Short answer. Yes. The Civil Code expressly allows a third person who is not a party to the principal loan to secure it by pledging or mortgaging his own property. You can put up your property as collateral for another's debt, provided you own it and have free disposal of it — the essential requisites still apply.
What the law says
Third persons who are not parties to the principal obligation may secure the latter by pledging or mortgaging their own property.
Civil Code, Article 2085 — Essential Requisites of Pledge and Mortgage. Read the full provision →
A stranger to the loan may still put up security
Article 2085 lists the essential requisites of pledge and mortgage, then adds a sentence that answers your question directly: third persons who are not parties to the principal obligation may secure the latter by pledging or mortgaging their own property. You do not have to be the borrower to give collateral. Someone who owes nothing on the loan can still charge his own asset to guarantee that the borrower pays. This is common when a relative or friend backs another person's financing by offering land or a movable they own as security.
You must own the property and be free to charge it
The permission comes with conditions drawn from the same article. The security must be constituted to secure the fulfillment of a principal obligation; the person putting up the property must be its absolute owner; and he must have the free disposal of it, or in the absence of that, be legally authorized for the purpose. So you can pledge or mortgage for another's debt only if the property is truly yours to give and nothing bars you from encumbering it. Charging property you do not own, or cannot freely dispose of, fails these requisites.
What you are risking
Understand the exposure before you sign. By giving collateral you are staking that specific property on someone else's performance. If the borrower defaults, the creditor can proceed against the thing you pledged or mortgaged to satisfy the debt — your property can be foreclosed or sold even though the money was never yours. You are securing the obligation with the asset, so the asset bears the consequence of default. This is why offering your property for another's loan is a serious commitment, not a mere formality of vouching for them.
Security is not the same as personally owing the debt
A third-party mortgagor or pledgor is not automatically a co-borrower. As a rule, your liability is limited to the property you put up unless you also separately bound yourself personally, such as by signing as a guarantor or solidary debtor. The creditor's recourse under the security runs against the thing, not against your other assets, absent such a personal undertaking. Read the documents carefully: the difference between pledging one asset and guaranteeing the whole debt with everything you own is exactly the difference these requisites and your signatures define.
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.
- Technology Resource Center (TRC) formerly known as Technology and Livelihood Resources Center vs. Heirs, G.R. No. 214410, August 3, 2022 — read the decision on LawPhil →
- Spouses Nilo Ramos and Eliadora Ramos vs. Raul Obispo and Far East Bank and Trust Co, G.R. No. 193804, February 27, 2013 — read the decision on LawPhil →
- Flordeliza H. Cabuhat vs. The Hon. Court of Appeals, et al, G.R. No. 122425, September 28, 2001 — read the decision on LawPhil →
- Merlinda Plana vs. Lourdes Tan Chiua and Heirs of Ramon Chiang, G.R. No. 250636, January 10, 2023 — read the decision on LawPhil →