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The declaration of policy is to encourage debtors and creditors to resolve and adjust competing claims and property rights, and ensure timely, fair, transparent, effective and efficient rehabilitation or liquidation of debtors.

The purpose is to ensure or maintain certainty and predictability in commercial affairs, preserve and maximize the value of the assets of debtors, recognize creditor rights and respect priority of claims, and ensure equitable treatment of creditors who are similarly situated.

The State aims to encourage debtors and creditors to resolve competing claims and property rights, ensure a timely and fair rehabilitation or liquidation of debtors, and maintain certainty and predictability in commercial affairs.

The Financial Rehabilitation and Insolvency Act applies to both juridical and natural persons who are debtors and their creditors.

The principles of preserving and maximizing the value of debtor's assets, recognizing creditor rights, respecting priority of claims, and ensuring equitable treatment of creditors who are similarly situated should be followed in the rehabilitation or liquidation of debtors.

Financial Rehabilitation and Insolvency Act (RA No. 10142)

To ensure timely, fair, transparent, effective and efficient rehabilitation or liquidation of debtors

To maintain certainty and predictability in commercial affairs, preserve and maximize the value of debtor's assets, recognize creditor rights and respect priority of claims, and ensure equitable treatment of creditors

To ensure or maintain certainty and predictability in commercial affairs, preserve and maximize the value of debtor's assets, recognize creditor rights and respect priority of claims, and ensure equitable treatment of creditors who are similarly situated

Liquidation