SPECIAL COMMERCIAL LAW

1. LETTERS OF CREDIT (Articles 567-572), Code of Commerce

2. TRUST RECEIPTS LAW (P.D No. 115)
3. THE NEW CENTRAL BANK ACT (R.A No. 7653)
4. GENERAL BANKING ACT (R.A No. 8791)
5. LAW ON SECRECY OF BANK DEPOSITS (R.A No. 1405, as amended)
6. PHILIPPINE DEPOSIT INSURANCE CORPORATION ACT (R.A No. 3591, as
amended)
7. ANTI-MONEY LAUNDERING LAW (R.A No. 9160, as amended by R.A No.
9194)
8. TRUTH IN LENDING ACT (R.A No. 3765)
9. ELECTRONIC COMMERCE ACT (R.A No. 8792)
10. DATA PRIVACY ACT (R.A No. 10173)
11. FINANCIAL REHABILITATION, INSOLVENCY, LIQUIDATION AND
SUSPENSION OF PAYMENTS (R.A No. 10142)
- FR RULES [A.M NO. 12-12-11-SC] and
- FLSP RULES [A.M NO. 15-04-06-SC]
12. FOREIGN INVESTMENTS ACT (R.A No. 7042) as amended
1. LETTERS OF CREDIT (Articles 567-572), Code of Commerce

TITLE XIII
Letters of Credit
ARTICLE 567. Letters of credit are those issued by one merchant to another, or for
purpose of attending to a commercial transaction.
ARTICLE 568. The essential conditions of letters of credit shall be:
1. To be issued in favor of a determined person and not to order.
2. To be limited to a fixed and specified amount, or to one or more
indeterminate amounts, but all included in a maximum sum the
limit of which must be exactly stated.
Letters of credit which do not have one of these conditions shall be considered simply
as letters of recommendation.

ARTICLE 569. Who issues a letter of credit shall be liable to the person on whom it was
issued for the amount paid by virtue of the same within the maximum fixed therein.
Letters of credit can not be protested, even when not paid, nor can the holder thereof
acquire any right of action for said nonpayment against the person who issued it.
The payor shall have a right to demand the proof of the identity of the person in whose
favor the letter of credit was issued.

ARTICLE 570. The donor of a letter of credit may annul it, informing the bearer and the
person to whom it is addressed of said revocation.

ARTICLE 571. The holder of a letter of credit shall pay the donor the amount received
without delay.
Should he not do so an action including attachment may be brought to recover said
amount with the legal interest and the current exchange in the place where the payment
was made to the place where it was repaid.

ARTICLE 572. If the holder of a letter of credit does not make use thereof within the
period agreed upon with the donor of the same, or, in the absence of a fixed period,
within six months from its date in any point of the Philippine Islands, and within twelve
months outside thereof, it shall be void in fact and in law.
2. TRUST RECEIPTS LAW (P.D No. 115)

PROVIDING FOR THE REGULATION OF TRUST RECEIPT TRANSACTIONS

WHEREAS, the utilization of trust receipts, as a convenient business device to
assist importers and merchants solve their financing problems, had gained popular
acceptance in international and domestic business practices, particularly in commercial
banking transactions;
WHEREAS, there is no specific law in the Philippines that governs trust receipt
transactions, especially the rights and obligations of the parties involved therein and the
enforcement of the said rights in case of default or violation of the terms of
the trust receipt agreement;
WHEREAS, the recommendations contained in the report on the financial
system which have been accepted, with certain modifications by the monetary
authorities included, among others, the enactment of a law regulating the trust receipt
transactions;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines,
by virtue of the powers vested in me by the Constitution, as Commander-in-Chief of all
the Armed Forces of the Philippines, and pursuant to Proclamation No. 1081, dated
September 21, 1972, and General Order No. 1, dated September 22, 1972, as
amended, and in order to effect the desired changes and reforms in the social,
economic, and political structure of our society, do hereby order and decree and make
as part of the law of the land the following:

SECTION 1. Short Title. — This Decree shall be known as the Trust Receipts Law.

SECTION 2. Declaration of Policy. — It is hereby declared to be the policy of the state:

(a) to encourage and promote the use of trust receipts as an additional and
convenient aid to commerce and trade;
(b) to provide for the regulation of trust receipt transactions in order to assure
the protection of the rights and the enforcement of obligations of the parties
involved therein; and
(c) to declare the misuse and/or misappropriation of goods or proceeds
realized from the sale of goods, documents or instruments released
under trust receipts as a criminal offense punishable under Article Three
hundred and fifteen of the Revised Penal Code.

SECTION 3. Definition of terms. — As used in this Decree, unless the context

otherwise requires, the term — cd
(a) "Document" shall mean written or printed evidence of title to goods.
 (b) "Entrustee" shall refer to the person having or taking possession of
goods, documents or instruments under a trust receipt
transaction, and any successor in interest of such person for the
purpose or purposes specified in the trust receipt agreement.
(c) "Entruster" shall refer to the person holding title over the goods,
documents, or instruments subject of a trust receipt transaction,
and any successor in interest of such person.
(d) "Goods" shall include chattels and personal property other than:
money, things in action, or things so affixed to land as to become
a part thereof.
(e) "Instrument" means any negotiable instrument as defined in the
Negotiable Instrument Law; any certificate of stock, or bond or
debenture for the payment of money issued by a public or private
corporation, or any certificate of deposit, participation certificate
or receipt, any credit or investment instrument of a sort marketed
in the ordinary course of business or finance, whereby the
entrustee, after the issuance of the trust receipt, appears by virtue
of possession and the face of the instrument to be the owner.
"Instrument" shall not include a document as defined in
this Decree.
( f ) "Purchase" means taking by sale, conditional sale, lease, mortgage,
or pledge, legal or equitable. cdasia
(g) "Purchaser" means any person taking by purchase.
(h) "Security Interest" means a property interest in goods, documents
or instruments to secure performance of some obligations of the
entrustee or of some third persons to the entruster and includes
title, whether or not expressed to be absolute, whenever such title
is in substance taken or retained for security only.
(i) "Person" means, as the case may be, an individual, trustee, receiver,
or other fiduciary, partnership, corporation, business trust or other
association, and two or more persons having a joint or common
interest. acd
( j) "Trust Receipt" shall refer to the written or printed document signed
by the entrustee in favor of the entruster containing terms and
conditions substantially complying with the provisions of
this Decree. No further formality of execution or authentication
shall be necessary to the validity of a trust receipt.
(k) "Value" means any consideration sufficient to support a simple
contract.

SECTION 4. What constitutes a trust receipt transaction. — A trust receipt

transaction, within the meaning of this Decree, is any transaction by and between
 a person referred to in this Decree as the entruster, and another person referred
to in this Decree as the entrustee, whereby the entruster, who owns or holds
absolute title or security interests over certain specified goods, documents or
instruments, releases the same to the possession of the entrustee upon the
latter's execution and delivery to the entruster of a signed document called a
"trust receipt" wherein the entrustee binds himself to hold the designated goods,
documents or instruments in trust for the entruster and to sell or otherwise
dispose of the goods, documents or instruments with the obligation to turn over
to the entruster the proceeds thereof to the extent of the amount owing to the
entruster or as appears in the trust receipt or the goods, documents or
instruments themselves if they are unsold or not otherwise disposed of, in
accordance with the terms and conditions specified in the trust receipt, or for
other purposes substantially equivalent to any of the following: acd
1. In the case of goods or documents, (a) to sell the goods or
procure their sale; or (b) to manufacture or process the goods with
the purpose of ultimate sale: Provided, That, in the case of goods
delivered under trust receipt for the purpose of manufacturing or
processing before its ultimate sale, the entruster shall retain its
title over the goods whether in its original or processed form until
the entrustee has complied fully with his obligation under
the trust receipt; or (c) to load, unload, ship or transship or
otherwise deal with them in a manner preliminary or necessary to
their sale; or acd
2. In the case of instruments, (a) to sell or procure their sale or
exchange; or (b) to deliver them to a principal; or (c) to effect the
consummation of some transactions involving delivery to a
depository or register; or (d) to effect their presentation, collection
or renewal.
The sale of goods, documents or instruments by a person in the business of
selling goods, documents or instruments for profit who, at the outset of the transaction,
has, as against the buyer, general property rights in such goods, documents or
instruments, or who sells the same to the buyer on credit, retaining title or other interest
as security for the payment of the purchase price, does not constitute a trust receipt
transaction and is outside the purview and coverage of this Decree. cdt

SECTION 5. Form of trust receipts; contents. — A trust receipt need not be in any
particular form, but every such receipt must substantially contain
(a) a description of the goods, documents or instruments subject of
the trust receipt;
(2) the total invoice value of the goods and the amount of the draft to be paid
by the entrustee;
(3) an undertaking or a commitment of the entrustee
(a) to hold in trust for the entruster the goods, documents or instruments
therein described;
 (b) to dispose of them in the manner provided for in the trust receipt; and
(c) to turn over the proceeds of the sale of the goods, documents or instruments
to the entruster to the extent of the amount owing to the entruster or as appears in
the trust receipt or to return the goods, documents or instruments in the event of
their non-sale within the period specified therein.
The trust receipt may contain other terms and conditions agreed upon by the
parties in addition to those hereinabove enumerated provided that such terms and
conditions shall not be contrary to the provisions of this Decree, any existing laws, public
policy or morals, public order or good customs. cd

SECTION 6. Currency in which a trust receipt may be

denominated. — A trust receipt may be denominated in Philippine currency or
any foreign currency acceptable and eligible as part of international reserves of the
Philippines, the provisions of existing law, executive orders, rules and regulations
to the contrary notwithstanding: Provided, however, That in the case
of trust receipts denominated in foreign currency, payment shall be made in its
equivalent in Philippine currency computed at the prevailing exchange rate on the
date the proceeds of sale of the goods, documents or instruments held in trust by
the entrustee are turned over to the entruster or on such other date as may be
stipulated in the trust receipt or other agreements executed between the entruster
and the entrustee.

SECTION 7. Rights of the entruster. — The entruster shall be entitled to the proceeds
from the sale of the goods, documents or instruments released under
a trust receipt to the entrustee to the extent of the amount owing to the entruster
or as appears in the trust receipt, or to the return of the goods, documents or
instruments in case of non-sale, and to the enforcement of all other rights conferred
on him in the trust receipt provided such are not contrary to the provisions of
this Decree.

The entruster may cancel the trust and take possession of the goods,
documents or instruments subject of the trust or of the proceeds realized therefrom
at any time upon default or failure of the entrustee to comply with any of the terms
and conditions of the trust receipt or any other agreement between the entruster
and the entrustee, and the entruster in possession of the goods, documents or
instruments may, on or after default, give notice to the entrustee of the intention to
sell, and may, not less than five days after serving or sending of such notice, sell
the goods, documents or instruments at public or private sale, and the entruster
may, at a public sale, become a purchaser.
The proceeds of any such sale, whether public or private, shall be applied
(a) to the payment of the expenses thereof;
(b) to the payment of the expenses of re-taking, keeping and storing the
goods, documents or instruments;
 (c) to the satisfaction of the entrustee's indebtedness to the entruster.
The entrustee shall receive any surplus but shall be liable to the entruster
for any deficiency. Notice of sale shall be deemed sufficiently given if in
writing, and either personally served on the entrustee or sent by post-
paid ordinary mail to the entrustee's last known business address.

SECTION 8. Entruster not responsible on sale by entrustee. — The entruster

holding a security interest shall not, merely by virtue of such interest or having
given the entrustee liberty of sale or other disposition of the goods, documents or
instruments under the terms of the trust receipt transaction, be responsible as
principal or as vendor under any sale or contract to sell made by the entrustee.

SECTION 9. Obligations of the entrustee. — The entrustee shall:

(1) hold the goods, documents or instruments in trust for the entruster and
shall dispose of them strictly in accordance with the terms and conditions of
the trust receipt;
(2) receive the proceeds in trust for the entruster and turn over the same to the
entruster to the extent of the amount owing to the entruster or as appears on
the trust receipt;
(3) insure the goods for their total value against loss from fire, theft, pilferage
or other casualties;
(4) keep said goods or proceeds thereof whether in money or whatever form,
separate and capable of identification as property of the entruster;
(5) return the goods, documents or instruments in the event of non-sale or upon
demand of the entruster; and
(6) observe all other terms and conditions of the trust receipt not contrary to
the provisions of this Decree.

SECTION 10. Liability of entrustee for loss. — The risk of loss shall be borne by the
entrustee. Loss of goods, documents or instruments which are the subject of
a trust receipt, pending their disposition, irrespective of whether or not it was due
to the fault or negligence of the entrustee, shall not extinguish his obligation to the
entruster for the value thereof.

SECTION 11. Rights of purchaser for value and in good faith. — Any purchaser of
goods from an entrustee with right to sell, or of documents or instruments through
their customary form of transfer, who buys the goods, documents, or instruments
for value and in good faith from the entrustee, acquires said goods, documents or
instruments free from the entruster's security interest.
SECTION 12. Validity of entruster's security interest as against creditors. — The
entruster's security interest in goods, documents, or instruments pursuant to the
written terms of a trust receipt shall be valid as against all creditors of the entrustee
for the duration of the trust receipt agreement.

SECTION 13. Penalty clause. — The failure of an entrustee to turn over the proceeds
of the sale of the goods, documents or instruments covered by a trust receipt to
the extent of the amount owing to the entruster or as appears in the trust receipt
or to return said goods, documents or instruments if they were not sold or disposed
of in accordance with the terms of the trust receipt shall constitute the crime of
estafa, punishable under the provisions of Article Three hundred and fifteen,
paragraph one (b) of Act Numbered Three thousand eight hundred and fifteen, as
amended, otherwise known as the Revised Penal Code. If the violation or offense
is committed by a corporation, partnership, association or other juridical entities,
the penalty provided for in this Decree shall be imposed upon the directors,
officers, employees or other officials or persons therein responsible for the offense,
without prejudice to the civil liabilities arising from the criminal offense.

SECTION 14. Cases not covered by this Decree. — Cases not provided for in
this Decree shall be governed by the applicable provisions of existing laws.

SECTION 15. Separability clause. — If any provision or section of this Decree or the
application thereof to any person or circumstance is held invalid, the other
provisions or sections hereof and the application of such provisions or sections to
other persons or circumstances shall not be affected thereby.

SECTION 16. Repealing clause. — All Acts inconsistent with this Decree are hereby
repealed.

SECTION 17. This Decree shall take effect immediately.

5. LAW ON SECRECY OF BANK DEPOSITS (R.A No. 1405, as amended)

REPUBLIC ACT NO. 1405

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

SECTION 1. It is hereby declared to be the policy of the Government to give

encouragement to the people to deposit their money in banking institutions and to
discourage private hoarding so that the same may be properly utilized by banks in
authorized loans to assist in the economic development of the country.

SECTION 2. All deposits of whatever nature with banks or banking institutions in the
Philippines including investments in bonds issued by the Government of the Philippines,
its political subdivisions and its instrumentalities, are hereby considered as of an
absolutely confidential nature and may not be examined, inquired or looked into by any
person, government official, bureau or office, except upon written permission of the
depositor, or in cases of impeachment, or upon order of a competent court in cases of
bribery or dereliction of duty of public officials, or in cases where the money deposited
or invested is the subject matter of the litigation.

SECTION 3. It shall be unlawful for any official or employee of a banking institution to

disclose to any person other than those mentioned in Section two hereof any information
concerning said deposits.

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

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

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

Approved, September 9, 1955.
Published in the Official Gazette, Vol. 51, No. 10, p. 4976 in October 1955
(Secrecy of Bank Deposits Act, Republic Act No. 1405, [September 9,
1955])

5. LAW ON SECRECY OF BANK DEPOSITS (R.A No. 1405, as amended)

 PRESIDENTIAL DECREE NO. 1792
AMENDING REPUBLIC ACT NO. 1405 *
WHEREAS, under existing legal framework, the Central Bank has the
authority to examine all records of banks in the discharge of its responsibilities under
the Central Bank Charter; cd i
WHEREAS, the prohibition against inquiry into bank deposits adversely
delimits the examining authority of the Central Bank;
WHEREAS, limited examination powers operate against effective supervision
of banks and endanger the safety of deposits which may affect the public's faith in
the banking system.
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the
Philippines, by virtue of the powers vested in me by the Constitution, do hereby
decree and make the following part of the law of the land;

SECTION 1. Section 2 of Republic Act No. 1405 is hereby amended to read as

follows: cd i
"Sec. 2. All deposits of whatever nature with banks or
banking institutions in the Philippines including investments in
bonds issued by the Government of the Philippines, its political
subdivisions and its instrumentalities, are hereby considered as of
an absolutely confidential nature and may not be examined,
inquired or looked into by any person, government official, bureau
or office, except when the examination is made in the course of a
special or general examination of a bank and is specifically
authorized by the Monetary Board after being satisfied that there is
reasonable ground to believe that a bank fraud or serious
irregularity has been or is being committed and that it is necessary
to look into the deposit to establish such fraud or irregularity, or
when the examination is made by an independent auditor hired by
the bank to conduct its regular audit provided that the examination
is for audit purposes only and the results thereof shall be for the
exclusive use of the bank, or upon written permission of the
depositor, or in cases of impeachment, or upon order of a
competent court in cases of bribery or dereliction of duty of public
officials, or in cases where the money deposited or invested is the
subject matter of the litigation."

SECTION 2. Section 3 of the same Act is hereby amended to read as follows:

"Sec. 3. It shall be unlawful for any official or employee of a
bank to disclose to any person other than those mentioned in
Section Two hereof, or for an independent auditor hired by a bank
to conduct its regular audit to disclose to any person other than a
 bank director, official or employee authorized by the bank, any
information concerning said deposits." Cda

SECTION 3. This Decree shall take effect immediately.

DONE in the City of Manila, this 16th day of January, in the year of Our
Lord, Nineteen Hundred and Eighty-One.
Published in the Official Gazette, Vol. 77 No. 19, 2451-101 Supp., on
May 11, 1981.
||| (Amending R.A. No. 1405, Presidential Decree No. 1792, [January 16,
1981])