Professional Documents
Culture Documents
Purposes:
1. to encourage people to deposit their money in banks
2. to discourage private hoarding so that the banks may lend out the money and assist in the
economic development of the country
Prohibited Acts:
1. the EXAMINAI!N AN" IN#$I%& !% '!!(IN) into !! deposits o" #hte$er
%ture *ith banks or banking institutions in the +hilippines ,including investments in
bonds issued by the )overnments or its political subdivisions and instrumentalities- by
i. any person or
ii. any government official or
iii. any bureau or
iv. any office
2. the "I./'!.$%E by
i. any !00I/IA' of any banking institution or
ii. any EM+'!&EE of any banking institution
to AN& $NA$1!%I2E" +E%.!N of any information concerning the said deposit.
M3 a ne*spaper columnist3 *hile making a deposit in a bank3 overheard a bank teller
informing a co4employee that )3 a *ell4kno*n public official3 has 5ust a fe* hundred
pesos in )6s bank account and that her check *ill probably bounce. M *rote about this
information in his ne*spaper column. ) filed a complaint against M for unla*fully
disclosing information about her bank account.
he suit *ill not prosper. he 'a* on .ecrecy of 7ank "eposits does not penali8e the
mere receipt of information about a bank account. M3 having merely overheard the
information on )6s account and not having e9amined3 in:uired or looked into the said
account cannot be penali8ed under .ec. 2 of the 7ank .ecrecy 'a*. Neither could he be
penali8ed under .ec. ; of the 7ank .ecrecy 'a* since .ec. ; refers to disclosures made
by officials or employees of banking institutions.
A has +1<3<<< in his savings account3 +2<3<<< in his checking account3 +;<3<<< in his
money market placement and +=<3<<< in a trust fund. >hich of the accounts are covered
by the .ecrecy of 7ank "eposits 'a*?
!nly the savings and checking account are covered. he money market placement and
the trust fund are not covered.
1
A bought some goods from a department store and paid *ith his personal check. he
check *as dishonored. !n the assumption that the department store did not kno* *ho A
*as3 the store manager in:uired from the check6s dra*ee bank the name of the
dishonored check. he dra*ee bank refused to disclose the name of the dra*er invoking
the .ecrecy of 7ank "eposits 'a*.
In this case3 the bank is not 5ustified in not divulging the name of the dra*er to the store
manager. he store manager is merely in:uiring as to the name of the dra*er of the
check. o divulge the same *ould not in any*ay amount to disclosure of any
1
his *as the ans*er of the resource persons for the 1@@A 7ar E9ams ,see p. ;@-. 1o*ever3
Miravite thinks that the trust fund is also covered. ,p. B;A- Miravite says a money market placement is not
covered since it is not deposited in the bank.
1
information concerning his deposits. Also3 the in:uiry is not an investigation of any
balance in favor of the dra*er. o include such disclosure *ithin the ambit of the
prohibition *ould be unduly straining and stretching the meaning of the .ecrecy of 7ank
"eposits 'a*.
Instances >hen E9amination or "isclosure of Information about 7ank "eposits is Allo*ed
1. upon >%IEN +E%MI..I!N !0 1E "E+!.I!%
2. in cases of IM+EA/1MEN
;. upon order of a competent court in cases of
I. 7%I7E%& of public officials or
II. "E%E'I/I!N of duty of public officials
=. in cases *here the money deposited or invested is the sub5ect matter of the litigation
&e!!o% B%' $s( &)si%o
Even in cases not involving prosecution under the Anti4)raft and /orrupt
+ractices Act3 an in:uiry into the *hereabouts of the amount converted necessarily to
*hatever is concealed ,by being held or recorded in the name of persons other than the
one responsible for illegal ac:uisition- inasmuch as the case is aimed at recovering the
amount converted.
B. upon order of the court in cases of $NEX+'AINE" >EA'1 $N"E% .E/. C !0 1E
ANI )%A0 AN" /!%%$+ +%A/I/E. A/ D %A ;<1@ ,+N7 v. )ancayco-
B%co Fi!ipi%o $s( Purisi*
he permitted in:uiry into illegally ac:uitted property in anti4graft cases e9tends
to instances *here such property is concealed by being held by or recorded in the
name of other persons.
E. upon order of the /ommissioner of Internal %evenue in respect of the bank deposits of a
decedent for the +$%+!.E !0 "EE%MININ) .$/1 "E/E"EN6. )%!..
E.AE ,.ec. E F0G F1G3 NI%/-
A. upon the order of the /ommissioner of Internal %evenue in respect of the bank deposits
of a ta9payer *ho has filed an A++'I/AI!N 0!% /!M+%!MI.E !0 1I. AX
'IA7I'I& under .ec. 2<= ,A- ,2- of the NI%/ by reason of financial incapacity to pay
his ta9 liability ,.ec. E F0G F2G3 NI%/-
C. upon !%"E% !0 1E !M7$".MAN ,.ec. 1B FCG3 %A EAA<-
M *as able to secure a favorable 5udgment against + for recovery of a sum of money and
the said 5udgment became final and e9ecutory. M *as informed by someone that + might
have a deposit *ith a bank in *hich M *as a stockholder. Invoking his right as a
stockholder to inspect the corporate records3 M demanded to see the records to see if +
really had a savings deposit *ith the bank. he bank manager refused invoking the
.ecrecy of 7ank "eposits 'a*.
In this case3 the stockholder6s right to the inspection of corporate books *ill have to bo*
to the provisions of the .ecrecy of 7ank "eposits 'a*. he case of M does not fall
under any of the e9ceptions. he only remedy of M is to ask the court for a *rit of
garnishment to be served on the bank.
he /ity 0iscal re:uired a bank to produce at a hearing the records of the bank deposits
of A. he bank refused invoking the .ecrecy of 7ank "eposits 'a*. hreatened *ith
2
prosecution3 the bank filed an action for declaratory relief. May the bank be compelled to
disclose the bank deposits of A?
$nless the case comes under one of the e9ceptions3 the court cannot compel the bank to
disclose A6s deposits.
+r%ish*e%t o" B%' Deposits
garnishment of bank deposits *ill not violate the bank secrecy la*
Chi% B%' $s( Orte)
he discussion in the conference committee report on the .enate and 1ouse bills
*hich eventually became %A 1=<B indicates that it *as not the intention of the legislature
to place bank deposits beyond the reach of the e9ecution to satisfy a final 5udgment.
0urthermore3 there is no real in:uiry in an order for garnishment and if the e9istence of
the deposit *ere disclosed3 the disclosure *as purely incidental to the e9ecution process.
RCBC $s( de Cstro
he ./ said that to e9pose garnishees to risks for obeying court orders and
processes *ould only undermine the administration of 5ustice.
PCIB $s( Court o" Appe!s
)arnishment is considered as a specie of attachment for reaching credits
belonging to the 5udgment debtor and o*ing to him from a stranger to the litigation. he
garnishee ,the ;
rd
person- is obliged to deliver the credits3 etc. to the proper officer issuing
the *rit and Hthe la* e9empts from liability the person having in his possession or under
his control any credits or other personal property belonging to the defendant3 of such
property be delivered or transferred to the clerk3 sheriff3 or other officer of the court in
*hich the action is pending.
.ince there is no evidence that the bank divulged the information that its client had an
account *ith the said bank and it is undisputed that the said account *as properly the
ob5ect of the notice of garnishment and the *rit of e9ecution carried out by the deputy
sheriff3 a duly authori8ed officer of the court3 there is no violation of the .ecrecy of 7ank
"eposits 'a*.
he branch manager of a bank3 in response to a notice of garnishment3 discloses to the
sheriff the outstanding deposit balance of the 5udgment debtor *ith the bank as of the
date of the receipt of the garnishment notice. he 5udgment debtor files a criminal
complaint for violation of the 7ank .ecrecy 'a*.
In this case the criminal complaint *ill not prosper. he prohibition against e9amination
of3 or in:uiry3 into a bank deposit does not preclude its being garnished to insure
satisfaction of a 5udgment. Indeed3 there is no real in:uiry in such a case3 and if the
e9istence of the deposit is disclosed3 the disclosure is purely incidental to the e9ecution
process.
App!ictio% o" the Secrec, o" B%' Deposits o% S"et, Deposit Bo-es
the prohibition against in:uiry or disclosure of bank accounts under the .ecrecy of 7ank
"eposits 'a* does N! to apply to safety deposit bo9es
2
Speci! Note o% Forei)% Curre%c, Deposits
the 0oreign /urrency "eposit Act ,%A E=2E- allo*s any person to deposit33 and banks to
accept for deposit AN& foreign currency A//E+A7'E A. +A% !0 !$%
INE%NAI!NA' %E.E%IE
2
his *as the ans*er of the resource persons for the 1@C@ 7ar E9ams ,see p. 1@;-3 and yet3 the
resource persons *ere unsure of their ans*er. 1o*ever3 Miravite has a contrary opinion ,p. B=<-. In my
notes for +rof. /atindig6s class3 it says that safety deposit bo9es are considered deposits since the la* says
Hall deposits of *hatever natureJ.
;
unlike ordinary bank deposits3 foreign currency deposits en5oy the follo*ing uni:ue
privileges
1. absolute confidentiality
EX/E+ $+!N >%IEN +E%MI..I!N !0 1E "E+!.I!%3 a
foreign currency deposit cannot be e9amined3 in:uired3 or looked into
by any person or office3 *hether public or private3 or 5udicial3
administrative or legislative
M *ithdre* *ithout authority funds of the partnership in the amounts
of +B<<3<<< and KB<3<<<. 1e deposited the +B<<3<<< in his personal
peso current account and the KB<3<<< in his foreign currency savings
account. he partnership sued M to return the money.
In this case3 the bank can be compelled to disclose the peso deposit of
M since sec. 2 of %A 1=<B allo*s the disclosure of deposits in case
*here the money deposited is the sub5ect matter of litigation.
>ith respect to the foreign currency deposit3 $nder the 0oreign
/urrency 'a*3 the e9emption to the prohibition against disclosure of
information concerning bank deposits is the *ritten consent of the
depositor
2. numbered accounts
authori8ed banks may adopt a numbered account system for
recording and servicing the said deposits
;. rate of interest
authori8ed banks are free to pay any rate of interest
=. ta9es
the interest received by an individual residents3 domestic and
resident foreign corporations from such deposits are sub5ected to a
A.BL final income ta9
there is N! final income ta9 on the interest received by non4resident
individuals and non4resident foreign corporations
B. court order or process
EXEM+ from attachment3 garnishment or any other order or
process of any court3 legislative or administrative body3 or
government agency *hatsoever
S!$cio% $s( Ce%tr! B%' o" the Phi!ippi%es
7artelli3 a foreign transient3 deposited his dollars in a foreign
currencyt account *ith /hina 7ank. 7artelli raped .alvacion. A
criminal case for rape and a civil action for damages for rape *ere
filed. he ./ said that the e9emption from garnishment granted to
foreign currency deposits is inapplicable to a foreign transient.
;
E. ne* enactment or regulation
in the event that a ne* enactment or regulation is issued decreasing
the rights granted under the la*3 such ne* enactment or regulation
.1A'' N! A++'& ! 0!%EI)N /$%%EN "E+!.I.
A'%EA"& MA"E or e9isting at the time of issuance of such ne*
enactment or legislative
;
he ./ said that the e9emption from garnishment did not apply in this case because of the
+E/$'IA% /I%/$M.AN/E.. .o3 one can argue that the e9emption from garnishment *ill still apply
to foreign transients as long as there are no peculiar circumstances.
=
TR.T/ IN LENDIN+ ACT
Purpose
to protect citi8ens from a lack of a*areness of the true cost of credit to the user by
assuring a full disclosure of such cost *ith a vie* to preventing the uninformed use of
credit to the detriment of the national economy
!bligation of the /reditors
furnish to each person ! >1!M /%E"I I. EXEN"E" +%I!% ! 1E
/!N.$MMAI!N !0 1E %AN.A/I!N3 a disclosure statement *hich contains
the follo*ingM
1. the cash price or delivered +%I/E !0 1E +%!+E%& !% .E%II/E ! 7E
A/#$I%E"
2. 1E AM!$N.3 I0 AN&3 ! 7E /%E"IE" A. "!>N +A&MEN andNor trade4
in
;. the difference bet*een the amounts set forth under clauses ,1- and ,2-
=. the charges3 individually itemi8ed3 *hich are to be paid by such person in connection
*ith the transaction but *hich are not incident to the e9tension of credit ,i.e. N!N4
0INAN/E /1A%)E.-
B. the !A' AM!$N to be financed
E. the 0INAN/E /1A%)E. e9pressed in terms of pesos and centavos
A. the +E%/ENA)E 1A 1E 0INAN/E /1A%)E. bears to the total amount
financed e9pressed as a simple annual rate on the outstanding unpaid balance of the
obligation.
/reditor
any person engaged in the business of e9tending credit ,including any person *ho has a
regular business practice of making loans or sells or rents property or services on a time3
credit or installment basis3 either as principal or as agent- *ho re:uires as an incident to
the e9tension of credit the payment of a finance charge
"isclosure .tatement
the statement *hich a creditor is obliged to furnish each person to *hom a credit is
e9tended prior to the consummation of the transaction in order to protect the said person
from a lack of a*areness of the true cost of credit
there is no compliance *ith the ruth in 'ending Act if the creditor merely gives the
totalO it is re:uired that the breakdo*n ,detailed information- be given
the disclosure statement is given 7E0!%E 1E A)%EEMEN I. MA"E
" bought a car on installment basis and had it financed by a financing company. In
addition to the advertised selling price3 the financing company imposed financing and
non4financing charges. he disclosure statement failed to include the non4financing
charges. 1o*ever3 the conditional deed of sale *hich the parties e9ecuted mentioned the
total amount indicated therein included such non4finance charges.
In this case3 there *as no substantial compliance *ith the ruth in 'ending Act. he la*
provides that the creditor must make a full disclosure of the credit cost. he statement
that the total amount due includes the principal the financial charges3 and non4financial
*ithout specifying the amounts due on each portion thereof *ould be insufficient and
unacceptable.
B
A violation of the ruth in 'ending Act *ill not adversely affect the validity of the
contract itself. he violation of the ruth in 'ending Act *ould allo* " to refuse
payment of financial charges or3 if already paid3 to recover the same. " may also initiate
criminal charges against the creditor.
Credit Tr%sctio%s #ithi% the Scope o" the L#
1. loan
2. mortgage
;. deed of trust
=. advance
B. discount
E. conditional sales contract
A. contract to sell
C. contract of sale of property or services either for present or future delivery under *hich
all or part of the price is payable subse:uent to the making of such sale or contract
@. rental purchase contract
1<. contract for hire
11. contract for bailment
12. contract for leasing of property
1;. option
1=. demand
1B. lien
1E. pledge
1A. any claim against3 or for the delivery of3 property or money
1C. any purchase or ac:uisition of3 or any credit upon the security of any obligation or claim
arising out of any of the foregoing
1@. any transaction or series of transactions having a similar purpose or effect
Credit Tr%sctio%s Outside the Scope o" the L#
1. those that "! N! INI!'IE 1E +A&MEN !0 0INAN/E /1A%)E by the debtor
2. those in *hich the "E7!% I. 1E !NE .+E/I0&IN) A "E0INIE AN" 0IXE"
.E !0 /%E"I E%M. such as
a- bank deposits
b- insurance contracts
c- sale of bonds3 etc.
no disclosure statement is re:uired in these 2 instances
Fi%%ce Chr)es
E
amounts to be paid by the debtor IN/I"EN ! 1E EXEN.I!N !0 /%E"I such
as
a- interests
b- discounts
c- collection fees
d- credit investigation fees
e- attorney6s fees
Co%so!idted B%' %d Trust $s( Court o" Appe!s
he ./ held that *hile banks are authori8ed by the /7 to collect handling
charges on loans3 a /7 /ircular re:uires banks to adhere strictly to the provisions of
the ruth in 'ending Act such that if the promissory note signed by the borro*er
does not contain a stipulation on the payment of handling charges3 the bank cannot
charge and collect such handling charges from the borro*er.
No%0Fi%%ce Chr)es
amounts A"IAN/E" 7& A /%E"I!% 0!% IEM. N!%MA''& A..!/IAE"
>I1 1E !>NE%.1I+ !0 +%!+E%& !% 1E AIAI'MEN !0 1E .E%II/E.
purchased *hich are not IN/I"EN ! 1E EXEN.I!N !0 /%E"I ,i.e. *hen a
debtor purchases a car on credit3 the creditor may advance the insurance premium as *ell
as the registration fee-
1io!tio% o" Truth i% Le%di%) Act
1. "!E. N! INIA'I"AE the loan agreement
2. debtor can %E0$.E to pay 0INAN/E /1A%)E.
;. if the debtor had already paid the finance charges3 the debtor can %E/!IE% 0INAN/E
/1A%)E.
=. debtor can file a /%IMINIA' A/I!N against the creditor
P/ILIPPINE DEPOSIT INS.RANCE CORPORATION ACT
+urposesM
1. to protect depositors from bank failures and other similar situations preventing banks
from paying out deposits
2. to encourage people to deposit in banks
+"I/
the government4o*ned entity mandated by la* to insure the depositors of all banks
entitled to the benefits of insurance under this Act
"eposit 'iabilities %e:uired to be Insured by the +"I/
the follo*ing deposits are re:uired to be insured *ith the +"I/
1. deposit liabilities of AN& 7AN( engaged in the business of receiving deposits
2. deposit liabilities of AN& 7AN(IN) IN.I$I!N engaged in the business of
receiving deposits
PDIC $s( Court o" Appe!s
A
In order that a claim for deposit insurance *ith the +"I/ may prosper3
the la* re:uires that a corresponding deposit be placed in the insured bank.
coverage is /!M+$'.!%&
"eposit
the unpaid balance of M!NE& or its e:uivalent %E/EIIE" 7& A 7AN( in the usual
course of business and for *hich it has given or is obliged to give credit to a commercial3
checking3 savings3 time or thrift account for *hich is evidenced by a passbook3 check
andNor certificate of deposit3 printed or issued in accordance *ith /entral 7ank rules and
regulations and other applicable la*s
)en. %uleM any obligation of a bank *hich is payable at the office of the bank
'!/AE" !$.I"E of the +hilippines shall N! 7E A "E+!.I for any
purpose of this Act or included as part of the total deposits or of insured
deposit
E9ceptionM any insured bank incorporated under +hilippine la* *hich maintains a
branch outside the +hilippines if approved by the +"I/ 7oard of "irectors
may elect to include for insurance its deposit obligations payable only at such
branch
trust funds are not considered as insured deposits
a safety deposit bo9 is not insured under the +"I/ 'a* for 2 reasons
1. it is not *ithin the definition of deposit
2. a moral ha8ard is created if the safety deposit bo9 is coveredO it *ould encourage
morally honest people to be dishonest since only they *ould kno* *hat6s inside the
bo9
A has +1<3<<< in his savings account3 +2<3<<< in his checking account3 +;<3<<< in his
money market placement and +=<3<<< in a trust fund. >hich of the accounts are covered
by the +"I/ 'a*?
In this case3 only the savings and checking account are covered. he +=<3<<< trust fund
is e9pressly e9empt from the coverage of the +"I/ 'a*.
As for the +;<3<<< money market3 it shall not also be insured because of its very nature
*hich involves market dealing in standardi8ed short4term credit instruments *here
lenders and borro*ers do not deal directly *ith each other but through a middle man or
dealer in the open market. If the money is not received by the bank3 it cannot be insured.
ermination of Insured .tatus
1. *hen the banks fails or refuse to pay assessment
the bank has ;< days from the *ritten notice given by the +"I/ to correct such
failure or refusal3 other*ise3 the insured status of the bank shall be terminated