Are e-signatures legal in the Philippines?
So, you’re finally convinced of the significant cost and productivity benefits that electronic signatures can bring to your business. But there’s one compelling thought that has been keeping you from giving your green light to adopt the technology – are e-signatures legal in the Philippines?
This is a valid question considering the time, cost, and effort it would take you to implement the technology. It is critical to understand the legalities of e-signatures to make sure that you are making the right investment and not giving yourself future legal headaches.
Now, the short answer to your question is, ‘yes, e-signatures are legal in the Philippines’. However, there are nuances in our law that you must know to ensure that you are investing in the right e-signature solution.
What are e-signatures?
To better understand the legalities of e-signatures in the Philippines, we must first know how the law defines them.
The Republic Act No. 8792, or the Electronic Commerce Act of 2000, defines e-signatures as any distinctive mark, characteristic, and/or sound in (electronic) that represents a person’s identity and is attached to an electronic data message or electronic document. The intention of which is to authenticate or approve an electronic data message or electronic document.
Now, you must be wondering, “does that mean a line or even a simple dot can be considered an e-signature?” Technically, yes, but that does not make them legally binding.
For e-signatures to be considered valid, they must meet the following conditions set by law.
- There must be a prescribed procedure for signing that is unalterable by other people interested in the electronic document.
- A method is used to identify the signatory and to indicate that his or her e-signature is necessary to consent or approve the electronic document.
- The method must be reliable and appropriate for the purpose for which the electronic document was generated or communicated, considering all circumstances, including any relevant agreement.
- The signatory must have executed or provided his or her electronic signature to proceed with the transaction.
- The other parties, interested in the electronic document, are authorized and enabled to verify the e-signature.
How to prove e-signature’s authenticity?
To prove e-signatures’ authenticity, an appropriate methodology or security procedures must be in place and have been adopted by the signatory to electronically sign an electronic data message or electronic document to authenticate or approve it.
Similarly, the electronic data message or electronic document to which e-signatures are or will be attached must also be proven valid.
There must be proof that an appropriate procedure was employed to verify the source of the electronic data message or electronic document and detect errors or alterations in its communication, content, or storage. This can be through using algorithms or codes identifying words, encryption, answers back, acknowledgment procedures, or similar security devices.
However, these are not the only ways to authenticate e-signatures, electronic data messages, or electronic documents. The Supreme Court may adopt other methods like using electronic notarization systems.
What documents can be electronically signed?
Essentially, you can electronically sign any document. However, if the law or the party you’re transacting with requires the document to be notarized, then a handwritten signature must be used. Some examples are: royalty agreements to assign patents or patent applications; applications for registration of securities with the Securities and Exchange Commission (SEC); several corporate documents to be submitted to the SEC, like articles of incorporation; and tax returns, among others.
Why switch to e-signatures?
If implemented correctly and in accordance with the requirements of the law, e-signatures may bring a lot of benefits to your business, like faster approval process as documents can be signed anytime and anywhere; reduced document fraud risks as e-signatures employ multiple layers of verification, and authentication tools, and increased work productivity and cost savings as your employers no longer need to print and post physical documents.
All these benefits lead to faster business growth and an improved customer experience.
To get these results, you must start by partnering with a reliable and law-compliant solution provider. Twala is compliant with the E-Commerce Act, the Supreme Court’s rules on electronic evidence, and other e-signature laws globally. Twala uses blockchain technology, so you can be sure that your e-signatures and electronic documents are traceable and unalterable, as required by the law.
If you want to learn more about the legalities of e-signatures in the Philippines, download our FREE e-book here.