Second, the dual registration system requires that some of Chattel`s mortgages be registered with the Clerk of Deeds in various provinces. [91] This system applies in two situations. The first is that the secured personal property is located in a province different from the province where the mortgage resides. In this case, Chattel`s mortgage must be registered in the deeds register of both provinces. The second is when the guaranteed assets include shares of a company. If the company`s head office or head office is located in a province other than the one where the Mortgagor resides, a double registration is required. [92] The dual registration requirement has been criticized for its cumbersome and cost-effectiveness, as it unnecessarily requires potential creditors to search the records of each province where a mortgage granted by the debtor could be registered. [93] Gilmore`s observation is also true in the Philippines. In Giberson, a chatl mortgage granted by a partnership against subsequent creditors was cancelled because it did not contain good faith sworn insurance, whereas the mortgagee clearly did not commit fraud. [49] However, this risk to creditors should not be overestimated. Today, it is rare to find a Chatl mortgage without such an affidavit. Nevertheless, its preservation is at odds with modern credit security documents. In the United States, for example, Article 9 of the Single Code of Commerce (revised) (hereafter the UCC) abolished the signing formalities and related sworn assurances.

It is true that in some developed economies in the Asian region,[50] there are laws such as the Bills of Sale Act and the Bills of Sale Ordinance[51] that require compliance with certain subscription-related formalities, but they are colonial legacies of the 19th century, and even in these cases, there are now demands for reform. [52] However, the rules for creating Chatl`s Mortgage Act are theoretically simple. Anyone can create a Chatl mortgage for the benefit of any other person to secure personal property, material and intangible property, both available and acquired; [41] A single set of creative rules applies to both business and non-business borrowers; and a single security terminology with different effects and consequences is systematically used to create non-proprietary security in all security transactions. These give the Chattel mortgage a modern twist and promote a simple approach to security repair on personal property, especially when contrasted with the non-owner security of the common law, infamous for its tedious process, detailed security schedules[42] and discrimination between business and non-professional borrowers. [43] The Chattel mortgage thus avoids certain complexities and anomalies that prevail in common law legal systems. [44] In this context, this paper examines whether there is now a reason to reform the Personal Property Security Act in the Philippines[29] and, if so, what model the Philippines should consider in reforming its existing structure. To this end, the basic criteria of the Asian Development Bank (`ADB`) are adopted to assess the effectiveness of the Philippines` credit security legal framework on four key points: the creation, perfection, advertising and implementation of the deposit, Chattel mortgages and the receipt of trust. The basic criteria of the ADB are: the Chattel mortgage therefore functions as the “floating link” in the United States, a security that “floats” on all current and future assets of the debtor. [23] [37] In England (the homeland of the common law), the “legal mortgage” itself has been criticized by academics and the courts.