Dealing with Debt Collection in the Philippines: A Guide to Sending a Demand Letter

Are you struggling with debt collection in the Philippines? Does it feel like an endless battle that's never going to end?

What if I told you, that with the right steps and a demand letter, you could make debt collection a lot simpler? There are many resources available to help you write a proper demand letter, but there is still much confusion about the process.

Debt collection can be a challenging and stressful experience, both for creditors and debtors. In the Philippines, there are laws and regulations in place to govern debt collection practices, and one effective method to demand payment from a debtor is through a demand letter.

Luckily, this article is here to help by providing readers with valuable information on writing and sending a demand letter in the Philippines.

Understanding Debt Collection in the Philippines

In the Philippines, there are several laws that regulate debt collection practices, including the Civil Code of the Philippines and the Fair Debt Collection Practices Act (FDCPA). The FDCPA is enforced by the Securities and Exchange Commission (SEC), which regulates debt collection agencies in the country. Some common debt collection practices include calling the debtor, sending demand letters, and filing a case in court.

Preparing to Send a Demand Letter

Before sending a demand letter, it's essential to gather all necessary documents and information related to the debt. These may include a copy of the contract, receipts, and invoices. When drafting the demand letter, it's crucial to be specific about the details of the debt, including the amount owed and the due date for payment.

Contents of a Demand Letter

When sending a demand letter to a debtor in the Philippines, it's crucial to include specific details to make the communication as clear and effective as possible. Here are some essential elements to consider when drafting the letter:

  1. The name of the creditor and details (i.e., address, contact details): The demand letter should include the name and contact information of the creditor or the person or entity demanding payment. This information makes it easy for the debtor to identify the source of the letter and communicate back to the creditor if necessary. It's also helpful to include any relevant reference numbers, such as an account or invoice number.

  2. The name of the debtor and details (i.e., address): Similarly, the demand letter should also clearly indicate the name and address of the debtor or the person who owes the debt. Including this information helps the debtor to identify the specific debt in question and understand the letter's relevance. It's also essential to make sure that the debtor's name and address are accurate to avoid any confusion or delays in the payment process.

  3. A brief description of the reason the debtor owes money: To give context to the demand letter, it's helpful to provide a brief description of the reason why the debtor owes the money. For example, the description could include a specific product or service provided, an outstanding loan amount, or an overdue invoice. This information can help the debtor to understand the situation better and take appropriate action.

  4. The total amount owed: The demand letter should clearly state the total amount owed, including any interest or late payment fees if applicable. It's important to be specific and provide an accurate amount to avoid any confusion or dispute over the debt.

  5. The period given to the debtor to voluntarily comply with the demand letter before taking legal action: Finally, the demand letter should include a specific period given to the debtor to comply with the payment demand voluntarily. This period varies depending on the nature of the debt and can range from a few days to a few weeks. The demand letter should specify the deadline for payment and warn the debtor of the potential consequences of non-payment, such as legal action or credit reporting.

Including these specific details in a demand letter can help to make the communication clear and effective, increasing the chances of recovering the debt. It's important to be professional, concise, and accurate when drafting the demand letter and to seek legal advice if necessary.

Follow-Up Actions

After sending a demand letter to a debtor in the Philippines, there are several possible outcomes depending on how the debtor responds. Here are some common follow-up actions that creditors may take:

  1. Negotiations with the debtor: Sometimes, the debtor may respond to the demand letter with a counteroffer or request for more time to pay. In this case, the creditor can choose to negotiate with the debtor to reach a mutually agreeable solution. Negotiations can involve discussing a payment plan, reducing the amount owed, or extending the deadline for payment.

  2. Reminder letters or calls: If the debtor fails to respond to the initial demand letter, the creditor may choose to send reminder letters or make phone calls to follow up on the payment request. These communications serve as a reminder to the debtor of the outstanding debt and the consequences of non-payment.

  3. Legal action: If negotiations and reminders fail, the creditor may choose to pursue legal action to recover the debt. In the Philippines, creditors can file a case in court to recover the debt, which can involve a lengthy and costly legal process. Before taking legal action, creditors should seek legal advice and ensure that they have sufficient evidence to support their claim.

  4. Debt collection agencies: In some cases, creditors may choose to engage a debt collection agency to recover the debt on their behalf. Debt collection agencies are companies that specialize in debt recovery and may have more resources and expertise in recovering outstanding debts.

The follow-up actions after sending a demand letter to a debtor depend on the debtor's response and the nature of the debt. It's important to approach debt collection professionally, ethically, and legally, and to seek appropriate advice and assistance when necessary.


In conclusion, debt collection is a tricky process and requires patience and skill. Following the steps outlined above to compose and send a demand letter will give you the best chance of gathering the money owed from the debtor without too much hassle. If in doubt, consider consulting a lawyer or debt collector who understands the complexities of Philippine law and knows how to best navigate these types of situations on your behalf.

At the end of this process, one thing is certain: don’t forget to be polite but firm whenever communicating with debtors in order to keep relationships as professional as possible. Good luck!

Pinoy Attorney

Written by : Pinoy Attorney