Currency in Which a Trust Receipt May Be Denominated

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Alburo Law
May 15, 2026

Section 3(j) of Presidential Decree No. 115 provides that “Trust Receipt” shall refer to the written or printed document signed by the entrustee in favor of the entruster containing terms and conditions substantially complying with the provisions of this Decree. No further formality of execution or authentication shall be necessary to the validity of a trust receipt.

In commercial practice, a trust receipt is more than a routine banking document, it is a vital tool that sustains the flow of goods in trade. It enables importers and retail dealers, particularly those with limited capital, to acquire merchandise by using the goods themselves as collateral.

What Law Governs Trust Receipts? 

Trust receipts transactions are governed by Presidential Decree No. 115, which lays down the legal framework for their creation, use, and enforcement. The law underscores the importance of trust receipts in supporting both domestic and commerce and international trade.

Currency of Denomination: What Does the Law Allow? 

A recurring question in commercial transactions is: In what currency may a trust receipt be denominated?

Under Section 6 of Presidential Decree No. 115, a trust receipt may be denominated in:

Section 6. Currency in which a trust receipt may be denominated. A trust receipt may be denominated in the Philippine currency or any foreign currency acceptable and eligible as part of international reserves of the Philippines, the provisions of existing law, executive orders, rules and regulations to the contrary notwithstanding: xxx

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The Supreme Court held that the rule is that where the contract is illegal and constitutes a criminal offense, and both parties are in pari delicto or ‘in equal fault,’ the courts will leave them where they are found. This doctrine rests on the maxim ex dolo malo non oritur action, “no action arises from a wrongful cause,” and is designed to discourage illegal agreements by refusing judicial aid to either party.

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