E-commerce Act

ATTY. IVAN YANNICK S. BAGAYAO CPA, MBA

 Republic Act No. 8792

AN ACT PROVIDING FOR THE RECOGNITION AND USE OF ELECTRONIC COMMERCIAL AND NON-COMMERCIAL
TRANSACTIONS, PENALTIES FOR UNLAWFUL USE THEREOF, AND OTHER PURPOSES

SECTION 1. Short Title. - This Act shall be known and cited as the "Electronic Commerce Act".
Sec. 3. Objective. - This Act aims to facilitate domestic and international dealings, transactions, arrangements,
agreements, contracts and exchanges and storage of information through the utilization of electronic, optical and
similar medium, mode, instrumentality and technology to recognize the authenticity and reliability of electronic
documents related to such activities and to promote the universal use of electronic transaction in the government
and general public.

Sec. 4. Sphere of Application. This Act shall apply to any kind of data message and electronic document used in the
context of commercial and non-commercial activities to include domestic and international dealings, transactions,
arrangements, agreements, contracts and exchanges and storage of information.
The new law defines in Section 5 thereof what constitutes "electronic data message", "electronic signature" and
"electronic document", as follows:

c) "Electronic data message" refers to information generated, sent, received or stored by electronic, optical or similar
means.

e) "Electronic signature" refers to any distinctive mark, characteristic and/or sound in electronic form, representing the
identity of a person and attached to or logically associated with the electronic data message or electronic document or
any methodology or procedures employed or adopted by a person and executed or adopted by such person with the
intention of authenticating or approving an electronic data message or electronic document.

f) "Electronic document" refers to information or the representation of information, data, figures, symbols or other
modes of written expression, described or however represented, by which a right is established or an obligation
extinguished, or by which a fact may be proved and affirmed, which is received, recorded, transmitted, stored,
processed, retrieved or produced electronically.
Sec. 6. Legal Recognition of Electronic Data Message - Information shall not be denied validity or
enforceability solely on the ground that it is in the form of an electronic data message purporting to
give rise to such legal effect, or that it is merely incorporated by reference in that electronic data
message.
Sec. 7. Legal Recognition of Electronic Documents - Electronic documents shall have the legal effect, validity or
enforceability as any other document or legal writing, and

(a) Where the law requires a document to be in writing, that requirement is met by an electronic document if the
said electronic document maintains its integrity and reliability and can be authenticated so as to be usable for
subsequent reference, in that

-i) The electronic document has remained complete and unaltered, apart from the addition of any
endorsement and any authorized change, or any change which arises in the normal course of communication,
storage and display; and
ii) The electronic document is reliable in the light of the purpose for which it was generated
and in the light of all relevant circumstances.

(b) Paragraph (a) applies whether the requirement therein is in the form of an obligation or whether the law simply
provides consequences for the document not being presented or retained in its original form. 
(c)Where the law requires that a document be presented or retained in its original form, that
requirement is met by an electronic document if –

i) There exists a reliable assurance as to the integrity of the document from the time when it was
first generated in its final form; and

ii) That document is capable of being displayed to the person to whom it is to be

presented: Provided, That no provision of this Act shall apply to vary any and all requirements of
existing laws on formalities required in the execution of documents for their validity.
Sec. 8. Legal Recognition of Electronic Signatures. An electronic signature on the electronic document shall be
equivalent to the signature of a person on a written document if that signature is proved by showing that a
prescribed procedure, not alterable by the parties interested in the electronic document, existed under which –

a.) A method is used to identify the party sought to be bound and to indicate said party’s access to the electronic
document necessary for his consent or approval through the electronic signature;

b.) Said method is reliable and appropriate for the purpose for which the electronic document was generated or
communicated, in the light of all the circumstances, including any relevant agreement;

c.) It is necessary for the party sought to be bound, in order to proceed further with the transaction, to have
executed or provided the electronic signature; and

d.) The other party is authorized and enabled to verify the electronic signature and to make the decision to
proceed with the transaction authenticated by the same.
Sec. 9. Presumption Relating to Electronic Signatures. –
In any proceedings involving an electronic signature, it shall be presumed that –

a.) The electronic signature is the signature of the person to whom it correlates; and

b.) The electronic signature was affixed by that person with the intention of signing or approving the electronic
document unless the person relying on the electronically signed electronic document knows or has notice of defects
in or unreliability of the signature or reliance on the electronic signature is not reasonable under the circumstances.
Sec. 10. Original Documents –

(1) Where the law requires information to be presented or retained in its original form, that requirement is met by an
electronic data message or electronic document if:

a) the integrity of the information from the time when it was first generated in its final form, as an electronic data
message or electronic document is shown by evidence aliunde or otherwise; and
b) where it is required that information be presented, that the information is capable of being displayed to the person
to whom it is to be presented.

(2) Paragraph (1) applies whether the requirement therein is in the form of an obligation or whether the law simply
provides consequences for the information not being presented or retained in its original form.

(3) For the purposes of subparagraph (a) of paragraph (1):

a) the criteria for assessing integrity shall be whether the information has remained complete and unaltered, apart from
the addition of any endorsement and any change which arises in the normal course of communication, storage and
display; and
b) the standard of reliability required shall be assessed in the light of the purpose for which the information was
generated and in the light of all the relevant circumstances.
Sec. 11. Authentication of Electronic Data Messages and Electronic Documents - Until the Supreme Court by
appropriate rules shall have so provided, electronic documents, electronic data messages and electronic
signatures, shall be authenticated by demonstrating, substantiating and validating a claimed identity of a user,
device, or another entity in an information or communication system, among other ways.

The new law further provides in Section 12 thereof that electronic messages and electronic documents are
admissible and have evidential weight.
Sec. 12. Admissibility and Evidential Weight of Electronic Data Message and Electronic Documents. - In any legal
proceedings, nothing in the application of the rules on evidence shall deny the admissibility of an electronic data
message or electronic document in evidence.

a. On the sole ground that it is in electronic form;

b. On the ground that it is not in the standard written form and electronic data message or electronic document
meeting, and complying with the requirements under Sections 6 or 7 hereof shall be the best evidence of the
agreement and transaction contained therein.

In assessing the evidential weight of an electronic data message or electronic document, the reliability of the
manner in which it was generated, stored or communicated, the reliability of the manner in which its originator
was identified, and other relevant factors shall be given due regard
E-commerce in Carriage Of Goods:

(a) With reference to electronic commerce in carriage of goods, the new law provides in
Section 26 thereof that "where the law requires that any action (in connection with a
contract of carriage of goods) be carried out in writing or by using a paper document,
that requirement is met if the action is carried out by using one or more electronic data
or electronic documents." Thus, electronic messages or electronic documents may be
used as "functional equivalents" of written or paper documents in connection with the
following instances:

a. (i) furnishing the marks, number, quantity or weight of goods;

(ii) stating or declaring the nature or value of goods;
(iii) issuing a receipt for goods;
(iv) confirming that goods have been loaded;
(b) (i) notifying a person of terms and conditions of the contract; (ii) giving instructions to a carrier;

(c) (i) claiming delivery of goods;

(ii) authorizing release of goods;
(iii) giving notice of loss of, or damage to, goods

(d) giving any other notice or statement in connection with the performance of the contract;

(e) undertaking to deliver goods to a named person or a person authorized to claim delivery;

(f) granting, acquiring, renouncing, surrendering, transferring or negotiating rights in goods;

(g) acquiring or transferring rights and obligations under the contract.

Electronic transaction in government:

Sec. 27. Government Use of Electronic Data Messages, Electronic Documents and Electronic Signatures. –

Notwithstanding any law to the contrary, within two (2) years from the date of the effectivity of this Act, all departments,
bureaus, offices and agencies of the government, as well as all government-owned and-controlled corporations, that
pursuant to law require or accept the filing of documents, require that documents be created, or retained and/or submitted,
issue permits, licenses or certificates of registration or approval, or provide for the method and manner of payment or
settlement of fees and other obligations to the government, shall –

(a) accept the creation, filing or retention of such documents in the form of electronic data messages or electronic
documents;
(b) issue permits, licenses, or approval in the form of electronic data messages or electronic documents;
(c) require and/or accept payments, and issue receipts acknowledging such payments, through systems using electronic
data messages or electronic documents;
(d) (d) transact the government business and/or perform governmental functions using electronic data messages or
electronic documents, and for the purpose, are authorized to adopt and promulgate, after appropriate public hearing
and with due publication in newspapers of general circulation, the appropriate rules, regulations, or guidelines
Sec. 29. Authority of the Department of Trade and Industry and Participating Entities.

- The Department of Trade and Industry (DTI) shall direct and supervise the promotion and development of
electronic commerce in the country with relevant government agencies, without prejudice to the provisions of
Republic Act. 7653 (Charter of Bangko Sentral ng Pilipinas) and Republic Act No. 337 (General Banking Act), as
amended.
SEC. 33. Penalties. – The following Acts shall be penalized by fine and/or imprisonment, as follows:

a. Hacking or cracking which refers to unauthorized access into or interference in a computer

system/server or information and communication system; or any access in order to corrupt,
alter, steal, or destroy using a computer or other similar information and communication
devices, without the knowledge and consent of the owner of the computer or information and
communications system, including the introduction of computer viruses and the like, resulting
in the corruption, destruction, alteration, theft or loss of electronic data messages or electronic
documents shall be punished by a minimum fine of One Hundred Thousand Pesos
(P100,000.00) and a maximum commensurate to the damage incurred and a mandatory
imprisonment of six (6) months to three (3) years;
b. Piracy or the unauthorized copying, reproduction, dissemination, distribution, importation, use, removal, alteration,
substitution, modification, storage, uploading, downloading, communication, making available to the public, or
broadcasting of protected material, electronic signature or copyrighted works including legally protected sound
recording or phonograms or information material on protected works, through the use of telecommunication networks,
such as, but not limited to, the internet, in a manner that infringes intellectual property rights shall be punished by a
minimum fine of One Hundred Thousand Pesos (P100,000.00) and a maximum commensurate to the damage incurred
and a mandatory imprisonment of six (6) months to three (3) years;

c. Violation of the Consumer Act or Republic Act No. 7394 and other relevant or pertinent laws through transactions
covered by or using electronic data messages or electronic documents, shall be penalized with the same penalties as
provided in those laws;

d. Other violations of the provisions of this Act, shall be penalized with a maximum penalty of One Million Pesos
(P1,000,000.00) or six (6) years imprisonment
THE END!