PHILIPPINE LAWS, RULES,

AND REGULATIONS ON
SECRECY OF BANK
DEPOSITS
REPUBLIC ACT NO. 1405
REPUBLIC ACT NO. 6426
REPUBLIC ACT NO. 1405
THE LAW ON SECRECY OF BANK DEPOSITS
• enacted in September 1955
• to encourage the public to invest their money in government securities and deposit them
in banking institutions, discourage private hoarding
• to enhance protection of privacy rights
REPUBLIC ACT NO. 6426
FOREIGN CURRENCY DEPOSIT ACT OF THE PHILIPPINES

• enacted on April 4, 1972

• to attract and invite deposits of foreign currencies in duly authorized banks in order that
they may be put into the stream of the banking system
• to put in place the primary incentives of protection and stability of the foreign currency
deposit system
“ERA OF BANK SECRECY IS OVER”

As early as 2011, the Group of Twenty or G2017 declared that the “era of bank secrecy is over”
after it endorsed the standards on transparency and exchange of information. In 2014, the
Organisation for Economic Co-operation and Development (OECD) released the standard for
automatic exchange of information as the new global standard of obtaining detailed account
information from financial institutions, and exchanging that information automatically with other
jurisdictions for the purpose of combatting tax evasion, money laundering, and commission of
other crimes. This global regulatory watch means lifting the cloak of bank secrecy.
At present, the Philippines is the only country to still have restrictive banking laws making it hard
for the government to go after tax evaders and money launderers. This, notwithstanding the
global trend to shift from secrecy towards transparency.
LAW ON SECRECY OF BANK DEPOSITS
ABSOLUTE CONFIDENTIALITY

All deposits of whatever nature in banks or banking institutions in the Philippines and
investments in government bonds are absolutely confidential in nature.
ABSOLUTE CONFIDENTIALITY

Deposit means the unpaid balance of money or its equivalent received by a bank in the usual
course of business and for which it has given or is obliged to give credit to a commercial,
checking, savings, time or thrift account, evidenced by a passbook, certificate of deposit, or other
evidence of deposit issued in accordance with Bangko Sentral rules, regulations and other
applicable laws, together with such other obligations of a bank, which, consistent with banking
usage and practices, the Board of Directors of the Philippine Deposit Insurance Corporation
(PDIC) shall determine and prescribe by regulations to be deposit liabilities of the bank. Deposit
is characterized as being in the nature of a simple loan. The placing of a deposit in a bank creates
a creditor-debtor relationship between the depositor and the bank. The bank, as debtor, has the
obligation to pay a certain sum of money to the depositor, as creditor.
The term “deposit of whatever nature” is construed broadly to include accounts that may be
used by banks for authorized loans to third persons, although there is no creditor-debtor
relationship arising from the account, such as money placed under trust accounts.
ABSOLUTE CONFIDENTIALITY

Investments in government bonds refer to investments in bonds issued by the

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

The General Banking Law of 2000 prohibits bank directors, officers, employees, or agents
from disclosing to any unauthorized person, without order of a competent court, any
information relative to funds or properties belonging to private individuals, corporations, or
any other entity in the custody of the bank. It is not required that all the details of a bank
deposit be examined, inquired or looked into. The prohibition applies even if the disclosure
pertains only to the mere existence of a bank deposit, without revealing the bank or
amount.
The Thrift Banks Act of 1995 and the Rural Banks Act of 1992 likewise prohibit any bank
officer, employee, or agent from disclosing any information on such funds or properties.
ABSOLUTE CONFIDENTIALITY
PROHIBITED ACTS AND PERSONS LIABLE
The following are liable under this law:
• Any person or government official who, or any government bureau or office that,
examines, inquires, or looks into a bank deposit or government bond investment in any of
the instances not allowed under the law;
• Any official or employee of a banking institution who makes a disclosure concerning bank
deposits to another in any instance not allowed by law; and
• Any person who commits a violation of any of the provisions of the law.
ABSOLUTE CONFIDENTIALITY
EXCEPTIONS TO CONFIDENTIALITY
Bank deposits and investments in government bonds may be examined, inquired, and looked into in the following
instances:
a. Upon written permission or consent in writing by the depositor. For consent to be valid, it should be made
knowingly, voluntarily, and with sufficient awareness of the relevant circumstances and likely consequences.
b. In cases of impeachment of the President,Vice President, members of the Supreme Court, members of the
Constitutional Commissions, and Ombudsman for culpable violation of the Constitution, treason, bribery, graft
and corruption, other high crimes, or betrayal of public trust.
c. Upon order of a competent court in cases of bribery or dereliction of duty of public officials (including cases of
unexplained wealth and plunder.
d. In cases where the money deposited or invested is the subject matter of the litigation. The money deposited
should be the very thing in dispute.
ABSOLUTE CONFIDENTIALITY
EXCEPTIONS TO CONFIDENTIALITY
Bank deposits and investments in government bonds may be examined, inquired, or looked into
as provided in other laws and jurisprudence:
a. Investigation by the Ombudsman under The Ombudsman Act of 1989
b. Cases of Unexplained Wealth of Public Officials or Violations of the Anti-Graft and Corrupt Practices
Act
c. Borrowings of directors, officers, stockholders, and their related interests who are required to
execute a written waiver of secrecy of bank deposits under The New Central Bank Act
d. Application for Compromise of Tax Liability, Determination of Decedent’s Estate, and Exchange of
Tax Information under the National Internal Revenue Code (NIRC)
e. As a Remedy for the Collection of Delinquent Taxes or Duties under NIRC56
ABSOLUTE CONFIDENTIALITY
EXCEPTIONS TO CONFIDENTIALITY
f. Garnishment of Deposits in Satisfaction of Judgment under the Rules of Court
g. Deposits or Investments Related to Unlawful Activities or Money Laundering Offenses under
the Anti-Money Laundering Act of 2001 (AMLA)
h. Annual Testing of Numbered Accounts under AMLA
i. Cases of Unsafe or Unsound Banking under Republic Act No. 3591, or the PDIC Charter
j. Failure of Prompt Corrective Action (PCA) under the PDIC Charter
k. Examination Pursuant to the Anti-Terrorism Act of 2020
l. Examination Pursuant to the Terrorism Financing Prevention and Suppression Act of 2012
ABSOLUTE CONFIDENTIALITY
EXCEPTIONS TO CONFIDENTIALITY
m. Audit of Government Deposits under the Constitution91 and the Government Auditing Code
n. Investigation To Recover Ill-Gotten Wealth under Executive Order No. 1
o. Review of Records by a Rehabilitation Receiver under the Financial Rehabilitation and
Insolvency Act (FRIA) of 2010
p. Escheat Proceedings under the Act No. 3936, as amended, or the Unclaimed Balances Law
q. Records of Closed Banks based on jurisprudence
FOREIGN CURRENCY DEPOSIT ACT OF THE
PHILIPPINES
ABSOLUTE CONFIDENTIALITY

All foreign currency deposits are absolutely confidential and cannot be examined, inquired,
or looked into by any person, government official, bureau, or office, whether judicial or
administrative or legislative, or any other private or public entity. Foreign currency deposits
are also exempt from attachment, garnishment, or any other order or process of any court,
legislative body, government agency, or any administrative body whatsoever.
Foreign currency deposits refer to funds in foreign currencies that are accepted and held by
authorized banks in the regular course of business with the obligation to return an
equivalent amount to the owner thereof, with or without interest.
ABSOLUTE CONFIDENTIALITY
PROHIBITED ACTS AND PERSONS LIABLE
The following are liable under this law:
• Any person or government official who, or any government bureau or office that, examines,
inquires, or looks into a foreign currency deposit without the written permission of the
depositor;
• Any official or employee of a banking institution who makes a disclosure concerning foreign
currency deposits to another, in any instance not allowed by law;
• Anyone who shall attach, garnish, or subject the foreign currency deposit to any other order
or process of any court, legislative body, government agency, or any other administrative body;
or
• Any person who commits a willful violation of any of the provisions of Foreign Currency
Deposit Act of the Philippines or regulation issued by the Monetary Board pursuant to the
said law.
ABSOLUTE CONFIDENTIALITY
EXCEPTIONS TO CONFIDENTIALITY
Absolute confidentiality is mandated for all foreign currency deposits subject to the
following limited exceptions:
1. Foreign Currency Deposit Act of the Philippines
The only exception to the absolute confidentiality under this law is when there is written
permission of the depositor. Absent the written permission of the depositor and subject to
other exceptions provided under other laws, banks cannot be compelled to disclose any
information on foreign currency deposits; otherwise, it might expose itself to criminal
liability.
ABSOLUTE CONFIDENTIALITY
EXCEPTIONS TO CONFIDENTIALITY
2. Other Laws and Jurisprudence
a. Borrowings of directors, officers, stockholders, and related interests who are required to execute a
written waiver of secrecy of deposits of whatever nature in all banks in the Philippines, in accordance
with The New Central Bank Act;
b. In cases of application for compromise of tax liability, determination by the Commissioner of BIR of a
decedent’s gross estate, and exchange of tax information;
c. A covered institution that reports foreign currency deposits in covered transaction reports or
suspicious transaction reports to AMLC;
d. Inquiry by AMLC into deposits or investments related to unlawful activities or money laundering
offenses;
e. Investigation by AMLC of deposits and investments related to financing or acts of terrorism;120
ABSOLUTE CONFIDENTIALITY
EXCEPTIONS TO CONFIDENTIALITY
e. Investigation by AMLC of deposits and investments related to financing or acts of terrorism;
f. Conduct of annual testing by Bangko Sentral that is solely limited to the determination of the
existence and true identity of the owners of foreign currency non-checking numbered accounts,
to prevent money laundering;
g. Inquiry or examination of deposits or investments by Bangko Sentral in the course of a
periodic or special examination to ensure compliance with the AMLA;
h. Inquiry by PDIC and Bangko Sentral in cases of unsafe or unsound banking and failure of
prompt corrective actions;
i. Audit of government deposits by Commission on Audit; and
j. Investigation by PCGG to recover ill-gotten wealth.
ABSOLUTE CONFIDENTIALITY
EXCEPTIONS TO CONFIDENTIALITY
3. Grounds of equity as declared by jurisprudence
a. Account of a non-resident alien
• The garnishment of a foreign currency deposit account of a non-resident alien found guilty of
raping a minor was allowed on the basis of equity.

b. Account of a co-payee of a check

• A co-payee of a check who filed a suit for recovery of sum of money was considered, in a pro
hac vice ruling by the Supreme Court, as a depositor in view of the distinctive circumstances of
the case.