SECRECY OF BANK DEPOSITS AND

UNCLAIMED BALANCES LAW

• A person bought some goods from a
department store and paid with her BPI
personal check. When the check was
presented for payment, it was dishonored
for having been drawn against insufficient
funds. Not knowing who the buyer was, the
store proprietor, through his lawyer, wrote a
letter to BPI inquiring about the name of
the drawer of the check. BPI refused to
disclose the name of the drawer. Was BPI’s
refusal justified?
Nature of Deposits

•All deposits of whatever nature with

banks or banking institutions in the
Philippines including investments in
bonds issued by the Government of
the Philippines, its political
subdivisions and its instrumentalities,
are hereby considered as of an
absolutely confidential.
• Chang Corporation bought numerous
treasury bills at DBP. The Economic and
Intelligence Bureau of the DoF was
investigating Chang for underpayment of
taxes. The EIIB thus requested from the DBP
a list of the Treasury Bills bought by Chang.
Can the request be granted?
Punishable Act

• Unauthorized disclosure by an
official or employee of a banking
institution.
Exceptions – Peso Accounts

• upon written permission of the

depositor;
• in cases of impeachment;
• upon order of a competent
court in cases of bribery or
dereliction of duty of public
officials;
Exceptions – Peso Accounts

• prosecution for unexplained

wealth;
• authority of the BIR commissioner
to inquire into bank accounts;
• power of the Ombudsman to
examine bank records;
Exceptions – Peso Accounts

• garnishment of bank deposits;

• authority of the AMLC to inquire
into bank accounts;
• reporting of covered or
suspicious transactions;
Exceptions – Peso Accounts

• unclaimed balances law;

• authority of the BSP/PDIC to
inquire into bank accounts;
• foreign account tax compliance;
Exceptions – Peso Accounts

• in cases where the money

deposited or invested is the
subject matter of the litigation.
• Anne Investments, Inc. bought T-bills from
Sheen Brokers Corporation, a dealer of T-
bills. Anne paid P200 million to Sheen but the
latter did not deliver the T-bills to Anne.
Sheen’s officers and employees deposited
the money in various bank accounts. Anne
sued Sheen for its failure to deliver the T-bills.
During the pendency of the case, Anne
applied for an order to examine the bank
accounts to which the money was
deposited. Should the application for the
order be granted?
Magsino vs. Mellon Bank
•Magsino spouses received
USD1,000,000 instead of the USD1,000
which they were actually supposed to
receive. In the suit by Mellon Bank
against the Magsinos, the action was
for recovery of the money by virtue of
a constructive trust. Can Mellon Bank
inquire into the bank deposits of
Spouses Magsino?
Exceptions – Foreign Current Account

•depositor’s written permission;

•authority of the AMLC to inquire
into bank deposits;
•reporting of covered or suspicious
transactions;
Exceptions – Foreign Current Account

•authority of the BSP/PDIC to

examine bank accounts;
•authority of the BIR commissioner
to inquire into bank deposits;
•foreign tax account compliance.
Unclaimed balances (PD 679)
• Shall include credits or deposits of
money, bullion, security or other
evidence of indebtedness of any kind,
and interest thereon with banks, buildings
and loan associations, and trust
corporations, as hereinafter defined, in
favor of any person known to be dead or
who has not made further deposits or
withdrawals during the preceding ten
years or more.
Unclaimed balances (PD 679)
• Such unclaimed balances,
together with the increase and
proceeds thereof, shall be
deposited with the Treasurer of the
Philippines to the credit of the
Government of the Republic of the
Philippines to be used as the
Congress may direct.
Thank You!