Regulatory Framework and Legal Issues in Business

MODULE 1: LESSON 1
For March 23, 2020
For BSA 2 and BSMA 2

Prepared by: Atty. Angelo Andro M. Suan, CPA

LESSON/TOPIC :BATAS PAMBANSA BLG. 22; AN ACT PENALIZING THE MAKING OR

DRAWING AND ISSUANCE OF A CHECK WITHOUT SUFFICIENT FUNDS OR
CREDIT AND FOR OTHER PURPOSES.

Learning Target(s) : To point out the coverage of the law penalizing issuing and
drawing checks with insufficient fund
Reference :
https://lawphil.net/statutes/bataspam/bp1979/bp_22_1979.html

Concept:

BP 22, commonly referred to as “Bouncing Checks Law”, punishes any person who makes or
draws and issues any checks to apply on account or for value, 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 upon its presentment

Bouncing checks are checks which are returned by the bank because their issuers do not have
sufficient funds on deposit. This term originated from the fact that a check is “bounced” back
from the bank. Another term for it is “rubber check.”

In the Philippines, there are two laws which criminalize and punish the issuance of bouncing
checks. The first is under Article 315 of the Revised Penal Code which punishes for estafa a
person who issues a check in payment of an obligation when he had no funds in the bank
sufficient to cover the amount of the check. The failure to deposit the amount to cover the
check within three days from receipt of notice of dishonor shall be prima facie evidence of
deceit.

Questions:

Answer the following, in a yellow sheet of paper. It must be handwritten. Further, do not
write anything at the back of the sheet.

Rashid asked Rene to lend him PhP50,000, payable in six (6) months and, as payment for the
loan, Rashid issued a postdated check for the said amount plus the agreed interest. Rashid
assured Rene that the account would have sufficient funds on maturity date. On that date,
Rene presented the check to the drawee bank for payment but it was dishonored for the
reason that it was drawn against insufficient funds (DAIF).

Rene sent Rashid a timely notice of dishonor of the check and demanded the latter to make
good the same within five (5) days from notice. After the lapse of the five (5)-day notice, Rene
redeposited the check with the drawee bank but it was again dishonored for the same
reason, i.e., DAIF. Rene thereafter filed two (2) separate criminal actions against Rashid: (1)
Estafa under Art. 315(2)(d) of the RPC, as amended by R.A. No. 4885, i.e, estafa committed by
postdating a check, or issuing a check in payment of an obligation without sufficient funds in
the bank; and (2) Violation of B.P. 22 or the Bouncing Checks Law.

(a) Can he be held liable under both actions? (2.5%)

(b) If the check is presented for payment after four (4) months, but before it becomes
stale, can the two actions still proceed? (2.5%)