Manila * Cavite * Laguna * Cebu * Cagayan De Oro * Davao

Since 1977

RFBT.3507 VILLEGAS/APRADO/MAGUMUN/CELIS
Cooperative (RA 9520), PDIC (RA 3591), Secrecy (RA 1405), ECA (RA 8792) OCTOBER 2023

Other Coops as may be determined

Cooperative (RA 9520) F. According to terms of membership, the following
are the categories of cooperatives:
The law which governs cooperatives, prior to the recent
enactment of Republic Act No. 9520 (“Philippine
Primary Cooperative – the members of which are
Cooperative Code of 2008”), is Republic Act No. 6938
natural person of legal age;
(“Cooperative Code of the Philippines of 1990”).
Secondary Cooperative – the members of which
are primaries;
A. Cooperative (defined)
Tertiary Cooperative – the members of which are
secondary cooperatives. Cooperatives whose
A Cooperative is an autonomous and duly
members are cooperatives are called as the
registered association of persons, with a common
federation and unions.
bond of interest, who have voluntarily joined
together to achieve their social, economic, and
G. Basic in Cooperative
cultural needs and aspirations by making equitable
contributions to the capital required, patronizing
The minimum paid-up share capital is PhP15,000.00
their products and services and accepting a fair
for primary cooperatives, except for multipurpose
share of the risks and benefits of the undertaking in
cooperative - P100,000.00 or as required by the
accordance with universally accepted cooperative
feasibility study whichever is higher.
principles (Art. 3, RA 9520).
The par value of shares of a primary cooperative
B. The Cooperative Development Authority (CDA),
shall not exceed PhP1,000.
under the Office of the President created under RA
No. 6839, is the agency charged with the authority
No member of primary cooperative other than
and responsibility for implementing the program of
cooperative itself shall own or hold more than 10%
cooperatives development.
of the share capital of the cooperative.
C. Basic Purpose - The declared purpose of the law,
Should preferred share capital be provided in the
among others, is to foster the creation and growth
their by-laws, it shall not exceed 25% of the total
of cooperatives as a practical vehicle for promoting
authorized share capital of the cooperative.
self-reliance and harnessing people power towards
the attainment of economic development and social
Finally, for both common and preferred share
justice.
capital, no fractional shares shall be issued.
D. Cooperative Principles
H. Liability of Members
1. Open and voluntary membership
A member shall be liable for the debts of the
2. Democratic member control
cooperative to the extent of his contribution to the
3. Member economic participation
share capital of the cooperative. (Doctrine of
4. Autonomy and independence
Limited Liability)
5. Cooperative education
6. Cooperation among cooperatives
I. Capital Subscription And Paid Up Capital
7. Concern for community
Requirement
E. Types of Cooperative
At least twenty-five per centum (25%) of the
Credit Cooperative
authorized share capital must be subscribed
Consumers Cooperative
Producers Cooperative
At least twenty-five per centum (25%) of the total
Marketing Cooperative
subscription has been paid.
Service Cooperative
Multipurpose Coop
In no case shall the paid-up share capital be less
Advocacy Cooperative
than Fifteen thousand pesos (P15,000.00).
Agrarian Reform Cooperative
Cooperative Bank
J. Registration of Cooperative
Dairy Cooperative
Education Cooperative
A cooperative formed and organized under this
Electric Cooperative
Code acquires juridical personality from the date the
Financial Service Cooperative
Authority issues a certificate of registration under
Fishermen Cooperative
its official seal.
Health Service Cooperative
Housing Cooperative
All applications for registration shall be finally
Insurance Cooperative
disposed of by the Authority within a period of sixty
Transport Cooperative
(60) days from the filing thereof, otherwise the
Water Service Cooperative
Workers Cooperative

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application is deemed approved, unless the cause of
the delay is attributable to the applicant.
In case of a denial of the application for registration,
an appeal shall lie with the Office of the President
within ninety (90) days from receipt of notice of
such denial.
Failure of the Office of the President to act on the
appeal within ninety (90) days from the filing
thereof shall mean approval of said application.
COOPERATIVE MC QUESTIONS
1. The following are characteristics of a cooperative,
except:
a. An autonomous and duly registered association of
persons
b. With a common enjoyment of property
c. Who have voluntarily joined together to achieve
their social, economic, and cultural needs and
aspirations
d. By making equitable contributions to the capital
required
e. Patronizing their products and services
2. The following are universally accepted principles of
cooperative, except:
a. Voluntary and Open Membership
b. Democrative Member Control
c. Member Economic Participation
d. Autonomy and Relativity
e. Concern for Community
3. A cooperative may be organized and registered for any
or all of the following purposes, except:
a. To divide the profits and losses among themselves
b. To encourage thrift and savings mobilization
among the members
c. To generate funds and extend credit to the
members for productive and provident purposes
d. To encourage among members systematic
production and marketing
e. To provide goods and services and other
requirements to the members
4. A cooperative may be organized and registered for any
or all of the following purposes, except:
a. To promote and advance the economic, social and
educational status of the members
b. To establish, own, sell, appropriate, lease,
mortgage or operate private markets
c. To coordinate and facilitate the activities of the
cooperatives
d. To advocate for the cause of the cooperative
movement
e. To ensure the viability of cooperatives through the
utilization of new technologies
5. It promotes and undertakes savings and lending
services among its members. It generates a common
pool of funds in order to provide financial assistance to
its members for productive and provident purposes.
a. Credit Cooperative
b. Consumers Cooperative
c. Producers Cooperative
d. Marketing Cooperative
e. Service Cooperative
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6. It combines two (2) or more of the business activities
of these different types of cooperatives.
a. Service Cooperative
b. Marketing Cooperative
c. Multi-purpose Cooperative
d. Advocacy Cooperative
e. Consumers Cooperative
7. It is organized by marginal farmers of which are
agrarian reform beneficiaries for the purpose of
developing an appropriate system of land tenure, land
development, land consolidation of land management in
areas covered by agrarian reform.
a. Cooperative Bank
b. Multi-purpose Cooperative
c. Financial Cooperative
d. Service Cooperative
e. Agrarian Reform Cooperative
8. S1 - Primary Cooperative has members are natural
persons.
S2 - Secondary Cooperative has members of which are
primaries.
S3- Tertiary Cooperative has members of which are
secondary cooperatives.
a. All are correct
b. All are incorrect
c. Only S1 and S2 are correct and S3 is incorrect
d. Only S2 and S3 are correct and S1 is incorrect
e. Correct answer not given
9. The following are the qualifications of the persons who
will organize a cooperative, except:
a. Fifteen (15) or more natural persons
b. Majority of whom are Filipino citizens
c. of legal age
d. having a common bond of interest
e. actually residing or working in the intended area of
operation
10. S1 - At least twenty-five per centum (25%) of the
authorized share capital must be subscribed.
S2 - At least twenty-five per centum (25%) of the total
subscription has been paid.
S3 - In no case shall the paid-up share capital be less
than Five thousand pesos. (P5,000.00).
a. All are correct
b. All are incorrect
c. Only S1 and S2 are correct and S3 is incorrect
d. Only S2 and S3 are correct and S1 is incorrect
e. Correct answer not given
11. S1 - All applications for registration shall be finally
disposed of by the Authority within a period of ninety
(90) days from the filing thereof, otherwise the
application is deemed approved, unless the cause of the
delay is attributable to the applicant.
S2 - No extension of a Cooperative can be made earlier
than five (5) years prior to the original or subsequent
expiry date/dates unless there are justifiable reasons
for an earlier extension as may be determined by the
Authority.
a. Both are correct
b. Both are incorrect
c. S1 is correct, S2 is incorrect
d. S1 is incorrect, S1 is correct
12. An Associate member in Cooperative is:
S1 – One who has no right to vote nor be voted upon
and shall be entitled only to such rights and privileges
as the bylaws may provide.
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S2 - One who meets the minimum requirements of
regular membership, continues to patronize the
cooperative for three (3) years, and signifies his/her
intention to remain a member shall be considered a
regular member
a. Both are correct
b. Both are incorrect
c. S1 is correct, S2 is incorrect
d. S1 is incorrect, S1 is correct
13. S1 - A member shall be liable for the debts of the
cooperative to the extent of his contribution to the share
capital of the cooperative.
S2 – The disqualification for elective officials of the
government does not extend to a party list
representative being an officer of a cooperative he or
she represents.
a. Both are correct
b. Both are incorrect
c. S1 is correct, S2 is incorrect
d. S1 is incorrect, S1 is correct
14. S1 – A sixty (60) day notice to the board of directors is
required in case of withdrawal of membership
S2 - The insolvency or dissolution of a member in a
secondary or tertiary cooperative may be considered
valid grounds for termination of membership.
a. Both are correct
b. Both are incorrect
c. S1 is correct, S2 is incorrect
d. S1 is incorrect, S1 is correct
15. The following are causes for termination of the
membership of the Board of Directors, except:
a. When a member has not patronized any of the
services of the cooperative for an unreasonable
period of time as may be previously determined by
the board of directors
b. When a member has continuously failed to comply
with his obligations
c. When a member has acted in violation of the
bylaws and the rules of the cooperative
d. In case of death or insanity of a member in a
primary cooperative
e. For any act or omission injurious or prejudicial to
the interest or the welfare of the cooperative
16. In a Cooperative, the quorum requirement for a
meeting are as follows:
S1 - Electric Cooperatives, the quorum requirement
shall be one-half plus one of the number of voting
shares of all the members in good standing.
S2 - Cooperative Banks, a quorum, unless otherwise
provided in the bylaws, shall consist of five per centum
(5%) of all the members entitled to vote.
a. Both are correct
b. Both are incorrect
c. S1 is correct, S2 is incorrect
d. S1 is incorrect, S1 is correct
17. Voting System in a Cooperative
S1 - In the case of members of secondary or tertiary
cooperatives, they shall have one (1) basic vote and as
many incentive votes as provided for in the bylaws but
not exceed five (5) votes.
S2 - The bylaws of a cooperative other than a primary
may provide for voting by proxy.
a. Both are correct
b. Both are incorrect
c. S1 is correct, S2 is incorrect
d. S1 is incorrect, S1 is correct
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18. S1 – The BOD of a Cooperative shall hold office for Three
(3) years and shall hold office until their successors are
duly elected an qualified, or until duly removed for
caused.
S2 – The members of the board of directors shall hold
any other position directly involved in the day to day
operation and management of the cooperative.
a. Both are correct
b. Both are incorrect
c. S1 is correct, S2 is incorrect
d. S1 is incorrect, S1 is correct
19. S1 - Loss of confidence shall not be a valid ground for
removal unless evidenced by acts or omission causing
loss of confidence in the honesty and integrity of such
BOD in a Cooperative.
S2 – When a director, officer or committee member
attempts to acquire or acquires, in violation of his duty,
any interest or equity adverse to the cooperative in
respect to any matter which has been reposed in him in
confidence, he shall, as a trustee for the cooperative,
be liable for damages and shall be accountable for the
profits which otherwise would have accrued to the
cooperative.
a. Both are correct
b. Both are incorrect
c. S1 is correct, S2 is incorrect
d. S1 is incorrect, S1 is correct
20. S1 - The directors and officers of a cooperative shall not
be entitled to any per diem when, in the preceding
calendar year, the cooperative reported a net loss or
had a dividend rate less than the official inflation rate
for the same year.
S2 - Any compensation other than per diems may be
granted to directors by a 2/3 vote of the members with
voting rights at a regular or special general assembly
meeting specifically called for the purpose.
a. Both are correct
b. Both are incorrect
c. S1 is correct, S2 is incorrect
d. S1 is incorrect, S1 is correct
21. S1 - In case of self-dealing directors in a cooperative,
where any of the two conditions set forth in the law is
absent, in the case of a contract with a director, such
contract may be ratified by a three-fourths (3/4) vote
of all the members with voting rights, present and
constituting a quorum in a meeting called for the
purpose.
S2 - A director who, by virtue of his office, acquires for
himself an opportunity which should belong to the
cooperative shall be liable for damages and must
account for the profits that otherwise would have
accrued to the cooperative by refunding the same,
unless his act has been ratified by a three-fourths (3/4)
vote of all the members with voting rights, present and
constituting a quorum.
a. Both are correct
b. Both are incorrect
c. S1 is correct, S2 is incorrect
d. S1 is incorrect, S1 is correct
22. The Authority may suspend or revoke, after due notice
and hearing, the certificate of registration of a
cooperative on any of the following grounds:
a. Having obtained its registration by fault
b. Existing for an illegal purpose
c. Willful violation, despite notice by the Authority, of
the provisions of this Code or its bylaws
d. Willful failure to operate on a cooperative basis
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e. Failure to meet the required minimum number of
members in the cooperative
23. S1 - If a cooperative has not commenced business and
its operation within two (2) years after the issuance of
its certificate of registration or has not carried on its
business for two (2) consecutive years, the Authority
shall send a formal notice to the said cooperative to
show cause as to its failure to operate.
S2 – In case of voluntary dissolution where no creditors
are affected in a cooperative, Resolution by the
affirmative vote of at least 2/3 of all the members with
voting rights, present and constituting a quorum at a
meeting called for the purpose.
a. Both are correct
b. Both are incorrect
c. S1 is correct, S2 is incorrect
d. S1 is incorrect, S1 is correct
24. A cooperative may be dissolved by order of a competent
court after due hearing on the grounds of:
a. Violation of any law or regulation
b. Violation of the provisions of its bylaws
c. Insolvency
d. In case of death or insanity of a member in a
primary cooperative
25. S1 - No merger or consolidation shall be valid unless
approved by a three-fourths (3/4) vote of all the
members with voting rights, present and constituting a
quorum of each of the constituent cooperatives at
separate general assembly meetings.
S2 - An elective officer may be removed by three
fourths (3/4) votes of the regular members present and
constituting a quorum, in a regular or special general
assembly meeting called for the purpose.
a. Both are correct
b. Both are incorrect
c. S1 is correct, S2 is incorrect
d. S1 is incorrect, S1 is correct
26. The period to appeal from the denial of application of a
Cooperative in Cooperative Development Authority.
a. 30 days
b. 60 days
c. 90 days
d. 120 days
27. In the previous question, where do you appeal the
decision of the CDA?
a. DTI
b. RTC
c. SEC
d. DOLE
e. Office of the President
28. S1 – Period of liquidation of Cooperative is 3 years.
S2 – Period to extend the life of the Cooperative is 3
years.
a. Both statements are true
b. Both statements are false
c. Only S1 is false
d. Only S2 is false
29. Percentage of maximum ownership in a Cooperative.
a. 5%
b. 10%
c. 15%
d. 20%
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PDIC Law
(RA 3591, as amended)
1. Insurable Deposits
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 such bank or deposited 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.
Note that the term “deposit” shall not include any obligation
of a bank which is payable at the office of the bank located
outside of the Philippines, but any insured bank which is
incorporated under the laws of the Philippines which
maintains a branch outside the Philippines may elect to
include for insurance its deposit obligation payable only at
such branch.
The term "insured deposit" means the amount due to any
bona fide depositor for legitimate deposits in an insured
bank net of any obligation of the depositor to the insured
bank as of date of closure, but not to exceed Five hundred
thousand pesos (P500,000.00). (Sec. 4f, Republic Act (RA)
No. 3591, as amended by RA 9576)
Deposits not Covered by Insurance
The PDIC shall not pay deposit insurance for the following
accounts or transactions, whether denominated,
documented, recorded or booked as deposit by the bank:
(1) Investment products such as bonds and securities,
trust accounts, and other similar instruments;
(2) Deposit accounts or transactions which are
unfunded, or that are fictitious or fraudulent;
(3) Deposits accounts or transactions constituting,
and/or emanating from, unsafe and unsound
banking practice/s, as determined by the
Corporation, in consultation with the BSP, after due
notice and hearing, and publication of a cease and
desist order issued by the Corporation against such
deposit accounts or transactions; and
(4) Deposits that are determined to be the proceeds of
an unlawful activity as defined under republic act
9160, as amended. (Sec. 4f, Republic Act (RA) No.
3591, as amended by RA 9576)
2. Maximum Liability
PDIC covers only the risk of a bank closure ordered by the
Monetary Board. Thus, bank losses due to theft, fire, closure
by reason of strike or existence of public disorder, revolution
or civil war, are not covered by PDIC.
The maximum insurance liability is P500,000.00.
How is the Liability Determined?
In determining such amount due to any depositor, there
shall be added together all deposits in the bank maintained
in the same right and capacity for his or her benefit either
in his or her own name or in the name of others.
i. Per depositor, per capacity rule
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In determining such amount due to any depositor, there
shall be added together all deposits in the bank maintained
in the same right and capacity for his or her benefit either
in his or her own name or in the name of others.
ii. Joint accounts
A joint account regardless of whether the conjunction ‘and’,
‘or’, ‘and/or’ is used, shall be insured separately from any
individually- owned deposit account: Provided, That –
a. If the account is held jointly by two or more natural
persons, or by two or more juridical persons or
entities; The maximum insured deposit shall be
divided into as many equal shares as there are
individuals, juridical persons or entities, Unless a
different sharing is stipulated in the document of
deposit.
b. If the account is held by a juridical person or entity
jointly with one or more natural persons, the
maximum insured deposit shall be presumed to
belong entirely to such juridical person or entity.
The aggregate of the interest 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.
3. REQUIREMENTS FOR CLAIMS
PDIC shall commence the determination of insured deposits
due the depositors of a closed bank upon its actual takeover
of the closed bank.
PDIC shall give notice to the depositors of the closed bank
of the insured deposits due them by whatever means
deemed appropriate by the Board of Directors: Provided,
That – a. PDIC shall publish the notice once a week for at
least three (3) consecutive weeks in a newspaper of general
circulation; or b. When appropriate, it shall be published in
a newspaper circulated in the community or communities
where the closed bank or its branches are located. [Sec. 18,
R.A. 9302]
Period to file claim: Depositors have two (2) years from
PDIC's takeover of the closed bank to file their deposit
insurance claims. After the two-year period, the depositor's
right to claim for deposit insurance is barred. (Section 21(e)
of R.A. 3591, as amended.)
Who are required to file claim?
Depositors:
2.1.With valid deposit accounts with balances of more
than P100,000.00;
2.2.With outstanding obligations with the closed bank
either as borrower, co-maker, or as spouse of
borrower;
2.3.With incomplete mailing address found in the bank
records, or failed to update them through the MAUF
issued by the PDIC;
2.4.With accounts maintained under the name of
business entities;
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2.5.With accounts not eligible for early payment,
regardless of type of account and account balance
per advice of PDIC; and
2.6.Who are deceased whose filing of claim is thru the
legal heirs
Requirements in Filing Claims
1. ORIGINAL EVIDENCE OF DEPOSITS such as savings
passbook, certificate of time deposit, bank
statement, used or unused checks, or ATM card.
2. ONE (1) VALID ORIGINAL PHOTO-BEARING
IDENTIFICATION DOCUMENT (ID) with clear
signature of depositor/claimant.
3. For depositors below eighteen (18) years old,
photocopy of birth certificate from the Philippine
Statistics Authority (PSA) or a duly certified copy
issued by the local civil registrar, and valid ID of the
parent.
4. Original copy of a notarized Special Power of
Attorney (SPA) for claimants who are not the
signatories in the bank records. In the case of minor
depositor, the SPA must be executed by the parent.
5. Duly accomplished claim form. (PDIC Website)
Effects of Payment by the PDIC
PDIC, upon payment of any depositor, shall be subrogated
to all rights of the depositor against the closed bank to the
extent of such payment.
Such subrogation shall include the right on the part of PDIC
to receive the same dividends and payments from the –
1. Proceeds of the assets of such closed bank; and
2. Recoveries on account of stockholders’ liability, as
would have been payable to the depositor on a claim
for the insured deposits.
However, such depositor shall retain his claim for any
uninsured portion of his deposit.
Failure of depositor to claim insured deposits
If the depositor in the closed bank shall fail to claim his
insured deposits with PDIC within two (2) years from actual
takeover of the closed bank by the receiver, or does not
enforce his claim filed with the corporation within two (2)
years after the two-year period to file a claim:
a. All rights of the depositor against PDIC with
respect to the insured deposit shall be barred
b. However, all rights of the depositor against the
closed bank and its shareholders or the receivership
estate to which PDIC may have become subrogated,
shall thereupon revert to the depositor.
c. Thereafter, PDIC shall be discharged from any
liability on the insured deposit. [Sec. 18, R.A. 9302]
PDIC Law MC QUESTIONS
1. The PDIC is also authorized to conduct independent
special examination of banks and may inquire into or
examine deposit accounts of ailing banks in the event
a. there is a finding of unsafe and unsound banking
practices
b. The bank is in the verge of insolvency
c. The bank is in the liquidation proceeding
d. The bank is under receivership
e. The bank is under conservatorship
2. S1 – The Bangko Sentral ng Pilipinas is composed of 7
members in the board.
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S2 – The PDIC is composed of 5 members of the board. insured deposit shall be presumed to belong entirely to
a. All are correct such natural person.
b. All are wrong a. Only S1 is incorrect
c. Only S1 is incorrect b. Only S2 is incorrect
d. Only S2 is incorrect c. Only S3 is incorrect
d. Both S1 and S2 are incorrect
3. The following are functions of PDIC, except: e. Both S2 and S3 are incorrect
a. Deposit Insurer
b. Co-regulator of Banks 9. R.A. No. 9576 stipulates that PDIC will pay deposit
c. Receiver and Liquidator of Closed Banks insurance for the following accounts or transactions,
d. Administrator of Banks except:
a. Investment products such as bonds, securities and
4. S1 - Examination involves an evaluation of the current trust accounts;
status of a bank and determines its compliance with the b. Deposit accounts which are unfunded, fictitious or
set standards regarding solvency, liquidity, asset fraudulent;
valuation, operations, systems, management, and c. Deposit products constituting or emanating from
compliance with banking laws, rules and regulations. unsafe and unsound banking practices;
Such a process then involves an intrusion into a bank’s d. Deposits that are determined to be proceeds of an
records. unlawful activity as defined under the Anti-Money
S2 - Investigation is conducted based on specific Laundering Law.
findings of certain acts or omissions which are subject e. All of the above
of a complaint or a Final Report of Examination made
by PDIC 10. S1 - Membership of banks to PDIC is mandatory.
a. All are correct S2 - As for Philippine banks with branches outside the
b. All are wrong country, RA 9576 stipulates that subject to the approval
c. Only S1 is incorrect of the Board of Directors, any insured bank with branch
d. Only S2 is incorrect outside the Philippines may elect to include for
insurance its deposit obligations payable at such
5. The maximum deposit insurance coverage under the branch.
PDIC Law is ________________. All deposit accounts S3 - Foreign currency deposits are also insured by PDIC.
by a depositor in a closed bank maintained in the same a. Only S1 is incorrect
right and capacity shall be added together. b. Only S2 is incorrect
a. P100,000 per depositor c. Only S3 is incorrect
b. P500,000 per depositor d. All are correct
c. P1million per depositor e. All are incorrect
d. P2million per depositor
11. PDIC covers only the risk of a -
6. The PDIC may propose to adjust the minimum deposit a. bank losses due to theft
insurance coverage, subject to the approval of the b. bank closure ordered by the Monetary Board
President of the Philippines, in case of c. bank losses due to fire, closure by reason of strike
_________________________ that may have d. banks losses due to existence of public disorder,
systemic consequences. revolution or civil war
a. exercise of the police power of the State e. All of the above
b. exercise of eminent domain
c. bankruptcy of the majority of banks in the 12. The insurance premium assessed against the bank
Philippines under the PDICS is -
d. a condition that threatens the monetary and a. 1/5 of 1% per annum of the assessment base of the
financial stability of the banking system bank
e. law passed by Congress b. 1/4 of 1% per annum of the assessment base of the
bank
7. It means a deposit in an insured bank made available c. 1/5 of 2% per annum of the assessment base of the
to a depositor by the Corporation as payment of insured bank
deposit of such depositor in a closed bank and assumed d. 1/4 of 2% per annum of the assessment base of the
by another insured bank. bank
a. Deposit substitutes
b. Demand deposit 13. S1 – For purposes of the PDIC Law, deposits in different
c. Trust deposit banking institutions are insured separately.
d. Trust substitutes S2 – For purposes of the PDIC Law, if a bank has one or
e. Transfer deposit more branches, the main office and all branch offices
are considered as one bank
8. S1 - A joint account regardless of whether the a. All are correct
conjunction ‘and,’ ‘or,’ ‘and/or’ is used, shall be insured b. All are wrong
separately from any individually-owned deposit c. Only S1 is incorrect
account. d. Only S2 is incorrect
S2 - If the account is held jointly by two or more natural
persons, or by two or more juridical persons or entities, 14. The depositor of the closed insured bank has
the maximum insured deposit shall be divided into as ____________ to file his deposit insurance claim.
many equal shares as there are individuals, juridical a. 3 months from date of bank takeover
persons or entities. b. 6 months from date of bank takeover
S3 - If the account is held by a juridical person or entity c. 9 months from date of bank takeover
jointly with one or more natural persons, the maximum d. 12 months from date of bank takeover
e. 24 months from date of bank takeover

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EXCEL PROFESSIONAL SERVICES, INC.

c. Become a claim against the asset of the closed

15. Under the PDIC Law, the Corporation, its directors, bank.
officers, employees and agents are held free and d. Be written off immediately by the depositor.
harmless to the fullest extent permitted by law from any
liability, and they shall be indemnified for any and all 22. The PDIC will not pay deposit insurance on the
liabilities, losses, claims, demands, damages, following accounts or transactions except
deficiencies, costs and expenses of whatsoever kind and a. Investment products such as bonds
nature that may arise in connection with the b. Deposits that are determined to be the proceeds
performance of their functions, without prejudice to any of an unlawful activity
criminal liability under existing laws, except in the c. Deposit accounts or transactions which are
following: fictitious or fraudulent as determined by the
a. willful violation of this PDIC Law Corporation.
b. performed in bad faith d. Deposits in foreign currency.
c. with malice and/or gross negligence
d. All of the above 23. Citation of the PDIC Law -
a. RA 4951
16. Deposits NOT covered by Insurance under the PDIC b. RA 3591
Law, except: c. RA 1405
a. The amount in excess of insured deposit of d. RA 3293
P500,000
b. Deposit that is payable in foreign branches 24. The year of the effectivity of the PDIC law.
c. Deposit accounts that resulted from splitting of a. 1962
deposit b. 1974
d. Foreign currency deposits in the Philippines c. 1982
d. 1963
17. It means funds held by an insured bank in a fiduciary
capacity and includes without being limited to, funds 25. S1: PDIC covers only the risk of a bank closure
held as trustee, executor, administrator, guardian or ordered by the Monetary Board.
agent. S2: The Maximum Liability of the PDIC for Joint
a. Trust funds d. Trust substitutes Accounts is P500,000.00
b. Demand deposit e. Transfer deposit a. True, True
c. Trust deposit b. True, False
c. False, False
18. Which of the following is not a function of PDIC? d. False, True
a. Deposit insurer
b. Co-regulator of banks
26. Depositors have __ years from PDIC’s takeover of
c. Receiver and liquidator of closed banks
the closed bank to file a claim:
d. Engage in the lending of funds obtained from
the public a. 1
b. 2
19. Deposits in which of the following banks are insured c. 3
by the PDIC? d. 4
I. Commercial banks
II. Mortgage banks 27. Hansel has the following accounts before the
III. Cooperative banks Landbank of the Philippines:
IV. Rural banks
Account Name Type of Balance
a. All except II per Bank Deposit
b. All except IV Records
c. All except III Hansel Trust 500,000.00
d. All banks enumerated are covered Account
Hansel Checking 100,000.00
20. Mercy is a depositor of Redstone Bank. She has 3 Account
deposit accounts all under her name. One, in Hansel Savings 400,000.00
checking account, one in savings account and Deposit
another one in time deposit account. Each account Hansel Time Deposit 300,000.00
has a balance of P250,000. Redstone Bank became
Hansel Flower Savings 100,000.00
insolvent. PDIC closed the Bank. Mercy therefore is
Shop- Sole Deposit
unable to withdraw from all of the accounts. She
Proprietor
then filed her claims with the PDIC. Which
statement is most accurate?
Based on the table above, which statement is
a. X can claim a total of P500,000 for all 3
correct?
accounts.
a. The trust account is separately insured by the
b. X can only claim from 1 account of P250,000
PDIC, hence Hansel can claim the whole amount
c. X can claim a total of P750,000 from all 3
accounts. in case of bank closure
d. X cannot claim anything from any of the deposit b. The Time deposit by Hansel is not covered by
accounts. PDIC
c. Hansel has an uninsured deposit of
21. The portion of the deposit not insured shall: P400,000.00
a. Be forfeited in favor of the bank. d. None of the above
b. Be forfeited in favor of the Government.

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28. Based on the table above, how much can Hansel 2. Investments in bonds issued by the Philippine
claim before the PDIC in case of Bank Closure? government, its branches, and institutions (R.A.
a. 500,000.00 1405, Sec. 2).
b. 600,000.00 3. Trust accounts.
c. 900,000.00
d. 1,000,000.00 Deposits in the context of the Secrecy of Philippine currency
deposits include deposits of whatever nature and kind. They
include funds deposited in the bank giving rise to creditor-
29. Don Vito has the following bank accounts, together
debtor relationship, as well as funds invested in the bank
with Fredo and Johnny, before the Bank of the like trust accounts. The money deposited under the trust
Philippine Islands: agreement (“Trust account”) is intended not merely to
remain with the bank but to be invested by it elsewhere. To
hold that this type of account is not protected by R.A. 1405
Account Name Type of Balance would encourage private hoarding of funds that could
per Bank Deposit otherwise be invested by banks in other ventures, contrary
Records to the policy behind the law (Ejercito v. Sandiganbayan,
Don Vito Trust Account 200,000.00 G.R. No. 157294-95, November 30, 2006).
Don Vito Savings 600,000.00
Deposit 4. Exceptions
Don Vito and Time Deposit 500,000.00
Fredo Instances where examination or disclosure of information
Don Vito or Demand 800,000.00 about deposits can be allowed:
Johnny Deposit 1. Upon written consent of the depositor
2. In cases of impeachment
In case of bank closure, how much can Don Vito 3. Upon order of competent court in cases of bribery
claim before the PDIC? or dereliction of duty of public officials
a. 500,000.00 4. In cases where the money deposited or invested is
b. 700,000.00 the subject matter of the litigation (RA 1405, Sec.
c. 1,000,000.00 2)
d. 1,900,000.00
Other instances:
a. Upon order of the Commissioner of Internal
Revenue in respect of the bank deposits of a
BANK SECRECY LAW decedent for the purpose of determining such
(RA 1405, as amended) decedent’s gross estate (NIRC, Sec. 6[F][1])
b. In case of dormant accounts/deposits for at least 10
Purpose years under the Unclaimed Balances Act (Act No.
3936, Sec. 2)
The purposes of RA 1405 are: c. The Anti-Money Laundering Council (AMLC) may
1. Encourage deposit in banking institutions; and inquire into any deposit with any bank in case of
2. Discourage private hoarding so that banks may lend violation of the RA 9160 or the AMLA if there is
such funds and assist in the economic development probable cause that it is related to an unlawful
of the country. (Section 1, Republic Act (RA) No. activity (RA 9160, as amended, Sec. 11)
1405) d. The PDIC and the BSP may examine deposit
accounts and all information related to them in case
4. Prohibited Acts
of a finding of unsafe or unsound banking practices
The following are the prohibited acts in RA 1405: (RA 3591, as amended, Sec. 8)
1. Examination/inquiry/looking into all deposits of e. With court order: a. In cases of unexplained wealth
whatever nature with banks or banking institutions under Sec. 8 of the Anti-Graft and Corrupt Practices
in the Philippines (including investment in bonds Act (PNB v. Gancayco, L-18343, September 30,
issued by the government) by any person, 1965) b. In cases filed by the Ombudsman and upon
government official or office (RA 1405, Sec. 2). the latter’s authority to examine and have access to
2. Disclosure by any official or employee of any bank accounts and records (Marquez v. Desierto,
banking institution to any unauthorized person of GR 138569, September 11, 2003
any information concerning said deposit (RA 1405, f. Without court order: If the AMLC determines that a
Sec. 3) particular deposit or investment with any banking
institution is related to the following: a. Hijacking,
Note: Non-bank official or employee is not covered by the b. Kidnapping, c. Murder, d. Destructive Arson, and
prohibition. Neither is disclosure by a bank official or e. Violation of the Dangerous Drugs Act, f. Acts of
employee of information about bank deposit in favor of a Terrorism or in violation of Human Security Act.
co-employee in the course of the performance of his duties
covered by the prohibition. 5. Garnishment of Deposit including Foreign
Deposits
3. Deposits Covered
Foreign currency deposits are covered by R.A. 6426
1. All deposits of whatever nature with banks or otherwise known as the “Foreign Currency Deposits Act”
banking institutions found in the Philippines. General Rule: Foreign currency deposits cannot be inquired
or looked into. All foreign currency deposits are absolutely
confidential (RA 6426, Sec. 8).

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EXCEL PROFESSIONAL SERVICES, INC.
Exceptions:
1. The depositor has given his written permission;
2. The Commissioner of Internal Revenue is
authorized to inquire into bank deposits of the
following:
a. A decedent to determine his estate; and
b. Any taxpayer who has filed for an application for
compromise of his tax liability
c. A specific taxpayer upon request for tax
information from a foreign tax authority
pursuant to an international convention or
agreement on tax matters to which the
Philippines is a party (NIRC, Sec. 6 [f]).
3. AMLC may inquire into any deposit with a bank or
financial institution in case of violation of RA 9160 if
there is probable cause that it is related to an
unlawful activity (RA 9160, Sec. 11).
4. PDIC and BSP may examine deposit accounts and
all information related to them in case of a finding
of unsafe or unsound banking practices (RA 3591,
as amended, Sec. 8).
5. AMLC can investigate (a) any property of funds
related to financing terrorism; (b) property or funds
of any person if there is probable cause to believe
he is committing or attempting or conspiring to
commit terrorism or financing terrorism (RA 10168,
Sec. 10).
Note: Garnishment of a bank deposit does not violate
RA 1405.
The prohibition against examination or inquiry does not
preclude its being garnished for satisfaction of judgment.
The disclosure is purely incidental to the execution process
and it was not the intention of the legislature to place bank
deposits beyond the reach of judgment creditor (PCIB v. CA,
G.R. No. 84526, January 28, 1991).
Garnishment of Foreign Currency Deposits
General Rule: 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 (RA 6426, Sec 8).
Exception: The application of Sec. 8 of RA 6426 depends on
the extent of its justice. The garnishment of a foreign
currency deposit should be allowed to prevent injustice and
for equitable grounds, otherwise, it would negate Article 10
of the New Civil Code which provides that “in case of doubt
in the interpretation or application of laws, it is presumed
that the lawmaking body intended right and justice to
prevail (Salvacion v. Central Bank of the Philippines, G.R.
94723, August 21, 1997).
Bank Secrecy Law MC QUESTIONS
1. The Law on Secrecy of Bank Deposits is an act
prohibiting the disclosure of or inquiry into deposits with
any banking institution and its purposes are, except:
a. encourage people to deposit money in banks
b. strengthen the peso
c. discourage private hoarding of money
d. protect the confidentiality of bank deposits
2. The following are exceptions under the Bank Secrecy
Law, which exception is found under other laws:
a. Upon written permission or consent in writing by the
depositor
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b. In cases of impeachment of the President, Vice
President, members of the Supreme Court,
members of the Constitutional Commission and the
Ombudsman
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
e. The Presidential Commission on Good Government
in the conduct of its investigations to recover ill-
gotten wealth
3. The CIR is authorized to inquire into bank deposits in
the following instances, except:
a. an application for compromise of tax liability
b. determination of a decedent’s gross estate under
NIRC
c. determination of the gross income of a corrupt
public official
d. 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
4. The Anti-Money Laundering Council 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, except:
a. espionage
b. kidnapping for ransom
c. violation of the Comprehensive Dangerous Drugs
Act
d. hijacking and other violations under Republic Act
No. 623510
e. destructive arson and murder
5. The Philippine Deposit Insurance Commission and the
Bangko Sentral may inquire into bank deposits when:
a. there is a request for tax information of specific
taxpayers made by a foreign tax authority pursuant
to a tax treaty
b. there is a finding of unsafe or unsound banking
practices
c. when there is probable cause that the deposits or
investments are related to an unlawful activity or a
money laundering offense
d. there is a conduct annual testing which is limited to
the determination of the existence and true identity
of the owners of numbered accounts
e. necessary 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
6. The following are Authorized Disclosures in the Bank
Secrecy Law, except:
a. when there is probable cause that the deposits or
investments are related to an unlawful activity or a
money laundering offense
b. reporting of unclaimed balances to the Treasurer
of the Philippines
c. turn-over to the CIR of the amount in bank accounts
as may be sufficient to satisfy the writ of
garnishment issued to collect delinquent taxes
d. submission of report, and turn-over to, the court
officer or executing sheriff of garnished amounts
pursuant to a writ of garnishment in satisfaction of
a judgment
e. disclosure by a bank officer or employee upon
order of the court in connection with a deposit in a
closed bank that was used in the perpetration of
anomalies
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EXCEL PROFESSIONAL SERVICES, INC.
7. The Anti-Money Laundering Council, either upon its own
initiative or at request of the Anti-Terrorism Council,
further authorize to issue an ex parte order to freeze
accounts without delay. Freeze order shall be for a
period of ___ days, unless extended by the CA up to a
period not exceeding six (6) months upon petition by
the AMLC.
a. 10 days d. 40 days
b. 20 days e. 50 days
c. 30 days
8. S1 - The Secrecy of Bank Deposit Law does not apply to
foreign currency deposits.
S2 – The AMLC, without a court order, is authorized to
investigate property or funds that are in any way related
to financing of terrorism or acts of terrorism OR the
property or funds of any person or persons in relation
to whom there is probable cause that such person is
involved in the acts of terrorism.
a. Both Statements are correct
b. Both Statements are incorrect
c. Only Statement 1 is incorrect
d. Only Statement 2 is incorrect
9. S1 - Bank accounts may not be garnished by the
creditors of the depositor as this constitutes a violation
of the bank Secrecy Law.
S2 - AMLC may inquire into deposits upon order of the
court when there is probable cause that the deposits are
related to the crime of unlawful activities.
a. Both Statements are correct
b. Both Statements are incorrect
c. Only Statement 1 is incorrect
d. Only Statement 2 is incorrect
10. The following persons are not liable under Bank Secrecy
Law, except:
a. 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 not allowed
in Sec. 2;
b. Any official or employee of a banking institution who
makes a disclosure concerning bank deposits to
another in any instance not allowed
c. Any person who commits a violation of any of the
provisions of the law
d. All of the above
e. None of the above
11. The Bank Secrecy Law prohibits disclosing any
information about deposit records of an individual
without court order, except:
a. In an examination to determine gross estate of a
decedent.
b. In an investigation for violation of Anti-Graft and
Corrupt Practices.
c. In an investigation by the Ombudsman.
d. None of the above.
12. The Anti-Money Laundering Council may, without court
order, examine a particular deposit or investment if this
is related to the following predicate crimes except:
a. Kidnapping c. Homicide
b. Destructive Arson d. Hijacking
13. I. Foreign currency deposits are exempt from
attachment, garnishment, or any other order or process
of any court, legislative body, government agency or
any administrative body whatsoever.
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II. Peso currency deposits are not exempt from
attachment, garnishment, or any other order or process of
any court, legislative body, government agency or any
administrative body whatsoever.
a. Both statements are correct.
b. Both statements are incorrect.
c. Statement I is correct while statement II is
incorrect.
d. Statement I is incorrect while statement II is
correct.
14. Deposits covered under the Law on Secrecy of Bank
Deposits are the following except:
a. All deposits of whatever nature.
b. Investments in bonds issued by the Government of
the Philippines, its political subdivisions and its
instrumentalities.
c. Trust accounts.
d. None of the above.
15. The declared policy of the Government in making the
Law on Secrecy of Bank Deposits is to give
encouragement to the people to deposit their money in:
a. Government institution
b. Banking institution
c. Economic institution
d. Educational institution
16. The period to file the claim in PDIC.
a. 6 months
b. 12 months
c. 24 months
d. 5 years
17. S1: The BSP and PDIC can examine the deposit
information of all depositors of the bank without the
consent of the deposits to determine the presence of
unsafe bank practices.
S2. Courts cannot issue an order for examination of
bank deposit without the consent of the depositor.
a. True, True
b. True, False
c. False, False
d. False, True
18. Which of the following is not prohibited under the Bank
Secrecy Law?
a. Alvin, a friend of Agnes, who accompanied the latter
to a bank to deposit money, and disclosed that Sara
deposited 5 million pesos to her bank account to his
wife.
b. Harold, a bank teller, disclosing to his wife, that his
friend Gianna deposited 10 million pesos in his bank
account yesterday.
c. Carlo, an NBI agent investigating Philip because of
his suspected illegal activities, examined the bank
accounts of the latter.
d. All of the above are prohibited acts.
19. S1 - Garnishments of bank accounts is not allowed
under the law since it is contrary to Bank Secrecy Law.
S2 – The foreign currency account can be opened in
case of impeachment of the President of the Philippines.
a. Both are true
b. Both are false
c. Only S1 is true
d. Only S2 is true
Unclaimed Balances Law
(Act No. 3936)
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EXCEL PROFESSIONAL SERVICES, INC.
a. 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 (1) known to be dead or who has (2) 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 (Sec. 1, PD 679).
b. Deposits that have become dormant for a period of ten
(10) years may be ESCHEATED in favor of the
Government.
c. Solicitor General shall commence the action in the RTC
of the province or city where the bank, xxx xxx is located,
in which shall be joined as parties the bank, building and
loan association or trust corporation and all such creditors
or depositors.
d. Every 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 (1) known to be dead, or (2) 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:
i. The NAMES and last known place of residence or post
office addresses of the persons in whose favor such
unclaimed balances stand;
ii 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;
iii. 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
iv. The INTEREST due on such unclaimed balance, if any,
and the amount thereof (Sec. 2)
e. The Regional Trial Court (RTC) shall declare the
unclaimed balances as ESCHEATED to the Government of
the Republic of the Philippines and to be deposited to the
Treasurer of the Republic of the Philippines.
f. Make the statement under oath, report it to the Treasurer
of the Philippines, and comply with the law.
UNCLAIMED BALANCES LAW
MC QUESTIONS
1. Unclaimed Balances 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, in favor of any person, except:
a. known to be dead
b. known to be insane
c. not made further deposits during the preceding ten
years or more
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d. not made withdrawals during the preceding ten
years or more
2. Deposits that have become dormant for a period of ten
(10) years may be __________ in favor the
Government.
a. subject to attachment b. executed
b. garnished c. escheated
3. Every 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 (1) known to be dead, or (2) 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, except;
a. The names and first 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
d. The interest due on such unclaimed balance, if any,
and the amount thereof
4. Under the Unclaimed Balances Law, the Solicitor
General shall commence the action in the RTC of the
province or city _______________________________
in which shall be joined as parties the bank, building
and loan association or trust corporation and all such
creditors or depositors.
a. where the depositor first resided
b. where the depositor last resided
c. where the last deposit was made
d. where the first deposit was made
e. where the bank is located
5. Under the Unclaimed Balances Law, 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
________________________ thereof during which
such default shall continue
a. five hundred pesos a month for each month or
fraction
b. one thousand pesos a month for each month or
fraction
c. two thousand pesos a month for each month or
fraction
d. five thousand pesos a month for each month or
fraction
e. ten thousand pesos a month for each month or
fraction
ELECTRONIC COMMERCE ACT
(RA 8792)
1. Principles
The law aims to facilitate domestic and international
dealings, transactions, arrangements agreements,
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EXCEL PROFESSIONAL SERVICES, INC.
contracts and exchanges and storage of information
through the utilization of electronic, optical and similar
medium, mode, instrumentality and technology to
recognize the authenticity and reliability of electronic
documents related to such activities and to promote the
universal use of electronic transaction in the government
and general public. (Sec. 3, RA 8792)
2. Application
The law shall apply to any kind of data message and
electronic document used in the context of commercial and
non-commercial activities to include domestic and
international dealings, transactions, arrangements,
agreements contracts and exchanges and storage of
information.
3. Definition of Terms
"Electronic Data Message" refers to information generated,
sent, received or stored by electronic, optical or similar
means.
"Information and Communications System" refers to a
system intended for and capable of generating, sending,
receiving, storing, or otherwise processing electronic data
messages or electronic documents and includes the
computer system or other similar device by or in which data
is recorded or stored and any procedures related to the
recording or storage of electronic data message or
electronic document.
"Electronic Signature" refers to any distinctive mark,
characteristic and/or sound in electronic form, representing
the identity of a person and attached to or logically
associated with the electronic data message or electronic
document or any methodology or procedures employed or
adopted by a person and executed or adopted by such
person with the intention of authenticating or approving an
electronic data message or electronic document.
"Electronic Document" refers to information or the
representation of information, data, figures, symbols or
other modes of written expression, described or however
represented, by which a right is established or an obligation
extinguished, or by which a fact may be prove and affirmed,
which is receive, recorded, transmitted, stored, processed,
retrieved or produced electronically. (Section 5, RA 8792)
Note: the term "electronic document" may be used
interchangeably with "electronic data message". (A.M. No.
01-7-01-SC)
"Ephemeral electronic communication" refers to telephone
conversations, text messages, chatroom sessions,
streaming audio, streaming video, and other electronic
forms of communication the evidence of which is not
recorded or retained. (Sec. 1, A.M. No. 01-7-01-SC)
"Digital signature" refers to an electronic signature
consisting of a transformation of an electronic document or
an electronic data message using an asymmetric or public
cryptosystem such that a person having the initial
untransformed electronic document and the signer's public
key can accurately determine:
i. whether the transformation was created using the
private key that corresponds to the signer's public
key; and
ii. whether the initial electronic document had been
altered after the transformation was made.
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4. Legal Recognition And Communication Of
Electronic Data Message And Electronic
Documents
Legal Recognition of Electronic Data Messages or
Documents
In cases of documents and signatures in electric form, the
information shall not be denied legal effect, validity or
enforceability solely on the grounds that it is in the data
message purporting to give rise to such legal effect, or that
it is merely referred to in that electronic data message (Sec.
6, RA 8792). For evidentiary purposes, an electronic
document shall be the functional equivalent of a written
document under existing laws (Sec. 7 of RA 8792).
On the other hand, as to electronic signature placed on the
electronic document, it shall be equivalent to the signature
of a person on a written document if that signature is proved
by showing that a prescribed procedure, not alterable by the
parties interested in the electronic document, existed under
which:
a. A method is used to identify the party sought to be
bound and to indicate said party’s access to the
electronic document necessary for his consent or
approval through the electronic signature;
b. Said method is reliable and appropriate for the purpose
for which the electronic document was generated or
communicated, in the light of all circumstances,
including any relevant agreement;
c. It is necessary for the party sought to be bound, in or
order to proceed further with the transaction, to have
executed or provided the electronic signature; and
d. The other party is authorized and enabled to verify the
electronic signature and to make the decision to
proceed with the transaction authenticated by the
same. (Sec. 7 of RA 8792)
In furtherance of the support in favor of the recognition
of electronic signature, it shall be presumed that electronic
signature is the signature of the person to whom it
correlates and it was affixed by that person with the
intention of signing or approving the electronic document
unless the person relying on the electronically signed
electronic document knows or has noticed of defects in or
unreliability of the signature or reliance on the electronic
signature is not reasonable under the circumstances (Sec.
8 of RA 8792).
Communication of Electronic Data Messages or
Documents
Under the Civil Code of the Philippines, all contracts have
three (3) essential elements, these are, consent of the
contracting parties, the object which is the subject matter
of the contract and cause of the obligation which is
established (Article 1318 of the Civil Code). Consent is
manifested by the meeting of the offer and the acceptance
upon the thing and the cause which are to constitute the
contract (1319 of the Civil Code). Under RA 8792, except
when otherwise agreed by the parties, an offer and its
acceptance and such other elements for the formation of
contracts may be expressed, demonstrated, and proved by
means of electronic data messages or electronic documents.
No contract shall be denied validity or enforceability on the
sole ground that it is in the form of an electronic data
message or electronic document, or that any or all of the
elements required under existing laws for the formation of
contracts is expressed, demonstrated and proved by means
of electronic data messages or electronic documents (Sec.
16 (1) of RA 8792).
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 EXCEL PROFESSIONAL SERVICES, INC.
Consummation of the Transaction Through Electronic
Messages or Documents
The electronic transactions made through networking
among banks, or linkages thereof with other entities or
networks, and vice versa, shall be deemed consummated
upon the actual dispensing of cash, or the debit of one
account, and the corresponding credit to another, whether
such transaction is initiated by the depositor, or by an
authorized collecting party. The obligation of one bank,
entity, or person similarly situated to another arising 6.
therefrom shall be considered absolute, and shall not be
subjected to the process of preference of credits (Sec. 16
(2) of RA 8792).
5. Electronic Commerce in Carriage of Goods
This applies to any action in connection with, or in
pursuance of, a contract of carriage of goods, including but
not limited to:
a. (i) Furnishing the marks, number, quantity or
weight of goods; (ii) stating or declaring the nature
or value of goods; (iii) issuing a receipt for goods;
(iv) confirming that goods have been loaded;
b. (i) Notifying a person of terms and conditions of the
contract; (ii) giving instructions to a carrier;
c. (i) Claiming delivery of goods; (ii) authorizing
release of goods; (iii) giving notice of loss of, or
damage to goods;
d. Giving any other notice or statement in connection
with the performance of the contract;
e. Undertaking to deliver goods to a named person or
a person authorized to claim delivery;
f. Granting, acquiring, renouncing, surrendering,
transferring or negotiating rights in goods; and
g. Acquiring or transferring rights and obligations
under the contract (Sec. 25, RA 8792).
Transport of Goods
In the transport of the goods to the buyer or recipient, RA
8792 provides:
1. Where the law requires that any action referred to
contract of carriage of goods be carried out in writing or
by using a paper document, that requirement is met if
the action is carried out by using one or more data
messages or electronic documents.
2. The preceding paragraph applies whether the
requirement therein is in the form of an obligation or
whether the law simply provides consequences for
failing either to carry out the action in writing or to use
a paper document.
3. If a right is to be granted to, or an obligation is to be
acquired by, one person and no person, and if the law
requires that, in order to effect this, the right or
obligation must be conveyed to that person by the
transfer, or use of, a paper document, that requirement
is met if the right or obligation is conveyed by using one
or more electronic data messages or electronic
documents unique;
4. For the purposes of paragraph (3), the standard of
reliability required shall be assessed in the light of the
purpose for which the right or obligation was conveyed
and in the light of all the circumstances, including any
relevant agreement.
5. Where one or more data messages are used to effect
any action in undertaking to deliver goods to a named
person or a person authorized to claim delivery or in
Page 13 of 14 www.teamprtc.com.ph
granting, acquiring, renouncing, surrendering,
transferring or negotiating rights in goods, no paper
document used to effect any such action is valid unless
the use of electronic data message or electronic
document has been terminated and replaced by the
used of paper documents. A paper document issued in
these circumstances shall contain a statement of such
termination. The replacement of the electronic data
messages or electronic documents by paper documents
shall not affect the rights or obligation of the parties
involved.
If a rule of laws is compulsorily applicable to a contract
of carriage of goods which is in, or is evidenced by, a
paper document, that rule shall not be inapplicable to
such a contract of carriage of goods which is evidenced
by one or more electronic data messages or electronic
documents by reason of the fact that the contract is
evidenced by such electronic data messages or
electronic documents instead of by a paper document.
7. ELECTRONIC TRANSACTIONS IN
GOVERNMENT
All departments, bureaus, offices and agencies of the
government, as well as all government-owned and -
controlled corporations, that pursuant to law require or
accept the filling of documents, require that documents be
created, or retained and/or submitted, issue permits,
licenses or certificates of registration or approval, or provide
for the method and manner of payment or settlement of
fees and other obligations to the government, shall -
(a) accept the creation, filing or retention of such
documents in the form of electronic data messages or
electronic documents;
(b) issue permits, licenses, or approval in the form of
electronic data messages or electronic documents;
(c) require and/or accept payments, and issue receipts
acknowledging such payments, through systems using
electronic data messages or electronic documents; or
(d) transact the government business and/or perform
governmental functions using electronic data messages or
electronic documents, and for the purpose, are authorized
to adopt and promulgate, after appropriate public hearing
and with due publication in newspapers of general
circulation, the appropriate rules, regulations, or guidelines,
to, among others, specify -
1) the manner and format in which such electronic
data messages or electronic documents shall be
filed, created, retained or issued;
2) where and when such electronic data messages
or electronic documents have to signed, the use of
an electronic signature, the type of electronic
signature required;
3) the format of an electronic data message or
electronic document and the manner the electronic
signature shall be affixed to the electronic data
message or electronic document;
4) the control processes and procedures as
appropriate to ensure adequate integrity, security
and confidentiality of electronic data messages or
electronic documents or records of payments;
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EXCEL PROFESSIONAL SERVICES, INC.

5) other attributes required to electronic data a. Blocking d. Piracy

messages or electronic documents or payments; b. Erasure e. Interference
and c. Cracking

6) the full or limited use of the documents and
papers for compliance with the government
requirements: Provided, that this Act shall be itself
mandate any department of the government, organ
of state or statutory corporation to accept or issue
any document in the form of electronic data
messages or electronic documents upon the
adoption, promulgation and publication of the
appropriate rules, regulations or guidelines. (Sec.
27, RA 8792)
E-COMMERCE ACT MC QUESTIONS
(RA 8792)
1. The E-commerce Law aims to facilitate domestic and
international dealings, transactions, arrangements,
agreements, contracts and exchanges and storage of
information through the utilization of electronic, optical
and similar medium, mode, instrumentality and
technology to recognize the authenticity and _______
of electronic data messages or electronic documents
related to such activities and to promote the universal
use of electronic transaction in the government and by
the general public.
a. Confidentiality
b. Accessibility
c. Validity
d. Reliability
2. It refers to a person by whom, or on whose behalf, the
electronic document purports to have been created,
generated and/or sent. The term does not include a
person acting as an intermediary with respect to that
electronic document.
a. Data subject c. Addressee
b. Originator d. Intermediary
3. The E-Commerce law expressly provides that for
evidentiary purposes, an electronic document shall be
the _______________________ under existing laws.
a. equivalent of the public document
b. equivalent of a registered document
c. exact duplicate of a notarized document
d. functional equivalent of a document in writing
6. The following are essential features of the E- Commerce
Law, except:
a. Legal recognition of electronic documents
b. Use in transactions involving carriage of goods
c. Admissibility as evidence
d. Permanent insurance fund
e. Electronic transactions in government
7. This refers to information generated, sent, received or
stored by electronic, optical or similar means.
a. Electronic document
b. Electronic signature
c. Electronic data message
d. Electronic contract
8. Electronic transactions made through networking
among banks is deemed consummated upon:
a. receipt of the email confirmation about the
transaction.
b. sending the confirmation code to the bank.
c. the actual dispensing of cash or the debit of one
account and the corresponding credit to another.
d. placing of electronic signature in the electronic
document.
9. I. Another term for hacking is cracking.
II. The introduction of computer viruses is also
categorized as hacking.
a. Both statements are correct.
b. Both statements are incorrect.
c. Statement I is correct while statement II is
incorrect.
d. Statement I is incorrect while statement II is
correct.
10. It is the unauthorized copying, reproduction, alteration
and importation of protected material.
a. Photocopying
b. Cracking
c. Piracy
d. Hacking
11. The following are the illegal activities under E-
Commerce Act except:
a. Hacking c. Piracy
b. Photocopying d. Violation of the Consumer Act

4. Authorities and parties with the legal right can only gain 12. The unauthorized copying, reproduction, dissemination,
access to electronic documents, electronic data distribution of protected material, electronic signature
messages, and electronic data messages, and electronic or copyrighted works including legally protected sound
signatures. For confidentiality purposes, it shall not recordings or phonograms or information material on
share or convey to any other person. protected works, through the use of telecommunication
a. Obligation of Reliability networks
b. Obligation of Confidentiality a. Hacking c. Piracy
c. Obligation of Authenticity b. Infringement d. Forgery
d. Obligation of Security
“The more you sweat in peace, the less you bleed in war.”
5. Hacking or ________ refers to the unauthorized access
into or interference in a computer system / server or End of RFBT.3507
information and communication system; or any access
in order to corrupt, alter, seal, or destroy using a
computer or other similar information and
communication devices, without the knowledge and
consent of the owner of the computer or information
and communications system, including the introduction
of computer viruses and the like, resulting in the
corruption, destruction, alteration, theft or loss of
electronic data messages or electronic document.

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