Latest Issuances Related to Electronic and Digital Signatures from the Philippine Government
The E-Commerce Act of 2000 allows the use of electronic and digital signatures in the Philippines. As long as the electronic signature and the method on how it is secured are in compliance with the requirements of the law, it will become legal, binding, and can be presented as evidence in any legal dispute in courts.
With the challenges presented by the pandemic regarding the physical and manual signing of documents, many businesses and organizations are planning to switch to the use of electronic or digital signatures in their transactions. However, there are a lot of questions around if the government agencies will accept them or at least have processes or rules in place — since a lot of documents indeed need to be submitted to them. Below, you will find several government agencies and their pronouncement, memoranda, issuance, and general guidelines on the use of electronic and digital signatures.
Anti-Red Tape Authority (ARTA)
The Anti-Red Tape Authority or the ARTA, under the Office of the President, released a memorandum as early as August 2020 to allow government agencies to transform their transactions with the department digitally. They patterned the memorandum from Republic Act №11032 or the Ease of Doing Business and Efficient Government Service Delivery Act of 2018. Such act empowered ARTA to act, where necessary, to ensure the timely and efficient delivery of government services and to recommend policies, processes, and systems to improve regulatory management to increase the productivity, efficiency, and effectiveness of business permitting and licensing agencies, and provide technical assistance and advisory opinions in the review of existing procedures to ensure timely delivery of services to the public.
The memorandum was issued to all government agencies and local government units to provide simplified, streamlines, and automated standards, measures, and procedures to be adopted by all covered agencies in delivering efficient and hazard-free government services under the New Normal.
One of the recommendations of ARTA to simplify, streamline, and automate the systems of government agencies is to set up an online processing system for accepting applications for permits, licenses, clearances and to adopt electronic versions of such. These should have the same level of authority as that of the signer hard copy, and which may be printed by the applicants or requesting parties in the convenience of their offices.
The government agencies must likewise accept electronic copies of the documentary requirements, including photographs, in place of hard copies, unless a hard copy of the requirement is required by law.
Further, the memorandum directed government agencies to avail of and recognize the use of the Philippine National Public Key Infrastructure (PNPKI) of the Department of Information and Communication Technology (DICT), which utilizes digital signatures in signing official documents. Aside from PNPKI, government agencies may also avail of other means to digitally sign official documents, licenses, and permits being offered by private entities provided it follows the requirements of the DICT and the E-Commerce Act of 2000 on the use of electronic or digital signatures.
You may view the full memorandum here: https://arta.gov.ph/wp-content/uploads/2020/10/mc_2020-06.pdf.
Commission on Audit (COA)
The Commission on Audit (COA) released circular 2021–006 on September 6, 2021, and it speaks of the guidelines on the use of Electronic Documents, Electronic Signatures, and Digital Signatures in Government Transactions. The Commission released such a circular as they recognized the increasing significance of technology resulting in the government’s paradigm shift from manual to electronic or automated processing of transactions. COA added that this Circular shall prescribe guidance on the use of electronic signatures for accountability purposes to resolve doubts over the reliability of information to be used as audit evidence.
COA listed the three general principles and guidelines which are:
- Submission of electronic documents with electronic signatures (including digital signatures) following the rules in this Circular, shall mean sufficient compliance to the requirement of submission of duly signed document as any other duly signed paper document used in government transactions.
- When under existing rules a document requires a signature, the use of electronic signature (including digital signature) on the electronic document shall be an accepted alternative and shall be equivalent to the signature of a person on a written document such as, but not limited to, procurementrelated documents, Disbursement Vouchers, Requisition and Issuance Slips, Purchase Orders, Contracts, and Memoranda among others.
- Private parties involved in transactions with government, in the absence of a digital certificate, may use other types of electronic signature, subject to the controls implemented by the transacting government entity.
COA also listed the guidelines on the use of digital signatures mainly from the Department of Information Communications Technology (DICT) — Philippine National Public Key Infrastructure (PNPKI) and the specific guidelines on the use of Electronic Signature (other than Digital Signature).
Specific Guidelines on the use of Electronic Signature (other than Digital Signature)
When the officer opts to use an electronic signature other than a digital signature on an electronic document, the signed electronic document may be validly accepted provided the agency is able to establish that:
a. the electronic signature is that of the person to whom it correlates;
b. the electronic signature was affixed by that person with the intention of authenticating or approving the electronic document to which it is related or to indicate such person’s consent to the transaction embodied therein;
c. the methods or processes utilized to affix or verify the electronic signature, if any, operated without error or fault; and
d. the person whose e-signature was affixed, takes responsibility and assumed accountability that the document remained unchanged until it was submitted to the auditor.
You may download the circular here: https://coa.gov.ph/wpfd_file/coa-circular-no-2021-006-september-6-2021/
Securities and Exchange Commission (SEC)
In an announcement last April 9, 2021, called the SEC Memorandum Circular №3, Series of 2021, the Securities and Exchange Commission (SEC) said that they are allowing corporations enrolled in their Online Submission Tool to submit electronically signed annual financial statements that ended on December 31, 2020, as well as for other fiscal years ending this 2021. The memorandum provided for the dates of filing for corporations with the fiscal year ending on December 31 in accordance with the last numerical digit of their SEC registration. For those that have other fiscal years ending this 2021, they should file their annual financial statements within 120 days from the end of their fiscal year.
By submitting their annual financial statements through the Online Submission Tool that the SEC recently launched, the corporations ensure that such documents are signed and officially submitted to the Commission through their authorized filers.
However, the memorandum said that SEC still requires the management and external auditors of the corporations that they have the manually signed annual financial statements ready and available upon the request or directive of the Commission. This mandate is pursuant to their supervisory and investigative authority and visitorial power under the Securities Regulation Code and Revise Corporation Code of the Philippines.
The move was brought about by the fact that Metro Manila and nearby provinces remained under enhanced community quarantine.
You may find the full announcement here:
Bureau of Internal Revenue (BIR)
The Bureau of Internal Revenue (BIR) released their Revenue Memorandum Circular №29–2021 to make it known to the public that they have certain forms and certificates that can be signed electronically and digitally.
These forms are the following:
a. BIR Form №2304 — Certificate of Income Payment not Subject to Withholding Tax (Excluding Compensation Income)
b. BIR Form №2306 — Certificate of Final Tax Withheld at Source
c. BIR Form №2307 — Certificate of Creditable Tax Withheld at Source
d. BIR Form №2316 — Certificate of Compensation Payment/Tax Withheld
Under the latest circular by the BIR, agents, income payors, or their duly authorized representatives now have the option to use e-signatures even without prior approval from the BIR. The e-signature made on the certificates or forms will give rise to the following presumptions:
1. The e-signature is that of the person to whom it correlates;
2. The e-signature was affixed by that person with the intention of authenticating or approving the electronic document to which it is related or to indicate such person’s consent to the transaction embodied therein; and
3. The methods or processed utilized to affix or verify the e-signature operated without error or fault.
This memorandum circular was issued on February 26, 2021 and you may view the full version here:
Bangko Sentral ng Pilipinas (BSP)
The Bangko Sentral ng Pilipinas (BSP) released Resolution №440 last March 26, 2020, covering the operational relief measures for foreign exchange transactions under the Manual of Regulations on Foreign Exchange Transactions. The memorandum will remain effective for the duration of the declaration of community quarantine by the Office of the President, or as may be extended by the BSP.
Here, documentary requirements for the sale of Foreign Exchange by authorized agent banks or authorized agent banks forex corps may be submitted through electronic means. This includes documents issued by the BSP that need to be submitted or presented in hard copy to the Foreign Exchange selling institutions.
Provided, however, that the transmittal be done through official e-mails or electronic or digital channels or systems, the transaction is still subject to the bank’s due diligence, “Know Your Customer,” and risk management policies, the authorized agent banks or authorized agent banks forex corps will adopt appropriate and prudent operational control measures, and the transaction will be duly reported to the BSP.
The documents with electronic and/or digital signatures, as well as the soft copies of accomplished forms or other documentary requirements without the electronic or digital signatures or required notarizations, may still be accepted by the BSP or Foreign Exchange selling or remitting institutions if it complies with the following:
a. The authorized signatory of such documents shall send these via official e-mail or electronic or digital channels or systems;
b. The authorized signatory shall send in a separate email an attestation that the document submitted (indicating the time, date, and subject of email) from the same e-mail address is authentic, was transmitted via official e-mail or electronic or digital channel or system, and it is available and may be submitted to the BSP or Foreign Exchange selling or remitting institution in hard copy of original or photocopy or duly notarized, as required under the Foreign Exchange manual.
Such authorized signatory shall submit these after the period covered by the Circular and/or as required by the BSP or the Foreign Exchange selling or remitting institution.
For the BSP-issued documents, the authorized agent banks or authorized agent banks forex corps shall verify with the BSP-International Operations Department (IOD) the authenticity of the copy of the electronically-issues document sent by the Foreign Exchange purchaser prior to the Foreign Exchange sale through email to the addresses listed below:
You may view the full resolution here:
https://www.bsp.gov.ph/Lists/Download%20Section/Attachments/112/c1080.pdf.
Department of Information and Communication Technology (DICT)
The Department of Information and Communication Technology (DICT) released a circular on April 2, 2020, which centers on the guidelines on the application and issuance of Philippine National Public Key Infrastructure (PNPKI) digital certificates for external clients during the state of public health emergency.
The PNPKI digital certificates will be given to various government agencies, private entities, and the public nationwide. For filing an application, DICT said that the applicant must download the Application Form at the DICT PNPKI website and attach the necessary documentary documents. After submitting the application form, the verification will be done online through video call platforms and once the verification process is done, that is when the digital certificates will be issued.
A PNPKI digital certificate authenticates the date source and ensures the data was not tampered with while in transit. It is also used to encrypt data like email or online transactions.
You may view the full circular here:
Philippine Overseas Employment Administration (POEA)
The Philippine Overseas Employment Administration or the POEA also released their Advisory №20, Series of 2021 last February. They pointed out that meetings held virtually can be signed digitally due to the limitations posed by the pandemic.
They said that they opted to use digital signatures since it also has the same effect as the written signatures as long as the requirements on identity, reliability, and consent are identified.
The advisory states that they will use digital signatures in their virtual hearings. The minutes will be signed electronically provided that the e-signature is registered under the Philippines National Public Key Infrastructure (PNPKI) of the DICT. Once it is registered to the DICT, it will become a digital signature, which is a secure form of e-signature as it is asymmetrically encrypted using a hash function and certified by an authority to be authentic and can be verified.
You may view the full advisory here:
https://www.poea.gov.ph/advisories/2021/Advisory-20-2021.pdf.
Department Of Trade And Industry (DTI) and Department of Science And Technology (DOST)
The Department of Trade and Industry (DTI) and the Department of Science and Technology (DOST) released a joint department administrative order even before the pandemic. This was issued on September 28, 2001. The administrative order provides the Implementing Rules and Regulation on electronic authentication and electronic signatures.
Under Section 5 of the administrative order, they mirrored how an electronic signature will become legally recognized as stated in the E-Commerce Act (ECA) of 2000 and the Implementing Rules and Regulation of the ECA. Section 5 states:
An electronic signature on the electronic document shall be equivalent to the signature of a person on a written document if that signature is proved by showing that a prescribed procedure, not alterable by the parties interested in the electronic document, existed under which:
a. A method is used to identify the party sought to be bound and to indicate said party’s access to the electronic document necessary for his consent or approval through the electronic signature;
b. Said method is reliable and appropriate for the purpose for which the electronic document was generated and communicated, in the light of all circumstances, including any relevant agreement;
c. It is necessary for the party sought to be bound, in order to proceed further with the transaction, to have executed or provided the electronic signature; and
d. The other party is authorized and enabled to verify the electronic signature, and to make the decision to proceed with the transaction authenticated by the same.
You may view the joint administrative order here:
https://www.lawphil.net/administ/jointdept/jdao_2_2001.html.
Department of Education (DepEd)
The Department of Education issued an order amending DepEd order №016, Series of 017. The amended order pertains to research management guidelines. Because of the pandemic, the order allows research-related activities and initiatives conducted virtually and/or remotely. Further, the order allows the use of digital signatures in their memorandum of agreement to ensure confidentiality, authenticity and integrity, and non-repudiation of electronic transactions.
The order also encourages offices to avail of and recognize the use of the Philippine National Public Key Infrastructure (PNPKI) or other means of digitally signing official documents being offered by private entities provided that they are compliant with the requirements of the E-Commerce Act of 2000.
You may view the full order here:
https://www.deped.gov.ph/wp-content/uploads/2021/06/DO_s2021_026.pdf.
University of the Philippines Diliman
The University of the Philippines Diliman, through its Data Protection Office, released an advisory on March 31, 2020, regarding affixing and acceptance of electronic signatures. It is an exhaustive explanation as to the legality and effectiveness of digital and electronic signatures in the Philippines.
You may view the full advisory here:
https://upd.edu.ph/wp-content/uploads/2020/04/Affixing-and-Acceptance-of-Electronic-Signatures.pdf.
Commission On Higher Education (CHED)
The Commission on Higher Education (CHED) released a Memorandum Order in 2020, which pertains to the interim policy on documentary submissions and mitigation measures for the scholarships for graduate studies during the pandemic. This memorandum was released in response to ARTA’s advisory regarding the adoption of fast-track measures during the pandemic, applicable to all government agencies.
Under Section 3.1 of the memorandum, it states that CHED will allow the submission of electronically signed, generated, validated, and/or submitted documents relating to the claims of living and other allowances, thesis/dissertation/capstone assistance, special requests, and other time-sensitive or urgent matters.
You can check out the full memorandum here:
Supreme Court (SC)
The Supreme Court released the Rules on Electronic Evidence last July 17, 2001, and it talks of the admissibility of electronic documents or electronic data message as evidence in court. Such rule applies to all civil actions as well as quasi-judicial and administrative cases.
The law provided under Rule 3:
Section 1. Electronic documents as functional equivalent of paper-based documents. — Whenever a rule of evidence refers to the term writing, document, record, instrument, memorandum or any other form of writing, such term shall be deemed to include an electronic document as defined in these Rules.
Section 2. Admissibility. — An electronic document is admissible in evidence if it complies with the rules on admissibility prescribed by the Rules of Court and related laws and is authenticated in the manner prescribed by these Rules.
Section 3. Privileged communication. — The confidential character of privileged communication is not lost solely on the ground that it is in the form of an electronic document.
It also provides provisions regarding electronic and digital signatures patterned from the Electronic Commerce Act of 2000.
You may read the full law here:
https://lawphil.net/courts/supreme/am/am_01-7-01_sc_2001.html.
Aside from the 2001 law, the Supreme Court likewise issued the 2020 Interim Rules on Remote Notarization of Paper Documents. The general rule is that there are documents that cannot be electronically and digitally signed because they need to be notarized to be valid and binding. The 2020 Interim Rules on Remote Notarization of Paper Documents allows the notarization of documents through video conferencing but only if either the notary public or the person seeking notarial service, or both, are residing, holding office, or located in an area under community quarantine. This applies only to paper documents and instruments with handwritten signatures or marks but not for the execution of notarial wills.
There are more rules to follow regarding Remote Notarization of Paper Documents under A.M. №20–07–04-SC and you can view it here: https://sc.judiciary.gov.ph/12490/.
With these laws, memoranda, orders, and advisories, it is clear that the Philippines is gearing towards digitalizing the processes and transactions of the government. In many of these orders, it stated that the use of a digital signature (compared to an ordinary electronic signature) is the best way to secure the validity, legality, and authenticity of an electronic signature and electronic documents.
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