SMALL CLAIMS NOW UP TO 400K IN METROPOLITAN TRIAL COURTS

February 27, 2019

The Supreme Court increased the limit of small claims cases filed before the Metropolitan Trial Courts from P300,000.00 to P400,000.00, beginning 1 April 2019. Upon the recommendation of the Office of the Court Administrator to Associate Justice Diosdado M. Peralta, Chairperson of the Special Committee on Small Claims Cases, who took it up with the Court en banc, the initiative was to streamline and harmonize the rules of procedure for money claims filed before all first level courts. 

Before the concept of small claims was introduced in our court system, the Revised Rule on Summary Procedure applied to money claims not exceeding P100,000.00 in first level courts outside Metro Manila, while P200,000.00 in first level courts within Metro Manila, otherwise known as the Metropolitan Trial Courts. These amounts were later increased to P300,000.00 and P400,000.00, respectively, under Republic Act No. 7691. In 2010, the Court authorized the implementation of the Rule of Procedure for Small Claims Cases to all first level courts nationwide for money claims of not more than P100,000.00. In 2015, the Supreme Court increased this to P200,000.00 and in 2018, to P300,000.00.

As a consequence, money claims filed before the first level courts outside Metro Manila were all covered by the Revised Rules of Procedure for Small Claims Cases, whereas those filed before the Metropolitan Trial Courts were considered either as small claims cases for claims of up to P300,000.00, or proceeded under the Revised Rule on Summary Procedure, for claims above P300,000.00 to P400,000.00.

According to Justice Peralta, this move by the Court “will result in the speedier and more efficient resolution of money claims cases, as well as help increase the country’s score in the World Bank’s Ease of Doing Business Report.” In the World Bank’s 2019 Report, the Philippines ranked 124th out of 190 countries, dropping from its 2018 ranking of 113. This score is based on a number of indicators, one of which involves measuring the time and cost of resolving commercial disputes before the Metropolitan Trial Court in Quezon City for claims amounting to 200% of the Philippine’s income per capita, or P337,331.00. Under the Revised Rules of Procedure for Small Claims Cases, courts are mandated to resolve a case within thirty (30) days from the day the statement of claim was filed. Justice Peralta “believes that applying the Revised Rules of Procedure for Small Claims Cases in all money claims filed before the Metropolitan Trial Courts will increase the country’s score in next year’s report.” He added that “the increase is in accord with the four-point agenda of Chief Justice Lucas P. Bersamin for the Judiciary, to make our rules more efficient, effective and responsive to the needs of the court users.”

In a message relayed to the Court, Department of Trade and Industry (DTI) Secretary Ramon M. Lopez also expressed optimism that “the move initiated by the Supreme Court will benefit small entrepreneurs using the court system and result in an increase in the country’s ranking in the World Bank Doing Business Survey.” He “thanked the Supreme Court for it strong support to Ease of Doing Business reforms. The SC’s swift action to increase the threshold for small claims in the Metropolitan Trial Courts in Metro Manila will significantly reduce the number of days for trial and judgment under the DB Enforcing Contracts indicator.” 

The reform also decreases cost on the part of the claimant by approximately 20%, since attorney’s fees are no longer necessary given that lawyers are not allowed to represent a party in small claims cases. 

“This reform,” Secretary Lopez explains, “is one of the initiatives of the government to promote Ease of Doing Business. The DTI is optimistic that the strong partnership between the Executive and the Judicial branches of government will bring positive results. We look forward to working with the Supreme Court to improve the quality of judicial processes index, particularly in the area of court automation and case management.”