Finance Contract for Philippines

Finance Contract Template for Philippines

A Finance Contract governed by Philippine law is a comprehensive legal agreement that establishes the terms and conditions of a financial facility between a lender and borrower. The document incorporates requirements from the Civil Code of the Philippines, banking regulations issued by the Bangko Sentral ng Pilipinas, and relevant financial services legislation. It details loan amount, interest rates, repayment terms, security arrangements, borrower obligations, events of default, and remedies while ensuring compliance with local truth-in-lending laws and consumer protection regulations.

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What is a Finance Contract?

The Finance Contract serves as the primary documentation for lending arrangements in the Philippines, whether for corporate financing, project development, or personal loans. It is essential for establishing legally binding financial relationships while ensuring compliance with Philippine banking regulations, including the General Banking Law of 2000 and BSP circulars. The document typically includes comprehensive details about the facility, security arrangements, borrower obligations, and lender's rights, while incorporating mandatory provisions required by Philippine law. This contract type is crucial for financial institutions and borrowers to document their lending relationship, manage risks, and ensure enforceability of their rights and obligations. It should be tailored to specific transaction requirements while maintaining compliance with local regulatory requirements, including those related to interest rate calculations, fees, and mandatory disclosures.

What sections should be included in a Finance Contract?

1. Parties: Identifies and defines the lender, borrower, and any guarantors with their complete legal details

2. Background: Explains the context of the financing arrangement and purpose of the loan

3. Definitions: Defines key terms used throughout the agreement including financial terms, dates, and technical terminology

4. Facility Details: Specifies the type, amount, and purpose of the financial facility being provided

5. Interest and Fees: Details the interest rate, calculation method, fees, charges, and payment terms

6. Drawdown: Specifies conditions and procedures for accessing the loan funds

7. Repayment Terms: Outlines the repayment schedule, methods, and prepayment provisions

8. Representations and Warranties: States the legal and factual assertions made by the borrower

9. Borrower Covenants: Lists positive and negative obligations of the borrower during the loan term

10. Events of Default: Defines circumstances constituting default and consequences thereof

11. Remedies: Outlines the lender's rights and remedies upon default

12. Governing Law and Jurisdiction: Specifies Philippine law as governing law and defines jurisdiction for disputes

13. Notices: Details how formal communications between parties should be made

14. Execution: Signature blocks and execution formalities

What sections are optional to include in a Finance Contract?

1. Security Arrangements: Required when the loan is secured by collateral, detailing the security structure and enforcement rights

2. Guarantees: Needed when third-party guarantees are part of the financing structure

3. Insurance Requirements: Required when specific insurance coverage is mandatory for the loan

4. Assignment and Transfer: Include when the lender wants the right to assign or transfer the loan

5. Conditions Subsequent: Include when certain conditions must be fulfilled after initial drawdown

6. Tax Provisions: Detailed section needed for corporate borrowers or complex financing structures

7. Regulatory Compliance: Enhanced section needed for regulated borrowers or specific industry requirements

8. Change of Control: Required for corporate borrowers to address ownership changes

What schedules should be included in a Finance Contract?

1. Drawdown Notice Form: Template for borrower to request loan disbursement

2. Repayment Schedule: Detailed amortization table showing payment dates and amounts

3. Security Details: Detailed description of collateral and security arrangements

4. Conditions Precedent Documents: List of required documents before loan disbursement

5. Fee Schedule: Detailed breakdown of all applicable fees and charges

6. Compliance Certificates: Templates for periodic compliance reporting

7. Insurance Requirements: Detailed specifications of required insurance coverage

8. Financial Covenants Calculations: Formulas and methods for calculating financial covenants

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Philippines

Publisher

Genie AI

Document Type

Finance Agreement

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Banking and Financial Services

Real Estate and Property Development

Manufacturing

Retail and Commerce

Agriculture

Technology and Telecommunications

Infrastructure and Construction

Energy and Utilities

Healthcare

Education

Transportation and Logistics

Mining and Natural Resources

Relevant Teams

Legal

Finance

Treasury

Compliance

Risk Management

Credit Administration

Corporate Secretariat

Business Development

Project Finance

Operations

Documentation

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Legal Counsel

Compliance Officer

Risk Manager

Credit Manager

Corporate Secretary

Financial Controller

Banking Relationship Manager

Loan Officer

Contract Administrator

Business Development Manager

Project Finance Manager

Corporate Finance Manager

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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