Time to enact a new Warehouse Receipts Law

The House of Representatives took a step closer to updating the archaic Warehouse Receipts Law, also known as Act No. 2137, that was enacted by the Philippine Legislature “by authority of the United States” in 1912 or 111 years ago. It approved last week on third and final reading House Bill (HB) No. 198 or the Revised Warehouse Receipts Law of the Philippines.

A legal researcher who reviews this law will realize why it has stood the test of time. It is written simply and clearly. It does not use complex or convoluted language. It provides a comprehensive enumeration of the forms of receipts and essential terms used in transactions involving warehouse receipts. Consider this excerpt —

SEC 2. Form of receipts; Essential terms.—Warehouse receipts need not be in any particular form, but every such receipt must embody within its written or printed terms— (a) The location of the warehouse where the goods are stored; (b) The date of issue of the receipt; (c) The consecutive number of the receipt; (d) A statement whether the goods received will be delivered to the bearer, to a specified person, or to a specified person or his order; (e)  The rate of storage charges; (f) A description of the goods or of the packages containing them; g) The signature of the warehouseman, which may be made by his authorized agent…”

Alas and alack, digital transformation has brought about significant changes. Consider for instance the operations of a Philippine multinational, International Container Terminal Services, inc. (ICTSI). A port management firm headquartered in Manila, it is the eighth largest in the world in terms of volume handled, operating 34 terminals in 20 countries.
In August 2022, the firm launched the ICTSI App that enables users to gain real-time “access to the company’s newest digital services (and allows them to) monitor trucks, containers and vessels, as well as view payment estimates from corresponding ICTSI terminals in advance.”

The bill passed by the House seeks to promote economic activity by increasing access – particularly for entities engaged in agricultural activities such as farming – to the least cost of credit through the establishment of a simplified, unified and modern warehouse receipts framework for the storage of goods in warehouses and the succeeding trading of interests therein. According to House Speaker Ferdinand Martin Romualdez:

“We envision this measure to help farmers, agricultural workers and those in the sector of agriculture obtain greater access to credit by revising and modernizing the law. The House of Representatives has spent sufficient time deliberating on this and I am confident we crafted an outstanding measure.”

The bill requires a counterpart measure in the Senate for enactment into a new Republic Act upon approval and signature of the President of the Philippines. Clearly, this is a vital legislative measure that should be enacted as soon as possible to update the legal framework and ensure efficient delivery of real-time services.

Credit belongs to : www.mb.com.ph