eSignature Legality
in Philippines
In the Philippines, electronic signatures have been expressly recognized for more than two decades. Electronic documents and electronic signatures are recognized in the Philippines by the Electronic Commerce Act of 2000 (E-Commerce Act), which clearly specifies that an “electronic signature on an electronic document shall be equivalent to the signature of a person on a written document”.
This law emphasizes the crucial role of information and communications technology in nation building, and it aims to use electronic technology to facilitate domestic and international dealings, transactions, and contracts, to recognize the authenticity and reliability of electronic messages or electronic documents related to such activities, and to promote the use of electronic transactions in government and by the general public.
In 2001, the Supreme Court issued the Rules on Electronic Evidence (REE), which expressly provides that an electronic signature is admissible in evidence as the functional equivalent of a person’s signature on a written document if authenticated in the manner provided in the REE, in recognition of the E-Commerce Act’s objectives and pursuant to its power to promulgate rules concerning pleading, practice, and procedure in all courts.
Hence, the Electronic Commerce Act of 2000 and its Implementing Rules and Regulations, or Republic Act No. 8792, is the country’s main electronic commerce legislation. The E-Commerce Act was created to make electronic contracting legally enforceable and to resolve legal questions concerning whether electronic contracting was legal. Electronic signatures are recognized as the legal equivalent of handwritten signatures, and electronic documents are recognized as the legal equivalent of paper documents.
Rules on Electronic Evidence (REE)
The Philippines’ Supreme Court’s Rules on Electronic Evidence (REE) and the Departments of Trade and Industry and Science and Technology’s Joint Administrative Order No. 2 (JAO), establishes a regulatory framework for digital signatures backed by certificates from recognized trusted service providers and significantly promotes the Public Key Infrastructure (PKI).
Electronic Commerce Act, 2000 (E-Commerce Act)
According to Section 5(e) of E-Commerce Act, an electronic signature is defined as “Any distinctive mark, characteristic, and/or sound in electronic form, representing the identity of a person and attached to, or logically associated with, the electronic data message or electronic document, or any methodology or procedures employed or adopted by a person and executed or adopted by such person with the intention of authenticating or approving an electronic data message or electronic document”.
Further, an electronic signature may also consist of a transformation of an electronic document or an electronic data message using an asymmetric or public cryptosystem such that a person possessing the initial untransformed electronic document and the signer’s public key can accurately determine the following:
- whether the transformation was created using the private key that corresponds to the signer's public key; and
- whether the initial electronic document had been altered after the transformation was made.
It is pertinent to note that, there is no official list of third-party certifying authorities that may be trusted. The Philippine National Public Key Infrastructure System, on the other hand, is an official PKI system.
Conditions for valid e-signatures under E-Commerce Act
Only electronic signatures that satisfy the following conditions are valid under the E-Commerce Act:
- the signature must comply to the E-Commerce Act's definition of an electronic signature;
- there must be a prescribed method of signing that cannot be altered by the parties involved in signing of the electronic document;
- the method for signing must identify the party sought to be bound and indicate such party's access to the electronic document necessary for his consent or approval through the electronic signature;
- the method for signing is reliable and appropriate for the purpose for which the electronic document was generated;
- the parties intended to be bound and must have executed or provided the electronic signature in order to continue with the transaction; and
- 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 electronic signature.
Electronic signatures must satisfy the preceding standards in order to have the same presumption of enforceability and admission as a “wet” signature. Under Philippine law, only an electronic document bearing a certificate-based digital signature that can be verified by a trusted third party is recognized as the equivalent of a “wet” signature.
The presumption of enforceability and admissibility is lost if the E-Commerce Act is not followed. Electronic signatures that do not satisfy these conditions, however, can nevertheless be used to prove an individual’s consent to the document which they signed electronically. An electronic or digital signature is functional equivalent of a person’s signature on a written document if the electronic or digital signature is authenticated under the Supreme Court’s Rules on Electronic Evidence.
Ways for validation of e-signature under REE
An electronic or digital signature may be validated in the following ways under the REE:
- by establishing that a method or process was used to create and verify an electronic signature or digital signature;
- by any other legal means provided by law; or
- by any other means satisfactory to the judge for confirming the electronic signature's or digital signature's authenticity.
When an electronic or digital signature is authenticated under the REE, disputable presumptions are created. Until and unless evidence contradicts and overcomes these presumptions, they are satisfactory for legal purposes. They’re as follows:
- the electronic signature belongs to the individual with whom it is associated
- the electronic signature was affixed by that person with the intent 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
- the methods or processes used to affix or verify the electronic signature were error-free
- the digital signature belongs to the individual with whom it is associated
- that individual used a digital signature to authenticate or approve the electronic document to which it was attached, or to express that person's consent to the transaction embodied therein
- the methods or processes used to affix or verify the digital signature operated without error or fault
- that the information provided in certificate is true
- the digital signature was established during the certificate's operational period
- there is no reason for a certificate to be invalid or revocable
- A certificate had been granted by the certification authority stated therein, and the message associated with a digital signature has not been changed after it was signed
The laws governing electronic signatures are well-known in the courts, and hence they are duly taken into account during the legal proceedings.
For transactions with public sector entities
In the Philippines, there are no additional criteria or limitations for using digital or electronic signatures with government entities. Electronic signatures, or documents signed with electronic signatures, are allowed in government offices.
eSignatures: What Are the Use Cases?
The following are examples of circumstances where an electronic signature is normally appropriate:
- Preapproved templates for HR documents, quick employee updates, new employee onboarding processes, and a 360-degree view of employee files.
- End user agreements, such as sales and service terms, documentation for starting a new retail account, invoices, shipment details, user manuals, EULAs, and policies
- Contracts involving the transfer of intangible property
It is pertinent to note that, there is no official list of third-party certifying authorities that may be trusted. The Philippine National Public Key Infrastructure System, on the other hand, is an official PKI system.
DISCLAIMER
Certinal is making available the information and materials in this article for informational purposes only and is meant to help companies understand eSignature’s application in a legal framework. Laws change rapidly and Certinal makes every reasonable effort to keep the content of this article current, hence Certinal makes no claims or representations that the information contained in this article is true, accurate, correct, or current. The law is different from jurisdiction to jurisdiction, and even similar laws may be interpreted differently in different courts or in different places. Since these factors differ according to individuals and businesses, Certinal is not liable for any consequence of any action taken by any third party relying on material/ information provided under this article. The contents hereof should not be construed as legal advice in any manner whatsoever. In cases you require any assistance; you must seek independent legal advice.
