdiction;<\/li>\n<li>(v) Official receipt, payment of registration fee (which depends on the gross weight of the aircraft in kilograms);<\/li>\n<li>(vi) Official receipt, payment of recordation fee of PhP400.00 (about USD8.00) and a 12% Value Added Tax (VAT) if the applicant is not VAT-exempt (Note, however, that there has been a proposal to increase these fees);<\/li>\n<li>(vii) CAAP Accounting Clearance;<\/li>\n<li>(viii) Assignment of registration number\/RP-C number. The applicant must reserve a registration number which must be used within 90 days, otherwise the reserved registry number is dee med automatically canceled if not used within that specified period;<\/li>\n<li>(ix) Articles of Incorporation and By-laws of the owner or lessee;<\/li>\n<li>(x) Names of the directors of the company owning or leasing the aircraft and their specimen signatures giving authority to register and\/or operate the aircraft in the Philippines. This document must also designate the person(s) who has the authority to transact on their behalf on matters relating to the aircraft registration and\/or operation;<\/li>\n<li>(xi) Proof of identity, such as a copy of a government issued identity card, passport if owned by an individual, or any other identification card approved by the CAAP; and<\/li>\n<li>(xii) Certified true copy of aircraft Certificate of Insurance.<\/li>\n<\/ul>\n<p>Additionally, for aircrafts for hire to the general public, the following must also be submitted:<\/p>\n<p>(i) Civil Aeronautics Board (the &#8220;CAB&#8221;) Permit\/Approval of the Lease; and<\/p>\n<p>(ii) Air Operator Certificate.<\/p>\n<p>The CAAP may also require the submission of other supporting documents. If the CAAP Director General finds that the aircraft is eligible for registration, such aircraft shall be registered and an aircraft Certificate of Registration will be issued.<\/p>\n<p>Documents executed abroad that are required to be submitted with the CAAP must at least be (i) apostilled under the Apostille Convention, for those documents executed in countries that are parties to the Apostille Convention, or (ii) authenticated following the usual authentication process, i.e., consularization, for those documents executed in countries that are not parties to the Apostille Convention.<\/p>\n<p>Once the CAAP deems the application to be sufficient, it shall issue the aircraft&#8217;s Certificate of Registration.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a security document register in your jurisdiction where a mortgagee\u2019s interests will be recorded? If so, please also state any conditions, procedural steps or formality requirements for such registration and explain how this is evidenced (for example, the issuance of a certificate or official stamp on the security document)<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, the CAAP maintains a Registry where all liens, mortgages, or other interests in aircrafts are to be registered. Meanwhile, security interests over other movable collaterals are registered in the online Personal Property Security Registry pursuant to Republic Act No. 11057 or the Personal Property Security Act (the &#8220;PPSA&#8221;).<\/p>\n<p>In the case of any conveyance affecting title or interest in an aircraft of Philippine registry, such conveyance is also required to be recorded in the books of the CAAP in order to be binding against third parties having no actual notice thereof. The CAAP law requires that the formalities for land registration should be followed in order to register a document with the CAAP, which are: (i) the document must be signed in the presence of at least two witnesses who shall likewise sign thereon, and (ii) signed on each and every page (except the signature page) at the left-hand margin by the person or persons executing the instrument and their witnesses, and all the pages sealed with the notarial seal, and this fact as well as the number of pages shall be stated in the notarial acknowledgment.<\/p>\n<p>The security document to be submitted to the CAAP must be original, notarized, and consularized or apostilled (as applicable).<br \/>\nIn addition, the CAAP requires the presentation of proof of authority of the signatories to the security documents (e.g., board resolutions), which must also be notarized and, if executed abroad, consularized or apostilled (as applicable).<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What is the effect of registration of: a. Ownership interest (for example, proof of title to third parties of ownership) b. Lease (for example, perfects the status of the Lessor under the Lease) c. Security document (for example, secures priority over later registered security). If there are any interests that could rank prior to the security document please state these<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p><strong>a. Ownership interest (for example, proof of title to third parties of ownership)<\/strong><\/p>\n<p>Registration of an ownership interest in an aircraft with the CAAP constitutes public notice to third parties of the ownership over the aircraft and such shall be binding against all such persons from the date of its recordation in the books of the CAAP.<\/p>\n<p><strong>b. Lease (for example, perfects the status of the Lessor under the Lease)<\/strong><\/p>\n<p>The registration of the interest of the lessor with the CAAP constitutes public notice to third parties of the rights of the less or over the aircraft and such lease shall be binding against all such persons from the date of its recordation in the books of the CAAP.<\/p>\n<p><strong>c. Security document (for example, secures priority over later registered security). If there are any interests that could rank prior to the security document please state these<\/strong><\/p>\n<p>The registration of security interest over the aircraft with the CAAP constitutes public notice to third parties of the rights of the secured party and such security interest shall be binding against all such persons from the date of its recordation in the books of the CAAP.<\/p>\n<p>Generally, prior registration coupled with good faith, confers a better right over subsequent registrations.<\/p>\n<p>However, in a bankruptcy situation of the owner, the concurrence and preference of credits as enumerated in the Civil Code and other relevant laws will be observed, unless a preferred creditor voluntarily waives his preferred right. (Section 133, Financial Rehabilitation and Insolvency Act of 2010 (&#8220;FRIA&#8221;)).<\/p>\n<p>Liens on specific immovable property of the owner have preference on those assets and exclude all other to the extent of the value of the property to which the preference refers. If there are two or more credits with respect to the same immovable property, they are to be satisfied pro rata after the payment of duties, taxes and fees due to the State (Sections 2248 and 2249, Civil Code). For movables, generally, the priority of security interests and liens in the same collateral is determined according to the time of registration of a notice without regard to the order of creation of the security interests and liens (Section 17, PPSA). Those credits, which do not enjoy preference with respect to specific property of the Lessee and those, which enjoy preference as to the amount not paid are satisfied according to the order of preference established in Article 2244 of the Civil Code.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What types of lease are recognized in your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Philippine law recognizes leases over aircraft whether they be finance leases or operating leases. The CAAP further classifies operating lease agreements into &#8220;dry&#8221; leases, &#8220;wet&#8221; leases, &#8220;damp&#8221; leases, charter, and interchange agreement.<\/p>\n<p>However, in order to be binding to third persons who have no actual notice thereof, leases must be registered with the CAAP. In this connection, in order to register a document to with the CAAP, the document must be notarized, and apostilled or consularized (as applicable).<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What formalities are required to perfect Lessor\u2019s rights under a lease in your jurisdiction (for example, translation, notarization, apostille, legalization etc.)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The following formalities should be observed for registration of the lease with the CAAP:<br \/>\n(i) it must be in writing, (ii) it must be signed by two witnesses, (iii) signed by the signatory and the two witnesses on the left-hand margin of each and every page, (iv) notarized, (v) if executed outside of the Philippines, notarized and consularized or apostilled (as applicable), and (vi) the language of the lease should be English.<\/p>\n<p>If the lease is in a foreign language other than English, an accompanying English translation, with a certification by the translator that the translation is correct and accurate, would be required. For purposes of registration with the CAAP, such English translation must be notarized and, if executed abroad, apostilled or consularized (as applicable).<\/p>\n<p>Based on our informal queries with the CAAP, the English translation must also be signed by the signatories on the signature page thereof.<\/p>\n<p>The CAAP also requires documentation showing the authority of the persons who executed the document (e.g., special power of attorney) which should also be notarized and, if executed abroad, consularized or apostilled (as applicable).<\/p>\n<p>The lease agreement should also contain particular terms namely, the name of the parties (i.e. lessor and lessee), the description of the aircraft leased, the amount of rent, and the term of the lease.<\/p>\n<p>Lastly, as mentioned above, if the aircraft will be used for commercial operations, the lease must be approved by the CAB.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are the ownership rights relating to engines recognized as separate and distinct from the ownership of the rest of the aircraft in your jurisdiction? Please highlight any separate registration, filing or additional formalities that are required to be completed to perfect Lessor\u2019s interest in the engines<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>If the engine is attached to the aircraft, the CAAP considers it as part of the aircraft and is subsumed in the aircraft&#8217;s registration.<\/p>\n<p>However, if the engine is not attached to the aircraft (i.e., spare engine), it must be separately registered with the CAAP.<\/p>\n<p>Please see our response in item 12 below on perfection of security interest.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What form does security over aircraft generally take in your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Previously, a security document over an aircraft would take the form of a chattel mortgage. However, The Philippines recently enacted the PPSA which repeals, modifies, and amends the Chattel Mortgage Law.<\/p>\n<p>The PPSA states that it applies to all transactions of any form that secure an obligation with movable collateral, except interests in aircraft, which is subject to the CAAP Law. The CAAP Law merely provides for the registration of aircraft interests with the CAAP registry, and the PPSA and its Implementing Rules and Regulations (the &#8220;PPSA IRR&#8221;) do not clarify if only the creation and perfection of security interest over aircraft are excluded from the coverage of the PPSA. There is a position that the creation and enforcement of security interest over aircraft should be governed by the PPSA and the PPSA IRR, while its registration requirements should continue to be governed by the CAAP Law. An alternative view is that the Chattel Mortgage Law still applies to security over aircraft. Given that the PPSA and the PPSA IRR are new laws, such positions are not free from doubt.<\/p>\n<p>Under the PPSA, the security document is a security agreement. A security agreement is a written contract signed by the parties that establishes their intent to create a security interest. Under the PPSA, a &#8220;security interest&#8221; is a &#8220;property right in collateral that secures payment or other performance of an obligation, regardless of whether the parties have denominated it as a security interest, and regardless of the type of asset, the stat us of the grantor or secured creditor, or the nature of the secured obligation; including the right of a buyer of accounts receivable and a lessor under an operating lease for not less than one year.&#8221; A security agreement may also provide for the creation of a security interest in future property; however, it will only be created when the grantor acquires rights over such property or the power to encumber it.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any particular terms or characteristics that such a security document must take (for instance, a cap on the secured liabilities)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under the PPSA, the security agreement must be in writing and contain a general description of the collateral. The description of the collateral will be deemed sufficient when it reasonably identifies the collateral. Under the same law, a description such as &#8220;all personal property&#8221;, &#8220;all equipment&#8221;, &#8220;all inventory&#8221;, or &#8220;all personal property within a generic category&#8221; of the grantor shall be sufficient.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any perfection requirements for such security document? If so, please state any conditions, procedural steps, formality requirements or documentation (for example, corporates, list of directors etc.) required to effect this<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under the PPSA, it is upon perfection that a security interest becomes effective against third parties. This can be done either through registration of the notice of the security agreement or possession of the asset. However, given the position that the registration requirements should still be governed by the CAAP Law, it is submitted that the security agreement should always be registered with CAAP. Under the CAAP Law, any conveyance affecting title or interest in any Philippine-registered aircraft or any portion thereof must be recorded with the CAAP in order to be valid and effective against third persons.<\/p>\n<p>For registration, the security agreement must be in writing, signed on each page, and notarized. If executed abroad, it should also be consularized or apostilled. The CAAP also requires documentation showing the authority of the persons who executed the document (e.g., special power of attorney) which should also be notarized, and, if executed abroad, consularized or apostilled (as applicable).<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Summarize any captive insurance regime in your jurisdiction as applicable to aviation.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>A Philippine entity is not allowed to procure or accept policies or contracts of insurance from any insurance company not authorized to transact business in the Philippines covering risks situated in the Philippines. The restriction for obtaining insurance coverage locally does not apply to reinsurance. However, no insurance company may cede all or part of any risk situated in the Philippines by way of reinsurance directly to any foreign insurer not authorized to do business in the Philippines unless such foreign insurer or, if the services of a non-resident broker is utilized, such non-resident reinsurer or broker is represented by a resident agent duly registered with the Philippine Insurance Commission.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are cut-through clauses under the insurance and reinsurance documentation legally effective in your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Cut-through clauses are generally valid under Philippine Law.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there minimum requirements for the amount of third-party liability cover that must be in place in your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>While no specific amount is prescribed, as a minimum, any person operating an aircraft must have valid insurance guarantee covering aircraft hull, each person, freight, and mail on board the aircraft, and third-party liability.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Can a mortgagee (or equivalent security interest holder) or lessor following an event of default under a mortgage (or equivalent security document) or lease, respectively, take possession of the aircraft without judicial intervention in your jurisdiction? Please also state any conditions, procedural steps, formality requirements or documentation (for example, original, legalized, translated Lease\/Mortgage, corporates etc.) required to effect this<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Public policy prohibits a mortgagee from simply taking and appropriating the personal property turned over to it as security for the payment of a principal obligation. This is known as <em>pactum commissorium<\/em> under Article 2088 of the Civil Code. Instead, there must be formal proceedings prior to appropriation of such personal property.<\/p>\n<p>Under the PPSA, a secured creditor may enforce its security interest whether through a judicial process or through an extra-judicial process, including the sale of the secured assets through either a public or private disposition. The secured creditor may take possession of the property without need of judicial process and proceed to dispose the collateral in a public or private sale upon notice to the debtor. Further, a secured creditor may propose to take all or part of the collateral in total or partial satisfaction of the secured obligation. The secured creditor may send a proposal to the debtor, any other secured creditor or lien-holder who perfected its security interest or lien by registration at least five days before the proposal is sent, and any other person with an interest in the collateral who has notified the creditor. The creditor may retain the collateral for full satisfaction of the secured obligation if the creditor does not receive an objection in writing from any person entitled to receive such proposal within 20 days after the proposal is sent to such person. The creditor may retain the collateral in partial satisfaction of the secured obligation, only if the creditor receives the affirmative consent of each addressee of the proposal within 20 days after the proposal is sent to such person.<\/p>\n<p>The taking of possession by the secured creditor in this instance, however, assumes that it can be done without breach of the peace. Under the PPSA, breach of peace shall include entering the private residence of the grantor without permission, resorting to physical violence or intimidating, or being accompanies by a law enforcement officer when taking possession or confronting the grantor.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How can a mortgagee (or equivalent security interest holder), lessor under a lease or designee\/beneficiary of an IDERA deregister the aircraft? Please also state any conditions, procedural steps, formality requirements or documentation (for example, original, legalized, translated Lease\/Mortgage\/IDERA etc.) required to effect this<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>As a general rule, only the person in whose favor the Certificate of Registration has been issued may apply for deregistration. However, if the entity registered in the Certificate of Registration grants a power of attorney (<em>i.e.<\/em>, Deregistration Power of Attorney) to the owner, lessor, or security trustee to process the deregistration, then such power of attorney may be used by the owner, lessor, or security trustee to request for deregistration.<\/p>\n<p>Prior to the processing of the deregistration, the CAAP requires that all annotations on the aircraft&#8217;s Certificate of Registration must be cancelled.<\/p>\n<p>Deregistration of an aircraft typically requires the submission of the notarized CAAP deregistration form (CAAP Form 1028-1) and the surrender of the originals of documents obtained during the registration of the aircraft. In particular, the following documents and information must be submitted to the CAAP:<\/p>\n<ol>\n<li>Letter of Intent\/Request for deregistration;<\/li>\n<li>Notarized (and consularized\/apostilled (as applicable) Deed\/Bill of Sale (if applicable);<\/li>\n<li>Original Certificate of Registration<\/li>\n<li>Original Certificate of Airworthiness;<\/li>\n<li>Country to where the aircraft will be exported;<\/li>\n<li>Name of new owner\/lessee;<\/li>\n<li>CAAP accounting clearance of current aircraft owner;<\/li>\n<li>Proof of payment of CAAP prescribed fees (evidenced by an original and photocopy of the official receipt); and<\/li>\n<li>Others as required by the CAAP.<\/li>\n<\/ol>\n<p>If the aircraft is registered in the Philippines by reason of a lease, the application for de-registration may be based on the termination of the lease.<\/p>\n<p>A deregistration fee of PhP750.00 (USD15.00) (for foreign) or PhP300.00 (about USD6.00) (for domestic) is payable, subject to 12% VAT, unless there is a law providing that the applicant for deregistration is exempt from the payment of taxes. Additionally, if there are unpaid dues to CAAP or any other government authority like the Manila International Airport Authority, these would need to be settled in order to obtain the CAAP Accounting Clearance, which is a requirement for deregistration.<\/p>\n<p>Requests for deregistration shall not be granted unless there is a State accepting or facilitating registration, unless the aircraft will be scrapped or placed in a museum or educational institution.<\/p>\n<p>Once all the requirements have been met, the CAAP shall issue a Certificate of Deregistration. The process takes approximately eight working days according to the CAAP&#8217;s 2025 Citizen&#8217;s Charter.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Can the government or the lessee lawfully prevent the repossession or deregistration and if so, in what circumstances<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under the 1987 Philippine Constitution, in times of national emergency, when the public interest so requires, the State may, during the emergency and under reasonable terms prescribed by it, temporarily take over or direct the operation of any privately owned public utility or business affected with public interest. Under the CAAP Law, aircraft operation is impressed with public interest.<\/p>\n<p>On the other hand, in case of rehabilitation or liquidation of the operator, there is a practical risk that the aircraft may be included in the registry of assets of the operator and form part of the rehabilitation or liquidation proceedings.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">If judicial intervention is required, please describe the process? Please also state any procedural steps, length of time to complete and advise as to documentation required<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Previously, under the Chattel Mortgage Law, the financiers may resort to either judicial foreclosure of the mortgage or extra judicial foreclosure as provided. It is customary for the mortgage to provide for extrajudicial foreclosure in the event of default or non-payment. For this limited purpose, the mortgagee, who is usually appointed attorney-in-fact for the mortgagor, may take possession of the aircraft without judicial intervention. The aircraft would then be sold at a public auction by the sheriff or by any other public officer after the usual formalities of the posting of the notice of sale. If the mortgage is foreclosed extra-judicially, the mortgagee may, after 30 days from the time of default, cause the aircraft to be sold at a public auction upon ten days&#8217; notice to the mortgagor. However, recourse to an extrajudicial foreclosure of mortgage is premised on the voluntary surrender of the aircraft by the lessee to the owner. A writ of replevin may be obtained from a court preparatory to extrajudicial foreclosure of chattel mortgage in case the aircraft is not voluntarily surrendered. A writ of replevin is a provisional remedy that would allow the lessor to retain the aircraft during the pendency of the action<\/p>\n<p>Now, Section 47{c) of the PPSA provides that if, upon default, the secured creditor cannot take possession of collateral without breach of the peace, the secured creditor will be entitled to an expedited hearing upon application for an order granting the secured creditor possession of the collateral. Such application must include a statement by the secured creditor, under oath, verifying the existence of the security agreement attached to the application and identifying at least one event of default by the debtor under the security agreement. The secured creditor is entitled to an order granting possession of the collateral upon the court finding that a default has occurred under the security agreement and that the secured creditor has a right to take possession of the collateral. The court may direct the grantor to take such action as the court deems necessary and appropriate so that the secured creditor may take possession of the collateral.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How is legal title transferred under the laws of your jurisdiction? Please also state any conditions, procedural steps, formality requirements or documentation (for example, corporates etc.) required to effect this<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>No particular form of transfer is required for validity and legal recognition of a title transfer as between the parties. But for the same to be binding against third persons who have no notice thereof, the same must be registered with the CAAP.<\/p>\n<p>A recordation fee of PhP400.00 {about USD8.00) is currently collected for every recordation or annotation filed with the CAAP. An additional fee of PhP400.00 (about USD8.00) is collected for every re-issuance of the Certificate of Registration with annotations. Note, however, that there has been a proposal to increase these fees. This fee is subject to 12% VAT, unless there is a law providing that the applicant for deregistration is exempt from the payment of taxes.<\/p>\n<p>For the transfer to be recorded, it should comply with the following:<\/p>\n<ol>\n<li>conveyance to be recorded, it should also state:<br \/>\n(a) the interest in the aircraft of the person by whom such conveyance is made or executed or, in the case of a contract of conditional sale, the interest of the seller; and<br \/>\n(b) the interest transferred by the conveyance.<\/li>\n<li>The document evidencing the title transfer must be (a) signed on each and every page of the left hand margin (b) notarized, and (c) apostilled or consularized, if executed outside of the Philippines.<\/li>\n<\/ol>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any restrictions on the sale of an aircraft following enforcement (for example, the requirement to obtain a court order or conduct a public auction or other action in order to sell the aircraft upon enforcement)<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The general rule is that judicial intervention is not required for a lessor to take possession of an aircraft. The lease usually provides that a lessor has the right to repossess an aircraft in the event of default of the lessee or upon expiry or termination of the lease.<\/p>\n<p>However, judicial intervention will be necessary to forcibly take possession of an aircraft if the lessee asserts that the retaking is wrongful or otherwise refuses to voluntarily surrender possession of the aircraft to the lessor. lf the lessor elects to file an action in the Philippines, it may file an action for replevin for the recovery of the aircraft, with an application for the issuance of a writ of replevin, which is a provisional remedy that would allow the lessor to retain the aircraft during the pendency of the action.<\/p>\n<p>Generally, the permission of any other party {including any official body) is not required for a lessor to take possession of an aircraft unless it (i) has been attached by order of a court in a proceeding instituted by a third party against the lessor or the lessee, or {ii) inadvertently included among the assets of the lessee placed under suspension of payments, receivership or liquidation, or (iii) distrained by tax authorities for non-payment of any Philippine tax payable by the lessor or seized by customs authorities for non-payment of customs duties, fees, charges, fines, or violation of the Customs Modernization and Tariff Act (&#8220;CMTA&#8221;). In such instances, the approval of the courts or the governmental offices concerned in the proper case will be necessary to release the aircraft to the lessor.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Would lease rentals be subject to tax (for example, withholding or income tax)? Please also state if there are any conditions for such tax to be imposed and any steps usually taken to mitigate this<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under Section 28 {8)(4) of the Tax Code, rentals and other fees derived by a non-resident Lessor of the Aircraft are subject to a final withholding tax of seven and one half percent (7\u00bd%) of the gross rentals or fees.<\/p>\n<p>The rental income of the non-resident Lessor may be exempt from Philippine taxes if the franchise of the Lessee so provides, under such terms provided by the franchise, <em>e.g<\/em>., assumption by the Lessee of such cost.<\/p>\n<p>The income tax on the rentals earned by a non-resident Lessor of the Aircraft may also be exempt from Philippine taxation in accordance with the provisions of an applicable tax treaty between the Philippines and the country where the Lessor is domiciled. To avail of such tax treaty exemption, the non-resident Lessor will have to obtain confirmation from the BIR by filing a Tax Treaty Relief Application.<\/p>\n<p>For other payments made to the lessor under the lease {other than rental income or indemnification of actual losses incurred by a lessor) derived from sources within the Philippines, a non-resident foreign corporation is generally subject to income tax at the rate of 25% of the gross income received, which is withheld at source.<\/p>\n<p>Philippine taxation employs the final withholding tax system on income earned by non-resident foreign corporations not engaged in trade or business in the Philippines. Under the final withholding tax system, the amount of income tax due on the income is withheld by a withholding agent (i.e., the payor of income or the lessee). The tax withheld by lessee as such withholding agent is constituted as a full and final payment of the income tax due from the payee on the said income.<\/p>\n<p>The liability for payment of the tax rests primarily on the payor as a withholding agent. In case of its failure to withhold the tax or in case of under with holding, the payor\/withholding agent is liable for the deficiency tax<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Would a sale of an aircraft in your jurisdiction incur sales tax? Please also provide details of amount or calculation and any steps usually taken to mitigate this<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under Philippine tax laws, only a &#8220;person who, in the course of trade or business, sells, barters, exchanges, leases goods or properties, renders services, and any person who imports goods,&#8221; are liable for VAT. The term &#8220;in the course of trade or business&#8221; means &#8220;the regular conduct or pursuit of a commercial or economic activity, including transactions incidental thereto, by any person.&#8221;<\/p>\n<p>Generally, a contract of sale perfected and consummated in the Philippines will give rise to a taxable event, which will subject the transaction or the parties thereto to the taxing authority of the Philippines. Notably, the sale of the Aircraft, including its engine, equipment, and spare parts, for domestic or international transport operations is VAT-exempt. If the seller is not engaged in trade or business in the Philippines, a transfer of the Aircraft while outside of Philippine airspace will not give rise to transfer taxes, VAT, or withholding taxes. A sale and purchase of the Aircraft does not attract documentary stamp taxes or any other transfer fees.<\/p>\n<p>However, note that if a transfer of the Aircraft is made while the Aircraft is in the Philippines or within Philippine airspace, the seller may be held liable for income taxes and other taxes or fees associated with a transfer of the Aircraft, even if the seller is not considered as engaged in trade or business in the Philippines. The BIR has ruled that:<\/p>\n<ul>\n<li>Corollary, Section 159 of Regulations No. 2, otherwise known as the Income Tax Regulations, provides that income derived from the purchase and sale of personal property shall be treated as derived entirely from the country in which sold. The word &#8216;sold&#8217; includes &#8216;exchange&#8217;. The &#8216;country&#8217; in which &#8216;sold&#8217; ordinarily means the place where the property is marketed.<\/li>\n<li>It is clear from the above-mentioned section that income derived from the sale of personal property except shares of stock shall be taxable in the country in which sold. This is true, considering that under the requisites or limitations on the power of taxation, person, property or interest taxed must be within the jurisdiction of the taxing authority.<\/li>\n<\/ul>\n<p>Thus, parties to the sale and purchase of the aircraft may wish to ensure that the transfer of the Aircraft is perfected and completed offshore in order to minimize, if not altogether avoid, the application of Philippine income tax laws to the transaction.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any restrictions on the import or export of aircraft in your jurisdiction and would such importation or exportation incur any liability as to customs or taxes? Please also state if any consents or approvals are required and the procedural steps taken to obtain these, and any procedural steps or formality requirements to mitigate any taxes<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The Importation or lease of passenger or cargo vessels and aircraft, including engine, equipment, and spare parts for domestic or international transport operations, are exempt from VAT.<\/p>\n<p>According to Section 800 of the CMTA, aircraft and such other goods or supplies imported by and for the use of scheduled airlines operating under congressional franchise which are:<br \/>\n(a) not locally available in reasonable quantity, quality and price and (b) are necessary or incidental to the proper operation of the scheduled airline importing the same, are exempt from the payment of import duties upon compliance with the formalities prescribed in the regulations promulgated by the Customs Commissioner. Particularly, these importations must secure a Tax Exemption Endorsement from the Department of Finance-Revenue Office pursuant to Customs Administrative Order No. 6-2020.<\/p>\n<p>There are no duties payable for the export of an aircraft.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any foreign exchange restrictions on transfers of funds<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, cross-border transfers of Philippine pesos and foreign currencies are regulated in the Philippines. However, Philippine foreign exchange regulations have been liberalized such that generally, authorized agent banks in the Philippines may sell foreign currency for non-trade purposes to a Philippine resident without the prior approval of the <em>Bangko Sentral ng Pilipinas<\/em> (the &#8220;BSP&#8221;, our central monetary authority). Thus, the Lessee may purchase foreign currency from the Philippine banking system to service rental payments, without need of prior approval from the BSP.<\/p>\n<p>However, to purchase amounts in excess of USDl,000,000, the Application to Purchase Foreign Exchange must be accompanied by supporting documents. For charters and leases of vessels\/aircraft, it must be supported by (a) the billing statement from the non-resident lessor\/owner of the vessel\/aircraft and (b) a photocopy of the contract\/agreement.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How successful have foreign creditors and lessors been in enforcing their security and lessor rights over and successfully repossessing aircraft in a timely manner?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Based on our firm&#8217;s experience, owners and lessors have been able to successfully process the repossession, deregistration, and export of aircraft upon the termination or expiration of operation leases. However, the said processes require the cooperation of the aircraft operators as certain information and documents that are required by the government agencies are with the aircraft operators. While making use of a power of attorney is recognized, using one (without the operator&#8217;s cooperation) may be chalie nging since government agencies still sometimes require confirmation from the operator that they consent to the acts being done using the powerof attorney. This is because the operator is the entity identified in various government documents and registrations with respect to the aircraft.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What government led reforms affecting creditor and lessor rights are currently underway in the aviation sector in your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>None as of now.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Please describe any interesting legal development in your jurisdiction (for instance, decided court cases or arbitral awards) which affect creditor and lessor rights?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>None.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Please discuss any relevant governmental regulations implemented in your country to help alleviate the financial and other difficulties faced by airlines in your jurisdiction caused by CoVid 19 and whether that will impact rights of lessors (who lease aircraft to the airlines) and lenders (who finance such aircraft which are mortgaged in favour of the lenders)? Are such governmental regulations expected to be in place until the difficulties faced by airlines caused by the CoVid 19 subside or are they more long term?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Some measures that were implemented during the COVID-19 pandemic included (i} CAAP extending the validity period of Certificates of Airworthiness of registered aircraft until March 21, 2022, and (ii} CAAP waiving airport concession rental charges for 2022 pursuant to the authority granted under Republic Act No. 11494 or the Bayanihan to Recover as One Act (Bayanihan II}. However, these measures have since been lifted. As of date, there are no longer any remaining considerations for aircraft lessors or creditors that have been granted by the CAAP or other government agencies to help alleviate the effects of the COVID-19 pandemic.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\r\n<div class=\"word-count-hidden\" style=\"display:none;\">Estimated word count: <span class=\"word-count\">7690<\/span><\/div>\r\n\r\n\t\t\t<\/ol>\r\n\r\n<script type=\"text\/javascript\" src=\"\/wp-content\/themes\/twentyseventeen\/src\/jquery\/components\/filter-guides.js\" async><\/script><\/div>"}},"_links":{"self":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide\/121420","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide"}],"about":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/types\/comparative_guide"}],"wp:attachment":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/media?parent=121420"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}