SaaS Subscription Agreement in Philippines: Template, Key Clauses and Local Law (2026)

What a SaaS subscription agreement does, and when Philippine law applies A SaaS (software as a service) subscription agreement lets a customer access software hosted by a provider over the internet for a recurring fee. The customer does not own or hold a copy of the software. It rents access for a term. That shapes every key clause: the provider keeps the software and infrastructure, the customer keeps its own data, and the contract sets the rules for availability, security, payment and exit. Philippine law applies when a party is based in the Philippines, when the service is consumed there, or when the parties choose Philippine law to govern. A foreign provider selling to a Philippine business is still caught by local data protection and tax rules even if another country's law governs the contract, so the governing-law clause does not remove local obligations. This page explains how to build a SaaS subscription agreement that works in the Philippines. It is general information, not legal advice. ## Is a SaaS subscription agreement binding in the Philippines? Yes. Under the Civil Code (Republic Act No. 386), a contract needs consent, a certain object and a cause (Article 1318), and parties are free to set their terms under Article 1306 so long as they are not contrary to law, morals, good customs, public order or public policy. A contract is generally binding in whatever form (Article 1356), so an online subscription accepted by click-to-accept is as binding as a signed paper contract, and electronic acceptance and signatures are recognised under the Electronic Commerce Act (Republic Act No. 8792). Two practical points: make click-wrap acceptance a clear positive act with the terms available before the customer commits, and keep a record of who accepted which version and when. ## The key clauses in a Philippine SaaS subscription agreement ### Subscription grant and scope of use Define what the customer may access: the modules, the number of users or seats, usage limits, and that use is for the customer's own business. State clearly this is a right to access a service, not a licence to the underlying code and not a transfer of intellectual property. ### Fees, billing and the VAT point Set the fee, billing cycle, currency and renewal pricing, with price increases capped or notified in advance. On tax, 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 value added tax to digital services, including those supplied by non-resident digital service providers and consumed in the Philippines. A foreign SaaS provider that meets the threshold must register and account for VAT. State whether fees are inclusive or exclusive of VAT so the payable amount is clear. ### Service levels and availability The service level agreement (SLA) is where trust is earned or lost. Define the uptime commitment (for example 99.9 percent monthly), how it is measured, what is excluded (planned maintenance, customer-caused issues), and the remedy for a miss, usually a service credit. As provider, make the credit the sole remedy for availability failures; as customer, make sure it is meaningful. ### Data protection and the Data Privacy Act If the service processes personal data, the Data Privacy Act of 2012 (Republic Act No. 10173) applies, overseen by the National Privacy Commission (NPC). The provider processing data on the customer's behalf is a personal information processor; the customer is usually the personal information controller. The agreement should include data protection terms or a separate data processing agreement covering security measures, breach notification, sub-processors and data handling on exit. The Act and its implementing rules require reasonable and appropriate security measures and prompt breach reporting to the NPC and affected individuals. ### Intellectual property The provider keeps all rights in the software, which is protected by copyright under the Intellectual Property Code (Republic Act No. 8293). The customer keeps all rights in its own data, granting the provider only the limited licence needed to run the service. Say this clearly, and confirm that any feedback does not transfer the customer's data rights. ### Confidentiality, warranties and liability Protect each side's confidential information. Warrant that the service will perform materially as described, and disclaim broad implied terms where allowed. Cap liability, usually at fees paid over a set period, and carve out items that should never be capped, such as a confidentiality breach, a data privacy failure or an intellectual property infringement indemnity. ### Term, renewal and termination State the initial term, whether it auto-renews, and the notice window to stop renewal. Auto-renewal is the most common source of unwanted cost, so the notice window and a reminder for it matter. Cover termination for breach and insolvency, the customer's right to export its data in a usable format within a stated period, and the provider's right to delete it after. ### Governing law and dispute resolution Choose Philippine law if the deal is centred there. For disputes, the courts are the default, while arbitration under the Alternative Dispute Resolution Act of 2004 (Republic Act No. 9285) is a common private alternative. ## A simple SaaS subscription agreement structure 1. Parties and definitions

2. The subscription: grant, scope, users and limits
3. Fees, billing, VAT and renewal pricing
4. Service levels, support and maintenance
5. Customer data, privacy and data processing terms
6. Intellectual property and feedback
7. Confidentiality
8. Warranties and disclaimers
9. Limitation of liability and indemnities
10. Term, suspension, termination and data export on exit
11. Governing law (Philippines) and dispute resolution
12. General: assignment, notices, force majeure, entire agreement ## Common mistakes in Philippine SaaS contracts - Leaving the VAT position silent, then arguing over whether the 12 percent sits on top of the quoted fee.

• Treating data protection as boilerplate when the Data Privacy Act carries real security and breach-reporting duties.
• An SLA with a published uptime number but no measurement method and no remedy.
• Auto-renewal with a short notice window buried in the terms and no reminder.
• No clear data export right on termination, leaving the customer's data trapped. ## Keeping SaaS contracts under control A SaaS portfolio is rarely one contract. It is dozens of subscriptions with different renewal dates, SLAs and data terms, bought by different teams. The real work is not drafting one agreement. It is drafting consistently, catching the clause that drifts from your standard, remembering every renewal window, and knowing which version is in force. That is the same work whether you run two subscriptions or two hundred, and it is far easier when drafting, per-clause risk review, version history and renewal tracking live in one place rather than across email, a shared drive and a spreadsheet. A single AI contract workspace such as Adira is built around that idea. Adira is India-first today, with other jurisdictions including the Philippines on its roadmap, so for Philippine-specific positions you would still confirm the local law with counsel. The point to take is the direction: contracts you can trust are the ones that stay in one place, in step, with their deadlines in view.