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B. KINDS OF DEPOSIT

1. Demand DepositsSEC. 58, NCBA - For purposes of this Act, the term "demand deposits" means all those liabilities of the Bangko Sentral and of other banks, which are denominated in Philipp

currency and are subject to payment in legal tender upon demand by the presentation of checks.

SEC. 59, NCBA - Only banks duly authorized to do so may accept funds or create liabilities payable in pesos upon demand by the presentation of checks, and such operation

shall be subject to the control of the Monetary Board in accordance with the powers granted it with respect thereto under this Act.

SEC. 60, NCBA - Checks representing demand deposits do not have legal tender power and their acceptance in the payment of debts, both public and private, is at the optio

of the creditor: Provided, however, That a check which has been cleared and credited to the account of the creditor shall be equivalent to a delivery to the creditor of cash

an amount equal to the amount credited to his account.

BPI FAMILY SAVINGS BANK v. FIRST METRO INVESTMENT CORP,

429 SCRA 30 (2004)

DOCTRINE: Demand Deposits are all those liabilities of the Bangko Sentraland of other banks which are denominated in the Philippine currency and are subject to payme

n legal tender upon demand by the presentation of depositors checks. Under CB Circular No. 22 (Series of 1994), demand dep osits shall not be subject to any interest ra

ceiling. This, in effect, is an open authority to pay interest on demand deposits, such interest not being subject to any rate ceiling.

FACTS

FMIC, through its Executive Vice President Antonio Ong, opened a current account and deposited a METROBANK check P100 million with BPI Family Bank* (BPI FB). BPI FB

guaranteed the payment of P14,667,687.01 representing 17% per annum interest of P100 million deposited by FMIC. The latter, in turn, assured BPI FB that it will maintain

deposit of P100 million for a period of one year on condition that the interest of 17% per annum is paid in advance. Subsequently, BPI FB paid FMIC 17% interest or

P14,667,687.01 upon clearance of the latters check deposit.

However, on August 29, 1989, on the basis of an Authority to Debit signed by Ong and Ma. Theresa David, Senior Manager of FMIC, BPI FB transferred P80 million from FM

current account to the savings account of Tevesteco

ArrastreStevedoring, Inc.

FMIC denied having authorized the transfer of its funds to Tevesteco, claiming that the signatures of Ong and David were falsified. To recover immediately its deposit, FMI

on September 12, 1989, issued BPI FB check no. 129077 for P86,057,646.72 payable to itself and drawn on its deposit with BPI FB SFDM branch. But upon presentation for

payment on September 13, 1989, BPI FB dishonored the check as it was "drawn against insufficient funds" (DAIF).

FMIC filed with the RTC a civil case against BPI FB. RTC ruled in favor of FMIC, ordering BPI to pay P80M + interest at legal rate. CA modified amount to P65M + interest at 1

SSUE

s it a Time Deposit or interest-bearing current account?

HELD

Time Deposit. The parties did not intend the deposit to be treated as a demand deposit but rather as an interest-earning time deposit not withdrawable any time. Both agr

that the deposit of P100 million was non-withdrawable for one year upon payment in advance of the17% per annum interest.

Ordinarily, a time deposit is defined as "one the payment of which cannot legally be required within such a specified number of days." In contrast, demand deposits are "

those liabilities of the Bangko Sentral and of other banks which are denominated in Philippine currency and are subjectto payment in legal tender upon demand by thepresentation of(depositors) checks."4 While it may be true that barely one month and seven days from the date of deposit, respondent FMIC demanded the withdrawal

P86,057,646.72 through the issuance of a check payable to itself, the same was made as a result of the fraudulent and unauthorized transfer by petitioner BPI FB of its P80

million deposit to Tevestecos savings account. Certainly, suchwas a normal reaction of respondent as a depositor to petitioners failure in its fiduciary duty to treat its

account with the highest degree of care. Under this circumstance, the withdrawal of deposit by respondent FMIC before the one-year maturity date did not change the na

of its time deposit to one of demand deposit.

For UB and KB

GBL. Section 33.Acceptance of Demand Deposits.- A bank other than a universal or commercial bank cannot accept or create demand deposits except upon prior approva

of, and subject to such conditions and rules as may be prescribed by the Monetary Board. (72-Aa)

For TB

Sec. 10. Powers of Thrift Banks.In addition to powers granted it by this Act and existing laws, any thrift bank may:

(b) Open current or checking accounts: Provided, That the thrift bank has net assets of at least Twenty million pesos (P20,000,000) subject to such guidelines as may be

established by the Monetary Board; and shall be allowed to directly clear its demand deposit operations with the Bangko Sentral and the Philippine Clearing HouseCorporation;

For RB/Coop Bank

Sec. 12, Rural Banks Act - Inaddition to the operations especially authorized in this Act, any rural bank may:

(b) Open current or checking accounts, provided the rural bank has net assets of at least Five million (P5,000,000) subject to such guidelines as may be established by the

Monetary Board:

For Islamic Banks

Sec. 6 Islamic Banks Powers.The Al-Amanah Islamic Investment Bank of the Philippines, upon its organization, shall be a body corporate and shall have the power:

par. 7To perform the following banking services;

(a) Open Current or checking accounts;


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2. Savings Deposit3. Negotiable Order of Withdrawal (NOW) Accounts

PEOPLE v. REYES, 454 SCRA 635 (2005)

DOCTRINE: NOW Accounts are defined as interest-bearing deposit accounts that combine the payable on demand feature of checks and the investment feature of savings

accounts.

FACTS

Aloma Reyes and her daughter Tricha (at large) were convicted for ESTAFA. Private complainant Jules Alabastro bases his complaint on one subject check (for P280,000); e

time a check issued by the Reyes's (a total of 5 or 6) bounced, he would return it, and it would be replaced by them with cash, except this last one, which they refused to

replace with cash.

Complainant claims that the transactions between himself and the Reyes's involved the rediscounting of checks. Defendant claims that she issued the instruments as paymfor loans she obtained from Alabastro with respect to her and her daughter's softdrinks business, which eventually went under.

She allegedly issued 16 instruments, one for P6k and the rest for P13k, to pay for the (232k) obligation. These would come from a NOW (Negotiable Order of Withdrawal)

Account, described as "a savings account where the drawer may issue instrument payable only to a specific payee. A NOW check cannot be issued payable to BEARER.

Hence, it cannot be further negotiated.

On appeal to the SC, she raises the following issues: 1) whether the nature of a NOW instrument is a "check" within the meaning of Art. 315 of the Revised Penal Code, sinc

the NOW check is drawn against the savings, not the current account, of appellant, and it is payable only to a specific person or the payee and is not valid when made

payable to bearer or to cash, and 2) whether her and her daughter's liability should be merely civil, since the check was issued in payment of a pre-existing obligation.

SSUE

1) Whether the nature of a NOW instrument is a "check" within the meaning of Art. 315 of the Revised Penal Code, and

2) Whether the Reyes's liability should be merely civil, since the check was issued in payment of a pre-existing obligation.

RULING

1) NO. Section X223 of the Manual of Regulations for Banks defines Negotiable Order of Withdrawal (NOW) Accounts as "interest-bearing deposit accounts thatcombine the payable on demand feature of checks and the investment feature of savings accounts."

The fact that a NOW check shall be payable only to a specific person, and not valid when made payable to BEARER or to CASH or when indorsed by the paye

another person, is inconsequential. The same restriction is produced when a check is crossed: only the payee named in the check may deposit it in his bank

account. If a third person accepts a cross check and pays cash for its value despite the warning of the crossing, he cannot be considered in good faith and thus n

holder in due course. The purpose of the crossing is to ensure that the check will be encashed by the rightful payee only. Yet, despite the restriction on the

negotiability of cross checks, we held that they are negotiable instruments.

2) YES. Conviction Reversed. A careful examination of the records establishes that appellant issued him the subject check in payment of a preexisting obligation. Itpuzzles the Court that after the NOW check dated August 31, 1997 boun ced on September 3, 1997 for the reason ACCOUNT CLOSED, private complainant wo

still discount appellants checks in succession. It baffles us more that private complainant would discount a P280,000.00 -check in February 1998 despite knowle

of the closure of appellants NOW Account.

In the case at bar, private complainant knew that appellant did not only have insufficient funds; he knew her NOW Account was closed at the time he allegedlydiscounted the subject check. There is no estafa through bouncing checks when it is shown that private complainant knew that the drawer did not have sufficie

funds in the bank at the time the check was issued to him. Such knowledge negates the element of deceit and constitutes a defense in estafa through bouncing

checks.

4. Time DepositsBPI FAMILY SAVINGS BANK v. FIRST METRO INVESTMENT CORP,

429 SCRA 30 (2004)

5. Foreign Currency DepositsFOREIGN CURRENCY DEPOSIT ACT

Section 2.Authority to deposit foreign currencies.Any person, natural or juridical, may, in accordance with the provisions of this Act, deposit with such Philippine banks

good standing, as may, upon application, be designated by the Central Bank for the purpose, foreign currencies which are acceptable as part of the international reserve,

except those which are required by the Central Bank to be surrendered in accordance with the provisions of Republic Act Numbered two hundred sixty-five (NowRep. Act7653).

Section 3.Authority of banks to accept foreign currency deposits. The banks designated by the Central Bank under Section two hereof shall have the authority:

(1) To accept deposits and to accept foreign currencies in trust Provided, That numbered accounts for recording and servicing of said deposits shall be allowed;

(2) To issue certificates to evidence such deposits;

(3) To discount said certificates;

(4) To accept said deposits as collateral for loans subject to such rules and regulations as may be promulgated by the Central Bank from time to time; and

(5) To pay interest in foreign currency on such deposits.
http://www.lawphil.net/statutes/repacts/ra1993/ra_7653_1993.htmlhttp://www.lawphil.net/statutes/repacts/ra1993/ra_7653_1993.htmlhttp://www.lawphil.net/statutes/repacts/ra1993/ra_7653_1993.htmlhttp://www.lawphil.net/statutes/repacts/ra1993/ra_7653_1993.html


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C. OPENING OF DEPOSIT ACCOUNTS

1. Know Your Customer Standards2. Prohibitions

SEC. 9 (A), AMLA: Prevention of Money Laundering; Customer Identification Requirements and Record Keeping.

(a) Customer Identification, - Covered institutions shall establishand record the true identity of its clients based on officialdocuments. They shall maintain a system of

verifying the true identity of their clients and, in case of corporate clients, require a system of verifying their legal existence and organizationalstructure, as well as the

authority and identification of allpersons purporting to act on their behalf.

The provisions of existing laws to the contrary notwithstanding, anonymous accounts, accounts under fictitious names, and all other similar accounts shall be absolutely

prohibited. Peso andforeign currency non-checking numbered accounts shall beallowed. The BSP may conduct annual testing solely limited tothe determination of the

existence and true identity of theowners of such accounts.

SEC. 3 (1), FDCA:Authority of banks to accept foreigncurrency deposits. The banks designated by the Central Bank under Section two hereof shall have the authority:

(1) To accept deposits and to accept foreign currencies in trust Provided, That numbered accounts for recording and servicing of said deposits shall be allowed.

3. Joint AccountsART. 485, NCC: The share of the co-owners, in the benefits as well as in the charges, shall be proportional to their respective interests. Any stipulation in a contract to the

contrary shall be void.

The portions belonging to the co-owners in the co-ownership shall be presumed equal, unless the contrary is proved.

ART. 1207, NCC: The concurrence of two or more creditors or of two or more debtors in one and the same obligation does not imply that each one of the former has a righ

demand, or that each one of the latter is bound to render, entire compliance with the prestation. There is a solidary liability only when the obligation expressly so states, o

when the law or the nature of the obligation requires solidarity.

ART. 1208, NCC: If from the law, or the nature or the wording of the obligations to which the preceding article refers the contrary does not appear, the credit or debt shal

presumed to be divided into as many shares as there are creditors or debtors, the credits or debts being considered distinct from one another, subject to the Rules of Cour

governing the multiplicity of suits.

D. SECRECY OF BANK DEPOSITS

INTENGAN v. CA, 377 SCRA 63 (2002)

DOCTRINE: Where the accounts in question are US dollar deposits, the applicable law is RA 6426 (FCDA), not RA 1405 (Bank Secrecy Law). Under the applicable law, the on

exception to the secrecy of foreign currency deposits is upon the written permission of the depositor.

FACTS

n 1993, Citibank filed a complaint for violation of Sec. 31, in relation to Sec. 144 of the Corporation Code against its 2 officers, Santos and Genuino. It was alleged in the

affidavit executed by its VP Vic Lim that Santos and Genuino managed or caused existing bank clients/depositors to divert their money from Citibank NA to products offere

by other companies (Torrance Development Corporation and Global Pacific Corporation) that were yielding higher interest rates. In return, Santos and Genuino derived

substantial financial gains. It was also determined that the bank clients accommodated by Santos and Genuino include Intengan, Neri and Brawner, who have long standinaccounts with Citibank NA in savings/dollar deposits and/or in trust accounts and/or money placements.

As evidence, Lim annexed bank records, including dollar deposits of Intengan, Neri and Brawner, to establish the deception practiced by Santos and Genuino.

n turn, Global Consumer Banking Group of Citibanks VP/Business Manager Reyes admitted to having authorized Lim to state the names of the clients involved and to atta

said bank records.

ntengan, Neri and Brawner filed their respective motions for the exclusion and physical withdrawal of their bank records, which was initially dismissed by 2nd Asst. Provin

Prosecutor Ubana, Sr. However, Provincial Prosecutor Castro directed the filing of informations against Rajkotwala, Ferguson, Reyes and Lim for alleged violation of the Ba

Secrecy Law. On appeal before the DOJ, this was reversed.

SSUE

Whether the Bank Secrecy Law, RA 1405 applies in this caseHELD

NO. The accounts in question are US dollar deposits. Consequently, the applicable law is RA 6426 known as the Foreign Currency Deposit Act of the Philippines, and not RA

1405 (Bank Secrecy Law).

Under Sec. 8 of RA 6426, there is only a single exception to the secrecy of foreign currency deposits, that is, disclosure is allowed only upon the written permission of the

depositor. Incidentally, the acts of the Citibank officials complained of happened before the enactment of RA 9160, Anti-Money Laundering Act of 2001.

A case for violation of RA 6426 should have been the proper case brought against the banks officials. Lim and Reyes admitted that they had disclosed details of petitioner

dollar deposits without the latters written permission. It does not matter if that such disclosure was necessary to establish the banks case against Santos and Genuino. Li

act of disclosing details of petitioners bank records regarding their foreign currency deposits, with the authority of Reyes, would appear to belong to the species.

SEC. 8, RA 3019:Dismissal due to unexplained wealth. If in accordance with the provisions of Republic Act Numbered One thousand three hundred seventy-nine, a public

official has been found to have acquired during his incumbency, whether in his name or in the name of other persons, an amount of property and/or money manifestly out

proportion to his salary and to his other lawful income, that fact shall be a ground for dismissal or removal. Properties in the name of the spouse and unmarried children of

such public official may be taken into consideration, when their acquisition through legitimate means cannot be satisfactorily shown. Bank deposits shall be taken into

consideration in the enforcement of this section, notwithstanding any provision of law to the contrary.


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PNB v. GANCAYAO, 15 SCRA 91 (1965)

DOCTRINE: Sec. 8 of RA 3019 directs in mandatory terms that bank deposits shall be taken into consideration in the enforcement of this section, notwithstanding any

provision of law to the contrary.

FACTS

Prosecutor Gancayao required PNB to produce the records of the bank deposits of Jimenez, the former administrator of the Agricultural Credit and Cooperative

Administration. Jimenez was under investigation for unexplained wealth. PNB refused to produce the records of the bank deposits for fear of prosecution under RA 1405 (

Secrecy Law). Gancayao on the other hand relied on the provisions of RA 3019 (Anti Graft and Corrupt Practices Act), stating

Sec. 8. Dismissal due to unexplained wealth. xx xx xx Bank deposits shall be taken into consideration in the enforcement of this section, notwithstanding any

provision of law to the contrary.

SSUE

Whether RA 3019 prevails over RA 1405?

RULING

YES. Anti Graft and Corrupt Practices Act prevails over the Bank Secrecy Law. The anti graft law directs in mandatory terms that bank deposits shall be taken into

consideration in the enforcement of this section, notwithstanding any provision of law to the contrary. The only conclusion possible is that Section 8 of the Anti Graft Law

ntended to amend Section 2 of the Bank Secrecy Law by providing an additional exception to the rule against the disclosure of bank deposits.

BANCO FILIPINO SAVINGS AND MORTGAGE BANK v. PURISIMA, 161

SCRA 576 (1988)

DOCTRINE: By enacting Sec. 8 of RA 3019, Congress intended to provide an additional ground for the examination of bank deposits for without such provision, the prosecu

would be hampered if not altogether frustrated in the prosecution of those charged with having acquired unexplained wealth while in public office.

FACTS

The Tanodbayan issued a subpoenaduces tecum to the Banco Filipino Savings & Mortgage Bank, commanding its representative to appear at a specified time at the Office

the Tanodbayan and furnish the latter with duly certified copies of the records in all its branches and extension offices, of the loans, savings and time deposits and other

banking transactions, dating back to 1969, appearing in the names of Caturla, his wife, Purita Caturla, their children Manuel, Jr., Marilyn and Michael and/or Pedro

Escuyos.

Caturla moved to quash the subpoena duces tecum arguing that compliance therewith would result in a violation of Sections 2 and 3 of the Law on Secrecy of Bank Deposit

Then Tanodbayan Vicente Ericta not only denied the motion for lack of merit, and directed compliance with the subpoena, but also expanded its scope through a second

subpoenaduces tecum, this time requiring production by Banco Filipino of the bank records in all its branches and extension offices, of Siargao Agro-Industrial Corporation

Pedro Escuyos or his wife, Emeterio Escuyos, Purita Caturla, Lucia Escuyos or her husband, Romeo Escuyos, Emerson Escuyos, Fraterno Caturla, Amparo Montilla, Cesar

Caturla, Manuel Caturla or his children, Manuel Jr., Marilyn and Michael, LTD Pub/Restaurant, and Jose Buo or his wife, Evelyn. Two other subpoena of substantially the sa

tenor as the second were released by the Tanodbayan's Office. The last required obedience under sanction of contempt.

The Banco Filipino Savings & Mortgage Bank, hereafter referred to simply as BF Bank, took over from Caturla in the effort to nullify the subpoenae. It filed a complaint for

declaratory relief with the Court of First Instance of Manila, which was assigned by raffle to the sala of respondent Judge Fidel Purisima. BF Bank prayed for a judicial

declaration as to whether its compliance with the subpoenae duces tecum would constitute an infringement of the provisions of Sections 2 and 3 of R.A. No. 1405 in relatio

to Section 8 of R.A. No. 3019. It also asked that pending final resolution of the question, the Tanodbayan be provisionally restrained from exacting compliance with the

subpoenae.

Respondent Judge Purisima issued an Order denying for lack of merit the application by BF Bank for a preliminary injunction and/or restraining order. It further argues tha

subpoenae in question are in the nature of "fishing expeditions" or "general warrants" since they authorize indiscriminate inquiry into bank records; that, assuming that su

an inquiry is allowed as regards public officials under investigation for a violation of the Anti-Graft & Corrupt Practices Act, it is constitutionally impermissible with respect

private individuals or public officials not under investigation on a charge of violating said Act; and that while prosecution of offenses should not, as a rule, be enjoined, the

are recognized exceptions to the principle one of which is here present, i.e. to avoid multiplicity of suits, similar subpoenae having been directed to other banks as well.

SSUE

Whether the "Law on Secrecy of Bank Deposits" precludes production by subpoena duces tecum of bank records of transactions by or in the names of the wife, children an

friends of a special agent of the Bureau of Customs, accused before the Tanodbayan of having allegedly acquired property manifestly out of proportion to his salary and ot

awful income, in violation of the "Anti-Graft and Corrupt Practices Act.

RULING

The provisions of R.A. No. 1405 subject of BF's declaratory action, read as follows:

Sec. 2.All deposits of whatever nature with banks or banking institutions in the Philippines including investments in bonds issued by the Government of the Philippines, its

political subdivisions and its instrumentalities, are hereby considered as of an absolutely confidential nature and may not be examined, inquired or looked into by any pergovernment official, bureau or office, except upon written permission of the depositor, or in cases of impeachment, or upon order of a competent court in cases of bribery

dereliction of duty of public officials, or in cases where the money deposited or invested is the subject matter of litigation.

Sec. 3.It shall be unlawful for any official or employee of a banking institution to disclose to any person other than those mentioned in Section two hereof any information

concerning said deposits

The other provision involved in the declaratory action is Section 8 of R.A. No. 3019. It reads:

Sec. 8. Dismissal due to unexplained wealth. If in accordance with the provisions of Republic Act Numbered One thousand three hundred seventy-nine, a public officia

been found to have acquired during his incumbency, whether in his name or in the name of other persons, an amount of property and/or money manifestly out of proport

to this salary and to his other lawful income, that fact shall be a ground for dismissal or removal. Properties in the name of the spouse and unmarried children of such publ

official may be taken into consideration, when their acquisition through legitimate means cannot be satisfactorily shown. Bank deposits shall be taken into consideration in

the enforcement of this section, notwithstanding any prohibition of law to the contrary.


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The only conclusion possible is that section 8 of the Anti-Graft Law is intended to amend section 2 of Republic Act No. 1405 by providing an additional exception to the rule

against the disclosure of bank desposits. The inquiry into illegally acquired property or property NOT"legitimately acquired" extends to cases where such propert

concealed by being held by or recorded in the name of otherpersons. This proposition is made clear by R.A. No. 3019 which quitecategorically states that the term,

"legitimately acquired property ofa public officer or employee shall not include .. property unlawfullyacquired by the respondent, but its ownership is concealed by it

being recorded in the name of, or held by, respondent's spouse,ascendants, descendants, relatives or any other persons.

To sustain the petitioner's theory, and restrict the inquiry only to property held by or in the name of the government official or employee, or his spouse and unmarried

children is unwarranted in the light of the provisions of the statutes in question, and would make available to persons in government who illegally acquire property an eas

and fool-proof means of evading investigation and prosecution; all they would have to do would be to simply place the property in the possession or name of persons othe

than their spouse and unmarried children. This is an absurdity that we will not ascribe to the lawmakers.

SEC. 11, AMLA: Authority to Inquire into Bank Deposits. -

Notwithstanding the provisions of Republic Act No. 1405, as amended; Republic Act No. 6426, as amended; Republic Act No. 8791, and other laws, the AMLC may inquire i

or examine any particular deposit or investment with any banking institution or non- bank financial institution upon order of any competent court in cases of violation of tAct when it has been established that there is probable cause that the deposits or investments involved are in any way related to a money laundering offense: Provided, T

this provision shall not apply to deposits and investments made prior to the effectivity of this Act.

MARQUEZ v. DESIERTO, 359 SCRA 772 (1991)

DOCTRINE: Before an in camera inspection by the Ombudsman may be allowed, there must be a pending case before a court of competent jurisdiction. Further, the accou

must be clearly identified, the inspection limited to the subject matter of the pending case before the court of competent jurisdiction. The bank personnel and the accoun

holder must be notified to be present during the inspection, and such inspection may cover only the account identified in the pending case.

FACTS

Petitioner is being held in indirect contempt for not allowing in camera inspection of the accounts related to an investigation being done by the Ombudsman relating to pa

offs for the PEA-AMARRI scandal. Petitioner hopes to nullify order for the in camera investigation and to hold her in contempt.

Petitioner is the branch manager of Union Bank, Julio Vargas Branch. She received an Order from the Respondent to produce several bank documents for inspection in cam

relative to a pending investigation before Respondent (Ombudsman Desierto).

Respondents case is the Fact Finding and Intelligence Bureau (FFIB) vs. Amado Lagdameo relative to the JVA between PEA and AMARI. The Order emphasized Responde

power to issue subpoena and subpoena duces tecum and contempt power under RA 6770 aka the Ombudsman Act of 1989. The Act is a later legislation to RA 1405 aka

Secrecy of Bank Deposits law; hence amending some provisions of the latter.

Orders objective: to trail the managers checks purchased by Trivinio respondent in the pending case)

Trivinio purchased 51 managers checks worth P272.1M from Traders Royal Bank, UN Ave. 11 of these checks, P70.6M, were deposited to an account handled by Petitione

branch

Though Union Banks lawyer told Petitioner to comply with the Order, she had some difficulty making her ask for some time extensions. She said the accounts cannot be e

dentified and despite diligent efforts and from the account numbers presented, she cannot identify these accounts since the checks were issued in cash or bearer o Surm

that the account has been dormant since it is not covered by the new account number generated by the Union Bank system o Hence, she has to verify from the Interbank

records archives for the whereabouts of the account

After two extensions, Respondent issued the controversial order threatening to hold Petitioner in indirect contempt for causing delays in the investigation.

Petitioner and Union Bank filed for declaratory relief in the RTC of Makati to clarify their rights and duties, seeing complying with the Order may conflict or violate the

Secrecy of Bank Deposits law.

Lower Court Denied the Petition, but Petitioner sought reconsideration.

Grounds used by the lower court: No great or irreparable injury to restrain respondent The Ombudsman would have to file to the RTC for the indirect contempt charge

Petitioner failed to show prima facie evidence that the subject matter of the investigation is outside the jurisdiction of Respondent.

Reconsideration was likewise denied.

A motion to cite Petitioner in contempt was filed with the Office of the Ombudsman. Petitioner asserted that such was premature since there was a pending case in the lo

court, but eventually she was held in contempt

SSUE

(Ombudsman act) whether petitioner may be cited for indirect contempt for her failure to produce the documents requested by the Ombudsman. And whether the orderthe Ombudsman to have an in camera inspection of the questioned account is allowed as an exception to the law on secrecy of bank deposits (R. A. No. 1405).

RULING

NO, she may not be held in contempt or may the Ombudsman have an in camera inspection.

Examination of the secrecy of bank deposits law (R. A. No. 1405) would reveal the following exceptions:

1. Where the depositor consents in writing;

2. Impeachment case;

3. By court order in bribery or dereliction of duty cases against public officials;

4. Deposit is subject of litigation;

5. Sec. 8, R. A. No. 3019, in cases of unexplained wealth as held in the case of PNB vs. Gancayco


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The order of the Ombudsman to produce for in camera inspection the subject accounts with the Union Bank of the Philippines, Julia Vargas Branch, is based on a pending

nvestigation at the Office of the Ombudsman against Amado Lagdameo, et. al. for violation of R. A. No. 3019, Sec. 3 (e) and (g) relative to the Joint Venture Agreement

between the Public Estates Authority and AMARI.

We rule that before an in camera inspection may be allowed, there must be a pending case before a court of competent jurisdiction.

Further, the account must be clearly identified, the inspection limited to the subject matter of the pending case before the court of competent jurisdiction. The bank

personnel and the account holder must be notified to be present during the inspection, and such inspection may cover only the account identified in the pending case.

n Union Bank of the Philippines v. Court of Appeals, we held that Section 2 of the Law on Secrecy of Bank Deposits, as amended, declares bank deposits to be absolutel

confidential except:

(1) In an examination made in the course of a special or general examination of a bank that is specifically authorized by the Monetary Board after being satisfied that there

reasonable ground to believe that a bank fraud or serious irregularity has been or is being committed and that it is necessary to look into the deposit to establish such fraud

rregularity,

(2) In an examination made by an independent auditor hired by the bank to conduct its regular audit provided that the examination is for audit purposes only and the

results thereof shall be for the exclusive use of the bank,

(3) Upon written permission of the depositor,

(4) In cases of impeachment,

(5) Upon order of a competent court in cases of bribery or dereliction of duty of public officials, or

(6) In cases where the money deposited or invested is the subject matter of the litigation

n the case at bar, there is yet no pending litigation before any court of competent authority. What is existing is an investigation by the office of the Ombudsman. In sh

what the Office of the Ombudsmanwould wish to do is to fish for additional evidence to formally charge Amado Lagdameo, et. al., with the Sandiganbayan. Clearly, there

no pendingcase in court, which would warrant the opening of the bank account for inspection.

SALVACION v. CENTRAL BANK, 278 SCRA 27 (1997)

DOCTRINE: Sec. 113 of CB Circular No. 960, which exempts from garnishment, attachment or any other order or process of any court, legislative body, government agency

any administrative body whatsoever foreign currency deposits, is NOT applicable to a foreign transient, but only to foreign lenders and investors to the development of th

Foreign Currency Deposit System and Offshore Banking System in the Philippines.

FACTS

On February 4, 1989, Greg Bartelli y Northcott, an American tourist, coaxed and lured petitioner Karen Salvacion, then 12 years old to go with him to his apartment. There

Greg Bartelli detained Karen Salvacion for four days, or up to February 7, 1989 and was able to rape the child. Greg was eventually apprehended but he escaped from

detention.

The Deputy Sheriff of Makati served a Notice of Garnishment on China Banking Corporation. In a letter dated March 13, 1989 to the Deputy Sheriff of Makati, China Banki

Corporation invoked Republic Act No. 1405 as its answer to the notice of garnishment served on it. On March 15, 1989, Deputy Sheriff of Makati Armando de Guzman sent

reply to China Banking Corporation saying that the garnishment did not violate the secrecy of bank deposits since the disclosure is merely incidental to a garnishment prop

and legally made by virtue of a court order which has placed the subject deposits in custodia legis. In answer to this letter of the Deputy Sheriff of Makati, China Banking

Corporation, in a letter dated March 20,1989, invoked Section 113 of Central Bank Circular No. 960 to the effect that the dollar deposits of defendant Greg Bartelli are exempt from attachment, garnishment, or a

other order or process of any court, legislative body, government agency or any administrative body, whatsoever.

After hearing the case ex-parte, the court rendered judgment in favor of petitioners on March 29, 1990.

But China Bank still refuses to garnish the foreign denominated deposits of

Greg.

SSUE

Should Section 113 of Central Bank Circular No. 960 and Section 8 of R.A.6426, as amended by P.D. 1246, otherwise known as the Foreign Currency Deposit Act be made

applicable to a foreign transient?

RULING

NO. If Karen's sad fate had happened to anybody's own kin, it would be difficult for him to fathom how the incentive for foreign currency deposit could be more important

than his child's rights to said award of damages; in this case, the victim's claim for damages from this alien who had the gall to wrong a child of tender years of a country

where he is a mere visitor. This further illustrates the flaw in the questioned provisions.

t is worth mentioning that R.A. No. 6426 was enacted in 1983 or at a time when the country's economy was in a shambles; when foreign investments were minimal and

presumably, this was the reason why said statute was enacted. But the realities of the present times show that the country has recovered economically; and even if not, t

questioned law still denies those entitled to due process of law for being unreasonable and oppressive. The intention of the questioned law may be good when enacted. Th

aw failed to anticipate the iniquitous effects producing outright injustice and inequality such as the case before us.

Act 3936 (Unclaimed Balances Law), as amended by PD 679, "Sec. 2.Immediately after the taking effect of this Act and within the month of January of every odd year, al

banks, building and loan associations, and trust corporations shall forward to the Treasurer of the Philippines a statement, under oath, of their respective managing officer

all credits and deposits held by them in favor of persons known to be dead, or who have not made further deposits or withdrawals during the preceding ten years or more,

arranged in alphabetical order according to the names of creditors and depositors, and showing:

"(a) The names and last known place of residence or post office addresses of the persons in whose favor such unclaimed balances stand;

"(b) The amount and the date of the outstanding unclaimed balance and whether the same is in money or in security, and if the latter, the nature of the same;

"(c) The date when the person in whose favor the unclaimed balance stands died, if known, or the date when he made his last deposit or withdrawal; and

"(d) The interest due on such unclaimed balance, if any, and the amount thereof.


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"A copy of the above sworn statement shall be posted in a conspicuous place in the premises of the bank, building and loan association, or trust corporation concerned for

east sixty days from the date of filing thereof: Provided, That immediately before filing the above sworn statement, the bank, building and loan association, and trust

corporation shall communicate with the person in whose favor the unclaimed balance stands at his last known place of residence or post office address.

"It shall be the duty of the Treasurer of the Philippines to inform the Solicitor General from time to time the existence of unclaimed balances held by banks, building and lo

associations, and trust corporations.

GBL, Section 54.Prohibition to Act as Insurer.- A bank shall not directly engage in insurance business as the insurer. (73)

GBL, Section 55.Prohibited Transactions.

55.1. No director, officer, employee, or agent of any bank shall -

(a) Make false entries in any bank report or statement or participate in any fraudulent transaction, thereby affecting the financial interest of, or causing damage

the bank or any person;

(b) Without order of a court of competent jurisdiction, disclose to any unauthorized person any information relative to the funds or properties in the custody o

bank belonging to private individuals, corporations, or any other entity: Provided, That with respect to bank deposits, the provisions of existing laws shall preva

(c) Accept gifts, fees, or commissions or any other form of remuneration in connection with the approval of a loan or other credit accommodation from said ba

(d) Overvalue or aid in overvaluing any security for the purpose of influencing in any way the actions of the bank or any bank; or

(e) Outsource inherent banking functions.

55.2. No borrower of a bank shall -

(a) Fraudulently overvalue property offered as security for a loan or other credit accommodation from the bank;

(b) Furnish false or make misrepresentation or suppression of material facts for the purpose of obtaining, renewing, or increasing a loan or other credit

accommodation or extending the period thereof;

(c) Attempt to defraud the said bank in the event of a court action to recover a loan or other credit accommodation; or

(d) Offer any director, officer, employee or agent of a bank any gift, fee, commission, or any other form of compensation in order to influence such persons into

approving a loan or other credit accommodation application.

55.3 No examiner, officer or employee of the Bangko Sentral or of any department, bureau, office, branch or agency of the Government that is assigned to supervise, exam

assist or render technical assistance to any bank shall commit any of the acts enumerated in this Section or aid in the commission of the same. (87-Aa)

The making of false reports or misrepresentation or suppression of material facts by personnel of the Bangko Sental ng Pilipinas shall be subject to the administrative and

criminal sanctions provided under the New Central Bank Act.

55.4. Consistent with the provisions of Republic Act No. 1405, otherwise known as the Banks Secrecy Law, no bank shall employ casual or non regular personnel or too leng

probationary personnel in the conduct of its business involving bank deposits.

SEC. 26, NCBA- Any director, officer or stockholder who, together with his related interest, contracts a loan or any form of financial accommodation from: (1) his bank; or

from a bank (a) which is a subsidiary of a bank holding company of which both his bank and the lending bank are subsidiaries or (b) in which a controlling proportion of the

shares is owned by the same interest that owns a controlling proportion of the shares of his bank, in excess of five percent (5%) of the capital and surplus of the bank, or in

maximum amount permitted by law, whichever is lower, shall be required by the lending bank to waive the secrecy of his deposits of whatever nature in all banks in the

Philippines. Any information obtained from an examination of his deposits shall be held strictly confidential and may be used by the examiners only in connection with the

supervisory and examination responsibility or by the Bangko Sentral in an appropriate legal action it has initiated involving the deposit account.

E. Garnishment

SEC. 9 (C), RULE 39 OF RULES OF COURT - Garnishment of debts and credits. - The officer may levy on debts due the judgment obligor and other credits, including bank

deposits, financial interests,royalties, commissions and other personal property notcapable of manual delivery in the posssession or control ofthird parties. Levy shall be

made by serving notice upon theperson owing such debts or having in his possession or control such credits to which the judgment obligor is entitled. Thegarnishment sh

cover only such amount as will satisfy thejudgment and all lawful fees. The garnishee shall make awritten report to the court within five (5) days from service ofthe notic

garnishment stating whether or not the judgmentobligor has sufficient funds or credits to satisfy the amount ofthe judgment. If not, the report shall state how much fund

credits the garnishee holds for the judgment obligor. Thegarnished amount in cash, or certified bank check issued inthe name of the judgment obligee, shall be delivered

directlyto the judgment obligee within ten (10) working days from service of notice on said garnishing requiring such delivery, except the lawful fees which shall be paiddirectly to the court.In the event there are two or more garnishees holding deposits or credits sufficient to satisfy the judgment, the judgment obligor, if available, shall ha

the right to indicate the garnishee or garnishees who shall be required to deliver the amount due; otherwise, the choice shall be made by the judgment obligee. The execu

sheriff shall observe the same procedure under paragraph (a) with respect to delivery of payment to the judgment obligee.

SEC. 13, RULE 39 OF RULES OF COURT - Property exempt from execution.

Except as otherwise expressly provided by law, the following property, and no other, shall be exempt from execution:

(a) The judgment obligor's family home as provided by law, or the homestead in which he resides, and land necessarily used in connection therewith;

(b) Ordinary tools and implements personally used by him in hs trade, employment, or livelihood;

(c) Three horses, or three cows, or three carabaos, or other beasts of burden such as the judgment obligor may select necessarily used by him in his ordinary occupation;

(d) His necessary clothing and articles for ordinary personal use, excluding jewelry;


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The prohibition against examination of or inquiry into a bank deposit under Republic Act 1405 does not preclude its being garnished to insure satisfaction of a judgment.

ndeed there is no real inquiry in such a case, and if the existence of the deposit is disclosed the disclosure is purely incidental to the execution process. It is hard to conceiv

that it was ever within the intention of Congress to enable debtors to evade payment of their just debts, even if ordered by the Court, through the expedient of converting

their assets into cash and depositing the same in a bank.

Liability for Release Cases

RCBC v. DE CASTRO. 168 SCRA 49 (1988)

FACTS

n connection with a civil case between Badoc Planters Inc(BADOC) vs. Philippine Virginia Tobacco Administration (PVTA) et al, an action for recovery of unpaid tobacco

deliveries, the Judge issued a partial order, directing PVTA to pay plaintiff BADOC.

BADOC filed a motion to for a writ of execution, which was granted on the same day. The sheriff then issued a Notice of Garnishment addressed to RCBC asking if PVTA hadany proterty in the possession RCBC. to which RCBC replied in the affirmative. PVTA was notified by RCBC of such notice.

Later on the Judge issued and order directing RCBC to ""to deliver in check the amount garnished to the Sheriff and the Sheriff in turn is ordered to cash the check and deliv

the amount to BADOC". RCBC complied with the order, the check was issued, delivered to the Sheriff, and subsequently encashed.

PVTA however filed an MR assailing the execution. The court granted the MR, invalidated the execution, and ordered RCBC and BADOC to jointly and severally restore the

account of PVTA.

SSUE

Whether RCBC is liable to restore the account of PVTA

HELD

NO. RCBC merely obeyed a mandatory directive from the respondent Judge, ordering it "to deliver in check the amount garnished to the Sheriff and the Sheriff is in turn

ordered to cash the check and deliver the amount to BADOC."

As to the allegation by PVTA that RCBC was negligent in prematurely releasing its funds. The court held that the contention by PVTA was without merit since RCBC was

expressly ordered by the court to deliver and encash the check. RCBC had already filed a reply to the Notice of Garnishment stating that it had in its custody funds belongin

the PVTA. Also, RCBC promptly notified PVTA of the existence of the Notice of Garnishment.

t is important to stress, at this juncture, that there was nothing irregular in the delivery of the funds of PVTA by check to the sheriff, whose custody is equivalent to the

custody of the court, he being a court officer. The order of the court was composed of two parts, requiring: 1) RCBC to deliver in check the amount garnished to the

designated sheriff and 2) the sheriff in turn to cash the check and deliver the amount to the plaintiffs representative and/or counsel on record. It must be noted that in

delivering the garnished amount in check to the sheriff, the RCBC did not thereby make any payment, for the law mandates that delivery of a check does not produce the

effect of payment until it has been cashed. [Article 1249, Civil Code.]

Moreover, by virtue of the order of garnishment, the same was placed in custodia legis and therefore, from that time on, RCBC was holding the funds subject to the orders

the court a quo. That the sheriff, upon delivery of the check to him by RCBC encashed it and turned over the proceeds thereof to the plaintiff was no longer the concern of

RCBC as the responsibility over the garnished funds passed to the court. Thus, no breach of trust or dereliction of duty can be attributed to RCBC in delivering its deposito

funds pursuant to a court order, which was merely in the exercise of its power of control over such funds.

The bank had no choice but to comply with the order demanding delivery of the garnished amount in check. The very tenor of the order called for immediate compliancetherewith. On the other hand, the bank cannot be held liable for the subsequent encashment of the check as this was upon order of the court in the exercise of its power o

control over the funds placed in custodia legis by virtue of the garnishment.

F. DEPOSIT INSURANCE

1. Coverage

SEC. 5, PDIC CHARTER:The deposit liabilities of any bank or banking institution, which is engaged in the business of receiving deposits as herein defined on the effective d

of this Act, or which thereafter may engage in the business of receiving deposits, shall be insured with the Corporation. (As amended by R.A. 6037, 04 August 1969;

renumbered from Sec. 4 by R.A. 9302, 12 August 2004)

SEC. 9, FCDA:Deposit insurance coverage.The deposits under this Act shall be insured under the provisions of Republic Act No. 3591, as amended (Philippine Deposit

nsurance Corporation), as well as its implementing rules and regulations: Provided, That insurance payment shall be in the same currency in which the insured deposits ar

denominated.

2. Amount Insured

SEC. 4 (G), PDIC CHARTER:The term insured deposit means the amount due to any bona fide depositor for legitimate deposits in an insured bank net of any obligation o

depositor to the insured bank as of the date of closure, but not to exceed Five Hundred Thousand Pesos (P500,000.00).2 Such net amount shall be determined according to

such regulations as the Board of Directors may prescribe. In determining such amount due to any depositor, there shall be added together all deposits in the bank maintain

n the same right and capacity for his benefit either in his own name or in the name of others. A joint account regardless of whether the conjunction "and," "or," "and/or" is

used, shall be insured separately from any individually owned deposit account: Provided, That (1) If the account is held jointly by two or more natural persons, or by two or

more juridical persons or entities, the maximum insured deposit shall be divided into as many equal shares as there are individuals, juridical persons or entities, unless a

different sharing is stipulated in the document of deposit, and (2) if the account is held by a juridical person or entity jointly with one or more natural persons, the maximu

nsured deposit shall be presumed to belong entirely to such juridical person or entity: Provided, further, That the aggregate of the interest of each co-owner over several

accounts, whether owned by the same or different combinations of individuals, juridical persons or entities, shall likewise be subject to the maximum insured deposit of F

Hundred Thousand Pesos (P500,000.00): Provided, furthermore, That the provisions of any law to the contrary notwithstanding, no owner/holder of any negotiable certifi

of deposit shall be recognized as a depositor entitled to the rights provided in this Act unless his name is registered as owner/holder thereof in the books of the issuing ban

Provided, finally, That, in case of a condition that threatens the monetary and financial stability of the banking system that may have systemic consequences, as defined in

section 17 hereof, as determined by the Monetary Board, the maximum deposit insurance cover may be adjusted in such amount, for such a period, and/or for such depos


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products, as may be determined by a unanimous vote of the Board of Directors in a meeting called for the purpose and chaired by the Secretary of Finance, subject to the

approval of the President of the Philippines. (As amended by R.A. 9302, 12 August 2004; R.A. 9576, 2009)

3. Rules on Payment

SEC. 10 (B), PDIC CHARTER: REPEALED ALREADY.For purposes of this Act an insured bank shall be deemed to have been closed on account of insolvency when ordered clo

by the Monetary Board of the Central Bank of the Philippines pursuant to Section 29 of R.A. 265, as amended.

SEC. 10 (C), PDIC CHARTER:Whenever an insured bank shall have been closed by the Monetary Board pursuant to Section 30 of R.A. 7653, payment of the insured deposit

such closed bank shall be made by the Corporation as soon as possible either (1) by cash or (2) by making available to each depositor a transferred deposit in another insur

bank in an amount equal to insured deposit of such depositor: Provided, however, That the Corporation, in its discretion, may require proof of claims to be filed before pa

the insured deposits, and that in any case where the Corporation is not satisfied as to the viability of a claim for an insured deposit, it may require final determination of a

court of competent jurisdiction before paying such claim: Provided, further, That failure to settle the claim, within six (6) months from the date of filing of claim for insured

deposit, where such failure was due to grave abuse of discretion, gross negligence, bad faith, or malice, shall, upon conviction, subject the directors, officers or employees the Corporation responsible for the delay, to imprisonment from six (6) months to one (1) year: Provided, furthermore, That the period shall not apply if the validity of the

claim requires the resolution of issues of facts and or law by another office, body or agency including the case mentioned in the first proviso or by Corporation together w

such other office, body or agency."

SEC. 10 (D), PDIC CHARTER:The Corporation, upon payment of any depositor as provided for in subsection (c) of this Section3, shall be subrogated to all rights of the depo

against the closed bank to the extent of such payment. Such subrogation shall include the right on the part of the Corporation to receive the same dividends and payments

from the proceeds of the assets of such closed bank and recoveries on account of stockholders liability as would have been p ayable to the depositor on a claim for the ins

deposits but, such depositor shall retain his claim for any uninsured portion of his deposit. All payments by the Corporation of insured deposits in closed banks partake of t

nature of public funds, and as such, must be considered a preferred credit similar to taxes due to the National Government in the order of preference under Article 2244 of

the New Civil Code: Provided, further, That this preference shall be likewise effective upon liquidation proceedings already commenced and pending as of the approval of

Act, where no distribution of assets has been made. (As amended by P.D. 1940, 27 June 1984; R.A. 7400, 13 April 1992; renumbered from Sec. 10(d) by R.A. 9302, 12 Augu

2004)

G. UNCLAIMED BALANCES

1. Definition

SEC. 1, UNCLAIMED BALANCES LAW (as amended by PD 679):"Unclaimed balances", within the meaning of this Act, shall include credits or deposits of money, bullion,

security or other evidence of indebtedness of any kind, and interest thereon with banks, buildings and loan associations, and trust corporations, as hereinafter defined, in

favor of any person known to be dead or who has not made further deposits or withdrawals during the preceding ten years or more. Such unclaimed balances, together wi

the increase and proceeds thereof, shall be deposited with the Treasurer of the Philippines to the credit of the Government of the Republic of the Philippines to be used as

National Assembly may direct.

"Banks", "building and loan associations" and "trust corporations", within the meaning of this Act, shall refer to institutions defined under Section two, thirty-nine and fifty

respectively, of Republic Act Numbered Three Hundred Thirty Seven, otherwise known as the General Banking Act, as amended, whether organized under special charters

not.

2. Report to Treasurer; Notice, Posting, Publication

SEC. 2, UNCLAIMED BALANCES LAW (as amended by PD 679):Immediately after the taking effect of this Act and within the month of January of every odd year, all banks,

building and loan associations, and trust corporations shall forward to the Treasurer of the Philippines a statement, under oath, of their respective managing officers, of alcredits and deposits held by them in favor of persons known to be dead, or who have not made further deposits or withdrawals during the preceding ten years or more,

arranged in alphabetical order according to the names of creditors and depositors, and showing:

"(a) The names and last known place of residence or post office addresses of the persons in whose favor such unclaimed balances stand;

"(b) The amount and the date of the outstanding unclaimed balance and whether the same is in money or in security, and if the latter, the nature of the same;

"(c) The date when the person in whose favor the unclaimed balance stands died, if known, or the date when he made his last deposit or withdrawal; and

"(d) The interest due on such unclaimed balance, if any, and the amount thereof.

"A copy of the above sworn statement shall be posted in a conspicuous place in the premises of the bank, building and loan association, or trust corporation concerned for

east sixty days from the date of filing thereof: Provided, That immediately before filing the above sworn statement, the bank, building and loan association, and trust

corporation shall communicate with the person in whose favor the unclaimed balance stands at his last known place of residence or post office address.

"It shall be the duty of the Treasurer of the Philippines to inform the Solicitor General from time to time the existence of unclaimed balances held by banks, building and lo

associations, and trust corporations.

3.Escheat ProceedingsSEC. 3, UNCLAIMED BALANCES LAW (as amended by PD 679):Whenever the Solicitor General shall be informed of such unclaimed balances, he shall commence an action

actions in the name of the People of the Republic of the Philippines in the Court of First Instance of the province or city where the bank, building and loan association or trucorporation is located, in which shall be joined as parties the bank, building and loan association or trust corporation and all such creditors or depositors. All or any of such

creditors or depositors or banks, building and loan association or trust corporations may be included in one action. Service of process in such action or actions shall be ma

by delivery of a copy of the complaint and summons to the president, cashier, or managing officer of each defendant bank, building and loan association or trust corporat

and by publication of a copy of such summons in a newspaper of general circulation, either in English, in Filipino, or in a local dialect, published in the locality where the ban

building and loan association or trust corporation is situated, if there be any, and in case there is none, in the City of Manila, at such time as the court may order. Upon the

trial, the court must hear all parties who have appeared therein, and if it be determined that such unclaimed balances in any defendant bank, building and loan association

trust corporation are unclaimed as hereinbefore stated, then the court shall render judgment in favor of the Government of the Republic of the Philippines, declaring that

unclaimed balances have escheated to the Government of the Republic of the Philippines and commanding said bank, building and loan association or trust corporation to

forthwith deposit the same with the Treasurer of the Philippines to credit of the Government of the Republic of the Philippines to be used as the National Assembly may

direct.

"At the time of issuing summons in the action above provided for, the clerk of court shall also issue a notice signed by him, giving the title and number of said action, and

referring to the complaint therein, and directed to all persons, other than those named as defendants therein, claiming any interest in any unclaimed balance mentioned i

said complaint, and requiring them to appear within sixty days after the publication or first publication, if there are several, of such summons, and show cause, if they hav

any, why the unclaimed balances involved in said action should not be deposited with the Treasurer of the Philippines as in this Act provided and notifying them that if they


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not appear and show cause, the Government of the Republic of the Philippines will apply to the court for the relief demanded in the complaint. A copy of said notice shall b

attached to, and published with the copy of, said summons required to be published as above, and at the end of the copy of such notice so published, there shall be a

statement of the date of publication, or first publication, if there are several, of said summons and notice. Any person interested may appear in said action and become a

party thereto. Upon the publication or the completion of the publication, if there are several, of the summons and notice, and the service of the summons on the defendan

banks, building and loan associations or trust corporations, the court shall have full and complete jurisdiction in the Republic of the Philippines over the said unclaimed

balances and over the persons having or claiming any interest in the said unclaimed balances, or any of them, and shall have full and complete jurisdiction to hear and

determine the issues herein, and render the appropriate judgment thereon.

4.Effects of Compliance/Non-ComplianceSEC. 4, UNCLAIMED BALANCES LAW (as amended by PD 679):If the president, cashier or managing officer of the bank, building and loan association, or trust corporation

neglects or refuses to make and file the sworn statement required by this action, such bank, building and loan association, or trust corporation shall pay to the Governmen

the sum of five hundred pesos a month for each month or fraction thereof during which such default shall continue.

SEC. 5, UNCLAIMED BALANCES LAW (as amended by PD 679):Any bank, building and loan association or trust corporation which shall make any deposit with the Treasure

the Philippines in conformity with the provisions of this Act shall not thereafter be liable to any person for the same and any action which may be brought by any person

against in any bank, building and loan association, or trust corporation for unclaimed balances so deposited with the Treasurer of the Philippines shall be defended by the

Solicitor General without cost to such bank, building and loan association or trust corporation."

H. ANTI-MONEY LAUNDERING ACT (RA 9160, as amended by RA 9194, RA 10167 and RA 10365)

RA 9160, 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 whenever committed.

RA 9194, SECTION 1.Section 3, paragraph (b) of Republic Act No. 9160 is hereby amended as follows:

"(b) 'Covered transaction'is a transaction in cash or other equivalent monetary instrument involving a total amount in excess of Five hundred thousand pesos (

500,000.00) within one (1) banking day.

RA 9194, SECTION 2.Section 3 of the same Act is further amended by inserting between paragraphs (b) and (c) a new paragraph designated as (b-1) to read as follows:

"(b-1) 'Suspicious transaction'are transactions with covered institutions, 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;

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 Act;

5. Any circumstances 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

institution;

6. The transactions is in a 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 transactions that is similar or analogous to any of the foregoing."

RA 10365, Section 1.Section 3(a) of Republic Act No. 9160, as amended, is hereby amended to read as follows:

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

"(1) banks, non-banks, quasi-banks, trust entities, foreign exchange dealers, pawnshops, money changers, remittance and transfer comp

and other similar entities and all other persons and their subsidiaries and affiliates supervised or regulated by the Bangko Sentral ng Pilip

(BSP);

"(2) insurance companies, pre-need companies and all other persons supervised or regulated by the Insurance Commission (IC);

"(3) (i) securities dealers, brokers, salesmen, investment houses and other similar persons managing securities or rendering services as

investment agent, advisor, or consultant, (ii) mutual funds, close-end investment companies, common trust funds, and other similar persoand (iii) other entities administering or otherwise dealing in currency, commodities or financial derivatives based thereon, valuable objec

cash substitutes and other similar monetary instruments or property supervised or regulated by the Securities and Exchange Commission

(SEC);

"(4) jewelry dealers in precious metals, who, as a business, trade in precious metals, for transactions in excess of One million pesos

(P1,000,000.00);

"(5) jewelry dealers in precious stones, who, as a business, trade in precious stones, for transactions in excess of One million pesos

(P1,000,000.00);

"(6) company service providers which, as a business, provide any of the following services to third parties: (i) acting as a formation agent

juridical persons; (ii) 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; (iii) providing a registered office, business address or accommodati

correspondence or administrative address for a company, a partnership or any other legal person or arrangement; and (iv) acting as (or

arranging for another person to act as) a nominee shareholder for another person; and


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"(7) persons who provide any of the following services:

(i) managing of client money, securities or other assets;

(ii) management of bank, savings or securities accounts;

(iii) organization of contributions for the creation, operation or management of companies; and

(iv) creation, operation or management of juridical persons or arrangements, and buying and selling business entities.

"Notwithstanding the foregoing, the term covered persons shall exclude lawyers and accountants acting as independent lega

professionals in relation to information concerning their clients or where disclosure of information would compromise client

confidences or the attorney-client relationship: Provided, That these lawyers and accountants are authorized to practice in the

Philippines and shall continue to be subject to the provisions of their respective codes of conduct and/or professionalresponsibility or any of its amendments."

Section 9 (as amended by RA 10365).Prevention of Money Laundering; Customer Identification Requirements and Record Keeping.

(a) Customer Identification, - Covered institutions shall establish and record the true identity of its clients based on official documents. They shall maintain a

system of verifying the true identity of their clients and, in case of corporate clients, require a system of verifying their legal existence and organizational structu

as well as the authority and identification of all persons purporting to act on their behalf.

The provisions of existing laws to the contrary notwithstanding, anonymous accounts, accounts under fictitious names, and all other similar accounts shall be

absolutely prohibited. Peso and foreign currency non-checking numbered accounts shall be allowed. The BSP may conduct annual testing solely limited to the

determination of the existence and true identity of the owners of such accounts.

(b) Record KeepingAll records of all transactions of covered institutions shall be maintained and safely stored for five (5) years from the date of transactions.

With respect to closed accounts, the records on customer identification, account files and business correspondence, shall be preserved and safety stored for at

least five (5) years from the dates when they were closed.

"(c) Reporting of Covered and Suspicious Transactions.Covered persons shall report to the AMLC all covered transactions and suspicious transactions within

(5) working days from occurrence thereof, unless the AMLC prescribes a different period not exceeding fifteen (15) working days.

"Lawyers and accountants acting as independent legal professionals are not required to report covered and suspicious transactions if the relevant information w

obtained in circumstances where they are subject to professional secrecy or legal professional privilege.

When reporting covered transactions to the AMLC, covered institutions and their officers, employees, representatives, agents, advisors, consultants or associates shall not

deemed to have violated Republic Act No. 1405, as amended; Republic Act No. 6426, as amended; Republic Act No. 8791 and other similar laws, but are prohibited from

communicating, directly or indirectly, in any manner or by any means, to any person the fact that a covered transaction report was made, the contents thereof, or any oth

nformation in relation thereto. In case of violation thereof, the concerned officer, employee, representative, agent, advisor, consultant or associate of the covered institu

shall be criminally liable. However, 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 this Act or any other Philippine law.

"When reporting covered or suspicious transactions to the AMLC, covered persons and their officers and employees are prohibited from communicating, directly or indire

n any manner or by any means, to any person or entity, the media, the fact that a covered or suspicious transaction has been reported or is about to be reported, the

contents of the report, or any other information in relation thereto. Neither may such reporting be published or aired in any manner or form by the mass media", electronmail, or other similar devices. In case of violation thereof, the concerned officer and employee of the covered person and media shall be held criminally liable."

Section 4, RA 10365.Section 4 of the same Act is hereby amended to read as follows:

"SEC. 4. Money Laundering Offense.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:

"(a) transacts said monetary instrument or property;

"(b) converts, transfers, disposes of, moves, acquires, possesses or uses said monetary instrument or property;

"(c) conceals or disguises the true nature, source, location, disposition, movement or ownership of or rights with respect to said monetary instrumen

property;

"(d) attempts or conspires to commit money laundering offenses referred to in paragraphs (a), (b) or (c);

"(e) aids, abets, assists in or counsels the commission of the money laundering offenses referred to in paragraphs (a), (b) or (c) above; and

"(f) performs or fails to perform any act as a result of which he facilitates the offense of money laundering referred to in paragraphs (a), (b) or (c) ab

"Money laundering is also committed by any covered person who, knowing that a covered or suspicious transaction is required under this Act to be reported to

Anti-Money Laundering Council (AMLC), fails to do so."

Section 2, RA 10365.Section 3(i) of the same Act is hereby amended to read as follows:

"(i)Unlawful activityrefers to any act or omission or series or combination thereof involving or having direct relation to the following:

"(1) Kidnapping for ransom under Article 267 of Act No. 3815, otherwise known as the Revised Penal Code, as amended;

"(2) 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 200


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"(3) Section 3 paragraphs B, C, E, G, H and I of Republic Act No. 3019, as amended, otherwise known as the Anti-Graft and Corrupt Practices Act;

"(4) Plunder under Republic Act No. 7080, as amended;

"(5) Robbery and extortion under Articles 294, 295, 296, 299, 300, 301 and 302 of the Revised Penal Code, as amended;

"(6) Jueteng and Masiao punished as illegal gambling under Presidential Decree No. 1602;

"(7) Piracy on the high seas under the Revised Penal Code, as amended and Presidential Decree No. 532;

"(8) Qualified theft under Article 310 of the Revised Penal Code, as amended;

"(9) Swindling under Article 315 and Other Forms of Swindling under Article 316 of the Revised Penal Code, as amended;

"(10) Smuggling under Republic Act Nos. 455 and 1937;

"(11) Violations of Republic Act No. 8792, otherwise known as the Electronic Commerce Act of 2000;

"(12) Hijacking and other violations under Republic Act No. 6235; destructive arson and murder, as defined under the Revised Penal Code, as amend

"(13) Terrorism and conspiracy to commit terrorism as defined and penalized under Sections 3 and 4 of Republic Act No. 9372;

"(14) 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:

"(15) Bribery under Articles 210, 211 and 211-A of the Revised Penal Code, as amended, and Corruption of Public Officers under Article 212 of the

Revised Penal Code, as amended;

"(16) Frauds and Illegal Exactions and Transactions under Articles 213, 214, 215 and 216 of the Revised Penal Code, as amended;

"(17) Malversation of Public Funds and Property under Articles 217 and 222 of the Revised Penal Code, as amended;

"(18) Forgeries and Counterfeiting under Articles 163, 166, 167, 168, 169 and 176 of the Revised Penal Code, as amended;

"(19) Violations of Sections 4 to 6 of Republic Act No. 9208, otherwise known as the Anti-Trafficking in Persons Act of 2003;

"(20) Violations of Sections 78 to 79 of Chapter IV, of Presidential Decree No. 705, otherwise known as the Revised Forestry Code of the Philippines,

amended;

"(21) Violations of Sections 86 to 106 of Chapter VI, of Republic Act No. 8550, otherwise known as the Philippine Fisheries Code of 1998;

"(22) Violations of Sections 101 to 107, and 110 of Republic Act No. 7942, otherwise known as the Philippine Mining Act of 1995;

"(23) Violations of Section 27(c), (e), (f), (g) and (i), of Republic Act No. 9147, otherwise known as the Wildlife Resources Conservation and Protection

Act;

"(24) Violation of Section 7(b) of Republic Act No. 9072, otherwise known as the National Caves and Cave Resources Management Protection Act;

"(25) Violation of Republic Act No. 6539, otherwise known as the Anti-Carnapping Act of 2002, as amended;

"(26) Violations of Sections 1, 3 and 5 of Presidential Decree No. 1866, as amended, otherwise known as the decree Codifying the Laws on

Illegal/Unlawful Possession, Manufacture, Dealing In, Acquisition or Disposition of Firearms, Ammunition or Explosives;

"(27) Violation of Presidential Decree No. 1612, otherwise known as the Anti-Fencing Law;

"(28) Violation of Section 6 of Republic Act No. 8042, otherwise known as the Migrant Workers and Overseas Filipinos Act of 1995, as amended by

Republic Act No. 10022;

"(29) Violation of Republic Act No. 8293, otherwise known as the Intellectual Property Code of the Philippines;

"(30) Violation of Section 4 of Republic Act No. 9995, otherwise known as the Anti-Photo and Video Voyeurism Act of 2009;

"(31) Violation of Section 4 of Republic Act No. 9775, otherwise known as the Anti-Child Pornography Act of 2009;

"(32) Violations of Sections 5, 7, 8, 9, 10(c), (d) and (e), 11, 12 and 14 of Republic Act No. 7610, otherwise known as the Special Protection of Children

Against Abuse, Exploitation and Discrimination;

"(33) Fraudulent practices and other violations under Republic Act No. 8799, otherwise known as the Securities Regulation Code of 2000; and

"(34) Felonies or offenses of a similar nature that are punishable under the penal laws of other countries."

Section 5, RA 9160.Jurisdiction of Money Laundering Cases.The regional trial courts shall have jurisdiction to try all cases on money laundering. Those committed by pu

officers and private persons who are in conspiracy with such public officers shall be under the jurisdiction of the Sandiganbayan.


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Section 5, RA 10365. Section 6(a) of the same Act is hereby amended to read as follows:

"SEC. 6. Prosecution of Money Laundering.

"(a) Any person may be charged with and convicted of both the offense of money laundering and the unlawful activity as herein defined.

"(b) The prosecution of any offense or violation under this Act shall proceed independently of any proceeding relating to the unlawful activity."

Section 16, RA 9160 . Prohibitions Against Political Harassment.This Act shall not be used for political prosecution or harassment or as an instrument to hamper

competition in trade and commerce.

No case for money laundering may be filed against and no assets shall be frozen, attached or forfeited to the prejudice of a candidate for an electoral office during an elec

period.

RA 10365, Section 8.Section 10 of the same Act, as amended by Republic Act No. 10167, is hereby amended to read as follows:

"SEC. 10. Freezing of Monetary Instrument or Property.Upon a verified ex parte petition by the AMLC and after determination that probable caus

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 m

issue a freeze order which shall be effective immediately, and which shall not exceed six (6) months depending upon the circumstances of the case:

Provided, That if there is no case filed against a person whose account has been frozen within the period determined by the court, the freeze order s

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 t

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

the twenty-four (24)-hour period shall exclude the nonworking days.

"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 th

freeze order.

"No court shall issue a temporary restraining order or a writ of injunction against any freeze order, except the Supreme Court."

RA 9194, SECTION 8. "To ensure compliance with this Act, the Bangko Sentral ng Pilipinas (BSP) may inquire into or examine any deposit of investment with any banking

nstitution or non-bank financial institution when the examination is made in the course of a periodic or special examination, in accordance with the rules of examination o

the BSP.

SEC. 6, RA 10365. 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 Ban

Sentral ng Pilipinas as Chairman, the Commissioner of the Insurance Commission and the Chairman of the Securities and Exchange Commission, as members. The AMLC sh

act unanimously in the discharge of its functions as defined hereunder:

"(1) to require and receive covered or suspicious transaction reports from covered institutions;

"(2) to issue orders addressed to the appropriate Supervising Authority or the covered institutions to determine the true identity of the owner of any monetary instrumen

preperty subject of a covered transaction or suspicious transaction report or request for assistance from a foreign State, or believed by the Council, on the basis fo substan

evidence, to be, in whole or in part, wherever located, representing, involving, or related to directly or indirectly, in any manner or by any means, the proceeds of an unlaw

activitity.

"(3) to institute civil forfeiture proceedings and all other remedial proceedings through the Office of th Solicitor General;

"(4) to cause the filing of complaints with the Department of Justice or the Ombudsman for the prosecution of money laundering offenses;

"(5) to investigate suspicious transactions and covered transactions deemed suspicious after an investigation by AMLC, money laundering activities and other violations of

Act;

"(6) to apply before the Court of Appeals, ex parte, for the freezing of any monetary instrument or property alleged to be laundered, proceeds from, or instrumentalities u

n or intended for use in any unlawful activity as defined in Section 3(i) hereof;

"(7) to implement such measures as may be necessary and justified under this Act to counteract money laundering;

"(8) to receive and take action in respect of, any request from foreign states for assistance in their own anti-money laundering operations provided in this Act;

"(9) to develop educational programs on the pernicious effects of money laundering, the methods and techniques used in the money laundering, the viable means of

preventing money laundering and the effective ways of prosecuting and punishing offenders;

"(10) to enlist the assistance of any branch, department, bureau, office, agency, or instrumentality of the government, including government-owned and -controlled

corporations, in undertaking any and all anti-money laundering operations, which may include the use of its personnel, facilities and resources for the more resolute

prevention, detection, and investigation of money laundering offenses and prosecution of offenders; and

"(11) to impose administrative sanctions for the violation of laws, rules, regulations, and orders and resolutions issued pursuant thereto."

"(12) to require the Land Registration Authority and all its Registries of Deeds to submit to the AMLC, reports on all real estate transactions involving an amount in excess

Five hundred thousand pesos (P500,000.00) within fifteen (15) days from the date of registration of the transaction, in a form to be prescribed by the AMLC. The AMLC ma

also require the Land Registration Authority and all its Registries of Deeds to submit copies of relevant documents of all real estate transactions."


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RA 9160, Section 13. Mutual Assistance among States.

(a) Request for Assistance from a Foreign State.Where a foreign State makes a request for assistance in the investigation or prosecution of a money launderi

offense, the AMLC may execute the request or refuse to execute the same and inform the foreign State of any valid reason for not executing the request or for

delaying the execution thereof. The principles of mutuality and reciprocity shall, for this purpose, be at all times recognized.

(b) Power of the AMLC to Act on a Request for Assistance from a Foreign State.The AMLC may execute a request for assistance from a foreign State by: (1)

tracking down, freezing, restraining and seizing assets alleged to be proceeds of any unlawful activity under the procedures laid down in this Act; (2) giving

information needed by the foreign State within the procedures laid down in this Act; and (3) applying for an order of forfeiture of any monetary instrument or

property in the court: Provided, That the court shall not issue such an order unless the application is accompanied by an authenticated copy of the order of a co

in the requesting State ordering the forfeiture of said monetary instrument or properly of a person who has been convicted of a money laundering offense in t

requesting State, and a certification of an affidavit of a competent officer of the requesting State stating that the conviction and the order of forfeiture are final

then no further appeal lies in respect or either.

(c) Obtaining Assistance from Foreign States.The AMLC may make a request to any foreign State for assistance in (1) tracking down, freezing, restraining and

seizing assets alleged to be proceeds of any unlawful activity; (2) obtaining information that it needs relating to any covered transaction, money laundering offe

or any other matter directly or indirectly, related thereto; (3) to the extent allowed by the law of the Foreign State, applying with the proper court therein for a

order to enter any premises belonging to or in the possession or control of, any or all of the persons named in said request, and/or search any or all such person

named therein and/or remove any document, material or object named in said request: Provided, That the documents accompanying the request in support of

application have been duly authenticated in accordance with the ap

mt reviewer

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