The Philippines Accedes to the UNECC; DTI Acknowledges Crucial Support from the U.P. Law Center

Cross-border electronic communications and contracts involving Philippine parties are now subject to the United Nations Convention on the Use of Electronic Communications in International Contracts (UNECC), following the adoption in June 2022 by President Rodrigo Duterte of the instrument of ratification for the Convention, which the Philippines had originally signed in September 2007. The Department of Trade and Industry (DTI), led by Secretary Ramon Lopez had spearheaded the efforts towards the country’s accession to the Convention. The UNECC facilitates the use of electronic communications in international trade by assuring that contracts concluded and other communications exchanged electronically are as valid and enforceable as their traditional paper-based equivalents. DTI Secretary Lopez, in lauding the accession to the UNECC, noted that the Convention creates a modern and enabling legal framework for electronic commercial exchange as it reinforces the level of uniformity in electronic transactions by establishing common rules across jurisdictions.

DTI Assistant Secretary for Digital Philippines Mary Jean Pacheco acknowledged the crucial role of the University of the Philippines Law Center (UP Law Center), through its Technology Law and Policy Program (TLPP-UPLC) in securing accession through the technical and legal assistance it extended to the DTI. “The Department of Trade and Industry extends its thanks to the Technology Law and Policy Program of the UP Law Center in ensuring, after 15 years, Philippine accession of the UNECC. This is a landmark achievement of the Department in the implementation of its eCommerce roadmap. We are especially thankful for the expert advice of Prof. JJ Disini, Atty. Oliver Xavier Reyes, and Atty. Ofelia Leano of the TLPP-UP Law Center.”

The UNECC sets out criteria for establishing functional equivalence between electronic communications and paper documents, as well as between electronic authentication methods and handwritten signatures. It allows for the enforceability of contracts formed using automated message systems despite lack of review by natural persons. The time of dispatch and the time of receipt of electronic communications are also defined in the UNECC, effectively adapting the concepts of transmittal and receipt to fit modern conventions. The UNECC only applies to electronic communications that are made in relation to commercial cross-border transactions. As such, domestic transactions are still governed by the E-Commerce Act. The UNECC is also inapplicable to several classes of contracts including those concluded for personal purposes, or those involving specific financial service transactions such as payment systems, negotiable instruments, derivatives, swaps, repurchase agreements, foreign exchange, securities and bond markets.

Accession to the UNECC is one of the agenda items in the DTI’s Philippine eCommerce Roadmap. In August of 2019, the UP Law Center entered into a Memorandum of Agreement with the Department of Trade and Industry, providing particular support in the promotion of eCommerce development and regulation in the Philippines. The TLPP has supported the DTI in several resulting activities related to the development of eCommerce policies and regulations, including the successful accession to the UNECC.