Statute of Limitations (Prescription) in Philippine Debt-Collection Cases (A practitioner-oriented primer, updated to 27 June 2025)

1. Why “prescription” matters

In Philippine law, an unpaid creditor does not have an unlimited time to sue. Once the prescriptive (statute-of-limitations) period lapses:

the debtor may raise prescription as an affirmative defense and secure dismissal, and
the debt itself is not extinguished, but it becomes a natural obligation (it may still be voluntarily paid, yet it can no longer be enforced through the courts).

2. Primary sources

Source	Key provisions / points
Civil Code of the Philippines (Republic Act No. 386), Title V (“Prescription”), Arts. 1139 – 1155	Governs all civil actions unless a special law provides otherwise.
Act No. 3323 (1926)	Still cited for open-account obligations; fixes a six-year period from the date of the last item or last written demand/acknowledgment.
Rules of Court, Rule 8, Sec. 12	Prescription must be pleaded; otherwise it is deemed waived. The judge may, however, dismiss motu proprio when prescription is apparent on the face of the complaint (Sec. 1, Rule 9).
Special laws (e.g., the 2016 Credit Card Industry Regulation Law - RA 10870, the Financial Rehabilitation & Insolvency Act - FRIA)	None alter Civil-Code periods for ordinary money claims; they sometimes suspend or stay actions while rehabilitation, insolvency, or pandemic-era court suspensions are in force.

3. Prescriptive periods for common money claims

Type of claim (examples)	Period	Reckoned from	Governing article / jurisprudence
Written contract: loan agreement, promissory note, credit-card T&Cs, notarized real-estate mortgage, suretyship	10 years	When the debt falls due (date of maturity or date stated in demand-on-demand note once demand is made)	Art. 1144(1); Development Bank v. CA, G.R. 189206 (17 Nov 2010)
Obligation created by law: e.g., solidary liability of partners after dissolution	10 years	When the law deems the obligation actionable	Art. 1144(2)
Action on a judgment (to revive or enforce a final decision awarding a sum of money)	10 years	From finality of the judgment, not from its promulgation	Art. 1144(3); Heirs of Malate v. Gamboa, G.R. 170338 (12 Sept 2011)
Oral contract / quasi-contract: verbal loans, unjust enrichment claims, solutio indebiti	6 years	Upon demandability / default	Art. 1145
Open account / running account: merchandise supplied on credit, professional services billed periodically	6 years (Act 3323)	Last item on the account or last written demand/acknowledgment—whichever is later	Philippine National Bank v. Court of Appeals, G.R. L-29263 (30 July 1971)
Deficiency action after foreclosure (judicial or extrajudicial)	10 years (written contract)	From confirmation of sale (judicial) or registration of sale (extrajudicial)	Spouses Cruz v. PNB, G.R. 187266 (29 Aug 2012)
Quasi-delict injuries (tortious damage to property)	4 years	Date of injury or discovery, whichever is earlier	Art. 1146(2)

Practice tip: In consumer banking, credit-card issuers often cite a “3- to 5-year” window, but that figure comes from BSP debt-collection guidelines and does not override the 10-year prescriptive period for written contracts.

4. When the clock starts

Obligations with a fixed maturity date – prescription runs the day after due date.
Payable-on-demand loans – the cause of action accrues only upon written demand (BPI Family Bank v. Yu, G.R. 227547, 15 June 2015). However, a creditor may not “sleep” indefinitely; courts have ruled that an unreasonable delay to demand can amount to laches even if the prescriptive period is technically intact.
Installment debts – prescription runs per installment; each missed installment has its own clock.
Open accounts – under Act 3323, the period counts from the last item (supply of goods/services) or the last written acknowledgment / partial payment, whichever is later.

5. How prescription is interrupted or suspended

Mode of interruption (Art. 1155)	Effect	Practical example
(a) Filing an action in court or arbitration	Clock stops while the case is pending; if dismissed without prejudice, the time already spent does not count until final dismissal	Creditor files a collection suit on year 9; case is dismissed after 3 years. The creditor still has 1 year left to re-file
(b) Extrajudicial demand by the creditor (usually a written demand letter)	Prescription resets; a new full period begins the day after demand is received	A 6-year oral-loan period interrupted by demand on year 5 resets the clock, giving the creditor 6 more years
(c) Written acknowledgment of the debt by the debtor (including partial payment, restructuring, or promise to pay)	Same interruptive effect as (b)	Borrower pays ₱1,000 against a ₱50,000 note in year 9 → creditor still has another 10 years to sue

External suspensions

Court-declared suspensions – e.g., pandemic lockdown issuances (Supreme Court Adm. Circulars Nos. 37-40-2020) temporarily tolled prescriptive and reglementary periods.
Rehabilitation or insolvency – FRIA imposes an automatic stay on all claims while proceedings are pending; the prescriptive clock is paused.

6. Raising prescription as a defense

Must be affirmatively pleaded in the answer (Rule 8).
Can be a ground for dismissal on the pleadings if unmistakable on the complaint’s face (Rule 9).
Even if the defendant forgets, the court may dismiss motu proprio when the complaint and annexes show that the period has clearly lapsed.

7. Special notes & edge cases

Scenario	Prescriptive nuance
Solidary debtors and sureties	Interruption against one solidary debtor benefits all (Art. 1216). A demand addressed to any solidary debtor or surety stops prescription for the entire obligation.
Credit cards under RA 10870	The new law regulates fees and collection practices but does not change the 10-year prescription for written contracts.
B.P. 22 (Bouncing Checks)	A criminal charge may be filed within 4 years (Art. 90, Revised Penal Code) from the check’s dishonor; the civil action to collect the underlying debt follows the Civil-Code periods above.
Government-owned banks	They cannot invoke state immunity to avoid prescription; actions filed by or against them are subject to the same Civil-Code periods (PNB v. Court of Appeals, supra).
Laches vs. prescription	Even when filed within the statutory period, an action may still fail if the delay was so long and prejudicial that it violates equity (laches). Courts apply laches sparingly in money-claim cases, preferring the bright-line Civil-Code rules.

8. Checklist for creditors

Diary the maturity dates of every note, invoice, or installment due.
Send a written demand well before the prescriptive period expires—this both interrupts prescription and supplies documentary proof of default.
Keep originals (or notarized copies) of contracts, ledgers, demand letters, and any acknowledgment or partial payment by the debtor.
File suit promptly; do not rely on repeated demands indefinitely—courts frown on “sleeping on one’s rights.”
Consider Small Claims Court (Rule SC 2022, as amended): for money claims not exceeding ₱400,000 (Metro Manila)/₱300,000 (elsewhere), filing is streamlined and lawyer appearance is optional.

9. Checklist for debtors

Verify the age of the debt; compute from when the cause of action accrued, not from the loan date alone.
Exercise caution before signing restructuring agreements or making partial payments—either act resets prescription under Art. 1155.
Raise prescription early in litigation; if omitted, the defense is waived.
Distinguish between prescription (a legal defense) and credit-bureau reporting windows or collection-agency practices, which are governed by separate regulations.

10. Illustrative timeline

Loan (written, ₱500 k) dated 15 May 2015
Maturity: 15 May 2017
↓ 10-year written-contract clock starts 16 May 2017
Demand letter served               01 Apr 2024   ← interrupts
↓ Clock resets: new 10-year period runs to 31 Mar 2034
Suit filed                         30 Mar 2034   ← timely

If no demand letter had been sent, suit filed after 15 May 2027 would have been time-barred.

11. Key Supreme Court decisions (quick reference)

Case	G.R. No.	Date	Holding
Development Bank of the Phils. v. CA	189206	17 Nov 2010	Action on a written loan prescribes in 10 years; extrajudicial demand interrupts.
BPI Family Savings Bank v. Yu	227547	15 Jun 2015	For on-demand loans, prescription begins only upon demand.
Spouses Cruz v. PNB	187266	29 Aug 2012	Deficiency action after extrajudicial foreclosure must be filed within the 10-year period governing written contracts.
Heirs of Malate v. Gamboa	170338	12 Sep 2011	10-year period to enforce a money judgment runs from finality of judgment, not its promulgation.
PNB v. CA	L-29263	30 Jul 1971	Six-year prescriptive period under Act 3323 for open accounts applies from last item/demand.

12. Bottom line

10 years for written contracts and judgments; 6 years for oral contracts and open accounts; 4 years for quasi-delicts.
The clock usually starts on maturity or default, resets with demands or acknowledgments, and pauses with court filings or statutory suspensions.
Both creditors and debtors should track dates meticulously; missing or mis-computing the prescriptive period can be fatal to a claim—or a windfall defense.

Disclaimer: This article is for general educational purposes and does not constitute legal advice. Specific situations may require professional counsel, especially where multiple contracts, foreign-law elements, insolvency proceedings, or pandemic-era suspensions are involved.