EXTINGUISHMENT OF SALE Art. 1603.

In case of doubt, a contract

purporting to be a sale with right to repurchase
Art. 1600. Sales are extinguished by the same
shall be construed as an equitable mortgage. (n)
causes as all other obligations, by those stated
in the preceding articles of this Title, and by Art. 1604. The provisions of Article 1602 shall
conventional or legal redemption. (1506) also apply to a contract purporting to be an
absolute sale. (n)

SECTION 1. - Conventional Redemption Art. 1605. In the cases referred to in Articles

1602 and 1604, the apparent vendor may ask
Art. 1601. Conventional redemption shall take
for the reformation of the instrument. (n)
place when the vendor reserves the right to
repurchase the thing sold, with the obligation to Art. 1606. The right referred to in Article 1601,
comply with the provisions of Article 1616 and in the absence of an express agreement, shall
other stipulations which may have been agreed last four years from the date of the contract.
upon. (1507)
Should there be an agreement, the period
Art. 1602. The contract shall be presumed to be cannot exceed ten years.
an equitable mortgage, in any of the following
However, the vendor may still exercise the right
cases:
to repurchase within thirty days from the time
(1) When the price of a sale with right to final judgment was rendered in a civil action on
repurchase is unusually inadequate; the basis that the contract was a true sale with
right to repurchase. (1508a)
(2) When the vendor remains in possession as
lessee or otherwise; Art. 1607. In case of real property, the
consolidation of ownership in the vendee by
(3) When upon or after the expiration of the
virtue of the failure of the vendor to comply
right to repurchase another instrument
with the provisions of article 1616 shall not be
extending the period of redemption or granting
recorded in the Registry of Property without a
a new period is executed;
judicial order, after the vendor has been duly
(4) When the purchaser retains for himself a heard. (n)
part of the purchase price;
Art. 1608. The vendor may bring his action
(5) When the vendor binds himself to pay the against every possessor whose right is derived
taxes on the thing sold; from the vendee, even if in the second contract
no mention should have been made of the right
(6) In any other case where it may be fairly to repurchase, without prejudice to the
inferred that the real intention of the parties is provisions of the Mortgage Law and the Land
that the transaction shall secure the payment of Registration Law with respect to third persons.
a debt or the performance of any other (1510)
obligation.
Art. 1609. The vendee is subrogated to the
In any of the foregoing cases, any money, fruits, vendor's rights and actions. (1511)
or other benefit to be received by the vendee as
rent or otherwise shall be considered as interest Art. 1610. The creditors of the vendor cannot
which shall be subject to the usury laws. (n) make use of the right of redemption against the
vendee, until after they have exhausted the Art. 1616. The vendor cannot avail himself of
property of the vendor. (1512) the right of repurchase without returning to the
vendee the price of the sale, and in addition:
Art. 1611. In a sale with a right to repurchase,
the vendee of a part of an undivided immovable (1) The expenses of the contract, and any other
who acquires the whole thereof in the case of legitimate payments made by reason of the
article 498, may compel the vendor to redeem sale;
the whole property, if the latter wishes to make
(2) The necessary and useful expenses made on
use of the right of redemption. (1513)
the thing sold. (1518)
Art. 1612. If several persons, jointly and in the
Art. 1617. If at the time of the execution of the
same contract, should sell an undivided
sale there should be on the land, visible or
immovable with a right of repurchase, none of
growing fruits, there shall be no reimbursement
them may exercise this right for more than his
for or prorating of those existing at the time of
respective share.
redemption, if no indemnity was paid by the
The same rule shall apply if the person who sold purchaser when the sale was executed.
an immovable alone has left several heirs, in
Should there have been no fruits at the time of
which case each of the latter may only redeem
the sale and some exist at the time of
the part which he may have acquired. (1514)
redemption, they shall be prorated between the
Art. 1613. In the case of the preceding article, redemptioner and the vendee, giving the latter
the vendee may demand of all the vendors or the part corresponding to the time he
co-heirs that they come to an agreement upon possessed the land in the last year, counted
the purchase of the whole thing sold; and from the anniversary of the date of the sale.
should they fail to do so, the vendee cannot be (1519a)
compelled to consent to a partial redemption.
Art. 1618. The vendor who recovers the thing
(1515)
sold shall receive it free from all charges or
Art. 1614. Each one of the co-owners of an mortgages constituted by the vendee, but he
undivided immovable who may have sold his shall respect the leases which the latter may
share separately, may independently exercise have executed in good faith, and in accordance
the right of repurchase as regards his own with the custom of the place where the land is
share, and the vendee cannot compel him to situated. (1520)
redeem the whole property. (1516)
SECTION 2. - Legal Redemption
Art. 1615. If the vendee should leave several
Art. 1619. Legal redemption is the right to be
heirs, the action for redemption cannot be
subrogated, upon the same terms and
brought against each of them except for his own
conditions stipulated in the contract, in the
share, whether the thing be undivided, or it has
place of one who acquires a thing by purchase
been partitioned among them.
or dation in payment, or by any other
But if the inheritance has been divided, and the transaction whereby ownership is transmitted
thing sold has been awarded to one of the heirs, by onerous title. (1521a)
the action for redemption may be instituted
Art. 1620. A co-owner of a thing may exercise
against him for the whole. (1517)
the right of redemption in case the shares of all
the other co-owners or of any of them, are sold
to a third person. If the price of the alienation is thirty days from the notice in writing by the
grossly excessive, the redemptioner shall pay prospective vendor, or by the vendor, as the
only a reasonable one. case may be. The deed of sale shall not be
recorded in the Registry of Property, unless
Should two or more co-owners desire to
accompanied by an affidavit of the vendor that
exercise the right of redemption, they may only
he has given written notice thereof to all
do so in proportion to the share they may
possible redemptioners.
respectively have in the thing owned in
common. (1522a) The right of redemption of co-owners excludes
that of adjoining owners. (1524a)
Art. 1621. The owners of adjoining lands shall
also have the right of redemption when a piece Real estate mortgage
of rural land, the area of which does not exceed
A real estate mortgage is an accessory contract
one hectare, is alienated, unless the grantee
constituted by the owner of a real property
does not own any rural land.
(mortgagor) whereby he allows a lien to be
This right is not applicable to adjacent lands constituted thereon for the purpose of securing
which are separated by brooks, drains, ravines, in favor of the creditor (mortgagee) the
roads and other apparent servitudes for the fulfillment of a principal obligation. A real
benefit of other estates. estate mortgage is a contract creating a real
right. Hence, third persons who come into the
If two or more adjoining owners desire to
possession of the real estate subject of the
exercise the right of redemption at the same
contract are bound thereby, subject to the
time, the owner of the adjoining land of smaller
provisions of the Mortgage Law and the Land
area shall be preferred; and should both lands
Registration laws (Article 1312, Civil Code). The
have the same area, the one who first
mortgage directly and immediately subjects the
requested the redemption. (1523a)
property upon which it is imposed, whoever the
Art. 1622. Whenever a piece of urban land possessor may be, to the fulfillment of the
which is so small and so situated that a major secured obligation (Article 2127, Civil Code).
portion thereof cannot be used for any practical
While registration is not essential for the validity
purpose within a reasonable time, having been
of the real estate mortgage, the mortgage must
bought merely for speculation, is about to be re-
be registered in order that it will bind third
sold, the owner of any adjoining land has a right
persons. Hence, an innocent purchaser for
of pre-emption at a reasonable price.
value who acquires a land subject of an
If the re-sale has been perfected, the owner of unregistered real estate mortgage is not bound
the adjoining land shall have a right of by the mortgage (Article 2125, Civil Code;
redemption, also at a reasonable price. Sections 44 and 51 of the Property Registration
Decree).
When two or more owners of adjoining lands
wish to exercise the right of pre-emption or Foreclosure
redemption, the owner whose intended use of
Foreclosure of real estate mortgage is the
the land in question appears best justified shall
proceeding whereby the property subject of the
be preferred. (n)
real estate mortgage is sold at public auction for
Art. 1623. The right of legal pre-emption or the payment of the principal obligation in favor
redemption shall not be exercised except within of the mortgagee. (Article 2087, Civil Code). It
is called foreclosure because the purpose of the from the sale and custody of said property less
action is to foreclose or divest the rights in the the income derived therefrom. However, the
property of the mortgagor and junior purchaser at the auction sale concerned
encumbrancers and to vest their rights in the whether in a judicial or extrajudicial foreclosure
purchaser (Section 3 of Rule 68, Rules of Court). shall have the right to enter upon and take
possession of such property immediately after
Extrajudicial foreclosure
the date of the confirmation of the auction sale
Foreclosure of real estate mortgage may be and administer the same in accordance with
done judicially under Rule 68 of the Rules of law. Any petition in court to enjoin or restrain
Court or extrajudicially pursuant to Act No. 3135 the conduct of foreclosure proceedings
and to Supreme Court A.M. No. 99-10-05-0. For instituted pursuant to this provision shall be
extrajudicial foreclosure, it is required that there given due course only upon the filing by the
be a special power of attorney inserted in or petitioner of a bond in an amount fixed by the
annexed to the deed of mortgage empowering court conditioned that he will pay all the
the mortgagee to sell the land at public auction damages which the bank may suffer by the
(Sec. 1, Act No. 3135). enjoining or the restraint of the foreclosure
proceeding.
In a case, the real estate mortgage provided
that in the event of nonpayment of the loan, Notwithstanding Act 3135, juridical persons
“the mortgagors expressly agree to the whose property is being sold pursuant to an
extrajudicial foreclosure of the mortgaged extrajudicial foreclosure, shall have the right to
property.” The Supreme Court held that this redeem the property in accordance with this
provision was not sufficient to authorize provision until, but not after, the registration of
extrajudicial foreclosure. It was a mere the certificate of foreclosure sale with the
expression of the parties’ amenability to applicable Register of Deeds which in no case
extrajudicial foreclosure as the means of shall be more than three (3) months after
foreclosing the mortgage but did not constitute foreclosure, whichever is earlier. Owners of
the special power or authority to sell the property that has been sold in a foreclosure sale
mortgaged property to enable the mortgagees prior to the effectivity of this Act shall retain
to recover the unpaid obligations (Baysa v. their redemption rights until their expiration.
Plantilla, 13 July 2015). (78a)

SECTION 47. Foreclosure of Real Estate

Mortgage. — In the event of foreclosure, iii. Judicial
whether judicially or extrajudicially, of any
1. Section 3, Rule 68 of Rules of Court
mortgage on real estate which is security for any
loan or other credit accommodation granted, 2. Section 28 and 29, Rule 39 of Rules of Court
the mortgagor or debtor whose real property
has been sold for the full or partial payment of
his obligation shall have the right within one
year after the sale of the real estate, to redeem
the property by paying the amount due under
the mortgage deed, with interest thereon at the RULE 68
rate specified in the mortgage, and all the costs
and expenses incurred by the bank or institution Foreclosure of Real Estate Mortgage
Section 3. Sale of mortgaged property; effect. amount at the same rate; and if the purchaser
— When the defendant, after being directed to be also a creditor having a prior lien to that of
do so as provided in the next preceding section, the redemptioner, other than the judgment
fails to pay the amount of the judgment within under which such purchase was made, the
the period specified therein, the court, upon amount of such other lien, with interest.
motion, shall order the property to be sold in
Property so redeemed may again be redeemed
the manner and under the provisions of Rule 39
within sixty (60) days after the last redemption
and other regulations governing sales of real
upon payment of the sum paid on the last
estate under execution. Such sale shall not
redemption, with two per centum thereon in
affect the rights of persons holding prior
addition and the amount of any assessments or
encumbrances upon the property or a part
taxes which the last redemptioner may have
thereof, and when confirmed by an order of the
paid thereon after redemption by him, with
court, also upon motion, it shall operate to
interest on such last named amount, and in
divest the rights in the property of all the
addition, the amount of any liens held by said
parties to the action and to vest their rights in
last redemptioner prior to his own, with
the purchaser, subject to such rights of
interest. The property may be again, and as
redemption as may be allowed by law.
often as a redemptioner is so disposed,
Upon the finality of the order of confirmation or redeemed from any previous redemptioner
upon the expiration of the period of redemption within sixty (60) days after the last redemption,
when allowed by law, the purchaser at the on paying the sum paid on the last previous
auction sale or last redemptioner, if any, shall be redemption, with two per centum thereon in
entitled to the possession of the property addition, and the amounts of any assessments
unless a third party is actually holding the same or taxes which the last previous redemptioner
adversely to the judgment obligor. The said paid after the redemption thereon, with interest
purchaser or last redemptioner may secure a thereon, and the amount of any liens held by
writ of possession, upon motion, from the court the last redemptioner prior to his own, with
which ordered the foreclosure. (3a) interest.

RULE 39 Written notice of any redemption must be given

to the officer who made the sale and a duplicate
Execution, Satisfaction and Effect of Judgments
filed with the registry of deeds of the place, and
Section 28. Time and manner of, and amounts if any assessments or taxes are paid by the
payable on, successive redemptions; notice to redemptioner or if he has or acquires any lien
be given and filed. — The judgment obligor, or other than that upon which the redemption was
redemptioner, may redeem the property from made, notice thereof must in like manner be
the purchaser, at any time within one (1) year given to the officer and filed with the registry of
from the date of the registration of the deeds; if such notice be not filed, the property
certificate of sale, by paying the purchaser the may be redeemed without paying such
amount of his purchase, with the per assessments, taxes, or liens. (30a)
centum per month interest thereon in addition,
Section 29. Effect of redemption by judgment
up to the time of redemption, together with the
obligor, and a certificate to be delivered and
amount of any assessments or taxes which the
recorded thereupon; to whom payments on
purchaser may have paid thereon after
redemption made. — If the judgment obligor
purchase, and interest on such last named
redeems he must make the same payments as
are required to effect a redemption by a THOUSAND FIVE HUNDRED NINETY-ONE, AS
redemptioner, whereupon, no further AMENDED, OTHERWISE KNOWN AS THE PDIC
redemption shall be allowed and he is restored CHARTER, AND FOR OTHER PURPOSES
to his estate. The person to whom the
Be it enacted by the Senate and House of
redemption payment is made must execute and
Representatives of the Philippines in Congress
deliver to him a certificate of redemption
assembled:
acknowledged before a notary public or other
officer authorized to take acknowledgments of SECTION 1. Statement of State Policy and
conveyances of real property. Such certificate Objectives. – It is hereby declared to be the
must be filed and recorded in the registry of policy of the State to strengthen the mandatory
deeds of the place in which the property is deposit insurance coverage system to generate,
situated and the registrar of deeds must note preserve, maintain faith and confidence in the
the record thereof on the margin of the record country’s banking system, and protect it from
of the certificate of sale. The payments illegal schemes and machinations.
mentioned in this and the last preceding
sections may be made to the purchaser or Towards this end, the government must extend
redemptioner, or for him to the officer who all means and mechanisms necessary for the
made the sale. (31a) Philippine Deposit Insurance Corporation to
effectively fulfill its vital task of promoting and
LAW ON OTHER BUSINESS TRANSACTIONS safeguarding the interests of the depositing
public by way of providing permanent and
1. Philippine Deposit Insurance Corporation – As
continuing insurance coverage on all insured
amended by RA No.9576
deposits, and in helping develop a sound and
a. What is purposed of PDIC? stable banking system at all times.
b. Insurable Deposits – (Sec. 3)
SEC. 2. Section 4(f) of Republic Act No. 3591, as
c. Maximum liability - (Sec. 4) amended, is hereby amended by adding an
additional paragraph, to read as follows:
d. Requirements for claim – (See:
https://www.pdic.gov.ph/di_howtofileclaims) “(f) The term ‘deposit’ means the unpaid
balance of money or its equivalent
e. Calculation of Liability
received by a bank in the usual course of
i. Per depositor, per capacity rule business and for which it has given or is
obliged to give credit to a commercial,
ii. Joint accounts
checking, savings, time or thrift account,
f. Linsangan v. PDIC, GR No. 228807, February or issued in accordance with Bangko
11, 2019 Sentral rules and regulations and other
applicable laws, together with such other
AN ACT INCREASING THE MAXIMUM DEPOSIT obligations of a bank, which, consistent
INSURANCE COVERAGE, AND IN CONNECTION with banking usage and practices, the
THEREWITH, TO STRENGTHEN THE Board of Directors shall determine and
REGULATORY AND ADMINISTRATIVE prescribe by regulations to be deposit
AUTHORITY, AND FINANCIAL CAPABILITY OF liabilities of the bank: Provided, That any
THE PHILIPPINE DEPOSIT INSURANCE obligation of a bank which is payable at
CORPORATION (PDIC), AMENDING FOR THIS the office of the bank located outside of
PURPOSE REPUBLIC ACT NUMBERED THREE
the Philippines shall not be a deposit for of jurisdiction or with such grave abuse of
any of the purposes of this Act or included discretion as to amount to a lack or excess
as part of the total deposits or of insured of jurisdiction. The petition
deposit: Provided, further, That, subject to for certiorari may only be filed within
the approval of the Board of Directors, any thirty (30) days from notice of denial of
insured bank which is incorporated under claim for deposit insurance.”
the laws of the Philippines which
maintains a branch outside the Philippines SEC. 3. Section 4 (g) of the same Act is hereby
may elect to include for insurance its amended to read as follows:
deposit obligations payable only at such “(g) The term “insured deposit” means the
branch. amount due to any bona fide depositor for
“The Corporation shall not pay deposit legitimate deposits in an insured bank net
insurance for the following accounts or of any obligation of the depositor to the
transactions, whether denominated, insured bank as of date of closure, but not
documented, recorded or booked as to exceed Five hundred thousand pesos
deposit by the bank: (P500,000.00). Such net amount shall be
determined according to such regulations
“(1) Investment products such as bonds as the Board of Directors may prescribe. In
and securities, trust accounts, and other determining such amount due to any
similar instruments; depositor, there shall be added together
“(2) Deposit accounts or transactions all deposits in the bank maintained in the
which are unfunded, or that are fictitious same right and capacity for his benefit
or fraudulent; either in his own name or in the name of
others. A joint account regardless of
“(3) Deposit accounts or transactions whether the conjunction ‘and,’ ‘or,’
constituting, and/or emanating from, ‘and/or’ is used, shall be insured
unsafe and unsound banking practice/s, as separately from any individually-owned
determined by the Corporation, in deposit account: Provided, That (1) If the
consultation with the BSP, after due notice account is held jointly by two or more
and hearing, and publication of a cease natural persons, or by two or more
and desist order issued by the Corporation juridical persons or entities, the maximum
against such deposit accounts or insured deposit shall be divided into as
transactions; and many equal shares as there are
individuals, juridical persons or entities,
“(4) Deposits that are determined to be
unless a different sharing is stipulated in
the proceeds of an unlawful activity as
the document of deposit, and (2) If the
defined under Republic Act No. 9160, as
account is held by a juridical person or
amended.
entity jointly with one or more natural
“The actions of the Corporation taken persons, the maximum insured deposit
under this section shall be final and shall be presumed to belong entirely to
executory, and may not be restrained or such juridical person or entity: Provided,
set aside by the court, except on further, That the aggregate of the interests
appropriate petition for certiorari on the of each co-owner over several joint
ground that the action was taken in excess accounts, whether owned by the same or
 different combinations of individuals, excess of Two hundred fifty thousand pesos
juridical persons or entities, shall likewise (P250,000.00).
be subject to the maximum insured
SEC. 5. Section 8, paragraph Eighth of the same
deposit of Five hundred thousand pesos
Act is hereby amended to read as follows:
(P500,000.00): Provided, furthermore,
That the provisions of any law to the “Eighth – To conduct examination of banks
contrary notwithstanding, no with prior approval of the Monetary
owner/holder of any negotiable certificate Board: Provided, That no examination can
of deposit shall be recognized as a be conducted within twelve (12) months
depositor entitled to the rights provided in from the last examination date: Provided,
this Act unless his name is registered as however, That the Corporation may, in
owner/holder thereof in the books of the coordination with the Bangko Sentral,
issuing bank: Provided, finally, That, in conduct a special examination as the
case of a condition that threatens the Board of Directors, by an affirmative vote
monetary and financial stability of the of a majority of all of its members, if there
banking system that may have systemic is a threatened or impending closure of a
consequences, as defined in Section 17 bank: Provided, further, That,
hereof, as determined by the Monetary notwithstanding the provisions of Republic
Board, the maximum deposit insurance Act No. 1405, as amended, Republic Act
cover may be adjusted in such amount, for No. 6426, as amended, Republic Act No.
such a period, and/or for such deposit 8791, and other laws, the Corporation
products, as may be determined by a and/or the Bangko Sentral, may inquire
unanimous vote of the Board of Directors into or examine deposit accounts and all
in a meeting called for the purpose and information related thereto in case there
chaired by the Secretary of Finance, is a finding of unsafe or unsound banking
subject to the approval of the President of practice: Provided, finally, That to avoid
the Philippines.” overlapping of efforts, the examination
shall maximize the efficient use of the
SEC. 4. The maximum deposit insurance
relevant reports, information, and findings
coverage of Five hundred thousand pesos
of the Bangko Sentral, which it shall make
(P500,000.00) provided in Section 4(g) of
available to the Corporation.”
Republic Act 3591, as amended herein, shall be
paid by the Corporation: Provided, That, for the SEC. 6. A new Section 9 (h) of the same Act is
first three (3) years from the effectivity of this hereby added to read as follows:
Act, the first Two hundred fifty thousand pesos
(P250,000.00) of the deposit insurance coverage “(h) Unless the actions of the Corporation
shall be for the account of the Corporation, and or any of its officers and employees are
those in excess of Two hundred fifty thousand found to be in willful violation of this Act,
pesos (P250,000.00) but not more than Five performed in bad faith, with malice and/or
hundred thousand pesos (P500,000.00) shall be gross negligence, the Corporation, its
for the account of the National Government. directors, officers, employees and agents
The Congress shall annually appropriate the are held free and harmless to the fullest
necessary funding to reimburse the Corporation extent permitted by law from any liability,
for any payment to insured depositors paid in and they shall be indemnified for any and
all liabilities, losses, claims, demands,
 damages, deficiencies, costs and expenses of Directors shall determine the interest
of whatsoever kind and nature that may rates, maturity and other requirements of
arise in connection with the performance said obligations: Provided, further, That
of their functions, without prejudice to the Corporation shall provide for
any criminal liability under existing laws.” appropriate reserves for the redemption
or retirement of said obligation.
SEC. 7. Section 9 (h) of the same Act is
accordingly renumbered as Section 9 (i). “All notes, debentures, bonds, or such
obligations issued by the Corporation shall
SEC. 8. An additional paragraph to Section 17 of be exempt from taxation both as to
the same Act is hereby added after principal and interest, and shall be fully
subparagraph (b) to read as follows: guaranteed by the Government of the
“(c) It is hereby declared to be the policy Republic of the Philippines. Such
of the State that the Deposit Insurance guarantee, which in no case shall exceed
Fund of the Corporation shall be two times the Deposit Insurance Fund as
preserved and maintained at all times. of date of the debt issuance, shall be
Accordingly, all tax obligations of the expressed on the face thereof.
Corporation for a period of five (5) years “The Board of Directors shall have the
reckoned from the date of effectivity of power to prescribe rules and regulations
this Act shall be chargeable to the Tax for the issuance, reissuance, servicing,
Expenditure Fund (TEF) in the annual placement and redemption of the bonds
General Appropriations Act pursuant to herein authorized to be issued as well as
the provisions of Executive Order No. 93, the registration of such bonds at the
series of 1986; Provided, That, on the 6th request of the holders thereof.”
year and thereafter, the Corporation shall
be exempt from income tax, final SEC. 11. Section 21, paragraph (f)(5) is hereby
withholding tax, value-added tax on amended to read as follows:
assessments collected from member
“5) splitting of deposits or creation of
banks, and local taxes.”
fictitious loans or deposit accounts.
SEC. 9. Section 17 (c) of the same Act shall be
“Splitting of deposits occurs whenever a
accordingly renumbered as Section 17 (d).
deposit account with an outstanding
SEC. 10. Section 19 is hereby amended to read balance of more than the statutory
as follows: maximum amount of insured deposit
maintained under the name of natural or
“SEC. 19. With the approval of the juridical persons is broken down and
President of the Philippines, the transferred into two (2) or more accounts
Corporation is authorized to issue bonds, in the name/s of natural or juridical
debentures, and other obligations, both persons or entities who have no beneficial
local or foreign, as may be necessary for ownership on transferred deposits in their
purposes of providing liquidity for names within one hundred twenty (120)
settlement of insured deposits in closed days immediately preceding or during a
banks as well as for financial assistance as bank-declared bank holiday, or
provided herein: Provided, That the Board immediately preceding a closure order
 issued by the Monetary Board of the SEC. 16. Effectivity Clause. - This Act shall take
Bangko Sentral ng Pilipinas for the purpose effect fifteen (15) days following the completion
of availing of the maximum deposit of its publication in the Official Gazette or in two
insurance coverage;” (2) newspapers of general circulation.

SEC. 12. An additional paragraph shall be Approved,

inserted under Section 2, to read as follows: d. Requirements for claim – (See:
“SEC. 2. xxx The Board of Directors shall https://www.pdic.gov.ph/di_howtofileclaims)
have the authority: DEPOSITORS NOT REQUIRED TO FILE DEPOSIT
“x x x INSURANCE CLAIMS
“7. To review the organizational set-up of
the Corporation and adopt a new or
revised organizational structure as it may Depositors (individuals and registered entities)
deem necessary for the Corporation to with valid deposit accounts with balances of
undertake its mandate and functions.” P500,000.00 and below are not required to file
claims, provided they: (1) have no obligations
SEC. 13. Joint Congressional Oversight with the closed bank, or have not acted as co-
Committee. - There is hereby created a joint makers of these obligations, or are not spouses
congressional oversight committee to oversee of the borrowers; and (2) have complete mailing
the implementation of this Act. The committee addresses found in the bank records or have
shall be composed of the chairpersons of the updated their addresses through the Mailing
Senate Committee on Banks, Financial Address Update Form (MAUF) of PDIC.
Institutions and Currencies and the Committee
on Finance and five (5) senators to be appointed Postal Money Orders are sent to these
by the President of the Senate, and the depositors at their respective mailing addresses
chairpersons of the House Committee on Banks found in the bank records or indicated in the
and Financial Intermediaries and the Committee MAUF.
on Appropriations and five (5) members to be
appointed by the Speaker of the House of
Representatives. 2. WHO ARE REQUIRED TO FILE DEPOSIT
INSURANCE CLAIMS?
SEC. 14. Separability Clause. - If any provision or
section of this Act or the application thereof to Depositors: With valid deposit accounts with
any person or circumstances is held invalid, the balances of more than P500,000.00;
other provisions or sections of this Act, in the 2.2. With outstanding obligations with the Bank,
application of such provision or section to other either as borrower, co-maker, or spouse of
persons or circumstances, shall not be affected borrower;
thereby.
2.3. With incomplete mailing address found in
SEC. 15. Repealing Clause. - All acts or parts of the bank records, or failed to update them
acts and executive orders, administrative orders, through the MAUF;
or parts thereof, which are inconsistent with the
provisions of this Act, are hereby repealed.
2.4. With accounts under the names of
unregistered entities/associations;
When filing through mail, please download the
2.5.With accounts not eligible for early PDIC Claim Form (Please click to download the
payment, regardless of type of account and Claim Form). The Claim Form needs to be
account balance; or accomplished, signed, and notarized. Depositors
are required to check one (1) preferred payment
2.6. Who are deceased, whose filing of claims is
option in the Deposit Insurance Payment Option
thru the legal heirs.
(DIPO). Depositors must ensure that the
3. WHAT ARE THE REQUIREMENTS IN FILING signature on the Claim Form and DIPO is similar
CLAIMS? with the signature in the bank records and the
valid IDs submitted.
3.1. ORIGINAL EVIDENCE OF
DEPOSITS such as savings passbook, certificate REPUBLIC ACT No. 1405
of time deposit, bank statement, used or
AN ACT PROHIBITING DISCLOSURE OF OR
unused checks, or ATM card.
INQUIRY INTO, DEPOSITS WITH ANY BANKING
3.2. ONE (1) VALID ORIGINAL INSTITUTION AND PROVIDING PENALTY
PHOTO-BEARING IDENTIFICATION DOCUMENT THEREFOR.
(ID) with clear signature of depositor/claimant
Section 1. It is hereby declared to be the policy
(e.g. Driver's License, SSS/GSIS ID, Senior
of the Government to give encouragement to
Citizen's ID, Passport, PRC ID, OWWA/OFW ID,
the people to deposit their money in banking
Seaman's ID, Alien Certificate of Registration ID,
institutions and to discourage private hoarding
Voter's ID) or PhilID. (IT IS RECOMMENDED TO
so that the same may be properly utilized by
BRING AT LEAST TWO (2) VALID IDs IN CASE OF
banks in authorized loans to assist in the
DISCREPANCIES IN SIGNATURE).
economic development of the country.
3.3. For depositors below eighteen
Section 2. 1 All deposits of whatever nature with
(18) years old, photocopy of birth certificate
banks or banking institutions in the Philippines
from the Philippine Statistics Authority (PSA) or
including investments in bonds issued by the
a duly certified copy issued by the local civil
Government of the Philippines, its political
registrar, and valid ID of the parent.
subdivisions and its instrumentalities, are
3.4. Original copy of a notarized hereby considered as of an absolutely
Special Power of Attorney (SPA) for claimants confidential nature and may not be examined,
who are not the signatories in the bank records. inquired or looked into by any person,
In the case of minor depositor, the SPA must be government official, bureau or office, except
executed by the parent. (please click to upon written permission of the depositor, or in
download the sample Form of SPA). cases of impeachment, or upon order of a
competent court in cases of bribery or
3.5. Claim Form: dereliction of duty of public officials, or in cases
When filing claim during the onsite CSO period, where the money deposited or invested is the
or during personal filing at the PDIC PAC, a subject matter of the litigation.
system generated Claim Form shall be printed Section 3. It shall be unlawful for any official or
by PDIC representative after employee of a banking institution to disclose to
interview/processing. any person other than those mentioned in
Section two hereof any information concerning
said deposits.

Section 4. All Acts or parts of Acts, Special

Charters, Executive Orders, Rules and
Regulations which are inconsistent with the
provisions of this Act are hereby repealed.

Section 5. Any violation of this law will subject

offender upon conviction, to an imprisonment
of not more than five years or a fine of not more
than twenty thousand pesos or both, in the
discretion of the court.

Section 6. This Act shall take effect upon its

approval.

REPUBLIC ACT No. 6426

AN ACT INSTITUTING A FOREIGN CURRENCY

DEPOSIT SYSTEM IN THE PHILIPPINES, AND
FOR OTHER PURPOSES.

Section 8. Secrecy of foreign currency

deposits. – All foreign currency deposits
authorized under this Act, as amended by PD
No. 1035, as well as foreign currency deposits
authorized under PD No. 1034, are hereby
declared as and considered of an absolutely
confidential nature and, except upon the
written permission of the depositor, in no
instance shall foreign currency deposits be
examined, inquired or looked into by any
person, government official, bureau or office
whether judicial or administrative or legislative,
or any other entity whether public or
private; Provided, however, That said foreign
currency deposits shall be exempt from
attachment, garnishment, or any other order or
process of any court, legislative body,
government agency or any administrative body
whatsoever. (As amended by PD No. 1035, and
further amended by PD No. 1246, prom. Nov.
21, 1977.)