BULACAN STATE UNIVERSITY

COLLEGE OF LAW

COURSE SYLLABUS : BANKING LAWS (2 UNITS)

2021-2022 (2nd Semester)

The course covers the study of the General Banking Law, the New Central Bank Act, Philippine
Deposit Insurance Corporation Law, secrecy of bank deposits laws, Anti-Money Laundering Act, other
allied special laws (Truth in Lending Act, Trust Receipt Law, Letters of Credit, Securities Regulation
Code, Personal Property Securities Act, Data Privacy Act, and Philippine Competition Act).

Professor : Atty. Ronel U. Buenaventura, M.A.1

COURSE OBJECTIVES

The principal objectives of the course are for the students to: (i) master the pertinent legal
provisions, general principles, concepts, and underlying philosophy of the laws applicable to banks,
non-bank financial intermediaries, and allied commercial papers, and (ii) have an understanding of
laws relating to banks, non-bank financial intermediaries, and allied commercial papers for the
proper resolution of the legal issues involved in banking transactions.

I. INTRODUCTION
a. Mercantile Law
i. Mercantile Law vis-à-vis Civil Law
ii. Fundamental principles
iii. Code of Commerce

II. GENERAL BANKING LAW (R.A. No. 8791)

a. State policy (Sections 1 and 2)
i. Diligence required of banks
1. Simex International v. Court of Appeals, March 19, 1990 (diligence
required of banks)
2. Reyes vs. Court of Appeals, 15 August 2001 (diligence required of banks)
3. Carbonell vs. Metrobank, April 26, 2017 (diligence required of banks)
4. BPI vs. Quiaoit, 16 January 2019 (diligence required of banks)
5. Poole-Blunden vs. Union Bank, 29 November 2017 (diligence required of
banks)
6. Comsavings Bank vs. Capistrano, 28 August 2013 (diligence required of
banks)
7. PNB vs. Villa, August 1, 2016 (diligence required of banks)
8. Catapang v. Lipa Bank, January 27, 2020 (diligence required of banks)
b. Banks and quasi-banks (Sections 3, 4, and 71)
i. Financial intermediaries
1. First Planters Pawnshop vs. BIR, 30 July 2008 (financial intermediaries)
ii. Digital Banks
1. BSP Circular No. 1105, Series of 2020
c. Authority of Bangko Sentral over banks (Sections 4-7)
i. Other financial institutions
d. Organization, management, and administration of banks and quasi-banks (Section 8-22)
i. Deposit substitutes (Section 95, R.A. No. 7653)
1. BDO vs. Republic, 13 January 2015 and August 16, 2016 (deposit
substitutes)
e. Powers of universal banks (Sections 23-28)
f. Powers of commercial bank (Sections 29-32)

1
Atty. Ronel U. Buenaventura is currently the Acting Deputy Director of the Commitments and Policy Group of the
Anti-Money Laundering Council. Previously, he served as Legal Officer of Bangko Sentral ng Pilipinas and worked as
Associate Solicitor of the Office of the Solicitor General. He is also a member of the faculty of the Tarlac State University
School of Law and Tomas Claudio Colleges College of Law. He is a MCLE lecturer and bar reviewer at the Jurists Bar
Review Center. He graduated Class Valedictorian and Magna Cum Laude from Bulacan State University College of Law
Class of 2015 and ranked tenth (10 th) in the 2015 Bar Examinations. He finished MA Philosophy and BA Psychology from
the University of the Philippines – Diliman in 2011 and 2009, respectively.
Page 1
 g. Deposit function (Section 33)
i. Different kinds of account
1. Demand deposits (Section 58-60, R.A. 7653; Articles 1933-1995, New Civil
Code)
a. Areza vs. Express Savings Bank, 10 September 2014 (nature of
bank deposits, legal compensation, unauthorized payment of
checks)
b. Citibank N.A. vs. Sabeniano, 6 February 2007 (legal compensation)
c. Guingona vs. City Fiscal of Manila, 4 April 1984 (nature of bank
deposits)
d. Far East Bank vs. Querimit, 16 January 2002 (certificate of deposit)
e. BPI vs. Fernandez, 2 September 2015 (certificate of deposit)
f. Apique vs. Fahnenstich, 5 August 2015 (joint account)
g. In the Matter of the Intestate Estate of Rodriguez, 31 July 2018
(joint account)
h. Vitug vs. Court of Appeals, 29 March 1999 (survivorship agreement)
ii. Usury Law
1. Kinds of interests (relate to New Civil Code provisions)
a. Compensatory
b. Monetary
2. Floating interest rates and escalation clauses
a. Villa Crista Monte Realty and Development Corporation v. Equitable
PCI Bank, November 21, 2018 (escalation clause)
b. Security Bank Corporation v. Rodrigo, June 27, 2018 (escalation
clause)
3. Stipulations on interest
a. Nacar vs. Gallery Frames, 13 August 2013 (legal rate of interest)
b. Macalinao vs. BPI, 17 September 2009 (interest rate stipulation)
c. PNB vs. Manalo, 24 February 2014 (interest rate stipulation)
d. Cabanting vs. BPI Family Savings Bank, 17 February 2016 (interest
rate stipulation)
e. Louh vs. BPI, 08 March 2017 (interest rate stipulation)
f. Isla v. Estorga, July 2, 2018 (interest rate)
g. Vasquez v. Philippine National Bank, August 28, 2019 (applicable
interest rate)
h. Loan function (Sections 34-52)
i. Risk-based capital
ii. Single borrower’s limit
iii. DOSRI loans (include Section 26, R.A. 7653)
1. Soriano vs. People, 1 February 2010 (DOSRI)
2. Soriano v. People, January 8, 2020 (DOSRI)
3. Go vs. BSP, 23 October 2009 (DOSRI)
4. Republic vs. Sandiganbayan, 12 April 2011 (DOSRI and SBL)
5. HBILU vs. HSBC, 28 February 2018 (grant of loans)
iv. Foreclosure of real estate mortgage
1. Goldenway Merchandising vs. Equitable PCI, 13 March 2013 (redemption
period)
2. White Marketing vs. Grandwood Furniture, 23 November 2016 (redemption
period)
3. Alan vs. PNB, 27 January 2016 (redemption period)
4. Union Bank vs. CA, 25 June 2001 (redemption price)
i. Other banking services (Section 53)
i. CA Agro-industrial vs. Court of Appeals, 3 March 1993 (safety deposit box)
ii. Sia vs. Court of Appeals, 13 May 1993 (safety deposit box)
j. Prohibitions (Sections 54-66)
i. BPI Employees Union v. Bank of the Philippine Islands, July 24, 2013 (outsourcing
of bank services)
k. Cessation of banking business (Sections 68-70)
l. Foreign Banks (Sections 72-78)
i. PDIC vs. Citibank, 11 April 2012 (foreign banks, branches)
ii. Parcon-Song v. Parcon, July 7, 2020 (foreign bank and foreclosure)

Page 2
 m. Trust Operations (Sections 79-93)
i. Goyanko vs. UCPB, 6 February 2013 (in trust for account)

III. NEW CENTRAL BANK ACT (R.A. No. 7653, as amended by R.A. No. 11211)
a. Constitutional Provisions
i. Section 20, Article VII
ii. Section 20, Article XII
iii. Section 21, Article XII
1. Constantino v. Cuisia, 509 Phil. 486 (2005)
b. State Policy (Section 1; Section 5, R.A. No. 8791)
i. Price stability
c. Creation, responsibilities and corporate powers (Sections 2-5)
i. Central Bank of the Philippines (Sections 132, 136)
1. DBP vs. COA, 16 January 2002 (bank audit)
2. Central Bank Employees Association vs. BSP, 15 December 2004 (fiscal and
administrative autonomy)
3. UCPB vs. Ganzon, 30 June 2009 (BSP as administrative body)
4. Monetary Board vs. Philippine Veterans Bank, 21 January 2015 (BSP as
administrative body)
5. Central Bank Board of Liquidators vs. Banco Filipino, 21 February 2017
(Central Bank of the Philippines and Bangko Sentral ng Pilipinas)
d. Monetary Board (Sections 6-16)
e. Duties of the Governor (Sections 17-21)
i. BSP vs. Legaspi, 2 March 2016 (Authority to engage counsel)
ii. Tarrosa vs. Enriquez, 25 May 1994 (BSP Governor appointment)
f. Prohibitions on BSP personnel (Section 27)
i. Bangko Sentral ng Pilipinas v. Office of the Ombudsman, June 16, 2021
(prohibited borrowing)
g. Supervision over banks and other financial institutions (Sections 25, 28; Sections 4,6, R.A.
No. 8791)
i. Rural Bank of San Miguel vs. Monetary Board, February 16, 2007 (bank
examination)
h. Banks in distress
i. Conservatorship (Section 29; Section 67, R.A. No. 8791)
ii. Receivership and liquidation (Sections 30-33; Section 69, R.A. No. 8791)
iii. R.A. No. 10846
1. BSP vs. Valenzuela, October 2, 2009 (report on examination)
2. Central Bank of the Philippines vs. Court of Appeals, 30 March 1993 (close
now, hear later)
3. Vivas vs. Monetary Board, 7 August 2013 (close now, hear later)
4. Producers Bank vs. NLRC, 15 November 1998 (conservatorship)
5. Apex Bancrights vs. BSP, 2 October 2017 (receivership and liquidation)
6. In re: Petition for Assistance in the Liquidation of the Rural Bank of Bokod
(Benguet) Inc., PDIC vs. BIR, 18 December 2006 (liquidation)
7. Provident Savings Bank vs. Court of Appeals, 17 May 1993 (liquidation)
8. Fidelity Savings and Mortgage Bank vs. Cenzon, 5 April 1990 (liquidation)
9. Banco Filipino vs. BSP, June 4, 2018 (closed bank’s authority to file suits)
10. Balayan Bay Rural Bank vs. National Livelihood Development Corporation,
21 September 2015 (closed bank’s representative)
11. Cu vs. Small Business Guarantee, April 7, 2017 (liquidation)
12. Fil-Agro Rural Bank, Inc. v. Villaseñor Jr., July 28, 2020 (liquidation)
i. Administrative and penal sanctions (Sections 34-37)
j. Means of payment (Sections 48-57)
i. Legal tender power
ii. Exclusive issue power
iii. Digital and virtual currencies
1. BSP Advisory dated 03 June 2014
2. BSP Circular No. 944 dated 06 February 2017
3. BSP Advisory dated 29 December 2017
4. BSP Circular No. 1108, Series of 2021

Page 3
 iv. BSP Circular No. 537, Series of 2006
v. Penal provisions
1. Arts. 2, 163 to 168, 176, Revised Penal Code
2. P.D. No. 247
k. Guiding principles on monetary administration
i. Domestic monetary stabilization (Section 61)
1. Inflation
2. Deflation
a. Caltex vs. Singson, 04 October 2000 (extraordinary inflation)
b. Palanca vs. Court of Appeals, 02 December 1994 (extraordinary
inflation)
c. Almeda vs. Bathala Marketing, 28 January 2008 (extraordinary
inflation)
ii. International monetary stabilization (Sections 64-67)
l. Instruments to achieve price stability
i. Moral suasion (Section 68)
ii. Foreign exchange operations (Sections 70, 72-75)
iii. Regulation of foreign exchange operations of banks (Section 76)
iv. Credit policy (Section 81)
1. Lender of last resort
2. Normal credit operations (Section 82)
3. Special credit operation (Section 83)
4. Emergency credit operation (Section 84)
v. Open market operations (Sections 90-92)
1. Bank of Commerce vs. Planters Development Bank, 24 September 2012
open market operations)
vi. Bank reserves (Sections 94-97)
m. Banker of the government (Sections 110-113)
n. Financial advisor of the government (Sections 123-124)

IV. PHILIPPINE DEPOSIT INSURANCE CORPORATION LAW (R.A. No. 3591, as

amended)
a. Basic policy
b. Powers and functions of the PDIC; prohibitions
c. Concept of insured deposits
d. Liability to depositors
i. Deposit liabilities required to be insured
ii. Commencement of liability
iii. Deposit accounts not entitled to payment
iv. Extent of liability
v. Determination of insured deposits
vi. Calculation of liability
1. Per depositor, per capacity rule
2. Joint accounts
3. Mode of payment
4. Effect of payment of insured deposits
5. Payment of insured deposits as preferred credit
6. Failure to settle claim of insured depositor
7. Failure of depositor to claim insured deposits
a. Examination of banks and deposit accounts
b. Prohibition against splitting of deposits
c. Prohibition against issuances of temporary restraining order
8. Concept of bank resolution
9. Role of the PDIC in relation to banks in distress
a. Closure and takeover
b. Conservatorship
c. Receivership
d. liquidation
i. Linsangan v. PDIC, 11 February 2019
ii. PDIC vs. Gidwani, June 20, 2018
iii. PDIC vs. Citibank, 11 April 2012

Page 4
 iv. Chugani v. PDIC, March 19, 2018
v. Servo v. Philippine Deposit Insurance Corporation,
December 5, 2019

V. LAW ON SECRECY OF BANK DEPOSITS (R.A. No. 1405, as amended)

a. Purpose
b. Prohibited acts
c. Deposits covered
d. Exceptions
i. Unclaimed Balances Law (Act No. 3936)
e. Garnishment of deposits
f. Foreign currency deposit act
i. BSB Group Inc. vs. Go, 16 February 2010
ii. Dona Adela Export vs. TIDCORP, 11 February 2015
iii. Ejercito vs. Sandiganbayan, 30 November 2006
iv. People vs. Estrada, 2 April 2009
v. Marquez vs. Desierto, 27 June 2001
vi. Salvacion vs. Central Bank, 21 August 1997
vii. China Bank vs. CA, 18 December 2006
viii. Mellon Bank vs. Magsino, 18 October 1990
ix. Union Bank vs. Court of Appeals, 23 December 1999
x. Oñate vs, Abrogar, 23 February 1995
xi. Intengan vs. CA, 15 February 2002
xii. PSBank vs. Senate Impeachment Tribunal, 20 November 2012
xiii. Sibayan vs. Alda, January 17, 2018
xiv. In the Matter of Intestate Estate of Pacioles and Ching, 15 October 2018
xv. Sibayan v. Alda, January 17, 2018

VI. ANTI-MONEY LAUNDERING ACT (R.A. No. 9160, as amended)

a. State policies
b. Covered institutions
c. Obligations of covered institutions
d. Covered transactions
e. Suspicious transactions
f. Money laundering
g. Unlawful activities or predicate crimes
h. Anti-Money Laundering Council
i. Functions
j. Freezing of monetary instrument or property
k. Authority to inquire into bank deposits
l. Safe harbor provision
m. Mutual assistance among states
n. In relation to R.A. No. 10168 (Terrorism Financing Prevention and Suppression Act) and
R.A. No. 11479 (Anti-Terrorism Act)
o. R.A. No. 9194, R.A. No. 10167, R.A. No. 10365, R.A. No. 10927; R.A. No. 11521
i. PDIC vs. Gidwani, June 20, 2018
ii. Estrada vs. Sandiganbayan, 17 July 2018
iii. Republic vs. Cabrini Green and Ross, 5 May 2005
iv. Ligot vs. Republic, 6 March 2013
v. Republic vs. Eugenio, 14 February 2008
vi. Subido Pagente vs. Court of Appeals, December 6, 2016
vii. Republic vs. Bolante, April 17, 2017
viii. Republic v. Bloomberry Resorts and Hotels, Inc., September 2, 2020
ix. Republic v. Sandiganbayan, February 15, 2021

VII. LETTERS OF CREDIT

a. Definition and nature of letter of credit
b. Parties to a letter of credit
c. Basic principles of letter of credit
d. Warehouseman’s Lien (Act No. 2137)
i. Transfield Phils vs. Luzon Hydro Corp., November 22, 2004

Page 5
 ii. Feati Bank & Trust vs. CA, April 30, 1991
iii. Landl & Co. vs. Metrobank, July 30, 2004
iv. Metrobank vs. Ley Construction, December 3, 2014
v. HSBC vs. National Steel Corp., February 24, 2016
vi. PNB vs. San Miguel, January 15, 2014
vii. Bangayan vs. RCBC, 04 April 2011
viii. Land Bank vs. Monet’s Export, 10 March 2005
ix. Bank of America vs. Court of Appeals, 10 December 1993

VIII. TRUST RECEIPTS LAW (P.D. No. 115)

a. Concept of trust receipt
b. Rights of the entruster
c. Obligation and liability of the entrustee
d. Remedies available
i. Colinares vs. CA, September 5, 2000
ii.  Ng vs. People, April 23, 2010
iii. Osental vs. People, 05 September 2018
iv. Land Bank vs. Perez, June 13, 2012
v.  MWSS vs. Daway, June 21, 2004
vi. BSP vs. Libo-on, 23 November 2015
vii. Yang vs. People, August 14, 2013
viii. Security Bank vs. Great Wall Commercial, January 30, 2017

IX. TRUTH IN LENDING ACT (R.A. No. 3765)

a. Purpose
b. Obligation of creditors to person to whom credit is extended
c. Covered and excluded transactions
d. Consequences of non-compliance with obligation
i. Bank of the Philippine Islands v. Yu, January 20, 2010
ii. Silos v. Philippine National Bank, July 2, 2014
iii. Development Bank of the Philippines v. Arcilla Jr., June 30, 2005
iv. United Coconut Planters Bank v. Beluso, August 17, 2007

X. PERSONAL PROPERTY SECURITIES ACT (R.A. No. 11057)

a. Definitions and scope
b. Asset-specific rules
i. Future property
ii. Rights to proceeds and commingled funds
iii. Tangible assets commingled in a mass
iv. Accounts receivables
c. Perfection of security interests
d. Registration
e. Priority of security interests
f. Tangible assets; intangible assets
g. Enforcement of security interests
h. Prior interests and the transitional period
i. Implementing Rules and Regulations

XI. SECURITIES REGULATION CODE (R.A. No. 8799)

a. State policy
b. Definition of securities
c. Kinds of securities
i. Exempt securities
ii. Exempt transactions
iii. Non-exempt transactions
d. Powers and functions of the Securities and Exchange Commission
e. Procedure for registration of securities
f. Prohibitions on fraud, manipulation, and insider trading
i. Manipulation of security prices
ii. Short sales
iii. Option trading

Page 6
 iv. Fraudulent transactions
v. Insider trading
g. Protection of shareholder interests
i. Tender offer rule
ii. Rules on proxy solicitation
iii. Disclosure rule
1. Securities and Exchange Commission v. Subic Bay Golf and Country Club,
Inc., March 11, 2015
2. Primanila Plans, Inc. v. Securities and Exchange Commission, August 6,
2014
3. Baviera v. Paglinawan, February 8, 2007
4. Pua v. Citibank, N.A., September 16, 2013
5. Securities and Exchange Commission v. Astra Securities Corporation,
October 22, 2014
6. Virata v. Wee, July 5, 2017
7. Securities and Exchange Commission v. Prosperity.Com, Inc., January 25,
2012
8. CEMCO Holdings, Inc. v. National Life Insurance Company of the
Philippines, Inc., August 7, 2007
9. Banco De Oro v. Republic, January 13, 2015

XII. DATA PRIVACY ACT (R.A. No. 10173)

a. Definitions and scope
b. Extraterritorial application
c. Processing of personal information
i. General principles
ii. Sensitive and privileged information
iii. Subcontracting
iv. Privileged communication
d. Rights of the data subject; exceptions/non-applicability
e. Duties and responsibilities of personal information controller
f. Implementing Rules and Regulations

XIII. PHILIPPINE COMPETITION ACT (R.A. No. 10667)

a. Definitions and scope of application
b. Powers and functions of the Philippine Competition Commission
c. Prohibited Acts
i. Anti-competitive agreements
1. Per se violations
2. Not per se violations
ii. Abuse of dominant position
iii. Prohibited mergers and acquisitions
iv. Exceptions
d. Covered transactions
i. Thresholds for compulsory notification
ii. Notifying entity
iii. Exceptions
e. Determining the relevant market
f. Determining control or dominance of market
g. Determining existence of anti-competitive conduct
h. Forbearance by the Philippine Competition Commission
i. Implementing Rules and Regulations
i. Gios-Samar, Inc. v. Department of Transportation and Communication, March 12,
2019

REFERENCES

Banking and Allied Laws by Larry P. Ignacio

Optional: The New Central Bank Act Annotated (Book I) by Bangko Sentral ng Pilipinas
Optional: The General Banking Law Annotated (Book II) by Bangko Sentral ng Pilipinas
Optional: Special Banking Laws Annotated (Book III) by Bangko Sentral ng Pilipinas
Page 7
Any updated book on commercial laws
Pertinent laws
Supreme Court Decisions (additional cases will be assigned from time to time)

CASE DIGEST

Assigned cases for the particular meeting must be digested and submitted through email in
ronel.buenaventura@bulsu.edu.ph before 5:00 p.m. of the day before the class. Limit your case digests
as much as possible to one page per case. Cases must be digested on your own; collaboration with
classmates will be treated as a form of intellectual dishonesty and will merit failing grade.

Compilation of all case digests shall be submitted before the Final Exam.

TEACHING METHOD

Students are required to read, in advance and in full, the topics covered for the particular meeting.
Students are likewise required to master the provisions of the law. The course will be taught through
Socratic method – recitation.

ASSESSMENT AND GRADING

E. Standard Grading System (for minor/elective subjects) :

Class standing - 25%

(Attendance/Quizzes/Recitation/Case Digest)
Midterm - 35%
Final - 40%
TOTAL: - 100%

Being tardy is equivalent to one absent.

Absent clerical or mathematical error, the grades are final and will not be reconsidered or
adjusted. Cheating or any form of intellectual dishonesty warrants an automatic failing grade and
merits disciplinary sanctions.

For transparency, grades will immediately be posted publicly in Google Classroom as soon as available.

Cheating or any form of intellectual dishonesty warrants a failing grade and merits disciplinary sanctions.
No grade adjustment/curving will be done.

CONSULATION TIME

Upon prior appointment

Email: ronel.uy.buenaventura@gmail.com

BOOK - IGNACIO

“I believe that banking institutions are more dangerous to our liberties than standing armies.”
– Thomas Jefferson

Page 8