Bank Secrecy examined, inquired, or looked into by any person,

Security of Bank Deposits Law government official, bureau or office.

RA 1405(1955)
Amended What are deposits?
PD 1792; RA 7653
Deposits refer to money or funds placed with a
What is the Secrecy of Bank Deposits Law? bank that can be withdrawn on the depositor's
order or demand, such as deposit accounts in the
The Law on Secrecy of Bank Deposits is an act form of savings, current and time deposits.
PROHIBITING Deposits are characterized as being in the nature
(1) the examination, inquiry, or looking into of a simple loan. The placing of deposits in a bank
deposits by persons, government officials, bureaus, creates a creditor-debtor relationship between the
or offices, and/or depositor and the bank.
(2) the disclosure by banking institutions, officials,
or employees to unauthorized persons regarding What are investment in Government Bonds?
information about covered accounts (General
Rule). Investments in Government Bonds refer to
investments in bonds issued by the Government of
the Philippines, its political subdivisions, and its
G.R. Banks are not allowed to disclose the account instrumentalities. Government bonds are debt
balance of any of its depositors. securities which are unconditional obligations of the
State and backed by its full taxing power.
However, the required " secrecy " is limited only to Government bonds include treasury bills, treasury
the disclosure of whatever is the Depositor's notes, retail treasury bonds, dollar-linked peso
Account balance. notes, and other risk-free bonds.

The Bank can disclose the existence of the Secrecy of Bank Deposits
Depositor's Account without violating the Secrecy The following are LIABLE under this law:
Rule.
● Any person or government official who, or
What are the purposes of the law? any government bureau office that,
examines, inquires, or looks into a bank
Purposes of the law deposit or government bond investment in
- Encourage people to deposit money in any of the instances not allowed in Sec. 2;
banks
● Any official or employee of a banking
- Discourage private hoarding of money institution who makes a disclosure
concerning bank deposits to another in any
- Protect the confidentiality of bank deposits instance not allowed by law (Sec. 3, Rep.
Act No. 1405); and
What are covered by the law?
● Any person who commits a violation of
The law covers all deposits of whatever nature any of the provisions of the law (Sec. 5,
with banks or banking institutions in the Philippines, Rep. Act No. 1405).
including investment in bonds issued by the
Government of the Philippines, its political Are there other laws which prohibit the same
subdivisions and instrumentalities, and trust funds disclosure?
held by the banks, which are considered to be
absolutely confidential in nature and may not be
 - Any bank official, director, employee, or well as examine and access bank accounts
agent who discloses information relative to and records.
funds or properties in the custody of the
bank may also be held liable under the ● Bank deposits of a public official, his
applicable provisions of the General spouse, and unmarried children may be
Banking Law, Thrift Banks Act, and Rural taken into consideration in the enforcement
Banks Act. of Section 8 of The Anti-Graft and Corrupt
Practices Act.
Summary of Exceptions ● DOSRI* who contract a loan or any form of
financial accommodation with their bank or
4 Exceptions under the Law on Secrecy of Bank related bank are required to execute a
Deposits written waiver of secrecy of deposits
pursuant to The New Central Bank Act.
✓ Exceptions under OTHER LAWS ● The CIR is authorized in relation to (1)
application for compromise of tax liability by
✓ Authorized Disclosures reason of financial incapacity to pay his tax
liability; (2) a determination of a decedent's
✓ Foreign Currency Deposits Act (RA 6426) gross estate under NIRC; or
● The CIR is authorized in relation to (1) a (3)
✓ Human Security Act of 2007 (RA 9372) request for tax information of specific
taxpayers made by a foreign tax authority
✓ Terrorism Financing and Prevention and Suppression pursuant to a tax treaty under The
Act (RA 10168) Exchange of Information on Tax Matters Act
of 2009.
Exceptions - s- no violation of the Secrecy Law in ● The Anti-Money Laundering Council with
the following cases under Law on Secrecy of court order, when there is probable cause
Bank Deposits that the deposits or investments are related
to an unlawful activity or a money
● Upon written permission or consent in laundering offense.
writing by the depositor ● The Anti-Money Laundering Council without
need of court order, when probable cause
● In cases of impeachment of the President, exists that a particular deposit or investment
Vice President, members of the Supreme with any banking institution is related to
Court, members of the Constitutional certain predicate crimes, such as
Commission, and the Ombudsman kidnapping for ransom, violation of the
● Upon order of a competent court in cases of Comprehensive Dangerous Drugs Act,
bribery or dereliction of duty of public hijacking and other violations under
officials. Republic Act No. 623510, destructive arson
● In cases where the money deposited or and murder
invested is the subject matter of the
litigation. The money deposited should be UNDER THE ANTI-MONEY LAUNDERING LAW
the very thing in dispute.
General Rule: AMLC may inquire into deposits
Exceptions - no violation of the Secrecy Law in the upon order of the court when there is probable
following cases under other laws cause that the deposits are related to the crime of
unlawful activities defined in Section 3 (1) and
● The Ombudsman has the power to issue Section 4 of RA 9160, as amended by RA 9194.
subpoena and subpoena duces tecum, take
testimony in any investigation or inquiry, as Exception: no court order is required for:
 ● The Commission on Audit is authorized to
- Kidnapping for ransom under Article 267 of examine and audit government deposits
RPC; pertaining to the revenue and receipts of,
and expenditures or uses of funds and
- 4, 5, 8, 9, 10, 12, 13, 14, 15, and 16 of RA properties, owned or held in trust by, or
9165, otherwise known as the pertaining to, the Government or any of its
Comprehensive Dangerous Drugs Act of subdivisions, agencies or instrumentalities,
2002; including government-owned and controlled
corporations with original charters.
- Hijacking and other violations under RA ● The Presidential Commission on Good
6235; destructive arson and murder as Government, in the conduct of its
defined under RPC, including those investigations to recover ill-gotten wealth
perpetrated by terrorists against non- ● Examination by an independent Auditor,
combatant persons and similar targets. hired by the Bank and for the Bank's
exclusive use
● The Bangko Sentral is authorized to: ● Coup d'etat Law (RA 6968, Oct 24,1990)
● when the State exercises/invokes its Police
(a) inquire into or examine bank Power
deposits or investments in the course of a
periodic or special examination to ensure Exceptions - AUTHORIZED DISCLOSURES
compliance with The Anti-Money
Laundering Law ● reporting of unclaimed balances to the
Treasurer of the Philippines
(b) conduct annual testing which is
limited to the determination of the existence ● turn-over to the CIR of the amount in bank
and true identity of the owners of numbered accounts as may be sufficient to satisfy the
accounts writ of garnishment issued to collect
delinquent taxes
(c) an examination made in the
course of special or general examination of ● submission of report, and turn-over to, the
a bank that is specifically authorized by the court officer or executing sheriff of
Monetary Board after being satisfied that garnished amounts pursuant to a writ of
there is a reasonable ground to believe that garnishment in satisfaction of a judgment
a bank fraud or serious irregularity has been
or is being committed and that it is ● disclosure by a bank officer or employee
necessary to look into deposit to establish upon order of the court in connection with a
such fraud or irregularity deposit in a closed bank that was used in
the perpetration of anomalies.
● The Philippine Deposit Insurance
Corporation (PDIC) and the Bangko Sentral Deposits Not Covered
may inquire into bank deposits when there
is a finding of unsafe or unsound 1. Foreign currency deposits, which are governed
banking practices.* by Foreign Currency Deposit Act
● The Court of Appeals may issue an order
authorizing law enforcement officers to 2. Funds placed in a bank not in the nature of a
examine and gather information on the deposit by private individuals or entities.
deposits, placements, trust accounts, assets
and records in a bank or financial institution
in connection with anti-terrorism case
Rules on Foreign Currency Deposits Terrorism Financing and Prevention and
Suppression Act (RA 10168)
General Rule: Deposits in foreign currency
deposits and deposits in offshore banking units are AMLC is authorized to investigate property or funds
also confidential in nature. (without a court order) that are in any way related to
financing of terrorism or acts of terrorism OR the
FOREIGN CURRENCY DEPOSITS ACT* (RA property or funds of any person or persons in
6426) relation to whom there is probable cause that such
person is involved in the acts of terrorism (Sec. 10,
● The Secrecy of Bank Deposit Law does not RA 10168)
apply to foreign currency deposits.
AMLC, either upon its own initiative or at request of
Exceptions: the Anti-Terrorism Council, further authorize to
issue an ex parte order to freeze accounts
● Waiver / Written consent of depositor under without delay. Freeze order shall be for a period of
Section 8 of the Foreign Currency Deposits 20 days, unless extended by the CA up to a period
Act; not exceeding six (6) months upon petition by the
AMLC.
● Under Section 11 of the Anti-Money
Laundering Act (When the AMLC seeks to GARNISHMENT
examine suspicious deposits; or upon order
of the court [or even without court order in Bank accounts may be garnished by the creditors
proper cases] when there is probable cause of the depositor. There is no violation on Secrecy
of money laundering); of Bank Deposits. The amount of deposit is actually
not disclosed and the intent of the legislature does
● DOSRI are required to execute a written not cover garnishment. (China Bank v. Ortega,
waiver; G.R. L-34964, 1973)

● Under Sections 27 and 28 of the Human Garnishment (defined)

Security Act.
It is a court order directing that money or property
Human Security Act of 2007 (RA 9372) of a third party (usually wages paid by an employer)
be seized to satisfy a debt owed by a debtor to a
It allows examination and sequestration of deposits plaintiff creditor.
based on certain conditions.
Attachment versus Garnishment
The Court of Appeals designated as a special
court to handle anti-terrorism* cases may A writ of attachment is generally used to freeze a
authorize in writing any police or law enforcement defendant's assets pending the outcome of legal
officer and the members of his/her team to examine action. A garnishment is a court order directing a
or cause the examination of the deposits, third party to seize assets, such as wages or
placement, trust accounts, assets, and records in a money, from a person's paycheck or bank account
bank or financial institution (Section 27, HAS). to settle an unpaid debt.

The written order of the Court of Appeals

authorizing the examination of bank deposits,
placements, trust account, assets, and records is
allowed.
 1.2. Anonymous accounts accounts under fictitious
What are prohibited? names, and all other similar accounts shall be
absolutely prohibited.
The provisions of existing laws to the contrary
notwithstanding, anonymous accounts, accounts Section 2. Numbered Accounts.
under fictitious names, and all other similar
accounts shall be absolutely prohibited. 2.1. Numbered accounts, except non-checking
numbered accounts, shall not be allowed.
Peso and foreign currency non-checking
numbered accounts shall be allowed. 2.2. CTRS (Covered Transaction Reports) and
STRs (Sus involving non-checking numbered
The BSP may conduct annual testing solely limited accounts shall contain the true name of the account
to the determination of the existence and true holder.
identity of the owners of such accounts.
The General Banking Law prohibits bank
Prohibited (2016 IRR) directors, officers, employees or agents from
disclosing to any unauthorized person, without
Prohibited Accounts. The following accounts shall order of a competent court, any information relative
be prohibited and may be the subject of the to funds properties belonging to private or
Supervising Authorities' annual testing for the sole individuals, corporations, or any other entity in the
purpose of determining the existence and true custody of the bank.
identity of their owners: The Thrift Banks Act and the Rural Banks
Act likewise prohibit any bank officer, employee, or
a. Anonymous Accounts and Accounts under agent from disclosing any information on such
Fictitious Names. - Covered persons shall funds or properties.
maintain customers' account only in the true and
full name of the account owner or holder. REVISED NON-STOCK SAVINGS AND
Anonymous accounts under fictitious names and all ASSOCIATION ACT OF 1997 (RA 8367)
other similar accounts shall be absolutely
prohibited. All deposits of whatever nature with an Association
in the Philippines are hereby considered as of an
b. Numbered Accounts. Numbered accounts, absolutely confidential nature and may not be
except nonchecking numbered accounts, shall not examined, inquired, or looked into by any person,
be allowed. government official, bureau, or office. (Sec. 6, Rep.
Act No. 8367)
Covered and suspicious transaction reports
involving nonchecking numbered accounts shall What are the penalties for the violation of the
contain the true name of the account holder. Law?

Prohibited Accounts (IRR 2018) Any violation will subject the offender, upon
conviction, to an imprisonment of not more than five
Section 1. Anonymous Accounts and Accounts (5) years or a fine of not more than P20,000.00 or
under Fictitious Names. both at the discretion of the court. (RA 1405, Sec.
5)
1.1. Covered persons shall maintain customers'
account only in the true and full name of the
account owner or holder.