BATAS PAMBANSA BLG.

22; Approved April 3, 1979

AN ACT PENALIZING THE MAKING OR DRAWING AND ISSUANCE OF A CHECK WITHOUT SUFFICIENT
FUNDS OR CREDIT AND FOR OTHER PURPOSES.

Section 1. Checks without sufficient funds. - Any person who makes or draws and issues any check to apply on
account or for value, knowing at the time of issue that he does not have sufficient funds in or credit with the drawee
bank for the payment of such check in full upon its presentment, which check is subsequently dishonored by the
drawee bank for insufficiency of funds or credit or would have been dishonored for the same reason had not the
drawer, without any valid reason, ordered the bank to stop payment, shall be punished by imprisonment of not less
than thirty days but not more than one (1) year or by a fine of not less than but not more than double the amount of
the check which fine shall in no case exceed Two Hundred Thousand Pesos, or both such fine and imprisonment at
the discretion of the court.

The same penalty shall be imposed upon any person who, having sufficient funds in or credit with the drawee bank
when he makes or draws and issues a check, shall fail to keep sufficient funds or to maintain a credit to cover the
full amount of the check if presented within a period of ninety (90) days from the date appearing thereon, for which
reason it is dishonored by the drawee bank.

Where the check is drawn by a corporation, company or entity, the person or persons who actually signed the check
in behalf of such drawer shall be liable under this Act.

Section 2. Evidence of knowledge of insufficient funds. - The making, drawing and issuance of a check payment of
which is refused by the drawee because of insufficient funds in or credit with such bank, when presented within
ninety (90) days from the date of the check, shall be prima facie evidence of knowledge of such insufficiency of
funds or credit unless such maker or drawer pays the holder thereof the amount due thereon, or makes
arrangements for payment in full by the drawee of such check within (5) banking days after receiving notice that
such check has not been paid by the drawee.

Section 3. Duty of drawee; rules of evidence. - It shall be the duty of the drawee of any check, when refusing to pay
the same to the holder thereof upon presentment, to cause to be written, printed, or stamped in plain language
thereon, or attached thereto, the reason for drawee's dishonor or refusal to pay the same: Provided, That where
there are no sufficient funds in or credit with such drawee bank, such fact shall always be explicitly stated in the
notice of dishonor or refusal. In all prosecutions under this Act, the introduction in evidence of any unpaid and
dishonored check, having the drawee's refusal to pay stamped or written thereon or attached thereto, with the
reason therefor as aforesaid, shall be prima facie evidence of the making or issuance of said check, and the due
presentment to the drawee for payment and the dishonor thereof, and that the same was properly dishonored for the
reason written, stamped or attached by the drawee on such dishonored check.

Not with standing receipt of an order to stop payment, the drawee shall state in the notice that there were no
sufficient funds in or credit with such bank for the payment in full of such check, if such be the fact.

Section 4. Credit construed. - The word "credit" as used herein shall be construed to mean an arrangement or
understanding with the bank for the payment of such check.

Section 5. Liability under the Revised Penal Code. - Prosecution under this Act shall be without prejudice to any
liability for violation of any provision of the Revised Penal Code.

Section 6. Separability clause. - If any separable provision of this Act be declared unconstitutional, the remaining
provisions shall continue to be in force.

Section 7. Effectivity. - This Act shall take effect fifteen days after publication in the Official Gazette.
1âwphihh
REPUBLIC ACT No. 1405

AN ACT PROHIBITING DISCLOSURE OF OR INQUIRY INTO, DEPOSITS WITH ANY BANKING INSTITUTION
AND PROVIDING PENALTY THEREFOR.

Section 1. It is hereby declared to be the policy of the Government to give encouragement to the people to deposit
their money in banking institutions and to discourage private hoarding so that the same may be properly utilized by
banks in authorized loans to assist in the economic development of the country.

1
Section 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 person, government 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 or dereliction of duty of public officials, or in
cases where the money deposited or invested is the subject matter of the litigation.

Section 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.

Section 4. All Acts or parts of Acts, Special Charters, Executive Orders, Rules and Regulations which are
inconsistent with the provisions of this Act are hereby repealed.

Section 5. Any violation of this law will subject offender upon conviction, to an imprisonment of not more than five
years or a fine of not more than twenty thousand pesos or both, in the discretion of the court.

Section 6. This Act shall take effect upon its approval.

Approved: September 9, 1955

Purpose:
1. To encourage deposit in bank institutions.
2. To discourage private hoarding and at the same time encourage the people to deposit their money in
banking institutions, so that it may be utilized by way of authorized loans and thereby assist in economic
development.

Rules:
(Sec. 2. RA 1405) Al deposits of whatever nature with banks or banking institutions in the Philippines,
including investments in bonds issued by the Government, are considered:

1. Absolutely confidential and

2. May not be examined, inquired, or looked into by any person, government official, bureau or office

Prohibited Acts:
1. Bank (any official or employee or independent auditor of a bank) to disclose to any person other than a
bank director, official or employee authorized by the bank, any information concerning deposits.

It shall be unlawful:
2. Any person, including the government to inquire, examine or look into bank deposits or bonds issued by
the government.
Kinds of Deposits Covered:
1. All deposits of whatever nature with banks or banking institutions found in the Philippines; or

2. Investments in bonds issued by the Philippine government, its branches, and institutions. (Sec. 2. R.A.
1405)

The Bank Secrecy Law protects all deposits of whatever nature in banks or banking institutions in the
Philippines as well as investments in government bond. This law prohibits any person, subject to the
exceptions below, from disclosing to any person any information, relative to the funds or properties
belonging to the depositors in the custody of the bank. Simply put, no one can just go to your bank and
ask for your bank balance.

A. Peso Deposits
However, the rule is not absolute. The following are the exceptions to the bank secrecy law:
1. Written permission or consent in writing by the depositor;
2. In cases of impeachment;
3. Upon order of the court in cases of bribery or dereliction of duty of public officials;
4. Upon order of the court in cases where the money deposited or invested is the subject matter of the
litigation;
5. Upon a subpoena issued by the Ombudsman concerning an investigation it is conducting, provided
that there must already be a case pending in court, the account be clearly identified, the inspection be
limited to the subject matter of the pending case; and the bank personnel and the depositor must be
notified to be present during the inspection;
- Upon order of the court or tribunal in cases involving unexplained wealth under the Anti-Graft and
Corrupt Practices Act RA 3019.
6. The BIR can inquire into bank deposits in an application for compromise of tax liability or determination
of a decedent’s gross estate;
7. The Anti-Money Laundering Council (“AMLC”) can examine bank accounts pursuant to a court order,
where there is probable cause that the deposits are related to an unlawful activity or money laundering
offense; even without court order
8. The AMLC can examine bank accounts, WITHOUT a court order, where there is probable cause that
the deposits are related to certain crimes such as kidnapping for ransom, violation of the Dangerous
Drugs Act, hijacking, destructive arson, murder and violations of RA 6235 (acts inimical to civil aviation);
9. The Bangko Sentral can examine bank accounts in the course of its periodic or special examination
regarding compliance with Anti-Money Laundering Law.
10. Reports:
a. Disclosure to the Treasurer of the Philippines for dormant deposits for at least 10 years under the
Unclaimed Balances Act (RA 3936)
b. Report of banks to AMLC of covered and/or suspicious transactions.
11. Upon order of the Court of Appeals, examination by law enforcement officers in terrorism cases under
the Human Security Act of 2007 (RA 9372)
12. Examination is made in the course of a special or general examination of bank and is specifically
authorized by the Monetary Board after being satisfied that there is reasonable ground to believe that a
bank fraud or serious irregularity has been or is being committed and that is necessary to look into the
deposit to establish such fraud or irregularity
13. Examination is 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
14. Inquiry into illegally acquired amounts under the Plunder Law.
15. Where there is a waiver in case of DOSRI loans (directors, officers, stockholders and related interests)

B. Foreign currency deposits:

Under RA 6426 known as Foreign Currency Deposits Act, foreign currency deposits in banks are likewise
absolutely confidential and cannot be disclosed, except:

1. When there is written consent of depositor under Section 8 of the Foreign Currency Deposits Act (RA
6426)
2. Under Section 11 of the Anti-Money Laundering Act (probable cause established that it is related to an
unlawful activity as defined or money laundering)
3. Under Section 27 and 28 of the Human Security Act (existence of probable cause in anti-terrorism
cases and those involving persons charged with or suspected of the crime of terrorism or conspiracy to
commit terrorism, judicially declared and outlawed terrorist organization, association, or group of persons,
or member of such organization, association, or group of persons)

● Garnishment-Bank accounts may be garnished by the creditors of the depositor. In gamishment,

there is no violation of the bank secrecy law since the amount of the deposit is not actually
disclosed.

Deposits exempt from garnishment

1. Foreign currency deposits, Section 8 of RA 6426
2. Those exempt under Rules of Court

Penalties for violation:

Imprisonment Fines
Peso Deposits Not to exceed 5 years Not to exceed 20,000
Foreign Deposits 1 to 5 years 5,000 to 25,000

As you can see, although there are many exceptions, securing such exceptions is not an easy task. The
easiest way to waive the secrecy of bank deposits is through a written waiver. Although there is no
prescribed form for a waiver, it is necessary that the waiver be made voluntarily, knowingly and with
sufficient awareness of relevant circumstances and consequences. Thus, as a matter of practice, banks
will require the depositor to state in his waiver the specific bank account, bank branch, name of depositor,
period covered by the transactions and the name of the person authorized to access the bank account.