No. 125 Brgy.

San
Sebastian Lipa City,
Batangas,
Mobile Philippines
: 0927 283 8234
Telephon : (043) 723 8412
e Gmail :
[email protected]

Regulatory Framework for Business Transactions

Banking Laws

I. Philippine Deposit Insurance Corporation Law (RA 3591 as amended by RA 10846)

A. Description of Philippine Deposit Insurance Corporation

PDIC is a government instrumentality created in 1963 by virtue of Republic Act 3591 to

insure the deposits of all banks which are entitled to the benefits of insurance. The PDIC is
an attached agency of the Department of Finance.

The latest amendments to RA 3591 are contained in RA 10846 signed into law on May 23,
2016. RA 10846 empowered PDIC with stronger authorities to protect the depositing public
and promote financial stability. The new law also includes important provisions to ensure
that the PDIC remains financially and institutionally strong to fulfill its mandate under its
Charter.

The PDIC now has the authority to help depositors have quicker access to their insured
deposits should their bank close; resolve problem banks while still open; hasten the
liquidation process for closed banks; and mete out stiffer sanctions and penalties against
those who engage in unsafe and unsound banking practices.

Under amendment, depositors would have quicker access to their insured deposits in
the event of bank closure since PDIC now has the authority to pay insured deposits
without netting out depositors’ loan obligations with the closed bank, and based on
evidence of deposits and not on the closed bank’s records alone.

With its enhanced resolution authorities, PDIC would also be able to more effectively
promote financial inclusion through early intervention in problem banks or open bank
resolution. In cases where bank closure becomes inevitable, the new law enhanced the
chances of recovery by creditors of their claims against the assets of the closed bank by
preventing the further dissipation of these assets through seamless transition from bank
closure to liquidation. The new law does away with the 90-day receivership period and
allows PDIC to proceed directly to liquidation. The immediate assignment of
encumbered assets to closed bank creditors, adoption of purchase of assets and
assumption of liabilities as a mode of liquidation, and express prohibition on reopening of
banks ordered closed by the Monetary Board of the Bangko Sentral ng Pilipinas would
help enhance recovery rate for creditors of closed banks.

B. Insurable Deposits under PDIC Law (Covered by PDIC Insurance)

1. By Deposit Type:
a. Savings Deposit
b. Special Savings
c. Demand/Checking Account
d. Negotiable Order of Withdrawal (NOW)
e. Certificate of Time Deposits
f. Foreign currency Deposit
2. By Deposit Account:
a. Single Accounts - are individually-owned accounts or accounts held under one
name, either as natural person (single proprietorship or individual) or juridical
entity (corporation, partnership or cooperative).
b. Joint Accounts - are accounts held under more than one name.
i. A joint account regardless of whether the conjunction ―and‖, ―or‖ or
―and/or‖ is used shall be insured separately from single accounts.
ii. Unless a different sharing is stipulated in the deposit documents, the
insured amount up to the Maximum Deposit Insurance Coverage of
Php500,000 shall be divided equally between or among co-owners of a
joint account.
iii. The total shares of a co-owner in several joint accounts may exceed
Php500,000 but will only be insured up to the Maximum Deposit
Insurance Coverage of Php500,000.
iv. Joint accounts held in the names of a juridical entity and a natural
person shall be presumed to belong solely to the juridical entity.

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Batangas,
Mobile Philippines
: 0927 283 8234
Telephon : (043) 723 8412
e Gmail :
[email protected]

c. Account ―By‖, ―In Trust For‖ (ITF) or ―For the Account of‖ (FAO) another person
i. In a ―By‖ account, Ana by Ben, Ana is the depositor.
ii. In an ―In Trust For‖ (ITF) account, Ana In Trust For Ben, Ben is the
depositor.
iii. In a ―For the Account of‖ (FAO) account, Ana For the Account of Ben,
Ben is the depositor.

d. Explanatory Notes
i. To simplify: In the case where a depositor is the sole beneficial owner
of a single, ―For the Account of‖, ―By‖, and ―In Trust For‖ accounts,
the consolidated balances of these accounts shall be insured up to
Php500,000.
ii. The depositor’s total shares in his/her joint accounts shall be
separately insured up to Php500,000.
iii. A depositor with single accounts and joint accounts may have insured
deposits of up to Php1,000,000.

C. Items that are not covered by PDIC Deposit Insurance

The following, whether denominated, documented, recorded or booked as deposit by the

bank, are excluded from PDIC deposit insurance (Section 4 (f) of the PDIC Charter):
a. Investment products such as bonds and securities, trust accounts and other similar
instruments
b. Telegraphic note
c. Deposit accounts or transactions that:
i. Are unfunded, fictitious or fraudulent
ii. Constitute and/or emanate from unsafe and unsound banking practices as
determined by the PDIC, in consultation with the BSP, after due notice and
hearing and publication of PDIC’s cease & desist order against such deposit
accounts/transactions
iii. Are determined to be proceeds of an unlawful activity as defined in the
AntiMoney Laundering Act (Republic Act 9160, as amended)
d. Bank Deposits in Foreign Banks operating outside the Philippine territory or Bank
Deposits in Foreign branch of domestic bank operating outside the Philippine territory
Note: Unsafe and unsound deposit-related activities include, among others: (PDIC
Regulatory Issuance No. 2011-01)
 Deposit-related practice/activity/transaction without the approval or adequate
controls required under existing laws, rules and regulations
 Failure to keep bank records within bank premises
 Granting high interest rates, when bank has: (i) negative unimpaired capital, or (ii)
liquid assets to deposit ratio less than 10%
 Non-compliance with PDIC regulations

D. Maximum Liability (Maximum Deposit Insurance Coverage)

PDIC shall pay deposit insurance on all valid deposits up to the Maximum Deposit
Insurance Coverage of Php500,000, per depositor, of a closed bank . Accounts maintained
in the same right and capacity for a depositor’s benefit, whether in his own name or in the
name of others, are covered by deposit insurance. However, A depositor with single
accounts and joint accounts may have insured deposits of up to Php1,000,000.

Illustrative examples:

1. How much is Fe Santos’s insured deposit if she has the following four deposit accounts in
the same bank?
ACCOUNT NAME Deposit (in PHP) Insured Deposit of Fe Santos
Fe Santos 100,000 100,000
Ben Santos For the Account100,000 100,000
of
Fe Santos
Charlie Santos In Trust For100,000 100,000
Fe Santos
Fe Santos’ Store 700,000 200,000
(Sole Proprietorship)
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 No. 125 Brgy. San
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Batangas,
Mobile Philippines
: 0927 283 8234
Telephon : (043) 723 8412
e Gmail :
[email protected]

Total 1,000,000 500,000

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 No. 125 Brgy. San
Sebastian Lipa City,
Batangas,
Mobile Philippines
: 0927 283 8234
Telephon : (043) 723 8412
e Gmail :
[email protected]

2. How much is Fe Santos’s insured deposit if she has the following three joint accounts
in the same bank?
ACCOUNT NAME Deposit (in PHP) Insured Deposit of Fe Santos
Fe Santos or Ben Santos 500,000 250,000
Fe Santos and Charlie Santos 1,000,000 250,000
Fe Santos and/or Divina Santos 1,000,000 0*
Total 2,500,000 500,000
*Note: Mrs. Fe Santos does not have any insured deposit share since she already has
P500,000 in total shares in the two joint accounts she has with Ben and Charlie Santos.

3. How much is Fe Santos’s insured deposit for all her single and joint accounts in the same
bank?
ACCOUNT NAME Deposit (in PHP) Insured Deposit of Fe Santos
All single accounts of Fe 1,000,000 500,000
Santos in BDO Branch 1
All joint accounts of Fe Santos 2,500,000 500,000
in BDO Branch 2
Total 3,500,000 1,000,000

Note: For purposes of computing the insured deposits, all obligations or loans of the
depositor with the closed bank, as of bank closure, shall be deducted from the depositor’s
total deposits with the said bank. (PDIC Regulatory Issuance No. 2011-04).

Note: In case of joint account involving a juridical/artificial person and a natural person, the
maximum insured deposit of P500,000 to such joint account shall be given to
juridical/artificial person only.

E. Requirements for Claims of Insured Deposits

1. When are claims filed?

Claims are filed during the claims settlement operations period, as announced in the
Notice to Depositors published in national or local newspapers, or posted in the bank
premises and conspicuous places within the locality, and in the PDIC website

Depositors have two (2) years from PDIC’s takeover of the closed bank to file their
deposit insurance claims.

2. Who are required to file deposit insurance claims?

a. Depositors with valid deposit accounts with balances of more than Php100,000.
b. Depositors who have outstanding obligations with the closed bank regardless
of amount of deposits.
c. Depositors with account balances of less than Php100,000 who have no
updated addresses in the bank records or who have not updated their
addresses through the Mailing Address Update Form (MAUF) issued by the
PDIC.
d. Depositors who maintain their accounts under the name of business entities,
regardless of type of account and account balance.
e. Depositors with accounts not eligible for early payment, regardless of type of
account and account balance per advice of PDIC.

3. Who are depositors not required to file deposit insurance claims?

Depositors with valid deposit accounts with balances of Php100,000 and below are
not required to file claims provided they have no obligations with the closed bank
and have complete and updated addresses in the bank records or have updated
these through the Mailing Address Update Form (MAUF) issued by the PDIC.
Depositors with deposit balances of Php100,000 and below may update their
addresses using the MAUF and submit to PDIC representatives stationed at the
closed bank premises before the start of the onsite claims settlement operations
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 No. 125 Brgy. San
Sebastian Lipa City,
Batangas,
Mobile Philippines
: 0927 283 8234
Telephon : (043) 723 8412
e Gmail :
[email protected]

These depositors are entitled to immediate/early payment of deposit insurance claim

as part of PDIC’s initiative to provide convenience to small depositors. Payments to
these depositors are sent as postal money orders to the depositors’ mailing
addresses.

4. Steps in filing deposit insurance claims

a. Prepare the following documents:
i. Original evidence of deposits such as savings passbook, certificate
of time deposit, bank statement, unused checks, and ATM card.
ii. Original copy of ONE (1) VALID PHOTO-BEARING
IDENTIFICATION
DOCUMENTS (ID) with clear signature of depositor/claimant such as
Driver’s License, SSS/ GSIS ID, Senior Citizen’s ID, Passport, PRC ID,
OWWA/ OFW ID, Seaman’s ID, Alien Certification of Registration ID,
Voter’s ID, IBP. Please ensure that the ID number is clear and legible.
iii. If the depositor is below 18 years old, a photocopy of his/her birth
certificate from the Philippine Statistics Authority (PSA) or duly certified
copy from the local civil registrar and valid IDs of the parent.
iv. Original copy of a notarized Special Power of Attorney (SPA) for
claimants who are not the signatories in the bank records. In the case
of minor depositor, the SPA must be executed by the parent.
b. Submit to:
i. If filing personally:
1. The PDIC representatives at the premises of the closed bank
during Claims Settlement Operations (CSO) or to the PDIC
Public Assistance Center at the 3rd Floor, SSS Bldg., 6782 Ayala
Avenue corner V.A. Rufino Street, Makati City after the onsite
CSO.
ii. If filing through Mail
1. Send the accomplished and notarized Claim Form and
requirements to The Claims Processing Department of PDIC 4/F
SSS Building, 6782 Ayala Avenue corner V.A. Rufino St. 1226
Makati City

5. Who should sign the deposit insurance claim form?

a. Depositor of the account – for depositors 18 years old and above
b. Parent – if the depositor is below 18 years old
c. Agent – in the case of “By” accounts
d. Trustee – in the case of “In Trust for (ITF” accounts
e. Each Depositor – in the case of joint accounts such as “Or”, “And/Or” or
“And”
accounts

6. Procedures for Claiming Insurance Proceeds

a. Mode of payment

i. By Cash
ii. By making available to each depositor a transferred deposit in another
insured bank in an amount equal to insured deposit of such depositor

b. Requirement before payment

i. PDIC may require proof of claims before paying the insured deposit
ii. If PDIC is not satisfied as to the validity of a claim for an insured
deposit, it may require final determination of a court of competent
jurisdiction before paying such claim

c. Period for payment

i. It must be made within 6 months from the date of filing otherwise the
officers of PDIC will be liable for failure to pay if due to grave abuse of
discretion, gross negligence, bad faith or malice. The six-month period
shall not apply if the documents of the claimant are incomplete or if
the validity of the claim requires the resolution of issues of facts and
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 No. 125 Brgy. San
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Batangas,
Mobile Philippines
: 0927 283 8234
Telephon : (043) 723 8412
e Gmail :
[email protected]

law by another office, body or agency, independently or in coordination

with PDIC.

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 No. 125 Brgy. San
Sebastian Lipa City,
Batangas,
Mobile Philippines
: 0927 283 8234
Telephon : (043) 723 8412
e Gmail :
[email protected]

d. Rights of PDIC upon payment of insured deposits

i. PDIC shall be legally subrogated to all rights of depositor against the

closed bank to the extent of such payment.

II. Bank Secrecy Laws

A. AN ACT PROHIBITING DISCLOSURE OF OR INQUIRY INTO DEPOSITS WITH

ANY BANKING INSTITUTION (REPUBLIC ACT NO. 1405) a.k.a. Bank
Secrecy Law on
Philippine Peso Bank Deposit

a. Absolute Confidentiality of Domestic Bank Deposits and

Investments in Government Bonds

i. All deposits of whatever nature in banks or banking institutions in the

Philippines and investments in government bonds are absolutely
confidential in nature. (Sec. 2, Rep. Act No. 1405)
1. Deposits refer to money or funds placed with a bank that can be
withdrawn on the depositor’s order or demand, such as deposit
accounts in the form of savings, current and time deposits.
Deposits are characterized as being in the nature of a simple
loan. The placing of deposits in a bank creates a creditor-debtor
relationship between the depositor and the bank. As such, the
bank, being the debtor, has the obligation to pay a certain sum
of money to the depositor, being the creditor.

2. Investments in Government Bonds refer to investments in

bonds issued by the Government of the Philippines, its political
subdivisions and its instrumentalities. Government bonds are
debt securities which are unconditional obligations of the State,
and backed by its full taxing power. Government bonds include
treasury bills, treasury notes, retail treasury bonds, dollar linked
peso notes, and other risk-free bonds.

3. The General Banking Law prohibits bank directors, officers,

employees or agents from disclosing to any unauthorized
person, without order of a competent court, any information
relative to funds or properties belonging to private individuals,
corporations, or any other entity in the custody of the bank.
(Sec. 55[b], Rep. Act No. 8791) The Thrift Banks Act and the
Rural Banks Act likewise prohibit any bank officer, employee or
agent from disclosing any information on such funds or
properties. (Sec. 21[a][2], Rep. Act No. 7906 & Sec. 26[a][2],
Rep. Act No. 7353)
Prohibited Acts and Persons Liable

b. The following are criminally liable under this law:

i. Any person or government official who, or any government bureau or
office that, examines, inquires or looks into a bank deposit or
government bond investment in any of the instances not allowed in
Section 2;
ii. Any official or employee of a banking institution who makes a
disclosure concerning bank deposits to another in any instance not
allowed by law (Sec. 3,
Rep. Act No. 1405); and
iii. Any person who commits a violation of any of the provisions of the law
(Sec. 5, Rep. Act No. 1405).
iv. Any bank official, director, employee or agent who discloses
information relative to funds or properties in the custody of the bank
may also be held liable under the applicable provisions of the General
Banking Law, Thrift Banks Act and Rural Banks Act.

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 No. 125 Brgy. San
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Batangas,
Mobile Philippines
: 0927 283 8234
Telephon : (043) 723 8412
e Gmail :
[email protected]

c. Instances when Confidentiality of Domestic Bank Deposits is Not

Absolute. Bank deposits and investments in government bonds may be
examined, inquired or looked into under limited exceptions in Republic Act No.
1405 and in other laws as enumerated below:
1. Exceptions under the Law on Secrecy of Bank Deposits.
Section 2 of Republic Act No. 1405 provides that bank deposits
and government bond investments may be examined, inquired
and looked into in the following instances:
a. Upon written permission or consent in writing by the
depositor. For consent to be valid, it should be made
knowingly, voluntarily and with sufficient awareness of
the relevant circumstances and likely consequences.
b. In cases of impeachment of the President, Vice
President, members of the Supreme Court, members of
the Constitutional Commission (Commission on
Elections, Civil Service Commission and Commission on
Audit) and the Ombudsman for culpable violation of the
Constitution, treason, bribery, graft and corruption, other
high crimes or betrayal of public trust. (Art. XI, Sec. 2,
1987 Philippine Constitution)
c. Upon order of a competent court in cases of bribery or
dereliction of duty of public officials.
d. In cases where the money deposited or invested is the
subject matter of the litigation. The money deposited
should be the very thing in dispute. (Mellon Bank, N.A. v.
Magsino, 190 S.C.R.A. 633 [1990])
2. Exceptions under Other Laws. Bank deposits and
investments may be examined, inquired or looked into
as provided for under other laws in the following
instances:
a. The Ombudsman has the power to issue subpoena and
subpoena duces tecum, take testimony in any
investigation or inquiry, as well as examine and access
bank accounts and records. The power of the
Ombudsman to subpoena deposit information of a
government official may be exercised when the following
conditions concur: (1) there must be a case pending
before a court of competent jurisdiction; (2) the account
must be clearly identified; (3) the inspection must be
limited to the subject matter of the pending case; and
(4) the bank personnel and the account holder must be
notified to be present during the inspection. (Marquez v.
Desierto, 359 S.C.R.A. 772 [2001])
b. Bank deposits of a public official, his spouse and
unmarried children may be taken into consideration in
the enforcement of Section 8 of The Anti-Graft and
Corrupt Practices Act (Rep. Act No. 3019)
c. Directors, officers, stockholders and related interests
who contract a loan or any form of financial
accommodation with their bank or related bank are
required to execute a written waiver of secrecy of
deposits pursuant to The New Central Bank Act. (Sec. 26,
Rep. Act No. 7653)
d. The Commissioner of Internal Revenue is authorized to
inquire into bank deposit accounts in relation to: (1) an
application for compromise of tax liability or a
determination of a decedent’s gross estate under The
National Internal Revenue Code (Rep. Act No. 8424, as
amended by Rep. Act No. 10021); and (2) a request for
tax information of specific taxpayers made by a foreign
tax authority pursuant to a tax treaty under The
Exchange of Information on Tax Matters Act of 2009
(Rep. Act No. 8424, as amended by Rep. Act No. 10021).
e. The Anti-Money Laundering Council may be authorized
to examine and inquire into bank deposits or
investments with banks or nonbank financial institutions
– (1) with court order, when there is probable cause that
the deposits or investments are related to an unlawful
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Batangas,
Mobile Philippines
: 0927 283 8234
Telephon : (043) 723 8412
e Gmail :
[email protected]

activity or a money laundering offense (Secs. 3[i] and 4

of Rep. Act No. 9160); and (2) without need of court
order, when probable cause exists that a particular
deposit

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 No. 125 Brgy. San
Sebastian Lipa City,
Batangas,
Mobile Philippines
: 0927 283 8234
Telephon : (043) 723 8412
e Gmail :
[email protected]

or investment with any banking institution is related to

certain predicate crimes, such as kidnapping for ransom,
violation of the Comprehensive Dangerous Drugs Act,
hijacking and other violations under Republic Act No.
6235, destructive arson and murder (Sec. 11 of Republic
Act No. 9160).
f. The Bangko Sentral is authorized to – (1) inquire into or
examine bank deposits or investments in the course of a
periodic or special examination to ensure compliance
with The AntiMoney Laundering Law, in accordance with
the rule of examination of the Bangko Sentral (Sec. 11,
Rep. Act No. 9160, as amended); and (2) conduct annual
testing which is limited to the determination of the
existence and true identity of the owners of numbered
accounts (Sec. 9, Rep. Act No. 9160, as amended).
g. The Philippine Deposit Insurance Commission and the
Bangko Sentral may inquire into bank deposits when
there is a finding of unsafe or unsound banking
practices. (Sec. 8, Rep. Act No. 3591, as amended)
h. The Court of Appeals, designated as a special court, may
issue an order authorizing law enforcement officers to
examine and gather information on the deposits,
placements, trust accounts, assets and records in a bank
or financial institution in connection with anti-terrorism
case. (Rep. Act No. 9372)
i. The Commission on Audit is authorized to examine and
audit government deposits pertaining to the revenue
and receipts of, and expenditures or uses of funds and
properties, owned or held in trust by, or pertaining to,
the Government or any of its subdivisions, agencies or
instrumentalities, including government-owned and
controlled corporations with original charters. (See Art.
IX-D, 1987 Constitution and Pres. Dec. No. 1445)
j. The Presidential Commission on Good Government, in
the conduct of its investigations to recover ill-gotten
wealth accumulated by former President Ferdinand E.
Marcos, his immediate family, relatives, subordinates
and close associates, may issue subpoenas requiring the
attendance and testimony of witnesses and/or the
production of books, papers, contracts, records,
statement of accounts and other documents. (Sec. 3 [e],
Exec. Order No. 1 [1986])
3. Exceptions under Jurisprudence or Decision by Supreme
Court
a. Plunder is analogous to bribery. The exception in the law
that is applicable in bribery also applies to plunder. The
overt or criminal acts as described in Section 1(d) of
Republic Act No. 7080 would make the similarity
between plunder and bribery even more pronounced
since bribery is essentially included among these
criminal acts. (Ejercito v. Sandiganbayan, 509 S.C.R.A.
190 [2006])
b. Cases of unexplained wealth are similar to cases of
bribery or dereliction of duty and no reason is seen why
these two classes of cases cannot be excepted from the
rule making bank deposits confidential. (Phil. National
Bank v. Gancayco, 122 Phil. 503 [1965])
4. Authorized Disclosures by authorized and responsible
bank officials are allowed in the following instances:
a. reporting of unclaimed balances to the Treasurer of the
Philippines (Secs. 1 & 2, Act No. 3936);
b. turn-over to the Commissioner of Internal Revenue of
the amount in bank accounts as may be sufficient to
satisfy the writ of garnishment issued to collect
delinquent taxes (Secs. 205 & 208, Rep. Act No. 8424);
and
c. (submission of report, and turn-over to, the court officer
or executing sheriff of garnished amounts pursuant to a
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Mobile Philippines
: 0927 283 8234
Telephon : (043) 723 8412
e Gmail :
[email protected]

writ of garnishment in satisfaction of a judgment (Sec.

9[c], Rule 39, Rules of Court; See China Banking
Corporation v. Ortega, 49 SCRA 355 [1973]).

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Mobile Philippines
: 0927 283 8234
Telephon : (043) 723 8412
e Gmail :
[email protected]

d. disclosure by a bank officer or employee upon order of

the court in connection with a deposit in a closed bank
that was used in the perpetration of anomalies. (Soriano
v. Manuzon, C.A. G.R.- S.P No. 87634)

d. Penalties for Violation of Republic Act No. 1405 will subject the
offender, upon conviction, to the following penalties:
i. imprisonment of not more than five years;
ii. fine of not more than P20,000.00; or
iii. both imprisonment and fine.

B. FOREIGN CURRENCY DEPOSIT ACT OF THE PHILIPPINES (REPUBLIC ACT NO.

6426)
a.k.a Foreign Currency Deposit Secrecy Law

Absolute Confidentiality of Foreign Currency Deposits

a. All foreign currency deposits are absolutely confidential and cannot be
examined, inquired, or looked into by any person, government official, bureau
or office, whether judicial or administrative or legislative, or any other private
or public entity.

b. Foreign currency deposits are also exempt from attachment, garnishment, or

any other order or process of any court, legislative body, government agency
or any administrative body whatsoever. (Sec. 8, Rep. Act No. 6426) Foreign
currency deposits refer to funds in foreign currencies which are accepted and
held by authorized banks in the regular course of business with the obligation
to return an equivalent amount to the owner thereof, with or without interest.

c. Prohibited Acts and Persons Liable. The following are liable under this law:
i. Any person or government official who, or any government bureau or
office that, examines, inquires or looks into a foreign currency deposit
without the written permission of the depositor (Sec. 8, Rep. Act No.
6426);
ii. (Any official or employee of a banking institution who makes a
disclosure concerning foreign currency deposits to another, in any
instance not allowed by law (See Sec. 10, Rep. Act No. 6426);
iii. Anyone who shall attach, garnish, or subject the foreign currency
deposit to any other order or process of any court, legislative body,
government agency or any other administrative body (Sec. 8, Rep. Act
No. 6426); and
iv. Any person who commits a willful violation of any of the provisions of
Republic Act No. 6426 or regulation issued by the Monetary Board
pursuant to the said law (Sec. 10, Rep. Act No. 6426).

d. Instances when Confidentiality of Foreign Currency Deposits is Not

Absolute. Foreign currency deposits may be examined, inquired or looked
into under the limited exceptions in Republic Act No. 6426 and in other laws.
i. Exception under The Foreign Currency Deposit Act. Foreign
currency deposits may be examined, inquired or looked into when
there is written permission of the depositor. (Only one exception under
R,A, 6426)

ii. Exceptions under Other Laws

1. Directors, officers, stockholders and related interests who
contract a loan or any form of financial accommodation with
their bank or related bank are required to execute a written
waiver of secrecy of deposits pursuant to The New Central Bank
Act. (Sec. 26, Rep. Act No. 7653)
2. The Commissioner of Internal Revenue is authorized to inquire
into bank deposit accounts in relation to: (1) an application for
compromise of tax liability or a determination of a decedent’s
gross estate under The National Internal Revenue Code (Rep.
Act No. 8424, as amended by Rep. Act No. 10021); and (2) a
request for tax information of specific18 taxpayers made by a
foreign tax authority pursuant to a tax treaty under The
Exchange of Information on Tax Matters Act of 2009 (Rep. Act
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Mobile Philippines
: 0927 283 8234
Telephon : (043) 723 8412
e Gmail :
[email protected]

No. 8424, as amended by Rep. Act No. 10021).

3. The Anti-Money Laundering Council may be authorized to
examine and inquire into bank deposits or investments with
banking or non-bank

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Mobile Philippines
: 0927 283 8234
Telephon : (043) 723 8412
e Gmail :
[email protected]

financial institutions – (1) with court order, when there is

probable cause that the deposits or investments are related to
an unlawful activity or a money laundering offense (Secs. 3(i)
and 4 of Rep. Act No. 9160); and
(2) without need of court order, when probable cause exists
that a particular deposit or investment with any banking
institution is related to certain predicate crimes, such as
kidnapping for ransom, violation of the Comprehensive
Dangerous Drugs Act, hijacking and other violations under
Republic Act No. 6235, destructive arson and murder (Sec. 11 of
Republic Act No. 9160).
4. The Bangko Sentral is authorized to – (1) inquire into or
examine bank deposits and investments in the course of a
periodic or special examination to ensure compliance with The
AntiMoney Laundering Act, in accordance with the rules of
examination of the Bangko Sentral (Sec. 11, Rep. Act No. 9160,
as amended); and (2) conduct annual testing which is limited to
the determination of the existence and true identity of the
owners of numbered accounts (Sec. 9, Rep. Act No. 9160, as
amended).
5. The Philippine Deposit Insurance Commission and the Bangko
Sentral may inquire into bank deposits when there is a finding
of unsafe or unsound banking practices. (Sec. 8, Rep. Act No.
3591, as amended)
6. The Commission on Audit is authorized to examine and audit
government deposits pertaining to the revenue and receipts of,
and expenditures or uses of funds and properties, owned or
held in trust by, or pertaining to, the Government or any of its
subdivisions, agencies or instrumentalities, including
government-owned and controlled corporations with original
charters. (See Art. IX-D, 1987 Constitution and Pres. Dec. No.
1445)
7. The Presidential Commission on Good Government, in the
conduct of its investigations to recover ill-gotten wealth
accumulated by former President Ferdinand E. Marcos, his
immediate family, relatives, subordinates and close associates,
may issue subpoenas requiring the attendance and testimony
of witnesses and/or the production of books, papers, contracts,
records, statement of accounts and other documents. (Sec. 3
[e], Exec. Order No. 1 [1986])

iii. Exceptions under Jurisprudence on Grounds of Equity

1. Account of a Non-resident Alien The garnishment of a foreign

currency deposit account of a non-resident alien found guilty of
raping a minor was allowed on the basis of equity. ( [1997])
2. Account of a Co-payee of a Check A co-payee of a check who
filed a suit for recovery of sum of money was considered, in a
pro hac vice ruling by the Supreme Court, as a depositor in view
of the distinctive circumstances of the case. (China Banking
Corporation v. Court of Appeals, 511 S.C.R.A. 110 [2006])

e. Penalties of Violation of Republic Act No. 6426:

i. imprisonment of not less than one (1) year but not more than five (5)
years; or
ii. fine of not less than Five Thousand Pesos (P5,000.00) but not more
than Twenty Five Thousand Pesos (P25,000.00); or
iii. both imprisonment and fine.

f. The following sanctions may also be imposed against a bank or any

bank director and officer for violation of the provisions of Republic
Act No. 6426 and Bangko Sentral regulation issued pursuant to said
law:
i. revocation of the authority of the bank to accept new foreign currency
deposits; and
ii. administrative sanctions provided under Section 37 of the New Central
Bank Act (Rep. Act No. 7653), as may be applicable.

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III. Unclaimed Balances Law

A. Definition of Terms

a. “Unclaimed Balances” shall include (1) credits, (2) deposits of money, (3)
bullion, (4) security or (5) other evidence of indebtedness of any kind, and (6)
interest thereon with banks in favor of any person known to be dead or who
has not made further deposits or withdrawal during the preceding ten (10)
years or more.
b. “Applicant” pertains to the depositor or his successor-in-interest who
requests for the reactivation of the account which was reported by his
depository bank to the Treasurer of the Philippines pursuant to the Unclaimed
Balances Law.
c. “Procedure” refers to the course of action to be complied with by the
applicant in order that his request be given due course.
d. “Covered Institution” refers to all (1) banks, (2) trust companies, (3)
savings and mortgage banks, (4) mutual building and loan associations, (5) all
banking institutions of every kind, covered under Act No. 3936, as amended
by P.D. 679, which reported to the Treasurer of the Philippines as unclaimed
the account being applied for reactivation.
e. “Affidavit of Undertaking” is a sworn statement executed by the
responsible authorized officer of the bank absolving the Bureau of the
Treasury from any liability that may arise due to the granting of the
Applicant’s request for reactivation.

B. Procedure for Reactivation of Unclaimed Balances Reported to the

Treasurer of the Philippines

a. Letter Request of Depositor/Creditor. The depositor/creditor shall write his

depository bank requesting for the reactivation of his account which was
included in the report of unclaimed balances to the Bureau of the Treasury.
b. Authentication. The covered institution shall authenticate and verify the
request for reactivation and the signature of the depositor/creditor.
c. Letter Request of the Covered Institution. The depository bank shall write the
Bureau of the Treasury through the authorized approving official, requesting
authority to reactivate the deposit account concerned attaching to its letter
the stamped verified letter of the depositor/creditor.
d. Deed of Undertaking. The covered institution, through its responsible
authorized officer, shall execute a Deed of Undertaking ensuring that the
Bureau of the Treasury and its officials and employees shall be free and
harmless from any liability once the account is reactivated.
e. Letter of Authority to Reactivate. Finding complete documentation supporting
the request, the Bureau of the Treasury, through the authorized officer shall
issue the authority to the covered institution to reactivate the account.
f. Entity Requirements. In case the requesting party/deposit/creditor is a
juridical entity/person, the request must be accompanied with corresponding
board resolutions and /or Secretary’s Certificatate showing that the signatory
to the request for reactivation is fully authorized to transact with the Bureau
of the Treasury relative to the reactivation of its account.

g. APPROVING AUTHORITY The authority to reactivate on unclaimed balance

account/s shall be issued by the following officers:

i. Division Chief/Head Law & Litigation Division Legal Service - aggregate

amount of unclaimed balance not exceeding P100,000.00
ii. Director, Legal Service - aggregate amount of unclaimed balance
exceeding P100,000.00 but not exceeding P500,000.00
iii. Deputy Treasurer of the Philippines - aggregate amount exceeding
P500,000.00 but not exceeding P1,000,000.00
iv. Treasurer of the Philippines - aggregate amount of unclaimed
balances exceeding P1,000,000.00

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C. Escheat Proceedings for Unclaimed Balances

a. Section 1. Of Rule 91 When an by whom petition filed. — When a person

dies intestate, seized of real property in the Philippines, leaving no heir or
person by law entitled to the same, the Solicitor General or his representative
in behalf of the Republic of the Philippines, may file a petition in the Court of
First Instance of the province where the deceased last resided or in which he
had estate, if he resided out of the Philippines, setting forth the facts, and
praying that the estate of the deceased be declared escheated in favor of the
state or Republic of the Philippines.

b. Note: Demand drafts cannot be escheated, but telegraphic notes can be

escheated in favor of the state.

IV. Anti-Money Laundering Law (AMLA) (R.A. 9160 a.k.a. Anti Money Laundering
Act of 2001 as amended by R.A. 9194 and R.A. 10168 a.k.a. Terrorism Financing
Prevention and Suppression Act of 2012) and RA 10365 a.k.a AN ACT FURTHER
STRENGTHENING THE ANTI- MONEY LAUNDERING LAW)

A. Declaration of Policy: It is hereby declared the policy of the State to protect and
preserve the integrity and confidentiality of bank accounts and to ensure that the
Philippines shall not be used as a money laundering site for the proceeds of any unlawful
activity.

Consistent with its foreign policy, the Philippines shall extend cooperation in transnational
investigations and prosecutions of persons involved in money laundering activities
wherever committed.

B. Definition of Money Laundering - Money laundering is committed by any person

who, knowing that any monetary instrument or property represents, involves, or relates to
the proceeds of any unlawful activity: (Acts punishable as Money Laundering)
1. Transacts said monetary instrument or property;
2. Converts, transfers, disposes of, moves, acquires, possesses or uses said monetary
instruments or property or proceeds of any unlawful activity;
3. Conceals or disguises the true nature, source, location, disposition, movement or
ownership of or rights with respect to said monetary instruments or property or
proceeds of unlawful activity;
4. Attempts or conspires to commit Money Laundering referred to in par. 1), 2) & 3);
5. Aids, abets, assists in or counsels the commission of the Money Laundering offenses
referred to in par. 1), 2) & 3) above;
6. Performs or fails to perform any act as a result of which he facilitates the
offense of Money Laundering referred to in par. 1), 2) & 3) above; or
7. Any covered person who, knowing that a covered or suspicious transaction is
required under the AMLA to be reported to the AMLC, fails to do so.

C. Predicate Crimes of Money Laundering (34 Crimes)

1. Kidnapping for ransom under the Revised Penal Code (RPC)
2. Drug Trafficking and other violations of the Comprehensive Dangerous Drugs Act of
2002
3. Graft and Corruption (R.A. No. 3019, as amended)
4. Plunder (R.A. No. 7080, as amended)
5. Robbery and extortion (RPC)
6. Jueteng and Masiao (PD 1602)
7. Piracy (RPC & PD 532)
8. Qualified Theft (RPC)
9. Swindling/Estafa (RPC)
10. Smuggling (R.A. Nos. 455 & 1937)
11. Violations of Electronic Commerce Act of 2000 (R.A. No. 8792)
12. Hijacking (R.A. No. 6235), Destructive Arson and Murder (RPC)
13. Terrorism and Conspiracy to Commit Terrorism (R.A. No. 9372);
14. Financing of Terrorism (R.A. No. 10168)
15. Bribery and Corruption of Public Officers (RPC);
16. Frauds and Illegal Exactions and Transactions (RPC);
17. Malversation of Public Funds (RPC);
18. Forgeries and Counterfeiting (RPC);
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19. Trafficking in Persons (R.A. No. 9208

20. Violations of the Revised Forestry Code (PD 705);

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21. Violations of the Philippine Fisheries Code of 1998 (R.A. No. 8550);
22. Violations of the Philippine Mining Act of 1995 (R.A. No. 7942);
23. Violations of the Wildlife Resources Conservation and Protection Act (R.A. No. 9147);
24. Violations of the National Caves and Cave Resources Management Protection Act
(R.A. No. 9072);
25. Carnapping (R.A. No. 6539);
26. Illegal/Unlawful Possession, Manufacture, Dealing In, Acquisition or Disposition of
Firearms, Ammunitions and Explosives (PD 1866);
27. Fencing (PD 1612);
28. Illegal Recruitment (R.A. No. 8042);
29. Violations of the Intellectual Property Code;
30. Voyeurism (R.A. No. 9995);
31. Child Pornography (R.A. No. 9775);
32. Child Prostitution, Trafficking, and other forms of Abuse (R.A. No. 7610);
33. Fraudulent practices and other violations of the Securities Regulation Code (R.A. No.
8799); and
34. Felonies or offenses of a similar nature that are punishable under the penal laws
of other countries.

D. Types of Reportable Transactions to AMLC

 Covered Transactions are those transactions involving covered persons that
breached the quantitative threshold provided by AMLA for reporting purposes to
AMLC and therefore must be reported by covered persons to AMLC.
 Suspicious Transactions are those transactions that do not breach the quantitative
threshold provided by AMLA for reporting purposes to AMLC but must still be
reported to AMLC by covered persons because of the suspicious nature of the
transactions.
E. Amount of Covered Transaction for Reporting to AMLC
 A transaction in cash or other equivalent monetary instrument exceeding Five
Hundred Thousand pesos (P500,000)
 A transaction exceeding One Million pesos (P1,000,000) in cases of jewelry
dealers, dealers in precious metals and dealers in precious stones.
 Covered transaction now includes a Single Casino Cash Transaction involving an
amount in excess of Five Million Pesos (P5,000,000.00) or its equivalent in any other
currency.‖

F. Suspicious Transactions that shall also be reported to AMLC

1. there is no underlying legal or trade obligation, purpose or economic justification;
2. the client is not properly identified;
3. the amount involved is not commensurate with the business or financial capacity of
the client;
4. taking into account all known circumstances, it may be perceived that the client's
transaction is structured in order to avoid being the subject of reporting
requirements under the AMLA;
5. any circumstance relating to the transaction which is observed to deviate from the
profile of the client and/or the client's past transactions with the covered person;
6. the transaction is in any way related to an unlawful activity or any money laundering
activity or offense that is about to be committed, is being or has been committed; or
7. any transaction that is similar, analogous or identical to any of the foregoing.

G. Politically Exposed Person (PEP) – refers to an individual who is or has been

entrusted with prominent public position in (a) the Philippines with substantial authority over
policy, operations or the use or allocation of government-owned resources; (b) a foreign
State; or (c) an international organization. The term PEP shall include immediate family
members, and close relationships and associates that are reputedly known to have:1)Joint
beneficial ownership of a legal entity or legal arrangement with the main/principal PEP; or
Sole beneficial ownership of a legal entity or legal arrangement that is known to exist for the
benefit of the main/principal PEP

1. Under Implementing Rules and Regulations of AMLA issued by AMLC, the

following are the politically exposed persons (High Risk Government
Personnel)
a. AFP or PNP Officials such as Colonel or General
b. Senators or Congressmen or Mayor or Governor
c. Chairman or Commissioners of COMELEC or CoA or CSC
d. President or Vice-President or Department Secretary and Undersecretary
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e. Justices of Court of Appeals, Court of Tax Appeals, Sandiganbayan or Supreme

Court

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e Gmail :
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H. Covered persons, natural or juridical, required to report to AMLC covered

transactions and suspicious transactions
1. Under Bangko Sentral ng Pilipinas (BSP)
a. Banks
b. Non-banks
c. Quasi-banks
d. Trust entities
e. Nonstock savings and loan associations
f. Foreign exchange dealers,
g. Electronic money issuers
h. Pawnshops,
i. Money changers,
j. Remittance and transfer companies
k. All other persons and their subsidiaries and affiliated supervised or regulated by
the BSP.
2. Under Insurance Commission (IC)
a. Insurance companies
b. Pre-need companies
c. Insurance agents
d. Insurance brokers
e. Professional reinsurers
f. Holding companies
g. Holding company system
h. Mutual benefit associations
i. All other persons and their subsidiaries and affiliated supervised or
regulated by the Insurance Commission
3. Under Securities and Exchange Commission (SEC)
a. Securities dealers, brokers, salesmen, investment houses, and other similar
persons managing securities or rendering services such as investment agents.
b. mutual funds or open-end companies, close-end investment, investment
companies or issuers and other similar
c. other entities administering or otherwise dealing in commodities, or financial
derivatives based thereon, valuable objects, cash substitutes and other similar
monetary instruments or properties supervised and regulated by the SEC.

4. Other Designated Non-Financial Business and Professionals

a. Jewelry dealers, dealers in precious metals, and dealers in precious
stones for transactions in excess of 1,000,000.
b. Land Registration Authority and all of its Register of Deeds on all real
estate transaction with price exceeding P500,000.
c. Casino refers to a business authorized by the appropriate government
agency to engage in gaming operations for single casino transaction in excess
of P5,000,000.
i. Internet-based casino shall refer to casinos in which persons
participate by the use of remote communication facilities such as, but
not limited to, internet, telephone, television, radio or any other kind of
electronic or other technology for facilitating communication.
ii. Ship-based casino shall refer to casinos, the operation of which is
undertaken on board at vessel, ship, boat or any other water-based
craft wholly or partly intended for gambling.
d. Company service providers to 3rd parties including CPAs and Lawyers
1. acting as a formation agent of juridical persons;
2. acting as (or arranging for another person to act as) a director or
corporate secretary of a company, a partner of a partnership, or a similar
position in relation to other juridical persons;
3. providing a registered office; business address or accommodation,
correspondence or administrative address for a company, a partnership or
any other legal person or arrangement; and
4. acting as (or arranging for another person to act as) a nominee
shareholder for another person.
e. Person providing the following services including CPAs and lawyers
1. managing of client money, securities or other assets;
2. management of bank, savings or securities accounts;
3. organization of contributions for the creation, operation or management of
companies; and

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4. creation, operation or management of juridical persons or arrangements,

and buying and selling business entities.

Note: A shell company is an incorporated company that possesses no significant

assets and does not perform any significant operations. To launder money, the shell
company purports to perform some service that would reasonably require its
customers to often pay with cash. Cash transactions increase the anonymity of
customers and therefore decrease the government’s ability to trace the initial
recipient of the dirty money. Money launderers commonly select beauty salons and
plumbing services as shell companies. The launderer then deposits the money with
the shell company, which deposits it into its accounts. The shell company then
creates fake invoices and receipts to account for the cash. Such transactions create
the appearance of propriety and clean money. The shell company can then make
withdrawals and either return the money to the initial criminal or pass the money on
to further shell companies before returning it to further cloud who first deposited the
money.

5. Persons excluded to report covered transactions or suspicious transactions to

AMLC
1. Lawyers if acting as independent legal professionals in relation to information
concerning their clients or where disclosure of information would compromise client
confidences or the attorney- client relationship
2. Certified public accountants if acting as independent legal professionals in relation to
information concerning their clients or where disclosure of information would
compromise client confidences or the CPA-client relationship.

I. Jurisdiction over Money Laundering Cases

a. Regional Trial Court. - The regional trial courts shall have the jurisdiction to try
money laundering cases committed by private individuals, and public officers not
covered by the jurisdiction of the Sandiganbayan.
b. Sandiganbayan. - The Sandiganbayan shall have jurisdiction to try money
laundering cases committed by public officers under its jurisdiction (salary grade of
27 or higher), and private persons who are in conspiracy with such public officers.

J. Prosecution of Money Laundering Cases

a. Independent Proceedings. - The prosecution of money laundering and the
unlawful activity shall proceed independently. Any person may be charged with and
convicted of both money laundering and the unlawful activity.
b. Separate and Distinct Elements. - The elements of money laundering are
separate and distinct from the elements of the unlawful activity. The elements of the
unlawful activity, including the identity of the perpetrators and the details of the
commission of the unlawful
activity, need not be established by proof beyond reasonable doubt in the case for
money laundering.
c. Knowledge. - The element of knowledge may be established by direct or
circumstantial evidence.

K. Anti-Money Laundering Council - refers to the financial intelligence unit of the

Republic of the Philippines which is the government agency tasked to implement the AMLA.
a. Composition of Anti-Money Laundering Council
i. Chairperson – BSP Governor
ii. Member – Insurance Commissioner
iii. Member – SEC Chairperson
b. Unanimous Decision. - The AMLC shall act unanimously in discharging its
functions. In case of incapacity, absence, or disability of any member, the officer duly
designated or authorized to discharge the functions of the Governor of the BSP, the
Commissioner of the IC, and the Chairperson of the SEC, as the case may be, shall
act in his stead in the AMLC.

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L. Preventive Measures

1. Customer Due Diligence. - Covered persons shall establish and record the true
identity of their clients based on official documents, as defined under Rule 3 of RIRR
of AMLA.

2. Customer Identification
a. Face-to-Face Contact. - Covered persons shall conduct face-to-face contact
at the commencement of the relationship, or as reasonably practicable so as
not to interrupt the normal conduct of business
b. Minimum Customer Information and Identification Documents
i. Name of customer;
ii. Date and place of birth;
iii. Name of beneficial owner, if applicable;
iv. Name of beneficiary (in case of insurance contracts or remittance
transactions);
v. Present address;
vi. Permanent addresses;
vii. Contact number or information;
viii. Nationality;
ix. Specimen signatures or biometrics of the customer;
x. Nature of work and name of employer or nature of self-employment!
business, if applicable;
xi. Sources of funds or property; and
xii. Tax Identification Number (TIN), Social Security System . (SSS)
number or Government Service Insurance System (GSIS) number, if
applicable.
3. Prohibited Accounts
a. Anonymous Accounts and Accounts under Fictitious Names. - Covered
persons shall maintain customers' account only in the true and full name of the
account owner or holder. Anonymous accounts, accounts under fictitious
names, and all other accounts shall be absolutely prohibited.
b. Numbered Accounts. Numbered accounts, except non-checking numbered
accounts, shall not be allowed. Covered and suspicious transaction reports
involving non-checking numbered accounts shall contain the true name of the
account holder.
4. Record Keeping. - Covered persons shall maintain and safely store for five (5) years
from the
dates of transactions all records of customer identification and transaction
documents of their customers or five (5) years from the date the account is closed.

5. Transaction Reporting. - Covered persons shall report to the AMLC all covered
transactions and suspicious transactions within five (5) working days, unless the
AMLC prescribes a different period not exceeding fifteen (15) working days, from
the occurrence thereof.

6. For Suspicious transactions, "occurrence" refers to the date of determination of

the suspicious nature of the transaction, which determination should be made not
exceeding ten (10) calendar days from the date of transaction. However, if the
transaction is in any way related to, or the person transacting is involved in or
connected to, an unlawful activity or money laundering offense, the 10-day period for
determination shall be reckoned from the date the covered person knew or should
have known the suspicious transaction indicator.

7. Safe Harbor Provision of AMLA. No administrative, criminal or civil proceedings

shall lie against any person for having made a covered transaction report in the
regular performance of his duties and in good faith, whether or not such reporting
results in any criminal prosecution under the AMLA or any other Philippine law.

8. Freeze Order Freeze Order. - Upon verified ex parte petition by the AMLC and
after determination that probable cause exists that any monetary instrument or
property is in any way related to an unlawful activity, the Court of Appeals may
issue a freeze order, which shall be effective immediately for a period of 20 days.
Within 20-day period, the Court of Appeals shall conduct a summary hearing, with
notice to the parties, to determine whether or not to modify or life the freeze order or
to extend its effectivity
a. Freezing of Related Accounts and Materially-Linked Accounts. - Considering
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the intricate
and diverse web of interlocking accounts that a person may create in different
covered persons, and the high probability that these accounts are utilized to
divert, move, conceal, and disguise the monetary instrument or property
subject of the freeze order,

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the AMLC may include in its petition the freezing of related and materially-
linked accounts.
b. Period to Resolve Petition. - The Court of Appeals shall resolve the petition to
freeze within twenty-four (24) hours from filing thereof.
c. Effectivity of Freeze Order. – The total period of the freeze order issued by
the Court of Appeals under this provision shall not exceed six months. This is
without prejudice to an asset preservation order that the Regional Trial Court
having jurisdiction over the appropriate money-laundering case or civil
forfeiture case may issue on the same accounting depending upon the
circumstances of the case, where the Court of Appeals will remand the case
and its records: Provided, That if there is no case filed against a person whose
account has been frozen within the period determined by the Court of
Appeals, no exceeding six months, the freeze order shall be deemed ipso
lifted. Provided further, that this new rule shall not apply to pending cases in
the courts. In any case, the court should act on the petition to freeze within 24
hours from filing of the petition. If the application is filed a day before a
nonworking day, the computation of the 24-hour period shall exclude the
nonworking days. The freeze order or asset preservation order issued under
this Act shall be limited only to the amount of cash or monetary instrument or
value of property that the court finds there is probable cause to be considered
as proceeds of a predicate offense, and the freeze order or asset preservation
order shall not apply to amounts in the same account in excess of the amount
or value of the proceeds of the predicate offense
9. Bank Inquiry with Court Order. - Notwithstanding the provisions of Republic Act No.
140S, as amended; Republic Act No. 6426, as amended; Republic Act No. 8791, and
other laws, the AMLC may inquire into or examine any particular deposit or
investment account, including related accounts, with any banking institution or non-
bank financial institution, upon order by the Court of Appeals based on an ex parte
application in cases of violation of the AMLA when it has been established that
probable cause exists that the deposits or investments involved, including related
accounts, are in any way related to an unlawful activity or a money laundering
offense.
a. Period to Resolve Application. - The Court of Appeals shall resolve the
application within
twenty-four (24) hours from filing thereof.
b. Inquiry Into or Examination of Related Accounts. - A court order ex parte
must be obtained before the AMLC can inquire into the related accounts. The
procedure for the ex parte application for an order of inquiry into the
principal account shall be the same for that of the related accounts.
c. Compliance with Article III, Sections 2 and 3 of the Constitution. - The
authority to inquire into or examine the main account and the related
accounts shall comply with the requirements of Article III, Sections 2 and 3 of
the 1987 Constitution.

10. Bank Inquiry without Court Order. - The AMLC shall issue a resolution
authorizing the AMLC Secretariat to inquire into or examine anyparticular deposit or
investment account, including related accounts, with any banking institution or non-
bank financial institution and their subsidiaries and affiliates when it has been
established that probable cause exists that the deposits or investments involved,
including related accounts, are in any way related to any of the following unlawful
activities: (Predicate crimes that may authorize AMLC to inquire bank
accounts even without Court Order from Court of Appeals)
a. Kidnapping for ransom under Article 267 of Act No. 3815,otherwise known as
the Revised Penal Code, as amended;
b. Sections 4, 5, 6, 8, 9, 10, 11, 12, 13, 14, 15 and 16 of Republic Act No. 9165,
otherwise known as the Comprehensive Dangerous Drugs Act of 2002;
c. Hijacking and other violations under Republic Act No. 6235;
d. Destructive arson and murder, as defined under the Revised Penal Code, as
amended;
e. Felonies or offenses of a nature similar to those mentioned in Section 3(i) (1),
(2) and
(12) of the AMLA which are punishable under the penal laws of other countries;
f. Terrorism and conspiracy to commit terrorism as defined and penalized under
Republic Act No. 9372; and
g. Financing of terrorism under Section 4 and offenses punishable under
Sections 5, 6, 7 and 8 of Republic Act No. 10168, otherwise known as the
Terrorism Financing Prevention and Suppression Act of 2012.

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: 0927 283 8234
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e Gmail :
[email protected]

[Link] Forfeiture
h. Civil Forfeiture. - Upon determination that probable cause exists that any
monetary instrument or property is in any way related to an unlawful activity
or a money laundering offense, the AMLC shall file with the regional trial
court, through the Office of the Solicitor General, a verified petition for civil
forfeiture.

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: 0927 283 8234
Telephon : (043) 723 8412
e Gmail :
[email protected]

i. No Prior Criminal Charge, Pendency of or Conviction Necessary. - No

prior criminal charge, pendency of or conviction for an unlawful activity or
money laundering offense is necessary for the commencement or the
resolution of a petition for civil forfeiture.
j. Asset Forfeiture in Money Laundering Cases. - Where there is conviction for
money laundering, the court shall issue a judgment of forfeiture in favor of the
Government of the Philippines with respect to the monetary instrument or
property found to be proceeds of an unlawful activity.

RA 11521 : AN ACT FURTHER STRENGTHENING THE ANTI-MONEY

LAUNDERING LAW, AMENDING FOR THE PURPOSE REPUBLIC ACT NO. 9160,
OTHERWISE KNOWN AS THE "ANTI-MONEY LAUNDERING ACT OF 2001", AS
AMENDED

Be it enacted by the Senate and House of Representatives of the Philippines in Congress

assembled:

Section 1. Section 2 of Republic Act No. 9160, as amended, is hereby amended to read as
follows:

"Section 2. Declaration of Policy. - It is hereby declared the policy of the

State to protect and preserve the integrity and confidentiality of bank
accounts and to ensure that the Philippines shall not be used as a money
laundering site for the proceeds of any unlawful activity. Consistent with its
foreign policy, the State shall extend cooperation in transnational
investigations and prosecutions of persons involved in money laundering
activities wherever committed, as well as in the implementation of targeted
financial sanctions related to the financing of the proliferation of weapons of
mass destruction, terrorism, and financing of terrorism, pursuant to the
resolution of the United Nations Security Council."

Section 2. Section 3 of the same Act is hereby amended as follows:

"Section 3. Definitions. - For purposes of this Act, the following terms are
hereby defined as follows:

"(a) Covered persons', natural or juridical refer to:

"(1) x x x;

"(9) Real estate developers and brokers;

"(10) Offshore gaming operation, as well as their service

providers, supervised, accredited or regulated by the Philippine
Amusement and Gaming Corporation (PAGCOR) or any
government agency;

"(b) 'Covered transactions' is a transaction in cash or other equivalent

monetary instrument involving a total amount in excess of Five
hundred thousand pesos (P500,000.00) within one (1) banking day; for
covered persons under Section 3(a)(8), a single casino cash
transaction involving an amount in excess of Five million pesos
(P5,000,000.00) or its equivalent in any other currency.

"For covered persons under Section 3(a)(9) herein, a single cash

transaction involving an amount in excess of Seven million five
hundred thousand pesos (P7,500,000.00) or its equivalent in any
other currency.

"(b-1) 'Suspicious transactions' are transactions with covered

persons, regardless of the amounts involved, where any of the
following circumstances exist:

"1. There is no underlying legal or trade obligation,

purpose or economic justification;
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: 0927 283 8234
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e Gmail :
[email protected]

"2. The client is not properly identified;

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: 0927 283 8234
Telephon : (043) 723 8412
e Gmail :
[email protected]

"3. The amount involved is not commensurate with the

business or financial capacity of the client;

"4. Taking into account all known circumstances, it may

be perceived that the client's transaction is structured in
order to avoid being the subject of reporting
requirements under the Act

"5. Any circumstance relating to the transaction which is

observed to deviate from the profile of the client and/or
the client's past transactions with the covered person;

"6. The transaction is in any way related to an unlawful

activity or offense under this Act that is about to be, is
being or has been committed; or

"7. Any transaction that is similar or analogous to any of

the foregoing.

"x x x

"(i) 'Unlawful activity' refers to any act or omission or series or

combination thereof involving or having relation to the following:

"(1) x x x;

"(33) Fraudulent practice and other violations under

Republic Actr No. 8799, otherwise known as "The
Securities Regulation Code of 2000;

"(34) Violation of Section 9 (a)(3) of Republic Act No.

10697, otherwise known as the "Strategic Trade
Management Act", in relation to the proliferation of
weapons of mass destruction and its financing pursuant
to United Nations Security Council Resolution Numbers
1718 of 2006 and 2231 of 2015";

"(35) Violation of Section 254 of Chapter II, Title X of the

National Internal Revenue Code of 1997, as amended,
where the deficiency basic tax due in the final
assessment is in excess of Twenty-five million pesos
(P25,000,000.00) per taxable year, for each tax type
covered and there has been a finding of probable cause
by the competent authority: Provided,further, That
there must be a finding of fraud, willful misrepresenting
or malicious intent on the part of the taxpayer:
Provided, finally, That in no case shall the AMLC
institute forfeiture proceedings to recover monetary
instruments, property or proceeds representing,
involving, or relating to a tax crime, if the same has
already been recovered or collected by the Bureau of
Internal Revenue (BIR) in a separate proceeding and

"(36) Felonies and offenses of a similar nature

that are punishable under the penal laws of
other countries.

"x x x.

"(4) 'Offshore gaming operator' refers to an entity engaged in

offering online games of chance or sporting events via the
internet using a network and software program, by themselves
or through local service providers.

"(5) 'Service providers' refer to duly constituted business

corporations who provide components of offshore gaming
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e Gmail :
[email protected]

operations to offshore gaming operators.

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: 0927 283 8234
Telephon : (043) 723 8412
e Gmail :
[email protected]

"x x x.

"(m) 'Real estate developer' refers to any natural or juridical person

engaged in the business of developing real estate development project
for the account of the developer and offering them for sale or lease.

"(n) 'Real estate broker' refers to a duly registered and licensed

natural person who, for a professional fee, omission or other valuable
consideration, acts as an agent of a party in a real estate transaction
to offer, advertise, solicit, list, promote, mediate, negotiate, or effect
the meeting of the minds on the sale, purchase, exchange, mortgage,
lease or joint venture, or other similar transaction on real estate or
any interest therein.

"(o) 'Targeted financial sanctions' refer to both asset freezing and

prohibition to prevent funds or other assets from being made
available, directly or indirectly, for the benefit of any individual,
natural or legal persons or entity designated pursuant to relevant
United Nations Security Council resolution and its designation
processes.

"(p) 'Proliferation financing' refers when a person:

"(1) Makes available an asset; or

"(2) Provides a financial service; or

"(3) Conducts a financial transaction; and the person knows

that, or is reckless as to whether, the asset, financial service or
financial transaction is intended to, in whole or in part,
facilitate proliferation of weapons of mass destruction in
relation to UN Security Council Resolution Number 1718 0f
2006 and 2231 of 2015."

Section 3. Section 7 of the same Act is hereby amended to read as follows:

"Section 7. Creation of Anti-Money Laundering Council (AMLC). - The Anti-

Money Laundering Council is hereby created and shall be composed of the
Governor of the Bangko Sentral ng Pilipinas as Chairman, the Commissioner
of the Insurance Commission and the Chairman of the Securities and
Exchange Commission, as members. The AMLC shall act unanimously in the
discharge of its functions as defined hereunder:

"(1) to investigate suspicious transactions and covered transactions

deemed suspicious after determination by AMLC, money laundering
activities and other violations of this Act.

"x x x;

"(13) in the conduct of its investigation, the AMLC shall apply for the
issuance of a search and seizure order with any competent court;

"(14) in the conduct of its investigation, the AMLC shall apply for the issuance
of subpoena ad testificandum and/or subpoena duces tecum with any
competent court;

"(15) to implement targeted financial sanctions in relation to

proliferation of weapons of mass destruction and its financing,
including ex parte freeze, without delay, against all funds and other
assets that are owned and controlled, directly or indirectly, including
funds and assets derived or generated therefrom, by individuals or
entities designated and listed under United Nations Security Council
Resolution Numbers 1718 of 2006 and 2231 of 2015 and their
successor resolutions as well as any binding resolution of the Security
Council; and

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: 0927 283 8234
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e Gmail :
[email protected]

"(16) to preserve, manage or dispose assets pursuant to a freeze order, asset

preservation order, or judgment of forfeiture: Provided, however, That
pending

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: 0927 283 8234
Telephon : (043) 723 8412
e Gmail :
[email protected]

their turnover to the national government, all expenses incurred in

relation to the duties herein mentioned shall be deducted from the
amount to be turned over to the national government."

Section 4. A new Section 8-A is hereby inserted after Section 8 (Creation of a Secretariat)
of Republic Act No. 9160, as amended to read as follows:

"SEC. 8-A. Information Security and Confidentiality. - The AMLC and its Secretariat
shall securely protect information received or processed and shall not reveal, in any
manner, any information known to them by reason of their office. This prohibition
shall apply even after their separation from the AMLC.

"The AMLC shall formulate rules governing information exchange and dissemination,
the security and confidentiality of such information, including procedures for
handling, storage, and protection of, as well as access to such information."

Section 5. Section 10 of the same Act, is hereby further amended by inserting a new
paragraph to read as follows:

"Section 10. Freezing Monetary Instrument or Property. -

"(a) Upon a verified ex parte petition by the AMLC and after determination
that probable cause exists that any monetary instrument or property is in any
way related to an unlawful activity as defined in Section 3(i) hereof, the Court
of Appeals may issue a freeze order which shall be effective immediately, for
a period of twenty (20) days.
Within the twenty (20) day period, the Court of Appeals shall conduct a
summary hearing, with notice to the parties, to determine whether or not to
modify or lift the freeze order, or extend its effectivity. The total period of the
freeze order issued by the Court of Appeals under this provision shall not
exceed six (6) months. This is without prejudice to an asset preservation
order that the Regional Trial Court having jurisdiction over the appropriate
anti-money laundering case or civil forfeiture case may issue on the same
account depending on the circumstances of the case, where the Court of
Appeals will remand the case and its records: Provided, That if there is no
case filed against a person whose account has been frozen within the period
determined by the Court of Appeals, not exceeding six (6) months, the freeze
order shall be deemed ipso
facto lifted: Provided,further, That this new rule shall not apply to pending
cases in the courts. In any case, the court should act on the petition to freeze
within twenty-four (24) hours from filing of the petition. If the application is
filed a day before a nonworking day, the computation of the twenty-four (24)
hour period shall exclude the nonworking days.

"The freeze order or asset preservation order issued under this Act shall be
limited only to the amount of cash or monetary instrument or value of
property that court finds there is probable cause to be considered as
proceeds of a predicate offense, and the freeze order or asset preservation
order shall not apply tyo amounts in the same account in excess of the
amount or value of the proceeds of the predicate offense.

"A person whose account has been frozen may file a motion to lift the freeze
order and the court must resolve this motion before the expiration of the
freeze order.

"No court shall issue a temporary restraining order or a writ of injunction

against any freeze order, except the Supreme Court.

"(b) For purposes of implementing targeted financial sanctions in relation to

proliferation of weapons of mass destruction and its financing, as provided
under Section 3(15), the AMLC shall have the power to issue, ex porte, an
order to freeze without delay.

"The freeze order shall be effective until the basis for its issuance shall have
been lifted. During the effectivity of the freeze order, the aggrieved party
may, within twenty (20) days from issuance, file with the Court of Appeals a
petition to determine the basis of the freeze order according to the principle
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: 0927 283 8234
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e Gmail :
[email protected]

of effective judicial protection: Provided, That the person whose property or

funds have been frozen may withdraw such sums as the AMLC

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: 0927 283 8234
Telephon : (043) 723 8412
e Gmail :
[email protected]

determines to be reasonably needed for monthly family needs and

sustenance including the services of counsel and the family medical needs of
such person.

"The AMLC, if circumstance warrant, may initiate civil forfeiture proceedings

to preserve the assets and to protect it from dissipation. ℒαwρhi ৷ No court
shall issue a temporary restraining order or a writ of injunction against the
freeze order, except the Court of Appeals or the Supreme Court."

Section 6. Section 12 of the same Act is hereby amended by inserting a new paragraph to
read as follows:

"(d) No court shall issue a temporary restraining order (TRO) or a writ of

injunction against any provisional asset preservation order or asset
preservation, except the Court of Appeals or the Supreme Court."

Section 7. Section 14, paragraph (d) of Republic Act No. 9160, as amended, is hereby
further amended to read as follows:

"Section 14. Penal Provisions. -

"x x x

"(d) Breach of Information Security and Confidentiality. The punishment of

imprisonment ranging from three (3) to eight (8) years and a fine of not less
than Five hundred thousand Philippine pesos (P500,000.00) but not more
than One million Philippine pesos (P1,000,000.00), shall be imposed on a
person convicted for a violation under Section 9(c) 0r Section 8-A on
information security and confidentiality of this Act. If the offender is public
official or employee, he shall, in addition to the penalties prescribed herein,
suffer the penalty of perpetual or temporary absolute disqualification from
public office, as the case may be. In the case of a breach of confidentiality
that is published or reported by media, the responsible reporter, writer,
president, publisher, manager and editor-in-chief shall be liable under this
Act."

Section 8. Section 20 of the same Act is hereby amended to read as follows:

"Section 20. Non-Intervention in the Bureau of Internal Revenue (BIR)

Operations. - Nothing contained in this Act nor in related antecedent laws or
existing agreements shall be construed to allow the AMLC to participate in
any manner in the operation of the BIR. The AMLC, may, however, coordinate
with the BIR On investigations in relating to violations of Section 254 of NIRC,
as amended, as a predicate offense to money laundering."

V. Batas Pambansa Bilang 22 (Bouncing Checks Law)

A. Punishable Acts under BP 22

1. Any person who (a) makes or draws and issues any check to apply on account or for
value, (b) knowing at the time of issue that he does not have sufficient funds in or
credit with the drawee bank for the payment of such check in full upon its
presentment, (c) which check is subsequently dishonored by the drawee bank for
insufficiency of funds or credit or would have been dishonored for the same reason
had not the drawer, without any valid reason, ordered the bank to stop payment.
2. Any person who, having sufficient funds in or credit with the drawee bank when he
makes or draws and issues a check, shall fail to keep sufficient funds or to maintain a
credit to cover the full amount of the check if presented within a period of ninety (90)
days from the date appearing thereon, for which reason it is dishonored by the
drawee bank.

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Mobile Philippines
: 0927 283 8234
Telephon : (043) 723 8412
e Gmail :
[email protected]

B. Elements of Criminal Violation of BP 22 for issuance of worthless checks

1. There must be making, drawing, and issuance of any check to apply for account or for
value.
2. There must be knowledge of the maker, drawer, or issuer that at the time of issue he
does not have sufficient funds in or credit with the drawee bank for the payment of
the check in full upon its presentment.
3. There must be subsequent dishonor of the check by the drawee bank for insufficiency
of funds or creditor dishonor for the same reason had not the drawer, without any
valid cause, ordered the bank to stop payment.

C. Penalty for violation of BP 22 at the discretion of the court

1. Imprisonment of not less than thirty days but not more than one (1) year; or
2. Fine of not less than but not more than double the amount of the check which fine
shall in no case exceed Two Hundred Thousand Pesos; or
3. Both imprisonment of not less than thirty days but not more than one (1) year and
Fine of not less than but not more than double the amount of the check which fine
shall in no case exceed Two Hundred Thousand Pesos.
D. Evidence of Knowledge of Insufficiency of Funds by the Issuer of Worthless Check

The making, drawing and issuance of a check payment of which is refused by the drawee
because of insufficient funds in or credit with such bank, when presented within ninety (90)
days from the date of the check, shall be prima facie evidence of knowledge of such
insufficiency of funds or credit

E. Evidence or Defense to destroy prima facie evidence of knowledge of

insufficiency of funds by the Issuer of Worthless checks

The maker or drawer pays the holder thereof the amount due thereon, or makes
arrangements for payment in full by the drawee of such check within (5) banking days after
receiving notice that such check has not been paid by the drawee.

F. Duty of Drawee Bank

It shall be the duty of the drawee of any check, when refusing to pay the same to the holder
thereof upon presentment, to cause to be written, printed, or stamped in plain language
thereon, or attached thereto, the reason for drawee's dishonor or refusal to pay the same:
Provided, That where there are no sufficient funds in or credit with such drawee bank, such
fact shall always be explicitly stated in the notice of dishonor or refusal. In all prosecutions
under this Act, the introduction in evidence of any unpaid and dishonored check, having the
drawee's refusal to pay stamped or written thereon or attached thereto, with the reason
therefor as aforesaid, shall be prima facie evidence of the making or issuance of said check,
and the due presentment to the drawee for payment and the dishonor thereof, and that the
same was properly dishonored for the reason written, stamped or attached by the drawee
on such dishonored check. Notwithstanding receipt of an order to stop payment, the drawee
shall state in the notice that there were no sufficient funds in or credit with such bank for
the payment in full of such check, if such be the fact.

G. Credit Construed

The word "credit" as used herein shall be construed to mean an arrangement or

understanding with the bank for the payment of such check.

H. Evidence Required for Violation of BP 22

1. To prove violation of BP 22 or for conviction of crime of BP 22 – Proof beyond
reasonable doubt
2. To prove civil damages on civil action involving BP 22 – Preponderance of evidence
3. To sue or to file a case for violation of BP 22 – Probable cause or Prima Facie evidence

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Mobile Philippines
: 0927 283 8234
Telephon : (043) 723 8412
e Gmail :
[email protected]

I. Prosecution for Violation of BP 22 (Requirement of Receipt of Notice of Dishonor

by Maker or Drawer)

Failure to establish that a written notice of dishonor was actually received by the maker or
drawer of the check is a ground for an acquittal. Numerous BP 22 cases have been
dismissed and/ or have resulted in the acquittal of the accused on the ground that the
prosecution failed to establish that the accused had actually received a notice of dishonor.

First, the prosecution in a BP 22 case must establish that (a) notice of dishonor was sent to
the issuer of the dishonored check and (b) that the same was actually received. A notice of
dishonor may be sent to the maker or drawer of the dishonored check by (1) by personal
service upon the issuer or (2) by registered mail. If the notice of dishonor is sent by
registered mail, the fact of sending the notice of dishonor is established by the registry
receipt, the registry return card, and an affidavit executed by the person who mailed the
notice of dishonor detailing the circumstances of the mailing.

As to establishing actual receipt, the prosecution must also prove that the signature
appearing on the registry return card or notice of dishonor, in case of personal service,
belongs to that of the issuer of the dishonored check or, at the very least, to his duly
authorized agent. In the latter case, the prosecution must establish the capacity and
authority of such person as agent. An illegible signature, such as when a recipient merely
signs his/ her initials on the registry return card or notice of dishonor, as the case may be,
does not prove that the issuer actually received the notice of dishonor. It is also crucial that
the registry return card or the notice of dishonor indicate the date it was received in order to
fix the start of the five (5) day period within which the maker or drawer of the check must
pay or make arrangements for the payment of the amount of the check.

The notice of dishonor may be sent to the office of the maker or drawer of the dishonored
check but he must receive the notice personally or through his authorized agent. A
corporation or an officer of a corporation that receives a notice of dishonor addressed to one
of its employees has no obligation to forward the notice to the employee concerned. Thus,
such receipt is not the receipt contemplated by BP
22. A notice of dishonor may also be sent to the residence of the maker or drawer of the
dishonored check and received by him/her, the housemaids or houseboys who are deemed
to have a special power- of-attorney to receive mail in behalf of the addressee, or any
member of the family of sufficient age or discretion). Notably, the notice of dishonor may be
sent to, and received by, the maker or drawer of the dishonored check wherever he may be
found as long as the fact and date of receipt are established.

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