eSignature Legality & Law in The Philippines

The legality overview

Electronic signatures are legally recognized in the Philippines under The E-Commerce Act and its implementing rules, which broadly regulate the use of electronic records and signatures.

This legislation governs the use of electronic records and signatures across commercial and non-commercial activities. It establishes electronic documents as the legal equivalent of paper documents and electronic signatures as the equivalent of handwritten signatures, ensuring their enforceability in contracts and transactions.

The key aspects of this regulation include:

1. Scope of Application

Covers data messages, electronic documents, contracts of carriage of goods, and government transactions, including those with government-owned or controlled corporations.

2. International Framework

Since 2023, the Philippines has implemented the United Nations Convention on the Use of Electronic Communications in International Contracts (ECC), applicable to international commercial transactions between parties in the Philippines and ECC-ratified states.

3. Regulatory Framework

The Department of Trade and Industry and the Department of Science and Technology’s Joint Administrative Order No. 2 (JAO) promote the use of digital signatures backed by certificates from trusted service providers, with a Public Key Infrastructure (PKI) for secure authentication.

4. Judicial Guidance

The Supreme Court’s Rules on Electronic Evidence (REE) govern the admissibility and authentication of electronic documents and signatures in legal proceedings.

Types of eSignature used

The Philippines recognizes two main types of electronic signatures under its legal framework: electronic signatures and digital signatures, with the latter being a specific, more enhanced form.

Electronic signatures

An electronic signature is defined under the E-Commerce Act as any distinctive mark, characteristic, or sound in electronic form that represents a person’s identity and is associated with an electronic document or data. It must be executed or adopted with the intent of authenticating or approving the document. Examples include typed names, scanned signatures, or even voice recordings.

For an electronic signature to be valid under Philippine law, it must:

• Identify the signatory and confirm their access to the electronic document.
• Use a reliable and appropriate method suited to the document’s purpose.
• Require the signatory’s consent or approval to proceed with the transaction.
• Enable the other party to verify the signature and proceed with the transaction.

Digital signatures

A digital signature is a subset of electronic signatures defined under the Supreme Court’s Rules on Electronic Evidence (REE). It uses cryptographic methods, specifically asymmetric or public key cryptosystems, to transform an electronic document. This ensures:

1. Verification that the signature was created using the signer’s private key; and
2. Confirmation that the document remains unaltered after the signature was applied.

Digital signatures have additional legal strength due to their association with certificates issued by trusted service providers under the Philippine National Public Key Infrastructure (PKI) system. PKI ensures enhanced reliability and authenticity through proper issuance and management of digital certificates.

Presumptions of validity

When authenticated under the REE, both electronic and digital signatures carry validity presumptions, including:

• The signature belongs to the person it correlates to.
• The signature was signed with the intent to authenticate or approve the electronic document.
• The methods used for signing and verifying the signature operated without error.

As for digital signatures, additional presumptions include:

• The associated certificate contains accurate information.
• The signature was created during the certificate’s operational period and remains unaltered.

Permitted usages in the Philippines

Electronic signatures can be used for most commercial and non-commercial transactions, both domestic and international. These include contracts, agreements, arrangements, exchanges, and the storage of information, as long as there is no specific legal requirement for traditional signatures or notarization. The E-Commerce Act covers all forms of electronic records, meaning that an electronic signature is valid for any data message or electronic document, including contracts and transactions.

The use of electronic signatures is permitted unless Philippine law explicitly requires compliance with certain formalities that cannot be performed electronically (e.g., notarization).

While electronic signatures are generally accepted, there are specific situations where a traditional “wet” signature is required. These cases typically involve documents that are mandated by law to be notarized:

• Contracts of partnership involving immovable property or real rights (Civil Code, Art. 1771)
• Donation of immovable property (Civil Code, Art. 749)
• Special power of attorney for the sale of land or real property (Civil Code, Art. 1874)
• Royalty agreements related to patents (Intellectual Property Code, Sec. 105)
• Subordinated loan agreements (Securities Regulation Code, Rule 49.1)
• Secured demand notes (Securities Regulation Code, Rule 49.1)
• Corporate documents filed with the Securities and Exchange Commission (e.g., articles of incorporation, general information sheets)
• Proxies issued by brokers and dealers (Securities Regulation Code, Rule 20(11))
• Tax returns – Cession, repudiation, or renunciation of hereditary rights (Civil Code, Art. 1358)