Short answer. Yes. A debtor who fails to provide the security he promised loses the benefit of the period. Under Article 1198 the debtor cannot insist on the agreed due date when he does not furnish the guaranties or securities he undertook to give, so you may demand payment immediately.
What the law says
The debtor shall lose every right to make use of the period: (1) When after the obligation has been contracted, he becomes insolvent, unless he gives a guaranty or security for the debt; (2) When he does not furnish to the creditor the guaranties or securities which he has promised;
Civil Code, Article 1198 — When the Debtor Loses the Benefit of the Period. Read the full provision →
Who the period is meant to benefit
A due date, or period, usually works in the debtor's favour — it buys him time before he must pay. But that indulgence is not unconditional. Often the creditor grants time precisely because he was promised something in return, such as collateral to secure the debt. Article 1198 recognises this bargain and protects the creditor when the debtor takes the benefit of time but withholds the security that was its price. The period, in other words, is not a gift the debtor may keep while breaking the very undertaking that earned it.
Failing to give promised security ends the term
The article lists when the debtor shall lose every right to make use of the period, and your case is squarely covered: when he does not furnish to the creditor the guaranties or securities which he has promised. Having agreed to put up collateral in exchange for the term, and then not doing so, the debtor forfeits the term itself. The obligation becomes demandable at once, as though no period had been set. You are therefore entitled to require payment now rather than wait for a due date the debtor has effectively defaulted his way out of.
The related triggers
The same article covers neighbouring situations that equally undermine the creditor's security. The debtor loses the period when he becomes insolvent after contracting, unless he gives a guaranty or security for the debt; when by his own acts he impairs the securities already given, or they vanish through a fortuitous event and he does not promptly replace them with equally satisfactory ones; when he violates an undertaking that was the very reason the creditor agreed to the period; and when he attempts to abscond. The unifying idea is that the debtor may not keep the benefit of time while destroying the creditor's protection.
What you still have to establish
The right to accelerate is real, but it rests on facts you must be able to show — that the security was genuinely promised as part of the arrangement, and that the debtor has failed to furnish it. A vague hope of collateral, never actually agreed, is a weaker footing than a clear undertaking. The article decides that the period is lost; it does not by itself fix the amount owed or resolve other defenses the debtor may raise about the debt. And it addresses the loss of the term, not any separate penalty, which would depend on what the parties agreed.
Cases citing this provision
These Supreme Court decisions cite the provision above. We list them so you can read them yourself; the summaries of what each decided are not ours to give.
- Philippine Bank of Communications vs. Spouses Jose C. Go and Elvy T. Go, G.R. No. 175514, February 14, 2011 — read the decision on LawPhil →
- Eugene L. Lim vs. BPI Agriculture Development Bank, G.R. No. 179230, March 9, 2010 — read the decision on LawPhil →
- Siain Enterprises, Inc. vs. Cupertino Realty Corp. and Edwin R. Catacutan, G.R. No. 170782, June 22, 2009 — read the decision on LawPhil →
- Development Bank of the Philippines vs. Spouses Jesus and Anacorita Doyon, G.R. No. 167238, March 25, 2009 — read the decision on LawPhil →