(General information; not legal advice.)

1) The controlling rule and the current ceiling

Philippine small claims procedure is governed by the Supreme Court’s Rules on Expedited Procedures in the First Level Courts (A.M. No. 08-8-7-SC), effective 11 April 2022 and generally applied prospectively to cases filed from that date.

Under these Rules, a case is treated as a small claims case when the claim does not exceed ₱1,000,000.00, exclusive of interest and costs.

Bottom line for a ₱1,000,000 debt: If what you are asking the court to order the other party to pay (the money claim) is ₱1,000,000 or less, the claim can fall under small claims as long as it is the kind of claim allowed under the small claims rule (see below).

2) What “₱1,000,000 exclusive of interest and costs” means in practice

The Rules repeatedly state the ceiling as exclusive of interest and costs (and, for joinder, the total amount claimed must not exceed ₱1,000,000 exclusive of interest and costs).

Practical implications

Interest (e.g., contractual interest) and litigation costs are not counted for the ₱1,000,000 threshold.
The Rules do not use the broader exclusion wording found in summary procedure (which expressly excludes “damages of whatever kind” and “attorney’s fees,” etc., for the ₱2,000,000 cap).
- Because of that difference in wording, any add-ons you plead that are not “interest” or “costs” may be treated as part of the claim amount for small-claims threshold purposes. (This can matter if you add large “penalties,” liquidated damages, or attorney’s fees as a separate demand.)

Examples (illustrative)

₱1,000,000 principal + interest → generally within the ₱1,000,000 ceiling because the ceiling is stated exclusive of interest/costs.
₱950,000 principal + ₱200,000 non-interest add-on (e.g., separately claimed fees/damages) → may exceed the ceiling depending on how the court characterizes the add-on, because only “interest and costs” are expressly excluded for small claims.

3) What kinds of cases qualify as “small claims”

A “small claim” is defined as an action purely civil in nature where the relief is solely for payment or reimbursement of a sum of money. It excludes actions seeking other reliefs beyond payment/reimbursement and those coupled with provisional remedies.

Allowed money-claim sources (key list)

Small claims may involve money owed under:

Contract of lease
Contract of loan and other credit accommodations
Contract of services
Contract of sale of personal property (but the recovery of the personal property is excluded unless it becomes the subject of a compromise agreement)

Barangay settlement/arbitration enforcement (also covered)

Small claims also cover enforcement of barangay amicable settlement agreements and arbitration awards where the money claim does not exceed ₱1,000,000, subject to conditions such as no execution having been enforced by the barangay within six (6) months from relevant dates as stated in the Rules.

4) Which courts handle small claims

The small claims rule applies in first level courts: MeTC, MTCC, MTC, and MCTC.

This matters because (separately) the Rules also describe summary procedure coverage for certain civil cases up to ₱2,000,000 (exclusive of specified items) in first level courts, but small claims cases are carved out as their own category.

5) Is small claims optional? What if you file it “the wrong way”?

The Rules provide that if a case does not fall under the small claims rule, but falls under summary or regular procedure—or if it is filed under summary/regular procedure but actually falls under small claims—the case should not be dismissed; it should be re-docketed under the proper procedure (subject to payment of any deficiency in filing fees).

So, for an eligible ₱1,000,000 money-only claim, the court can effectively channel it into small claims as the proper track.

6) Venue rules (where to file) — especially important for lenders and banks

The Rules say regular venue rules apply, but add a specific restriction for plaintiffs engaged in lending, banking, and similar activities:

If the plaintiff is in that business and has a branch within the city/municipality where the defendant resides or holds business, the statement of claim shall be filed in the court of that city/municipality (and if there are multiple defendants, where any of them resides/holds business, at the plaintiff’s option).

This is a major anti–forum shopping feature for collection-type plaintiffs.

7) Starting a small claims case: what must be filed

A small claims action is commenced by filing an accomplished Statement of Claim (Form 1-SCC) with verification and certification (as indicated in the Rule), plus supporting documents/evidence.

Key requirements reflected in the Rule:

Attach certified photocopies of the actionable documents and supporting evidence; generally, no evidence is allowed at the hearing if it was not attached/submitted with the Statement of Claim unless good cause is shown.
Provide as many copies as there are defendants.
For juridical entities, attach a board resolution or secretary’s certificate authorizing the person to file the claim.
No formal pleading other than the Statement of Claim is necessary to initiate a small claims action.
Documents requiring certification (except public/official documents) may be certified by the signature of the party concerned.

8) Filing fees and cost rules you cannot ignore

The plaintiff pays docket and other legal fees under Rule 141, unless allowed to litigate as indigent; exemption is tightly controlled.
If more than five (5) small claims are filed by one party in a calendar year (regardless of station), additional filing fees apply progressively (as listed in the Rule).
If a case dismissed without prejudice for failure to serve summons is re-filed within one (1) year, the filing fee is a fixed ₱2,000, inclusive of the ₱1,000 service fee for summons and processes.
If the plaintiff is engaged in lending/banking/similar, the filing and other legal fees are the same as those applicable under the regular rules.

9) Early screening and outright dismissal risk

After examining the Statement of Claim and attachments, the court may dismiss outright on enumerated grounds, including:

lack of jurisdiction over the subject matter;
another pending action for the same cause;
res judicata;
prescription;
lack of jurisdiction over the person of the defendant;
improper venue;
lack of legal capacity to sue;
failure to state a cause of action;
non-compliance with a condition precedent;
failure to submit required affidavits.

There is also a specific sanction for misrepresenting whether the plaintiff is engaged in lending/banking/similar activities.

10) Summons, service, and the defendant’s response (tight deadlines)

If no dismissal ground is found, the court issues summons within 24 hours from receipt of the Statement of Claim, directing the defendant to submit a verified response.
Summons and notice of hearing are served by the sheriff/proper officer within 10 days from issuance.
If summons is returned unserved, the court may order the plaintiff (or representative) to serve/cause service; service outside the judicial region may also be ordered to be done by the plaintiff/representative.
If service is still not completed within the specified window, dismissal without prejudice may follow (with the re-filing rule noted above).
The defendant must file a verified Response within 10 days from receipt of summons, attaching supporting documents and affidavits/evidence; generally, no evidence is allowed at the hearing if it was not submitted with the Response unless good cause is shown.

Hearing schedule

The Notice of Hearing must set a hearing date not more than 30 days from filing of the Statement of Claim, or not more than 60 days if one defendant resides/holds business outside the judicial region.

Electronic filing and notice

Service may be through e-mail/fax/other electronic means, and notices may be served through mobile phone calls, SMS, or instant messaging applications, with the consent/mode indicated in the Statement of Claim or Response.

11) Appearance rules and the “no lawyers” principle

Parties must personally appear on the hearing date. Appearance through a representative must be for valid cause; the representative of an individual must not be a lawyer, and juridical entities shall not be represented by a lawyer in any capacity.
No attorney may appear for or represent a party at the hearing, unless the attorney is the plaintiff or defendant.
If the court finds a party cannot properly present the claim/defense, it may allow a non-attorney to assist, with the party’s consent.

Non-appearance consequences

Plaintiff’s non-appearance can lead to dismissal without prejudice; defendant who appears may obtain judgment on the counterclaim.
Defendant’s non-appearance generally has the same effect as failure to file a Response (subject to the Rule’s stated exception).

Postponements are extremely limited

A postponement may be granted only upon proof of physical inability to appear, and a party may avail of only one postponement.

12) The hearing, settlement, decision, and appeal (or lack of it)

At the hearing, the judge first exerts efforts to achieve an amicable settlement; settlement discussions are confidential.

If settlement fails, the court proceeds informally and then renders judgment within 24 hours from termination of the hearing.

The decision in small claims is final, executory, and unappealable.

Execution may issue upon ex parte motion of the winning party (with forms prescribed by the Rules).

13) Counterclaims, joinder, and waiver effects (often overlooked)

Joinder

A plaintiff may join multiple small claims against a defendant in a single Statement of Claim provided the total amount claimed, exclusive of interest and costs, does not exceed ₱1,000,000.

Counterclaims

Counterclaims must generally be filed in the Response if they fall within the Rule’s coverage; and any amount pleaded in a counterclaim in excess of ₱1,000,000 (excluding interests and costs) is deemed waived.

Practical consequence for a “₱1,000,000 debt” scenario

If the defendant has a counterclaim above ₱1,000,000 that arises from the same transaction and must be raised, the excess can be treated as waived under the small claims framework.

14) Barangay conciliation and other pre-filing conditions

The expedited-procedure rules recognize barangay conciliation as a condition precedent where required under law; failure to comply can be a basis tied to dismissal practice and allowable challenges under the framework of prohibited motions.

Additionally, small claims expressly include enforcement of certain barangay settlements/arbitration awards within the ₱1,000,000 ceiling (with the Rule’s conditions).

15) Key takeaways for “one million peso debt”

₱1,000,000 is within the small claims ceiling if the claim is for money payment/reimbursement and otherwise fits the Rule.
The ceiling is stated exclusive of interest and costs, so interest/costs do not determine eligibility.
Small claims is money-only and excludes other reliefs and cases with provisional remedies.
No lawyers (unless the lawyer is the party), strict appearance rules, typically one hearing day, and a final/unappealable decision are defining features.
If filed under the wrong track, the court can re-docket the case to the correct procedure instead of dismissing outright.