Republic of the Philippines

HOUSE OF REPRESENTATIVES
Quezon City

18TH CONGRESS
First Regular Session

HOUSE RESOLUTION No. ___

Introduced by Representative Virgilio S. Lacson

AN ACT PROHIBITING THE PRACTICE OF ATM “SANGLA” SCHEME WHERE

THE BORROWER IS ASKED TO SURRENDER THEIR ATM PAYROLL CARD AS
COLLATERAL FOR A LOAN OR OTHER MONETARY OBLIGATION.
Be it enacted by the Senate and the House of representatives in the Philippines assembled
Sec. 1 Title. - This act shall be known as the Anti-ATM “Sangla” Act of 2020
Sec. 2. Declaration of State Policy.- It is hereby declared the policy of the State to
regulate the establishment and operation of lending entities, to prevent and mitigate, as
far as practicable , practices prejudicial to public interest; and to impose criminal
penalties to those who would undermine existing policies aimed at protecting our
public servants from unregulated lending practices.
Sec. 3 Definition of Terms. – As used in this Act
a.) “ATM Sangla scheme” refers to the practice of employees surrendering
their ATM payroll card as collateral for loans.
b.) “Borrower” means any person employed by a government agency,
including elected officials or appointed members of governing bodies who
wishes to take out a loan from a lending entity.
c.) “Lending Entity” Any artificial person engaged in making, purchasing,
holding or otherwise investing in commercial loans and similar extensions
of credit in the ordinary course of its business.
d.) “Unfair Trade Practice in Lending” refers to the use of deceptive,
fraudulent, or unethical methods to obtain business from borrowers. This
practice would include misrepresentation, false advertising, deceptive
pricing and non-accreditation with any government regulatory body.
Sec. 4 Prohibition on using ATM payroll card as collateral for loan. – It shall be
considered Unfair Trade Practice in Lending for Lending entities to require borrowers
to surrender their ATM Payroll card as collateral for a loan or any forbearance of
money. Such practice known as “ATM Sangla Scheme” is hereby prohibited.
Sec. 5 Penal Provision. Any Entity who engages in Unfair Trade Practice in Lending
under this act shall suffer imprisonment of not less than six (3) years and a fine of not
less than One Million Pesos (P1,000,000.00)
Sec. 6 Repealing Clause. - All laws, decrees, orders, rules and regulations or other
issuances or parts thereof inconsistent with the provisions of this Act are hereby
repealed and modified accordingly.
Sec. 7 Separability Clause.- If any clause, sentence, paragraph or part of this Act shall
be adjudged by any court of competent jurisdiction to be invalid, such judgement shall
not affect, impair or invalidate the remainder of this act, but shall be confined in its
operation to the clause, sentence, paragraph or part thereof directly involved.
Sec. 8 Effectivity. - This act shall take effect fifteen (15) days following the completion
of its publication either in the official gazette or in a newspaper of general circulation in
the Philippines.

Approved.