BP blg.

22 Bouncing Checks Law

A check is a negotiable instrument that serves as a substitute for money and as a convenient form
of payment in financial transactions and obligations.

What BP 22 punishes is the mere act of issuing a bouncing check, not the purpose for which it was
issued nor the terms and conditions relating to its issuance.

The law was designed to prohibit and altogether eliminate the deleterious and pernicious practice
of issuing checks with insufficient or no credit or funds therefor.
include, within its coverage, is the making and issuing of a check by one who has no account with a
bank, or where such account was already closed when the check was presented for payment.
Specific Acts in Violation of this act
Checks Without Sufficient Funds.

 the making, drawing and issuance of any check to apply for account or for value..
 the knowledge of the maker, drawer, or issuer that at the time of issue he does not have
sufficient funds in or credit with the drawee bank for the payment of the check in full upon
its presentment.
 the subsequent dishonor of the check by the drawee bank for insufficiency of funds or credit
or dishonor for the same reason had not the drawer, without any valid cause, ordered the
bank to stop payment.
Penalty: Imprisonment of not less than thirty days but not more than one (1) year or by a fine
of not less than but not more than double the amount of the check which fine shall in no case
exceed Two Hundred Thousand Pesos, or both such fine and imprisonment at the discretion of
the court.

Evidence of Knowledge of Insufficient Funds.

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

(Notice of dishonor has to be in writing.)

The issuer of the check has a right to demand – and the basic postulates of fairness require – that
the notice of dishonor be actually sent to and received by her to afford her the opportunity to avert
prosecution under B.P. 22

It shall be the duty of the drawee of any check, when refusing to pay the same to the holder thereof
upon presentment, to cause to be written, printed or stamped in plain language thereon, or
attached thereto, the reason for drawee's dishonor or refusal to pay the same.
Distinction between BP 22 and Estafa under Estafa (Art. 315, par. 2, RPC)
Bouncing Check Law (BP 22)
1. Making, drawing, and issuance of any check 1. That the offender postdated or issued a check
to apply on account or for value; in payment of an obligation contracted at the
time the check was issued
2. Knowledge of the maker, drawer, or issuer 2. That such postdating or issuing a check was
that at the time of issue he does not have done when the offender had no funds in the
sufficient funds in or credit with the drawee bank, or his funds deposited therein were not
bank for the payment of the check in full sufficient to cover the amount of the check.
payment upon its presentment;
3. Subsequent dishonor of the check by the 3. Deceit or damage to the payee thereof.
drawee bank for insufficiency of funds or credit (People vs. Ojeda, 430 SCRA 436)
or dishonor of the check for the same reason
had not the drawer, without any valid cause,
ordered the bank to stop payment.

Philippine Deposit Insurance Corporation (Republic Act 3591)

PDIC is a government instrumentality created to insure the deposits of all banks which are entitled
to the benefit of insurance.

provide permanent and continuing deposit insurance coverage for the depositing public to help
promote public confidence and stability in the economy

acts as co-regulator of banks, and receiver and liquidator of closed banks.

conduct independent special examination of banks and may inquire into or examine deposit
accounts of ailing banks in the event there is finding of unsafe and unsound banking practices.

Maximum Deposit Insurance Coverage

Php. 500,000

A joint account regardless of whether the conjunction ‗and,‘ ‗or,‘ ‗and/or‘ is used, shall be insured
separately from any individually-owned deposit account subject to the following conditions:

 If the account is held jointly by two or more natural persons, or by two or more juridical
persons or entities, divide as to number of individuals or entities.
 If the account is held by a juridical person or entity jointly with one or more natural
persons, MDIC, belongs to juridical entity
 The aggregate of the interests of each co-owner over several joint accounts, whether owned
by the same or different combinations of individuals, juridical persons or entities, shall
likewise be subject to the maximum insured deposit of P500,000.00; and
 No owner/holder of any negotiable certificate of deposit shall be recognized as a depositor
entitled to the rights provided under the law unless his name is registered as owner/holder
thereof in the books of the issuing bank.
Accounts or transactions not allowed to be insured with PDIC:
1. Investment products such as bonds, securities and trust accounts;
2. Deposit accounts which are unfunded, fictitious or fraudulent;
3. Deposit products constituting or emanating from unsafe and unsound banking practices;
4. Deposits that are determined to be proceeds of an unlawful activity as defined under the Anti-
Money Laundering Law.

PDIC, in its discretion, may require proof of claims to be filed before paying the insured deposits,
and that in any case where PDIC is not satisfied as to the viability of a claim for an insured deposit, it
may require final determination of a court of competent jurisdiction before paying such claim.

Failure to settle the claim, within six (6) months from the date of filing of claim for insured deposit,
where such failure was due to grave abuse of discretion, gross negligence, bad faith, or malice, shall,
upon conviction, subject the directors, officers or employees of the Corporation responsible for the
delay, to imprisonment from six (6) months to one (1) year

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

Depositors required to file a claim:

1. Those with valid deposit accounts of more than P100,000.00;
2. Those who have outstanding obligations with the closed bank, regardless of the
amount of deposit;
3. Those with account balances of less than P100,000.00 but who have no updated
addresses in the bank records or who have not updated their addresses through the
MAUF issued by PDIC;
4. Those who maintain their accounts under the name of business entities, regardless
of the type of account and account balance; and
5. Those with accounts not eligible for early payment, regardless of type of account
and account balance per advice of PDIC.

Documentary requirements:
1. Original evidence of deposits such as savings passbook, certificate of time deposit, bank
statements, unused checks and ATM card;
2. Original copies of two (2) valid photo-bearing identification documents with clear signature of
depositor;
3. If the depositor is below 18 years old, a photocopy of his/her birth certificate from the Philippine
Statistics Authority or duly certified copy from the local civil registrar and valid IDs of the parents;
and
4. Original copy of a notarized Special Power of Attorney (SPA) for claimants who are not the
signatories in the bank records. In case of minor depositors, the SPA must be executed by the
parent/parents.
If the deposit account in a closed bank is more than P500,000.00, what happens to the excess of
the maximum amount of insured deposit?
 If the closed bank is not rehabilitated or taken over by another bank, amount in excess of the
P500,000 coverage can still be claimed upon the final liquidation of the remaining assets of the
closed bank.
 The claim may be filed with the Liquidator of the closed bank but payment of the said claim will
depend on the bank‘s available assets to settle its preferred claims (Government taxes, labor claims,
secured credits and trust funds) and approval of the Liquidation Court. The schedule of payment
beyond the P500,000.00 maximum insurance shall be based on priorities set by law.

Law on Secrecy of Bank Deposits ( Republic Act 1405)

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.

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 10 and may not be
examined, inquired or looked into by any person, government official, bureau or office.

Exceptions under the Law on Secrecy of Bank Deposits

(a)Upon written permission or consent in writing by the depositor. For consent to be valid, it should
be made knowingly, voluntarily and with sufficient awareness of the relevant circumstances and
likely consequences.
(b) In cases of impeachment of the President, Vice President, members of the Supreme Court,
members of the Constitutional 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 of public officials.
(d) In cases where the money deposited or invested is the subject matter of the litigation. The money
deposited should be the very thing in dispute.

Foreign Currency Deposit Act of the Philippines (Republic Act no. 6426)

The banks designated by the Central Bank under Section two hereof shall have the authority:
(1) To accept deposits and to accept foreign currencies in trust Provided, That numbered accounts for
recording and servicing of said deposits shall be allowed;
(2) To issue certificates to evidence such deposits;
(3) To discount said certificates;
(4) To accept said deposits as collateral for loans subject to such rules and regulations as may be
promulgated by the Central Bank from time to time; and
(5) To pay interest in foreign currency on such deposits.
Except as the Monetary Board may otherwise prescribe or allow, the depository banks shall
maintain at all times a one hundred percent foreign currency cover for their liabilities, of which
cover at least fifteen percent shall be in the form of foreign currency deposit with the Central Bank,
and the balance in the form of foreign currency loans or securities, which loans or securities shall be
of short term maturities and readily marketable.

Depository banks which, on account of net worth, resources, past performance, or other pertinent
criteria, have been qualified by the Monetary Board to function under an expanded foreign
currency deposit system, shall be exempt from the requirements in the preceding paragraph of
maintaining fifteen percent (15%) of the cover in the form of foreign currency deposit with the
Central Bank. With no limitations in maturity and marketability.
There shall be no restriction on the withdrawal by the depositor of his deposit or on the transferability
of the same abroad except those arising from the contract between the depositor and the bank.

All foreign currency deposits made under this Act, as amended by PD No. 1035, as well as foreign
currency deposits authorized under PD No. 1034, including interest and all other income or earnings
of such deposits, are hereby exempted from any and all taxes

The deposits under this Act shall be insured under the provisions of Republic Act No. 3591, as
amended (Philippine Deposit Insurance Corporation), as well as its implementing rules and
regulations: Provided, That insurance payment shall be in the same currency in which the insured
deposits are denominated.

Unclaimed Balances Law (Act no. 3936)

"Unclaimed balances", within the meaning of this Act, shall include credits or deposits of money,
bullion, security or other evidence of indebtedness of any kind, and interest thereon with banks,
buildings and loan associations, and trust corporations, as hereinafter defined, in favor of any
person known to be dead or who has not made further deposits or withdrawals during the
preceding ten years or more. Such unclaimed balances, together with the increase and proceeds
thereof, shall be deposited with the Treasurer of the Philippines to the credit of the Government of
the Republic of the Philippines to be used as the National Assembly may direct.

Immediately after the taking effect of this Act and within the month of January of every odd year, all
banks, building and loan associations, and trust corporations shall forward to the Treasurer of the
Philippines a statement, under oath, of their respective managing officers, of all credits and deposits
held by them in favor of persons known to be dead, or who have not made further deposits or
withdrawals during the preceding ten years or more, arranged in alphabetical order according to the
names of creditors and depositors, and showing:
(a) The names and last known place of residence or post office addresses of the persons in whose
favor such unclaimed balances stand;
(b) The amount and the date of the outstanding unclaimed balance and whether the same is in money
or in security, and if the latter, the nature of the same;
(c) The date when the person in whose favor the unclaimed balance stands died, if known, or the date
when he made his last deposit or withdrawal; and
(d) The interest due on such unclaimed balance, if any, and the amount thereof.
A copy of the above sworn statement shall be posted in a conspicuous place in the premises of the
bank, building and loan association, or trust corporation concerned for at least sixty days from the
date of filing thereof: Provided, That immediately before filing the above sworn statement, the bank,
building and loan association, and trust corporation shall communicate with the person in whose
favor the unclaimed balance stands at his last known place of residence or post office address.
It shall be the duty of the Treasurer of the Philippines to inform the Solicitor General from time to
time the existence of unclaimed balances held by banks, building and loan associations, and trust
corporations.

Whenever the Solicitor General shall be informed of such unclaimed balances, he shall commence an
action or actions in the name of the People of the Republic of the Philippines in the Court of First
Instance of the province or city where the bank, building and loan association or trust corporation is
located, in which shall be joined as parties the bank, building and loan association or trust
corporation and all such creditors or depositors.

If the president, cashier or managing officer of the bank, building and loan association, or trust
corporation neglects or refuses to make and file the sworn statement required by this action, such
bank, building and loan association, or trust corporation shall pay to the Government the sum of
five hundred pesos a month for each month or fraction thereof during which such default shall
continue.

Escheat proceedings refer to the judicial process in which the state, by virtue of its sovereignty,
steps in and claims abandoned, left vacant, or unclaimed property, without there being an interested
person having a legal claim thereto.

Anti- Money Laundering Act (AMLA) of 2001

Money laundering has been generally defined by the International Criminal Police Organization `as
any act or attempted act to conceal or disguise the identity of illegally obtained proceeds so that
they appear to have originated from legitimate sources.
Unlawful Activities under AMLA
‗Unlawful activity‘ refers to any act or omission or series or combination thereof involving or
having direct relation to the following:
(1) Kidnapping for ransom under Article 267 of Act No. 3815, otherwise known as the Revised Penal
Code, as amended;
(2) 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;
(3) Section 3 paragraphs B, C, E, G, H and I of Republic Act No. 3019, as amended, otherwise
known as the Anti-Graft and Corrupt Practices Act;
(4) Plunder under Republic Act No. 7080, as amended;
(5) Robbery and extortion under Articles 294, 295, 296, 299, 300, 301 and 302 of the Revised Penal
Code, as amended;
(6) Jueteng and Masiao punished as illegal gambling under Presidential Decree No. 1602; 23
(7) Piracy on the high seas under the Revised Penal Code, as amended and Presidential Decree No.
532;
(8) Qualified theft under Article 310 of the Revised Penal Code, as amended;
(9) Swindling under Article 315 and Other Forms of Swindling under Article 316 of the Revised
Penal Code, as amended;
(10) Smuggling under Republic Act Nos. 455 and 1937;
(11) Violations of Republic Act No. 8792, otherwise known as the Electronic Commerce Act of
2000;
(12) Hijacking and other violations under Republic Act No. 6235; destructive arson and murder, as
defined under the Revised Penal Code, as amended;
(13) Terrorism and conspiracy to commit terrorism as defined and penalized under Sections 3 and 4
of Republic Act No. 9372;
(14) 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:
(15) Bribery under Articles 210, 211 and 211-A of the Revised Penal Code, as amended, and
Corruption of Public Officers under Article 212 of the Revised Penal Code, as amended;
(16) Frauds and Illegal Exactions and Transactions under Articles 213, 214, 215 and 216 of the
Revised Penal Code, as amended;
(17) Malversation of Public Funds and Property under Articles 217 and 222 of the Revised Penal
Code, as amended;
(18) Forgeries and Counterfeiting under Articles 163, 166, 167, 168, 169 and 176 of the Revised
Penal Code, as amended;
(19) Violations of Sections 4 to 6 of Republic Act No. 9208, otherwise known as the Anti-
Trafficking in Persons Act of 2003;
(20) Violations of Sections 78 to 79 of Chapter IV, of Presidential Decree No. 705, otherwise known
as the Revised Forestry Code of the Philippines, as amended;
(21) Violations of Sections 86 to 106 of Chapter VI, of Republic Act No. 8550, otherwise known as
the Philippine Fisheries Code of 1998;
(22) Violations of Sections 101 to 107, and 110 of Republic Act No. 7942, otherwise known as the
Philippine Mining Act of 1995;
(23) Violations of Section 27(c), (e), (f), (g) and (i), of Republic Act No. 9147, otherwise known as
the Wildlife Resources Conservation and Protection Act;
(24) Violation of Section 7(b) of Republic Act No. 9072, otherwise known as the National Caves and
Cave Resources Management Protection Act;
(25) Violation of Republic Act No. 6539, otherwise known as the Anti-Carnapping Act of 2002, as
amended;
(26) Violations of Sections 1, 3 and 5 of Presidential Decree No. 1866, as amended, otherwise known
as the decree Codifying the Laws on Illegal/Unlawful Possession, Manufacture, Dealing In,
Acquisition or Disposition of Firearms, Ammunition or Explosives;
(27) Violation of Presidential Decree No. 1612, otherwise known as the Anti-Fencing Law;
(28) Violation of Section 6 of Republic Act No. 8042, otherwise known as the Migrant Workers and
Overseas Filipinos Act of 1995, as amended by Republic Act No. 10022;
(29) Violation of Republic Act No. 8293, otherwise known as the Intellectual Property Code of the
Philippines; 24
(30) Violation of Section 4 of Republic Act No. 9995, otherwise known as the Anti-Photo and Video
Voyeurism Act of 2009;
(31) Violation of Section 4 of Republic Act No. 9775, otherwise known as the Anti-Child
Pornography Act of 2009;
(32) Violations of Sections 5, 7, 8, 9, 10(c), (d) and (e), 11, 12 and 14 of Republic Act No. 7610,
otherwise known as the Special Protection of Children Against Abuse, Exploitation and
Discrimination;
(33) Fraudulent practices and other violations under Republic Act No. 8799, otherwise known as the
Securities Regulation Code of 2000; and
(34) Felonies or offenses of a similar nature that are punishable under the penal laws of other
countries.‖ [Section 3(i), AMLA]

Money Laundering Offense

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:
(a) transacts said monetary instrument or property;
(b) converts, transfers, disposes of, moves, acquires, possesses or uses said monetary instrument or
property;
(c) conceals or disguises the true nature, source, location, disposition, movement or ownership of or
rights with respect to said monetary instrument or property;
(d) attempts or conspires to commit money laundering offenses referred to in paragraphs (a), (b) or
(c);
(e) aids, abets, assists in or counsels the commission of the money laundering offenses referred to in
paragraphs (a), (b) or (c) above; and
(f) performs or fails to perform any act as a result of which he facilitates the offense of money
laundering referred to in paragraphs (a), (b) or (c) above.
Money laundering is also committed by any covered person who, knowing that a covered or
suspicious transaction is required under this Act to be reported to the Anti-Money Laundering
Council (AMLC), fails to do so. [Sec. 4, AMLA]
Suspicious Transactions:
Transaction refers to any act establishing any right or obligation or giving rise to any contractual or
legal relationship between the parties thereto. It also includes any movement of funds by any means
with a covered institution.
Covered Transaction is a transaction in cash or other equivalent monetary instrument involving a
total amount in excess of five hundred thousand pesos (Php500,000.00) within one (1) banking day.
Suspicious Transaction is a transaction, regardless of amount, where any of the following
circumstance exists: 25
(a) there is no underlying legal or trade obligation, purpose or economic justification;
(b) the client is not properly identified;
(c) the amount involved is not commensurate with the business or financial capacity of the client;
(d) taking into account all known circumstances, it may be perceived that the client‘s transaction is
structured in order to avoid being the subject of reporting requirements under the act;
(e) any circumstance relating to the transaction which is observed to deviate from the profile of the
client and/or the client‘s past transactions with the covered institution;
(f) the transaction is in any way related to an unlawful activity or any money laundering activity or
offense under the AMLA, as amended, is being or has been committed; and
(g) any transaction that is similar, analogous or identical to any of the foregoing.