Regulation of Pawnshops Operation in PH

"Pawnshop" means any person or entity engaged in lending money on personal property delivered as security.
"Pawner" refers to the borrower from a pawnshop.
"Pawnee" is the pawnshop or pawnbroker.
"Pawn" is the personal property given as security for a loan.
"Pawn ticket" is the pawnbroker's receipt for the pawn; not an evidence of indebtedness.
"Property" means personal property delivered into the pawnshop’s possession, excluding prohibited items like guns or knives.

Pawnshops may be established as sole proprietorships, partnerships, or corporations.

Pawnshops must register with the Bureau of Commerce for sole proprietorships or with the Securities and Exchange Commission for corporations or associations.
Licensing is required from the local city or municipal government where the pawnshop operates.

Pawnshops must file a sworn information sheet with the Central Bank before starting operations.
Existing pawnshops at the Decree’s effectivity had a six-month period to comply.

New pawnshops must have at least P100,000 minimum paid-in capital.
Existing pawnshops were given a grace period of at least three years to meet the capitalization standards.

Sole proprietorship pawnshops must be owned by Filipino citizens.
Partnerships must be at least 70% Filipino-owned.
Corporations must have at least 70% voting stock owned by Filipino citizens.
Foreign ownership exceeding 30% was restricted from increasing and may be reduced.

Loans must be at least 30% of the appraised value of the collateral unless the pawner agrees in writing to a lesser amount.

Pawnshops must keep a memorandum book with details of each loan: description, amount, interest rate, dates, and pawner identification.
Entries must be in ink and not erased or altered.
Pawners must sign or thumbmark the record.

Pawnshops are required to issue a pawn ticket reflecting the transaction's essential details.
Pawn tickets cannot entail any compensation or fees.

Pawners have 90 days from maturity to redeem the pawn by paying principal and interest.
Interest after maturity is computed on the sum of principal and accrued interest.

After 90 days' non-redemption, pawnshops may sell the items.
Pawners must be notified before sale, stating the time, date, and place of sale.

Sales must occur at a public auction at the pawnshop or other public place within the local jurisdiction.
Auctioneers must be licensed.
Notices must be published in two daily newspapers or posted publicly for remote areas.
Notices must include essential details and be in English and local language.

Pawnshops cannot close or transfer business within three months after the last pawn's disposal or redemption period.
Transfers within the same locality require newspaper notices in English and local dialect for at least three days, and conspicuous postings at old and new locations.

Violations may be punished by fines between P100 to P1,000, imprisonment from 30 days to one year, or both.
If a corporation or partnership commits offenses, responsible officers or employees are liable.
Civil liabilities for damages remain separate from criminal penalties.

Existing laws apply to matters not specifically covered by this Decree unless they conflict.

Invalidity of any part of the Decree does not affect other provisions or their applications.

The Central Bank issued Circular No. 374 (July 13, 1973) for rules governing pawnshops.
Circular No. 381 (September 17, 1973) prescribes procedures for processing complaints against pawnshops.