PHILIPPINES Law and Practice Contributed by: Patricia A O Bunye, Anica Angela G Gomez, Angel Rae N Balbin and Bianca Marie J Angela M Rañola, Cruz Marcelo & Tenefrancia
10.2 Electronic Signatures Contracts shall be obligatory in whatever form they may have been entered into, provided all the essential requisites for their validity under Article 1318 of the Civil Code are present. Moreover, the use of electronic signatures is valid and recognised under the E-Com - merce Act. To date, there is no existing jurisprudence where the due execution or authenticity of a digitally signed contract is in issue. 10.3 Stamp Duties A documentary stamp tax (DST) is imposed on certain documents, instruments, loan agreements and papers that evidence the acceptance, assignment, sale or transfer of an obligation, right or property. The tax is levied on the document itself because it evidences a transaction or legal relationship. DST is generally paid by the person making, signing, issuing, accepting or transferring the instrument, but all parties to the transaction may be held liable, and they may agree among themselves on who will shoul - der the cost. However, since the franchise agreement qualifies as a TTA, Section 88.4 of the IP Code man - dates that all Philippine taxes related to the arrange - ment must be borne by the licensor.
Since the franchise agreement qualifies as a TTA, Sec - tion 88.4 of the IP Code mandates that all Philippine taxes related to the arrangement must be borne by the licensor. 9.3 Foreign Currency Controls There are currently no laws or regulations that poten - tially hinder the payment of franchise fees in foreign currency. Generally, monetary obligations in the Philip - pines must be settled in Philippine currency, which is legal tender in the Philippines, unless the contracting parties stipulate that foreign currencies may be used for settling obligations (Section 1, Republic Act No 8183). 10. Execution Formalities 10.1 Authentication, Notarisation, Witnessing, Etc Since franchise agreements are essentially governed by the law on contracts under the Civil Code, the agreement shall be valid and binding among the par - ties regardless of its form. However, should the par - ties desire that the agreement be valid and binding with respect to third persons, the document should be notarised if executed in the Philippines and apostilled if executed abroad.
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