Short answer. From the last payment of interest, not from when the debtor first stopped paying anything else. Article 1151 provides that the prescriptive period for enforcing an obligation to pay principal with interest runs from the last payment of the interest. That last payment date is your starting point.
What the law says
The time for the prescription of actions which have for their object the enforcement of obligations to pay principal with interest or annuity runs from the last payment of the annuity or of the interest.
Civil Code, Article 1151 — Actions to Demand an Accounting. Read the full provision →
The last interest payment is the anchor date
Article 1151 fixes a specific starting point for exactly this kind of obligation. The time for the prescription of actions which have for their object the enforcement of obligations to pay principal with interest or annuity runs from the last payment of the annuity or of the interest. Your period to collect does not run from when the loan was made, from the original due date, or from the first missed payment — it runs from the date the debtor actually last paid interest.
Why the rule looks at the last payment, not the first default
A debtor who kept paying interest for years before eventually stopping is in a different position from one who defaulted from the start. Each interest payment reflects the continued existence and acknowledgment of the debt, so it makes sense that the clock only starts once those payments actually cease, rather than from an earlier date when the debt was still being serviced. This protects a creditor who reasonably relied on ongoing partial payments rather than acting sooner.
This applies specifically to principal-with-interest or annuity obligations
The article's rule is written for obligations that specifically involve paying principal together with interest, or an annuity. It is not a generic prescription rule for any unpaid debt; it is tailored to obligations with this recurring-payment structure, where the natural marker of ongoing performance is the payment stream itself rather than a single lump-sum due date. If your loan fits this description, the last-payment rule is what determines your starting point rather than a more general prescription provision.
What you need to establish
To know exactly when your period began running, you need to identify the actual date of the debtor's last interest payment — not an estimate, and not the date you noticed the payments had stopped. Bank records, receipts, or any acknowledgment of that last payment are the kind of evidence that pins down this date, since the article measures the period from that specific event rather than from a date either side simply assumes.
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.
- B & I Realty Co., Inc. vs. Teodoro Caspe, et al, G.R. No. 146972, January 29, 2008 — read the decision on LawPhil →