INSOLVENCY LAW
INSOLVENCY – state of a person
whose liabilities are more than his
assets. It is the inability of a person
to pay his debts as they become due
in the ordinary course of business.
INSOLVENCY vs. BANKRUPTCY
The only distinction between
insolvency and bankruptcy is a
matter of terminology and the source
of the laws relating thereto.
Either a bankruptcy or insolvency
statute may operate to discharge a
debt as well as release the debtor
from imprisonment, and either may
operate on the petition of the debtor
or that of his creditors.
PURPOSES OF INSOLVENCY
LAW:
1. To effect an equitable distribution
of the bankrupt’s property among his
creditors; and
2. To benefit the debtor in
discharging him from his liabilities
and enabling him to start afresh with
the property set apart to him as
exempt.
3. The regulatory and unifying
influence of the law on credit
transactions and business usage
throughout the country.
SUSPENSION OF PAYMENTS –
postponement, by court order, of the
payment of debts of one who, while
possessing sufficient property to
cover his debts, foresees the
impossibility of meeting them when
they respectively fall due.
PURPOSE:
To suspend or delay the payment of
debts the amount of which is not
affected although a postponement is
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declared.
BASIS:
Probability of the debtor’s inability to
meet his obligations when they
respectively fall due, despite the fact
that he has sufficient assets to cover
all his liabilities
REQUISITES OF PETITION FOR
SUSPENSION OF PAYMENTS:
Petition is filed by a debtor; 

Possessing sufficient property to cover all
his 
debts; 

Foreseeing the impossibility of meeting
them 
when they respectively fall
due; and 

Petitioning that he be declared in the
state of suspension of payments
VOLUNTARY INSOLVENCY – an
insolvent debtor owing debts
exceeding the amount of P1,000.00
may apply to be discharged from his
debts and liabilities by petition to the
RTC of the province or city in which
he has resided for six months next
preceding the filing of the petition.
INVOLUNTARY INSOLVENCY – an
adjudication of insolvency may be
made on the petition of three or
more creditors, residents of the
Philippines, whose credits or
demands accrued in the Philippines,
and the amount of which credits or
demands are in the aggregate of not
less than P1,000.00.
CORPORATE REHABILITATION
Rehabilitation is intended to enable a
distressed corporation to gain a new
lease on life, so to speak, and to
continue its business as a going
concern. On the other hand, insolvency
is intended to close and liquidate an
insolvent corporation (please note that
insolvency is also available to
individuals or natural persons, while
rehabilitation is available only to
corporations, partnerships and
associations).
The following are the vital components
of a rehabilitation law:
A. Stay Order
A stay order is sometimes essential to the
survival of a distressed company. A stay
order keeps at bay the pack of unhappy and
understandably impatient creditors and
prevents them from tearing apart and
bringing about the certain death of the
helpless company.
The critical issue, then, is not whether to
empower the courts to suspend the
assertion/enforcement of claims, but when
the suspension takes effect and if it should
apply wholesale to all claims. Under P.D.
No. 902-A, it is the act of appointing the
receiver that triggers that suspension of “all
actions for claims.”
B. Rehabilitation Plan
The Rehabilitation Plan is the map that
guides the floundering company out of the
shoals of financial distress. As provided in
RombeEximtrade (Phils.), Inc. v. Asiatrust
Development Bank it contains “the formula
for the successful recovery of the
corporation.”
It must contain enough information to
persuade the creditors, receiver and the
court that rehabilitation is feasible,
profitable, and work to the best interest of
the various stakeholders. The Plan must
identify the source of the ailment; and
prescribe the remedy. A Plan must set
realistic targets and provide the details on
how to achieve them.
C. Rehabilitation Receiver
The creditors and the debtor company have
competing interests. It is desirable that an
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impartial and competent third person assist
the rehabilitation court in assessing the
feasibility of rehabilitation the debtor
company a balancing the competing
interests of the parties. The law should
define the extent of the receiver’s powers.
D. Rights of the Parties
The law should define and delineate the
rights of the parties while rehabilitation is
ongoing. For example, the law as it stands
does not specify whether the rehabilitation
court has the authority to relieve a debtor
from paying interest rates or to require the
debtor to pay higher interest rates to
secured creditors compared to unsecured
creditors.
E. Rehabilitation Court
Since rehabilitation involves the competing
interests of the debtor and the creditors, as
the public has, to an extent, a stake in the
outcome of the rehabilitation process, the
intervention of our courts becomes
necessary. The court is tasked to consider
and balance the competing interests of the
debtor, creditors, and the public. The law
should be flexible enough to allow the
rehabilitation court to exercise some
discretion in deciding issues but
comprehensive enough to put reasonable
limits on such discretion. Too much
flexibility in the exercise of court discretion
is tantamount to surrendering the
Legislature’s functions to the Judiciary. On
the other hand, too little discretion would
result in the mechanical application of the
law and disregard the peculiar
circumstances of each case.
Contents of Petition
As one of the contents of the petition, which
shall be verified by a duly authorized officer
of the debtor, Section 9 provides that there
be a “nomination of three Rehabilitation
Receivers with their accompanying bio-data,
from which one may be appointed by the
court: Provided that if the court does not find
any of those nominated acceptable, it may,
at its discretion, appoint a receiver of its
own choice.”
The right to nominate the Rehabilitation
Receiver should rightly belong to the debtor
or, in cases where the rehabilitation is
initiated by the creditors, with the creditors.
The receiver has an important and sensitive
role to play and it is crucial that he enjoy the
trust and confidence of the parties.
If, as proposed under House Bill 3542, the
courts are given the authority to disregard
the nominees of the debtor/creditor, then
the law should, at least, define the
qualifications of the receiver in order to limit
the discretion of the courts in appointing the
receiver.
BP 22 (BOUNCING CHECKS)
To be liable under B.P. 22, it must be
established that the check was issued and
that it was dishonored. It must also be
shown that you, the accused, knew that
when you issued the check, the account will
not be sufficiently funded upon presentment
of the check to the bank.
For a B.P. 22 case to prosper, the following
should be sufficiently established:
1. A check was issued;
2. At the time of issue, the person who
issued the check knew that there would not
be sufficient funds if the check is presented
to the bank;
3. The check is dishonored.
Notice of Dishonor
The complainant will sent you a notice of
dishonor to prove that you were aware that
you had insufficient funds and that the bank
dishonored your check.
This notice creates the presumption that
you knew about the insufficiency.
The notice of dishonor may be given by: a.
the one you issued the check to; or b. the
bank.
Note! This should be written notice or at
least clear proof of notice. Remember that
this is a criminal case and the guilt should
be established beyond reasonable doubt.
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WHAT IF NOTICE IS REALLY GIVEN?
The law gives you five (5) banking days
after receiving the notice of dishonor to fund
the check or make arrangements for the
payment.
(Banking Days = Monday to Friday)
What else should we remember?
Even if the criminal case will not prosper,
you may still be held liable for the civil
aspect. This means that you have to pay the
person you issued the check to – usually
with legal interest and other interests that
the Court may impose.
CHECKS WITHOUT SUFFICIENT
FUNDS
Section 1. Checks without sufficient funds. -
Any person who makes or draws and issues
any check to apply on account or for value,
a. 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,
b. 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,
c. without any valid reason, ordered the
bank to stop payment, shall be punished by
imprisonment of not less than thirty days but
not more than one (1) year or by a fine of
not less than but not more than double the
amount of the check which fine shall in no
case exceed Two Hundred Thousand
Pesos, or both such fine and imprisonment
at the discretion of the court.
EVIDENCE OF KNOWLEDGE OF
INSUFFICIENT FUNDS
Section 2. Evidence of knowledge of
insufficient funds.
a. The making, drawing and issuance of a
check payment of which is refused by the
drawee because of insufficient funds in or
credit with such bank,

b. when presented within ninety (90) days
from the date of the check, shall be prima
facie evidence of knowledge of such
insufficiency of funds or credit unless such
maker or drawer pays the holder thereof the
amount due thereon,
he cannot compensate them with the
profits and benefits, which he may have
earned for the partnership by his industry
the courts may equitably lessen his
responsibility

c. or makes arrangements for payment in COOPERATIVE

full by the drawee of such check within (5)
banking days after receiving notice that The law which governs cooperatives, prior
such check has not been paid by the to the recent enactment of Republic Act No.
drawee. 9520(“Philippine Cooperative Code of
2008”), is Republic Act No.
6938 (“Cooperative Code of the
DUTY OF DRAWEE Philippines”). Here’s a basic discussion on
the new law (a more extensive primer will
Section 3.Duty of drawee; rules of subsequently be released, initially made
evidence.– It shall be the duty of the available to clients).
drawee of any check,
when refusing to pay the same to the holder Definition. A cooperative is an autonomous
thereof upon presentment, to cause to be and duly registered association of persons,
written, printed, or stamped in plain with a common bond of interest, who have
language thereon, or attached thereto, the voluntarily joined together to achieve their
reason for drawee's dishonor or refusal to social, economic, and cultural needs and
pay the same: aspirations by making equitable
contributions to the capital
Provided, that where there are no sufficient required, patronizing their products and
funds in or credit with such drawee bank, services and accepting a fair share of the
such fact shall always be explicitly stated in risks and benefits of the undertaking in
the notice of dishonor or refusal. accordance with universally accepted
cooperative principles. (Italicized
In all prosecutions under this Act, the words/phrases are inserted under the new
introduction in evidence of any unpaid and law.)
dishonored check, having the drawee's
refusal to pay stamped or written thereon or Purpose. The declared purpose of the law,
attached thereto, with the reason therefor as among others, is to foster the creation and
aforesaid, shall be prima facie evidence of growth of cooperatives as a practical vehicle
the making or issuance of said check, and for promoting self-reliance and harnessing
the due presentment to the drawee for people power towards the attainment of
payment and the dishonor thereof, and that economic development and social justice.
the same was properly dishonored for the
reason written, stamped or attached by the Principles of Cooperativism. The
drawee on such dishonored check.
following are the declared principles of
cooperativism:
CREDIT COSNTRUED
Voluntary and open membership.
The word "credit" as used herein shall be
Membership in a cooperative is voluntary
construed to mean an arrangement or
and available to all individuals regardless of
understanding with the bank for the
their social, political, racial or religious
payment of such check.
background or beliefs.

Democratic member control.

every partner is responsible to the
Cooperatives are democratic organizations
partnership for damages suffered by it
that are controlled by their members who
through his fault
actively participate in setting their policies
and making decisions. In primary
cooperatives, members have equal voting

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rights of one-member, one-vote.
Cooperatives at other levels are organized
in the same democratic manner.
Member economic participation.
Members contribute equitably to, and
democratically control, the capital of their
cooperatives. At least part of that capital is
the common property of the cooperative.
They shall receive limited compensation or
limited interest, if any, on capital subscribed
and paid as a condition of membership.
Autonomy and independence.
Cooperatives are autonomous, self-help
organizations controlled by their members.
Cooperation among cooperatives.
Cooperatives serve their members most
effectively and strengthen the cooperative
movement by working together through
local, national, regional and international
structures.
Cooperative education. All cooperatives
shall make provision for the education of
their members, officers and employees and
of the general public based on the principles
of cooperation.
Concern for community. Cooperatives
work for the sustainable development of
their communities through policies approved
by their members. This is a new provision.
ADMINISTRATION
"ART. 32. Composition of the General
Assembly. The general assembly shall be
composed of such members who are
entitled to vote under the articles of
cooperation and bylaws of the cooperative.
"ART. 32. Powers of the General Assembly.
The general assembly shall be composed of
such members who are entitled to vote
under the articles of cooperation and bylaws
of the cooperative.
"ART. 33. Powers of the General Assembly.
The general assembly shall be the highest
policy-making body of the cooperative and
shall exercise such powers as are stated in
this Code, in the articles of cooperation and
in the bylaws of the cooperative. The
general assembly shall have the following
exclusive powers which cannot be delegate:
"(1) To determine and approve amendments
to the articles of cooperation and bylaws;
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"(2) To elect or appoint the members of the
board of directors, and to remove them for
cause. However, in the case of the electric
cooperatives registered under this Code,
election of the members of the board shall
be held in accordance with its bylaws or
election guideline of such electric
cooperative; and
"(3) To approve developmental plans of the
cooperative.
"Subject to such other provisions of this
Code and only for purposes of prompt and
intelligent decision-making, the general
assembly may be a three-fourths (3/4) vote
of all its members with voting rights, present
and constituting a quorum, delegate some
of its powers to a smaller body of the
cooperative. These powers shall be
enumerated under the bylaws of the
cooperative.
ART. 9. Cooperative Powers and
Capacities. – A cooperative registered
under this Code shall have the following
powers, RIGHTS and capacities:
To FORM SUBSIDIARY COOPERATIVES
AND join federations or unions, as provided
in this Code;
To AVAIL OF LOANS, BE ENTITLED TO
CREDIT AND TO accept and receive
grants, donations and assistance from
foreign and domestic sources SUBJECT
TO THE CONDITIONS OF SAID LOANS,
CREDITS, GRANTS, DONATIONS OR
ASSISTAN CE THAT WILL NOT
UNDERMINE THE AUTONOMY OF THE
COOPERATIVE.
THE AUTHORITY, UPON WRITTEN
REQUEST, SHALL PROVIDE
NECESSARY ASSISTANCE IN THE
DOCUMENTARY REQUIREMENTS FOR
THE LOANS, CREDIT,GRANTS,
DONATIONS AND OTHER FINANCIAL
SUPPORT"
ART. 62. Privileges of Cooperatives.
Cooperatives registered under this Code,
notwithstanding the provisions of any law to
the contrary, be also accorded the following
privileges:
(1) Cooperatives shall enjoy the privilege of
depositing their sealed cash boxes or
containers, documents or any valuable
papers in the safes of the municipal or city
treasurers and other government offices
free of charge, and the custodian of such
articles shall issue a receipt acknowledging
the articles received duly witnessed by
another person;
(2) Cooperatives organized among
government employees, notwithstanding
any law or regulation to the contrary, shall
enjoy the free use of any available space in
their agency, whether owned or rented by
the Government;
(3) Cooperatives rendering special types of
services and facilities such as cold storage,
ice plant, electricity, transportation, and
similar services and facilities shall secure a
franchise therefore, and such cooperatives
shall open their membership to all persons
qualified in their areas of operation;
(4) In areas where appropriate cooperatives
exist, the preferential right to supply
government institutions and agencies rice,
corn and other grains, fish and other marine
products, meat, eggs, milk, vegetables,
tobacco and other agricultural commodities
produced by their members shall be granted
to the cooperatives concerned;
(5) Preferential treatment in the allocation of
fertilizers, including seeds and other
agricultural inputs and implements, and in
rice distribution shall be granted to
cooperatives by the appropriate government
agencies;
(6) Preferential and equitable treatment in
the allocation or control of bottomries of
commercial shipping vessels in connection
with the shipment of goods and products of
cooperatives;
(7) Cooperatives and their federations, such
as farm and fishery producers and
suppliers, market vendors and such other
cooperatives, which have for their primary
purpose the production and/or the
marketing of products from agriculture,
fisheries and small entrepreneurial
industries and federations thereof, shall
have preferential rights in the management
of public markets and/or lease of public
market facilities, stalls or spaces: Provided,
That these rights shall only be utilized
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exclusively by cooperatives: Provided,
further, That no cooperative forming a joint
venture, partnership or any other similar
arrangement with a non-cooperative entity
can utilize these rights;
(8) Cooperatives engaged in credit services
and/or federations shall be entitled to loans
credit lines, rediscounting of their loan
notes, and other eligible papers with the
Development Bank of the Philippines, the
Land Bank of the Philippines and other
financial institutions except the
BangkoSentral ng Pilipinas (BSP);
"The Philippine Deposit Insurance
Corporation (PDIC) and other government
agencies, government-owned and
controlled corporations and government
financial institutions shall provide technical
assistance to registered national federations
and unions of cooperatives which have
significant engagement in savings and
credit operations in order for these
federations and unions to establish and/or
strengthen their own autonomous
cooperative deposit insurance systems;
(9) A public transport service cooperative
may be entitled to financing support for the
acquisition and/or maintenance of land and
sea transport equipment, facilities and parts
through the program of the government
financial institutions. It shall have the
preferential right to the management and
operation of public terminals and ports
whether land or sea transport where the
cooperative operates and on securing a
franchise for active or potential routes for
the public transport;
(10) Cooperatives transacting business with
the Government of the Philippines or any of
its political subdivisions or any of its
agencies or instrumentalities, including
government-owned and controlled
corporations shall be exempt from
prequalification bidding requirements
notwithstanding the provisions of Republic
Act No.9184, otherwise known as, the
Government Procurement Act;
(11) Cooperative shall enjoy the privilege of
being represented by the provincial or city
fiscal or the Office of the Solicitor General,
free of charge, except when the adverse
party is the Republic of the Philippines;
(12) Cooperatives organized by faculty
members and employees of educational
institutions shall have the preferential right
in the management of the canteen and
other services related to the operation of the
educational institution where they are
employed: Provided, That such services are
operated within the premises of the said
educational institution; and
(13) The appropriate housing agencies and
government financial institutions shall create
a special window for financing housing
projects undertaken by cooperatives, with
interest rates and terms equal to, or better
than those given for socialized housing
projects. This financing shall be in the form
of blanket loans or long-term wholesale
loans to qualified cooperatives, without
need for individual processing.
"The Authority, in consultation with the
appropriate government agencies and
concerned cooperative sector, shall issue
rules and regulations on all matters
concerning housing cooperatives."
CAPITAL, PROPERTY AND FUNDS
ART 71 Capital– the capitalization of
cooperatives and the accounting
procedures shall be governed by the
provision of the code and the regulations
which shall be issued
ART. 72. Capital Sources. –
Cooperatives registered under this code
may derive their capital from any of all the
following sources:
1. Member’s share capital
2. Loans and borrowings including deposits
3. Revolving capital which consist of the
deferred payment of patronage refunds, or
interest on share capital; and
4. Subsidies, donations, legacies, grants,
aids and such other assistance from any
local or foreign institution whether public or
private
"Upon dissolution, such donated capital
shall be subject to escheat.
ART. 73. Limitation on Share Capital
Holdings.- No member of primary
cooperative other than cooperative itself
shall own or hold more than ten per centum
(10%) of the share capital of the cooperative
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"Where a member of cooperative dies, his
heir shall be entitled to the shares of the
decedent: Provided, That the total
sharEholding of the heir does not exceed
ten per centum (10%) of the share capital of
the cooperative;
Provided, further, That the heir qualify and
is admitted as members of the cooperative:
Provided finally , That where the heir fails to
qualify as a member or where his total
share holding exceeds ten per centum
(10%) of the share capital , the share or
shares excess will revert to the cooperative
upon payment to the heir of the value of
such shares.
ART. 74. Assignment of Share Capital
Contribution or Interest.-no member shall
transfer his shares or interest in the
cooperative or any part thereof unless.
(1) He has held such share capital
contribution or interest for not less than one
(1) year.
(2) The assignment is made to the
cooperative or to a member of the
cooperative or to a person who falls within
the field of the membership of the
cooperative; and
(3) The board of directors has approved
such assignment.
ART.75. Capital Build-Up.- To bylaws of
every cooperative shall be provided for a
reasonable and realistic member capital
build-up program to allow the continuing
growth of the members' investment in their
cooperative as their economic conditions
continue to improve.
ART. 76. Shares .– The term "share" refers
to a unit of capital IN A PRIMARY
COOPERATIVE the par value of which may
be fixed at any figure NOT MORE THAN
ONE THOUSAND PESOS (P1,000.00). The
share capital of a cooperative is the money
paid or required to be paid for THE
operations OF THE COOPERATIVE. The
method FOR the ISSUANCE OF share
certificates SHALL be prescribed in ITS
bylaws.
ART. 77. Fines.– The bylaws of a
cooperative may prescribe a fine on unpaid
subscribed share capital: PROVIDED,
THAT SUCH FINE IS FAIR AND
REASONABLE UNDER THE
CIRCUMSTANCES
ART.78. Investment of Capital. - A
cooperative may invest its capital in any of
the following:
(a) In shares or debentures or securities of
any other cooperative;
(b) In any reputable bank in the locality, or
any cooperative;
(c) In securities issued or guaranteed by the
Government;
(d) In real state primarily for the use of the
cooperative or its members; or
(e) In any other manner authorized in the
bylaws.
ART. 79. Revolving Capital. The general
assembly of any cooperative may authorize
the board of directors to raise a revolving
capital to strengthen its capital structure by
deferring the payment of patronage refunds
and interest on share capital or by the
authorized deduction of a percentage from
the proceeds of products sold or services
rendered, or per unit of product or services
handled. The board of directors shall issue
revolving capital certificates with serial
number, name, amount, and rate of interest
to be paid and shall distinctly set forth the
time of retirement of such certificates and
the amounts to be returned."
ART. 80. Annual Audit. Cooperatives
registered under this Code shall be subject
to an annual financial, performance and
social audit. The financial audit shall be
conducted by an external auditor who
satisfies all the following qualifications:
(1) He is independent of the cooperative or
any of its subsidiary that he is auditing; and
(2) He is a member in good standing of the
Philippine Institute of Certified Public
Accountants (PICPA) and is accredited by
both the Board and Accountancy and the
Authority.
The social audit shall be conducted by an
independent social auditor accredited by the
Authority.
Performance and social audit reports which
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contain the findings and recommendations
of the auditor shall be submitted to the
board of directors.
The Authority, in consultation with the
cooperative sector, shall promulgate the
rules and standards for the social audit of
cooperatives.
TYPES AND CATEGORIES OF
COOPERATIVES
ART. 23. Type and Categories of
Cooperatives.
Types of Cooperatives may fall under any of
the following types:
(a) Credit Cooperative is one that
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;
(b) Consumers Cooperative is one of the
primary purpose of which is to procure and
distribute commodities to members and
non-members;
(c) Producers Cooperative is one that
undertakes joint production whether
agricultural or industrial. It is formed and
operated by its members to undertake the
production and processing of raw materials
or goods produced by its members into
finished or processed products for sale by
the cooperative to its members and non-
members. Any end product or its derivative
arising from the raw materials produced by
its members, sold in the name and for the
account of the cooperative, shall be deemed
a product of the cooperative and its
members;
(d) Marketing Cooperative is one which
engages in the supply of production inputs
to members and markets their products;
(e) Service Cooperative is one which
engages in medical and dental care,
hospitalization, transportation, insurance,
housing, labor, electric light and power,
communication, professional and other
services;
(f) Multipurpose Cooperative is one which
combines two (2) or more of the business
activities of these different types of
cooperatives;
(g) Advocacy Cooperative is a primary
cooperative which promotes and advocates
cooperativism among its members and the
public through socially-oriented projects,
education and training, research and
communication, and other similar activities
to reach out to its intended beneficiaries;
(h) Agrarian Reform Cooperative is one
organized by marginal farmers majority of
which are agrarian reform beneficiaries for
the purpose of developing an appropriate
system of land tenure, land development,
land consolidation or land management in
areas covered by agrarian reform;
(i) Cooperative Bank is one organized for
the primary purpose of providing a wide
range of financial services to cooperatives
and their members;
(j) Dairy Cooperative is one whose
members are engaged in the production of
fresh milk which may be processed and/or
marketed as dairy products;
(k) Education Cooperative is one
organized for the primary purpose of owning
and operating licensed educational
institutions notwithstanding the provisions of
Republic Act No. 9155, otherwise known as
the Governance of Basic Education Act of
2001;
(l) Electric Cooperative is one organized
for the primary purposed of undertaking
power generations, utilizing renewable
energy sources, including hybrid systems,
acquisition and operation of
subtransmission or distribution to its
household members;
(m) Financial Service Cooperative is one
organized for the primary purpose of
engaging in savings and credit services and
other financial services;
(n) Fishermen Cooperative is one
organized by marginalized fishermen in
localities whose products are marketed
either as fresh or processed products;
(o) Health Services Cooperative is one
organized for the primary purpose of
providing medical, dental and other health
services;
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(p) Housing Cooperative is one organized
to assist or provide access to housing for
the benefit of its regular members who
actively participate in the savings program
for housing. It is co-owned and controlled by
its members;
(q) Insurance Cooperative is one engaged
in the business of insuring life and poverty
of cooperatives and their members;
(r) Transport Cooperative is one which
includes land and sea transportation, limited
to small vessels, as defined or classified
under the Philippine maritime laws,
organized under the provisions of this Code;
(s) Water Service Cooperative is one
organized to own, operate and manage
waters systems for the provision and
distribution of potable water for its members
and their households;
(t) Workers Cooperative is one organized
by workers, including the self-employed,
who are at same time the members and
owners of the enterprise. Its principal
purpose is to provide employment and
business opportunities to its members and
manage it in accordance with cooperative
principles; and
(u) Other types of cooperative as may be
determined by the Authority.
ART. 21. Merger and Consolidation of
Cooperatives.
(1) Two (2) or more cooperatives may
merge into a single cooperative which shall
either be one of the constituent
cooperatives or the consolidated
cooperative.
(2) 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. The dissenting
members shall have the right to exercise
their right to withdraw their membership
pursuant to Article 30.
(3) The Authority shall issue the guidelines
governing the procedure of merger or
consolidation of cooperatives. In any case,
the merger or consolidation of cooperatives.
In any case, the merger or consolidation
shall be effective upon the issuance of the
certificate of merger or consolidation by the
Authority.
ART. 22. Effects of Merger and
Consolidation. The merger or
consolidation of cooperatives shall have the
following effects:
(1) The constituent cooperatives shall
become a single cooperative which, in case
of merger, shall be the surviving
cooperative, and, in case of consolidation,
shall be the consolidated cooperative;
(2) The separate existence of the
constituent cooperatives shall cease, except
that of the surviving or the consolidated
cooperative;
(3) The surviving or the consolidated
cooperative shall possess al the assets,
rights, privileges, immunities and franchises
of each of the constituent cooperatives;
(4) The surviving or the consolidated
cooperative shall possess all the assets,
rights, privileges, immunities and franchises
of each of the constituent cooperatives; and
(5) The surviving or the consolidated
cooperative shall be responsible for all the
liabilities and obligation of each of the
constituent cooperatives in the same
manner as if such surviving or consolidated
cooperative had itself incurred such
liabilities or obligations. Any claim, action or
proceeding pending by or against any such
constituent cooperatives may be prosecuted
by or against the surviving or consolidated
cooperative, as the case may be. Neither
the rights of creditors nor any lien upon the
property of any such constituent
cooperatives shall be impaired by such
merger or consolidation.
DISSOLUTION OF COOPERATIVES
ART. 64. Voluntary Dissolution
Where no Creditors are Affected. If the
dissolution of a cooperative does not
prejudice the rights of any creditor having a
claim against it, the dissolution may be
affected by a majority vote of the board of
directors, and by a resolution duly adopted
by the affirmative vote of at least three-
fourths (3/4) of all the members with voting
rights, present and constituting a quorum at
Source:
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a meeting to be held upon call of the
directors:
Provided, That the notice of time, place and
object of the meeting shall be published for
three (3) consecutive weeks in a
newspaper published in the place where the
principal office of said cooperative is
located, or if no newspaper is published in
such place, in a newspaper of general
circulation in the Philippines:
Provided, further, That the notice of such
meeting is sent to each member of record
either by registered mail or by personal
delivery at least thirty (30) days prior to said
meeting. A copy of the resolution
authorizing the dissolution shall be certified
to by a majority of the board of directors and
countersigned by the board secretary.
The Authority shall thereupon issue the
certificate of dissolution.
ART. 65. Voluntary Dissolution
Where Creditors Are Affected. Where the
dissolution of a cooperative may prejudice
the rights of any creditor, the petition for
dissolution shall be filed with the Authority.
The petition shall be signed by a majority of
its board or directors or other officers
managing its affairs, verified by its
chairperson or board secretary or one of its
directors and shall set forth all claims and
demands against it and that its dissolution
was resolved upon by the affirmative vote of
at least three-fourths (3/4) of all the
members with voting rights, present and
constituting a quorum at a meeting called
for that purpose.
"If the petition is sufficient in form and
substance, the Authority shall issue an
order reciting the purpose of the petition and
shall fix a date which shall not be less than
thirty (30) nor more than sixty (60) days
after the entry of the order. Before such
date, a copy of the order shall be published
at least once a week for three (3)
consecutive weeks in a newspaper of
general circulation published in the
municipality or city where the principal office
of the cooperative is situated or in the
absence of such local newspaper, in a
newspaper of general circulation in the
Philippines, and a copy shall likewise be
posted for three (3) consecutive weeks in
three (3) public places in the municipality or
city where the cooperative's office is
located. If a cooperative has not commenced
business and its operation within two (2)
"Upon expiry of the five (5) day notice to file years after the issuance of its certificate of
objections, the Authority shall proceed to registration or has not carried on its
hear the petition and try any issue raised in business for two (2) consecutive years, the
the objection filed; and if the objection is Authority shall send a formal notice to the
sufficient and the material allegations of the said cooperative to show cause as to its
petition are proven, it shall issue an order to failure to operate. Failure of the cooperative
dissolve the cooperative and direct the to promptly provide justifiable cause for its
disposition of its assets in accordance with failure to operate shall warrant the Authority
existing rules and regulations. The order of to delete its name from the roster of
dissolution shall set forth therein: registered cooperatives and shall be
deemed dissolved.
(1) The assets and liabilities of the
cooperative; ART. 69. Liquidation of a Cooperative.

(2) The claim of any creditor; Every cooperative whose charter expires
by its own limitation or whose existence is
(3) The number of members; and terminated by voluntary dissolution or
through an appropriate judicial proceeding
(4) The nature and extend of the interests of shall nevertheless continue to exist for three
the members of the cooperative. (3) years after the time it is dissolved; not to
continue the business for which it was
ART. 66. Involuntary Dissolution. A established but for the purpose of
cooperative may be dissolved by order of a prosecuting and defending suits by or
competent court after due hearing on the against it; settlement and closure of its
grounds of: affairs; disposition, conveyance and
distribution of its properties and assets.
(1) Violation of any law, regulation or
provisions of its bylaws; or "At any time during the said three (3) years,
the cooperative is authorized and
(2)Insolvency. empowered to convey all of its properties to
trustees for the benefit of its members,
ART. 67. Dissolution by Order of the creditors and other persons in interest.
Authority. From and after any such conveyance, all
interests which the cooperative had in the
The Authority may suspend or revoke, after properties are terminated.
due notice and hearing, the certificate of
registration of a cooperative on any of the "Upon the winding up of the cooperative
following grounds: affairs, any asset distributable to any
creditor, shareholder or member who is
(1) Having obtained its registration by fraud; unknown or cannot be found shall be given
to the federation or union to which the
(2) Existing for an illegal purpose; cooperative is affiliated with.

(3) Willful violation, despite notice by the "A cooperative shall only distribute its
Authority, of the provisions of this Code or assets or properties upon lawful dissolution
its bylaws; and after payment of all its debts and
liabilities, except in the case of decrease of
(4) Willful failure to operate on a cooperative share capital of the cooperative and as
basis; and otherwise allowed by this Code.

(5) Failure to meet the required minimum ART. 70. Rules and Regulations on
number of members in the cooperative. Liquidation. The Authority shall issue the
appropriate implementing guidelines for the
liquidation of cooperatives."
ART. 68. Dissolution by Failure to
Organize and Operate.-

Source:
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www.moneylaunderingbulletin.com
The Philippine Deposit Insurance & desist order against such deposit
Corporation accounts/transactions
-- Are determined to be proceeds of an
unlawful activity as defined in the Anti-
(PDIC) was established on June 22, 1963
Money Laundering Act (Republic Act
by Republic Act 3591 to provide depositor
9160, as amended)
protection and help maintain stability in the
3/ Unsafe and unsound deposit-related
financial system by providing permanent
activities include, among others: (PDIC
and continuing deposit insurance up to the
Regulatory Issuance No. 2011-01)
maximum deposit insurance coverage of
-- Deposit-related
P500,000.001, per depositor, per bank.
practice/activity/transaction without the
coverage of P500,000.001, per depositor,
approval or
per bank.
adequate controls required under existing
laws, rules and regulations
What are covered by PDIC deposit
-- Failure to keep bank records within bank
insurance?
premises
PDIC insures valid deposits in domestic
-- Granting high interest rates, when bank
offices
has: (i) negative unimpaired
of its member banks.
capital, or (ii) liquid assets to deposit ratio
By Deposit Type:
less than 10%
• Savings
-- Non-compliance with PDIC regulations
• Special Savings
• Demand/ Checking
Maximum Deposit Insurance Coverage
• Negotiable Order of Withdrawal
(MDIC)
(NOW)
PDIC shall pay deposit insurance on all
• Certificate of Time Deposits
valid
By Deposit Account:
deposits up to the Maximum Deposit
• Single Account
Insurance
• Joint Account
Coverage of Php500,000, per depositor, of
• Account “By”, “In Trust For” (ITF) or
a
“For the Account of” (FAO) another
closed bank. Accounts maintained in the
person
same
By Currency:
right and capacity for a depositor’s benefit,
• Philippine peso
whether in his own name or in the name of
• Foreign currencies considered as
others, are covered by deposit insurance.
part
Deposits are considered valid upon the
of BSP’s international reserves
determination by the PDIC, based on bank
records, that the deposits were made with a
What are NOT covered by PDIC deposit
corresponding inflow of cash.
insurance?

The following, whether denominated,

documented, recorded or booked as deposit
by the bank, are excluded from PDIC
deposit
insurance (Section 4 (f) of the PDIC
Charter):
• Investment products such as bonds
and
securities, trust accounts and other similar
instruments
• Deposit accounts or transactions
that:
-- Are unfunded, fictitious or fraudulent
-- Constitute and/or emanate from unsafe
and unsound banking practice/s3 as
determined by the PDIC, in consultation
with the BSP, after due notice and
hearing and publication of PDIC’s cease

Source:
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www.moneylaunderingbulletin.com
1. WHEN ARE CLAIMS FILED?
FILING CLAIMS?
Claims are filed during the onsite Claims
Settlement Operations (CSO) period, as
announced in the Notice to Depositors
published in national or local newspapers,
or posted in the bank premises and
conspicuous places within the locality, and
in the PDIC website.
Depositors who failed to file their claims
during the onsite CSO may do so through
any of these options:
1.1Personal filing at the PDIC Public
Assistance Center located at the 3rd
Floor, SSS Bldg., 6782 Ayala Avenue
corner V. A. Rufino Street, Makati City,
8:00 AM to 5:00 PM, Monday to Friday,
except holidays.
1.2Filing through mail by sending a duly
accomplished and notarized Claim
Form and requirements to:
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 pursuant to Section 21(e) of
R.A. 3591, as amended.
2. WHO ARE REQUIRED TO FILE
DEPOSIT INSURANCE CLAIMS?
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;
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.
Source:
www.pdic.gov.ph
www.moneylaunderingbulletin.com
3. WHAT ARE THE REQUIREMENTS IN
3.1.ORIGINAL EVIDENCE OF DEPOSITS
such as savings passbook, certificate
of time deposit, bank statement, used
or unused checks, or ATM card.
3.2.ONE (1) VALID ORIGINAL PHOTO-
BEARING IDENTIFICATION
DOCUMENT (ID) with clear signature
of depositor/claimant (e.g. Driver’s
License, SSS/GSIS ID, Senior
Citizen’s ID, Passport, PRC ID,
OWWA/OFW ID, Seaman’s ID, Alien
Certificate of Registration ID, Voter’s
ID). (IT IS RECOMMENDED TO
BRING AT LEAST TWO (2) VALID IDs
IN CASE OF DISCREPANCIES IN
SIGNATURE).
3.3.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.
3.4.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.
3.5.Claim Form:
When filing claim during the onsite
CSO period, or during personal filing at
the PDIC PAC, a system generated
Claim Form shall be printed by PDIC
representative after
interview/processing.
When filing through mail, please
download the PDIC Claim Form. The
claim form needs to be accomplished,
signed, and notarized. Depositors must
ensure that the signature on the Claim
Form is similar with the signature in the
bank records and the valid IDs
submitted.
4. WHO SHOULD SIGN THE CLAIM
FORM?
4.1DEPOSITOR of the account
– for depositor 18 years old and
above
4.2PARENT
– of depositor below 18 years old
4.3AGENT
– in the case of “by” account
4.4TRUSTEE
– in the case of “In Trust for (ITF)”
account
4.5EACH DEPOSITOR/ACCOUNT
HOLDER for account maintained as
“Or”, “And/Or” or “And”
– in the case of joint accounts
A BangkoSentral ng Pilipinas briefer
on the Anti-Money Laundering Act
of 2001
1. What is money laundering?
Money laundering is an act or series or
combination of acts whereby proceeds
of an unlawful activity, whether in cash,
property or other assets, are
converted, concealed or disguised to
make them appear to have originated
from legitimate sources. One way of
laundering money is through the
financial system. Republic Act No.
9160, otherwise known as the Anti-
Money Laundering Act of 2001
(AMLA), as amended, defined money
laundering as a scheme whereby
proceeds of an unlawful activity are
transacted or attempted to be
transacted, thereby making them
appear to have originated from
legitimate sources.
2. What has the Philippine
government done to curb money
laundering?
The government enacted Republic Act
(R.A.) No. 9160 (The Anti-Money
Laundering Act of 2001), which took
effect on 17 October 2001. Certain
provisions of AMLA were amended
by R.A. No. 9194(An Act Amending
Source:
www.pdic.gov.ph
www.moneylaunderingbulletin.com
R.A. 9160) effective 23 March 2003. It
has also issued the Revised
Implementing Rules and Regulations
(RIRR) implementing R.A. No. 9160,
as amended.
3. What are considered unlawful
activities under the AMLA, as
amended?

There are 14 unlawful activities or
predicate crimes covered by the AMLA.
These are, 
in the order enumerated
in the law:
 Kidnapping for ransom
 Drug offenses
 Graft and corrupt practices
 Plunder
 Robbery and extortion
 Jueteng and masiao
 Piracy on the high seas
 Qualified theft
 Swindling
 Smuggling
 Electronic Commerce crimes
 Hijacking, destructive arson and
murder, including those
perpetrated against non-
combatant persons (terrorist
acts)
 Securities fraud
 Felonies or offenses of a similar
nature punishable under penal
laws of other 
countries
4. How is money laundered through
the financial system?
Placement – involves initial placement
or introduction of the illegal funds into
the financial system. Financial
institutions are usually used at this
point.
Layering – involves a series of
financial transactions during which the
dirty money is passed through a series
of procedures, putting layer upon layer
of persons and financial activities into
the laundering process. Ex. wire
transfers, use of shell corporations, etc.
Integration – the money is once again
made available to the criminal with the
occupational and geographic origin
obscured or concealed. The laundered
funds are now integrated back into the
 legitimate economy through the
purchase of properties, businesses and
other investments.
5. Why is Money Laundering a
problem?
Money laundering allows criminals to
preserve and enjoy the proceeds of
their crimes, thus providing them with
the incentives and the means to
continue their illegal activities. At the
same time, it provides them the
opportunity to appear in public like
legitimate entrepreneurs. Organized
crime, through money laundering, is
known to have the capacity to
destabilize governments and
undermine their financial systems. It is
thus a threat to national security.
6. What are the salient features of
the law?
 It criminalizes money
laundering, meaning it makes
money laundering a crime, and

provides penalties for its
commission, including hefty
fines and imprisonment.
 It states clearly the
determination of the
government to prevent the
Philippines from becoming a
haven for money laundering,
while ensuring to preserve the
integrity and confidentiality of
good bank accounts.
 It creates an Anti-Money
Laundering Council (AMLC)
that is tasked to oversee the
implementation of the law and
to act as a financial intelligence
unit to receive and analyze
covered and suspicious
transaction reports.
 It establishes the rules and the
administration process for the
prevention, detection and
prosecution of money
laundering activities.
 It relaxes the bank deposit
secrecy laws authorizing the
AMLC and the BangkoSentral
ng Pilipinas access to deposit
and investment accounts in
specific circumstances.
 It requires covered institutions
to report covered and
Source:
www.pdic.gov.ph
www.moneylaunderingbulletin.com
suspicious transactions and to
cooperate with the government
in prosecuting offenders. It also
requires them to know their
customers and to safely keep
all records of their transactions.
 It carries provisions to protect
innocent parties by providing
penalties for causing the
disclosure to the public of
confidential information
contained in the covered and
suspicious transactions.
 It establishes procedures for
international cooperation and
assistance in the apprehension
and prosecution of money
laundering suspects.
7. What is the Anti-Money
Laundering Council (AMLC)? What
are its powers?
The AMLC is the Philippines’ financial
intelligence unit, which is tasked to
implement the AMLA. It is composed of
the Governor of the BangkoSentral ng
Pilipinas (BSP) as Chairman & the
Commissioner of the Insurance
Commission (IC) and the Chairman of
the Securities and Exchange
Commission (SEC) as members.

The AMLC is authorized to:
 Require and receive covered or
suspicious transaction reports
from covered institutions.
 Issue orders to determine the
true identity of the owner of any
monetary instrument or
property that is the subject of a
covered or suspicious
transaction report, and to
request the assistance of a
foreign country if the Council
believes it is necessary.
 Institute civil forfeiture and all
other remedial proceedings
through the Office of the
Solicitor General.
 Cause the filing of complaints
with the Department of Justice
or the Ombudsman for the
prosecution of money
laundering offenses.
 Investigate suspicious
transactions, covered
transactions deemed
suspicious, money laundering
 activities and other violations of
the AMLA.
 Secure the order of the Court of
Appeals to freeze any monetary
instrument or property alleged
to be the proceeds of unlawful
activity.
 Implement such measures as
may be necessary and justified
to counteract money
laundering.
 Receive and take action on any
request from foreign countries
for assistance in their own anti-
money laundering operations.
 Develop educational programs
to make the public aware of the
pernicious effects of money
laundering and how they can
participate in bringing the
offenders to the fold of the law.
 Enlist the assistance of any
branch of government for the
prevention, detection and
investigation of money
laundering offenses and the
prosecution of offenders. In this
connection, the AMLC can
require intelligence agencies of
the government to divulge any
information that will facilitate the
work of the Council in going
after money launderers.
 Impose administrative
sanctions on those who violate
the law, and the rules,
regulations, orders and
resolutions issued in connection
with the enforcement of the law.
8. What are the covered
institutions?
 Banks, offshore banking units,
quasi-banks, trust entities, non-
stock savings and loan
associations, pawnshops, and
all other institutions, including
their subsidiaries and affiliates
supervised and/or regulated by
the BangkoSentral ng Pilipinas
(BSP)
 Insurance companies, holding
companies and all other
institutions supervised or
regulated by the Insurance
Commission (IC)
 Securities dealers, brokers, pre-
need companies, foreign
Source:
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www.moneylaunderingbulletin.com
exchange corporations,
investment houses, trading
advisers, as well as other
entities supervised or regulated
by the Securities and Exchange
Commission (SEC)
9. What are the Customer
Identification Requirements – KYC
(Know Your Customer Rule)?
Covered institutions shall:
 Establish and record the true
identity of their clients based on
official documents.
 In case of individual clients,
maintain a system of verifying
the true identity of their clients.
 In case of corporate clients,
require a system verifying their
legal existence and
organizational structure, as well
as the authority and
identification of all persons
purporting to act in their behalf.
 Establish appropriate systems
and methods based on
internationally compliant
standards and adequate
internal controls for verifying
and recording the true and full
identify of their customers.
10. What are the Record-Keeping
Requirements?

All covered institutions shall:
 Maintain and safely store all
records of all their transactions
for five years from the
transaction dates;
 Ensure that said records/files
contain the full and true identity
of the owners or holders of the
accounts involved in the
covered transactions and all
other identification documents;
 Undertake the necessary
adequate measures to ensure
the confidentiality of such files;
 Prepare and maintain
documentation, in accordance
with client identification
requirements, on their customer
accounts, relationships and
transactions such that any
account, relationship or
 transaction can be so
reconstructed as to enable the
AMLC and/or the courts to
establish an audit trail for
money laundering;
 Maintain and safely store all
records of existing and new
accounts and of new
transactions for 5 years from
October 17, 2001 or from the
dates of the accounts or
transactions, whichever is later;
 Anent closed accounts,
preserve and safely store the
records on customer
identification, account files and
business correspondence for at
least 5 years from the dates
they were closed;
 If a money laundering case
based on any record kept by
the covered institution has been
filed in court, retain said files
until it is confirmed that the
case has been finally resolved
or terminated by the court; and
 Retain records as originals in
such forms as are admissible in
court
11. What are covered transactions?
Transaction in cash or other equivalent
monetary instruments involving a total
amount in excess of P500,000.00
within one business day.
12. What are suspicious
transactions?

Transactions, regardless of the
amount involved, where 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;
d. taking into account all known
circumstances, it may be perceived
that the client’s 
transaction is
structured in order to avoid being the
Source:
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subject of reporting requirements under
the Act;
e. any circumstance relating to the
transaction which is observed to
deviate from the profile of the client
and/or the client’s past transactions
with the covered institution;
f. the transaction is in any way related
to an unlawful activity or 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 the foregoing.
13. What are the reporting
requirements?
Covered institutions shall report to the
AMLC all covered transactions and
suspicious transactions within five
working days from occurrence thereof,
unless the Supervision Authority (the
BangkoSentral ng Pilipinas, the
Securities and Exchange Commission,
or the Insurance Commission)
prescribes a longer period not
exceeding ten working days. 
Should
a transaction be determined to be both
a covered transaction and a suspicious
transaction, it shall be reported as
suspicious transaction.
14. How is reporting done?
The reports on covered and/or
suspicious transactions shall be
accomplished in the prescribed formats
and submitted within five business
days from occurrence of the
transactions in a secured manner to
the AMLC in electronic form, either via
diskettes, leased lines, or through
internet facilities. The corresponding
hard copy for suspicious transactions
shall be sent to AMLC at the 5th Floor
EDPC Building, BangkoSentral ng
Pilipinas Complex, Manila, Philippines.
All pawnshops should coordinate with
the AMLC thru tel. nos. 523-4421, 521-
5662 or 302-3979 on reporting
requirements, procedures and
deadlines.
15. Are there sanctions for failure to
report covered or suspicious
 transactions and non-compliance
with R.A. 9160, as amended?
Sanctions/penalties shall be imposed
on pawnshops that will fail to comply
with the provisions of R.A. 9160, as
amended.
16. What are the sanctions for
failure to report covered or
suspicious transactions?
Any person, required to report covered
and suspicious transactions failed to do
so will be subjected to penalty of 6
months to 4 years imprisonment or a
fine of not less than P100,000.00 but
not more than P500,000.00, or both.
17. Are there confidentiality
restrictions on the reporting of
covered transaction and/or
suspicious transaction?

When reporting covered transactions
or suspicious transactions to the
AMLC, covered institutions and their
officers and employees, are prohibited
from communicating, directly or
indirectly, in any manner or by any
means, to any person, entity, the
media, the fact that a covered or
suspicious transaction report was
made, the contents thereof, or any
other information in relation thereto.
Neither may such reporting be
published or aired in any manner or
form by the mass media, electronic
mail, or other similar devices. In case
of violation thereof, the concerned
officer, and employee, of the covered
institution, or media shall be held
criminally liable.
18. What are the other offenses
punishable under the AMLA, as
amended?
a. Failure to keep records is committed
by any responsible official or employee
of a covered institution who fails to
maintain and safely store all records of
transactions for 5 years from the dates
the transactions were made or when
the accounts were closed. 
The
penalty is 6 months to 1 year
imprisonment or a fine of not less than
P100,000.00 but not more than
Source:
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P500,000.00, or both.
b. Malicious reporting is committed by
any person who, with malice or in bad
faith, reports or files a completely
unwarranted or false information
regarding a money laundering
transaction against any person. 
The
penalty is 6 months to 4 years
imprisonment and a fine of not less
than P100,000.00 but not more than
P500,000.00. The offender is not
entitled to the benefits of the Probation
Law.
c. Breach of Confidentiality. For this
offense, the penalty is 3 to 8 years
imprisonment and a fine of not less
than P500,000.00 but not more than
P1 million. In case the prohibited
information is reported by media, the
responsible reporter, writer, president,
publisher, manager, and editor-in-chief
are held criminally liable.
d. Administrative offenses. The AMLC,
after due investigation, can impose
fines from P100,000.00 to P500,000.00
on officers and employees of covered
institutions or any person who violates
the provisions of the AMLA, as
amended, the Implementing Rules and
Regulations, and orders and
resolutions issued pursuant thereto.
The New Central Bank Act
SECTION 1. Declaration of Policy. _
The State shall
maintain a central monetary authority
that shall function and operate as an
independent and accountable body
corporate in the discharge of its
mandated responsibilities concerning
money, banking and credit. In line with
this policy, and considering its unique
functions and responsibilities, the
central monetary authority established
under this Act, while being a
government owned corporation, shall
enjoy fiscal and administrative
autonomy.
SEC. 52. Legal Tender Power. _ All
notes and coins issued by the
BangkoSentral shall be fully
guaranteed by the Government of the
Republic of the Philippines and shall be
legal
 tender in the Philippines for all debts,
both public and private:
Provided, however, That, unless
otherwise fixed by the Monetary
Board, coins shall be legal tender in
amounts not exceeding Fifty pesos
(P50) for denominations of twenty-five
centavos and above,
and in amounts not exceeding Twenty
pesos (P20) for
denominations of ten centavos or less.
SEC. 60. Legal Character. _ Checks
representing demand deposits do not
have legal tender power and their
acceptance in the payment of debts,
both public and private, is at the option
of the creditor: Provided, however,
That a check which has been cleared
and credited to the account of the
creditor shall be equivalent to a
delivery to the creditor of cash in an
amount equal to the amount credited to
his account.
SEC. 51. Liability for Notes and
Coins. _ Notes and coins issued by
the BangkoSentral shall be liabilities of
the BangkoSentral and may be issued
only against, and in amounts not
exceeding, the assets of the
BangkoSentral. Said notes and coins
shall be a first and paramount lien on
all assets of the BangkoSentral.The
BangkoSentral's holdings of its own
notes and coins shall not be
considered as part of it's currency
issue and, accordingly, shall not form
part of the assets or liabilities of the
BangkoSentral.
INTELLECTUAL PROPERTY LAW
Intellectual property refers to anything
created by someone, including but not
limited to inventions, literary works,
items created by artists (e.g. artwork
and musical pieces), symbols, designs,
images, pictures, and even names that
are used for commercial purposes.
All these creations are protected by the
law, ensuring that the people behind it
are given due recognition or
remuneration for their effort.
At the office of the Intellectual Property
Source:
www.pdic.gov.ph
www.moneylaunderingbulletin.com
in the Philippines, there are several
categories wherein a creator or
innovator can register their creation
under. Below are some categories:
PATENT
A patent refers to the exclusive rights
to a product or process, as well as its
improvements—granted that the
product or process offers something
new and useful.
The inventor or creator with the patent
has the right to choose as to who can
use, sell, or even make something
similar during its 2-year validity period.
Throughout the entire duration, a
patent’s information must be available
to the public, as the owner is given
enough time to gain ample commercial
returns. Some examples of inventions
or creations that can be filed as patents
include new and useful machines,
products and processes (non-biological
and microbiological in nature);
improvements of machines, products
and processes; and microorganisms.
The basic requirements for a creation
to be considered patentable are that
the creation would have a novel idea,
inventive, and can be applied in an
industrial setting.
One needs to fill out a Request Form
for a Grant of Philippine Patent, as well
as submit descriptions and drawings of
the invention or process.
Once the application has been filed, it
will be published in the IPO Gazette.
During the period of its publication,
anyone can write in or contest the
application.
Corresponding filing fees amount to
PHP 3,600 and PHP 1,800, for big and
small inventions, respectively.
Trademark
A trademark is a tool used to
differentiate services and goods from
one another. It can be in the form of a
word or a group of words; a sign, logo,
 or symbol. It could even be a purposes.
combination of those above.
Essential in marketing your products or
services, a trademark will help
consumers identify your brand among
the many others in the market. To
protect your business’ trademark, it is
advisable to have it registered.
This way, the owner of the trademark
would have exclusive rights to make
use of the mark. Furthermore, it will
ensure that no one else can use the
same or even a similar mark for the
products or services of a similar nature.
Application Process
Similar to a patent, you need to apply
or file for the exclusive rights of the
mark you wish to use for business
purposes. As the rights to a mark are
granted to the first person who filed
with the IPO, it is imperative that one
would conduct a search within the
IPO’s Database to avoid redundancies
in applications.
For filing purposes, one needs to fill out
the Trademark Application Form, as
well as attach a drawing of the mark.
Corresponding filing fees amount to
PHP 2,160 and PHP 1,080, for big and
small marks, respectively.
Copyright
A copyright refers to the protection
given to the owner of an original work
covering literary works, musical pieces,
paintings, and computer programs,
among others.
Under the copyright laws, the owner of
the original work is entitled to economic
rights and moral rights. Economic
rights enable the creator to receive
profit gains should his works be
distributed by third parties. Moral
rights, on the other hand, protect the
connection between the creator and his
work.
Once the owner receives the rights to
his work, unauthorized third parties are
prohibited from selling or distributing
the works, especially for trade
Source:
www.pdic.gov.ph
www.moneylaunderingbulletin.com
Application Process
One needs to fill out an application
form, attach a copy of their work, and
pay the basic filing fee of PHP 625 at
the IPO.
The Madrid Protocol
The Madrid Protocol is an international
treaty, allowing trademark registration
in the Philippines or any country—as
long as they are part of the Madrid
Protocol.
One would only need to file a single
application. Should your application be
ratified, the approved mark will be
protected in all the countries that are
part of the Madrid Protocol.
By acceding to the Madrid Protocol,
trademark owners in the Philippines
would have better platforms to secure
protection for their respective marks.
The Madrid Protocol offers a simple
and cost-effective solution that
promotes transparency and enables
entrepreneurs to secure their marks in
a faster and easier manner.
Moreover, it encourages opening up
businesses in multiple countries, as
one can designate the countries where
their marks would need protection.
With the Madrid Protocol, companies
can widen their market segment while
keeping their interests in check.
With globalization, gaps between
countries are now bridged easily.
Businesspeople can now partake in
business dealings around the world
without having to worry about
infringement of information.
With the help of all these intellectual
property laws, information now
becomes a boon to society.