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A Control Agreement lets a lender maintain control over a borrower's financial accounts as collateral for a loan in the Philippines. It's a three-way contract between a lender, borrower, and the bank where the accounts are held, giving the lender certain rights over those accounts.

Under Philippine banking regulations, these agreements help secure loans by allowing lenders to monitor and restrict account activities. When a borrower defaults, the Control Agreement lets the lender take immediate action to protect their interests, including freezing accounts or collecting funds directly from the account to cover the debt. It's commonly used in commercial lending and secured transactions.

Use a Control Agreement when lending money against deposit accounts or investment portfolios in the Philippines. It's essential for banks and financial institutions that need to secure their loans with a borrower's accounts, especially in commercial lending arrangements worth over ₱5 million.

The agreement becomes particularly important for high-risk loans, multiple account collateral situations, or when dealing with borrowers who have complex financial arrangements. Philippine banks often require Control Agreements for credit facilities to large corporations, real estate developers, and businesses with significant cash flows through multiple accounts.

• Basic Control Agreement: Covers standard account control provisions, commonly used for single deposit accounts as loan collateral
• Multi-Account Control Agreement: Designed for borrowers with multiple accounts across different banks, establishing unified control mechanisms
• Securities Account Control Agreement: Specifically for investment portfolios and securities accounts, including special provisions for trading activities
• Hybrid Control Agreement: Combines deposit and securities account control, popular among Philippine conglomerates with diverse financial holdings
• Springing Control Agreement: Activates lender control only upon specific trigger events, offering more flexibility for trusted borrowers

• Lenders: Banks, financial institutions, and credit providers who require security over deposit accounts as loan collateral
• Borrowers: Companies or individuals pledging their accounts as security, typically commercial enterprises seeking substantial financing
• Depository Banks: Financial institutions holding the controlled accounts, responsible for implementing account restrictions
• Legal Counsel: Lawyers who draft and review Control Agreements to ensure compliance with Philippine banking regulations
• Compliance Officers: Bank personnel who monitor agreement terms and ensure proper implementation of control mechanisms

• Account Details: Gather complete information about all accounts to be controlled, including account numbers and types
• Party Information: Collect legal names, addresses, and authorized signatories of the lender, borrower, and depository bank
• Loan Terms: Document the specific loan details, including amount, duration, and triggering events for control activation
• Control Rights: Define exact control mechanisms, access levels, and notification requirements
• Documentation: Prepare corporate authorizations, board resolutions, and specimen signatures from all parties
• Compliance Check: Verify alignment with BSP regulations and Philippine banking laws

• Party Identification: Full legal names and addresses of lender, borrower, and depository bank with authorized signatories
• Account Details: Specific account numbers, types, and locations covered by the agreement
• Control Rights: Clear description of lender's control powers and access limitations
• Notice Provisions: Communication protocols for account changes, defaults, or control activation
• Default Triggers: Specific events that activate enhanced control rights
• Governing Law: Statement designating Philippine law as governing authority
• Dispute Resolution: Agreed method for resolving conflicts under Philippine jurisdiction

A Control Agreement differs significantly from an Account Agreement in both scope and purpose. While both deal with bank accounts, they serve distinct functions in Philippine banking law.

• Primary Purpose: Control Agreements specifically enable lenders to secure rights over collateral accounts, while Account Agreements establish basic terms between a bank and its customer
• Parties Involved: Control Agreements require three parties (lender, borrower, bank), whereas Account Agreements are bilateral between bank and account holder
• Legal Authority: Control Agreements grant specific intervention rights to lenders, while Account Agreements focus on operational terms and service conditions
• Enforcement Triggers: Control Agreements activate upon specific default events, but Account Agreements remain continuously active throughout the banking relationship
• Regulatory Framework: Control Agreements fall under secured lending regulations, while Account Agreements align with basic banking service rules