Philippines climbs in property rights ranking

The Philippines went up a notch to 83^rd out of 126 countries in the 2025 International Property Rights Index (IPRI) by think tank Property Rights Alliance.

Out of 10, the country scored 4.276, below the global average of 5.131 and remained the lowest among its peers in the East and Southeast Asian region.

The index measures property rights using three pillars: legal and political environment, physical property rights, and intellectual property rights.

The Philippines went up a notch to 83^rd out of 126 countries in the 2025 International Property Rights Index (IPRI)

Source: Business World

Your rights after death of your common law partner

Question: My common law wife was previously married, but never had her marriage annulled or nullified. Do I have a claim on the properties we acquired?

In the Philippines, your legal rights to properties acquired during your relationship with your common-law wife depend significantly on her marital status under the law. Here's a breakdown of the legal implications:

1. Her Marriage is Still Valid

If your common-law wife was legally married and never obtained an annulment or nullity of marriage, then:

• Her marriage is still considered valid and subsisting under Philippine law.

• Any relationship with another person (including you) is not legally recognized and is considered an adulterous or bigamous relationship, depending on the circumstances.

  
  

2. Properties Acquired During Your Cohabitation

If you acquired properties together during your 20-year relationship:

Presumption of Co-ownership (but limited)

Under Article 147 of the Family Code, co-ownership rights may apply only if both parties are legally free to marry (i.e., not legally married to someone else). But since she was not free to marry, Article 148 applies:

Article 148 (Family Code) — For relationships where one or both parties are married to someone else:

• Only the properties acquired through the actual joint contribution of money, property, or industry of both parties shall be owned in common in proportion to their contributions.

• You must prove your actual contribution (financial or work/labor).

• If you can show that you contributed to the acquisition, you may have a proportionate claim.

Important Caveats:

• You do not get automatic 50-50 co-ownership as you would in a legal marriage or a common-law union where both parties are free to marry.

• Properties solely in her name, and where you cannot prove contribution, may not be claimable.

What You Should Do:

1. Gather evidence:

   • Receipts, bank records, construction materials, or any proof of monetary or labor contribution.

   • Witness statements if you did substantial work or helped financially.

2. Consult a lawyer:

   • A lawyer can help assess whether you can file a civil case for partition or recovery of your share in properties under Article 148.

3. Avoid prescriptive period issues:

   • There are time limits for asserting claims in court (prescriptive periods), so acting quickly is important.

Summary:

• You may have a claim, but only for properties you helped acquire, and only in proportion to your proven contribution.

• Her existing marriage means your relationship is not protected under typical cohabitation laws.

• Legal help is highly recommended for documenting your contributions and asserting your rights.

Sale of Mortgaged Property to Creditor Per Se Is Not Prohibited

When dealing with mortgaged properties, many people assume that selling such assets to the creditor is legally prohibited. However, this is not necessarily the case. Under the right legal framework, the sale of a mortgaged property to the creditor is allowed, provided that it does not violate laws on foreclosure, dation in payment, or the prohibition against pactum commissorium.

How Mortgages Can Be Paid

A mortgage is a security interest granted over a property to secure the performance of an obligation, typically the repayment of a loan. The debtor can satisfy the mortgage in several ways:

1. Full Payment of the Loan – The most straightforward way to release the mortgage is by repaying the debt in full. Once the debt is fully paid, the creditor must execute a release of mortgage, which should then be registered with the relevant land registry.

2. Foreclosure Sale – If the debtor fails to pay, the creditor may initiate a foreclosure process to sell the property, either through a judicial or extrajudicial foreclosure proceeding. The proceeds from the sale are then used to settle the outstanding debt.

3. Dation in Payment (Dacion en Pago) – Instead of paying in cash, the debtor may transfer ownership of the mortgaged property to the creditor in satisfaction of the debt. This is a voluntary arrangement between both parties and is valid as long as it does not constitute a disguised pactum commissorium.

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Relationship Between Dation in Payment and Pactum Commissorium

Dation in Payment (Dacion en Pago)

Dation in payment occurs when the debtor transfers ownership of the mortgaged property to the creditor in exchange for the extinguishment of the debt. This is a negotiated and consensual agreement between both parties. The key difference between dation in payment and a foreclosure sale is that in dation, the debtor willingly conveys ownership as an alternative means of settling the obligation.

For the dation to be valid, it must be agreed upon by both parties and must not be forced upon the debtor. It is a lawful and commonly used method of settling obligations when cash payment is not feasible.

Pactum Commissorium: The Prohibited Clause

Pactum commissorium, on the other hand, is an illegal provision in a mortgage or pledge that allows the creditor to automatically appropriate the mortgaged property in case of non-payment. This is prohibited because it is considered oppressive and inequitable to the debtor, as it bypasses the due process of foreclosure or voluntary dation.

For a transaction to be considered a prohibited pactum commissorium, two elements must be present:

1. A security arrangement (such as a mortgage or pledge).

2. An automatic transfer clause in favor of the creditor upon default.

Unlike dation in payment, which is voluntarily agreed upon after default, pactum commissorium is a pre-arranged forfeiture mechanism that is deemed invalid under the law.

Conclusion

The sale of a mortgaged property to the creditor is not inherently prohibited. It can be done through legitimate means, such as dation in payment or foreclosure. However, what is illegal is the automatic appropriation of the property by the creditor without due process, as seen in pactum commissorium. Understanding these legal concepts helps ensure that mortgage transactions remain fair and within the bounds of the law.

Source: Ziggurat Real Estate