Data Protection Laws of the World Handbook: Second Edition - Philippines - Data Protection

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The Philippines recently enacted the Data Privacy Act of 2012 (the "Act") or Republic Act No. 10173, which took effect on 8 September 2012.

DEFINITION OF PERSONAL DATA

Personal Information is defined in the Act as "any information whether recorded in a material form or not, from which the identity of an individual is apparent or can be reasonably and directly ascertained by the entity holding the information, or when put together with other information would directly and certainly identify an individual."

The Act, in addition to defining "Personal Information" that is covered by the law, also expressly excludes certain information from its coverage. These are:

Information about any individual who is or was an officer or employee of a government institution that relates to the position or functions of the individual, including:
- The fact that the individual is or was an officer or employee of the government institution;
- The title, business address and office telephone number of the individual;
- The classification, salary range and responsibilities of the position held by the individual; and
- The name of the individual on a document prepared by the individual in the course of employment with the government;
Information about an individual who is or was performing services under contract for a government institution that relates to the services performed, including the terms of the contract, and the name of the individual given in the course of the performance of those services;
Information relating to any discretionary benefit of a financial nature such as the granting of a license or permit given by the government to an individual, including the name of the individual and the exact nature of the benefit;
Personal information processed for journalistic, artistic, literary or research purposes;
Information necessary in order to carry out the functions of a public authority which includes the processing of personal data for the performance by the independent, central monetary authority and law enforcement and regulatory agencies of their constitutionally and statutorily mandated functions. Nothing in this Act shall be construed as to have amended or repealed Republic Act No. 1405, otherwise known as the Secrecy of Bank Deposits Act; Republic Act No. 6426, otherwise known as the Foreign Currency Deposit Act; and Republic Act No. 9510, otherwise known as the Credit Information System Act (CISA);
Information necessary for banks and other financial institutions under the jurisdiction of the independent, central monetary authority or Bangko Sentral ng Philipinas to comply with Republic Act No. 9510, and Republic Act No. 9160, as amended, otherwise known as the Anti-Money Laundering Act and other applicable laws; and
Personal information originally collected from residents of foreign jurisdictions in accordance with the laws of those foreign jurisdictions, including any applicable data privacy laws, which is being processed in the Philippines.

DEFINITION OF SENSITIVE PERSONAL DATA

Sensitive Personal Information is defined in the Act as personal information:

About an individual's race, ethnic origin, marital status, age, color, and religious, philosophical or political affiliations;
About an individual's health, education, genetic or sexual life of a person, or to any proceeding for any offense committed or alleged to have been committed by such person, the disposal of such proceedings, or the sentence of any court in such proceedings;
Issued by government agencies peculiar to an individual which includes, but not limited to, social security numbers, previous or cm-rent health records, licenses or its denials, suspension or revocation, and tax returns; and
Specifically established by an executive order or an act of Congress to be kept classified.

NATIONAL DATA PROTECTION AUTHORITY

The Act provides for the creation of a National Privacy Commission. As of 15 January 2013, the National Privacy Commission has not been constituted.

REGISTRATION

There is no system of mandatory registration provided in the Act.

DATA PROTECTION OFFICERS

The Personal Information Controller of an organisation must appoint a person or persons who shall be accountable for the organisation's compliance with the Act, and the identity of such person or persons must be disclosed to the data subjects upon the latter's request.

COLLECTION AND PROCESSING

The collection and processing of Personal Information must comply with the general principle that Personal Information must be:

Collected for specified and legitimate purposes determined and declared before, or as soon as reasonably practicable after collection, and later processed in a way compatible with such declared, specified and legitimate purposes only;
Processed fairly and lawfully;
Accurate, relevant and, where necessary for purposes for which it is to be used the processing of personal information, kept up to date; inaccurate or incomplete data must be rectified, supplemented, destroyed or their further processing restricted;
Adequate and not excessive in relation to the purposes for which they are collected and processed;
Retained only for as long as necessary for the fulfillment of the purposes for which the data was obtained or for the establishment, exercise or defense of legal claims, or for legitimate business purposes, or as provided by law; and
Kept in a form which permits identification of data subjects for no longer than is necessary for the purposes for which the data were collected and processed: Provided, That personal information collected for other purposes may lie processed for historical, statistical or scientific purposes, and in cases laid down in law may be stored for longer periods: Provided, further, that adequate safeguards are guaranteed by said laws authorizing their processing.

In addition, the processing of personal information must meet the following criteria, otherwise, such processing becomes prohibited:

The data subject has given his or her consent;
The processing of personal information is necessary and is related to the fulfillment of a contract with the data subject or in order to take steps at the request of the data subject prior to entering into a contract;
The processing is necessary for compliance with a legal obligation to which the personal information controller is subject;
The processing is necessary to protect vitally important interests of the data subject, including life and health;
The processing is necessary in order to respond to national emergency, to comply with the requirements of public order and safety, or to fulfill functions of public authority which necessarily includes the processing of personal data for the fulfillment of its mandate; or
The processing is necessary for the purposes of the legitimate interests pursued by the personal information controller or by a third party or parties to whom the data is disclosed, except where such interests are overridden by fundamental rights and freedoms of the data subject which require protection under the Philippine Constitution.

The processing of sensitive personal information is prohibited, except in the following cases;

The data subject has given his or her specific consent prior to the processing, or in the case of privileged information, all parties to the exchange have given their consent prior to processing;
The processing is provided for by existing laws and regulations, provided that such regulatory enactments guarantee the protection of the sensitive personal information and the privileged information, and the consent of the data subjects is not required by law or regulation permitting the processing of the sensitive personal information or the privileged information;
The processing is necessary to protect the life and health of the data subject or another person, and the data subject is not legally or physically able to express his or her consent prior to the processing;
The processing is necessary to achieve the lawful and noncommercial objectives of public organizations and their associations, provided, (i) such processing is only confined and related to the bona fide members of these organizations or their associations, (ii) the sensitive personal data are not transferred to third parties, and (iii) the consent of the data subject was obtained prior to processing;
The processing is necessary for purposes of medical treatment, is carried out by a medical practitioner or a medical treatment institution, and an adequate level of protection of personal information is ensured; or
The processing concerns such personal information as is necessary for the protection of lawful rights and interests of natural or legal persons in court proceedings, or the establishment, exercise or defense of legal claims, or when provided to government or public authority.

TRANSFER

The transfer of Personal Information is permitted without any restrictions or prerequisites, but the Personal Information Controller remains responsible for personal information under its control or custody that have been transferred to a third party for processing, whether domestically or internationally, subject to cross-border arrangement and cooperation. The transfer, however, of sensitive personal information to third parties is prohibited.

SECURITY

The personal information controller must implement reasonable and appropriate organisational, physical and technical measures to protect personal information against any type of accidental or unlawful destruction, such as from accidental loss, unlawful access, fraudulent misuse, unlawful destruction, alteration, contamination and disclosure, as well as against any other unlawful processing.

The determination of the appropriate level of security must take into account the nature of the personal information to be protected, the risks represented by the processing, the size of the organization and complexity of its operations, current data privacy best practices and the cost of security implementation.

In addition, the security measures to be implemented must include the following, which are subject to guidelines that the National Privacy Commission may issue:

safeguards to protect its computer network against accidental, unlawful or unauthorised usage or interference with or hindering of their functioning or availability;
a security policy with respect to the processing of personal information;
a process for identifying and accessing reasonably foreseeable vulnerabilities in its computer networks, and for taking preventive, corrective and mitigating action against security incidents that can lead to a security breach; and
regular monitoring for security breaches and a process for taking preventive, corrective and mitigating action against security incidents that can lead to a security breach.

The personal information controller is obligated to ensure that third parties processing personal information on its behalf shall implement the security measures required by the Act.

The obligation to maintain strict confidentiality of personal information that are not intended for public disclosure extends to the employees, agents or representatives of a personal information controller who are involved in the processing of such personal information.

BREACH NOTIFICATION

The Personal Information Controller is required to promptly notify the National Privacy Commission and the affected data subjects when it has reasonable belief that sensitive personal information or other information has been acquired by an unauthorised person, and that (a) such personal information may, under the circumstances, be used to enable identity fraud and (b) the Personal Information Controller or the National Privacy Commission believes that such unauthorised acquisition is likely to give rise to a real risk of serious harm to any affected data subject.

The notification shall at least describe the nature of the breach, the sensitive personal information possibly involved, and the measures taken by the entity to address the breach.

Notification may be delayed only to the extent necessary to determine the scope of the breach, to prevent further disclosures, or to restore reasonable integrity to the information and communications system. The National Privacy Commission may also authorize postponement of notification where such notification may hinder the progress of a criminal investigation related to a serious breach.

Notification is not required if the National Privacy Commission determines (a) that notification is unwarranted after taking into account compliance by the Personal Information Controller with the Act and the existence of good faith in the acquisition of personal information, or (b) in the reasonable judgment of the National Privacy Commission, such notification would not be in the public interest or in the interests of the affected data subjects.

ENFORCEMENT

The National Privacy Commission is responsible for ensuring compliance of the Personal Information Controller with the Act. It has the power to receive complaints, institute investigations, facilitate or enable settlement of complaints through the use of alternative dispute resolution processes, adjudicate, award indemnity on matters affecting any personal information, prepare reports on disposition of complaints and resolution of any investigation it initiates, and, in cases it deems appropriate, publicize any such report. Additionally, the National Privacy Commission can issue cease and desist orders, impose a temporary or permanent ban on the processing of personal information, upon finding that the processing will be detrimental to national security and public interest.

The National Privacy Commission, however, cannot prosecute violators for breach of the Act for which criminal penalties can be imposed. The Department of Justice is tasked with the prosecution for violations of the Act that are punishable with criminal sanctions.

The following actions are punishable by the Act with imprisonment in varying duration plus a monetary penalty:

Processing of personal information or sensitive personal information; (i) without the consent of the data subject or without being authorised by the Act or any existing law; or (ii) for purposes not authorised by the data subject or otherwise authorised under the Act or under existing laws;
Providing access to personal information or sensitive personal information due to negligence and without being authorised under this Act or any existing law;
Knowingly or negligently disposing, discarding or abandoning the personal information or sensitive personal information of an individual in an area accessible to the public or has otherwise placed the personal information of an individual in its container for trash collection;
Knowingly and unlawfully, or violating data confidentiality and security data systems, breaking in any way into any system where personal and sensitive personal information is stored;
Concealing the fact of such security breach, whether intentionally or by omission, after having knowledge of a security breach and of the obligation to notify the National Privacy Commission pursuant to Section 20(f) of the Act;
Disclosing by any personal information controller or personal information processor or any of its officials, employees or agents, to a third party personal information or sensitive personal information without the consent of the data subject and without malice or bad faith;
Disclosing, with malice or in bad faith, by any personal information controller or personal information processor or any of its officials, employees or agents of unwarranted or false information relative to any personal information or personal sensitive information obtained by him or her.

ELECTRONIC MARKETING

In 2008, the Department of Trade and Industry, the Department of Health, and the Department of Agriculture issued a joint administrative order implementing the Consumer Act of the Philippines (Republic Act No. 7394) and the E-Commerce Act (Republic Act No. 8792). The Joint DTI-DOH-DA Administrative Order No. 01 (the "Administrative Order") provides rules and regulations protecting consumers during online transactions, particularly on the purchase of products and services. It covers both local and foreign-based retailers and sellers engaged in e-commerce.

The Administrative Order particularly requires retailers, sellers, distributors, suppliers or manufacturers engaged in electronic commerce with consumers to refrain from engaging in any false, deceptive and misleading advertisement prohibited under the provisions of the Consumer Act of the Philippines.

In line with the Administrative Order's provision on fair marketing and advertising practices, retailers, sellers, distributors, suppliers or manufacturers engaged in electronic commerce are mandated to provide:

fair, accurate, clear and easily accessible information describing the products or services offered for sale such as the nature, quality and quantity thereof;
fair, accurate, clear and easily accessible information sufficient to enable consumers to make an informed decision whether or not to enter into the transaction; and
such information that allows consumers to maintain an adequate record of the information about the products and services offered for sale.

Republic Act No. 10175 or the "Cybercrime Prevention Act of 2012"2 (the "CPA") prohibits and penalizes unsolicited commercial communications unless:

there is prior affirmative consent from the recipient; or
the primary intent of the communication is for service and/or administrative announcements from the sender to its existing users, subscribers or customers; or
the following conditions are present:
- The commercial electronic communication contains a simple, valid, and reliable way for the recipient to reject receipt of further commercial electronic messages (opt-out) from the same source;
- The commercial electronic communication does not purposely disguise the source of the electronic message; and
- The commercial electronic communication does not purposely include misleading information in any part of the message in order to induce the recipients to read the message.

ONLINE PRIVACY (INCLUDING COOKIES AND LOCATION DATA)

The CPA is the first law in the Philippines which specifically criminalizes computer crimes. The law aims to address legal issues concerning online interactions. The CPA does not define nor does it particularly refer to online privacy, however, it penalises acts that violate an individual's rights to online privacy, particularly those interferences against the confidentiality, integrity and availability of computer data and systems.

Law enforcement authorities, with due cause, shall be authorised to collect or record by technical or electronic means traffic data in real-time associated with specified communications transmitted by means of a computer system. "Traffic data" as used in the CPA, refers to the communication's origin, destination, route, time, date, size, duration, or type of underlying service, but not content, nor identities.

All other data to be collected or seised or disclosed will require a court warrant.

The court warrant shall only be issued or granted upon written application and the examination under oath or affirmation of the applicant and the witnesses he may produce showing that there are:

reasonable grounds to believe that any of the crimes penalised by the CPA has been committed, or is being committed, or is about to be committed;
reasonable grounds to believe that evidence that will be obtained is essential to the conviction of any person for, or to the solution of, or to the prevention of, any such crimes; and
no other means readily available for obtaining such evidence.

The integrity of traffic data shall be preserved for a minimum period of six months from the date of the transaction.

Courts may issue a warrant for the disclosure of traffic data if such disclosure is necessary and relevant for the purposes of investigation in relation to a valid complaint officially docketed.

No law in this jurisdiction currently deals with the subject of Location Data or the regulation of the use of Cookies.

Footnotes

² The CPA was signed into law on 12 September 2012. However, the Philippine Supreme Court issued a temporary restraining order dated 9 October 2012 on the law's implementation. The order is effective for 120 days and is set to expire on 6 February 2013. Oral arguments were conducted on 15 January 2013 where a request for an extension of such restraining order was made. As of 20 January 2013, The Supreme Court has yet to act on such extension.

This publication is intended as a general overview and discussion of the subjects dealt with. It is not intended to be, and should not used as, a substitute for taking legal advice in any specific situation. DLA Piper Australia will accept no responsibility for any actions taken or not taken on the basis of this publication.

DLA Piper Australia is part of DLA Piper, a global law firm, operating through various separate and distinct legal entities. For further information, please refer to www.dlapiper.com

Philippines: Data Protection Laws of the World Handbook: Second Edition - Philippines E-Commerce And Privacy Alert

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