ANTI-MONEY

LAUNDERING ACT
(R.A. 9160, as amended)
Auditing and Assurance: Specialized Industries

Prepared by: Nixsun D. Casuncad

POLICY
• To protect and preserve the integrity and
confidentiality of bank accounts and to ensure
that the Philippines shall not be used as a
money laundering site for the proceeds of any
unlawful activity. Consistent with its foreign
policy, the State shall extend cooperation in
transnational investigations and prosecutions
of persons involved in money laundering
activities wherever committed.
WHAT IS MONEY
LAUNDERING?
MONEY LAUNDERING

This is a crime whereby the proceeds of an

unlawful activity are transacted, thereby
making them appear to have originated from
legitimate sources.
MONEY LAUNDERING

This is a crime whereby the proceeds of an

unlawful activity are transacted, thereby
making them appear to have originated from
legitimate sources.
HOW COMMITTED?
MONEY LAUNDERING OFFENSE
a. Any person knowing that any monetary
instrument or property represents, involves,
or relates to, the proceeds of any unlawful
activity:
1. transacts or attempts to transact said monetary
instrument or property;
2. Converts, transfers, disposes of, moves,
acquires, possesses or uses said monetary
instrument or property;
3. Conceals or disguises the true nature, source,
location, disposition, movement or ownership of
or rights with respect to said monetary
instrument or property;
MONEY LAUNDERING OFFENSE
a. Any person knowing that any monetary
instrument or property represents, involves,
or relates to, the proceeds of any unlawful
activity:
4. Attempts or conspires to commit money
laundering offenses referred to in (1), (2) and
(3);
5. Aids, abets, assists in or counsels the
commission of the money laundering offenses
referred to in (1), (2) or (3); and
6. Performs or fails to perform any act as a result
of which he facilitates the offense of money
laundering referred to (1), (2) or (3).
MONEY LAUNDERING OFFENSE

b. Any person knowing that a covered or

suspicious transaction is required to be
reported to the AMLC, fails to do so
PROSECUTION

Any person may be charged with and

convicted of both the offense of money
laundering and the unlawful activity as herein
defined.

Any proceeding relating to the unlawful

activity shall be given precedence over the
prosecution of any offense or violation under
this Act without prejudice to the freezing and
other remedies provided.
 WHAT IS A
COVERED
TRANSACTION?
COVERED TRANSACTION
A transaction in cash or other equivalent
monetary instrument involving a total amount
in excess of P500,000 within 1 banking day;

for covered persons like casinos, a single casino

cash transaction (involving the receipt of cash
by a casino paid by or behalf of a customer or
payout of cash by a casino to a customer or to
any person in his/her behalf) involving an
amount in excess of P5,000,000 or its
equivalent in any other currency.
 WHAT IS A
COVERED
TRANSACTION?
COVERED PERSONS (NATURAL
OR JURIDICAL)
1. Banks, non-banks, quasi-banks, trust
entities, foreign exchange dealers,
pawnshops, money changers, remittance
and transfer companies and other similar
entities, and all other institutions and their
subsidiaries and affiliates supervised or
regulated by the Bangko Sentral ng Pilipinas
(BSP)
COVERED PERSONS (NATURAL
OR JURIDICAL)
2. Insurance companies and all other
institutions supervised or regulated by the
Insurance Commission
COVERED PERSONS (NATURAL
OR JURIDICAL)
3. (i) Securities dealers, brokers, salesmen,
investment houses and other similar entities
managing securities or rendering services as
investment agent, advisor, or consultant, (ii)
mutual funds, close-end investment companies,
common trust funds, pre-need companies and
other similar entities, and (iii) other entities
administering or otherwise dealing in currency,
commodities or financial derivatives based
thereon, valuable objects, cash substitutes and
other similar monetary instruments or property
supervised or regulated by Securities and
Exchange Commission.
COVERED PERSONS (NATURAL
OR JURIDICAL)
4. Jewelry dealers in precious stones, who, as
a business, trade in precious stones, for
transactions in excess of P1,000,000

5. Jewelry dealers in precious metals, who, as

a business, trade in precious metals, for
transactions in excess of P1,000,000
COVERED PERSONS (NATURAL
OR JURIDICAL)
6. Company service provides which, as a business,
provide any of the following services to third
parties:
I. Acting as a formation agent of juridical persons
II. acting as (or arranging for another person to act as) a
director or corporate secretary of a company, a
partner of a partnership, or a similar position in
relation to other juridical persons;
III. providing a registered office, business address or
accommodation, correspondence or administrative
address for a company, a partnership or any other
legal person or arrangement; and (iv) acting as (or
arranging for another person to act as) a nominee
shareholder for another person; and
COVERED PERSONS (NATURAL
OR JURIDICAL)
7. Persons who provide any of the following
services:
• managing of client money, securities or other
assets;
• management of bank, savings or securities
accounts;
• organization of contributions for the creation,
operation or management of companies; and
• creation, operation or management of juridical
persons or arrangements, and buying and selling
business entities.
COVERED PERSONS (NATURAL
OR JURIDICAL)
8. Casinos, including internet and ship-based
casinos, with respect to their casino cash
transactions related to their gaming
operations.
EXCLUDED PERSONS:
‘Covered persons’ shall exclude lawyers and
accountants acting as independent legal
professionals in relation to information
concerning their clients or where disclosure of
information would compromise client
confidences or the attorney-client relationship.
 WHAT ARE THE
OBLIGATIONS OF
COVERED
PERSONS?
OBLIGATIONS OF COVERED
PERSONS
1. Customer Identification: Covered
institutions shall establish and record the true
identity of its clients based on official
documents. They shall maintain a system of
verifying the true identity of their clients and,
in case of corporate clients, require a system of
verifying their legal existence and
organizational structure, as well as the
authority and identification of all persons
purporting to act on their behalf.
OBLIGATIONS OF COVERED
PERSONS
2. Record Keeping: All records of all
transactions of covered institutions shall be
maintained and safely stored for five (5) years
from the dates of transactions. With respect to
closed accounts, the records on customer
identification, account files and business
correspondence, shall be preserved and safely
stored for at least five (5) years from the dates
when they were closed.
OBLIGATIONS OF COVERED
PERSONS
3. Reporting of Covered Transactions:
Covered institutions shall report to the AMLC all
covered and suspicious transactions within five
(5) working days from occurrence thereof,
unless the AMLC concerned prescribes a longer
period not exceeding 15 working days.
OBLIGATIONS OF COVERED
PERSONS
4. Should a transaction be determined to be both a
covered and a suspicious transaction, it shall be
reported as suspicious transaction.

5. When reporting covered transactions to the

AMLC, covered institutions and their officers,
employees, representatives, agents, advisors,
consultants or associates shall not be deemed to
have violated bank secrecy laws and similar laws,
BUT ARE PROHIBITED from communicating, directly
or indirectly, in any manner or by any means, to any
person the fact that a covered transaction report
was made, the contents thereof, or any other
information in relation thereto.
OBLIGATIONS OF COVERED
PERSONS
6. Safe Harbor: no administrative, criminal or
civil proceedings, shall lie against any person
for having made a covered transaction report in
the regular performance of his duties and in
good faith, whether or not such reporting
results in any criminal prosecution under this
Act or any other Philippine law.
 WHAT ARE
SUSPICIOUS
TRANSACTIONS?
SUSPICIOUS TRANSACTIONS
Transactions with covered institutions, regardless
of the amount involved, where any of the following
circumstances exists:

there is no underlying legal or trade obligation,

purpose or economic justification;

the client is not properly identified;

the amount involved is not commensurate with

the business or financial capacity of the client;
SUSPICIOUS TRANSACTIONS
Transactions with covered institutions, regardless
of the amount involved, where any of the following
circumstances exists:

 taking into account all known circumstances, it

may be perceived that the client’s transaction is
structured in order to avoid being the subject of
reporting requirements under the Act;

any circumstance relating to the transaction

which is observed to deviate from the profile of
the client and/or the client’s past transactions
with the covered institution;
SUSPICIOUS TRANSACTIONS
Transactions with covered institutions,
regardless of the amount involved, where any
of the following circumstances exists:

 the transaction is in any way related to an

unlawful activity or offense under this Act
that is about to be, is being or has been
committed; or

any transaction that is similar or analogous to

any of the foregoing.
 WHAT ARE
UNLAWFUL
ACTIVITIES?
UNLAWFUL ACTIVITIES
Any act or omission or series or combination
thereof involving or having direct relation to
the following:

Kidnapping for ransom under Article 267 of

Act No. 3815, otherwise known as the Revised
Penal Code, as amended;
UNLAWFUL ACTIVITIES
Any act or omission or series or combination
thereof involving or having direct relation to
the following:
Sections 4, 5, 7, 8, 9, 10, 12, 13, 14, 15, and
16 of Republic Act No. 9165, otherwise known
as the Comprehensive Dangerous Drugs Act of
2002:
Importation of prohibited drugs
Sale of prohibited drugs
Administration of prohibited drugs
Distribution of prohibited drugs
Transportation of prohibited drugs
UNLAWFUL ACTIVITIES
Any act or omission or series or combination
thereof involving or having direct relation to the
following:
Sections 4, 5, 6, 8, 9, 10, 12, 13, 14, 15, and 16
of Republic Act No. 9165, otherwise known as the
Comprehensive Dangerous Drugs Act of 2002:
Maintenance of den, dive or resort for prohibited users
Manufacture of prohibited drugs
Possession of prohibited drugs
Use of prohibited drugs
Cultivation of plants which are sources of prohibited
drugs
Culture of plants which are sources of prohibited drugs
UNLAWFUL ACTIVITIES
Any act or omission or series or combination
thereof involving or having direct relation to
the following:

Section 3 paragraphs B, C, E, G, H and I of

Republic Act No. 3019, as amended, otherwise
known as the Anti-Graft and Corrupt Practices
Act;
UNLAWFUL ACTIVITIES
Any act or omission or series or combination
thereof involving or having direct relation to
the following:

Plunder under Republic Act No. 7080, as

amended;

Robbery and extortion under Articles 294,

295, 296, 299, 300, 301 and 302 of the Revised
Penal Code, as amended;
UNLAWFUL ACTIVITIES
Any act or omission or series or combination
thereof involving or having direct relation to
the following:

Jueteng and Masiao punished as illegal

gambling under Presidential Decree No. 1602;

Piracy on the high seas under the Revised

Penal Code, as amended and Presidential
Decree No. 532;
UNLAWFUL ACTIVITIES
Any act or omission or series or combination
thereof involving or having direct relation to the
following:

Qualified theft under Article 310 of the Revised

Penal Code, as amended;

Swindling under Article 315 of the Revised Penal

Code, as amended;

 Smuggling under Republic Act Nos. 455 and 1937;

UNLAWFUL ACTIVITIES
Any act or omission or series or combination
thereof involving or having direct relation to the
following:

Violations under Republic Act No. 8792, otherwise

known as the Electronic Commerce Act of 2000;

Hijacking and other violations under Republic Act

No. 6235;

Destructive arson and murder, as defined under

the Revised Penal Code
UNLAWFUL ACTIVITIES
Any act or omission or series or combination
thereof involving or having direct relation to
the following:

Terrorism and conspiracy to commit terrorism

under Sections 3 and 4 of RA 9372 “Human
Security Act of 2007”

Financing terrorism under Sec. 4 and offenses

punishable under Sec. 5,6,7 and 8 of RA 10168
UNLAWFUL ACTIVITIES
Any act or omission or series or combination
thereof involving or having direct relation to
the following:

Bribery under Articles 210, 211 and 211-A of

RPC and corruption of public officers under
Article of RPC.

Fraudulent practices and other violations

under Republic Act No. 8799, otherwise known
as the Securities Regulation Code of 2000
UNLAWFUL ACTIVITIES
Any act or omission or series or combination
thereof involving or having direct relation to
the following:

Felonies or offenses of a similar nature that

are punishable under the penal laws of other
countries

Frauds and illegal exactions and transactions

under Art. 213, 214, 215 and 216 of RPC
UNLAWFUL ACTIVITIES
Any act or omission or series or combination
thereof involving or having direct relation to
the following:

Malversation of public funds and property

under Art. 217 and 222 of RPC

Forgeries and counterfeiting under Art. 163,

166, 167, 168, 169 and 176 of RPC
UNLAWFUL ACTIVITIES
Any act or omission or series or combination
thereof involving or having direct relation to the
following:

Violations of Sections 4 to 6 of Republic Act No.

9208, otherwise known as the “Anti-Trafficking in
Persons Act of 2003, as amended”;

Violations of Sections 78 to 79 of Chapter IV of

Presidential Decree No. 705, otherwise known as
the “Revised Forestry Code of the Philippines, as
amended”;
UNLAWFUL ACTIVITIES
Any act or omission or series or combination
thereof involving or having direct relation to
the following:

Violations of Sections 86 to 106 of Chapter IV

of Republic Act No. 8550, otherwise known as
the “Philippine Fisheries Code of 1998”;

Violations of Sections 101 to 107, and 110 of

Republic Act No. 7942, otherwise known as
the “Philippine Mining Act of 1995”;
UNLAWFUL ACTIVITIES
Any act or omission or series or combination
thereof involving or having direct relation to the
following:

Violations of Section 27(c), (e), (f), (g) and (i) of

Republic Act No. 9147, otherwise known as the
“Wildlife Resources Conservation and Protection
Act”;

Violations of Section 7(b) of Republic Act No.

9072, otherwise known as the “National Caves
and Cave Resources Management Protection Act”;
UNLAWFUL ACTIVITIES
Any act or omission or series or combination
thereof involving or having direct relation to the
following:

Violation of Republic Act No. 6539, otherwise

known as the “Anti-Carnapping Act of 2002, as
amended”;

Violation of Sections 1, 3, and 5 of Presidential

Decree No. 1866, as amended, otherwise known
as the decree “Codifying the Laws on
Illegal/Unlawful Possession, Manufacture, Dealing
In, Acquisition or Disposition of Firearms,
Ammunition or Explosives”
UNLAWFUL ACTIVITIES
Any act or omission or series or combination
thereof involving or having direct relation to the
following:

Violation of Presidential Decree No. 1612,

otherwise known as the “Anti-Fencing Law”;

Violation of Section 6 of Republic Act No. 8042,

otherwise known as the “Migrant Workers and
Overseas Filipinos Act of 1995, as amended”;

Violation of Republic Act No. 8293, otherwise

known as the “Intellectual Property Code of the
Philippines, as amended”;
UNLAWFUL ACTIVITIES
Any act or omission or series or combination thereof
involving or having direct relation to the following:

Violation of Section 4 of Republic Act No. 9995,

otherwise known as the “Anti-Photo and Video
Voyeurism Act of 2009”;

Violation of Section 4 of Republic Act No. 9775,

otherwise known as the “Anti-Child Pornography Act
of 2009”;

Violations of Sections 5, 7, 8, 9, 10 (c), (d) and (e),

11, 12 and 14 of Republic Act No. 7610, otherwise
known as the “Special Protection of Children Against
Abuse, Exploitation and Discrimination”;
JURISDICTION
JURISDICTION OVER MONEY
LAUNDERING
1. Regional Trial Court. - The regional trial
courts shall have jurisdiction to try money
laundering cases committed by private
individuals, and public officers not covered
by the jurisdiction of the Sandiganbayan.

2. Sandiganbayan. - The Sandiganbayan shall

have jurisdiction to try money laundering
cases committed by public officers under its
jurisdiction, and private persons who are in
conspiracy with such public officers.
ANTI-MONEY
LAUNDERING
COUNCIL
COMPOSITION

The AMLC is composed of the Governor of the

BSP as Chairperson, and the Commissioner of
the IC and the Chairperson of the SEC, as
Members.

NOTE: The AMLC shall act unanimously in the

discharge of its functions.
FUNCTIONS
1. to require and receive covered transaction
reports from covered institutions;

2. to issue orders addressed to the appropriate

Supervising Authority or the covered institution
to determine the true identity of the owner of
any monetary instrument or property subject of
a covered transaction report or request for
assistance from a foreign State, or believed by
the Council, on the basis of substantial
evidence, to be, in whole or in part, wherever
located, representing, involving, or related to,
directly or indirectly, in any manner or by any
means, the proceeds of an unlawful activity;
FUNCTIONS
3. to institute civil forfeiture proceedings and
all other remedial proceedings through the
Office of the Solicitor General;

4. to cause the filing of complaints with the

Department of Justice or the Ombudsman
for the prosecution of money laundering
offenses;

5. to initiate investigations of covered

transactions, money laundering activities
and other violations of this Act;
FUNCTIONS
6. to freeze any monetary instrument or
property alleged to be proceeds of any
unlawful activity;

7. to implement such measures as may be

necessary and justified under this Act to
counteract money laundering;

8. to receive and take action in respect of, any

request from foreign states for assistance in
their own anti-money laundering operations
provided in this Act;
FUNCTIONS
9. to develop educational programs on the pernicious
effects of money laundering, the methods and
techniques used in money laundering, the viable
means of preventing money laundering and the
effective ways of prosecuting and punishing
offenders;

10. to enlist the assistance of any branch, department,

bureau, office, agency or instrumentality of the
government, including government-owned and -
controlled corporations, in undertaking any and all
anti-money laundering operations, which may
include the use of its personnel, facilities and
resources for the more resolute prevention,
detection and investigation of money laundering
offenses and prosecution of offenders.
FUNCTIONS

11.To impose administrative sanctions for the

violation of laws, rules, regulations, orders,
and resolutions issued pursuant to law.
WHAT IS FREEZING?
FREEZING
Upon application ex parte by the AMLC and
after determination that probable cause exists
that any monetary instrument or property is in
any way related to an unlawful activity, the
Court of Appeals may issue a freeze order,
which shall be effective immediately.

Ex parte – no need to notify third party; one

decided by a judge without requiring all of the
parties to the dispute to be present.
FREEZING

The freeze order shall be for a period of twenty

(20) days unless extended by the court (total
period shall not exceed 6 months). In any case,
the court should act on the petition to freeze
within twenty-four (24) hours from filing of the
petition. If the application is filed a day before
a nonworking day, the computation of the
twenty-four (24)-hour period shall exclude the
nonworking days.
FREEZING
Considering the intricate and diverse web of
related and interlocking accounts pertaining to the
monetary instruments or properties that any person
may create in the different covered institutions,
their branches and/or other units, the AMLC may
apply with the Court of Appeals for the freezing of
the monetary instruments or properties in the
names of the reported owners/holders and
monetary instruments or properties named in the
application of the AMLC including all other related
web of accounts pertaining to other monetary
instruments and properties, the funds and sources
of which originated from or are related to the
monetary instruments or properties subject of the
freeze orders.
RELATED WEB OF ACCOUNTS

Those accounts, the funds and sources of which

originated from and/or are materially linked to
the monetary instruments or properties subject
of the freeze order.
RELATED WEB OF ACCOUNTS

Those accounts, the funds and sources of which

originated from and/or are materially linked to
the monetary instruments or properties subject
of the freeze order.
 WHEN IS AMLC
AUTHORIZED TO
INQUIRE INTO BANK
DEPOSITS?
AUTHORITY TO INQUIRE INTO
BANK DEPOSITS
The AMLC may inquire into deposits upon order
of the court when there is probable cause that
the deposits are related to the crime or
unlawful activities.
AUTHORITY TO INQUIRE INTO
BANK DEPOSITS
HOWEVER, a court order is not necessary when
the offense or unlawful activity involved is any
of the following:
1. Kidnapping for ransom under Article 267 of
Act No. 3815, otherwise known as the
Revised Penal Code, as amended;

2. Sections 4, 5, 7, 8, 9, 10, 12, 13, 14, 15, and

16 of Republic Act No. 9165, otherwise
known as the Comprehensive Dangerous
Drugs Act of 2002
AUTHORITY TO INQUIRE INTO
BANK DEPOSITS
HOWEVER, a court order is not necessary when the
offense or unlawful activity involved is any of the
following:
3. Hijacking and other violations under RA 6235

4. Destructive arson and murder as defined under

RPC

5. Felonies or offenses of a similar nature to (1),

(2), (3) and (4) that are punishable under the
penal laws of other countries
AUTHORITY TO INQUIRE INTO
BANK DEPOSITS
HOWEVER, a court order is not necessary when
the offense or unlawful activity involved is any
of the following:
6. Terrorism and conspiracy to commit
terrorism under RA 9372

7. Financing terrorism under Section 4 and

offenses punishable under Sections 5, 6, 7
and 8 of RA 10168
AUTHORITY TO INQUIRE INTO
BANK DEPOSITS
Inquiry into deposits may be availed of even in
the absence of a pre-existing criminal case
under the same law.

However, the order authorizing bank inquiry

cannot be issued ex parte.
CIVIL FORFEITURE
PROCEEDINGS
The AMLC is authorized to institute civil
forfeiture proceedings and all other remedial
proceedings through the Office of the Solicitor
General, upon the determination that a
probable cause exists that any monetary
instrument or property is in any way related to
an unlawful activity or money laundering
offense.
 PHILIPPINE DEPOSIT
INSURANCE CORPORATION
ACT
(R.A. 3591, as amended)
Auditing and Assurance: Specialized Industries

Prepared by: Nixsun D. Casuncad

BASIC POLICY

Promote and safeguard the interests of the

depositing public by way of providing
permanent and continuing insurance coverage
on all insured deposits.
 WHAT IS AN
INSURED DEPOSIT?
INSURED DEPOSIT

Amount due to any bonafide depositor for

legitimate deposits in an insured bank, net of
any obligation of the depositor, as of the date
of closure but not to exceed Five hundred
thousand pesos (P500,000.00).
INSURED DEPOSIT

In case of a condition that threatens the

monetary and financial stability of the banking
system that may have systemic consequences,
as determined by the Monetary Board, the
maximum deposit insurance cover may be
adjusted in such amount, for such a period,
and/or for such deposit products, as may be
determined by a unanimous vote of the Board
of Directors in a meeting called for the purpose
and chaired by the Secretary of Finance,
subject to the approval of the President of the
Philippines.
INSURED DEPOSIT
Under Sec. 22 of the PDIC Charter, a systemic
risk refers to the possibility that failure of one
bank to settle net transactions with other banks
will trigger a chain reaction, depriving other
banks of funds leading to a general shutdown of
normal clearing and settlement activity.
Systemic risk also means the likelihood of a
sudden, unexpected collapse of confidence in a
significant portion of the banking or financial
system with potentially large real economic
effects.
COVERAGE
DEPOSIT INSURANCE
COVERAGE
The deposit liabilities of any bank which is
engaged in the business of receiving deposits as
herein defined on the effective date of the
PDIC Act, or which thereafter may engage in
the business of receiving deposits, shall be
insured with the PDIC.
COMMENCEMENT OF THE
LIABILITY
PDIC shall commence the determination of
insured deposits due the depositors of a closed
bank upon its actual takeover of the closed
bank.
DEPOSIT ACCOUNTS NOT
ENTITLED TO PAYMENT
1. Investment products such as bonds and securities, trust
accounts, and other similar instruments;

2. Deposit accounts or transactions which are fictitious or

fraudulent as determined by the Corporation;

3. Deposit accounts or transactions constituting, and/or

emanating from, unsafe and unsound banking practice/s,
as determined by the PDIC, in consultation with the BSP,
after due notice and hearing, and publication of a
directive to cease and desist issued by the PDIC against
such deposit accounts, transactions or practices; and

4. Deposits that are determined to be the proceeds of an

unlawful activity as defined under Republic Act No.
9160, as amended.
PER DEPOSITOR,
PER CAPACITY RULE
All deposits in the bank maintained in the same
right and capacity for his or her benefit either
in his or her own name or in the name of
others.
JOINT ACCOUNTS

Joint accounts can either be:

• A joint “and” account - a type of account,

commonly used by business partners, in which
the approval of both owners is needed to
make withdrawals. Joint “and” account
implies that withdrawal from said account
may only be made with the signatures of all
co-depositors.
JOINT ACCOUNTS

Joint accounts can either be:

• A joint “or” and “and/or” account - types of

accounts commonly used by husband and wife
in which either, acting separately, can make
deposits or withdrawals at any time. It offers
the convenience of needing only one
signatory.
JOINT ACCOUNTS

A joint account regardless of whether the

conjunction ‘and’, ‘or’, ‘and/or’ is used, shall be
insured separately from any individually-owned
deposit account, provided that:

1. if the account is held jointly by two or more

natural persons, or by two or more juridical
persons or entities, the maximum insured deposit
shall be divided into as many equal shares as there
are individuals, juridical persons or entities, unless
a different sharing is stipulated in the document of
deposit, and
JOINT ACCOUNTS

A joint account regardless of whether the

conjunction ‘and’, ‘or’, ‘and/or’ is used, shall
be insured separately from any individually-
owned deposit account, provided that:

2. if the account is held by a juridical person

or entity jointly with one or more natural
persons, the maximum insured deposit shall be
presumed to belong entirely to such juridical
person or entity.
No owner/holder of any passbook, certificate of
deposit, or other evidence of deposit shall be
recognized as a depositor entitled to the rights
provided in this Act unless the passbook,
certificate of deposit, or other evidence of
deposit is determined by the Corporation to be
an authentic document or record of the issuing
bank.
FAILURE TO SETTLE
CLAIM OF INSURED
DEPOSITOR
Failure to settle the claim, within six (6)
months from the date of filing of claim for
insured deposit, where such failure was due to:
grave abuse of discretion,
gross negligence,
bad faith, or
malice,

shall, upon conviction, subject the directors,

officers or employees of the Corporation
responsible for the delay, to imprisonment from
six (6) months to one (1) year
 FAILURE OF
DEPOSITOR TO
CLAIM INSURED
DEPOSITS
Unless otherwise waived by PDIC, if the
depositor in the closed bank shall fail to claim
his insured deposit with PDIC WITHIN TWO
YEARS FROM ACTUAL TAKEOVER OF THE
CLOSED BANK or DOES NOT ENFORCE HIS
CLAIM FILED WITH PDIC WITHIN TWO YEARS
AFTER THE TWO YEAR PERIOD TO FILE A
CLAIM, all rights of the depositor against the
PDIC with respect to the insured deposit shall
be barred; however, all rights of the depositor
against the closed bank and its shareholders or
the receivership estate to which the PDIC may
have become subrogated shall thereupon revert
to the depositor.
SPLITTING OF
DEPOSITS
Splitting of deposits occurs whenever a deposit
account with an outstanding balance of more than
the statutory maximum amount of insured deposit
maintained under the name of natural or juridical
persons is broken down and transferred into two
(2) or more accounts in the name/s of natural or
juridical persons or entities who have no beneficial
ownership on transferred deposits in their names:
within one hundred twenty (120) days
immediately preceding or during a bank-
declared bank holiday, or
immediately preceding a closure order issued
by the Monetary Board of the Bangko Sentral
ng Pilipinas for the purpose of availing of the
maximum deposit insurance coverage;
SPLITTING OF DEPOSITS IS PROHIBITED

The penalty of imprisonment of not less than

six (6) years but not more than twelve (12)
years or a fine of not less than Fifty thousand
pesos (P50,000.00) but not more than Ten
million pesos (P10,000,000.00), or both, at the
discretion of the court.
TRUTH IN LENDING ACT
REPUBLIC ACT NO. 3765
Auditing and Assurance: Specialized Industries

Prepared by: Nixsun D. Casuncad

POLICY

To protect its citizens from a lack of awareness

of the true cost of credit to the user by assuring
a full disclosure of such cost with a view of
preventing the uninformed use of credit to the
detriment of the national economy.
CREDIT
Any loan, mortgage, deed of trust, advance, or
discount;

any conditional sales contract;

any contract to sell, or sale or contract of sale of

property or services, either for present or future
delivery, under which part or all of the price is
payable subsequent to the making of such sale or
contract; any rental-purchase contract;

any contract or arrangement for the hire,

bailment, or leasing of property;
CREDIT
any option, demand, lien, pledge, or other
claim against, or for the delivery of, property
or money;

any purchase, or other acquisition of, or any

credit upon the security of, any obligation of
claim arising out of any of the foregoing;

and any transaction or series of transactions

having a similar purpose or effect.
FINANCE CHARGE
Includes interest, fees, service charges,
discounts, and such other charges incident to
the extension of credit as the Board (Monetary
Board of the Central Bank of the Philippines)
may be regulation prescribe.
CREDITOR
any person engaged in the business of
extending credit (including any person who as
a regular business practice make loans or sells
or rents property or services on a time, credit,
or installment basis, either as principal or as
agent) who requires as an incident to the
extension of credit, the payment of a finance
charge.
CONTENTS OF WRITTEN
STATEMENT
Any creditor shall furnish to each person to
whom credit is extended, prior to the
consummation of the transaction, a clear
statement in writing setting forth, to the
extent applicable and in accordance with rules
and regulations prescribed by the Board, the
following information:

1. the cash price or delivered price of the

property or service to be acquired;
CONTENTS OF WRITTEN
STATEMENT
Any creditor shall furnish to each person to
whom credit is extended, prior to the
consummation of the transaction, a clear
statement in writing setting forth, to the
extent applicable and in accordance with rules
and regulations prescribed by the Board, the
following information:

2. the amounts, if any, to be credited as down

payment and/or trade-in;
CONTENTS OF WRITTEN
STATEMENT
Any creditor shall furnish to each person to
whom credit is extended, prior to the
consummation of the transaction, a clear
statement in writing setting forth, to the
extent applicable and in accordance with rules
and regulations prescribed by the Board, the
following information:

3. the difference between the amounts set

forth under clauses (1) and (2);
CONTENTS OF WRITTEN
STATEMENT
Any creditor shall furnish to each person to
whom credit is extended, prior to the
consummation of the transaction, a clear
statement in writing setting forth, to the
extent applicable and in accordance with rules
and regulations prescribed by the Board, the
following information:

4. the charges, individually itemized, which

are paid or to be paid by such person in
connection with the transaction but which
are not incident to the extension of credit;
CONTENTS OF WRITTEN
STATEMENT
Any creditor shall furnish to each person to
whom credit is extended, prior to the
consummation of the transaction, a clear
statement in writing setting forth, to the
extent applicable and in accordance with rules
and regulations prescribed by the Board, the
following information:

5. the total amount to be financed;

6. the finance charge expressed in terms of

pesos and centavos; and
CONTENTS OF WRITTEN
STATEMENT
Any creditor shall furnish to each person to
whom credit is extended, prior to the
consummation of the transaction, a clear
statement in writing setting forth, to the
extent applicable and in accordance with rules
and regulations prescribed by the Board, the
following information:

7. the percentage that the finance bears to

the total amount to be financed expressed
as a simple annual rate on the outstanding
unpaid balance of the obligation.
CONTENTS OF WRITTEN
STATEMENT
A. Any creditor who in connection with any
credit transaction fails to disclose to any
person any information in violation of this
Act or any regulation issued thereunder shall
be liable to such person in the amount of
P100 OR in an amount equal to twice the
finance charged required by such creditor
in connection with such transaction,
WHICHEVER IS THE GREATER, except that
such liability shall not exceed P2,000 on any
credit transaction
CONTENTS OF WRITTEN
STATEMENT
A. Action to recover such penalty may be
brought by such person within one year from
the date of the occurrence of the violation,
in any court of competent jurisdiction. In
any action under this subsection in which
any person is entitled to a recovery, the
creditor shall be liable for reasonable
attorney's fees and court costs as
determined by the court.
CONTENTS OF WRITTEN
STATEMENT
B. Except as specified in subsection (a) of this
section, nothing contained in this Act or any
regulation contained in this Act or any
regulation thereunder shall affect the
validity or enforceability of any contract or
transactions.

C. Any person who willfully violates any

provision of this Act or any regulation issued
thereunder shall be fined by not less than
P1,000 or more than P5,000 or imprisonment
for not less than 6 months, nor more than
one year or both.
THANK YOU!