Dear PAO,

I recently obtained a loan from a lending institution, and they required me to give my passport as collateral. I am planning to work abroad and need my passport to process my documents. When I asked the lending institution to return my passport, they refused, saying I had not fully paid my loan yet. Is this allowed?

Hannah Gracielle

Dear Hanna Gracielle,

The State has a duty to protect our constitutional right to travel. To support this right, the government has crafted rules and regulations to ensure that the issuance of passports and other travel documents aligns with international standards.

Section 22(c) of Republic Act (RA) 11983, otherwise known as the New Philippine Passport Act, explicitly penalizes the use of passports as collateral in any loan. According to this provision:

“(c) Offenses relating to improper use of passports, other travel documents, and supporting documents; penalties. – Imprisonment of not less than six (6) years and one (1) day but not more than fifteen (15) years and a fine of not less than One hundred thousand pesos (P100,000.00) but not more than Two hundred fifty thousand pesos (P250,000.00) shall be imposed upon any person who willfully and knowingly:

“(1) Uses or attempts to use any passport or other travel document issued for the use of another;

“(2) Uses or attempts to use any supporting document belonging to another; or

“(3) Sells, trades, pawns, mortgages, or uses a passport or other travel document as a collateral to secure debt, or in any manner uses such passport or other travel document as currency or object of commerce x x x” (Emphasis supplied)

To answer your question, the law clearly provides the prohibition against using passports or other travel documents as collateral to secure debt. Simply put, a passport is not a currency or object of commerce that may be sold, traded, pawned, mortgaged or used as security — in this case, collateral. After all, passports are government property and not the property of the person to whom it is issued as declared under Section 13 of the same law, viz.:

“Section 13. Ownership of Passports. – A Philippine passport remains at all times the property of the government and the same may not be confiscated by any entity or person other than the DFA. Any other government agency, official or employee who confiscates a passport or travel document shall promptly turn over the same to the DFA. xxx”

Thus, you may be held liable should it be proven that you have willfully and knowingly used your passport as collateral to secure the debt from the lending institution you mentioned. Similarly, the law penalizes the lending institution which required the passport as collateral. Section 22(c) of the same the law further adds:

“Provided, That in such situation, the buyer, trader, creditor, or mortgagee shall also be liable to the same extent as the passport/travel document holder.”

Hence, any person who requires a passport before giving out loans, or buys, trades or mortgages the same, is liable for the same penalty stated above.

We hope that we were able to answer your queries. This advice is based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.

Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to [email protected]