Are electronic signatures legal in the Philippines? What are the main laws regulating electronic signatures?

Electronic signatures are legal in the Philippines. Electronic signatures in the Philippines are primarily governed by Republic Act No. 8792, otherwise known as the Electronic Commerce Act of 2000 (ECA), the Supreme Court's Rules on Electronic Evidence (REE), and Joint Administrative Order (JAO) No. 2 of the Department of Trade and Industry and the Department of Science and Technology.

What is an electronic signature in the Philippines?

Section 5(e) of the Electronic Commerce Act defines an "electronic signature" as: "any distinctive mark, characteristic and/or sound in electronic form, representing the identity of a person and attached to or logically associated with the electronic data message or electronic document."

What kind of electronic signature is valid in the Philippines?

Under the Electronic Commerce Act, an electronic signature is valid only if it meets the following conditions:

• The signature must conform to the definition of an electronic signature under the Electronic Commerce Act;

• There must be a prescribed method of signing that is not alterable by the parties interested in the electronic document;

• The signing method must identify the party sought to be bound and indicate that party's approval of the information contained in the electronic document to which the signature relates;

• The signing method is reliable and appropriate for the purpose for which the electronic document was generated or communicated, in light of all circumstances, including any relevant agreement;

• The party sought to be bound must have executed or provided the electronic signature for the purpose of authenticating or approving the electronic document; and

• The other party is authorized and able to verify the electronic signature and to make the decision to proceed with the transaction authenticated by the same electronic signature.

Non-compliance with the Electronic Commerce Act removes the presumption of enforceability and admissibility. However, an electronic signature not meeting these requirements may still be used to prove an individual's consent to a document they signed electronically. An electronic or digital signature authenticated under the Supreme Court's Rules on Electronic Evidence may be considered as a signature functionally equivalent to a signature on a written document.

What types of electronic signatures are recognised in the Philippines? What are the respective requirements for each?

The Philippines recognises two types of electronic signatures: electronic signatures and digital signatures.

1.Electronic Signature

Refers to any distinctive mark, characteristic and/or sound in electronic form, representing the identity of a person and attached to or logically associated with the electronic data message or electronic document.

2.Digital Signature

The REE define a "digital signature" as "an electronic signature consisting of a transformation of an electronic document or an electronic data message using an asymmetric or public cryptosystem such that a person having the initial untransformed electronic document and the signatory’s public key can accurately determine: (i) whether the transformation was created using the private key that corresponds to the signatory’s public key; and (ii) whether the initial electronic document had been altered after the transformation was made."

When an electronic or digital signature is authenticated under the REE, what are known as "disputable presumptions" arise. These presumptions are satisfactory in law unless they are contradicted and overcome by other evidence. Some apply to all electronic signatures, while others apply to digital signatures. They are:
(1) The electronic signature is that of the person to whom it correlates;
(2) That person affixed said electronic signature with the intention of authenticating or approving the electronic document to which it is related or to indicate such person’s consent to the transaction embodied therein; and
(3) The methods or processes used to affix or verify the electronic signature operated without error or fault.
(4) The digital signature is that of the person to whom it correlates;
(5) That person affixed said digital signature with the intention of authenticating or approving the electronic document to which it is related or to indicate such person’s consent to the transaction embodied therein;
(6) The methods or processes used to affix or verify the digital signature operated without error or fault;
(7) The information contained in the certificate is correct;
(8) The digital signature was created during the operational period of the certificate;
(9) No cause exists to render the certificate invalid or revocable;
(10) The message associated with the digital signature has not been altered from the time of signing; and
(11) The certificate was issued by the certification authority indicated therein.

The ECA applies separate requirements for international electronic communications. Cross-border electronic communications or contracts are considered "signed" if a method is used to identify a party and to indicate that party's approval of the information contained in the electronic communication. The method must be reliable and appropriate for the purpose for which the communication was generated or communicated.

In which situations in the Philippines must traditional (wet-ink) signatures be used?

Traditional signatures must be used for the following instruments or in the following scenarios:
Documents required by law to be notarised, or where parties require notarisation, generally cannot be signed in electronic form. These include:
 

• Partnership contracts which contribute immovable property or real rights.

• Donations of immovable property.

• An agent's authority to sell land or any interest therein (Special Power of Attorney).

• Patent royalty agreements involving the assignment of patents or patent applications.

• Subordinated loan agreements, i.e., agreements evidencing or governing the subordinated borrowing of cash by broker-dealers. This requirement applies to all subordinated loan agreements between a lender and a broker-dealer.

• Secured demand notes, i.e., a secured demand note evidences the contribution of a secured demand note to a broker-dealer and the pledge of securities and/or cash by the lender to the broker-dealer as collateral for the payment of such secured demand note.

• Applications for registration of securities with the Securities and Exchange Commission ("SEC") (Form 12-1), where every prospectus must also be subscribed under oath by the issuer.

• Several corporate documents submitted to the SEC, such as Articles of Incorporation, Voting Trust Agreements, applications for a license to do business in the Philippines filed by foreign corporations, General Information Sheets, applications for registration of securities (Form 12-1), and reports and forms submitted by banks to the Bangko Sentral ng Pilipinas (Central Bank of the Philippines).

• Powers of attorney issued by brokers and dealers; Tax returns.

• The waiver, disclaimer, or renunciation of hereditary rights or of the conjugal partnership of gains.

• The power of an agent for acts that are required to appear in a public document, or which are intended to prejudice third parties.

• The cession of actions or rights proceeding from an act appearing in a public document.

• The assignment of credits, rights or actions shall produce no effect as against third persons (though it remains valid between the parties) unless it appears in a public instrument, or, if the assignment involves real property, the instrument is recorded in the Registry of Property.