REGULATORY FRAMEWORK FOR

BUSINESS TRANSACTIONS Jamel Tabao

BANKING LAWS Mamutuk

February 1, 2020
 #OUTLINE
A. General Banking Law (GBL)
B. Philippine Deposit Insurance Corp. (PDIC) Law
C. Bank Secrecy Law
D. Unclaimed Balances Law
E. The New Central Bank Act (NCBA)
F. Anti-Money Laundering (AMLA) Law
G. Bouncing Checks Law
A. GENERAL BANKING LAW (R.A.
NO. 8791)

Question: What are banks?

R.A. = REPUBLIC ACT

GENERAL BANKING LAW (GBL FOR SHORT)
WHAT ARE BANKS?

BANKS – entities engaged in the lending of

funds obtained in the form of deposits (S3.1,
GBL)

•It is required that banks are stock corporations and

that its funds are obtained from the public, meaning
deposits of twenty (20) or more persons (S8, GBL)
Question:

What are bank deposits?

WHAT ARE BANK DEPOSITS?

BANK DEPOSITS – refer to money or funds placed with

a bank that can be withdrawn on the depositor’s order
or demand.
E.g.: savings, demand/current/checking and time
deposits

Q: What do you call the person who placed money or funds with
a bank?
Question:

What is the relationship between the

depositor and the bank? What is the
nature of the contract between the
bank and its depositors?
DEPOSITOR X BANK

The contract between the bank and its depositors is in

the nature of a simple loan, governed by the
provisions of the Civil Code.
•The placing of deposits in a bank creates a debtor-
creditor relationship between the bank and the depositor.
The bank is the debtor and the depositor is the creditor.
•The depositor lends the bank money, and the bank has
the obligation to pay the depositor.
BPI vs. First Metro (G.R. No. 132390, December 8, 2004)

There is a debtor-creditor relationship between the bank

and its depositor. The bank is the debtor and the depositor
is the creditor. The depositor lends the bank money and
the bank agrees to pay the depositor on demand. The
savings deposit agreement between the bank and the
depositor is the contract that determines the rights and
obligations of the parties.
Question:

Is an investment company a
bank?
 No. An investment company that performs as
such is not a bank.
#GeneralRule #InvestmentCompanyNotBank

Banas vs. Asia Pacific Finance Corp., G.R. No. 128703, October 18, 2000
An investment company that is engaged solely in
investing, reinvesting or trading in securities is not
engaged in banking.
#Exception2DRule
Republic vs. Security Credit and Acceptance Corp., G.R. No. L-20583, Jan. 23,
1967

However, an investment company which

loans out the money to its customers,
collects the interests, and charges a
commission to both lender and borrower
is engaged in banking.
Question:

What is the nature of banking business?

#NatureOfBankingBusiness
Banking is FIDUCIARY in nature that
requires high standards of integrity and
performance. A bank has a vital role in
providing an environment conducive to the
sustained national economy. (S2, GBL)
 impressed with #publicinterest
#ConsequenceOfFiduciaryNature
Simex International Inc. vs. CA, 183 SCRA 361

It is required to exercise UTMOST DILIGENCE

in the handling of deposits.

Question: What is the degree of diligence

required of banks in the conduct of their
business?
Answer: #HighestDegreeOfDiligence
#ConsequenceOfFiduciaryNature
Central Bank of the Phil. vs. CA, 208 SCRA 652

It is subject to heavy and close

supervision and/or regulation by the
Bangko Sentral ng Pilipinas (BSP).
Authority to Incorporate and Operate

A banking corporation cannot be incorporated without

authority from the BSP. The Articles of Incorporation to be
filed with the Securities and Exchange Commission (SEC)
should be accompanied by the favorable recommendation of
the BSP, otherwise, it shall not be accepted or approved (S14,
GBL)

An entity that is performing banking function cannot operate

without a certificate or authority from the BSP (S6, GBL).
Question:

What are the classifications or types of

banks?
 TYPES OF BANKS
A. Commercial Banks
B. Universal Banks
C. Thrift Banks
D. Rural Banks
E. Cooperative Banks
F. Islamic Bank
G. Government-owned Banks
 COMMERCIAL BANKS
Banks that have, in addition to the general powers incident to
corporations, all such powers as may be necessary to carry on the
business of commercial banking, such as:
accepting drafts and issuing letters of credit,
 discounting and negotiating promissory notes, drafts, bills of exchange, and
other evidence of debt,
 accepting or creating demand deposits,
 receiving other types of deposits and deposit substitutes,
 buying and selling foreign exchange and god or silver bullion,
 acquiring marketable bonds and other debt securities,
 and extending credit, subject to such rules as the Monetary Board may
promulgate.
 UNIVERSAL BANKS
Banks that have the authority to exercise, in
addition to the powers and functions of
commercial banks, the powers of an investment
house and the power to invest in non-allied
enterprises.
 THRIFT BANKS
 include savings and mortgage bank, private
development banks, and stock savings and loan
associations organized under existing laws, i.e. R.A.
No. 7906
 purposes, among others: a) accumulate the savings of
depositors and invest them; b) provide short-term
working capital, medium and long-term financing, to
businesses engaged in agriculture, services, industry
and housing.
 RURAL BANKS
Banks that are created to make needed credit
available and readily accessible in the rural areas
for the purpose of promoting comprehensive rural
development (R.A. No. 7353)
 In granting of loans, the rural bank shall give
preference to the application of farmers,
fishermen, farm-families and merchants whose
cash requirements are small.
 COOPERATIVE BANKS
Banks that primarily provide
financial, banking and credit services
to cooperative organizations and their
members (R.A. No. 9520)
 ISLAMIC BANK
A bank created to promote and accelerate the
socio-economic development of the ARMM,
now BARMM, by performing banking,
financing and investment operations and to
establish and participate in agricultural,
commercial and industrial ventures based on
the Islamic concept of banking (R.A. No. 6848).
GOVERNMENT-OWNED BANKS
Those banks controlled and owned by
the national government. They are
created by special law to achieve a
particular public purpose.
E.g.: Land Bank of the Philippines and
Development Bank of the Philippines
 IMPORTANT NOTES
1. Only universal banks and commercial banks can create
and accept demand deposits without separate authority
from the Monetary Board.
2. Only universal banks may act as an investment house.
3. Incorporators of banks are natural persons, except Rural
Banks which can be organized by cooperatives and
corporations.
4. A rural bank must be WHOLLY owned by Filipinos, while
other banks require only forty percent Filipino ownership
of their voting stocks.
 OTHER IMPORTANT NOTES
1. There are two basic functions of banks:
Deposit and Loan.
2. Banks are prohibited from engaging in
INSURANCE business.
3. Outsourcing of functions are generally
prohibited. Example: A bank cannot hire
another company to accept deposits.
 OTHER IMPORTANT NOTES
4. The bank can make use as its own the money deposited. Said
amount is not being held in trust for the depositor not is it being
kept for safekeeping.
5. The bank has the right of compensation. It can set off the
deposits with the indebtedness of the depositor that are due and
demandable.
6. Third persons who may have a right to the money deposited
cannot hold the bank responsible unless there is a court order or
garnishment.
7. The officers of the bank cannot be held liable for estafa if they
authorized the use of the money deposited by the depositor.
 OTHER IMPORTANT NOTES
8. Minors can open bank accounts in their own right, provided
that they are at least 7 years old, able to read and write and
have sufficient discretion, not otherwise disqualified by any
other incapacity, and it should only be savings or time deposits.
9. Married women are allowed to open bank accounts without the
assistance of their husbands (R.A. No. 7192).
10. The most common kind of deposit is SAVINGS account. Other
kinds: demand deposits, negotiable order of withdrawal
accounts (NOW) and time deposits.
11. Savings account is usually evidence by a PASSBOOK.
 OTHER IMPORTANT NOTES
12. Demand deposits are those liabilities of banks which are
denominated in Philippine currency and are subject to payment
in legal tender upon demand by presentation of checks.
13. Negotiable Order of Withdrawal (NOW) accounts are interest-
bearing deposit accounts that combine the payable on demand
feature of checks and investment feature of savings accounts.
14. Time deposits are accounts with fixed terms.
15. Anonymous accounts are prohibited (R.A. No. 9194), except
foreign currency deposits which may be a “numbered account.”
 OTHER IMPORTANT NOTES
16. Bank account may be opened by one individual
(#singleaccount) or by two or more persons (#jointaccount).
Whenever two or more persons open an account, the same
may be an “and/or account” or an “and” account.
17. In a “By” account, Salma by Nasip, Salma is the depositor
18. In an “In Trust For” (ITF) account, Salma In Trust For
Nasip, Nasip is the depositor
19. In a “For the Account of” (FAO) account, Salma For the
Account of Nasip, Nasip is the depositor
B. PHILIPPINE DEPOSIT INSURANCE CORPORATION
(PDIC) LAW
(R.A. NO. 3591, AS AMENDED BY R.A. NO. 10846)

All deposits in banks are insured with the

Philippine Deposit Insurance Corporation or
PDIC (S4, RA3591 as amended).
 MEANING OF DEPOSIT
Deposit means the unpaid balance of money
or its equivalent received by a bank in the usual
course of business and for which it has given or
is obliged to give credit to a commercial,
checking, savings, time or thrift account, or
issued in accordance with BSP rules and
regulations and other applicable laws.
 HOW MUCH IS THE INSURED DEPOSIT?
OR, WHAT IS THE AMOUNT DUE TO THE
DEPOSITOR?
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 the date of
closure, but not to exceed P500,000.00.
 WHAT IS PHILIPPINE DEPOSIT
INSURANCE CORP. OR PDIC?
PDIC is a government instrumentality created in
1963 by virtue of R.A. No. 3591 to insure the
deposits of all banks which are entitled to the
benefits of insurance. The PDIC is an attached
agency of the Department of Finance.
Note: The latest amendments to R.A. No. 3591 are contained
in R.A. No. 10846 signed into law on May 23, 2016.
 PRIMARY FUNCTIONS OF PDIC
To act as:
(a) deposit insurer,
(b) co-regulator of banks, and
(c) receiver and liquidator of closed banks
Question:

What are insurable deposits under

PDIC Law (covered by PDIC
Insurance)?
INSURABLE DEPOSITS (COVERED BY
PDIC INSURANCE)
1. By Deposit Type:
a) Savings deposit d) Negotiable order of withdrawal
b) Special savings e) Time deposit
c) Demand/ checking account f) Foreign currency deposit
2. By Deposit Account:
a) Single account
b) Joint account
c) Account “By,” “In Trust For,” (ITF) or “For the Account
of” (FAO)
Question:

Are all deposits in banks covered by

insurance?
 DEPOSITS NOT COVERED BY
INSURANCE
1. The amount in excess of insured deposit of P500,000.00;
2. Deposit that is payable in a place outside the Philippines
(Example: in foreign branches);
3. Investment products such as bonds and securities, trust
accounts, and other similar instruments;
4. Deposit accounts or transactions which are unfounded, or
that are fictitious or fraudulent
5. Deposit accounts or transactions constituting, and/or
emanating from, unsafe and unsound banking practice/s
 DEPOSITS NOT COVERED BY
INSURANCE
6. Deposits that are determined to be the proceeds of an unlawful
activity as defined under R.A. No. 9160 or the Anti-Money
Laundering Law;
7. Deposit accounts that resulted from splitting of deposit; and
8. Money placements by the head office of a foreign bank in its
branch in the Philippines because there is only one entity.

Note: Inter-branch deposits are not covered by deposit insurance. Inter-

branch deposits refer to funds of one branch or the Head Office of bank in
another branch. These branches are part of one and the same juridical
entity.
Question:

What is the maximum liability or

the maximum deposit insurance
coverage?
 P500,000.00
Answer:

PDIC shall pay deposit insurance on all

valid deposits up to the maximum deposit
insurance coverage of P500,000 per
depositor of a closed bank.
However, a depositor with single
accounts and joint accounts may have
insured deposits of up to P1,000,000.
Question:

How do you determine the

amount due to a depositor?
Answer:

To determine the amount due to a

depositor, all of his deposits in the bank
maintained in the same right and
capacity and for the benefit either in
his own name or in the name of others,
are added together.
Illustration A: How much is Salma’s insured deposit if she has the following four
deposit accounts in the same bank?

ACCOUNT NAME Deposit Insured

(in PHP) Deposit of
Salma
Salma 100,000 100,000
Nasip For the Account of Salma 100,000 100,000
Joe Abul In Trust For Salma 100,000 100,000
Salma’s Store (sole proprietorship) 700,000 200,000
Total 1,000,000 500,000
 Illustration B: How much is Salma’s insured deposit if she has the following three joint
accounts in the same bank?
ACCOUNT NAME Deposit Insured
(in PHP) Deposit of
Salma
Salma or Nasip 500,000 250,000
Salma and Joe Abul 1,000,000 250,000
Salma and/or Abqary D. Mama 1,000,000 0*
Total 2,500,000 500,000

*Note: Salma does not have any insured deposit share since she already has P500,000 in total shares in the
two joint accounts she has with Nasip and Joe Abul
 Illustration C:
ACCOUNT NAME Deposit Insured
(in PHP) Deposit of
Salma
All single accounts of Salma in 1,000,000 500,000
BDO Branch 1
All joint accounts of Salma in BDO 2,500,000 500,000
Branch 2
Total 3,500,000 1,000,000
Problem:

Viral Bank was closed by the Monetary

Board on account of insolvency. At the time it
was closed, Salma has three accounts with
Viral Bank and each account has an
outstanding balance of P250,000 or a total
amount of P750,000. How much can Salma
recover from the PDIC?
Question:

When is payment made?

 The proceeds of the insurance shall be paid by the
PDIC to the depositor whenever the insured bank is
closed on account of insolvency. An insured bank shall
be deemed to have been closed on account of insolvency
when ordered closed by the Monetary Board of the BSP
(S10b, RA 3591).
The claim must be filed within 2 years from actual
takeover by the receiver.
 BANK SECRECY LAWS
A. PESO DEPOSITS – governed by R.A. No. 1405 (An
Act Prohibiting Disclosure of or Inquiry Into Deposits
With Any Banking Institution)

B. FOREIGN CURRENCY DEPOSITS – governed by

R.A. No. 6426 (Foreign Currency Deposit Act of the
Philippines)
 PESO DEPOSITS

All deposits of whatever nature in banks or

banking institutions in the Philippines and
investments in government bonds are absolutely
confidential in nature (S2, RA 1405)
#Absoluteconfidentialityofbankdeposits
 PESO DEPOSITS
#EXCEPTIONSTOTHEGENERALRULE
Bank deposits and investments in government bonds may be
examined, inquired or looked into under limited exceptions as
follows:
1. When there is written permission or consent of the depositor;
2. Impeachment cases;
3. Upon the order of a competent court in cases of bribery or
dereliction of duty of public officials;
4. Upon the order of a competent court 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;
5. Upon the order of a competent court in cases of unexplained
wealth under the Anti-Graft and Corrupt Practices Act;
PESO DEPOSITS
#EXCEPTIONSTOTHEGENERALRULE

6. Upon inquiry by the Commissioner of Internal Revenue for the purpose

of determining the net estate of a deceased depositor;
7. Upon the order of a competent court where there is probable cause of
money laundering;
8. Disclosure to the Treasurer of the Philippines for dormant deposits for
at least ten (10) years under the Unclaimed Balances Act (S2, RA3936);
9. Report of banks to Anti-Money Laundering Council (AMLC) of covered
and/or suspicious transactions (S9, RA9160);
10.Upon order of the Court of Appeals, examination by law enforcement
officers in terrorism cases under the Human Security Act of 2007 (S27,
RA8372)
WHO ARE CRIMINALLY LIABLE UNDER
THE LAW?
The following are criminally liable under the law:
1. 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
Section 2;
2. Any official or employee of a banking institution who makes a
disclosure concerning bank deposits to another in any instance not
allowed by law; and
3. Any person who commits a violation of any of the provision of the
law.
WHAT ARE THE PENALTIES FOR
VIOLATION OF RA NO. 1405?
The following are the penalties:
1. imprisonment of not more than 5 years;
2. fine of not more than P20,000, or
3. both imprisonment and fine.
 FOREIGN CURRENCY DEPOSITS

All foreign currency deposits are absolutely

confidential and cannot be examined, inquired, or
looked into by any person, government official,
bureau or office, whether judicial or administrative
or legislative, or any other private or public entity.
 EXCEPTIONS

a) When there is written consent of depositor under

Section 8 of the Foreign Currency Deposits Act;
b) Under Section 11 of the Anti-Money Laundering
Act; and
c) Under Sections 27 and 28 of the Human Security
Act.
WHAT ARE THE PENALTIES FOR
VIOLATION OF RA NO. 6426?
The following are the penalties:
1. imprisonment of not less than one (1)
year but not more than 5 years;
2. fine of not less then P5,000 but not more
than P20,000, or
3. both imprisonment and fine.
UNCLAIMED BALANCES LAW
ACT NO. 3936
 UNCLAIMED BALANCES LAW
Unclaimed balances
include credits or deposits of money, bullion,
security or other evidence of indebtedness of any
kind, and interest thereon with banks in favor of
any person known to be dead or who has not made
further deposits or withdrawals during the
preceding ten (10) years or more. (S1, Act No.
3936)
 NOTES ON UNCLAIMED BALANCES
• Deposits that have become DORMANT for a period
of 10 years may be escheated in favor of the
government, or reactivated upon request of the
depositor.
• Initially, there should be notice to the depositor of the
unclaimed balance.
•Thereafter, the bank is required to report to the
Treasurer of the Philippines the existence of such
deposits.
•The Treasurer will in turn inform the Solicitor General
Escheat – the return of property of a
deceased person to the state where there are
no legal heirs or claimants.
PROCEDURE FOR REACTIVATION OF
UNCLAIMED BALANCES
• Letter Request of Depositor/Creditor
• Authentication
• Letter Request of the Covered Institution
• Deed of Undertaking
• Letter of Authority to Reactivate
 ESCHEAT PROCEEDINGS FOR
UNCLAIMED BALANCES
Sec. 1, Rule 91, Rules of Court
When and by whom petition filed. – When a person
dies intestate, xxx, leaving no heir or person by law
entitled to the same, the Solicitor General or his
representative in behalf of the Republic of the
Philippines, may file a petition in the Court of First
Instance of the province where the deceased last
resided or in which he had estate, if he resided out of
the Philippines, setting forth the facts, and praying
that the estate of the deceased be declared escheated.
THE NEW CENTRAL BANK ACT (NCBA)
R.A. NO. 7653

A. Characteristics and Nature of Bangko Sentral ng

Pilipinas (BSP)
B. Primary Responsibilities and Objectives of BSP
C. Governing Body of BSP (BSP Monetary Board)
D. Legal Tender Power over Coins and Note
 BANGKO SENTRAL NG PILIPINAS

The Bangko Sentral ng Pilipinas (BSP) is the central

monetary authority maintained by the State to function
and operate as an independent and accountable body
corporate in the discharge of its mandated
responsibilities concerning money, banking and credit
(Sec. 1, NCBA, RA No. 7653)
THE NEW CENTRAL BANK ACT (R.A. NO. 7653)
CHARACTERISTICS AND NATURE OF BSP

a. It is a public corporation created by special law, i.e., RA No.

7653.
b. It is fully government-owned and controlled corporation
with original capital stock of P50B.
c. It is an independent central monetary authority which is
governed by the Monetary Board.
d. It enjoys fiscal and administrative authority.
e. The importation and exportation by the BSP of notes and
coins, etc., shall be fully exempt from all customs duties, etc.
THE NEW CENTRAL BANK ACT (R.A. NO. 7653)
CHARACTERISTICS AND NATURE OF BSP

f. Appointments in the BSP, except as to those which are

policy-determining, primarily confidential or highly
technical in nature, shall be made only according the Civil
Service Law and regulations.
g. Officers and employees of the BSP shall not engage
directly or indirectly in partisan activities or take part in
any election except to vote.
h. The BSP shall not engage in development banking or
financing.
THE NEW CENTRAL BANK ACT (R.A. NO. 7653)
RESPONSIBILITIES AND OBJECTIVES OF BSP

a. It shall provide policy directions in the areas of money,

banking, and credit.
b. It shall have supervision over the operations of banks and
exercises regulatory powers over the operations of finance
companies, etc.
c. Its primary objective is to maintain price stability conducive
to a balanced and sustainable growth of the economy.
d. It shall promote and maintain monetary stability and the
convertibility of the peso.
Governing Body of BSP
= Monetary Board

Composition: 7 members
BSP Governor (Chair), 5 from private
sector, and another member from Cabinet
BSP – has the SOLE POWER and authority to issue
currency, within the territory of the Philippines.

Currency – all Philippine notes and coins issued or

circulating
Peso – unit of monetary value in the Philippines,
represented by the sign “P”
All notes and coins issued by the BSP shall be its liability; shall be
fully guaranteed by the Government of the Republic of the
Philippines.

Legal Tender – refers to the type of currency which a debtor can

compel a creditor to accept in case of obligation to pay a sum of
money.
1. 1C, 5 C, 10 C and 25 C – up to P100 only
2. P1, P5, P10, P20 coins – up to 1,000 only.
3. P20, P50, P100, P200, P500, P1000 bills/notes - unlimitd
Can a debtor compel a creditor to accept a check to
settle his obligation?
Do checks have legal tender power?
No.
Checks representing demand deposits do
not have legal tender power and their
acceptance in the payment of debts is at the
option of the creditor. Checks produce
payment only when encashed or when they
are impaired through the fault of the creditor.
THE NEW CENTRAL BANK ACT (R.A. NO. 7653)
CONSERVATORSHIP OF BANKS

GROUND: Whenever the Monetary Board finds that

bank is in a STATE OF CONTINUING INABILITY OR
UNWILLINGNESS TO MAINTAIN A CONDITION OF
LIQUIDTY deemed adequate to protect the interest of
depositors and creditors.
Responsibility of Bank Conservator: take charge of the
assets, liabilities and the management of the bank;
reorganize the management of the bank; to exercise all
powers necessary to restore its viability, etc.
THE NEW CENTRAL BANK ACT (R.A. NO. 7653)
BANK RECEIVERSHIP

GROUND: Bank is unable to pay its liabilities as they became

due in the ordinary course of business; bank has insufficient
realizable assets to meet its liabilities; bank cannot continue in
business without involving probable losses to its depositors or
creditors.
Procedure for Bank Receivership: The receiver shall
immediately gather and take charge of all the assets and
liabilities of the institution, administer the same for the benefit
of its creditors, exercise the general powers of a receiver, etc.
THE NEW CENTRAL BANK ACT (R.A. NO. 7653)
BANK LIQUIDATION

GROUND: If the receiver determines that the institution

cannot be rehabilitated or permitted to resume business.
Procedure for Bank Liquidation: The receiver shall file
ex parte with the proper RTC a petition for assistance in
the liquidation of the institution pursuant to a liquidation
plan adopted by the PDIC for general application to all
closed banks.
THE NEW CENTRAL BANK ACT (R.A. NO. 7653)
CLOSE NOW HEAR LATER ORDER BY BSP MONETARY
BOARD
No prior hearing is necessary in appointing a receiver and in
closing the bank. The doctrine is founded on practical and
legal consideration to obviate unwarranted dissipation of the
bank’s assets and as a valid exercise of police power to
protect the depositors, creditors, stockholders and the general
public. Due process does not necessarily require a prior
hearing. Swift, adequate and determined actions must be
taken against financially distressed and mismanaged banks by
government agencies lest the public faith in the banking
system deteriorate to the prejudice of the national economy.
 ANTI-MONEY LAUNDERING LAW (AMLA)
R.A. NO. 9160, AS AMENDED BY R.A. NO. 9194, R.A. NO. 10168, AND
R.A. NO. 10365 (AN ACT FURTHER STRENGTHENING THE ANTI-
MONEY LAUNDERING LAW)
 ANTI-MONEY LAUNDERING LAW (AMLA)
R.A. NO. 9160, AS AMENDED BY R.A. NO. 9194, R.A.
NO. 10168, AND R.A. NO. 10365 (AN ACT FURTHER
STRENGTHENING THE ANTI-MONEY LAUNDERING
LAW)
A. State Policy
B. Definition of Money Laundering
C. Predicate Crimes of Money Laundering
D. Types of Reportable Transactions to AMLC
E. Amount of Covered Transaction for Reporting to AMLC
F. Suspicious Transactions that shall also be reported to
AMLC
ANTI-MONEY LAUNDERING LAW (AMLA), R.A. NO.
9160, AS AMENDED
STATE POLICY
It is the policy of the State to protect and
preserve the integrity and confidentiality of
bank accounts and to ensure that the
Philippines shall not be used as a money
laundering site for the proceeds of any unlawful
activity.
ANTI-MONEY LAUNDERING LAW (AMLA), R.A. NO.
9160, AS AMENDED
MONEY LAUNDERING, DEFINED
Money laundering is a crime committed by any person who
knowing that any monetary instrument or property represents,
involves, or relates to the proceeds of any unlawful activity:
(1) transacts said monetary instrument or property;
(2) converts, transfers, disposes of, moves, acquires, possesses or uses
said monetary instrument or property;
(3) conceals or disguises the true nature, source, location, disposition,
movement or ownership of or rights with respect to said monetary
instrument or property;
ANTI-MONEY LAUNDERING LAW (AMLA), R.A. NO.
9160, AS AMENDED
MONEY LAUNDERING, DEFINED
(4) attempts or conspires to commit money laundering offenses referred
in par. 1, 2 and 3 above;
(5) aids, abets, assists in or counsels the commission of the money
laundering offenses referred to in par. 1, 2 and 3 above;
(6) performs or fails to perform any act as a result of which he facilitates
the offense of money laundering referred to in par. 1, 2 and 3 above; or
(7) any covered person who, knowing that a covered or suspicious
transaction is required under the AMLA to be reported to the AMLC,
fails to do so.
*AMLC – Anti-Money Laundering Council (tasked to implement AMLA)
ANTI-MONEY LAUNDERING LAW (AMLA), R.A. NO.
9160, AS AMENDED
UNLAWFUL ACTIVITY/ PREDICATE CRIMES OF
MONEY LAUNDERING
1. kidnapping for ransom under the Revised Penal Code;
2. Drug trafficking and other violations of the Comprehensive Dangerous Drugs Act of
2002;
3. Graft and Corruption (R.A. No. 3019, as amended);
4. Plunder (R.A. No. 7080, as amended);
5. Robbery and extortion (RPC);
6. Jueteng and Masiao (PD No. 1602);
7. Piracy (RPC);
8. Qualified Theft (RPC);
9. Swindling/ Estafa (RPC);
10. Smuggling (RA Nos. 455 and 1937)
ANTI-MONEY LAUNDERING LAW (AMLA), R.A. NO.
9160, AS AMENDED
UNLAWFUL ACTIVITY/ PREDICATE CRIMES OF
MONEY LAUNDERING
11. Violations of the Electronic Commerce Act of 2000 (RA No. 8792);
12. Hijacking (RA 6235), Destructive Arson and Murder (RPC);
13. Terrorism and Conspiracy to Commit Terrorism (RA 9372);
14. Financing of terrorism;
15. Bribery and Corruption of Public Officers (RPC);
16. Frauds and Illegal Exactions and Transactions (RPC);
17. Malversation of Public Funds and Property (RPC);
18. Forgeries and Counterfeiting (RPC);
19. Violations of the Anti-Trafficking in Persons (R.A. 9208);
xxx xxx xxxx
34. Felonies or offenses of a similar nature that are punishable under the penal laws of other
countries.
ANTI-MONEY LAUNDERING LAW (AMLA), R.A. NO.
9160, AS AMENDED
TYPES OF REPORTABLE TRANSACTIONS TO AMLC
(1) Covered transactions – those that breached the
quantitative threshold provided by AMLA for
reporting purposes to AMLC
(2) Suspicious transactions – those that do not
breach the threshold, but must still be reported to
AMLC because of the suspicious nature of the
transaction
ANTI-MONEY LAUNDERING LAW (AMLA), R.A. NO.
9160, AS AMENDED
COVERED TRANSACTIONS
• A transaction in cash or other equivalent
monetary instrument involving a total amount in
excess of Five hundred thousand pesos
(P500,000.00) within one (1) banking day.
• A transaction exceeding One Million pesos in cases of jewelry
dealers, dealers in precious metals and dealers in precious stones.
•A single Casino cash transaction involving an amount in excess of
Five Million pesos or its equivalent in any other currency.
ANTI-MONEY LAUNDERING LAW (AMLA), R.A. NO.
9160, AS AMENDED
COVERED ENTITIES
Covered entities: include banks, non-banks,
quasi-banks, trust entities, foreign exchange
dealers, pawnshops, money changers,
remittance and transfer companies and other
similar entities supervised or regulated by the
BSP, etc.
ANTI-MONEY LAUNDERING LAW (AMLA), R.A. NO.
9160, AS AMENDED
SUSPICIOUS TRANSACTION
Transactions with covered institutions, regardless
of the amounts involved, where any of the following
circumstances exist:
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;
ANTI-MONEY LAUNDERING LAW (AMLA), R.A. NO.
9160, AS AMENDED
SUSPICIOUS TRANSACTION
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 circumstances 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
offense under this Act that is about to be, is being or has been
committed; or
g) any transaction that is similar or analogous to any of the
ANTI-MONEY LAUNDERING LAW (AMLA), R.A. NO.
9160, AS AMENDED
PREVENTION OF MONEY LAUNDERING
#PREVENTIVEMEASURES
a) Customer Due Diligence – covered persons shall establish and
record the true identity of their clients based on official documents.
b) Customer Identification
 Face-to-Face Contact – at the commencement of the relationship
 Minimum Customer Information and Identification Documents (name,
date/place of birth, name of beneficial owner, present/permanent address,
contact number, nationality, specimen signature, nature of work and name of
employer, sources of funds or property, and TIN)
c) Record Keeping – maintain and safely store for 5 years all
records of customer identification and transaction documents
c) Reporting of Covered and Suspicious Transactions – report to
 BOUNCING CHECKS LAW
BATAS PAMBANSA (B.P.) BLG. 22

A. Punishable Acts
B. Elements of Criminal Violation of B.P. Blg. 22
C. Penalty for Violation of B.P. Blg. 22
BOUNCING CHECKS LAW (B.P. BLG. 22)
PUNISHABLE ACTS
1. Any person who (a) makes or draws and issues any
check to apply on account or for value, (b) knowing at the
time of issue that he does not have sufficient funds in or
credit with the drawee bank for the payment of such check
in full upon its presentment, (c) which check is
subsequently dishonored by the drawee bank for
insufficiency of funds or credit or would have been
dishonored for the same reason had not the drawer, without
any valid reason, ordered the bank to stop payment.
BOUNCING CHECKS LAW (B.P. BLG. 22)
PUNISHABLE ACTS
2. Any person who, having sufficient funds in or credit
with the drawee bank when he makes or draws and issue
a check, shall fail to keep sufficient funds or to maintain
a credit to cover the full amount of the check if presented
within a period of ninety (90) days from the date
appearing thereon, for which reason it is dishonored by
the drawee bank.
 BOUNCING CHECKS LAW (B.P. BLG. 22)
ELEMENTS OF CRIMINAL VIOLATION OF BP
BLG. 22
1. There must be drawing and issuance of any check to apply
for account or for value,
2. There must be 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,
3. There must be 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.
BOUNCING CHECKS LAW (B.P. BLG. 22)
PENALTY FOR VIOLATION OF BP BLG. 22
1. Imprisonment of not less than thirty days but not more
than one (1) year, or
2. 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
3. Both imprisonment and fine.
#SANGGIBOSALAMAT