ESTRADA V. SANDIGANBAYAN|| G.R. No.
217682 || July 17, 2018
On September 11, 2013, Benhur K. Luy, Merlina P. Sunas, Gertrudes K. Luy, Nova Kay
Batal-Macalintal, Elena S. Abundo and Avelina C. Lingo (whistleblowers) executed their
Pinagsamang Sinumpaang Salaysay in which they revealed the details of the Pork Barrel
Scam that involved the misuse or illegal diversion by certain legislators of their allocations
from the Priority Development Assistance Fund (PDAF) in connivance with Janet Lim
Napoles (Napoles), the whistleblowers' former employer.
The National Bureau of Investigation (NBI) conducted its investigation, and on September 16,
2013 resolved to file in the Office of the Ombudsman verified criminal complaints for plunder,
malversation, direct bribery, and graft and corrupt practices against the persons involved in the
Pork Barrel Scam, including petitioner Senator Jose "Jinggoy" P. Ejercito Estrada (Estrada).
Acting on the criminal complaints, the Office of the Ombudsman requested the Anti-Money
Laundering Council (AMLC) on October 11, 2013 to conduct a financial investigation of
the bank accounts of the petitioners and others.
Meanwhile, the AMLC, determining that Estrada's accounts were probably related to the
charge of plunder and the violation of R.A. No. 3019 charged against him and others,
authorized its secretariat to file in the Court of Appeals (CA) an ex parte application for bank
inquiry pursuant to R.A. No. 9160, as amended (The Anti-Money Laundering Act). In the
resolution promulgated on May 28, 2014, the CA granted the ex parte application.
 the process of inquiring into Estrada's accounts, the AMLC discovered that Estrada had
transferred substantial sums of money to the accounts of his wife, co-petitioner Ma.
Presentacion Vitug Ejercito (Ejercito), on the dates relevant to the Pork Barrel Scam.
Considering that the transfers lacked apparent legal or economic justifications, the AMLC
concluded that the accounts were linked to a predicate crime of plunder. Hence, the
AMLC filed in the CA a supplemental ex parte application for the bank inquiry to be
conducted on Ejercito's accounts, among others. On August 15, 2014, the CA granted the
supplemental ex parte application.
The results of the AMLC's bank inquiry into Estrada's accounts were contained in the so-
called Inquiry Report on the Bank Transactions Related to the Alleged Involvement of Senator
Jose "Jinggoy" P. Ejercito Estrada in the PDAF Scam (Inquiry Report). On December 19,
2014, the AMLC furnished the Office of the Ombudsman a copy of the Inquiry Report.
During Estrada's bail hearings in the Sandiganbayan, the Prosecution presented Atty. Orlando
C. Negradas, Jr., an AMLC financial investigator, who testified on the Inquiry Report.
On January 23, 2015, Estrada filed the motion to suppress. On February 2, 2015, the
Sandiganbayan issued the assailed resolution denying the motion to suppress. Estrada moved
for reconsideration, but the Sandiganbayan denied his motion on March 2, 2015
ISSUES:
1. Whether Section 11 of R.A. 9160 (Anti Money Laundering Act is constitutional?
YES
2. Whether amendment to Section 11 of R.A. 9160 allowing ex parte application for
the bank inquiry violates the proscription against ex post facto laws? NO.
1
RATIO:
1. The petitioners herein contend that Section 11 of R.A. No. 9160, as amended, is
unconstitutional insofar as it allows the filing of an ex parte application for an order to
inquire into bank deposits and investments for violating the constitutionally-mandated
right to due process and right to privacy; that Section 11 of R.A. No. 9160 is being used
for a "fishing expedition;" that the disclosure of "related accounts" imposed by the
amendment to Section 11 of R.A. No. 9160 is clearly a "fruit of the poisonous tree;" and
that the Inquiry Report should consequently be declared inadmissible as evidence.
The petitioners' contentions have no merit.
To start with, the procedural rules under Rule 65 of the Rules of Court governing the
special civil actions for certiorari, prohibition and mandamus limit the remedy to
a person aggrieved by the assailed decision, resolution, order or act. For purposes of the
rule, a person aggrieved is one who was a party in the original proceedings before the
respondent officer, tribunal or agency. As such, Ejercito cannot seek the annulment of
the assailed resolutions of the Sandiganbayan because she was not a party in the
original proceeding pending thereat involving Estrada, her husband.
And, secondly, the petitioners' assailing herein the constitutionality of Section 11 of R.A.
No. 9160, as amended, constitutes a collateral attack against such legal provision. A
collateral attack against a presumably valid law like R.A. No. 9160 is not
permissible. Unless a law or rule is annulled by a direct proceeding, the legal
presumption of its validity stands.
It is relevant to remind, however, that the constitutionality of Section 11 of R.A. No.
9160, as amended, has been dealt with and upheld in Subido, where we ruled that the
AMLC's ex parte application for the bank inquiry order based on Section 11 of R.A.
No. 9160, as amended by R.A. No. 10167, did not violate substantive due process
because the physical seizure of the targeted corporeal property was not
contemplated by the law.
We clarify that the AMLC, in investigating probable money laundering activities, does
not exercise quasi-judicial powers, but merely acts as an investigatory body with the
sole power of investigation similar to the functions of the National Bureau of
Investigation (NBI). Hence, the ex parte application for the bank inquiry order cannot be
said to violate any person's constitutional right to procedural due process. Also, the
source of the right to privacy respecting bank deposits is statutory, not
constitutional; hence, the Congress may validly carve out exceptions to the rule on
the secrecy of bank deposits, as illustrated in Section 11 of R.A. No. 9160. [21]
With the consistency of the assailed provision of R.A. No. 9160 with the Constitution, the
petitioners' argument that the Inquiry Report was the fruit of a poisonous tree and,
therefore, inadmissible in evidence remains unsubstantiated.
2. The petitioners insist that R.A. No. 10167, which amended Section 11 of R.A. No. 9160,
is an ex post facto legislation because it applies retroactively to bank transactions made
prior to the effectivity of the amendment and imposes new legal burdens to already-
completed transactions; that R.A. No. 10167 should only be prospective; that in Republic
v. Eugenio, Jr. (545 SCRA 384), the application for the bank inquiry order issued on July
4, 2005 as a means of inquiring into the records of transactions entered into prior to the
passage of R.A. No. 9160 would be constitutionally infirm and offensive to the ex post
facto clause; that the present case involves transactions and deposits made by the
petitioners in the period from 2005 up to 2012, or prior to the amendment of Section 11
of R.A. No. 9160 that took effect on June 18, 2012; that by analogy the authority given
through the order issued upon ex parte application under R.A. No. 10167 cannot be made
to apply to deposits and transactions of the petitioners prior to June 18, 2012. [22]
The insistence of the petitioners is unfounded and bereft of substance.
An ex post facto law is a law that either: (1) makes criminal an act done before the
passage of the law that was innocent when done, and punishes such act; or (2) aggravates
a crime, or makes the crime greater than it was when committed; or (3) changes the
punishment and inflicts a greater punishment than the law annexed to the crime when it
was committed; or (4) alters the legal rules of evidence, and authorizes conviction upon
less or different testimony than the law required at the time of the commission of the
offense; or (5) assumes to regulate civil rights and remedies only, but in effect imposes a
penalty or deprivation of a right for an act that was lawful when done; or (6) deprives a
person accused of a crime of some lawful protection to which he has become entitled,
such as the protection of a former conviction or acquittal, or a proclamation of amnesty.
The petitioners rely on Republic v. Eugenio, Jr., wherein the Court declared that the
proscription against ex post facto laws should be applied to the interpretation of the
original text of Section 11 of R.A. No. 9160 because the passage of said law "stripped
another layer off the rule on absolute confidentiality that provided a measure of lawful
protection to the account holder." Accordingly, we held therein that the application for
the bank inquiry order as the means of inquiring into records of transactions entered into
prior to the passage of R.A. No. 9160 would be constitutionally infirm, offensive as it
was to the ex post facto clause of the Constitution.
The petitioners' reliance on Republic v. Eugenio, Jr. is misplaced. Unlike the passage of
R.A. No. 9160 in order to allow an exception to the general rule on bank secrecy, the
amendment introduced by R.A. No. 10167 does away with the notice to the account
holder at the time when the bank inquiry order is applied for. The elimination of the
requirement of notice, by itself, is not a removal of any lawful protection to the
account holder because the AMLC is only exercising its investigative powers at this
stage. Indeed, R.A. No. 10167, in recognition of the ex post facto clause of the
Constitution, explicitly provides that "the penal provisions shall not apply to acts done
prior to the effectivity of the AMLA on October 17, 2001."
Furthermore, the AMLC's inquiry and examination into bank accounts are not undertaken
whimsically based on its investigative discretion. The AMLC and the CA are
respectively required to ascertain the existence of probable cause before any bank
inquiry order is issued. Section 11 of R.A. 9160, even with the allowance of an ex
2
parte application therefor, cannot be categorized as authorizing the issuance of a
general warrant. This is because a search warrant or warrant of arrest contemplates a
direct object but the bank inquiry order does not involve the seizure of persons or
property.
Lastly, the holder of a bank account subject of a bank inquiry order issued ex
parte is not without recourse. He has the opportunity to question the issuance of the
bank inquiry order after a freeze order is issued against the account. He can then assail
not only the finding of probable cause for the issuance of the freeze order, but also
the finding of probable cause for the issuance of the bank inquiry order.
SUBIDO PAGENTE CERTEZA MENDOZA and BINAY LAW OFFICES vs. THE
COURT OF APPEALS, HON. ANDRES B. REYES, JR and the ANTI-MONEY
LAUNDERING COUNCIL, represented by its members, HON. AMANDO M.
TETANGCO, JR., Governor of the BANGKO SENTRAL NG PILIPINAS, HON.
TERESITA J. HERBOSA, Chairperson of the Securities and Exchange Commission,
and HON. EMMANUEL F. DOOC, Insurance Commissioner of the Insurance
Commission
G.R. No. 216914. December 6, 2016
FACTS:
1. In 2015, a year before the 2016 presidential elections, reports abounded on the supposed
disproportionate wealth of then Vice President Jejomar Binay and the rest of his family
2. From various news reports announcing the inquiry into then Vice President Binay's bank
accounts, including accounts of members of his family, petitioner Subido Pagente
Certeza Mendoza & Binay Law Firm (SPCMB) was most concerned with the article
published in the Manila Times on 25 February 2015 entitled "Inspect Binay Bank
Accounts”
a. AMLC asked the Court of Appeals to allow the Council to peek into the bank
accounts of the Binays, their corporations, and a law office where a family member
was once a partner.
b. Also the bank accounts of the law office linked to the family, the Subido Pagente
Certeza Mendoza & Binay Law Firm, where the Vice President's daughter Abigail
was a former partner.
3. The following day SPCMB wrote public respondent, Presiding Justice of the CA, Andres
B. Reyes, Jr: The law firm of Subido Pagente Certeza Mendoza and Binay was surprised
to receive a call from Manila Times requesting for a comment regarding a [supposed
petition] filed by the Republic of the Philippines represented by the Anti-Money
Laundering Council before the Court of Appeals seeking to examine the law office's bank
accounts.
4. Within twenty four (24) hours, Presiding Justice Reyes wrote SPCMB denying its
request,
a. that a petition of this nature is strictly confidential in that when processing the
same, not even the handling staff members of the Office of the Presiding Justice
know or have any knowledge who the subject bank account holders are, as well as
the bank accounts involved.
b. the Office of the Presiding Justice is strictly mandated not to disclose, divulge, or
communicate to anyone directly or indirectly, in any manner or by any means, the
 fact of the filing of any petition brought before this Court by the Anti-Money
Laundering Council, its contents and even its entry in the logbook
5. The Manila Times published another article entitled, "CA orders probe of Binay's assets"
reporting that the appellate court had issued a Resolution granting the ex-parte
application of the AMLC to examine the bank accounts of SPCMB.
6. Forestalled in the CA thus alleging that it had no ordinary, plain, speedy, and adequate
remedy to protect its rights and interests in the purported ongoing unconstitutional
examination of its bank accounts by public respondent Anti-Money Laundering Council
(AMLC), SPCMB undertook direct resort to this Court via this petition for certiorari and
prohibition on the following grounds:
a. ANTI-MONEY LAUNDERING ACT IS UNCONSTITUTIONAL
INSOFAR AS IT ALLOWS THE EXAMINATION OF A BANK
ACCOUNT WITHOUT ANY NOTICE TO THE AFFECTED PARTY:
i. IT VIOLATES THE PERSON'S RIGHT TO DUE PROCESS;
AND
ii. IT VIOLATES THE PERSON'S RIGHT TO PRIVACY.
b. EVEN ASSUMING ARGUENDO THAT THE ANTI-MONEY
LAUNDERING ACT IS CONSTITUTIONAL, THE RESPONDENTS
COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO
LACK OR EXCESS OF JURISDICTION CONSIDERING THAT:
i. REFUSAL OF RESPONDENT PRESIDING JUSTICE TO
PROVIDE PETITIONER WITH A COPY OF THE EX-PARTE
APPLICATION FOR BANK EXAMINATION - VIOLATES
PETITIONER'S RIGHT TO DUE PROCESS
ii. A CARTE BLANCHE AUTHORITY TO EXAMINE ANY
AND ALL TRANSACTIONS PERTAINING TO
PETITIONER'S BANK ACCOUNTS VIOLATES THE
ATTORNEY-CLIENT PRIVILEGE
iii. A BLANKET AUTHORITY TO EXAMINE PETITIONER'S
BANK ACCOUNTS, INCLUDING ANY AND ALL
TRANSACTIONS THEREIN FROM ITS OPENING UP TO
THE PRESENT, PARTAKES THE NATURE OF A
GENERAL WARRANT THAT IS CLEARLY INTENDED TO
AID A MERE FISHING EXPEDITION
iv. THERE IS NOTHING IN THE ANTI-MONEY
LAUNDERING ACT THAT ALLOWS OR JUSTIFIES THE
WITHHOLDING OF INFORMATION AND/OR ANY
COURT RECORDS OR PROCEEDINGS PERTAINING TO
AN EXAMINATION OF A BANK ACCOUNT, ESPECIALLY
IF THE COURT HAS ALREADY GRANTED THE
AUTHORITY TO CONDUCT THE EXAMINATION
7. OSG argues for the dismissal of the present petition, highlighting that the AMLC's
inquiry into bank deposits does not violate due process nor the right to privacy.
8. OKAY SUMMARY OF THE 3 CRUCIAL MATTERS IN THIS CASE:
a. (1) the petition reaches the SC from a letter of the Presiding Justice of the
CA in response to a letter written by SPCMB;
b. (2) SPCMB's bank account has been reported to be a related account to
Vice President Binay's investigated by the AMLC for anti-money
laundering activities; and
3
c. (3) the constitutionality of Section 11 1 of the AMLA at its recent
amendment has not been squarely raised and addressed.
9. SPCMB directly assails the constitutionality of Section 11 of the AMLA where it
has been widely reported that Vice President Binay's bank accounts and all related
accounts therewith are subject of an investigation by the AMLC. However, SPCMB
alleged that its accounts have been inquired into but not subjected to a freeze order
under Section 10 of the AMLA.
ISSUE: Whether the AMLA is constitutional? YES.
HELD:
1. Section 11 of the AMLA has three elements: (1) ex-parte application by the AMLC;
(2) determination of probable cause by the CA; and (3) exception of court order in
cases involving unlawful activities defined in Sections 3 (i) (1), (2), and (12).
2. the text originally did not specify for an ex-parte application by the AMLC for
authority to inquire into or examine certain bank accounts or investments.
3. Congress enacted Republic Act No. 10167 amending Section 11 of the AMLA and
specifically inserted the word ex-parte appositive of the nature of this provisional
remedy available to the AMLC thereunder.
4. Section 11 of the AMLA providing for ex-parte application and inquiry by the
AMLC into certain bank deposits and investments does not violate substantive due
process, there being no physical seizure of property involved at that stage.
1
SEC. 11. Authority to Inquire into Bank Deposits. — Notwithstanding the provisions of Republic Act
No. 1405, as amended; Republic Act No. 6426, as amended; Republic Act No. 8791; and other laws, the
AMLC may inquire into or examine any particular deposit or investment, including related accounts, with
any banking institution or non-bank financial institution upon order of any competent court based on an ex
parte application in cases of violations of this Act, when it has been established that there is probable
cause that the deposits or investments, including related accounts involved, are related to an unlawful
activity as defined in Section 3(i) hereof or a money laundering offense under Section 4 hereof; except
that no court order shall be required in cases involving activities defined in Section 3(i)(1), (2), and (12)
hereof, and felonies or offenses of a nature similar to those mentioned in Section 3(i)(1), (2), and (12),
which are punishable under the penal laws of other countries, and terrorism and conspiracy to commit
terrorism as defined and penalized under Republic Act No. 9372.
The Court of Appeals shall act on the application to inquire into or examine any deposit or investment
with any banking institution or non-bank financial institution within twenty-four (24) hours from filing of
the application.
To ensure compliance with this Act, the Bangko Sentral ng Pilipinas may, in the course of a periodic or
special examination, check the compliance of a covered institution with the requirements of the AMLA
and its implementing rules and regulations.
For purposes of this section, 'related accounts' shall refer to accounts, the funds and sources of which
originated from and/or are materially linked to the monetary instrument(s) or property(ies) subject of the
freeze order(s).
A court order ex parte must first be obtained before the AMLC can inquire into these related Accounts:
Provided, That the procedure for the ex parte application of the ex parte court order for the principal
account shall be the same with that of the related accounts.
The authority to inquire into or examine the main account and the related accounts shall comply with the
requirements of Article III, Sections 2 and 3 of the 1987 Constitution, which are hereby incorporated by
reference.
 5. It is the preliminary and actual seizure of the bank deposits or investments in
question which brings these within reach of the judicial process, specifically a
determination that the seizure violated due process.
6. At the stage in which the petition was filed before the SC, the inquiry into certain
bank deposits and investments by the AMLC still does not contemplate any form of
physical seizure of the targeted corporeal property.
7. SPCMB points out that the AMLC's bank inquiry is preliminary to the seizure and
deprivation of its property as in a freeze order under Section 10 of the AMLA which
peculiarity lends itself to a sui generis proceeding akin to the evaluation process in
extradition proceedings.
a. The determination of the same, based on jurisprudence, would entail a
determination of AMLC’s jurisdiction and whether it is a quasi-judicial
body.
8. [On AMLC’s jurisdiction]
9. the grant of jurisdiction over cases involving money laundering offences is bestowed
on the Regional Trial Courts and the Sandiganbayan as the case may be.
a. In fact, Rule 5 of the IRR is entitled Jurisdiction of Money Laundering
Cases and Money Laundering Investigation Procedures:
b. Rule 5.a. Jurisdiction of Money Laundering Cases. — The Regional Trial
Courts shall have the jurisdiction to try all cases on money laundering.
Those committed by public officers and private persons who are in
conspiracy with such public officers shall be under the jurisdiction of the
Sandiganbayan.
c. Rule 5.b. Investigation of Money Laundering Offenses. — The AMLC
shall investigate:
d. (1) suspicious transactions;
e. (2) covered transactions deemed suspicious after an investigation
conducted by the AMLC;
f. (3) money laundering activities; and
g. (4) other violations of the AMLA, as amended.
10. The enabling law itself, the AMLA, specifies the jurisdiction of the trial courts, RTC
and Sandiganbayan, over money laundering cases, and delineates the investigative
powers of the AMLC.
11. Textually, the AMLA is the first line of defense against money laundering in
compliance with our international obligation. There are three (3) stages of
determination, two (2) levels of investigation, falling under three (3) jurisdictions:
a. The AMLC investigates possible money laundering offences and initially
determines whether there is probable cause to charge any person with a
money laundering offence under Section 4 of the AMLA, resulting in the
filing of a complaint with the Department of Justice or the Office of the
Ombudsman;
b. The DOJ or the Ombudsman conducts the preliminary investigation
proceeding and if after due notice and hearing finds probable cause for
money laundering offences, shall file the necessary information before the
Regional Trial Courts or the Sandiganbayan;
c. The RTCs or the Sandiganbayan shall try all cases on money laundering,
as may be applicable.
12. the AMLC's investigation of money laundering offenses and its determination
of possible money laundering offenses, specifically its inquiry into certain bank
4
accounts allowed by court order, does not transform it into an investigative
body exercising quasi-judicial powers.
13. Hence, Section 11 of the AMLA, authorizing a bank inquiry court order,
cannot be said to violate SPCMB's constitutional right to procedural due
process.
[on the violation of the right to privacy]
1. The theme of playing off privacy rights and interest against that of the state's interest
in curbing money laundering offenses is recurring.
a. The Constitution did not allocate specific rights peculiar to bank deposits;
b. The general rule of absolute confidentiality is simply statutory, i.e., not
specified in the Constitution, which has been affirmed in jurisprudence;
c. Exceptions to the general rule of absolute confidentiality have been carved
out by the Legislature which legislation have been sustained, albeit
subjected to heightened scrutiny by the courts;
d. One such legislated exception is Section 11 of the AMLA.
2. Sec 11 provides safeguards before a bank inquiry order is issued, ensuring
adherence to the general state policy of preserving the absolutely confidential nature
of Philippine bank accounts
a. The AMLC is required to establish probable cause as basis for its ex-parte
application for bank inquiry order;
b. The CA, independent of the AMLC's demonstration of probable cause,
itself makes a finding of probable cause that the deposits or investments
are related to an unlawful activity under Section 3 (i) or a money
laundering offense under Section 4 of the AMLA;
c. A bank inquiry court order ex-parte for related accounts is preceded by a
bank inquiry court order ex-parte for the principal account which court
order ex-parte for related accounts is separately based on probable cause
that such related account is materially linked to the principal account
inquired into; and
d. The authority to inquire into or examine the main or principal account and
the related accounts shall comply with the requirements of Article III,
Sections 2 and 3 of the Constitution.
3. the requirement of demonstration by the AMLC, and determination by the CA, of
probable cause emphasizes the limits of such governmental action.
[on whether the appellate court, through the Presiding Justice, gravely abused its discretion
when it effectively denied SPCMB's letter-request for confirmation that the AMLC had
applied (ex-parte) for, and was granted, a bank inquiry order to examine SPCMB's bank
accounts relative to the investigation conducted on Binay's accounts]
1. An act of a court or tribunal can only be considered tainted with grave abuse of
discretion when such act is done in a capricious or whimsical exercise of judgment
as is equivalent to lack of jurisdiction.
2. While no grave abuse of discretion could be ascribed on the part of the appellate
court when it explained in its letter that petitions of such nature "is strictly
confidential in that when processing the same, not even the handling staff members
of the Office of the Presiding Justice know or have any knowledge who the subject
bank account holders are, as well as the bank accounts involved," it was incorrect
when it declared that "under the rules, the Office of the Presiding Justice is strictly
mandated not to disclose, divulge, or communicate to anyone directly or indirectly,
 in any manner or by any means, the fact of the filing of any petition brought before
[the Court of Appeals] by the Anti-Money Laundering Council, its contents and
even its entry in the logbook."
3. As a result, the appellate court effectively precluded and prevented SPCMB of any
recourse, amounting to a denial of SPCMB's letter request.
4. SPCMB, as the owner of the bank account which may be the subject of inquiry of
the AMLC, ought to have a legal remedy to question the validity and propriety of
such an order by the appellate court under Section 11 of the AMLA even if
subsequent to the issuance of a freeze order.
WHEREFORE, the petition is DENIED. Section 11 of Republic Act No. 9160, as amended, is
declared VALID and CONSTITUTIONAL.
NOTE: sorry long digest, super long case. Browse through the Eugenio case because the
original kept making references to it.
Republic v. Eugenio | G.R. No. 174629 | 14 February 2008 (Sorry for the long digest!)
FACTS: After the Agan v. PIATCO ruling, a series of investigations concerning the award of
the NAIA 3 contracts to PIATCO were undertaken by the Ombudsman and the Compliance
and Investigation Staff (“CIS”) of the Anti-Money Laundering Council (“AMLC”).
The OSG wrote AMLC requesting AMLC’s assistance “in obtaining more evidence to
completely reveal the financial trail of corruption surrounding the NAIA 3 Project,” and also
noting that the Republic was presently defending itself in two international arbitration cases.
The CIS conducted an intelligence database search on the financial transactions of certain
individuals involved in the award, including Alvarez (Chairman of the Pre-Qualification Bids
and Awards Technical Committee). By this time, Alvarez had already been charged by the
Ombudsman with violation of Section 3(J) of the Anti Graft and Corrupt Practices Act. The
search revealed that Alvarez maintained 8 bank accounts with 6 different banks.
The AMLC issued a resolution authorizing its Executive Director to sign and verify an
application to inquire into the deposits or investments of Alvarez et al. and to authorize the
AMLC Secretariat to conduct an inquiry once the RTC grants the application. The rationale
for the resolution was founded on the findings of the CIS that amounts were transferred from a
Hong Kong bank account to bank accounts in the Philippines maintained by respondents. The
Resolution also noted that by awarding the contract to PIATCO (despite its lack of financial
capacity) Alvarez violated Section 3(E) of the Anti Graft and Corrupt Practices Act.
The Makati RTC rendered an Order granting the AMLC the authority to inquire and examine
the subject bank accounts of Alvarez et al.
Special Prosecutor of the Office of the Ombudsman, Dennis Villa-Ignacio, wrote a letter
requesting the AMLC to investigate the accounts of Alvarez, PIATCO, and several other
entities involved in the nullified contract. In response to a letter of Special Prosecutor Villa-
Ignacio, AMLC issued a Resolution authorizing its Executive Director to inquire into and
examine the accounts of Alvarez, PIATCO, and several other entities involved in the nullified
contract.
AMLC filed an application before the MANILA RTC to inquire into and/or examine 13
accounts and 2 related web of accounts alleged as having been used to facilitate corruption in
the NAIA 3 Project. The ex parte application was granted and the MANILA RTC issued a
bank inquiry order granting the Ex Parte Application.
5
Alvarez, through counsel, filed an Urgent Motion to Stay Enforcement of the said Order
arguing that nothing in R.A. No. 9160 authorized the AMLC to seek the authority to inquire
into bank accounts ex parte. The Manila RTC issued an Order staying the enforcement of its
bank inquiry order and giving the Republic five (5) days to respond to Alvarez’ motion. The
Republic filed an Omnibus Motion for Reconsideration which was granted by the Manila RTC
denying Alvarez’s motion to dismiss and reinstating in full force and effect the stayed order.
  
Acting on Alvarez’s latest motion, the Manila RTC issued an Order directing the AMLC to
refrain from enforcing the order until the expiration of the period to appeal, without any appeal
having been filed. On the same day, Alvarez filed a Notice of Appeal. The Republic filed an
Urgent Omnibus Motion for Reconsideration urging that it be allowed to immediately enforce
the bank inquiry order against Alvarez and that Alvarezs notice of appeal be expunged from
the records since appeal from an order of inquiry is disallowed under the Anti money
Laundering Act (AMLA).
Meanwhile, respondent Lilia Cheng filed with the Court of Appeals a Petition for Certiorari,
Prohibition and Mandamus with Application for TRO and/or Writ of Preliminary Injunction
directed against the Republic of the Philippines through the AMLC, Manila RTC Judge
Eugenio, Jr. and Makati RTC Judge Marella, Jr. imputing grave abuse of discretion on the part
of the Makati and Manila RTCs in granting AMLCs ex parte applications for a bank inquiry
order, arguing among others that the ex parte applications violated her constitutional right to
due process, that the bank inquiry order under the AMLA can only be granted in connection
with violations of the AMLA and that the AMLA can not apply to bank accounts opened and
transactions entered into prior to the effectivity of the AMLA or to bank accounts located
outside the Philippines.
After several motions, manifestations, orders and resolutions the case went up to the SC. The
following are the arguments of the parties:
1. Petitioner’s argue that the bank inquiry orders issued by the Manila and Makati
RTCs are valid and immediately enforceable whereas the assailed rulings, which
effectively stayed the enforcement of the Manila and Makati RTCs bank inquiry
orders, are sullied with grave abuse of discretion. These conclusions flow from the
posture that a bank inquiry order, issued upon a finding of probable cause, may be
issued ex parte and, once issued, is immediately executory. Petitioner further argues
that the information obtained following the bank inquiry is necessarily beneficial, if
not indispensable, to the AMLC in discharging its awesome responsibility regarding
the effective implementation of the AMLA and that any restraint in the disclosure of
such information to appropriate agencies or other judicial fora would render
meaningless the relief supplied by the bank inquiry order. 
2. Petitioners also questions Lilia Cheng’s right to seek injunctive relief before the
Court of Appeals, noting that not one of the bank inquiry orders is directed against
her.
3. Petitioner argues that Alvarez cannot assert any violation of the right to financial
privacy in behalf of other persons whose bank accounts are being inquired into,
particularly those other persons named in the Makati RTC bank inquiry order who
did not take any step to oppose such orders before the courts. 
Issue: Whether or not the bank inquiry orders issued are valid and enforceable? NO.
Ratio:
 Petitioner relies on what it posits as the final and immediately executory character of
the bank inquiry orders issued by the Manila and Makati RTCs. Implicit in that position is the
notion that the inquiry orders are valid, and such notion is susceptible to review and validation
based on what appears on the face of the orders and the applications which triggered their
issuance, as well as the provisions of the AMLA governing the issuance of such orders.
Indeed, to test the viability of petitioner’s argument, the Court will have to be
satisfied that the subject inquiry orders are valid in the first place. However, even from a
cursory examination of the applications for inquiry order and the orders themselves, it is
evident that the orders are not in accordance with law.
OVERVIEW OF AMLA
Money laundering has been generally defined by the International Criminal Police
Organization (Interpol) `as "any act or attempted act to conceal or disguise the identity of
illegally obtained proceeds so that they appear to have originated from legitimate
sources." Even before the passage of the AMLA, the problem was addressed by the Philippine
government through the issuance of various circulars by the Bangko Sentral ng Pilipinas. Yet
ultimately, legislative proscription was necessary, especially with the inclusion of the
Philippines in the Financial Action Task Force’s list of non-cooperative countries and
territories in the fight against money laundering. The original AMLA, Republic Act (R.A.)
No. 9160, was passed in 2001. It was amended by R.A. No. 9194 in 2003.  Although oriented towards different purposes, the freeze order under Section 10 and
Section 4 of the AMLA states that "[m]oney laundering is a crime whereby the
proceeds of an unlawful activity as [defined in the law] are transacted, thereby making them
appear to have originated from legitimate sources." The section further provides the three
modes through which the crime of money laundering is committed. Section 7 creates the
AMLC and defines its powers, which generally relate to the enforcement of the AMLA
provisions and the initiation of legal actions authorized in the AMLA such as civil forefeiture
proceedings and complaints for the prosecution of money laundering offenses
In addition to providing for the definition and penalties for the crime of money
laundering, the AMLA also authorizes certain provisional remedies that would aid the AMLC
in the enforcement of the AMLA. These are the "freeze order" authorized under Section
10, and the "bank inquiry order" authorized under Section 11. 
Respondents posit that a bank inquiry order under Section 11 may be obtained only
upon the pre-existence of a money laundering offense case already filed before the courts.
The Court does not agree with respondent. If we follow the interpretation of
respondent, the bank inquiry order would be limited in purpose as a tool in aid of litigation of
live cases, and wholly inutile as a means for the government to ascertain whether there is
sufficient evidence to sustain an intended prosecution of the account holder for violation of the
AMLA. Should that be the situation, in all likelihood the AMLC would be virtually deprived
of its character as a discovery tool, and thus would become less circumspect in filing
complaints against suspect account holders. After all, under such set-up the preferred strategy
would be to allow or even encourage the indiscriminate filing of complaints under the AMLA
with the hope or expectation that the evidence of money laundering would somehow surface
during the trial.
Since the AMLC could not make use of the bank inquiry order to determine whether there is
evidentiary basis to prosecute the suspected malefactors, not filing any case at all would not be
an alternative. Such unwholesome set-up should not come to pass. Thus Section 11 cannot be
interpreted in a way that would emasculate the remedy it has established and encourage the
unfounded initiation of complaints for money laundering.  upon application ex parte  by the AMLC and after determination that probable cause exists
Still, even if the bank inquiry order may be availed of without need of a pre-existing
case under the AMLA, it does not follow that such order may be availed of ex parte. There are
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several reasons why the AMLA does not generally sanction ex parte applications and
issuances of the bank inquiry order.
Section 10 v. Section 11 of AMLA
It is evident that Section 112 does not specifically authorize, as a general rule, the
issuance ex parte of the bank inquiry order. Of course, Section 11 also allows the AMLC to
inquire into bank accounts without having to obtain a judicial order in cases where there is
probable cause that the deposits or investments are related to kidnapping for ransom, certain
violations of the Comprehensive Dangerous Drugs Act of 2002, hijacking and other violations
under R.A. No. 6235, destructive arson and murder. Since such special circumstances do not
apply in this case, there is no need for us to pass comment on this proviso. Suffice it to
say, the proviso contemplates a situation distinct from that which presently confronts us,
and for purposes of the succeeding discussion, our reference to Section 11 of the AMLA
excludes said proviso. 
In the instances where a court order is required for the issuance of the bank inquiry
order, nothing in Section 11 specifically authorizes that such court order may be issued ex
parte. It might be argued that this silence does not preclude the ex parte issuance of the bank
inquiry order since the same is not prohibited under Section 11. Yet this argument falls when
the immediately preceding provision, Section 103, is examined.
the bank inquiry order under Section 11 are similar in that they are extraordinary provisional
reliefs which the AMLC may avail of to effectively combat and prosecute money laundering
offenses.
Crucially, Section 10 uses specific language to authorize an ex parte application
for the provisional relief therein, a circumstance absent in Section 11. If indeed the
legislature had intended to authorize ex parte proceedings for the issuance of the bank
inquiry order, then it could have easily expressed such intent in the law, as it did with the
freeze order under Section 10. That the AMLA does not contemplate ex
parte proceedings in applications for bank inquiry orders is confirmed by the present
IRR of the AMLA.
2
SEC. 11. Authority to Inquire into Bank Deposits. ― Notwithstanding the provisions of
Republic Act No. 1405, as amended, Republic Act No. 6426, as amended, Republic Act No.
8791, and other laws, the AMLC may inquire into or examine any particular deposit or
investment with any banking institution or non bank financial institution upon order of any
competent court in cases of violation of this Act, when it has been established that there is
probable cause that the deposits or investments are related to an unlawful activity as
defined in Section 3(i) hereof or a money laundering offense under Section 4 hereof, except
that no court order shall be required in cases involving unlawful activities defined in
Sections 3(i)1, (2) and (12).
To ensure compliance with this Act, the Bangko Sentral ng Pilipinas (BSP) may inquire into or
examine any deposit of investment with any banking institution or non bank financial
institution when the examination is made in the course of a periodic or special examination,
in accordance with the rules of examination of the BSP. 70 (Emphasis supplied)
3
SEC. 10. Freezing of Monetary Instrument or Property. ― The Court of Appeals,
that any monetary instrument or property is in any way related to an unlawful activity as
defined in Section 3(i) hereof, may issue a freeze order which shall be effective immediately.
The freeze order shall be for a period of twenty (20) days unless extended by the court.
 With respect to freeze orders under Section 10, the implementing rules do expressly word "determination" implies deliberation and is, in normal legal contemplation, equivalent to
provide that the applications for freeze orders be filed ex parte, but no similar clearance is "the decision of a court of justice.”
granted in the case of inquiry orders under Section 11. These implementing rules were The court receiving the application for inquiry order cannot simply take the
promulgated by the Bangko Sentral ng Pilipinas, the Insurance Commission and the Securities AMLC’s word that probable cause exists that the deposits or investments are related to an
and Exchange Commission, and if it was the true belief of these institutions that inquiry orders unlawful activity. It will have to exercise its own determinative function in order to be
could be issued ex parte similar to freeze orders, language to that effect would have been convinced of such fact. The account holder would be certainly capable of contesting such
incorporated in the said Rules. This is stressed not because the implementing rules could probable cause if given the opportunity to be apprised of the pending application to inquire
authorize ex parte applications for inquiry orders despite the absence of statutory basis, but into his account; hence a notice requirement would not be an empty spectacle. It may be so
rather because the framers of the law had no intention to allow such ex parte applications.  that the process of obtaining the inquiry order may become more cumbersome or prolonged
Even the Rules of Procedure adopted by this Court in A.M. No. 05-11-04-SC to enforce the because of the notice requirement, yet we fail to see any unreasonable burden cast by such
provisions of the AMLA specifically authorize ex parte applications with respect to freeze circumstance. After all, as earlier stated, requiring notice to the account holder should not, in
orders under Section 10 but make no similar authorization with respect to bank inquiry orders any way, compromise the integrity of the bank records subject of the inquiry which remain in
under Section 11.  the possession and control of the bank. 
A freeze order under Section 10 on the one hand is aimed at preserving monetary The Constitution and the Rules of Court prescribe particular requirements attaching
instruments or property in any way deemed related to unlawful activities as defined in Section to search warrants that are not imposed by the AMLA with respect to bank inquiry orders. A
3(i) of the AMLA. The owner of such monetary instruments or property would thus be constitutional warrant requires that the judge personally examine under oath or affirmation the
inhibited from utilizing the same for the duration of the freeze order. To make such freeze complainant and the witnesses he may produce, such examination being in the form of
order anteceded by a judicial proceeding with notice to the account holder would allow for or searching questions and answers. Those are impositions which the legislative did not
lead to the dissipation of such funds even before the order could be issued.  specifically prescribe as to the bank inquiry order under the AMLA, and we cannot find
On the other hand, a bank inquiry order under Section 11 does not necessitate any sufficient legal basis to apply them to Section 11 of the AMLA. Simply put, a bank inquiry
form of physical seizure of property of the account holder. What the bank inquiry order order is not a search warrant or warrant of arrest as it contemplates a direct object but not the
authorizes is the examination of the particular deposits or investments in banking institutions seizure of persons or property. 
or non-bank financial institutions. The monetary instruments or property deposited with such
banks or financial institutions are not seized in a physical sense, but are examined on Section 11 and right to privacy considerations
particular details such as the account holder’s record of deposits and transactions. Unlike the Because of the Bank Secrecy Act, the confidentiality of bank deposits remains a
assets subject of the freeze order, the records to be inspected under a bank inquiry order basic state policy in the Philippines. Subsequent laws, including the AMLA, may have added
cannot be physically seized or hidden by the account holder. Said records are in the possession exceptions to the Bank Secrecy Act, yet the secrecy of bank deposits still lies as the general
of the bank and therefore cannot be destroyed at the instance of the account holder alone as rule. It falls within the zones of privacy recognized by our laws. The framers of the 1987
that would require the extraordinary cooperation and devotion of the bank.  Constitution likewise recognized that bank accounts are not covered by either the right to
Without doubt, a requirement that the application for a bank inquiry order be done information or under the requirement of full public disclosure. Unless the Bank Secrecy Act is
with notice to the account holder will alert the latter that there is a plan to inspect his bank repealed or amended, the legal order is obliged to conserve the absolutely confidential nature
account on the belief that the funds therein are involved in an unlawful activity or money of Philippine bank deposits.
laundering offense. Still, the account holder so alerted will in fact be unable to do anything to  
conceal or cleanse his bank account records of suspicious or anomalous transactions, at least Any exception to the rule of absolute confidentiality must be specifically legislated.
not without the whole-hearted cooperation of the bank, which inherently has no vested interest Section 2 of the Bank Secrecy Act itself prescribes exceptions whereby these bank accounts
to aid the account holder in such manner. may be examined by any person, government official, bureau or office; namely when: (1)
The necessary implication of this finding that Section 11 of the AMLA does not generally upon written permission of the depositor; (2) in cases of impeachment; (3) the examination of
authorize the issuance ex parte of the bank inquiry order would be that such orders bank accounts is upon order of a competent court in cases of bribery or dereliction of duty of
cannot be issued unless notice is given to the owners of the account, allowing them the public officials; and (4) the money deposited or invested is the subject matter of the litigation.
opportunity to contest the issuance of the order. Without such a consequence, the Section 8 of R.A. Act No. 3019, the Anti-Graft and Corrupt Practices Act, has been
legislated distinction between ex parte proceedings under Section 10 and those which are recognized by this Court as constituting an additional exception to the rule of absolute
not ex parte under Section 11 would be lost and rendered useless.  confidentiality and there have been other similar recognitions as well.
There certainly is fertile ground to contest the issuance of an ex parte order. Section   
11 itself requires that it be established that "there is probable cause that the deposits or The AMLA also provides exceptions to the Bank Secrecy Act. Under Section 11,
investments are related to unlawful activities," and it obviously is the court which stands as the AMLC may inquire into a bank account upon order of any competent court in cases of
arbiter whether there is indeed such probable cause. The process of inquiring into the violation of the AMLA, it having been established that there is probable cause that the
existence of probable cause would involve the function of determination reposed on the trial deposits or investments are related to unlawful activities as defined in Section 3(i) of the law,
court. Determination clearly implies a function of adjudication on the part of the trial court, or a money laundering offense under Section 4 thereof. Further, in instances where there is
and not a mechanical application of a standard pre-determination by some other body. The probable cause that the deposits or investments are related to kidnapping for ransom certain

7
violations of the Comprehensive Dangerous Drugs Act of 2002 hijacking and other violations were involved in cases of bribery or dereliction of duty of public officials, or in a case where
under R.A. No. 6235, destructive arson and murder, then there is no need for the AMLC to the money deposited or invested was itself the subject matter of the litigation.
obtain a court order before it could inquire into such accounts.
  The passage of the AMLA stripped another layer off the rule on absolute confidentiality that
It cannot be successfully argued the proceedings relating to the bank inquiry order provided a measure of lawful protection to the account holder. The application of the bank
under Section 11 of the AMLA is a litigation encompassed in one of the exceptions to the inquiry order as a means of inquiring into transactions entered into prior to the passage of the
Bank Secrecy Act which is when the money deposited or invested is the subject matter of the AMLA would be constitutionally infirm, offensive as to the ex post facto clause.
litigation. The orientation of the bank inquiry order is simply to serve as a provisional relief or NEVERTHELESS, the argument that the prohibition against ex post facto laws goes as far as
remedy. As earlier stated, the application for such does not entail a full-blown trial. to prohibit any inquiry into deposits in bank accounts OPENED prior to the effectivity of the
  AMLA even if the TRANSACTIONS were entered into when the law had already taken effect
Nevertheless, just because the AMLA establishes additional exceptions to the Bank cannot be sustained. This argument will create a loophole in the AMLA that would result to
Secrecy Act it does not mean that the later law has dispensed with the general principle further money laundering. It is hard to presume that Congress intended to enact a self-
established in the older law that all deposits of whatever nature with banks or banking defeating law in the first place, and the courts are inhibited from such a construction by the
institutions in the Philippines are considered as of an absolutely confidential nature. Indeed, by cardinal rule that “a law should be interpreted with a view to upholding rather than destroying
force of statute, all bank deposits are absolutely confidential, and that nature is unaltered even it.”
by the legislated exceptions referred to above. There is disfavor towards construing these
exceptions in such a manner that would authorize unlimited discretion on the part of the
government or of any party seeking to enforce those exceptions and inquire into bank deposits.
If there are doubts in upholding the absolutely confidential nature of bank deposits against
affirming the authority to inquire into such accounts, then such doubts must be resolved in
favor of the former. Such a stance would persist unless Congress passes a law reversing the
general state policy of preserving the absolutely confidential nature of Philippine bank
accounts.
 
While petitioner would premise that the inquiry into Lilia Chengs accounts finds
root in Section 11 of the AMLA, it cannot be denied that the authority to inquire under Section
11 is only exceptional in character, contrary as it is to the general rule preserving the secrecy
of bank deposits. Even though she may not have been the subject of the inquiry orders, her
bank accounts nevertheless were, and she thus has the standing to vindicate the right to
secrecy that attaches to said accounts and their owners. This statutory right to privacy will not
prevent the courts from authorizing the inquiry anyway upon the fulfillment of the
requirements set forth under Section 11 of the AMLA or Section 2 of the Bank Secrecy Act; at
the same time, the owner of the accounts have the right to challenge whether the requirements
were indeed complied with.

Ex Post Facto Laws

It is clear that no person may be prosecuted under the PENAL provisions of the
AMLA for acts committed prior to the enactment of the law (17 October 2001).

With respect to the AUTHORITY TO INSPECT, it should be noted that an ex post facto law
is one that (among others) deprives a person accused of a crime of some lawful protection to
which he has become entitled, such as the protection of a former conviction or acquittal, or a
proclamation of amnesty.
PRIOR to the AMLA:
(1) The fact that bank accounts were involved in activities later on enumerated in the law did
not, by itself, remove such accounts from the shelter of absolute confidentiality.
(2) In order that bank accounts could be examined, there was need to secure either the written
permission of the depositor OR a court order authorizing such examination, assuming that they