Small Claims in the Philippines: Demand Letter Template and Filing Requirements

Introduction to Small Claims Courts in the Philippines

In the Philippine legal system, small claims courts provide an accessible, efficient, and cost-effective mechanism for resolving minor monetary disputes without the need for lawyers. Established under the Rules of Procedure for Small Claims Cases, as amended by the Supreme Court, these courts aim to expedite justice for claims involving amounts not exceeding PHP 1,000,000 (as of the latest amendments effective in 2023). This threshold was increased from previous limits to accommodate inflation and broader access to justice.

Small claims proceedings are governed by A.M. No. 08-8-7-SC, which emphasizes simplicity, informality, and speed. Parties represent themselves (pro hac vice), and the process is designed to conclude within a short period, often in a single hearing. This system is particularly beneficial for individuals and small businesses dealing with unpaid debts, minor damages, or contractual breaches where hiring legal counsel might be impractical.

The small claims process begins with a demand letter, followed by filing a complaint if the demand is unmet. Understanding the demand letter and filing requirements is crucial for initiating a successful claim.

Jurisdiction and Scope of Small Claims

Small claims courts have exclusive jurisdiction over civil actions for the payment of money arising from contracts, quasi-contracts, torts, or quasi-delicts, where the principal amount claimed (excluding interest, damages, attorney's fees, litigation expenses, and costs) does not exceed PHP 1,000,000. This includes:

Unpaid loans or promissory notes.
Claims for damages to property or personal injury from accidents (e.g., vehicular mishaps).
Breach of lease agreements or service contracts.
Recovery of unpaid rentals or utility bills.

Excluded from small claims are actions involving title to or possession of real property, admiralty or marine cases, probate proceedings, and criminal offenses. If the claim exceeds the threshold or falls outside the scope, it must be filed as a regular civil case in the appropriate Regional Trial Court or Metropolitan Trial Court.

Jurisdiction is determined by the residence of the defendant or where the cause of action arose, typically in the Municipal Trial Courts (MTC), Metropolitan Trial Courts (MeTC), or Municipal Circuit Trial Courts (MCTC).

The Importance of a Demand Letter

Before filing a small claims case, a demand letter is mandatory under the rules. It serves as a formal notice to the respondent (defendant) to settle the dispute amicably, potentially avoiding court proceedings. The letter must be sent via registered mail with return receipt or personal delivery with acknowledgment, and proof of delivery is required when filing the complaint.

Failure to send a demand letter can result in the dismissal of the case for non-compliance with the pre-filing requirement. The demand letter gives the respondent a reasonable period (usually 10-15 days) to comply, promoting out-of-court settlements in line with the Alternative Dispute Resolution (ADR) principles embedded in Philippine law.

Demand Letter Template

Below is a standard template for a demand letter in small claims cases. This should be customized to fit the specific facts of your case. Use formal language, be concise, and include all relevant details.

[Your Full Name]
[Your Address]
[City/Municipality, Province]
[Contact Number]
[Email Address, if any]
[Date]

[Respondent's Full Name]
[Respondent's Address]
[City/Municipality, Province]

Subject: Demand for Payment of [Specify Amount, e.g., PHP 50,000] Arising from [Brief Description, e.g., Unpaid Loan]

Dear [Respondent's Name],

This letter serves as a formal demand for the payment of [amount in words and figures, e.g., Fifty Thousand Philippine Pesos (PHP 50,000.00)], representing [describe the basis of the claim, e.g., the principal amount of a loan extended to you on [date], as evidenced by the promissory note attached hereto].

Despite previous verbal reminders on [dates of reminders, if any], you have failed to settle this obligation. Interest at the rate of [specify rate, if applicable, e.g., 6% per annum] has accrued, amounting to [additional amount, if any].

You are hereby given [specify period, e.g., ten (10) days] from receipt of this letter to pay the full amount, including accrued interest, via [preferred payment method, e.g., bank transfer to account number XXX at [bank name]]. Failure to comply will compel me to file a small claims action against you before the appropriate court, seeking not only the principal and interest but also damages, costs, and other reliefs as may be warranted.

Please contact me at [your contact details] to discuss settlement. This demand is without prejudice to my rights under the law.

Sincerely,

[Your Signature]
[Your Full Name]

Attachments: [List evidence, e.g., Promissory Note, Receipts, etc.]

Proof of sending (e.g., registry receipt) should be retained for court filing.

Filing Requirements for Small Claims

If the demand letter yields no resolution, proceed to file the small claims case. The process is straightforward, but strict compliance with requirements is essential to avoid dismissal.

1. Required Forms and Documents

Statement of Claim (Form 1-SCC): This is the primary filing document, available for free from the Office of the Clerk of Court or downloadable from the Supreme Court's website (judiciary.gov.ph). It must include:
- Names and addresses of the claimant and respondent.
- Amount claimed and basis (with supporting details).
- Certification of non-forum shopping.
- Verification under oath.
Supporting Documents: Attach all evidence, such as contracts, receipts, promissory notes, photographs, witness affidavits, and the demand letter with proof of delivery. Originals should be presented during hearings, but copies suffice for filing.
Certificate to File Action: If the dispute underwent barangay conciliation (mandatory for claims under PHP 100,000 between residents of the same city/municipality), obtain this from the Lupong Tagapamayapa. Exemptions apply if parties are from different localities or the claim exceeds the threshold.

2. Filing Fees

Fees are minimal and based on the claim amount:

Claim Amount (PHP)	Filing Fee (PHP)
Up to 20,000	500
20,001 - 50,000	1,000
50,001 - 100,000	1,500
100,001 - 200,000	2,000
200,001 - 300,000	2,500
300,001 - 400,000	3,000
400,001 - 500,000	3,500
500,001 - 750,000	4,000
750,001 - 1,000,000	4,500

Additional sheriff's fees for service of summons (around PHP 500-1,000) may apply.
Indigent litigants can apply for exemption by submitting a certificate of indigency.

3. Where and How to File

File in triplicate at the MTC/MeTC/MCTC with jurisdiction.
The clerk assesses the form for completeness. If compliant, the court issues a summons to the respondent, setting a hearing date (usually within 30 days).
No motions or extensions are allowed, emphasizing the expedited nature.

The Small Claims Process After Filing

Upon filing, the court serves the summons and Statement of Claim to the respondent, who must file a Response (Form 3-SCC) within 10 days. Failure to respond leads to a default judgment.

Hearings are informal: the judge facilitates discussion, and parties present evidence without formal rules of evidence applying strictly. Mediation is encouraged, and if unsuccessful, the judge renders a decision on the spot or within 24 hours. Decisions are final and executory, with no appeal except via certiorari for grave abuse of discretion.

Enforcement involves a Motion for Execution if the judgment is not complied with, leading to writs for levy or garnishment.

Common Pitfalls and Tips

Incomplete Documentation: Ensure all evidence is attached; hearsay is inadmissible without corroboration.
Jurisdictional Errors: Double-check the amount and venue to avoid dismissal.
Time Limits: File within the prescriptive period (e.g., 10 years for written contracts under the Civil Code).
Self-Representation: Prepare thoroughly; while lawyers are prohibited, seeking free legal aid from the Public Attorney's Office (PAO) for advice (not representation) is allowed.
Counterclaims: Respondents can file these if within the small claims threshold.

Small claims courts democratize access to justice in the Philippines, handling thousands of cases annually with high resolution rates. By mastering the demand letter and filing requirements, claimants can navigate this system effectively, saving time and resources. For updates, consult the latest Supreme Court issuances.