San Beda College Alabang

School of Law
Alabang Hills Village

A Comprehensive Study on Republic Act No. 1405: An Act Prohibiting the Disclosure of or Inquiry
into, Deposits with any Banking Institution and Providing Penalty Therefor and its Proposed
Amendments
And
The Vetoed provisions of R.A. No. 11213 (Tax Amnesty Law) that are relevant to the Bank Secrecy
Law

Submitted to:
Atty. Nicasio C. Cabaneiro

Submitted by:
Group 3
Camalig, Ylleanne Meridee G.
Celino, Rayan Jen C.
Espidol, Corinne Marie D.
Gandamra, Shariff Zain L.
Geroy, Rina Cerie G.
Poblador, Daniella S.
Tan, Mayrell T.
Valera, Carl Maria Vladimir S.

Table of Contents
 I. Brief Background…………………………………………………………..page 2
A. Bank Secrecy Law and its Amendments
B. Bills Proposing Amendments to Bank Secrecy Law
C. Important Excerpts from the Explanatory Note of the Bills

II. Comparison of the Bank Secrecy Law and its Proposed Amendments
A. Declaration of Policy……………………………………………..page 3
B. Confidentiality of Deposits……………………………………….page 4
C. Penalty Clause…………………………………………………....page 6

III. Proposed Additional Provisions to the Bank Secrecy Law……..……..page 7

IV. Vetoed provisions of Republic Act No. 11213 (Tax Amnesty Law) that are relevant to the
Bank Secrecy Law………………………………………………………....page 8

V. Role of Philippine Deposit Insurance Corporation (PDIC)…………….page 13

VI. Government (regulatory) side vs. Bank side of Bank Secrecy………..page 14

APPENDIX
Republic Act No. 1405 The Law on Secrecy of Bank Deposits
House Bill No. 1498
Senate Bill No. 634

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 I. Brief Background

A. Bank Secrecy Law

Republic Act No. 1405

➔ An Act Prohibiting Disclosure Of Or Inquiry Into, Deposits With Any Banking Institution And
Providing Penalty Therefor also known as the Bank Secrecy Law
➔ Effective September 9, 1955

B. Bills Proposing Amendments to Bank Secrecy Law

House Bill No. 1498

➔ Introduced by MAGDALO Party-list representative Manuel DG Cabochan III during the First
Regular Session of the 18th Congress
➔ Consists of 4 sections
➔ Submitted July 4, 2019

Senate Bill No. 634

➔ Introduced by Senator Francis N. Pangilinan during the First Regular Session of the 18th Congress
➔ Consists of 12 sections
➔ Submitted July 22, 2019

Please see the appendix of this paper for a complete reproduction of the aforementioned law and bills.

C. Important Excerpts from the Explanatory Note of the Bills

House Bill No. 1498

This bill was introduced by MAGDALO Party-List Representative Manuel DG. Cabochan III. Under
the Bank Secrecy Law, all deposits are absolutely confidential and may not be inquired or looked into except
upon written permission of the depositor, or in cases of impeachment, or upon order of a competent court
in cases of bribery or dereliction of duty of public officials, or in cases where the money deposited
or invested is the subject matter of the litigation. As mentioned in the bill’s explanatory note, such provision
of the law prohibiting the disclosure of or inquiry to bank deposits had been exploited time and again to
hamper and stall investigations of government officials and employees suspected of enriching themselves
while in public office. Hence, the bills seeks to exclude government officials and employees, whether
elected or appointed, from the coverage of the Bank Secrecy Law so that law enforcement authorities will
be equipped with the tools needed to go after crooks in government.

Senate Bill No. 634

This bill was introduced by Senator Francis Pangilinan. In the bill’s explanatory note it was mentioned
that Republic Act No. 11213 or the Tax Amnesty Act was signed into law by President Duterte but vetoed
the provision for a general tax amnesty. In his veto message, the President cited the absence of powers
for the State to run after tax evaders due, in part, to the rigidness of our bank secrecy laws. He noted:

“Without the provisions breaking down the walls of bank secrecy, setting the legal
framework for us to comply with international standards on exchange of information for tax
purposes, and safeguarding against those who abuse the amnesty by declaring an

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 untruthful asset or net worth, a general amnesty that is overgenerous and unregulated
would create an environment ripe for future tax evasion, the very thing we wish to address.

Without these measures, the government and ultimately the Filipino people will incur long
term substantial revenue losses. x x x without safeguards and measures against tax
evasion, the objectives of an amnesty such as raising revenues and expanding the tax
base cannot be fully achieved.”

Another matter pointed out by the explanatory note is the fact that in 2016, the Philippines was in
the center of a money laundering scandal involving millions of dollars. This drew attention to our outdated
bank secrecy laws that are being exploited to hide dirty money in the country. The same laws have made
it hard for authorities to investigate such cases and have hampered our government’s efforts to go after tax
evaders and criminals.

The author of the bill believes it is necessary and timely to lift all pertinent laws on the secrecy of
bank deposits to ensure rightful declaration of taxes and efficient revenue collection. Through this measure,
the government will be able to effectively combat domestic and global tax evasion, money laundering and
other financial crimes, and corruption; further improve the country’s attractiveness to foreign investors; and
protect the fundamental human right of privacy of communication, while ensuring free flow of information
to promote innovation and growth.

II. Comparison of the Bank Secrecy Law and its Proposed Amendments

A. Declaration of Policy

Illustrative Comparison No. 1

R.A. 1405 Senate Bill 634
Bank Secrecy Law Proposed amendments

SECTION 1. It is hereby declared to be the policy SEC. 2. Declaration of Policy. - It is hereby

of the Government to give encouragement to the
people to deposit their money in banking
institutions and to discourage private hoarding so
that the same may be properly utilized by banks in
authorized loans to assist in the economic
development of the country.
declared the policy of the State to effectively
combat domestic and global tax evasion,
money laundering and other financial crimes,
and corruption; to promote harmonious and
supportive international relations; and to comply
with international standards on transparency. It
is likewise the policy of the State to protect the
fundamental human right of privacy of
communication, while ensuring free flow of
information to promote innovation and growth.

B. Confidentiality of Deposits

Illustrative Comparison No. 2

R.A. 1405 House Bill 1498 Senate Bill 634
Bank Secrecy Law Proposed amendments Proposed amendments

SECTION 2. Section 2. All deposits of SEC. 3. Non-Confidentiality of

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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
nature and may not be examined,
inquired or looked into
by any person, government
official, bureau or office, except
upon written permission of
the depositor, or in cases of
impeachment, or upon order of a
competent court in cases
of bribery or dereliction of duty
of public officials, or in cases
where the money
deposited or invested is the
subject matter of the litigation.
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 nature and may not
be examined, inquired or looked
into by any person, government
official, bureau or office, except
upon written permission of the
depositor, or in cases of
impeachment, or upon order of a
competent court in cases of
bribery or dereliction of duty of
public officials, or in cases
where the money deposited or
invested is the subject matter of
the litigation; or when the
depositor is an elective or
appointive official or employee of
the Republic of the Philippines
including the officers and
members of the Armed Forces
of the Philippines (AFP), the
Philippine National Police (PNP),
and all members of the
uniformed services, and officers
and employees of Government-
owned and controlled
corporations and their
subsidiaries.
Deposits. - All deposits of
whatever nature of currency
denomination with banks and
non-banking financial
institutions in the Philippines
are hereby no longer
considered as absolutely
confidential in nature and can
now be examined, inquired, or
looked into under the following
legitimate purposes, subject to,
if application, Section 4 of this
Act:
a) Upon written permission or
waiver of the depositor;
b) In the course of investigation
or inquiry by the Office of the
Ombudsman, or pursuant to or in
relation to its Constitutional
and/or statutory mandate;
c) Upon order of a competent
court in relation to a case pending
before it;
d) Investigations by the Senate,
the House of Representatives
("HoR"), or any of its
Committees, in the course of,
or pursuant to, the exercise
of its Constitutional and /or
statutory mandate;
e) Investigations necessary in
the exercise of its mandates by
any government agency or
financial regulator, including,
but not limited to, the Anti-
Money Laundering Council
("AMLC"), Bureau of Internal
Revenue (“BIR"), the8 financial
regulators such as the Bangko
Sentral ng Pilipims ("BSP"),
Securities and Exchange
Commission ("SEC"),
Philippine Deposit Insurance
Corporation ("PDIC"), and
Insurance Commission ("IC");
f) Inquiry by independent auditors
or a qualified agent engaged by
the bank to provide independent
audit or technical services
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C. Penalty Clause
Illustrative Comparison No. 3
R.A. 1405
Bank Secrecy Law
Section 5. Any violation of this law will subject the
offender upon conviction, to an imprisonment of
not more than five years or a fine of not more than
twenty thousand pesos or both, in the discretion of
the court.
III. Proposed Additional Provisions
subject to a strict
confidentiality agreement; and
g) Inquiry on the account/s of a
deceased depositor by his/her
immediate family members or
compulsory heirs.Further, any
examination or inquiry and any
results thereof shall be for the
exclusive use of the requesting
body and shall not be made
available to any persona or
entity, whether public or
private, except upon
prescription by the persons
enumerated under Section 4 of
this Act, as the case may be.
Furthermore, no court shall
issue a temporary restraining
order or writ or injunction against
any act to examine, inquire, or
look into bank deposits except
upon order issued by the Court of
Appeals or the Supreme Court.
Senate Bill 634
Proposed amendments
Section 8 Penalty Clause
Any abuse on the initiation, conduct, or use of any
inquiry or examination of accounts or the refusal to
disclose or report deposits as required pursuant to
the provisions of this Act without justifiable reason
shall, upon conviction and without prejudice to
other liabilities provided by law, suffer the penalty
of imprisonment of at least three (3) years or a fine
of at least two hundred thousand pesos or both,
upon the discretion of the court.
In the case of government officials or employees,
the penalty of perpetual absolute disqualification to
hold public office shall likewise be imposed.
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A. SEC. 4. Authority to Issue Order - In cases where the deposit shall be examined, inquired, or looked
into, the authority to issue the Order requiring such examination or inquiry shall be limited to the
following persons:
a. In the case of Section 3 (B) of this Act, the Ombudsman;
b. In the case of Section 3 (C) of this Act, the Regional Trial Courts, the Court of Tax Appeals,
the Court of Appeals, or the Supreme Court;
c. In the case of Section 3 (D) of this Act, the Senate President of the Speaker of the HoR,
as the case may be; and
d. In the case of Section 3 (E) of this Act, the head of the government agency or financial
regulator concerned, provided that if the government agency or financial regulator has a
governing board or council, consent of the latter shall also be required.

B. SEC. 5. Clearing House, Authentication of Order - The BSP shall act as the clearing house of any
order issued pursuant to Section 4 hereof. It shall ensure that the Order is authentic and for a
legitimate purpose and is not violative of RA No. 10173 of the Data Privacy Act of 2012.

C. SEC. 6. Mandatory Disclosure. - Pursuant to the provisions of this Act, the bank or non-bank
financial institution concerned, their officers, and employees are mandated to disclose and report
the requested deposit account information; the bank or financial institution concerned, their officers,
and employees shall not refuse to allow such examination or to provide the desired information.

D. SEC. 7. Right to Privacy. - Inquiry, examination, disclosure or use of deposits shall always be for a
legitimate purpose pursuant to Section 3 and in relation to Sections 4 and 5 of this Act and shall
not be used in any manner to harass, threaten, or violate the right to privacy of any person.

E. SEC. 9. Implementing Rules and Regulations. - Within sixty (60) days from the effectivity of this
Act, the BSP shall, in consultation with the Department of Justice and other concerned financial
regulators, promulgate the necessary implementing rules and regulations for the effective and
efficient enforcement of this Act. Proinded, That the implementing rules and regulations shall take
effect fifteen (15) days following its publication in two (2) newspapers of general circulation.

F. SEC. 10. Separability Clause. - If any of the provisions of this Act is declared 10 invalid, the other
provisions not affected thereby shall remain in full force and effect.

G. Section 11 - Repealing Clause - The following provisions, insofar as they are related to deposits
are repealed:
a. Republic Act No. 1405, as amended, also known as the Secrecy of Bank Deposits Act;
b. Sections 81 and 12-A2 of Republic Act No. 6426, as amended, also known as the Foreign
Currency Deposit Act of the Philippines, with respect to foreign currency deposits;
c. Section 63 of Republic Act No. 8367, also known as the Revised Non-Stock Savings and
Loan Association Act of 1997, with respect to all deposits of whatever nature with a Non-
Stock Savings and Loan Association as provided under Republic Act No. 8367;
d. Section 334 of Republic Act No. 6848, also known as the Charter of the AlAmanah Islamic
Investment Bank of the Philippines, with respect to banking transactions relating to all
deposits of whatever nature as provided under Republic Act No. 6848;
e. Section 55(b)5 of Republic Act No. 8791, also known as the General Banking Law of 2000;
f. Section 26(a)(2)6 of Republic Act No. 7353, also known as the Rural Banks Act of 1992;
g. Section 21(a)(2)7 of Republic Act No. 7906, also known as the Thrift Banks Act of 1995;

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 h. Section 228 of Executive Order No. 81, also known as the 1986 Revised Charter of the
Development Bank of the Philippines with respect to banking transactions relating to all
deposits of whatever nature; and
i. Section 11 of Republic Act No. 9160, as amended, also known as the Anti Money
Laundering Act of 2001, as amended, in so far as it requires an order of any competent
court before the AMLC can inquire into bank deposits, including related accounts, with any
banking institution or non-bank financial institution.

All laws, presidential decrees, executive orders, rules and regulations, and other issuances, or any parts
thereof, inconsistent with this Act are hereby repealed, modified, or amended accordingly.

H. SEC. 12. Effectivity. - This Act shall take effect fifteen (15) days after its publication in the Official
Gazette or in at least two (2) newspapers of general circulation.

IV. Vetoed provisions of R.A. No. 11213 (Tax Amnesty Law) that are relevant to the Bank Secrecy
Law

❏ Section 2 (b)

Section 2. Declaration of Policy. - It is hereby declared the policy of the State to protect and enhance
revenue administration and collection, and make the country’s tax system more equitable, by
simplifying the tax compliance requirements. Towards this end, the State shall:

b) Broaden the tax base by offering a general tax amnesty for all unpaid internal revenue taxes that
will help cleanse, organize, and improve the Bureau of Internal Revenue’s database;

❏ Section 3 (d) & (e)

Section 3. Definition of Terms. - As used in this Act:

d) Statement of Assets, Liabilities, and Networth refers to a declaration of the assets, liabilities, and
networth. as of December 31, 2017, as follows:

(1) Assets within or without the Philippines, whether real or personal, tangible or intangible,
whether or not used in trade or business: Provided, That property other than money shall
be valued at the cost at which the property was acquired: Provided, further That foreign
currency assets and/or securities shall be valued at the rate of exchange prevailing as of
the date of the Statement of Assets, Liabilities, and Net worth;

(2) All existing liabilities which are legitimate and enforceable, secured or unsecured,
whether or not incurred in trade or business; and

(3) The networth of the taxpayer, which shall be the difference between the total assets
and total liabilities.

(e) Total asset refers to the amount of the aggregate assets whether within or without the
Philippines, real or personal, tangible or intangible, or ordinary or capital.

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 ❏ General Tax Amnesty

GENERAL TAX AMNESTY

Section 10. Coverage. - There is hereby authorized and granted a tax amnesty, hereinafter called General
Tax Amnesty, which shall cover all national internal revenue taxes such as, but not limited to, income tax,
withholding tax, capital gains tax. donor’s tax, value-added tax, other percentage taxes, excise tax and
documentary stamp tax collected by the Bureau of Internal Revenue, including value-added tax and excise
taxes collected by the Bureau of Customs for taxable year 2017 and prior years, with or without
assessments duly issued therefor, that have remained unpaid: Provided, however, That the General Tax
Amnesty hereby authorized and granted shall not cover persons or cases enumerated under Section 16
and Title IV hereof.

Section 11. Entitlement Under the General Tax Amnesty. - Except for the instances covered in Section 16
hereof, any person, whether natural or juridical, may enjoy the immunities and privileges of the General Tax
Amnesty by paying, at the taxpayers option, an amnesty tax at:

(i) the rate of two percent (2%) based on the taxpayer’s total assets as of December 31,2017, as
declared in the Statement of Total Assets; or

(ii) based on the taxpayer’s total networth as of December 31, 2017, as declared in the Statement of
Assets, Liabilities, and Networth filed pursuant to Section 12 hereof and in accordance with the following
schedule of amnesty tax rates and minimum amnesty tax payments required:

(a) Individual (whether resident or nonresident citizens, including resident or nonresident aliens),
Trusts and Estates………5% or ₱75,000, whichever is higher.

(b) Corporations

(1) With subscribed capital of above ₱50 million………5% or ₱1,000,000, whichever is higher.

(2) With subscribed capital of above ₱20 million up to ₱50 million………5% or ₱500,000,
whichever is higher.

(3) With subscribed capital of ₱5 million up to ₱20 million………5% or ₱250,000, whichever is

higher.

(4) With subscribed capital of below ₱5 million………5% or ₱100,000, whichever is higher.

(c) Other juridical entities, including, but not limited to, cooperatives and foundations, that have
become taxable as of December 31, 2017………5% or ₱75,000, whichever is higher:

Provided, That if the taxpayer opts to pay the amnesty tax based on total networth and the
computed networth is negative, the taxpayer may still avail of the benefits of tax amnesty under
this Title, and pay the minimum amnesty tax.

Section 12. Availment of the General Tax Amnesty; When and. Where to File and Pay. - Any person, natural
or juridical, who wishes to avail of the General Tax Amnesty shall, within one (1) year from the effectivity of
the Implementing Rules and Regulations, file with the appropriate office of the Bureau of Internal Revenue,
which has jurisdiction over the taxpayer, a sworn General Tax Amnesty Return accompanied by a notarized

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Statement of Total Assets or notarized Statement of Asssets, Liabilities, and Networth, as the case maybe,
as of December 31, 2017. The payment of the amnesty tax shall be made at the time the Return is filed:

Provided, That the Revenue District Officer shall issue and endorse an Acceptance Payment Form, in
such form as may be prescribed in the Implementing Rules and Regulations of this Act authorizing the
authorized agent bank, or in the absence thereof, the revenue collection agent or municipal treasurer
concerned, to accept the amnesty tax payment:

Provided, further, That the availment of the General Tax Amnesty and the issuance of the
corresponding Acceptance Payment Form do not imply any admission of criminal, civil or administrative
liability on the part of the availing taxpayer:

Provided, furthermore, That if the tax amnesty is availed based on the period indicated hereunder, the
taxpayer shall be entitled to the corresponding reduction in the total amnesty tax due:

(a) If paid on or before the end of the third calendar month from the effectivity of the Implementing
Rules and Regulations………20%;

(b) If paid after the end of the third calendar month until the end of the sixth calendar month from
the effectivity of the Implementing Rules and Regulations………15%; and

(c) If paid after the end of the sixth calendar month until the end of the ninth calendar month from
the effectivity of the Implementing Rules and Regulations………10%.

Section 13. Contents of the Statement of Total Assets and. Statement of Assets, Liabilities, and Networth.
-

(A) The Statement of Total Assets shall contain a declaration of the total assets as of December 31, 2017,
as follows:

(1) Assets within or without the Philippines, whether real or personal, tangible or intangible, whether or
not used in trade or business:

(a) Real properties shall be accompanied by a description of their classification, exact location, and
valued at acquisition cost, if acquired by purchase, or the zonal valuation or fair market value as
shown in the schedule of values of the provincial, city or municipal assessors at the time of
inheritance or donation, whichever is higher, if acquired through inheritance or donation;

(b) Personal properties other than money, shall be accompanied by a specific description of the
kind and number of assets (e.g. automobiles, shares of stock, etc.) or other investments, indicating
the acquisition cost less the accumulated depreciation or amortization, or the corresponding book
value for shares of stock, in proper cases, if acquired by purchase, or the fair market price or value
at the date of the Statement of Total Assets, if acquired through inheritance or donation;

(c) Assets denominated in foreign currency shall be converted into the corresponding Philippine
currency equivalent, at the rate of exchange prevailing as of the date of the Statement of Total
Assets; and

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 (d) Cash on hand and in bank in peso as of the date of the Statement of Total Assets, as well as
cash on hand and in bank in foreign currency, converted to Philippine peso at the rate of exchange
prevailing as of the date of the Statement of Total Assets.

(B) The Statement of Assets, Liabilities, and Networth shall contain a true and complete declaration of
assets, liabilities, and networth of the taxpayer as of December 31, 2017, as follows:

(1) Assets within or without the Philippines, whether real or personal, tangible or intangible, whether or
not used in trade or business:

(a) Real properties shall be accompanied by a description of their classification, exact location, and
valued at acquisition cost, if acquired by purchase, or the zonal valuation or fair market value as
shown in the schedule of values of the provincial, city or municipal assessors, at the time of
inheritance or donation, whichever is higher, if acquired through inheritance or donation;

(b) Personal properties other than money, shall be accompanied by a specific description of the
kind and number of assets (e.g. automobiles, shares of stock, etc.) or other investments, indicating
the acquisition cost less the accumulated depreciation or amortization, or the corresponding book
value for shares of stock, in proper cases, if acquired by purchase, or the fair market price or value
at the date of the Statement of Assets, Liabilities, and Networth, if acquired through inheritance or
donation;

(c) Assets denominated in foreign currency shall be converted into the corresponding Philippine
currency equivalent, at the rate of exchange prevailing as of the date of the Statement of Assets,
Liabilities, and Networth; and

(d) Cash on hand and in bank in peso as of the date of the Statement of Assets, Liabilities, and
Networth, as well as cash on hand and in bank in foreign currency, converted to Philippine peso at
the rate of exchange prevailing as of the date of the Statement of Assets, Liabilities, and Networth.

(2) All existing liabilities, which are legitimate and enforceable, secured or unsecured, whether or not
incurred in trade or business, disclosing or indicating clearly the name and address of the creditor and
the amount of the corresponding Lability.

(3) The total networth of the taxpayer, which shall be the difference between the total assets and total
liabilities.

Section 14. Presumption of Correctness of the Statement of Total Assets, and Statement of Assets,
Liabilities, and Networth. - The Statement of Total Assets or the Statement of Assets, Liabilities, and
Networth, filed at the option of the taxpayer, shall be conclusively presumed as true, correct, and final upon
filing thereof, and shall be deemed complete upon full payment of the amount due.

The Acceptance Payment Form, and the General Tax Amnesty Return shall be submitted to the Revenue
District Office after complete payment. The completion of these requirements shall be deemed full
compliance with the provisions of this Act. A Certificate of Availment of the General Tax Amnesty shall be
issued by the Bureau of Internal Revenue within fifteen (15) calendar days from submission to the Bureau
of Internal Revenue of the Acceptance Payment Form and the General Tax Amnesty Return. Otherwise,
the duplicate copies, stamped as received, of the Acceptance Payment Form, and the General Tax
Amnesty Return shall be deemed as sufficient proof of availment.

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Section 15. Immunities and Privileges. - Those who avail of the General Tax Amnesty and have fully
complied with all the conditions set forth in this Act and upon payment of the amnesty tax shall be entitled
to the following immunities and privileges:

(a) With respect to the years covered by the tax amnesty, the taxpayer shall be immune from the
payment of taxes, as well as additions thereto, and from all appurtenant civil, criminal, and
administrative cases and penalties under the National Internal Revenue Code of 1997, as amended,
arising from the failure to pay any and all internal revenue taxes for taxable year 2017 and prior years
and from such other investigations or suits insofar as they relate to the assets, liabilities, networth, and
internal revenue taxes that are subject of the tax amnesty.

(b) Any information or data contained in, derived from or provided by a taxpayer in the Tax Amnesty
Return, Statement of Total Assets or Statement of Assets, Liabilities, and Networth, as the case may
be, and appurtenant documents shall be confidential in nature and shall not be used in any investigation
or prosecution before any judicial, quasi-judicial, and administrative bodies. However, the taxpayer may
use this as a defense, whenever appropriate, in cases brought against the taxpayer.

(c) The books of accounts and other records of the taxpayer for the years covered by the tax amnesty
availed of shall not be examined by the Bureau of Internal Revenue: Provided, That the Commissioner
of Internal Revenue may authorize in writing the examination of the said books of accounts and other
records to verify the validity or correctness of a claim for any tax refund, tax credit (other than refund or
credit of taxes withheld on wages), tax incentives, and/or exemptions under existing laws.

All these immunities and privileges shall not apply when the taxpayer failed to file a General Tax Amnesty
Return and a Statement of Total Assets, or Statement of Assets, Liabilities, and Networth, as the case may
be.

Upon full compliance with all the conditions set forth in this Title and payment of the corresponding general
amnesty tax, the tax amnesty granted under this Title shall become final and irrevocable.

Section 16. Exceptions. - The General Tax Amnesty under this Act shall not extend to the following:

(a) Withholding tax agents who withheld taxes but failed to remit the same to the Bureau of Internal
Revenue:

(b) Taxpayers with cases pending in appropriate courts involving:

(1) Those that fall under the jurisdiction of the Presidential Commission on Good Government;

(2) Unexplained or unlawfully acquired wealth under Republic Act No. 3019, otherwise known as
the Anti-Graft and Corrupt Practices Act, and Republic Act No. 7080 or An Act Defining and
Penalizing the Crime of Plunder;

(3) Violations of Republic Act No. 9160, otherwise known as the Anti-Money Laundering Act, as
amended;

(4) Tax evasion and other criminal offenses under Chapter II of Title X of the National Internal
Revenue Code of 1997, as amended; and

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 (5) Felonies of frauds, illegal exactions and transactions, and malversation of public funds and
property under Chapters III and IV of Title VTI of the Revised Penal Code;

(c) Tax cases that have become final and executory; and

(d) Delinquencies and assessments that have become final and executory.

V. Role of Philippine Deposit Insurance Corporation (PDIC)

A. Roles of PDIC under Republic Act No. 35911

a. It shall insure the deposits of all banks which are entitled to the benefits of insurance and
which shall have the powers granted by law.
b. It shall, as a basic policy, promote and safeguard the interests of the depositing public by
way of providing permanent and continuing insurance coverage on all insured deposits.

B. Roles of PDIC under Republic Act No. 95762

SECTION 5. Section 8, paragraph Eighth of the same Act is hereby amended to read as follows:

"Eighth — To conduct examination of banks with prior approval of the Monetary Board: Provided, That no
examination can be conducted within twelve (12) months from the last examination date: Provided,
however, That the Corporation may, in coordination with the Bangko Sentral, conduct a special examination
as the Board of Directors, by an affirmative vote of a majority of all of its members, if there is a threatened
or impending closure of a bank: Provided, further, That, notwithstanding the provisions of Republic Act No.
14053, as amended, Republic Act No. 6426 4, as amended, Republic Act No. 87915, and other laws, the
Corporation and/or the Bangko Sentral, may inquire into or examine deposit accounts and all information
related thereto in case there is a 􏰁finding of unsafe or unsound banking practice: Provided, 􏰁finally, That
to avoid overlapping of efforts, the examination shall maximize the efficient use of the relevant reports,
information, and 􏰁findings of the Bangko Sentral, which it shall make available to the Corporation." c

VI. Government (regulatory) side vs. Bank side of Bank Secrecy

Government
As mentioned in the explanatory note of House Bill No. 1498, all deposits are absolutely
confidential and may not be inquired or looked into except upon written permission of the depositor, or in
cases of impeachment, or upon order of a competent court in cases of bribery or dereliction of duty of
public officials, or in cases where the money deposited or invested is the subject matter of the litigation.

1
AN ACT ESTABLISHING THE PHILIPPINE DEPOSIT INSURANCE CORPORATION, DEFINING ITS POWERS AND DUTIES AND
FOR OTHER PURPOSES

2
AN ACT INCREASING THE MAXIMUM DEPOSIT INSURANCE COVERAGE, AND IN CONNECTION THEREWITH, TO
STRENGTHEN THE REGULATORY AND ADMINISTRATIVE AUTHORITY, AND FINANCIAL CAPABILITY OF THE PHILIPPINE
DEPOSIT INSURANCE CORPORATION (PDIC), AMENDING FOR THIS PURPOSE REPUBLIC ACT NUMBERED THREE THOUSAND
FIVE HUNDRED NINETY-ONE, AS AMENDED, OTHERWISE KNOWN AS THE PDIC CHARTER, AND FOR OTHER PURPOSES

3
Bank Secrecy Law
4
Foreign Currency Deposit Act of the Philippines
5
The General Banking Law of 2000

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As mentioned in the bill’s explanatory note, such provision of the law prohibiting the disclosure of or inquiry
to bank deposits had been exploited time and again to hamper and stall investigations of government
officials and employees suspected of enriching themselves while in public office. Hence, the bills seeks to
exclude government officials and employees, whether elected or appointed, from the coverage of the Bank
Secrecy Law so that law enforcement authorities will be equipped with the tools needed to go after crooks
in government.

On the other hand, another matter pointed out by the explanatory note in Senate Bill No. 634
is the fact that in 2016, the Philippines was in the center of a money laundering scandal involving millions
of dollars. This drew attention to our outdated bank secrecy laws that are being exploited to hide dirty money
in the country. The same laws have made it hard for authorities to investigate such cases and have
hampered our government’s efforts to go after tax evaders and criminals.

The author of the bill believes it is necessary and timely to lift all pertinent laws on the secrecy
of bank deposits to ensure rightful declaration of taxes and efficient revenue collection. Through this
measure, the government will be able to effectively combat domestic and global tax evasion, money
laundering and other financial crimes, and corruption; further improve the country’s attractiveness to foreign
investors; and protect the fundamental human right of privacy of communication, while ensuring free flow
of information to promote innovation and growth.

Bank

As to the bank side of Bank Secrecy law, the maintenance of the current law or the Republic
Act No. 1405 giving absolute confidentiality to all kinds of deposit, would be favorable to them as it gives
encouragement to the people to deposit their money in banking institutions therefore discourages private
hoarding. When people deposit their money in the banking institutions, more amounts of money may be
properly utilized by the latter in authorized loans, in effect giving them more money through interests that
they implement on top of these loans.

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