Under Philippine law, the Conjugal Partnership of Gains (CPG) regime is a property regime that governs the property relations between spouses who choose it as their marital property arrangement, or those who were married without a prenuptial agreement before the effectivity of the Family Code on August 3, 1988, under specific circumstances.

This regime's legal foundation is found in the Family Code of the Philippines (Executive Order No. 209, as amended), specifically in Articles 105 to 134.

1. Definition and Characteristics

The Conjugal Partnership of Gains regime mandates that each spouse retains ownership of their individual or exclusive property (known as "separate property"), while the partnership is established exclusively to share in the "net gains" of the property acquired during the marriage. Upon dissolution of the marriage (by death, annulment, or legal separation), the net gains are equally divided between the spouses.

2. Exclusive Property of Each Spouse (Article 109)

The following are considered the exclusive property of each spouse under this regime:

Property Owned Before Marriage: Properties already owned by each spouse before the marriage remain theirs exclusively.
Property Acquired Gratuitously During Marriage: Property acquired by each spouse by inheritance, donation, or other gratuitous title during the marriage is also exclusive.
Personal or Strictly Private Use: Articles of personal and strictly private use, except jewelry, belong solely to the spouse who uses them.
Property for Career or Occupation: Property acquired before or during the marriage by each spouse for their profession or occupation, such as tools of trade, are exclusive.
Exchange of Exclusive Property: Properties acquired in exchange for or with proceeds of exclusive properties retain their exclusive character.

3. Conjugal Property (Article 117)

Conjugal property, distinct from exclusive property, includes properties acquired during the marriage by either or both spouses, except those excluded as exclusive property by law or by express stipulation.

The following are considered conjugal property:

Property Acquired by Both or Either Spouse During Marriage: Any property acquired during the marriage by both or either spouse.
Income from Exclusive Property: Income, fruits, and interest accrued during the marriage from exclusive property.
Properties Acquired by Chance: Any properties acquired by chance, like winnings from gambling or lotteries.
Businesses and Investments: All gains or income derived from any businesses or investments made during the marriage, even if initiated with exclusive funds.

4. Administration of Conjugal Partnership (Article 124)

Both spouses are generally expected to jointly manage the conjugal property. However, specific guidelines are in place for managing these assets:

Equal Authority: Both spouses have joint authority over conjugal property, ensuring they act for the family’s welfare.
Exclusive Right with Consent: Each spouse may exclusively administer their own exclusive property, but if the property will affect conjugal interests, consent from the other spouse is required.
Void Acts without Consent: Any act of administration or disposition by one spouse without the consent of the other, where such consent is legally required, is void.

5. Dissolution of the Conjugal Partnership of Gains (Article 126-134)

The Conjugal Partnership of Gains regime terminates upon the occurrence of certain events:

Death of Either Spouse: The partnership terminates, and the net gains are divided equally.
Legal Separation: Upon judicial decree of legal separation, the partnership is dissolved and assets are partitioned.
Annulment or Declaration of Nullity: If the marriage is annulled or declared void, the regime ends, and the partition of assets proceeds under the Family Code's provisions.

Liquidation Process (Article 129): Upon dissolution, a liquidation of assets is conducted as follows:

Inventory: A complete inventory of conjugal properties and obligations is conducted.
Payment of Debts and Obligations: Conjugal debts and obligations are settled from the conjugal assets.
Return of Exclusive Property: Each spouse’s exclusive property is returned, along with reimbursement for any contributions made to conjugal property.
Division of Net Gains: The net gains (conjugal property remaining after debts and obligations are paid) are divided equally.

6. Conjugal Debts and Liabilities (Article 121)

Under the Conjugal Partnership of Gains, conjugal debts and liabilities are obligations incurred for the benefit of the family. They may include:

Necessaries: Debts incurred for the family’s essential needs and living expenses.
Support: Expenses for the support, education, and maintenance of children from the marriage.
Professional or Business-related Obligations: Obligations related to any business or profession conducted by the spouses.
Taxes and Property Maintenance: Taxes or obligations incurred for the preservation of conjugal properties.

7. Reimbursement of Expenses (Article 120)

A spouse who uses their exclusive funds to benefit the conjugal partnership or the other spouse’s exclusive property may claim reimbursement for these expenses, which can be settled upon liquidation of the conjugal partnership assets.

8. Dissolution Due to Mismanagement or Abandonment (Article 129)

When one spouse mismanages the conjugal assets or abandons the other, the innocent spouse may petition the court to dissolve the conjugal partnership of gains. Mismanagement includes actions that harm the conjugal assets, jeopardizing the financial stability of the family.

9. Advantages and Disadvantages of the Conjugal Partnership of Gains

Advantages: Spouses share the gains of the marriage, ensuring joint benefit from mutual efforts. Each spouse retains exclusive rights over pre-marriage properties, inherited assets, and personal items.
Disadvantages: Liability extends to conjugal property for debts incurred for the family’s benefit. The division upon dissolution can become complex and contentious, especially in determining conjugal contributions.

10. Judicial Precedents and Relevant Rulings

Various Supreme Court decisions elaborate on the interpretation of the Conjugal Partnership of Gains regime. Judicial rulings have clarified boundaries regarding conjugal and exclusive property, rules on administration, and conditions for reimbursement.

This meticulous understanding of the Conjugal Partnership of Gains regime underscores its complexities and the need for careful property and financial management within a marriage.