In 2014, RA 10641 was enacted to amend RA 7721. "The amendment allowed the full entry of foreign banks in the Philippines, though it maintained the State policy to keep the financial system effectively controlled by Filipinos." One significant change was the addition of a provision on the participation of foreign banks in foreclosure proceedings:

"SECTION 9. Participation in Foreclosure Proceedings. — Foreign banks which are authorized to do banking business in the Philippines through any of the modes of entry under Section 2 hereof shall be allowed to bid and take part in foreclosure sales of real property mortgaged to them, as well as to avail of enforcement and other proceedings, and accordingly take possession of the mortgaged property, for a period not exceeding five years from actual possession: Provided, That in no event shall title to the property be transferred to such foreign bank. In case said bank is the winning bidder, it shall, during the said five-year period, transfer its rights to a qualified Philippine national, without prejudice to a borrower's rights under applicable laws. Should the bank fail to transfer such property within the five-year period, it shall be penalized one-half of one percent per annum of the price at which the property was foreclosed until it is able to transfer the property to a qualified Philippine national.

"Evidently, foreign banks may now foreclose and acquire mortgaged properties under RA 10641, subject to the following limitations: a) the possession is limited to five years; b) the title of the property shall not be transferred to the foreign bank; and c) the foreign bank must transfer its right to a qualified Philippine national within the five-year period. Failing to comply with the last condition shall make the foreign bank liable to pay half of 1 percent per annum of the foreclosure price until it transfers the property to a qualified Philippine national."

Notably, RA 10641 does not contain a retroactivity clause. For this reason, "it is construed as having only a prospective application unless the purpose and intention of the legislature to give [it] a retrospective effect [is] expressly declared or [is] necessarily implied from the language used."

It should be borne in mind that the parties entered into a Credit Agreement in 1999 and 2001. The default on the said loans, which led to the foreclosure sale of the mortgaged properties, took place in 2003. Clearly, Maybank cannot find solace in RA 10641 because the applicable law during the foreclosure proceedings was RA 4882. To recall, RA 4882 provides that "a mortgagee who is prohibited from acquiring public lands may possess the property for five years after default and for the purpose of foreclosure. However, it may not bid or take part in any foreclosure sale of the real property."

During the material period, Maybank, as a foreign bank, was a mortgagee disqualified to acquire lands in the Philippines. Therefore, "[i]t may possess the mortgaged property after default and solely for foreclosure, but it cannot bid or take part in any foreclosure sale." Therefore, the sale to Maybank was void.

The facts and quoted portion of the decision are from 4E Steel Builders Corporation and Spouses Filomeno and Virginia Ecraela v. Maybank Philippines Inc. (G.R. 230013 promulgated on 13 March 2023).