What does “encumbered” mean on a car’s CR, and how can I remove it in the Philippines?

When a car’s Certificate of Registration (CR) is marked “encumbered,” it means the vehicle is still under bank financing or chattel mortgage. To remove it, the loan must be fully paid, after which the bank issues a Release of Chattel Mortgage. This document is submitted to the LTO so the encumbrance can be cancelled and an updated CR issued.