Revolving Promissory Note Template for Philippines

The Revolving Promissory Note is a crucial financial instrument used in the Philippine business environment when parties need to establish a flexible borrowing arrangement. It is particularly useful for businesses requiring ongoing access to credit for working capital, inventory financing, or operational expenses. The document provides a legal framework compliant with Philippine banking and commercial laws, including the New Central Bank Act and the Truth in Lending Act. It details the revolving credit mechanism, allowing borrowers to draw down funds multiple times up to an approved limit, make repayments, and re-borrow the repaid amounts. This type of promissory note typically includes specific provisions for interest calculations, drawdown procedures, repayment terms, security arrangements (if any), and events of default, all structured to meet BSP requirements and local commercial practices.

1. Parties: Identification of the Maker/Borrower and the Payee/Lender, including complete legal names, addresses, and tax identification numbers

2. Background: Brief context of the revolving credit arrangement and the purpose of the facility

3. Definitions: Key terms used throughout the document, including 'Facility Amount', 'Interest Rate', 'Draw Down', 'Repayment Date', etc.

4. Facility Amount and Nature: Specification of the maximum credit limit and the revolving nature of the facility

5. Interest Rate and Computation: Details of the applicable interest rate, calculation method, and payment periods

6. Draw Down Mechanics: Procedures and conditions for drawing down funds under the revolving facility

7. Repayment Terms: Schedule and methods of repayment, including minimum payments and revolving credit provisions

8. Events of Default: Circumstances that constitute default and their consequences

9. Representations and Warranties: Standard declarations by the Maker regarding their capacity and authority to enter into the agreement

10. Governing Law and Jurisdiction: Specification of Philippine law as governing law and designation of courts having jurisdiction