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I. SECRECY OF BANK DEPOSITS

1. BANCO FILILPINO V. PURISIMA (1988)
Customs special agent Caturla was investigated by the Tanodbayan for violation of R.A. No. 3016 (Anti-Graft
and Corrupt Practices Act). He moved for the quashal of the subpoenas issued to BF Bank covering the
accounts under his name and his family on the ground that it allegedly violates the Bank Secrecy Act. BF Bank
also assailed the issuance of the subject subpoenas based on the same ground.

1st ISSUE: Whether or not there was a violation of the BSA?

HELD: None. The enactment of Sec. 8 of RA No. 3016 (“bank deposits shall be taken into
consideration….notwithstanding any prohibition of law to the contrary”) clearly intended to provide an
additional ground for the examination of bank deposits for without such provision, the prosecutors would be
hampered if not altogether frustrated in the prosecution of those charged with having acquired unexplained
wealth while in public office.

2nd ISSUE: WON “unexplained wealth may be considered to be similar with cases of bribery or dereliction of
duty provided under Sec. 2 of the BSA?
HELD: Yes. The inquiry into illegally acquired property - or property NOT “legitimately acquired” – extends to
cases where such property is concealed by being held by or recorded in the name of other persons.

2. EJERCITO V. SANDIGANBAYAN (2006)

Former President Ejercito challenges the inclusion of his trust account (Trust Account No. 858) in the
investigation contending that R.A. No. 4015 (Bank Secrecy Act) only applies to “deposits” which strictly means
the money delivered to the bank by which a creditor-debtor relationship is created between the depositor and
the bank.

ISSUE: WON trust accounts are included in the “deposits” contemplated under the BSL?
HELD: Yes. The trust agreement between petitioner Ejercito and Urban Bank provides that the trust account
covers “deposits, placement or investment of funds” by Urban Bank and in behalf of petitioner. The money
deposited under Trust Account No. 858 was therefore intended not merely to remain with the bank but to be
invested by it elsewhere. The policy behind BSA (under Sec. 1) is “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”. To hold that his types of account is not protected would encourage private hoarding of funds that
could otherwise be invested by banks in other ventures, contrary to the policy behind the law.

Furthermore, Sec. 2 of BSL provides “all deposits of whatever nature” and “in cases where the money
deposited or invested is the subject matter of the litigation.”

3. CHINA BANKING CORP. V. CA (2006)

Gotianuy charged his daughter Margaret Dee of stealing his US$ deposits with Citibank by using his checks
which were deposited to the latter’s account with China Banking Corp. The trial court subpoenaed the bank
but it refused to comply invoking BSL.

ISSUE: WON the prohibition under the BSA is applicable in the case at bar?
HELD: No. The Citibank checks readily demonstrates that Gotianuy is one of the payees of said checks. Being a
co-payee thereof, then he can be considered as a co-depositor of said checks. His request for the assailed
subpoena is tantamount to an express permission of a depositor for the disclosure of the name of the
accountholder.

4. BANGAYAN V. RCBC (2011)

The case stemmed from the Surety Agreement executed between Bangayan and RCBC which is secured by his 2
checking accounts with the latter. RCBC garnished Bangayan’s account which resulted in the dishonor of the
checks he issued. Bangayan claimed that the garnishment made by RCBC was unlawful since there was no writ
issued to that effect. He later on filed a case for damages against the bank. RCBC claims that the Surety
Agreement is in favor of several companies that defaulted in their payment of customs duties that resulted in
the imposition of a lien over Bangayan’s accounts, , particularly for the payment of customs duties assessed by
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the Bureau of Customs.. It further claimed that it had funded the letter of credit availed of by Lotec Marketing
to finance the latter’s importation with Bangayan’s account, who agreed to guarantee Lotec Marketing’s
obligations under the Surety Agreement. Bangayan also alleged that RCBC disclosed to a third party (the BOC)
classified information about the identity and nature of the transactions and deposits, in violation of the Bank
Secrecy Act. RCBC counters that no confidential information on Bangayan’s bank accounts was disclosed.

ISSUE: WON RCBC violated the BSA?

HELD: No. The Customs’s investigation with a subpoena/duces tecum sent to witness Mr. Lao on the three
companies, guaranteed by Bangayan naturally raised an alarm. Mr. Lao was asked to bring documents on the
questioned importations. The witness denied having given any statement in connection therewith. No evidence
was introduced by Bangayan to substantiate his claim that RCBC gave any classified information in violation of
Republic Act No. 1405.

In his Memorandum, Bangayan argues that there was a wrongful disclosure by RCBC Of confidential
information regarding his bank accounts in violation of the Bank Secrecy Act. However, he failed to identify
which confidential information RCBC divulged before the BOC that would make it liable under the said law.

5. SUBIDO V. CA (2016)
Subido Pagente Certeza Mendoza Law Office assails the legality of the CA’s Resolution allowing the Anti-Money
Laundering Council (AMLC) to inquire into the bank accounts of the Binays, their corporations, and a law
office where a family member was once a partner (VP Binay’s daughter Abigail was once a partner of the law
office), contending that the same is unconstitutional, violating its rights to due process and privacy.

Sec. 11. of the AMLA, grants the AMLC to inquire into or examine any particular deposit or investment with
any banking institution or non-bank financial institution upon order of any competent court. A bank inquiry
order under this section does not necessitate any form of physical seizure of property of the account holder.
What the bank inquiry order authorizes is the examination of the particular deposits or investments in banking
institutions or non-bank financial institutions. The monetary instruments or property deposited with such
banks or financial institutions are not seized in a physical sense, but are examined on particular details such as
the account holder's record of deposits and transactions. The AMLA also provides exceptions to the Bank
Secrecy Act. Under Section 11, the AMLC may inquire into a bank account upon order of any competent court
in cases of violation of the AMLA, it having been established that there is probable cause that the deposits or
investments are related to unlawful activities as defined in Section 3(i) of the law, or a money laundering
offense under Section 4 thereof.

The provision provides safeguards before a bank inquiry order is issued, ensuring adherence to the general
state policy of preserving the absolutely confidential nature of Philippine bank accounts:
(1) The AMLC is required to establish probable cause as basis for its ex-parte application for bank inquiry
order;
(2) The CA, independent of the AMLC's demonstration of probable cause, itself makes a finding of probable
cause that the deposits or investments are related to an unlawful activity under Section 3(i) or a money
laundering offense under Section 4 of the AMLA;
(3) A bank inquiry court order ex-parte for related accounts is preceded by a bank inquiry court order ex-parte
for the principal account which court order ex-parte for related accounts is separately based on probable cause
that such related account is materially linked to the principal account inquired into; and
(4) The authority to inquire into or examine the main or principal account and the related accounts shall
comply with the requirements of Article III, Sections 2 and 3 of the Constitution.

The foregoing demonstrates that the inquiry and examination into the bank account are not undertaken
whimsically and solely based on the investigative discretion of the AMLC. In particular, the requirement of
demonstration by the AMLC, and determination by the CA, of probable cause emphasizes the limits of such
governmental action. We will revert to these safeguards under Section 11 as we specifically discuss the CA's
denial of SPCMB's letter request for information concerning the purported issuance of a bank inquiry order
involving its accounts.
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6. SANICO V. COLIPANO (2017) [???]

Colipano filed a complaint for breach of contract of carriage and damages against Sanico (operator) and Castro
(jeepney driver). The trial court decided in favor of Colipano [4] In her complaint, Colipano claimed that at
4:00 P.M. more or less of December 25, 1993, Christmas Day, she and her daughter were; paying passengers in
the jeepney operated by Sanico, which was driven by Castro.
COMMENT: I don’t know why this case was assigned but it does not involve anything about our topic.

7. DOÑA ADELA EXPORT INT’L INC. V. TRADE & INVESTMENT DEV’T CORP.
Doña Adela Export International, Inc., (DAEII) was judicially declared as insolvent. The court also declared
that all civil proceeding against it is deemed stayed. Later on, its receiver (Atty. Gonzales) was allowed by the
trial court to enter into a compromise agreement with TIDCORP and BPI. DAEII moved to reconsider the
approval of the compromise agreement claiming that TIDCORP and BPI’s agreement imposes on it several
obligations, which includes the waiver of confidentiality of its bank deposits and further claims that it is not a
party and signatory to the said agreement. It contends that R.A. No. 1405 requires the express and written
consent of the depositor to make the waiver effective.

ISSUE: WON the waiver of confidentiality of its bank deposits under the Compromise Agreement is binding
with DAEII and/or its receiver?
HELD: No. The waiver of confidentiality of DAEII’s bank deposits in the BPI-TIDCORP Joint Motion to
Approve Agreement lacks the required written consent of petitioner and conformity of the receiver thus, hold
DAEII is not bound by the said provision.

8. MARQUEZ V. DESIERTO (2001)

Union Bank Branch Manager (Julia Vargas Branch) Marquez was ordered by Ombudsman Desierto to produce
several bank documents for purposes of inspection in camera relative to various accounts involved in a case
pending in its office against Amado Lagdameo, et al. Marquez and Union Bank later on filed a petition for
declaratory relief with the RTC of Makati against the Ombudsman. They sought a declaration of their rights
from the court due to the clear conflict between RA No.6770 (The Ombudsman Act), Section 15 and R.A. No.
1405 (BSA), Sections 2 and 3.

ISSUE: WON there is a violation of the BSA?

HELD: Yes. Before an in camera inspection may be allowed, there must be a pending case before a court of
competent jurisdiction. Further, the account must be clearly identified, the inspection limited to the subject
matter of the pending case before the court of competent jurisdiction. The bank personnel and the account
holder must be notified to be present during the inspection, and such inspection may cover only the account
identified in the pending case. In the case at bar, there is yet no pending litigation before any court of
competent authority. What is existing is an investigation by the Office of the Ombudsman. In short, what the
office of the ombudsman would wish to do is to fish for additional evidence to formally charge Amado
Lagdameo, et. al., with the Sandiganbayan. Clearly, there was no pending case in court which would warrant
the opening of the bank account for inspection.

9. UNIONBANK V. CA (1999)
A P1M check was drawn against Account No. 111-01854-8 with Allied Bank payable to the order of Jose Alvarez.
Alvarez deposited the check Union Bank who credited the P1M to Mr. Alvarez’ account. Union Bank had the
check cleared (through Philippine Clearing House Corporation/”PCHC”). Upon the check’s presentment for
payment, the Union Bank’s staff committed a discrepancy in the clearing (P1M erroneously "under-encoded" to
P1,000 only). Union Bank discovered the under-encoding almost a year later. It notified Allied Bank of the
discrepancy by way of a charge slip for P999,000 for automatic debiting against of Allied Bank. However,
Allied Bank refused since the transaction was completed per your Union Bank's original instruction and client's
account is now insufficiently funded. Union Bank filed in the RTC of Makati a petition for the examination of
Account No. 111-01854-8. Both RTC and CA agreed to the dismissal it does not fall under any of the foregoing
exceptions to warrant a disclosure of or inquiry into the ledgers/books of account of the subject account and is
not the subject matter of the litigation.
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ISSUE: WON the account is covered by the confidentiality under the BSA?

HELD: Yes. Copied from the book: The depositary bank (Union Bank) was fishing information so it can
determine the culpability of the drawee bank (Allied Bank) and the amount of damages it can recover. Union
Bank does not seek to recover the amount contained in the checking account. The subject matter of the dispute
may be the amount of P999,000 that the depositary bank seeks from the drawee bank but it is not the
P999,000 deposited in the drawer’s account.

10. BSB GROUP, INC. V. SALLY GO (2010)

BSB Group, Inc., charged its cashier Sally Go (wife of its President) for estafa and/or qualified theft alleging
that several checks (totaling ₱1,534,135.50) issued by the company’s customers in payment of their obligation
were, instead of being turned over to the company’s coffers, indorsed by Go who deposited the same to her
personal banking account maintained at Security Bank. The RTC granted the issuance of subpoena duces
tecum/ad testificandum against the managers/records custodians of Security Bank. Go moved for the quashal
of the subpoenas invoking the absolutely confidential nature of the Metrobank account under the provisions of
Republic Act (R.A.) No. 1405.

ISSUE: WON the accounts are exempted from inquiry under the provisions of BSA?
HELD: Yes. In the criminal Information filed with the trial court, Go, unqualifiedly and in plain language, is
charged with qualified theft by abusing BSB’s trust and confidence and stealing cash. The Information makes
no factual allegation that in some material way involves the checks subject of the testimonial and
documentary evidence sought to be suppressed. Neither do the allegations in said Information make
mention of the supposed bank account in which the funds represented by the checks have allegedly been kept.

It can hardly be inferred from the indictment itself that the Security Bank account is the ostensible subject of
the prosecution’s inquiry. Without needlessly expanding the scope of what is plainly alleged in the Information,
the subject matter of the action in this case is the money alleged to have been stolen by Go, and not the money
equivalent of the checks which are sought to be admitted in evidence. Thus, it is that, which the prosecution is
bound to prove with its evidence, and no other.

It comes clear that the admission of testimonial and documentary evidence relative to respondent’s Security
Bank account serves no other purpose than to establish the existence of such account, its nature
and the amount kept in it. It constitutes an attempt by the prosecution at an impermissible inquiry into a
bank deposit account the privacy and confidentiality of which is protected by law. On this score alone, the
objection posed by respondent in her motion to suppress should have indeed put an end to the controversy at
the very first instance it was raised before the trial court.

11. PNB V. GANCAYCO (1965)

The defendants are DOJ’s special prosecutors (Emilio A. Gancayco and Florentino Flor) whom required PNB to
produce at a hearing the records of the bank deposits of Ernesto T. Jimenez, former administrator of the
Agricultural Credit and Cooperative Administration, who was then under investigation for unexplained wealth.
PNB declined invoking RA No. 1405. Defendants cited the Anti-Graft and Corrupt Practices Act (Republic Act
No. 3019) in support of their claim of authority (Bank deposits shall be taken into consideration in the
enforcement of this section, notwithstanding any provision of law to the contrary.”).

ISSUE: Whether a bank can be compelled to disclose the records of accounts of a depositor who is under
investigation for unexplained wealth?
HELD: Yes. While Republic Act No. 1405 provides that bank deposits are "absolutely confidential ... and
[therefore] may not be examined, inquired or looked into," except in those cases enumerated therein, the Anti-
Graft Law directs in mandatory terms that bank deposits "shall be taken into consideration in the enforcement
of this section, notwithstanding any provision of law to the contrary." The only conclusion possible is that
section 8 of the Anti-Graft Law is intended to amend section 2 of Republic Act No. 1405 by providing
additional exception to the rule against the disclosure of bank deposits.
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While section 2 of Republic Act 1405 declares bank deposits to be "absolutely confidential," it nevertheless
allows such disclosure in the following instances: (1) Upon written permission of the depositor; (2) In cases of
impeachment; (3) Upon order of a competent court in cases of bribery or dereliction of duty of public officials;
(4) In cases where the money deposited is the subject matter of the litigation. Cases of unexplained wealth
are similar to cases of bribery or dereliction of duty and no reason is seen why these two classes
of cases cannot be excepted from the rule making bank deposits confidential. The policy as to one
cannot be different from the policy as to the other. This policy express the motion that a public office is a public
trust and any person who enters upon its discharge does so with the full knowledge that his life, so far as
relevant to his duty, is open to public scrutiny.

12. INTENGAN V. CA (2002)

Citibank filed a complaint for violation of section 31 in relation to section 144 of the Corporation Code against
its 2 officers (Santos and Genuino). It alleged that with the use of two (2) companies in which they have
personal financial interest, they managed or caused existing bank clients/depositors to divert their money from
Citibank, N.A., such as those placed in peso and dollar deposits and money placements, to products offered by
other companies that were commanding higher rate of yields and it was able to determine that the bank clients
which Santos and Genuino helped/caused to divert their deposits/money placements with Citibank, NA to the
2 companies for subsequent investment in securities, shares of stocks and debt papers in other companies
were: Carmen Intengan, Rosario Neri, and Rita Brawner (the petitioners). Petitioners filed a case for an
alleged violation of Republic Act No. 1405 against the prosecutors and Citibank officers.

ISSUE: WON the accounts of Intengan, et. al., which are foreign currency deposits, may be inquired into?
HELD: No. Under R.A. No. 6426 (Foreign Currency Deposit Act of the Philippines) there is only a single
exception to the secrecy of foreign currency deposits, that is, disclosure is allowed only upon the written
permission of the depositor. Incidentally, the acts of private respondents complained of happened before
the enactment of AMLA on September 29, 2001.

A case for violation of Republic Act No. 6426 should have been the proper case brought against private
respondents. Private respondents Lim and Reyes admitted that they had disclosed details of petitioners’ dollar
deposits without the latter’s written permission.

Note: The case was dismissed since their action already prescribed.

13. PCIB V. CA (1991)

A group of laborers filed a case before the NLRC wherein they obtain a favorable judgment (payment of
backwages) against Marinduque Mining & Industrial Corp. After failing to enforce the judgment against the
latter’s cash/movable/immovable properties, the sheriff prepared on his own a Notice of Garnishment 6 banks
including petitioner PCIB. PCIB’s lawyer, acting on a tip regarding the notice, requested the withholding of any
release of the deposit of Marinduque Mining with PCIB. Since no TRO was issued against NLRC to enforce the
judgment, PCIB’s bank manager (Henares) allowed the garnishment of a portion of the money judgment (only
the available balance of the company). Marinduque Mining later on filed a complaint for the alleged unlawfully
withdrawal and notwithstanding the alleged unauthorized disclosure of the said current deposit in the RTC of
Bacolod City. The trial court ruled in favor of Marinduque Mining.

ISSUE: Whether or not PCIB violated Republic Act No. 1405, otherwise known as the Secrecy of Bank Deposits
Act, when they allowed the sheriff to garnish the deposit of Marinduque Mining.
HELD: No. The Court in China Banking Corporation vs. Ortega had the occasion to dispose of this issue when
it stated, thus:

It is clear from the discussion of the conference committee report on Senate Bill No. 351 and
House Bill No. 3977, which later became Republic Act 1405, that the prohibition against
examination of or inquiry into a bank deposit under Republic Act 1405 does not preclude its
being garnished to insure satisfaction of a judgment. Indeed there is no real inquiry in
such a case, and if existence of the deposit is disclosed the disclosure is purely incidental to
the execution process. It is hard to conceive that it was ever within the intention of Congress
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to enable debtors to evade payment of their just debts, even if ordered by the Court, through the
expedient of converting their assets into cash and depositing the same in a bank.

Since there is no evidence that PCIB and Henares themselves divulged the information that the Marinduque
Mining had an account with the petitioner bank and it is undisputed that the said account was properly the
object of the notice of garnishment and writ of execution carried out by the deputy sheriff, a duly authorized
officer of the court.

II. FOREIGN CURRENCY DEPOSIT

14. GSIS V. CA (2011)
DOMSMAT obtained a surety bond (covered by a surety agreement) from GSIS to secure the payment of the
loan from the Banks. When Domsat failed to pay the loan, GSIS refused to comply with its obligation reasoning
that Domsat did not use the loan proceeds for the payment of rental for the satellite. GSIS alleged that Domsat,
with Westmont Bank as the conduit, transferred the U.S. $11 Million loan proceeds from the Industrial Bank of
Korea to Citibank New York account of Westmont Bank and from there to the Binondo Branch of Westmont
Bank. The Banks filed a complaint before the RTC of Makati against Domsat and GSIS. The RTC granted
GSIS’s request for the issuance of a subpoena duces tecum to the custodian of records of Westmont Bank for
the production of some documents. The banks opposed the request invoking that it will violate the Law on
Secrecy of Bank Deposits. The RTC subsequently ordered the quashal of the subpoenas based on the ruling in
Intengan v. CA that foreign currency deposits are absolutely confidential and may be examined only when
there is a written permission from the depositor.

ISSUE: WON, the Domsat’s account with Westmont Bank is covered by the confidentiality of foreign currency
deposits?
HELD: Yes. PD No. 1035 and later by PD No. 1246, provides:

Section 8. Secrecy of Foreign Currency Deposits. – All foreign currency deposits authorized under
this Act, as amended by Presidential Decree No. 1035, as well as foreign currency deposits
authorized under Presidential Decree No. 1034, are hereby declared as and considered of an
absolutely confidential nature and, except upon the written permission of the
depositor, in no instance shall foreign currency deposits be examined, inquired or
looked into by any person, government official, bureau or office whether judicial or
administrative or legislative or any other entity whether public or private; Provided,
however, That said foreign currency deposits shall be exempt from attachment, garnishment, or
any other order or process of any court, legislative body, government agency or any
administrative body whatsoever. (As amended by PD No. 1035, and further amended by PD No.
1246, prom. Nov. 21, 1977.)

Applying Section 8 of Republic Act No. 6426, absent the written permission from Domsat, Westmont Bank
cannot be legally compelled to disclose the bank deposits of Domsat, otherwise, it might expose itself to
criminal liability under the same act.

15. SALVACION V. CENTRAL BANK (1997) ***Supra-rape case

Minor Karen Salvacion was raped by Bartelli, an American tourist. Karen was rescued and Bartelli was
arrested. Among the items recovered from him are his passbooks with COCOBANK and CHINABANK. Aside
from the rape case, Karen’s parents also filed a damages case in the RTC of Makati. Bartelli escaped from jail.
The court in the civil case issued a writ of preliminary attachment prayed by the Salvacions. CHINABANK
invoked RA No. 1405 (“BSA”) when it was served with a notice of garnishment. It also invoked Sec. 113 of CB
Circular No. 960 (issued in accordance with RA No. 6426) exempting dollar deposits from attachment,
garnishment, or any other order or process of any court, legislative body, government agency or any
administrative body, whatsoever. The CHINABANK’s position was confirmed by the Central Bank in its letter
to the lawyer of the Salvacions. Bartelli was declared in default and accordingly, judgment was rendered in
favor of the Salvacions.
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ISSUE: WON RA No. 6426 (Foreign Currency Deposit Act) exempting Bartelli’s dollar account from
garnishment is applicable in the case at bar?

HELD: No. The purpose of the law is to assure the development and speedy growth of the foreign currency
deposit system and the offshore banking in the Philippines hence it is not applicable when the deposit does not
come from a lender/investor but from a mere transient or tourist who is not expected to maintain the deposit
in the bank for long.

16. CANCIO V. CA (1987)

Rosa Cancio, while clearing through the Pre-Boarding Area of Manila International Airport with her family to
board for Hongkong, was apprehended with US$102,900 in cash and US$600 in two traveler’s checks. She did
not declare her currency and had already passed the Customs inspection area; that subject currencies were
placed and concealed inside the two fairly-sized carton boxes for local chocolates, securely wrapped and taped
with tin foil-back paper; and, that in view of claimant's failure, upon being required, to present the Central
Bank Authority, the said currencies were accordingly confiscated and became the subject of this seizure
proceedings. The Commissioner of Customs ordered the forfeiture of the money. During trial, Cancio
presented certified xerox copy of her Bank Book for foreign currency deposit with PCIB, dollar remittances in
telegraphic transfers from abroad for deposits in her account, attesting to the fact she had withdrawn from her
FCDU Account for her travel and medical expenses in the United States via Hongkong. The CTA affirmed the
forfeiture for having been in violation of Central Bank Circulars Nos. 265 and 534, in relation to Section
2530(f) of the Tariff and Customs Code, as amended.

ISSUE: WON, Cancio’s money withdrawn from her FDCU Account can be forfeited?
HELD: No. It is a fact that Cancio could not present a certificate of withdrawal at the Manila International
Airport when she was about to depart. As she had explained, however, she was unaware of this requirement.
And if she had wrapped her dollar currency inside a chocolate box it was for "security reasons." Besides, as
instructed in the Circular-Letter above-quoted, it is the authorized depository bank which should advise its
depositors to carry with them the certificate of withdrawal. At any rate, respondent Court has found that
petitioner has presented in evidence her foreign currency bank book and her withdrawal cards. These may be
considered as substantial compliance for purposes of this case.

Indeed, given the underlying objective of the Foreign Currency Deposit Act, as amended, which is to attract and
invite the deposit of foreign currencies which are acceptable as part of the international reserve in duly
authorized banks in order that they may be put into the stream of the banking system, it would be to defeat the
very purpose of the law to place undue restrictions on the transferability of such funds. The countervailing
effect would be to discourage prospective foreign currency depositors to the detriment of the banking system.

In fine, Central Bank Circulars Nos. 265 and 534 requiring prior Central Bank authority for the taking out of
the country of foreign currency should not be made to encompass foreign currency depositors whose rights are
expressly defined and guaranteed in a special law, the Foreign Currency Deposit Act (RA 6426, as amended).
As a foreign currency depositor, therefore, petitioner cannot be adjudged to have violated the afore-stated
Central Bank Circulars. It follows that neither is there room for the application of Section 2530(f) of the Tariff
and Customs Code, as amended, which provides for the forfeiture of any article and other objects, the
exportation of which is effected or attempted contrary to law.

This is not to condone Cancio’s failure to declare the foreign currency she was carrying out of the country but
just to stress that the Foreign Currency Deposit Act grants her the right of transferability of her funds
abroad except that she was not advised by her bank to secure, and consequently was unable to present, the
necessary certificate of withdrawal from said bank.

III. DEPOSIT INSURANCE

16. PDIC V. CITIBANK (2012)

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PDIC discovered, during its examination of Citibank’s books of account that it received from its head office and
other foreign branches a total of ₱11,923,163,908.00 in dollars, covered by Dollar Time Deposits. It also
examined Bank of America’s (“BA”) books sums of amount similar in nature with that of Citibank’s. These
accounts were not reported to PDIC as deposit liabilities that were subject to assessment for insurance
resulting in the assessment for deficiency of both banks by PDIC. The 2 banks filed a declaratory relief in the
CFI or Rizal contending that the money placements they received from their head office and other foreign
branches were not deposits and did not give rise to insurable deposit liabilities under Sections 3 and 4 of R.A.
No. 3591 (the PDIC Charter) and, as a consequence, the deficiency assessments made by PDIC were improper
and erroneous. The trial court ruled in favor of the banks.

ISSUE: WON the subject dollar deposits are assessable for insurance purposes under the PDIC Act?
HELD: No. The funds in question are not deposits within the definition of the PDIC Charter and are, thus,
excluded from assessment.

As explained by the respondents, the transfer of funds, which resulted from the inter-branch transactions, took
place in the books of account of the respective branches in their head office located in the United States. Hence,
because it is payable outside of the Philippines, it is not considered a deposit pursuant to Section 3(f) of
the PDIC Charter:

Sec. 3(f) The term "deposit" means the unpaid balance of money or its equivalent received by a bank
in the usual course of business and for which it has given or is obliged to give credit to a
commercial, checking, savings, time or thrift account or which is evidenced by its certificate of
deposit, and trust funds held by such bank whether retained or deposited in any department of said
bank or deposit in another bank, together with such other obligations of a bank as the Board of
Directors shall find and shall prescribe by regulations to be deposit liabilities of the
Bank; Provided, that any obligation of a bank which is payable at the office of the
bank located outside of the Philippines shall not be a deposit for any of the purposes
of this Act or included as part of the total deposits or of the insured deposits; Provided
further, that any insured bank which is incorporated under the laws of the Philippines may elect to
include for insurance its deposit obligation payable only at such branch.

17. PDIC V. PHIL. COUNTRYSIDE (2011)

PDIC issued resolutions approving the conduct of investigation based on the complaint-affidavit of PCBI’s
corporate depositor. PDIC issued notices to PCBI and BEIA for the conduct of the said investigation. Both
PRBI and BEAI refused entry to their bank premises and access to their records and documents by the PDIC
Investigation Team contending that PDIC’s investigatory power pursuant to Section 9(b-1) of R.A. No. 3591, as
amended (An Act Establishing The Philippine Deposit Insurance Corporation, Defining Its Powers And Duties
And For Other Purposes), cannot be differentiated from the examination powers accorded to PDIC under
Section 8, paragraph 8 of the same law, under which, prior approval from the Monetary Board is
required. Later on, the banks filed their Petition for Injunction with Prayer for Preliminary Injunction35 (CA-
Cebu Petition) with the CA-Cebu (CA-Cebu). The TRO was issue enjoining PDIC, its representatives or agents
or any other persons or agency assisting them or acting for and in their behalf from conducting
examinations/investigations on the Banks’ head and branch offices without securing the requisite approval
from the Monetary Board of BSP.

ISSUE: WON the prior approval of the Monetary Board of the Bangko Sentral ng Pilipinas is necessary before
the PDIC may conduct an investigation of respondent banks?
HELD: No. Section 9(b-1) of the PDIC Charter further provides:

“(b-1) The investigators appointed by the Board of Directors shall have the power on behalf of the
Corporation to conduct investigations on frauds, irregularities and anomalies committed
in banks, based on reports of examination conducted by the Corporation and Bangko Sentral
ng Pilipinas or complaints from depositors or from other government agency. Each such investigator
shall have the power to administer oaths, and to examine and take and preserve the testimony of any
person relating to the subject of investigation. (As added by R.A. 9302, 12 August 2004).
 Page 9 of 10

As stated above, the charter empowers the PDIC to conduct an investigation of a bank and to appoint
examiners who shall have the power to examine any insured bank. Such investigators are authorized to conduct
investigations on frauds, irregularities and anomalies committed in banks, based on an examination conducted
by the PDIC and the BSP or on complaints from depositors or from other government agencies.

Indeed, while in a literary sense, the two terms may be used interchangeably, under the PDIC Charter,
examination and investigation refer to two different processes. To reiterate, an examination of banks requires
the prior consent of the Monetary Board, whereas an investigation based on an examination report, does not.

18. SPS. CHUGANI V. PDIC (2018)

Sps. Chugani, opened time deposits with Rural Bank of Mawab (Davao), Inc. (“RBMI”) through inter-branch
deposits to the accounts of RBMI maintained in Metrobank and China Bank- Tagum, Davao Branches. The
spouses later on found out that the Monetary Boardplaced RBMI under receivership and thereafter closed the
latter. They later on filed claims for insurance of their time deposits. PDIC denied the claims since their deposit
accounts are not part of RBMI's outstanding deposit liabilities and the amounts they purportedly deposited
were credited to the personal account of Garan, hence, they could not be construed as valid liabilities of RBMI.
The petition for certiorari filed by the spouses in the RTC, after PDIC denied their claim, was dismissed for lack
of jurisdiction. The CA affirmed the dismissal.

ISSUE: WON PDIC’s denial of their claim is proper?

HELD: Yes. The PDIC was created by Republic Act (R.A.) No. 3591[12] on June 22, 1963 as an insurer of
deposits in all banks entitled to the benefits of insurance under the PDIC Charter to promote and safeguard the
interests of the depositing public by way of providing permanent and continuing insurance coverage of all
insured deposits. Based on its charter, the PDIC has the duty to grant or deny claims for deposit insurance.
Section 4(f) of R.A. No. 3591, as amended by R.A. No. 9576 states that deposit means the unpaid balance of
money or its equivalent received by a bank in the usual course of business and for which it has given or is
obliged to give credit to a commercial, checking, savings, time or thrift account, or issued in accordance with
Bangko Sentral rules and regulations and other applicable laws, together with such other obligations of a bank,
which, consistent with banking usage and practices.

Section 2(d) of PDIC Regulatory Issuance No. 2011-02[21] states that for deposit to be considered as legitimate,
it should be 1) received by a bank as a deposit in the usual course of business; 2) recorded in the books of the
bank as such; 3) opened in accordance with established forms and requirements of the BSP and/or the PDIC.

Phil. Deposit Insurance Corp. v. CA: in order for the claim for deposit insurance with the PDIC may prosper, it
is necessary that the corresponding deposit must be placed in the insured bank.

Here, upon investigation by the PDIC, it was discovered that 1) the money allegedly placed by the petitioners in
RBMI was in fact credited to the personal account of Garan, hence, they could not be construed as
valid liabilities of RBMI to petitioners; 2) based on bank records and the certified list of the bank's
outstanding deposit liabilities, the alleged deposits of petitioners are not part of RBMI's outstanding
liabilities; and 3) the CTDs are not validly issued by RBMI, but were mere replicas of the unissued and
unused CTDs still included in the inventory of RBMI. Further, the act of petitioners in opening Time Deposits
and thereafter depositing several amounts of money through inter-branch deposits with Metrobank and China
Bank for the account of RBMI can hardly be considered as in the ordinary course of business.

19. SO V. PDIC (2018)

So has an account with Cooperative Rural Bank Bulacan (CRBB). He learned that CRBB closed its operations
and was placed under PDIC’s receivership prompting him, together with other depositors, to file an insurance
claim with the PDIC. PDIC found that So’s account originated from and was funded by the proceeds of a
terminated SISA (mother account), jointly owned by a certain Reyes family. Thus, based on the determination
that So's account was among the product of the splitting of the said mother account which is prohibited by law,
PDIC denied his claim. The RTC dismissed So's Petition for Certiorari for lack of jurisdiction. So contends
that the petition for certiorari, questioning PDIC's action, denying a deposit insurance claim should be filed
 Page 10 of 10

with the RTC, arguing that PDIC is not a quasi-judicial agency and it does not possess any quasi-judicial power
under its Charter; It merely performs fact-finding functions based on its regulatory power.

ISSUE: Which court has jurisdiction over the petition?

HELD: The Court of Appeals. PDIC is a quasi-judicial agency. PDIC was created under RA 3591 as an insurer
of deposits in all banks entitled to the benefits of insurance under the said Act to promote and safeguard the
interests of the depositing public. As such, PDIC has the duty and authority to determine the validity of and
grant or deny deposit insurance claims. Section 16(a) of its Charter, as amended, provides that PDIC shall
commence the determination of insured deposits due the depositors of a closed bank upon its actual take over
of the closed bank. Also, Section 1 of PDIC's Regulatory Issuance No. 2011-03, provides that as it is tasked to
promote and safeguard the interests of the depositing public by way of providing permanent and continuing
insurance coverage on all insured deposits, and in helping develop a sound and stable banking system at all
times, PDIC shall pay all legitimate deposits held by bona fide depositors and provide a mechanism by which
depositors may seek reconsideration from its decision, denying a deposit insurance claim. Further, it bears
stressing that as stated in Section 4(f) of its Charter, as amended, PDIC's action, such as denying a deposit
insurance claim, is considered as final and executory and may be reviewed by the court only through a petition
for certiorari on the ground of grave abuse of discretion.

Section 4, Rule 65 of the Rules, as amended by A.M. No. 07-7-12-SC:

Sec. 4. When and where to file the petition. - The petition shall be filed not later than sixty (60) days
from notice of the judgment, order or resolution. In case a motion for reconsideration or new trial is
timely filed, whether such motion is required or not, the petition shall be filed not later than sixty (60)
days counted from the notice of the denial of the motion.

If the petition relates to an act or an omission of a municipal trial court or of a corporation, a board,
an officer or a person, it shall be filed with the Regional Trial Court exercising jurisdiction over the
territorial area as defined by the Supreme Court. It may also be filed with the Court of Appeals or
with the Sandiganbayan, whether or not the same is in aid of the court's appellate jurisdiction.  If the
petition involves an act or an omission of a quasi-judicial agency, unless otherwise
provided by law or these rules, the petition shall be filed with and be cognizable only by
the Court of Appeals. 

Clearly, a petition for certiorari, questioning the PDIC's denial of a deposit insurance claim should be filed
before the CA, not the RTC. This further finds support in Section 22 of the PDIC's Charter, as amended, which
states that:

Section 22. No court, except the Court of Appeals, shall issue any temporary restraining order,
preliminary injunction or preliminary mandatory injunction against the Corporation for any action
under this Act. xxx.

Finally, the new amendment in PDIC's Charter under RA 10846, specifically Section 5(g) thereof,
confirms such conclusion, viz.:

The actions of the Corporation taken under Section 5(g) shall be final and executory, and may
only be restrained or set aside by the Court of Appeals, upon appropriate petition
for certiorari on the ground that the action was taken in excess of jurisdiction or with such grave
abuse of discretion as to amount to a lack or excess of jurisdiction. The petition for  certiorari may
only be filed within thirty (30) days from notice of denial of claim for deposit insurance.