Short answer. No. Article 34 makes it a prohibited practice to withhold or deny travel documents from applicant workers before departure for monetary or financial considerations. Holding your passport as leverage over an unpaid balance is exactly the conduct the clause names, whatever the agency calls it.
What the law says
To withhold or deny travel documents from applicant workers before departure for monetary or financial considerations other than those authorized under this Code and its implementing rules and regulations.
Labor Code, Article 34 — Prohibited Recruitment Practices. Read the full provision →
The clause is aimed at leverage, not at custody
An agency may legitimately hold documents for a short while to process a visa or stamp a contract, and that is not what this clause is about. What it forbids is withholding them for monetary or financial considerations — that is, using your passport as security for money. The tell is the condition attached. If the papers will be released once processing is finished, that is administration. If they will be released once you pay, the retention has a price on it, and the price is what the provision prohibits.
A debt does not create a lien over your passport
Agencies often argue that the worker owes them, so they are entitled to hold something until paid. Owing money and being entitled to hold a passport are separate questions, and the article answers the second one against the agency regardless of how the first stands. A passport is a travel document issued to you; it is not collateral, and the clause does not carve out an exception for balances the agency says are genuinely due. If money is owed, it is recoverable as money — not by holding your ability to leave.
Ask in writing, and keep the answer
Put the demand in a message rather than making it across a counter: state which documents you are asking for, and ask when they will be released. What you want is the agency's own written reason. A reply that ties release to payment of a balance is worth more than any account you could later give of a conversation, because it records the condition in the agency's words. Note the dates, who has the documents, and whether the person holding them is the licensed agency or an individual acting on his own.
What tends to matter next
Two things usually decide how this unfolds: whether the retention is documented, and whether you are dealing with a licensed entity or with someone who has no licence at all. A licensee has a licence and a bond exposed by the conduct, which gives it a reason to release the papers once the demand becomes formal. Someone unlicensed has neither, and the situation is a different and more serious one. Establish which you are facing early, and bring the written exchange to whoever advises you.