I.

Philippine Deposit Insurance Corporation Law (RA 3591 as amended by RA 10846)

A. Description of Philippine Deposit Insurance Corporation

PDIC is a government instrumentality created in 1963 by virtue of Republic Act 3591 to insure the deposits of all
banks which are entitled to the benefits of insurance. The PDIC is an attached agency of the Department of
Finance.

The latest amendments to RA 3591 are contained in RA 10846 signed into law on May 23, 2016. Ra 10846
empowered PDIC with stronger authorities to protect the depositing public and promote financial stability. The
new law also includes important provisions to ensure that the PDIC remains financially and institutionally strong
to fulfill its mandate under its Charter.

The PDIC now has the authority to help depositors have quicker access to their insured deposits should their
banks close; resolve problems banks while still open; hasten the liquidation process for closed banks; and mete
out stiffer sanctions and penalties against those who engage in unsafe and unsound banking practices.

Under amendment, depositors would have quicker access to their insured deposits in the event of bank closure
since PDIC now has the authority to pay insured deposits without netting out depositors’ loan obligations with
the closed bank and based on evidence of deposits and not on the closed bank’s records alone.

With its enhanced resolution authorities, PDIC would also be able to more effectively promote financial
inclusion through early intervention in problem banks or open bank resolution. In cases where bank closure
become inevitable, the new law enhanced the chances of recovery by creditors of their claims against the
assets of the closed bank by preventing the further dissipation of these assets through seamless transition from
bank closure to liquidation.

The new law does away with the 90-day receivership period and allows PDIC to proceed directly with
liquidation. The immediate assignment of encumbered assets to closed bank creditors, adoption of purchase
of assets and assumption of liabilities as a mode of liquidation, and express prohibition on reopening of banks
ordered closed by the Monetary Board of the BangkoSentralngPilipinas would help enhance recovery rate for
creditors of closed banks.

B. Insurable Deposits under PDIC Law (Covered by PDIC Insurance)

1. By Deposit Type
a. Savings Deposit
b. Special Savings
c. Demand/Checking Account
d. Negotiable Order of Withdrawal (NOW)
e. Certificate of Time Deposits

2. By Deposit Account:
a. Single Accounts – are individually-owned account or accounts held under one name, either as
natural person (single proprietorship or individual) or juridical entity (corporation, partnership or
cooperative).
b. Joint Accounts – are accounts held under more than one name
i. A joint account regardless of whether the conjunction ”and”, “or”, or “and/or” is used shall be
insured separately from single accounts
ii. Unless a different sharing is stipulated in the deposit documents, the insured amount up to the
Maximum Deposit Insurance Coverage of Php500,000 shall be divided equally between or
among co-owners of a joint account.
 iii. The total shares of a co-owner in several joint accounts may exceed Php500,000 but will only be
insured up to the Maximum Deposit Insurance Coverage of Php500,000.
iv. Joint accounts held in the name of a juridical entity and a natural person shall be presumed to
belong solely to the juridical entity.
c. Account “By”, “In Trust For” (ITF) or “For the Account of (FAO) another person
i. In a “By” account, Ana by Ben, Ana is the depositor.
ii. In an “In Trust For” (ITF) account, Ana in trust For Ben, Ben is the depositor.
iii. In a “For the Account of” (FAO) account, Ana For the Account of Ben, Ben is the depositor.
d. Explanatory Notes
i. To simplify: In the case where a depositor is the sole beneficial owner of a single, “For the
Account of”, “By”, and “In Trust For“ accounts, the consolidated balances of these accounts
shall be insured up to Php500,000.
ii. The depositor’s total share in his/her joint accounts shall be separately insured up to Php500,000.
iii. A depositor with single accounts and joint accounts may have insured deposits of up to
Php1,000,000.

C. Items that are not covered by PDIC Deposit Insurance

The following, whether denominated, documented, recorded or booked as deposit by the bank, are excluded
from PDIC deposit insurance (Section 4(f) of the PDIC Charter):

a. Investment policiessuch as bonds and securities, trust accounts and other similar instruments
b. Deposit accounts or transactions that:
i. Are unfunded, fictitious or fraudulent
ii. Constitute and/or emanate from unsafe and unsound banking practices as determined by the
PDIC, in consultation with the BSP after due notice and hearing and publication of PDIC's cease
& desist orderagainst such deposit accounts/transactions
iii. Are determined to be proceeds of an unlawful activity as defined in the Anti-Money Laundering
Act(Republic Act 9160, as amended)

Note: Unsafe and unsound deposit-related activities include, among others: (PDIC Regulatory Issuance No.
2011-01)
 Deposit-related practice/activity/transaction without the approval or adequate controls required under
existinglaws, rules and regulations
 Failure to keep bank records within bank premises
 Granting high interest rates, when bank has: (1) negative unimpaired capital, or (ii) liquid assets to deposit
ratioless than 10%
 Non-compliance with PDIC regulations

D. Maximum Liability (Maximum Deposit Insurance Coverage)

PDIC shall pay deposit insurance on all valid deposits up to the Maximum Deposit Insurance Coverage of
Php500,000, per depositor, of a closed bank. Accounts maintained in the same right and capacity for a
depositor's benefit, whether in his own name or in the name of others, are covered by deposit insurance.
However, A depositor with single accounts and joint accounts may have insured deposits of up to
Php1,000,000.

Deposits are considered valid upon the determination by the PDIC, based on bank records that the deposits
were

Illustrative examples:

1. How much is Fe Santos's insured deposit if she has the following four deposit accounts in the same bank?
ACCOUNT NAME Deposit (In PHP) Insured Deposit of Fe Santos
Fe Santos 100,000 100,000
Ben Santos For the Account of Fe Santos 100,000 100,000
Charlie Santos In Trust For Fe Santos 100,000 100,000
Fe Santos’ Store (Sole Proprietorship) 700,000 200,000
Total 1,000,000 500,000

2. How much is Fe Santos's insured deposit if she has the following three joint accounts in the same bank?
ACCOUNT NAME Deposit (In PHP) Insured Deposit of Fe Santos
Fe Santos or Ben Santos 500,000 250,000
Fe Santos and Ben Santos 1,000,000 250,000
Fe Santos and/or Ben Santos 1,000,000 0*
Total 2,500,000 500,000
*Note: Mrs. Fe Santos does not have any insured deposit share since she already has P500,000 in total shares in
the two joint accounts she has with Ben and Charlie Santos.

3. How much is Fe Santos's insured deposit for all her single and joint accounts in the same bank?
ACCOUNT NAME Deposit (In PHP) Insured Deposit of Fe Santos
All single accounts of Fe Santos in BDO 1,000,000 500,000
Branch 1
All single accounts of Fe Santos in BDO 2,500,000 500,000
Branch 1
Total 3,500,000 1,000,000

Note: For purposes of computing the insured deposits, all obligations or loans of the depositor with the closed
bank, as of bank closure, shall be deducted from the depositor's total deposits with the said bank. (PDIC
Regulatory Issuance No. 2011-04)

E. Requirements for Claims of Insured Deposits

1.When are claims filed?

Claims are filed during the claims settlement operations period, as announced in the Notice to Depositors
published in national or local newspapers, or posted in the bank premises and conspicuous places within the
locality, and in the PDIC website

Depositors have two (2) years from PDIC's takeover of the closed bank to file their deposit insurance claims.

2.Who are required to file deposit insurance claims?

a. Depositors with valid deposit accounts with balances of more than Php100,000.
b. Depositors who have outstanding obligations with the closed bank regardless of amount of deposits.
c. Depositors with account balances of less than Php100,000 who have no updated addresses in the
bankrecords or who have not updated their addresses through the Mailing Address Update Form
(MAUF)issued by the PDIC.
d. Depositors who maintain their accounts under the name of business entities, regardless of type of
accountand account balance.
e. Depositors with accounts not eligible for early payment, regardless of type of account and
accountbalance per advice of PDIC.
3.Who are depositors not required to file deposit insurance claims?
Depositors with valid deposit accounts with balances of Php100,000 and below are not required to file claims
provided they have no obligations with the closed bank and have complete and updated addresses in the
bank records or have updated these through the Mailing Address Update Form (MAUF) issued by the PDIC.
Depositors with deposit balances of Php100,000 and below may update their addresses using the MAUF and
submit to PDIC representatives stationed at the closed bank premises before the start of the onsite claims
settlement operations
These depositors are entitled to immediate/early payment of deposit insurance claim as part of PDIC's initiative
to provide convenience to small depositors. Payments to these depositors are sent as postal money orders to
the depositors' mailing addresses.

4. Steps in filing deposit insurance claims

a. Prepare the following documents:

i. Original evidence of deposits such, as savings passbook, certificate of time deposit, bankstatement,
unused checks, and ATM card.
ii. Original copy of ONE (1) VALID PHOTO-BEARING IDENTIFICATION DOCUMENTS(ID) with clear signature of
depositor/claimant such as Driver's License, SSS/ GSIS ID, Senior Citizen's ID, Passport, PRC ID, OWWA/
OFW ID, Seaman's ID, Alien Certification ofRegistration ID, Voter's ID, IBP. Please ensure that the ID
number is clear and legible.
iii. If the depositor is below 18 years old, a photocopy of his/her birth certificate from the PhilippineStatistics
Authority (PSA) or duly certified copy from the local civil registrar and valid IDs of theparent.
iv. Original copy of a notarized Special Power of Attorney (SPA) for claimants who are not thesignatories in
the bank records. In the case of minor depositor, the SPA must be executed by the parent.
b. Submit to:
i. If filing personally:
1. The PDIC representatives at the premises of the closed bank during Claims SettlementOperations
(CSO) or to the PDIC Public Assistance Center at the 3rd Floor, SSS Bldg.,6782 Ayala Avenue corner
V.A. Rufino Street, Makati City after the onsite CSO.
ii. If filing through Mail
1. Send the accomplished and notarized Claim Form and requirements to The ClaimsProcessing
Department of PDIC 4/F SSS Building, 6782 Ayala Avenue corner V.A. Rufino St. 1226 Makati City

5. Who should sign the deposit insurance claim form?

a. Depositor of the account - for depositors 18 years old and above
b. Parent - if the depositor is below 18 years old
c. Agent - in the case of "By" accounts
d. Trustee -- in the case of "In Trust for (ITF)" accounts
e. Each Depositor - in the case of joint accounts such as "Or", "And/Or" or "And" accounts

6. Procedures for Claiming Insurance Proceeds

a. Period for Payment

i. Whenever an insured bank is closed by Monetary Board
ii. Payment shall be made by PDIC as soon as possible

b. Mode of payment
i. By Cash
 ii. By making available to each depositor a transferred deposit in another insured bank in an
amountequal to insured deposit of such depositor

c. Requirement before payment

i. PDIC may require proof of claims, before paying the insured deposit
ii. If PDIC Is not satisfied as to the validity of a claim for an insured deposit, it may require final
determination of a court of competent jurisdiction before paying such claim

d. Period for payment.

i. It must be made within 6 months from the date of filing otherwise the officers of PDIC will beliable for
failure to pay if due to grave abuse of discretion, gross negligence, bad faith or malice.

e. Rights of PDIC upon payment of insured deposits

i. PDIC shall be subrogated to all rights of depositor against the closed bank to the extent of
suchpayment.

II. Bank Secrecy Laws

A. AN ACT PROHIBITING DISCLOSURE OF OR INQUIRY INTO DEPOSITS WITH ANY BANKINGINSTITUTION (REPUBLIC
ACT NO. 1405)

a. Absolute Confidentiality of Bank Deposits and Investments in Government Bonds

i. All deposits of whatever nature in banks or banking institutions in the Philippines andinvestments in
government bonds are absolutely confidential in nature. (Sec. 2, Rep. Act No. 1405)
1. Deposits refer to money or funds placed with a bank that can be withdrawn on thedepositor's order
or demand, such as deposit accounts in the form of savings, current and time deposits. Deposits are
characterized as being in the nature of a simple loan. The placing of deposits in a bank creates a
creditor-debtor relationship between the depositor and the bank. As such, the bank, being the
debtor, has the obligation to pay a certain sumof money to the depositor, being the creditor.
2. Investments in Government Bonds refer to investments in bonds issued by theGovernment of the
Philippines, its political subdivisions and its instrumentalities. Government bonds are debt securities
which are unconditional obligations of the State, and backed by its full taxing power. Government
bonds include treasury bills, treasurynotes, retail treasury bonds, dollar linked peso notes, and other
risk-free bonds.
3. The General Banking Law prohibits bank directors, officers, employees or agents fromdisclosing 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. (Sec. 55[b], Rep. Act No. 8791) The Thrift Banks Act and the Rural Banks Act likewise prohibit
any bank officer, employee or agent from disclosing any information on such funds or properties.
(Sec. 21[a][2], Rep. Act No. 7906 & Sec. 26[a][2], Rep. Act No. 7353) Prohibited Acts and Persons
Liable

b. The following are criminally liable under this law:

i. 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 notallowed in Section
2;
ii. Any official or employee of a banking institution who makes a disclosure concerning bankdeposits to
another in any instance not allowed by law (Sec. 3, Rep. Act No. 1405); and
iii. Any person who commits a violation of any of the provisions of the law (Sec. 5, Rep. Act No.1405). iv.
Any bank official, director, employee or agent who discloses information relative to funds orproperties in
 the custody of the bank may also be held liable under the applicable provisions of the General Banking
Law, Thrift Barks Act and Rural Banks Act.

c. Instances when Confidentiality of Domestic Bank Deposits is Not Absolute. Bank deposits andinvestments in
government bonds may be examined, inquired or looked into under limited exceptions in Republic Act No.
1405 and in other laws as enumerated below:

1. Exceptions under the Law on Secrecy of Bank Deposits. Section 2 of Republic ActNo. 1405 provides that
bank deposits and government bond investments 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 bevalid, it should be
made knowingly, voluntarily and with sufficient awareness ofthe relevant circumstances and likely
consequences.
b. In cases of impeachment of the President, Vice President, members of theSupreme Court, members
of the Constitutional Commission (Commission on Elections, Civil Service Commission and
Commission on Audit) and the Ombudsman for culpable violation of the Constitution, treason,
bribery, graft and corruption, other high crimes or betrayal of public trust. (Art. XI, Sec. 2, 1987
Philippine Constitution)
c. Upon order of a competent court in cases of bribery or dereliction of duty ofpublic officials.
d. In cases where the money deposited or invested is the subject matter of thelitigation. The money
deposited should be the very thing in dispute. (MellonBank, N.A. v. Magsino, 190 S.C.R.A. 633 [1990])

2. Exceptions under Other Laws. Bank deposits and investments may be examined,inquired or looked into
as provided for under other laws in the following instances:
a. The Ombudsman has the power to issue subpoena and subpoena ducestecum,take testimony in
any investigation or inquiry, as well as examine and access bank accounts and records. The power
of the Ombudsman to subpoena deposit information of a government official may be exercised
when the following conditions concur: (1) there must be a case pending before a court of
competent jurisdiction; (2) the account must be clearly identified; (3) the inspection must be limited
to the subject matter of the pending case; and (4) the bank personnel and the account holder
must be notified to be present during the inspection. (Marquezv. Desierto, 359 S.C.R.A. 772 [2001])
b. Bank deposits of a public official, his spouse and unmarried children may betaken into consideration
in the enforcement of Section 8 of The Anti-Graft andCorrupt Practices Act (Rep. Act No. 3019)
c. Directors, officers, stockholders and related interests who contract a loan or any form of financial
accommodation with their bank or related bank are required to execute a written waiver of
secrecy of deposits pursuant to The New CentralBank Act. (Sec. 26, Rep. Act No. 7653)
d. The Commissioner of Internal Revenue is authorized to inquire into bank depositaccounts in relation
to: (1) an application for compromise of tax liability or a determination of a decedent's gross estate
under The National Internal Revenue Code (Rep. Act No. 8424, as amended by Rep. Act No. 10021);
and (2) a request for tax information of specific9 taxpayers made by a foreign tax authority pursuant
to a tax treaty under The Exchange of Information on Tax Matters Act of 2009 (Rep. Act No. 8424, as
amended by Rep. Act No. 10021).
e. The Anti-Money Laundering Council may be authorized to examine and inquire into bank deposits
or investments with banks or nonbank financial institutions - (1) with court order, when there is
probable cause that the deposits or investments are related to an unlawful activity or a money
laundering offense (Secs. 3[i] and of Rep. Act No. 9160); and (2) without need of court order, when
probable cause exists that a particular deposit or investment with any banking institution is related to
certain predicate crimes, such as kidnapping for ransom, violation of the Comprehensive
Dangerous Drugs Act, hijacking and other violations under Republic Act No. 6235, destructive arson
and murder (Sec.11 of Republic Act No. 9160).
 f. The BangkoSentral is authorized to - (1) inquire into or examine bank depositsor investments in the
course of a periodic or special examination to ensure compliance with The Anti-Money Laundering
Law, in accordance with the rule of examination of the BangkoSentral (Sec. 11, Rep. Act No. 9160,
as amended); and (2) conduct annual testing which is limited to the determination of the existence
and true identity of the owners of numbered accounts (Sec. 9, Rep. ActNo. 9160, as amended).
g. The Philippine Deposit Insurance Commission and the BangkoSentral mayinquire into bank deposits
when there is a finding of unsafe or unsound bankingpractices. (Sec. 8, Rep. Act No. 3591, as
amended)
h. The Court of Appeals, designated as a special court, may issue an orderauthorizing law
enforcement officers to examine and gather information on the deposits, placements, trust
accounts, assets and records in a bank or financial institution in connection with anti-terrorism case.
(Rep. Act No. 9372)
i. The Commission on Audit is authorized to examine and audit government deposits pertaining to the
revenue and receipts of, and expenditures or uses of funds and properties, owned or held in trust by,
or pertaining to, the Government or any of its subdivisions, agencies or instrumentalities, including
governmentowned and controlled corporations with original charters. (See Art. IX-D,
1987Constitution and Pres. Dec. No. 1445)
j. The Presidential Commission on Good Government, in the conduct of itsinvestigations to recover ill-
gotten wealth accumulated by former President Ferdinand E. Marcos, his immediate family,
relatives, subordinates and close associates, may issue subpoenas requiring the attendance and
testimony of witnesses and/or the production of books, papers, contracts, records, statement of
accounts and other documents. (Sec. 3 [e], Exec. Order No. 1 [1986])

3. Exceptions under Jurisprudence or Decision by Supreme Court

a. Plunder is analogous to bribery. The exception in the law that is applicable inbribery also applies to
plunder. The overt or criminal acts as described in Section 1(d) of Republic Act No. 7080 would
make the similarity between plunder and bribery even more pronounced since bribery is essentially
included among thesecriminal acts. (Ejercito v. Sandiganbayan, 509 S.C.R.A. 190 [2006])
b. Cases of unexplained wealth are similar to cases of bribery or dereliction of dutyand no reason iseen
why these two classes of cases cannot be excepted from the rule making bank deposits
confidential. (Phil. National Bank v. Gancayco, 122 Phil. 503 [1965])

4. Authorized Disclosures by authorized and responsible bank officials areallowed in the following
instances:
a. reporting of unclaimed balances to the Treasurer of the Philippines (Secs. 1 & 2,Act No. 3936)
b. turn-over to the Commissioner of Internal Revenue of the amount in bank accounts as may be
sufficient to satisfy the writ of garnishment issued to collectdelinquent taxes (Secs. 205 & 208, Rep.
Act No. 8424); and
c. submission of report, and turn-over to, the court officer or executing sheriff ofgarnished amounts
pursuant to a writ of garnishment in satisfaction of a judgment (Sec. 9[c], Rule 39, Rules of Court; See
China Banking Corporation v. Ortega, 49SCRA 355 [1°73].
d. disclosure by a bank officer or employee upon order of the court in connectionwith a deposit in a
closed bank that was used in the perpetration of anomalies (Soriano v. Manuzon, C.A.G.R.-S.P No.
87634)

d. Penalties Violation of Republic Act No. 1405 will subject the offender, upon conviction, to thefollowing
penalties:
i. imprisonment of not more than five years;
ii. fine of not more than P20,000.00; or
iii. both imprisonment and fine.
B. FOREIGN CURRENCY DEPOSIT ACT OF THE PHILIPPINES (REPUBLIC ACT NO. 6426)

Absolute Confidentiality of Foreign Currency Deposits

a. All foreign currency deposits are absolutely confidential and cannot be examined, inquired, or looked
intoby any person, government official, bureau or office, whether judicial or administrative or legislative,
or any other private or public entity.

b. Foreign currency deposits are also exempt from attachment, garnishment, or any other order or process
ofany court, legislative body, government agency or any administrative body whatsoever. (Sec. 8, Rep.
Act No. 6426) Foreign currency deposits refer to funds in foreign currencies which 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.

c. Prohibited Acts and Persons Liable. The following are liable under this law:
i. 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 (Sec. 8, Rep.
Act No. 6426);
ii. (Any official or employee of a banking institution who makes a disclosure concerning
foreigncurrency deposits to another, in any instance not allowed by law (See Sec. 10, Rep. Act
No.6426);
iii. Anyone who shall attach, garnish, or subject the foreign currency deposit to any other order
orprocess of any court, legislative body, government agency or any other administrative body (Sec.
8, Rep. Act No. 6426); and
iv. Any person who commits a willful violation of any of the provisions of Republic Act No. 6426
orregulation issued by the Monetary Board pursuant to the said law (Sec. 10, Rep. Act No. 6426).

d. Instances when Confidentiality of Foreign Currency Deposits is Not Absolute. Foreign currencydeposits
may be examined, inquired or looked into under the limited exceptions in Republic Act No. 6426 and in
other laws.
i. Exception under The Foreign Currency Deposit Act. Foreign currency deposits may beexamined,
inquired of looked into when there is written permission of the depositor. (Only one exception under
R,A, 6426)

ii. Exceptions under Other Laws

1. Directors, officers, stockholders and related interests who contract a loan or any form of financial
accommodation with their bank or related bank are required to execute a written waiver of
secrecy of deposits pursuant to The New Central Bank Act. (Sec. 26, Rep. Act No. 7653)
2. The Commissioner of Internal Revenue is authorized to inquire into bank deposit accounts in
relation to: (1) an application for compromise of tax liability or a determination of a decedent's
gross estate under The National Internal Revenue Code (Rep. Act No. 8424, as amended by
Rep. Act No. 10021); and (2) a request for tax information of specific taxpayers made by a
foreign tax authority pursuant to a tax treaty under The Exchange of Information on Tax Matters
Act of 2009 (Rep. Act No. 8424, as amended by Rep. Act No. 10021).
3. The Anti-Money Laundering Council may be authorized to examine and inquire into bank
deposits or investments with banking or non-bank financial institutions - (1) with court order,
 when there is probable cause that the deposits or investments are related to an unlawful activity
or a money laundering offense (Secs. 3(i) and 4 of Rep. Act No. 9160); and (2) without need of
court order, when probable cause exists that a particular deposit or investment with any
banking institution is related to certain predicate crimes, such as kidnapping for ransom,
violation of the Comprehensive Dangerous Drugs Act, hijacking and other violations under
Republic Act No. 6235, destructive arson and murder (Sec. 11 of Republic Act No. 9160).
4. The BangkoSentral is authorized to - (1) inquire into or examine bank deposits andinvestments in
the course of a periodic or special examination to ensure compliance with The AntiMoney
Laundering Act, in accordance with the rules of examination of the BangkoSentral (Sec. 11, Rep.
Act No. 9160, as amended); and (2) conduct annual testing which is limited to the
determination of the existence and true identity of the owners ofnumbered accounts (Sec. 9,
Rep. Act No. 9160, as amended).
5. The Philippine Deposit Insurance Commission and the BangkoSentral may inquire intobank
deposits when there is a finding of unsafe or unsound banking practices. (Sec. 8,Rep. Act No.
3591, as amended)
6. The Commission on Audit is authorized to examine and audit government depositspertaining to
the revenue and receipts of, and expenditures or uses of funds and properties, owned or held in
trust by, or pertaining to, the Government or any of its subdivisions, agencies or instrumentalities,
including government-owned and controlled corporations with original charters. (See Art. IX-D,
1987 Constitution and Pres. Dec. No.1445)
7. The Presidential Commission on Good Government, in the conduct of its investigations to
recover ill-gotten Wealth accumulated by former President Ferdinand E. Marcos, his immediate
family, relatives, subordinates and close associates, may issue subpoenas requiring the
attendance and testimony of witnesses and/or the production of books, papers, contracts,
records, statement of accounts and other documents. (Sec. 3 [e], Exec. Order No. 1 [1986])

iii. Exceptionsunder Jurisprudence On Grounds of Equity

1. Account of a Non-resident Alien - The garnishment of a foreign currency depositaccount of a
non-resident alien found guilty of raping a minor was allowed on the basis ofequity. (Salvacion v.
Centrel Bank of the Philippines, 278 S.C.R.A. 27 [1997])
2. Account of a Co-payee of a Check - A co-payee of a check who filed a suit forrecovery 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. (China BankingCorporation v. Court of Appeals, 511
S.C.R.A. 110 [2006])

e. Penalties of Violation of Republic Act No. 6426:

i. imprisonment of not less than one (D year but not more than five (5) years; or
ii. fine of not less than Five Thousand Pesos (P5,000.00) but not more than Twenty Five Thousand Pesos
(P25,000.00);
iii. both imprisonment and fine.

f. The following sanctions say also be imposed against a bank or any bank director and officer forviolation
of the provisions of Republic Act No. 6426 and BangkoSentral regulation issued pursuant to said law:
i. revocation of the authority of the bank to accept new foreign currency deposits; and
ii. administrative sanctions provided under Section 37 of the New Central Bank Act (Rep. Act No.7653),
as may be applicable

III. Unclaimed Balances Law

A. Definition of Terms
 a. "Unclaimed Balances" shall include credits or deposits of money, bullion, security or other evidence
ofindebtedness of any kind, and interest thereon with banks in favor of any person known to be dead or
whohas not made further deposits or withdrawal during the preceding ten (10) years or more.
b. "Applicant" pertains to the depositor or his successor-in-interest who requests for the reactivation of
theaccount which was reported by his depository bank to the Treasurer of the Philippines pursuant to
theUnclaimed Balances Law.
c. "Procedure" refers to the course of action to be complied with by the applicant in order that his request
begiven due course.
d. "Covered Institution” refers to all banks, trust companies, savings and mortgage banks, mutual
buildingand loan associations, all banking institutions of every kind, covered under Act No. 3936, as
amended by P.D. 679, which reported to the Treasurer of the Philippines as unclaimed the account
being applied for reactivation.
e. "Affidavit of Undertaking" is a sworn statement executed by the responsible authorized officer of the
bank absolving the Bureau of the Treasury from any liability that may arise due to the granting of the
Applicant's request for reactivation.

B. Procedure for Reactivation of Unclaimed Balances Reported to the Treasurer of the Philippines

i. Letter Request of Depositor/Creditor. The depositor/creditor shall write his depository bank requesting
forthe reactivation of his account which was included in the report of unclaimed balances to the
Bureau ofthe Treasury.
ii. Authentication. The covered institution shall authenticate and verify the request for reactivation and
thesignature of the depositor/creditor.
iii. Letter Request of the Covered Institution. The depository bank shall write the Bureau of the
Treasurythrough the authorized approving official, requesting authority to reactivate the deposit
account concernedattaching to its letter the stamped verified letter of the depositor/creditor.
iv. Deed of Undertaking. The covered institution, through its responsible authorized officer, shall execute
aDeed of Undertaking ensuring that the Bureau of the Treasury and its officials and employees shall
befree and harmless from any liability once the account is reactivated.
v. Letter of Authority to Reactivate. Finding complete documentation supporting the request, the Bureau
ofthe Treasury, through the authorized officer shall issue the authority to the covered institution to
reactivate the account.
vi. Entity Requirements. In case the requesting party/deposit/creditor is a juridical entity/person, the
requestmust be accompanied with corresponding board resolutions and/or Secretary's Certificatate
showing that the signatory to the request for reactivation is fully authorized to transact with the Bureau
of the Treasury relative to the reactivation of its account,
vii. APPROVING AUTHORITY The authority to reactivate on unclaimed balance account/s shall be issued by
the following officers:
i. Division Chief/Head Law & Litigation Division Legal Service - aggregate amount ofunclaimed
balance not exceeding, P100,000.00
ii. Director, Legal Service - aggregate amount of unclaimed balance exceeding P100,000.00 butnot
exceeding P500,000.00
iii. Deputy Treasurer of the Philippines - aggregate amount exceeding P500,000.00 but not exceeding
P1,000,000.00
iv. Treasurer of the Philippines - aggregate amount of unclaimed balances exceedingP1,000,000.00

C. Escheat Proceedings for Unclaimed Balances

 a. Section 1 Of Rule 91 When and by whom petition filed. -.. When a person dies intestate, seized of
realproperty in the Philippines, leaving no heir or person by law entitled to the same, the Solicitor
General or his representative in behalf of the Republic of the Philippines, may file a petition in the Court
of First Instance of the province where the deceased last resided or in which he had estate, if he resided
out of the Philippines, setting forth the facts, and praying that the estate of the deceased be declared
escheated.

IV. General Banking Law (R.A. 8791)

A. Definition of Terms
a. "Banks" shall refer to entities engaged in the lending of funds obtained in the form of deposits.
b. "Quasi-banks" shall refer to entities engaged in the borrowing of funds through the
issuance,endorsement or assignment with recourse or acceptance of deposit substitutes.
c. "Deposits" refer to money or funds placed with a bank that can be withdrawn on the depositor's order
or demand, such as deposit accounts in the form of savings, current and time deposits. Deposits are
characterized as being in the nature of a simple loan. The placing of deposits in a bank creates a
creditor-debtor relationship between the depositor and the bank. As such, the bank, being the debtor,
has theobligation to pay a certain sum of money to the depositor, being the creditor.
d. The term "deposit substitutes" is defined as an alternative form of obtaining funds from the public,
otherthan deposits, through the issuance, endorsement, or acceptance of debt instruments for the
borrower's own account, for the purpose of relending or purchasing of receivables and other
obligations. These instruments may include, but need not be limited to, bankers’ acceptances,
promissory notes, participations, certificates of assignment and similar instruments with recourse, and
repurchase agreements.

B. Types of Banks
i. "Commercial bank" is a bank which shall have, in addition to the general powers incident
tocorporations, all such powers as may be necessary to carry on the business of commercial banking,
such as accepting drafts and issuing letters of credit; discounting and negotiating promissory notes,
drafts, bills of exchange, and other evidences of debt; accepting or creating demand deposits;
receiving other types of deposits and deposit substitutes; buying and selling foreign exchange and gold
or silver bullion; acquiring marketable bonds and other debt securities; and extending credit, subject to
such rules as the Monetary Board may promulgate. These rules may include the determination of bonds
and other debt securitieseligible for investment, the maturities and aggregate amount of such
investment.
ii. "Universal bank” is a bank which shall have the authority to exercise, in addition to the
powersauthorized for a commercial bank under the law, the powers of an investment house as
provided in existing laws and the power to invest in non-allied enterprises as provided in this law.
iii. "Thrift banks" shall include savings and mortgage banks, private development banks, and stock savings
and loans associations organized under existing laws, and any banking corporation that may be
organized for the following purposes:
(1) Accumulating the savings of depositors and investing them, together with capital loans secured by
bonds, mortgages in real estate and insured improvements thereon, chattel mortgage, bonds and
other forms of security or in loans for personal or household finance, whether secured or unsecured,
or in financing for homebuilding and home development; in readily marketable and debt securities;
in commercial papers and accounts receivables, drafts, bills of exchange, acceptances or notes
arising out of commercial transactions; and in such other investments and loans which the Monetary
Board may determine as necessary in the furtherance of national economic objectives;
(2) Providing short-term working capital, medium- and long-term financing, to businesses engaged in
agriculture, services, industry and housing; and
 (3) Providing diversified financial and allied services for its chosenmarket and constituencies specially
for small and medium enterprises and individuals.
iv. "Rural Banks" are banks that extend loan primarily for the purpose of meeting the normal credit needsof
farmers, fishermen or farm families owning or cultivating land dedicated io agricultural production as
well as the normal credit needs of cooperatives and merchants. In granting of loans, the rural bank
shallgive preference to the application of farmers and merchant whose cash requirements are small.
v. "Cooperative Bank" is one organized by the majority shares of which is owned and controlled
bycooperatives primarily to provide financial and credit services to cooperatives. The term
"cooperativebank" shall include cooperative rural banks.
vi. "Islamic Bank” is a bank created to promote and accelerate the socio-economic development of
theAutonomous Region of Muslim Mindanao (ARMM) by performing banking, financing and investment
operations and to establish and participate in agricultural, commercial and industrial ventures based on
the Islamic concept of banking.
vii. "Government-owned banks” are those banks controlled and owned by the national government. They
are created by special law to achieve a particular public purpose. They include Land Bank of the
Philippines and Development Bank of the Philippines

Note: A bank other than a universal or commercial bank cannot accept or create demand deposits except
upon prior approval of, and subject to such conditions and rules as may be prescribed by the Monetary Board.

C. Loans made by Bank

a. Risk-Based Capital

i. The Monetary Board shall prescribe the minimum ratio which the net worth of a bank must bearto its
total risk assets which may include contingent accounts.
ii. The Monetary Board may require that such ratio be determined on the basis of the net worth andrisk
assets of a bank and its subsidiaries, financial or otherwise, as well as prescribe the composition and
the manner of determining the net worth and total risk assets of banks and their subsidiaries: Provided,
That in the exercise of this authority, the Monetary Board shall, to the extent feasible, conform to
internationally accepted standards, including those of the Bank for International Settlements (BIS),
relating to risk-based capital requirements: Provided, further, That it may alter or suspend compliance
with such ratio whenever necessary for a maximum period of one (1) year: Provided, finally, That such
ratio shall be applied uniformly to banks ofthe same category.
iii. In case a bank does not comply with the prescribed minimum ratio, the Monetary Board maylimit or
prohibit the distribution of net profits by such bank and may require that part or all of the net profits be
used to increase the capital accounts of the bank until the minimum requirement has been met. The
Monetary Board may, furthermore, restrict or prohibit the acquisition of major assets and the making of
new investments by the bank, with the exception of purchases of readily marketable evidences of
indebtedness of the Republic of the Philippines and of the BangkoSentral and any other evidences of
indebtedness or obligations the servicing and repayment of which are fully guaranteed by the
Republic of the Philippines, until the minimum required capital ratio has been restored.

b. Single Borrower's Limit (SBL)

i. Maximum Limit of Loan to be granted by a bank to a single borrower

Except as the Monetary Board may otherwise prescribe for reasons of national interest, the total amount
of loans, credit accommodations and guarantees as may be defined by the MonetaryBoard that may
be extended by a bank to any person, partnership, association, corporation or other entity shall at no
 time exceed twenty percent (20%) of the net worth of such bank. The basis for determining compliance
with single-borrower limit is the total credit commitment of the bank to the borrower.

ii. Additional Limit of Loan that may be granted by a bank to a single borrower in addition tothe initial
maximum limit

Unless the Monetary Board prescribes otherwise, the total amount of loans, credit accommodations
and guarantees prescribed in the preceding paragraph may be increased by an additional ten
percent (10%) of the net worth of such bank provided the additional liabilities of any borrower are
adequately secured by trust receipts, shipping documents, warehouse receipts or other similar
documents transferring or securing title covering readily marketable, non-perishable goods which must
be fully covered by insurance.

iii. Loans and other credit accommodations included in the computation of Single Borrower'sLimit

(a) the direct liability of the maker or acceptor of paper discounted with or sold to such bankand
the liability of a general indorser, drawer or guarantor who obtains a loan or othercredit
accommodation from or discounts paper with or sells papers to such bank;
(b) in the case of an individual who owns or controls a majority interest in a corporation,partnership,
association or any other entity, the liabilities of said entities to such bank;
(c) in the case of a corporation, all liabilities to such bank of all subsidiaries in which suchcorporation
owns or controls a majority interest; and
(d) in the case of a partnership, association or other entity, the liabilities of the membersthereof to
such bank.
(e) Loans and other credit accommodations, deposits maintained with, and usual guaranteesby a
bank to any other bank or non-bank entity, whether locally or abroad, shall besubject to the
limits as herein prescribed.
Even if a parent corporation, partnership, association, entity or an individual who owns or controls a
majority interest in such entities has no liability to the bank, the Monetary Board may prescribe the
combination of the liabilities of subsidiary corporations or members of the partnership, association, entity
or such individual under certain circumstances, including but not limited to any of the following
situations:
(a) the parent corporation, partnership, association, entity or individual guarantees the repayment
of the liabilities;
(b) the liabilities were incurred for the accommodation of the parent corporation or another
subsidiary or of the partnership or association or entity or such individual; or
(c) the subsidiaries though separate entities operatemerely as departments or divisions of a single
entity.

iv. Loans and other credit accommodations excluded in the computation of Single Borrower'sLimit

(a) loans and other credit accommodations secured by obligations of the BangkoSentral of the
Philippine Government;
(b) loans and other credit accommodations fully guaranteed by the government as to thepayment
of principal and interest;
(c) loans and other credit accommodations covered by assignment of deposits maintained inthe
lending bank and held in the Philippines;
(d) loans, credit accommodations and acceptances under letters of credit to the extentcovered by
margin deposits; and
 (e) other loans or credit accommodations which the Monetary Board may from time to time,specify
as non-risk items.

v. The limit on loans, credit accommodations and guarantees prescribed herein shall not apply toloans,
credit accommodations and guarantees extended by a cooperative bank to its cooperative
shareholders.

c. Restriction on Bank Exposure to Directors, Officers, Stockholders, and Their Related Interests (DOSRI)

i. Requirements for validity of loan granted by bank to DOSRI

(a) No director or officer of any bank shall, directly or indirectly, for himself or as therepresentative or
agent of others, borrow from such bank nor shall he become a guarantor, indorser or surety for
loans from such bank to others, or in any manner be an obligor or incur any contractual liability
to the bank except with the written approval ofthe majority of all the directors of the bank,
excluding the director concerned.
(b) The required approval shall be entered upon the records of the bank and a copy of suchentry
shall be transmitted forthwith to the appropriate supervising and examiningdepartment of the
BangkoSentral.
(c) Dealings of a bank with any of its directors, officers or stockholders and their relatedinterests shall
be upon terms not less favorable to the bank than those offered to others.
ii. Power of Monetary Board to regulate loans or credit accommodations made by bank toDOSRI
(a) The Monetary Board may regulate the amount of loans, credit accommodations and
guarantees that may be extended, directly or indirectly, by a bank to its directors, officers,
stockholders and their related interests, as well as investments of such bank in enterprisesowned
or controlled by said directors, officers, stockholders and their related interests.
(b) Limitations of outstanding loans, credit accommodations and guarantees which abank may
extend to each of its DOSRI.
a. The outstanding loans, credit accommodations and guarantees which a bank mayextend
to each of its stockholders, directors, or officers and their related interests, shall be limited to
an amount equivalent to their respective unencumbered deposits and book value of their
paid-in capital contribution in the bank: Provided, however, That loans, credit
accommodations and guarantees secured by assets considered as non-risk by the Monetary
Board shall be excluded from such limit: Provided, further, That loans, credit
accommodations and advances to officers in the form of fringe benefits granted in
accordance with rules as may be prescribed by the Monetary Board shall not be subject to
the individual limit.

iv. Loans and other credit accommodations against real estate

i. Except as the Monetary Board may otherwise prescribe, loans and other credit
accommodationsagainst real estate shall not exceed seventy-five percent (75%) of the appraised
value of the respective real estate security, plus sixty percent (60%) of the appraised value of the
insured improvements, and such loans may be made to the owner of the real estate or to his
assignees.

v. Loansand other credit accommodations on Security of Chattels and Intangible Properties

i. Except as the Monetary Board may otherwise prescribe, loans and other credit accommodations
on security of chattels and intangible properties, such as, but not limited to, patents, trademarks,
trade names, and copyrights shall not exceed seventy-five percent (75%) of the appraised value of
the security, and such loans and other credit accommodations may be made to the title-holder of
the chattels and intangible properties or his assignees.
 vi. Requirement for grant of loans or other credit accommodations
i. Before granting a loan or other credit accommodation, a bank must ascertain that the debtor
iscapable of fulfilling his commitments to the bank. Toward this end, a bank may demand from its
credit applicants a statement of their assets and liabilities and of their income and expenditures and
such information as may be prescribed by law or by rules and regulations of Monetary Board to
enable the bank to properly evaluate the credit application which includes the corresponding
financial statements submitted for taxation purposes to the Bureau of Internal Revenue. Should such
statements prove to be false or incorrect in any material detail, the bank may terminate any loan or
other credit accommodation granted on the basis of said statements and shall have the right to
demand immediate repayment or liquidation of the obligation.

vii. Provisions for losses and write-offs

i. All debts due to any bank on which interest is past due and unpaid for such period as may
bedetermined by the Monetary Board, unless the same are well-secured and in the process of
collection shall be considered bad debts within the meaning of this Section. The Monetary Board
may fix, by regulation or by order in a specific case, the amount of reserves for bad debts or
doubtful accounts or other contingencies.

viii. Ceiling on Investment in Certain Assets

ix. Any bank may acquire real estate as shall be necessary for its own use in the conduct of its business:
Provided, however, That the total investment in such real estate and improvements thereof,
including bank equipment, shall not exceed fifty percent (50%) of combined capital accounts:
Provided, further, That the equity investment of a bank in another corporation engaged primarily in
real estate shall be considered as part of the bank's total investment in real estate, unless otherwise
provided by the Monetary Board.

D. Other Banking Services

a. Receive in custody funds, documents and valuable objects;
b. Act as financial agent and buy and sell, by order of and for the account of their customers,
shares,evidences of indebtedness and all types of securities;
c. Make collections and payments for the account of others and perform such other services for
theircustomers as are not incompatible with banking business;
d. Upon prior approval of the Monetary Board, act as managing, agent, adviser, consultant or
administratorof investment management/advisory/consultancy accounts; and
e. Rent out safety deposit boxes.

E. Prohibition to a Bank
a. A bank shall not directly engage in insurance business as the insurer.

F. Diligence required by law to be observed by bank

a. For demand deposit, savings deposit and time deposit
i. High standards of integrity and performance or extraordinary diligence
b. For other services and contracts
i. Ordinary diligence or diligence of a good father of a family

G. Limitation of foreign ownership of domestic bank and Filipinos and domestic non-bank corporations.
 a. Foreign individuals and non-bank corporations may own or control up to forty percent (40%) of
thevoting stock of a domestic bank. This rule shall apply to Filipinos and domestic non-bank
corporations.
b. The percentage of foreign-owned voting stocks in a bank shall be determined by the citizenship of the
individual stockholders in that bank. The citizenship of the corporation which is a stockholder in a bank
shall follow the citizenship of the controlling stockholders of the corporation, irrespective of the place of
incorporation.

V. The New Central Bank Act (R.A. 7653)

A. Characteristics and Nature of BangkoSentralngPilipinas (BSP)

a. It is a public corporation created by special law particularly RA 7653.
b. It is a fully government-owned and control corporation with original capital stock of P50B.
c. It is an independent central monetary authority which is governed by the Monetary Board.
d. It enjoys fiscal and administrative autonomy.
e. The BSP shall be exempt for a period of five (5) years from the approval RA 7653 from all
national,provincial, municipal and city taxes, fees, charges and assessments.
f. The provision of any general or special law to the contrary notwithstanding, the importation
andexportation by the BangkoSentral of notes and coins, and of gold and other metals to be used for
purposes authorized under this Act, and the importation of all equipment needed for bank note
production, minting of coins, metal refining and other security printing operations shall be fully exempt
from all customs duties and consular fees and from all other taxes, assessments and charges related
tosuch importation or exportation.
g. Appointments in the BangkoSentral, except as to those which are policy-determining,
primarilyconfidential or highly technical in nature, shall be made only according to the Civil Service Law
and regulations: Provided, That no qualification requirements for positions in the BangkoSentral shall be
imposed other than those set by the Monetary Board: Provided, further, That, the Monetary Board
orGovernor, in accordance with Sections 15(e) and 17(d) RA 7653, respectively, may without need of
obtaining prior approval from any other government agency, appoint personnel in the
BangkoSentralwhose services are deemed necessary in order not to unduly disrupt the operations of the
BangkoSentral.
h. Officers and employees of the BangkoSentral, including all meinbers of the Monetary Board, shall
notengage directly or indirectly in partisan activities or take part in any election except to vote.
i. The BangkoSentral shall not acquire shares of any kind or accept them as collateral, and shall
notparticipate in the ownership or management of any enterprise, either directly or indirectly.
j. The BangkoSentral shall not engage in development banking or financing: Provided, however,
Thatoutstanding loans obtained or extended for development financing shall not be affected by the
prohibition of this section.

B. Primary Responsibility and Objective of BSP

a. It shall provide policy directions in the areas of money, banking, and credit.
b. It shall have supervision over the operations of banks and exercise such regulatory powers as provided
inRA 7653 and other pertinent laws over the operations of finance companies and non-bank financial
institutions performing quasi-banking functions, hereafter referred to as quasi-banks, and
institutionsperforming similar functions.
c. Its primary objective is to maintain price stability conducive to a balanced and sustainable growth of
theeconomy.
d. It shall also promote and maintain monetary stability and the convertibility of the peso.

C. Governing Body of BSP (BSP Monetary Board)

 a. Composition of BSP Monetary Board
i. It is composed of seven (7) members appointed by the President of the Philippines for a term ofsix
(6) years.
ii. The BSP governor shall serve as chairman of the monetary board.
iii. Another member of the Cabinet shall be designated by the President of the Philippines,
iv. Five (5) members who shall come from the private sector, all of whom shall serve full-time.

b. Qualifications of members of the BSP Monetary Board

i. Natural-citizens of the Philippines
ii. 35 years of age with the exception of BSP governor who must be 40 years of age
iii. Of good moral character, of unquestionable integrity, of known probity and patriotism,
iv. With recognized competence in social and economic disciplines

c. Inhibitions and disqualifications of members of the BSP Monetary Board

i. Disqualifications imposed by RA 6713
ii. A member of the Monetary Board is disqualified from being a director, officer, employee,
consultant, lawyer, agent or stockholder of any bank, quasi-bank or any other institution which
issubject to supervision or examination by the BangkoSentral.
iii. The members of the Monetary Board coming from the private sector shall not hold any otherpublic
office or public employment during their tenure.
iv. No person shall be a member of the Monetary Board if he has been connected directly with any
multilateral banking or financial institution or has a substantial interest in any private bank in the
Philippines, within one (1) year prior to his appointment; likewise, no member of the Monetary Board
shall be employed in any such institution within two (2) years after the expiration of his term except
when he serves as an official representative of the Philippine Government to such institution.

d. Grounds for Removal of member of BSP Monetary Board by President of the Philippines
i. If the member is subsequently disqualified under the provisions of RA 7653.
ii. If he is physically or mentally incapacitated that he cannot properly discharge his duties
andresponsibilities and such incapacity has lasted for more than six (6) months.
iii. If the member is guilty of acts or operations which are of fraudulent or illegal character or whichare
manifestly opposed to the aims and interests of the BangkoSentral.
iv. If the member no longer possesses the qualifications specified in Section 8 RA 7653.

D. Legal Tender Power over Coins and Note

a. Unit of Monetary Value

i. The Peso. --- The unit of monetary value in the Philippines is the "peso," which is represented bythe
sign "P."
ii. The peso is divided into one hundred (100) equal parts called "centavos," which are representedby
the sign "c."
b. Definition of Currency
i. The word "currency" is hereby defined, for purposes of this Act, as meaning all Philippine notesand
coins issued or circulating in accordance with the provisions of RA 7653.

c. Exclusive Issue Power of BSP

i. The BangkoSentral shall have the sole power and authority to issue currency, within the territoryof
the Philippines.
 ii. No other person or entity, public or private, may put into circulation notes, coins or any otherobject
or document which, in the opinion of the Monetary Board, might circulate as currency, nor
reproduce or imitate the facsimiles of BangkoSentral notes without prior authority from
theBangkoSentral.
iii. The Monetary Board may issue such regulations as it may deem advisable in order to prevent
thecirculation of foreign currency or of currency substitutes as well as to prevent the reproduction
offacsimiles of BangkoSentral notes.
iv. The BangkoSentral shall have the authority to investigate, make arrests, conduct searches
andseizures in accordance with law, for the purpose of maintaining the integrity of the currency. V.
Violation of this provision or any regulation issued by the BangkoSentral pursuant thereto
shallconstitute an offense punishable by imprisonment of not less than five (5) years but not more
than ten (10) years. In case the Revised Penal Code provides for a greater penalty, then that
penalty shall be imposed.

d. Liability for Notes and Coins

i. Notes and coins issued by the BangkoSentral shall be liabilities of the BangkoSentral and maybe
issued only against, and in amounts not exceeding, the assets of the BangkoSentral. Said notesand
coins shall be a first and paramount lien on all assets of the BangkoSentral.
ii. The BangkoSentral's holdings of its own notes and coins shall not be considered as part of itscurrency
issue and, accordingly, shall not form part of the assets or liabilities of the BangkoSentral.

e. Legal Tender Power of BSP

i. All notes and coins issued by the BangkoSentral shall be fully guaranteed by the Government ofthe
Republic of the Philippines and shall be legal tender in the Philippines for all debts, bothpublic and
private.
ii. Legal Tender - It refers to the type of currency which a debtor can compel a creditor to accept
incase of obligation to pay a sum of money.
1. 5 Centavos, 10 Centavos and 25 Centavos -- Up to P100 only.
2. P1 Coin, P5 Coin and P10 Coin - Up to P1,000 only.
3. P20, P50, P100, P200, P500 and P1,000 bills or notes - Unlimited legal tender.
4. Checks representing demand deposits do not have legal tender power and theiracceptance in
the payment of debts, both public and private, is at the option 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 in an amount equal to the amount
credited to his account. Checks produce payment only whenencashed or when they are
impaired through the fault of creditor.
iii. The Monetary Board, with the approval of the President of the Philippines, shall prescribe
thedenominations, dimensions, designs, inscriptions and other characteristics of notes issued by the
BangkoSentral: Provided, however, That said notes shall state that they are liabilities of the
BangkoSentral and are fully guaranteed by the Government of the Republic of the Philippines. Said
notes shall bear the signatures, in facsimile, of the President of the Philippines and of theGovernor of
the BangkoSentral
iv. Similarly, the Monetary Board, with the approval of the President of the Philippines, shallprescribe the
weight, fineness, designs, denominations and other characteristics of the coins issued by the
BangkoSentral. In the minting of coins, the Monetary Board shall give full consideration to the
availability of suitable metals and to their relative prices and cost of minting.

f. Printing of Notes and Minting of Coins

i. The Monetary Board shall prescribe the amounts of notes and coins to be printed and
minted,respectively, and the conditions to which the printing of notes and the minting of coins shall
 be subject. The Monetary Board shall have the authority to contract institutions, mints or firms forsuch
operations.
ii. All expenses incurred in the printing of notes and the minting of coins shall be for the account ofthe
BangkoSentral.

g. Interconvertibility of Currency
i. The BangkoSentral shall exchange, on demand and without charge, Philippine currency of
anydenomination for Philippine notes and coins of any other denomination requested. If for any
reason the BangkoSentral is temporarily unable to provide notes or coins of the denominations
requested, it shall meet its obligations by delivering notes and coins of the denominations whichmost
nearly approximate those requested.

h. Replacement of Currency Unfit for Circulation

i. The BangkoSentral shall withdraw from circulation and shall demonetize all notes and coinswhich for
any reason whatsoever are unfit for circulation and shall replace them by adequate notes and
coins: Provided, however, That the BangkoSentral shall not replace notes and coins the
identification of which is impossible, coins which show signs of filing, clipping or perforation, and
notes which have lost more than two-fifths (2/5) of their surface or all of the signatures inscribed
thereon. Notes and coins in such mutilated conditions shall be withdrawn from circulation and
demonetized without compensation to the bearer.

i. Retirement of Old Notes And Coins

i. The BangkoSentral may call in for replacement notes of any series or denomination which aremore
than five (5) years old and coins which are more than (10) years old.
ii. Notes and coins called in for replacement in accordance with this provision shall remain legaltender
for a period of one (1) year from the date of call. After this period, they shall cease to be legal
tender but during the following year, or for such longer period as the Monetary Board may
determine, they may be exchanged at par and without charge in the BangkoSentral and by agents
duly authorized by the BangkoSentral for this purpose. After the expiration of this latter period, the
notes and coins which have not been exchanged shall cease to be a liability of the BangkoSentral
and shall be demonetized. The BangkoSentral shall also demonetize all notes and coins which have
been called in and replaced.

E. Supervision and examination of banks and quasi-banking institutions

a. The supervising and examining department head, personally or by deputy shall examine the books
ofevery banking institution once in every twelve (12) months, and at such other times as the Monetary
Board by an affirmative vote of five (5) members, may deem expedient and to make a report on the
same to the monetary Board: Provided, that there shall be an interval of at least twelve (12) months
between annual examinations.
b. The bank concerned shall afford to the need of the appropriate supervising and examining
departments and to his authorized deputies full opportunity to examine its books, cash and available
assets and general condition at any time during banking hours when requested to do so by the
BangkoSentral: Provided, however, That none of the reports and other papers relative to such
examinations shall be open to inspection by the public except insofar as such publicity is incidental to
the proceedings hereinafter authorized or is necessary for the prosecution of violations in connection
with the business of such institutions.
c. Banking and quasi-banking institutions which are subject to examination by the BangkoSentral shall pay
to the BangkoSentral, within the last thirty (30) days of each year, an annual fee in an amount equal to
a percentage as may be prescribed by the Monetary Board of its average total assets during the
 preceding year as shown on its End-of-month balance sheets, after deducting cash on hand and
amounts due from banks, including the BangkoSentral and bonks abroad.

F. Conservatorship of Banks

a. Grounds for placing a bank or quasi-bank under conservatorship

i. Whenever, on the basis of a report submitted by the appropriate supervising or
examiningdepartment, the Monetary Board finds that a bank or a quasi-bank is in a state of
continuing inability or unwillingness to maintain a condition of liquidity deemed adequate to protect
the interest of depositors and creditors

b. Responsibilities of Bank Conservator appointed by BSP Monetary Board

i. To take charge of the assets, liabilities, and the management of the bank.
ii. To reorganize the management of the bank.
iii. To collect all monies and debts due said institution.
iv. To exercise all powers necessary to restore its viability.
v. To report and be responsible to the Monetary Board
vi. To have the power to overrule or revoke the actions of the previous management and board
ofdirectors of the bank or quasi-bank.

c. Qualifications of Bank Conservator

i. He should be competent and knowledgeable in bank operations and management.

d. Period of Conservatorship
i. The conservatorship shall not exceed one (1) year.

e. Grounds for termination of Conservatorship

i. The Monetary Board shall terminate the conservatorship when it is satisfied that the institutioncan
continue to operate on its own and the conservatorship is no longer necessary.
ii. The conservatorship shall likewise be terminated should the Monetary Board, on the basis of
thereport of the conservator or of its own findings, determine that the continuance in business of the
institution would involve probable loss to its depositors or creditors, in which case the provisions of
receivership and liquidation shall apply.

G. Proceedings in Bank Receivership

a. Grounds for Bank Receivership and Liquidation

i. Bank is unable to pay its liabilities as they become due in the ordinary course of business:Provided,
That this shall not include inability to pay caused by extraordinary demands induced byfinancial
panic in the banking community;
ii. Bank has insufficient realizable assets, as determined by the BangkoSentral, to meet itsliabilities, or
iii. Bank cannot continue in business without involving probable losses to its depositors or creditors;or
iv. Bank has willfully violated a cease and desist order under Section 37 that has become final,involving
acts or transactions which amount to fraud or a dissipation of the assets of the institution; in which
cases, the Monetary Board may summarily and without need for prior hearing forbid the institution
from doing business in the Philippines and designate the Philippine Deposit Insurance Corporation as
receiver of the banking institution.

b. Receivers of Bank and Quasi Banks

i. PDIC for Banking institution
 ii. For a quasi-bank, any person of recognized competence in banking or finance may be designed
asreceiver

c. Procedures for Bank or Quasi-Bank Receivership

i. The receiver shall immediately gather and take charge of all the assets and liabilities of
theinstitution, administer the same for the benefit of its creditors, and exercise the general powers of
a receiver under the Revised Rules of Court but shall not, with the exception of administrative
expenditures, pay or commit any act that will involve the transfer or disposition of any asset of the
institution: Provided, That the receiver may deposit or place the funds of the institution in non-
speculative investments.
ii. The receiver shall determine as soon as possible, but not later than ninety (90) days from takeover,
whether the institution may be rehabilitated or otherwise placed in such a condition so that it may
be permitted to resume business with safety to its depositors and creditors and the general public:
Provided, That any determination for the resumption of business of the institution shall be subject to
prior approval of the Monetary Board.

H. Proceedings for Bank Liquidation

a. Ground for Bank Liquidation

i. If the receiver determines that the institution cannot be rehabilitated or permitted to
resumebusiness in accordance with the next preceding paragraph, the Monetary Board shall notify
in writing the board of directors of its findings and direct the receiver to proceed with the
liquidation of the institution.

b. Procedures for Bank Liquidation

i. The receiver shall file ex parte with the proper regional trial court, and without requirement ofprior
notice or any other action, a petition for assistance in the liquidation of the institution pursuant to a
liquidation plan adopted by the Philippine Deposit Insurance Corporation for general application
to all closed banks. In case of quasi-banks, the liquidation plan shall be adopted by the Monetary
Board. Upon acquiring jurisdiction, the court shall, upon motion by the receiver after due notice,
adjudicate disputed claims against the institution, assist the enforcement of individual liabilities of
the stockholders, directors and officers, and decide on other issues as may be material to
implement the liquidation plan adopted. The receiver shall pay the cost of theproceedings from
the assets of the institution.
ii. The receiver shall convert the assets of the institutions to money, dispose of the same to
creditorsand other parties, for the purpose of paying the debts of such institution in accordance
with the rules on concurrence and preference of credit under the Civil Code of the Philippines and
he may, in the name of the institution, and with the assistance of counsel as he may retain, institute
such actions as may be necessary to collect and recover accounts and assets of, or defend any
action against, the institution. The assets of an institution under receivership or liquidation shall be
deemed in custodialegis in the hands of the receiver and shall, from the moment the institution was
placed under such receivership or liquidation, be exempt from any order of garnishment, levy,
attachment, or execution.

I.Nature of actions of Monetary Board for Conservatorship, Receivership and Liquidation

a. The actions of the Monetary Board taken for conservatorship, receivership and liquidation shall be
finaland executory, and may not be restrained or set aside by the court except on petition for certiorari
on the ground that the action taken was in excess of jurisdiction or with such grave abuse of discretion
as to amount to lack or excess of jurisdiction. The petition for certiorari may only be filed by the
 stockholders of record representing the majority of the capital stock within ten (10) days from receipt by
the board ofdirectors of the institution of the order directing receivership, liquidation or conservatorship.
b. The designation of a conservator or the appointment of a receiver under this section shall be
vestedexclusively with the Monetary Board.
c. The designation of a conservator is not a precondition to the designation of a receiver.

J. "Close Now Hear Later Order by BSP Monetary Board"

a. The "close now, hear later" doctrine has already been justified as a measure for the protection of
thepublic interest. Swift action is called for on the part of the BSP when it finds that a bank is in dire
straits. Unless adequate and determined efforts are taken by the government against distressed and
mismanaged banks, public faith in the banking system is certain to deteriorate to the prejudice of the
national economy itself, not to mention the losses suffered by the bank depositors, creditors,
andstockholders, who all deserve the protection of the government.
b. Due process does not necessarily require a prior hearing; a hearing or an opportunity to be heard may
besubsequent to the closure. One can just imagine the dire consequences of a prior hearing: bank runs
would be the order of the day, resulting in panic and hysteria. In the process, fortunes may be wiped
out and disillusionment will run the gamut of the entire banking community.
c. The doctrine is founded on practical and legal considerations to obviate unwarranted dissipation of the
bank's assets and as a valid exercise of police power to protect the depositors, creditors, stockholders,
and the general public. Swift, adequate and determined actions must be taken against financially
distressed and mismanaged banks by government agencies lest the public faith in the banking system
deteriorate tothe prejudice of the national economy.
d. Accordingly, the MB can immediately implement its resolution prohibiting a banking institution to
dobusiness in the Philippines and, thereafter, appoint the PDIC as receiver. The procedure for the
involuntary closure of a bank is summary and expeditious in nature. Such action of the MB shall be final
and executory, but may be later subjected to a judicial scrutiny via a petition for certiorari to be filed by
the stockholders of record of the bank representing a majority of the capital stock. Obviously, this
procedure is designed to protect the interest of all concerned that is, the depositors, creditors and
stockholders, the bank itself and the general public. The protection afforded public interest warrants the
exercise of a summary closure.

K. Administrative sanctions on Banks and Quasi-Banks

a. Grounds for sanctioning Banks and Quasi-Banks

i. Willful violation of banking laws and rules and regulations of BSP
ii. Willful delay in submission of reports to BSP
iii. Refusal to permit examination into the affairs of the institution
iv. Willful making of a false or misleading statement to the Board or the appropriate supervising
andexamining department or its examiners
v. A false or misleading statement to the Board or the appropriate supervising and
examiningdepartment or its examiners; any willful failure or refusal to comply with, or violation of,
any banking law or any order, instruction or regulation issued by the Monetary Board, or any
order,instruction or ruling by the Governor
vi. Commission of irregularities
vii. Conducting business in an unsafe or unsound manner as may be determined by the MonetaryBoard

b. Administrative sanctions that may be imposed

i. fines in amounts as may be determined by the Monetary Board to be appropriate, but in no case
toexceed Thirty thousand pesos (P30,000) a day for each violation, taking into consideration the
 attendant circumstances, such as the nature and gravity of the violation or irregularity and the
sizeof the bank or quasi-bank;
ii. suspension of rediscounting privileges or access to BangkoSentral credit facilities;
iii. suspension of lending or foreign exchange operations or authority to accept new deposits or
makenew investments;
iv. suspension of interbank clearing privileges; and/or
v. revocation of quasi-banking license.

VI. Anti-Money Laundering Law (AMLA) RA, 9160 a.k.a. Anti-Money Laundering Act of 2001 as amended by R.A.
9194 and R.A. 10168 a.k.a. Terrorism Financing. Prevention and Suppression Act of 2012) and RA 10365 a.k.a AN
ACT FURTHER STRENGTHENING THE ANTI-MONEY LAUNDERING LAW)

A. 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
forthe proceeds of any unlawful activity.

Consistent with its foreign policy, the Philippines shall extend cooperation in transnational investigations and
prosecutions of persons involved in money laundering activities wherever committed.

B. Definition of Money Laundering - 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: (Acts
punishable asMoney Laundering)
1. Transacts said monetary instrument or property;
2. Converts, transfers, disposes of, moves, acquires, possesses or uses said monetary instruments or property
orproceeds of any unlawful activity.
3. Conceals or disguises the true nature, source, location, disposition, movement or ownership of or rights
withrespect to said monetary instruments or property or proceeds of unlawful activity;
4. Attempts or conspires to commit Money Laundering referred to in par. 1), 2) & 3);
5. Aids, abets, assists in or counsels the commission of the Money Laundering offenses referred to in par. 1),
2) & 3)above;
6. Performs or fails to perform any act as a result of which he facilitates the offense of Money Laundering
referred toin par. 1), 2) & 3) above.
7. Any covered person who, knowing that a covered or suspicious transaction is required under the AMLA
to bereported to the AMLC, fails to do so.

C. Predicate Crimes of Money Laundering (34 Crimes)

1. Kidnapping for ransom under the Revised Penal Code (RPC)

2. Drug Trafficking and other violations of the Comprehensive Dangerous Drugs Act of 2002
3. Graft and Corruption (R.A. No. 3019, as amended)
4. Plunder (R.A. No. 7080, as amended)
5. Robbery and extortion (RPC)
6. Jueteng and Masiao (PD 1602)
7. Piracy (RPC & PD 532)
8. Qualified Theft (RPC)
9. Swindling/Estafa (RPC)
10. Smuggling (R.A. Nos. 455 & 1937)
11. Violations of Electronic Commerce Act of 2000 (R.A. No. 8792)
12. Hijacking (R.A. No. 6235), Destructive Arson and Murder (RPC)
13. Terrorism and Conspiracy to Commit Terrorism (R.A. No. 9372);
 14. Financing of Terrorism (R.A. No. 10168)
15. Bribery and Corruption of Public Officers (RPC);
16. Frauds and Illegal Exactions and Transactions (RPC);
17. Malversation of Public Funds (RPC);
18. Forgeries and Counterfeiting (RPC);
19. Trafficking in Persons (R.A. No. 9208
20. Violations of the Revised Forestry Code (PD 705);
21. Violations of the Philippine Fisheries Code of 1998 (R.A. No. 8550);
22. Violations of the Philippine Mining Act of 1995 (R.A. No. 7942);
23. Violations of the Wildlife Resources Conservation and Protection Act (R.A. No. 9147);
24. Violations of the National Caves and Cave Resources Management Protection Act (R.A. No. 9072);
25. Carnapping (R.A. No. 6539);
26. Illegal/Unlawful Possession, Manufacture, Dealing In, Acquisition or Disposition of Firearms, Ammunitions
andExplosives (PD 1866); Amendments to AMLA:
27. Fencing (PD 1612);
28. Illegal Recruitment (R.A. No. 8042);
29. Violations of the Intellectual Property Code;
30. Voyeurism (R.A. No. 9995);
31. Child Pornography (R.A. No. 9775);
32. Child Prostitution, Trafficking, and other forms of Abuse (R.A. No. 7610);
33. Fraudulent practices and other violations of the Securities Regulation Code (R.A. No. 8799); and
34. Felonies or offenses of a similar nature that are punishable under the penal laws of other countries.

D. Amount of Covered Transaction for Reporting to AMLC

 A transaction in cash or other equivalent monetary instrument exceeding Five Hundred Thousand pesos
(Php500,000.00)
 A transaction exceeding One Million pesos (Phpl,000,000.00) in cases of jewelry dealers, dealers in
precious metals and dealers in precious stones.

E. Suspicious Transactions that shall also be reported to AMLC

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 orderto avoid being the subject of reporting requirements under the AMLA;
5. any circumstance relating to the transaction which is observed to deviate from the profile of the client
and/or theclient's past transactions with the covered person;
6. the transaction is in any way related to an unlawful activity or any money laundering activity or offense
that isabout to be committed, is being or has been committed; or
7. any transaction that is similar, analogous or identical to any of the foregoing.

F. Covered persons, natural or juridical, required to report to AMLC covered transactions and suspicious
transactions

1. Under BangkoSentralngPilipinas
a. Banks
b. Non-banks
c. Quasi-banks
d. Trust entities
e. Nonstock savings and loan associations
 f. Foreign exchange dealers,
g. Electronic money issuers
h. Pawnshops,
i. Money changers,
j. Remittance and transfer companies
k. All other persons and their subsidiaries and affiliated supervised or regulated by the BSP.

2. Under Insurance Commission

a. Insurance companies
b. Pre-need companies
c. Insurance agents
d. Insurance brokers
e. Professional reinsurers
f. Holding companies
g. Holding company system
h. Mutual benefit associations
i. All other persons and their subsidiaries and affiliated supervised or regulated by the
InsuranceCommission

3. Under Securities and Exchange Commission

a. Securities dealers, brokers, salesmen, investment houses, and other similar persons managing
securities orrendering services such as investment agents.
b. mutual funds or open-end companies, close-end investment, investment companies or issuers and
othersimilar other entities administering or otherwise dealing in commodities, or financial derivatives
based thereon,valuable objects, cash substitutes and other similar monetary instruments or
properties supervised and regulated by the SEC.

4. Other Designated Non-Financial Business and Professionals

a. Jewelry dealers, dealers in precious metals, and dealers in precious stones for transactions in excess
of P1M.
b. Land Registration Authority and all of its Register of Deeds on all real estate transaction with
priceexceeding P500,000
1. Jewelry dealers in precious metals, who, as a business, trade in precious metals, for transactions in
excess of P1M.
2. Company service providers to 3rd parties
a. acting as a formation agent of juridical persons.
b. acting as (or arranging for another person to act as a director or corporate secretary of a
company, apartner of a partnership, or a similar position in relation to other juridical persons;
c. providing a registered office; business address or accommodation, correspondence or
administrativeaddress for a company, a partnership or any other legal person or arrangement;
and
d. acting as (or arranging for another person to act as) a nominee shareholder for another person.
3. Person providing the following services
a. managing of client money, securities or other assets;
b. management of bank, savings or securities accounts;
c. organization of contributions for the creation, operation or management of companies; and
d. creation, operation or management of juridical persons or arrangements, and buying and
sellingbusiness entities.

5. Persons excluded to report covered transactions or suspicious transactions to AMLC

 1. Lawyers if acting as independent legal professionals in relation to information concerning their
clients or wheredisclosure of information would compromise client confidences or the attorney-
client relationship
2. Certified public accountants if acting as independent legal professionals in relation to information
concerning their clients or where disclosure of information would compromise client confidences or
the CPA-client relationship

G. Jurisdiction over Money Laundering Cases

a. Regional Trial Court. - The regional trial courts shall have the jurisdiction to try money laundering cases
committed by private individuals, and public officers not covered by the jurisdiction of the
Sandiganbayan.
b. Sandiganbayan. - The Sandiganbayan shall have jurisdiction to try money laundering cases committed
by public officers under its jurisdiction, and private persons who are in conspiracy with such public
officers.

H. Prosecution of Money Laundering Cases

a. Independent Proceedings. - The prosecution of money laundering and the unlawful activity shall
proceedindependently. Any person may be charged with and convicted of both money laundering
and the unlawful activity.
b. Separateand Distinct Elements. - The elements of money laundering are separate and distinct from the
elements of the unlawful activity. The elements of the unlawful activity, including the identity of the
perpetrators and the details of the commission of the unlawful activity, need not be established by
proof beyond reasonable doubt inthe case for money laundering.
c. Knowledge. - The element of knowledge may be established by direct or circumstantial evidence.

I. Anti-Money Laundering Council - refers to the financial intelligence unit of the Republic of the Philippines
which is the government agency tasked to implement the AMLA.

a. Composition of Anti-Money Laundering Council

i. Chairperson -- BSP Governor
ii. Member – Insurance Commissioner
iii. Member – SECChairperson

b. Unanimous Decision. - The AMLC shall act unanimously in discharging its functions. In case of
incapacity,absence, or disability of any member, the officer duly designated or authorized to discharge
the functions of theGovernor of the BSP, the Commissioner of the IC, and the Chairperson of the SEC, as
the case may be, shall act in his stead in the AMLC.

J. Preventive Measures

a. Customer Due Diligence. - Covered persons shall establish and record the true identity of their clients
based on official documents, as defined under Rule 3 of RIRR of AMLA.

b. Customer Identification
a. Face-to-Face Contact - Covered persons shall conduct face-to-face contact at the
commencement of therelationship, or as reasonably practicable so as not to interrupt the normal
conduct of business
b. Minimum Customer information and Identification Documents
i. Name of customer;
ii. Date and place of birth;
 iii. Name of beneficial owner, if applicable;
iv. Name of beneficiary (in case of insurance contracts or remittance transactions);
v. Present address:
vi. Permanent addresses;
vii. Contact number or information:
viii. Nationality;
ix. Specimen signatures or biometrics of the customer,
x. Nature of work and name of employer or nature of self-employment/ business, if applicable;
xi. Sources of funds or property, and
xii. Tax Identification Number (TIN), Social Security System. (SSS) number or Government
ServiceInsurance System (GSIS) number, if applicable.

c. Prohibited Accounts
a. Anonymous Accounts and Accounts under Fictitious Names. - Covered persons shall
maintaincustomers' account only in the true and full name of the account owner or holder.
Anonymous accounts, accounts under fictitious names, and all other accounts shall be absolutely
prohibited.
b. Numbered Accounts. Numbered accounts, except non-checking numbered accounts, shall not be
allowed.Covered and suspicious transaction reports involving non-checking numbered accounts
shall contain the true name of the account holder.

K. Record Keeping. - Covered persons shall maintain and safely store for five (5) years from the dates of
transactionsall records of customer identification and transaction documents of their customers or five (5) years
from the date the account is closed.

L. Transaction Reporting. - Covered persons shall report to the AMLC all covered transactions and
suspicioustransactions within five (5) working days, unless the AMLC prescribes a different period not exceeding
fifteen (15) working days, from the occurrence thereof.

M. For Suspicious transactions, "occurrence" refers to the date of determination of the suspicious nature of
thetransaction, which determination should be made not exceeding ten (10) calendar days from the date of
transaction. However, if the transaction is in any way related to, or the person transacting is involved in or
connected to, an unlawful activity or money laundering offense, the la-day period for determination shall be
reckoned from the date the covered person knew or should have known the suspicious transaction indicator.

N. Freeze Order - Upon verified ex parte petition by the AMLC and after determination that probablecause
exists that any monetary instrument or property is in any way related to an unlawful activity, the Court of
Appeals may issue a freeze order, which shall be effective immediately, directing the concerned covered
persons and government agency to desist from allowing any transaction, withdrawal, transfer, removal,
conversion, concealment, or other disposition of the subject monetary instrument or property.

a. Freezing of Related Accounts and Materially-Linked Accounts. - Considering the intricate and
diverseweb of interlocking accounts that a person may create in different covered persons, and the
high probability that these accounts are utilized to divert, move, conceal, and disguise the monetary
instrument or property subject of the freeze order, the AMLC may include in its petition the freezing of
related and materially-linked accounts.

b. Period to Resolve Petition. - The Court of Appeals shall resolve the petition to freeze within twenty-
four(24) hours from filing thereof.
 c. Effectivity of Freeze Order. - The freeze order shall be effective immediately and shall not exceed six (6)
months depending upon the circumstances of the case. On motion of the AMLC filed before the
expiration of the original period of the freeze order, the court may, for good cause shown, extend its
effectivity. Upon the timely filing of such motion and pending resolution by the Court of Appeals, the
freeze order shall remain effective.

O. Bank Inquiry with Court Order. - 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
into or examine any particular deposit or investment account, including related accounts, with any banking
institution or non-bank financial institution, upon order by the Court of Appeals based on an ex parte
application in cases of violation of the AMLA when it has been established that probable cause exists that the
deposits or investments involved, including related accounts, are in any way related to an unlawful activity or a
money laundering offense.
a. Period to Resolve Application - The Court of Appeals shall resolve the application within twenty-four(24)
hours from filing thereof.
b. Inquiry into or Examination of Related Accounts. - A court order ex parte must be obtained before
theAMLC can inquire into the related accounts. The procedure for the ex parte application for an order
ofinquiry into the principal account shall be the same for that of the related accounts.
c. Compliance with Article III, Sections 2 and 3 of the Constitution. - The authority to inquire into orexamine
the main account and the related accounts shall comply with the requirements of Article III, Sections 2
and 3 of the 1987 Constitution.

P. Bank Inquiry without Court Order. - The AMLC shall issue a resolution authorizing the AMLC Secretariat
toinquire into or examine anyparticular deposit or investment account, including related accounts, with any
banking institution or non-bank financial institution and their subsidiaries and affiliates when it has been
established that probable cause exists that the deposits or investments involved, including related accounts,
are in any way related to any of the following unlawful activities: (Predicate crimes that may authorize AMLC to
inquire bank accounts even without Court Order from Court of Appeals)

a. Kidnapping for ransom under Article 267 of Act No. 3815,otherwise known as the Revised Penal Code,
as amended;
b. 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 2002;
c. Hijacking and other violations under Republic Act No. 6235; destructive arson and murder, as defined
under the Revised Penal Code, as amended;
d. Felonies or offenses of a nature similar to those mentioned in Section 3(i) (1), (2) and (12) of the
AMLAwhich are punishable under the penal laws of other countries;
e. Terrorism and conspiracy to commit terrorism as defined and penalized under Republic Act No.
9372;and
f. 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.

Q. Asset Forfeiture
a. Civil Forfeiture. - Upon determination that probable cause exists that any monetary instrument or
property is in any way related to an unlawful activity or a money laundering offense, the AMLC shall file
with the regional trial court, through the Office of the Solicitor General, a verified petition for civil
forfeiture.
b. No Prior Criminal Charge, Pendency of or Conviction Necessary. - No prior criminal charge, pendencyof
or conviction for an unlawful activity or money laundering offense is necessary for the commencement
or the resolution of a petition for civil forfeiture.
c. Asset Forfeiture in Money Laundering Cases. - Where there is conviction for money laundering, the court
shall issue a judgment of forfeiture in favor of the Government of the Philippines with respect to the
monetary instrument or property found to be proceeds of an unlawful activity.