Demand Letters & Prescriptive Periods in the Philippines A Comprehensive Guide for Lawyers, Credit Officers, and Business Owners

1. What Is a “Demand Letter”?

A demand letter is a formal, written notice from a creditor, claimant, or would-be plaintiff asking a person or entity (the “debtor”) to do—or to stop doing—something: pay a sum, surrender property, comply with a contract, vacate premises, etc. It is not an action filed in court; it is an extrajudicial act intended to (a) give the other party a last chance to comply voluntarily, (b) document that the creditor has performed the condition precedent of “making demand,” and (c) in many cases, interrupt or “toll” the running of prescription (the Philippine term for statutes of limitation).

2. Prescription Under the Civil Code (Overview)

Civil action	Article	Prescriptive period	Typical scenario
Upon a written contract	Art. 1144(1)	10 years	Promissory notes, loan agreements, leases with fixed term
Upon an oral contract	Art. 1145(1)	6 years	Verbal sale of goods, open-account transactions
Upon a quasi-contract	Art. 1145(2)	6 years	Unjust enrichment, solutio indebiti
Upon an injury to rights (torts)	Art. 1146	4 years	Vehicular negligence, libel (civil aspect)
Upon defamation itself (criminal)	Art. 90, RPC	1 year (libel)	Filing criminal information
B.P. 22 (bouncing checks)	Sec. 1, B.P. 22; Art. 90, RPC (suppletory)	4 years	From date of check’s dishonor
Construction disputes (CIAC)	R.A. 9285, CIAC Rules	10 years (written), 6 (oral)	Unless parties shorten by contract

Key point: The prescriptive clock starts on the date the cause of action accrues (i.e., when the right to sue arises)—not on the date of the demand letter.

3. How a Demand Letter Affects Prescription

(Article 1155, Civil Code)

Article 1155 lists three events that interrupt prescription of actions:

Filing an action in court;
Written extrajudicial demand by the creditor;
Written acknowledgment of the debt by the debtor.

A properly crafted demand letter therefore stops the prescriptive clock on the day the debtor receives it (or on the date of constructive receipt, such as refusal to accept a registered letter). After interruption, the period begins to run anew—you obtain the entire statutory period again, not just the balance.

Practical tip: Send by registered mail with return card (Registry Return Receipt) or private courier with POD and keep the envelope or tracking sheet. Service by e-mail is acceptable if the debtor expressly designated the address (Rule 6, 2019 Amendments to the Rules of Civil Procedure).

4. Timing Your Demand Letter

When you send	Effect on prescription	Strategic note
Early (immediately after default)	Interrupts early; gives maximum time for negotiation before suit	Shows diligence, good faith
Midway	Still resets period; debtor may realize suit is imminent	Useful if you want to avoid waiver/estoppel arguments
Very late (e.g., days before expiry)	Legitimate but risky: receipt could be disputed; postal delays	If prescription lapses before receipt, action is barred

5. Content Requirements & Best Practices

Heading & address – Use letterhead; accurately identify parties.
Statement of facts – Dates, contract number, amount due, breaches.
Specific demand – “Pay ₱ __ within fifteen (15) days of receipt.”
Legal basis – Cite contract clause & Civil Code/TOS.
Effect of non-compliance – Warn of civil/criminal action, interest, costs.
Date & signature – Sign by counsel or authorized officer.
Mode of service – Registered mail, courier, personal.
Attachments – Contracts, statements of account, dishonored checks.
Proof of mailing & receipt – Keep registry receipts, tracking slips, or affidavit of server.

6. Special Contexts Where Demand Is Mandatory

Law / Rule	Why demand is indispensable
B.P. 22 (Bouncing Checks)	The 5-day written notice of dishonor constitutes the offense; without it no crime is committed (Lozano v. Hon. Martinez, G.R. L-63419, Feb 18 1986).
Civil Code rescission (Art. 1191)	Creditor must allow debtor to perform before canceling the contract.
Lease ejectment (Art. 1657; Rule 70)	Lessors must make a written demand to pay or vacate before filing unlawful detainer.
Labor money claims	Employer must be served with a written demand before certain DOLE complaints can prosper.

7. Jurisprudence to Remember

Case	Held / Doctrine
Philippine National Construction Corp. v. Court of Appeals (G.R. 116896, June 28 1996)	Extrajudicial demand interrupts prescription only upon receipt by debtor, not mere mailing.
C.T. Torres Enterprises v. Hibionada (G.R. 139372, May 15 2002)	Demand letter delivered to address stated in contract is presumed received; burden shifts to debtor to prove otherwise.
Saavedra v. Court of Appeals (G.R. 110239, Feb 17 1995)	Several partial payments plus demand letters constituted acknowledgment interrupting prescription.
Heirs of Malate v. Gamboa (G.R. 170139, April 1 2013)	Demand interrupts under Art. 1155 even if limitation period had almost expired; fresh ten-year period began.

8. Counting the Period Accurately

Civil Code Art. 13: Years, months, and days are counted in the ordinary Gregorian calendar.
Excl. the first day, incl. the last (Art. 13, Civil Code).
If the last day is a Saturday, Sunday, legal holiday, period extends to next working day (Sec. 1, Rule 22).
For B.P. 22’s five-day notice, count calendar days, not working days (Agbayani v. Court of Appeals, G.R. 143795, Feb 17 2005).

9. Common Pitfalls

Error	Consequence
Vague demand (“settle your account ASAP”)	May be deemed insufficient to interrupt prescription or trigger B.P. 22.
Sending by ordinary mail with no proof of arrival	Demand may not be credited; prescription continues.
Addressing to an outdated location despite notice of change	Demand is ineffective if debtor proves lack of receipt.
Successive demands less than one year apart but suing after 10 years total	Only the latest valid interruption matters; each new demand restarts, but if 10 years lapse from last interruption, action still prescribes.
Relying solely on demand after written acknowledgment	Acknowledgment is itself an interruption; but safer to include fresh demand.

10. Relationship to Criminal Prescription

Criminal vs. Civil: In crimes like estafa or B.P. 22, the period to file the information is governed by the Revised Penal Code (RPC) or special law—not Art. 1144. Civil actions for damages arising from the same offense follow civil prescription unless instituted jointly.
Demand’s dual role: For estafa and B.P. 22, demand is both an element of the offense (creating deceit or making the check “wrongful”) and possible interrupter of civil prescription for the recovery of money.

11. Drafting Checklist (Quick Reference)

Identify cause of action & applicable prescriptive period.
Verify last act or omission that started the clock.
Calendar end-date; count backwards reasonable buffer (e.g., 30 days).
Draft clear, unequivocal demand with deadline.
Attach supporting documents.
Send via a trackable method; obtain proof.
Diary follow-up date (e.g., 15 days after receipt).
Prepare complaint template in advance; file promptly if no compliance.

12. Practical Strategy Tips

Negotiation leverage: A strong demand letter—citing firm deadlines, legal grounds, and potential costs—often secures payment without litigation.
Rolling interruption: If negotiations drag, consider a renewed written demand before the newly running prescriptive period lapses.
Acknowledge receipts: If debtor issues any written reply (e-mail, text captured by screenshot & affidavit) recognizing the obligation, keep it—it is a separate ground for interruption under Art. 1155.
Labor‐related claims: While Labor Code money claims prescribe in three (3) years (Art. 306), the running is suspended by employer-employee talks or pending grievance machinery. Demand letters here prove earnest effort to settle and stop the clock.
One-suit policy: For secured obligations (e.g., mortgages), demand letters are essential before foreclosure—yet be mindful that, under the rule on splitting causes of action, you cannot later sue separately for deficiency if you forgo including it in the first suit.

13. Frequently Asked Questions

Question	Answer (Philippine context)
Does a demand letter need notarization?	Not required for validity; but notarizing may reinforce authenticity.
Can an e-mail count as a “written extrajudicial demand”?	Yes, if the debtor designated the e-mail address or actually received it; retention of server logs advisable.
What if the debtor refuses to receive the letter?	A notice left or refusal noted by the post office/courier constitutes constructive receipt; prescription is interrupted.
Is a phone call enough?	No. Art. 1155 requires written demand.
How often can I send demands?	No limit, but each one must be bona fide; harassing frequency could be actionable under the Anti-Harassment Law.

14. Key Takeaways

Know your prescriptive period—10, 6, 4, or even 1 year depending on the cause of action.
Send a written demand before the period expires; it stops the clock and resets it.
Proof of receipt is critical; without it, the interruption fails.
Demand letters serve multiple legal functions: condition precedent, evidence of good faith, element of certain crimes, and a negotiation tool.
Combine demand strategy with calendar management to avoid inadvertent prescription.

Disclaimer: This article is for informational purposes only and does not constitute legal advice. Laws and jurisprudence cited are current as of June 24, 2025. For specific cases, consult Philippine counsel.

Prepared by: [Your Name], Philippine-qualified lawyer & former court attorney