Master Services Agreement in Philippines: Template, Key Clauses and Local Law (2026)

What a master services agreement does A master services agreement (MSA) is the framework contract that sets the terms for an ongoing services relationship, so that each individual project can be ordered under a short statement of work (SOW) without renegotiating the legal terms every time. The MSA holds what stays the same across projects: liability, intellectual property, confidentiality, data protection, payment mechanics and dispute resolution. Each SOW then describes one engagement, its scope, deliverables, timeline and price. For a Philippine supplier or customer, this structure saves time and reduces disputes, but only if the MSA is drafted carefully against local law. This page explains the key clauses and how the Civil Code and other Philippine statutes shape them. It is general information, not legal advice. For a specific deal, confirm the position with a Philippine lawyer. ## Is a master services agreement binding in the Philippines? Yes. Under the Civil Code of the Philippines (Republic Act No. 386), a contract requires three essential elements: consent of the contracting parties, a certain object, and a cause (Article 1318). Article 1306 gives parties wide freedom to agree on terms, provided they are not contrary to law, morals, good customs, public order or public policy. Article 1159 states that obligations arising from contracts have the force of law between the parties. A contract is generally binding in whatever form it takes (Article 1356), so a written, signed MSA is firmly enforceable, and electronic execution is recognised under the Electronic Commerce Act (Republic Act No. 8792). Because of this freedom of contract, the terms you write largely decide the relationship, which is exactly why an MSA deserves care. ## Key clauses in a Philippine master services agreement ### Structure: MSA and statements of work State that the MSA sets the governing terms, that services are ordered through SOWs, that each SOW is subject to the MSA, and which prevails if they conflict (usually the MSA, unless a SOW expressly varies a term for that project). Confirm that no SOW is binding until both parties sign it. ### Services and performance standards Describe the services at a framework level and set the standard of performance, such as professional and workmanlike delivery in line with industry practice. Project-specific scope lives in the SOW. ### Fees, payment and tax Set how fees are charged, invoiced and paid across SOWs, including currency and late-payment terms. On tax, services in the Philippines are generally subject to 12 percent value added tax (VAT). For digital services, the VAT on Digital Services Act (Republic Act No. 12023), which took effect on 18 October 2024 with implementing rules in Revenue Regulations No. 3-2025, applies 12 percent VAT to digital services, including those supplied by non-resident digital service providers consumed in the Philippines. State whether fees are inclusive or exclusive of VAT, and address withholding tax where relevant. ### Intellectual property Decide who owns the deliverables and who keeps background intellectual property. A common position is that each party keeps what it brings, and the customer owns the specific deliverables once paid for, with the supplier keeping its reusable tools and know-how. Software and creative works are protected by copyright under the Intellectual Property Code (Republic Act No. 8293), so ownership and licences should be set out expressly. ### Confidentiality Protect each party's confidential information, define what it covers and excludes, and set the duration of the obligation and the handling of information on termination. ### Data privacy Where the services involve personal data, the Data Privacy Act of 2012 (Republic Act No. 10173) applies, overseen by the National Privacy Commission (NPC). If the supplier processes personal data on the customer's behalf, it acts as a personal information processor and the arrangement should be governed by a contract or a data processing agreement that meets the Act and its implementing rules, including security measures and breach handling. ### Warranties, liability and indemnities Give practical warranties (authority to contract, services performed with due skill) and disclaim broad implied terms where the law allows. Cap liability, commonly by reference to fees over a defined period, and carve out items that should not be capped, such as confidentiality breaches, data privacy failures or intellectual property infringement indemnities. Allocate indemnities clearly. ### Term, termination and transition Set the MSA term and renewal, the right to terminate for breach, insolvency or convenience, and the effect on open SOWs. Include a transition or wind-down clause so that work in progress, data and deliverables are handled cleanly on exit. ### Governing law and dispute resolution Choose Philippine law where the deal is centred there. For disputes, the courts are the default, but many commercial contracts choose arbitration under the Alternative Dispute Resolution Act of 2004 (Republic Act No. 9285), for example through the Philippine Dispute Resolution Center. ## A simple master services agreement structure 1. Parties, recitals and definitions

2. Structure: MSA, SOWs and order of precedence
3. Services and performance standards
4. Fees, invoicing, payment and tax (VAT)
5. Intellectual property ownership and licences
6. Confidentiality
7. Data privacy and processing
8. Warranties and disclaimers
9. Limitation of liability and indemnities
10. Term, termination and transition
11. Governing law (Philippines) and dispute resolution
12. General: assignment, notices, force majeure, entire agreement ## Common mistakes in Philippine MSAs - Writing an MSA with no clear SOW mechanism, so project terms get bolted on inconsistently.

• Leaving the VAT position silent, so the 12 percent charge is disputed on the first invoice.
• Vague intellectual property ownership, so both sides claim the deliverables.
• Treating data privacy as boilerplate when the Data Privacy Act places real duties on both controller and processor.
• No order-of-precedence clause, so a SOW and the MSA conflict with no rule to resolve it. ## Keeping master services agreements under control An MSA is never just one document. It is a framework with a growing stack of SOWs beneath it, each adding obligations, deliverables, milestones and payment dates. The hard part is not signing the MSA. It is keeping every SOW consistent with it, tracking the obligations and renewals spread across the relationship, and knowing which version of each document is the agreed one. That work is the same whether you run one MSA or a dozen, and it is far easier when drafting, per-clause risk review, version history and obligation tracking live in one place rather than across inboxes and shared drives. A single AI contract workspace such as Adira is built around that idea: draft the MSA and its SOWs, see the risky positions clause by clause, track the dates and obligations, and keep one trusted version. Adira is India-first today, with other jurisdictions including the Philippines on its roadmap, so for Philippine-specific positions you would still confirm the detail with counsel. The point to take is the direction: a services relationship you can manage is one where the MSA and every SOW stay in one place, consistent, with their obligations and dates in view.