What are covered by PDIC?

PDIC provides a maximum deposit insurance coverage of PhP500,000 per depositor per bank. It
covers all types of bank deposits in banks whether denominated in local or foreign
currencies. All deposit accounts of a depositor in a closed bank maintained in the same right and
capacity shall be added together.

What is PDIC law?

PDIC is a government instrumentality created in 1963 by virtue of Republic Act 3591 to
insure the deposits of all banks. PDIC exists to protect depositors by providing deposit
insurance coverage for the depositing public and help promote financial stability.

What is not covered by the PDIC deposit insurance?

PDIC covers only the risk of a bank closure ordered by the Monetary Board. Thus, bank losses
due to theft, fire, closure by reason of strike or existence of public disorder, revolution or
civil war, are not covered by PDIC.

What are the deposits not entitled to payment?

Deposit accounts not entitled to payment

deposit accounts or transactions constituting unsafe and unsound banking practices as

determined by PDIC, in consultation with BSP, after due notice and hearing, and publication of a
cease and desist order issued by the PDIC against such deposit accounts or transactions; and. Apr
26, 2019
Who can claim from PDIC?
Depositors
Depositors have two (2) years from PDIC's takeover of the closed bank to file their deposit
insurance claims. After the two-year period, the depositor's right to claim for deposit insurance
is barred pursuant to Section 21(e) of R.A. 3591, as amended.
Are all banks covered by PDIC?
Membership of banks to PDIC is mandatory; hence, all operating banks are members of
PDIC.

Are all banks’ members of PDIC? - Philippine Deposit Insurance ...

https://www.pdic.gov.ph › faqs-6

Search for: Are all banks covered by PDIC?

How do I claim PDIC?
Depositors may also file their claims through mail and enclose their original evidence of deposit
and photocopy of one (1) valid photo-bearing ID with signature together with a duly
accomplished and notarized Claim Form which can be downloaded from the PDIC website,
www.pdic.gov.ph
What is PDIC overall mandate?
PDIC exists to provide deposit insurance coverage for the depositing public to help promote
public confidence and stability in the economy.
How does PDIC source its funds?
The PDIC relies on financial reports submitted by banks on a quarterly basis and
information from examination reports and the PCA list provided by the BSP. Typically,
balance sheet and income report data is provided by banks to regulators with a several month lag.

No. Insurance premium is paid by the banks, not by the depositors. The bank is assessed 1/5 of
1% per annum of the assessment base of the bank.
FREQUENTLY ASKED QUESTIONS   (about PDIC) 

What is the Philippine Deposit Insurance Corporation (PDIC)?

What is PDIC’s overall mandate?
What are the functions of PDIC?
What is PDIC’s maximum deposit insurance coverage?
What is an insured deposit?
Are all banks’ members of PDIC?
What types of deposits are insured by PDIC?
Are deposits maintained in branches and subsidiaries of foreign banks operating in the
Philippines insured by the PDIC?
Are deposits maintained in Philippine banks with branches outside the Philippines insured by the
PDIC?
What specific risks to a bank does PDIC cover?
Shall the depositor pay any insurance premium to PDIC?
How is insurance coverage determined?
Can PDIC insurance coverage be increased by having several accounts in the same name in an
insured bank?
If I have deposits in several different insured banks, will my deposits be added together for
insurance purposes?
Is there a need for a depositor to file his claim for insured deposit with PDIC?
When should the depositor of a closed insured bank file his claim with PDIC?
What happens when the depositor of a closed bank fails to file his claim within the 24-month
period?
How long does it take PDIC to settle a claim for insured deposit?
What processes are involved before PDIC starts servicing claims?
How long does the pre-settlement examination take?
If the deposit account in a closed bank is more than P500,000.00, what happens to the excess of
the maximum amount of insured deposit?
All about bouncing checks law

There are basically two criminal statutes that involve a check:

 First, the Batas Pambansa Blg. 22 or known as the Bouncing Checks Law; and
 Second, the Revised Penal Code of the Philippines.
As to the first criminal law, the Bouncing Checks Law punishes a person who issues a worthless
check. The crime is malum prohibitum, which means that the mere commission of the act that
the law prohibits, and not its character or effect that determines whether or not the provision has
been violated, and malice or criminal intent is completely immaterial. This is opposite to crimes
which are  Malum in se examples are such as murder, rape, and robbery.

There are two ways of violating BP 22

1. By making or drawing and issuing a check to apply on account or for value. Knowing
that, at the time of issue that the check is not sufficiently funded. As to the first way, the
following are the elements:
o a) The making, drawing, and issuance of any check to apply for an account or for
value;
o b) The knowledge of the maker, drawer, or issuer that at the time of issue he does
not have sufficient funds in or credit with the drawee bank for the payment of
such check in full upon its presentment; and
o c) The subsequent dishonor of the check by the drawee bank for insufficiency of
funds or credit or dishonor for the same reason had not the drawer, without any
valid cause, ordered the bank to stop payment.
2. By having sufficient funds in or credit with the drawee bank at the time of issue but
failing to do so to cover the full amount of the check when presented to the drawee bank
without a period of ninety (90) days. The following are the elements:
o a) Any person makes or draws and issues a check;
o b) Such a person has sufficient funds in or credit with the drawee bank;
o c) Failure to keep sufficient funds or to maintain a credit to cover the full amount
of the check if presented within a period of ninety (90) days from the date
appearing thereon; and
o d) For which reason, it was dishonored by the drawee bank.

The 90 day period

The 90 day period to deposit the check is not an element of violating BP 22. It is simply one of
the conditions for the prima facie presumption of knowledge of lack of funds to arise. And it
does not also discharge the accused from the duty to maintain sufficient funds in the account
within a reasonable time. This is based on the landmark case of Wong vs. Court of Appeals,
docketed as G.R. No. 117857, February 2, 2001.

If a person is found guilty of violating the provisions of BP 22, the penalty is imprisonment for at
least 30 days but not more than one year, or a fine of at least double the amount of the check but
not to exceed P200,000.00.
The bases of these penalties are Section 1 of BP 22 and the Supreme Court’s Administrative
Circular Nos. 12-2000 and 13-01.

 In Administrative Circular No. 12-2000. The Supreme Court declared that the courts
should follow the policy of “redeeming valuable human material and preventing
unnecessary deprivation of personal liberty and economic usefulness with due regard to
the protection of the social order.” Because of this, in lieu of imprisonment. A fine in an
amount equal to double the amount of the check is considered an appropriate penalty.
 In Administrative Circular No. 13-01, the Supreme Court clarified that. The penalty is
not removed, but the courts should reserve imposing imprisonment as a penalty for
serious cases. When the violation of BP 22 negatively affects the social order.
We could not help but tackle the landmark case of Vaca vs. Court of Appeals docketed as G.R.
No. 181714 decided by the Supreme Court on November 16, 1998. In this case, the Supreme
Court modified the penalty imposed on the accused by deleting imprisonment and only fined
the accused in the amount double the amount of the check.

Crimes Involving Checks under the Revised Penal Code

After tackling BP 22, it is now ripe to discuss the crimes involving checks under the Revised
Penal Code. Basically, there are two crimes under the Revised Penal Code that cover checks.

Estafa

The first one is the crime of estafa/swindling under Article 315 paragraph 2(d) which has the
following elements:

 a) A check is postdated or issued in payment of an obligation contracted at the time the

check is issued;
 b) Lack or insufficiency of funds to cover the check; and
 c) Damage to the payee thereof.
The violation of this is penalized by depending on the amount involved. Article 315 of the
Revised Penal Code provides the following penalties:

 Prision correccional in its maximum period to Prision mayor in its minimum period.
o If the amount is P12,000.00 but does not exceed P22,000.00.
o If the amount exceeds this, the penalty shall be in its maximum period, adding one
year for each additional P10,000.00; but the total penalty which may be imposed
shall not exceed 20 years.
o The penalty of prision correccional in its minimum and medium periods if the
amount is over P6,000.00 but does not exceed P12,000.00. 
 Arresto mayor in its maximum period to Prision correccional in its minimum period if
such amount is over P200.00 but does not exceed P6,000.00.

The Revised Penal Code

The second crime involving checks under the Revised Penal Code is actually a list of crimes
found in:
“Title Four, Chapter One, Section Three, covering Articles 166, 167, 168, and 169.” We will not
go into the details of the elements of Article 166 and 167. This section covers “obligation or
security of the United States or of the Philippine Islands” which covers “all bonds, certificates
of indebtedness, national banknotes, coupons, United States or Philippine Islands notes,
treasury notes, fractional notes, certificates of deposit, bills, checks, or drafts for money.”

Table of comparison based on the Revised Penal Code and Republic Act No. 10951
Cases of Lawyers Issuing Worthless Checks
As to the effect of issuing worthless checks to the legal profession. Several cases such as the
following were decided by the supreme court:

 Heenan vs. Espejo, A.C. No. 10050, December 3, 2013;

 711 SCRA 290, A-1 Financial Services, Inc. vs. Valerio, A.C. No. 8390, July 02, 2010;
 Dizon vs. De Taza, A.C. No. 7676, June 10, 2014, 726 SCRA 70;
 Wong vs. Moya II, A.C. No. 6972, October 17, 2008;
 Cuizon vs. Macalino, A.C. No. 4334, July 7,  2004;
 Ong vs. Delos Santos, A.C. No. 10179, March 4, 2014; and
 Nulada vs. Paulma, A.C. No. 8172, April 12, 2016.
The Supreme Court penalized the lawyers who issued worthless checks by suspending them
from the practice of law, ranging from six months to two years, and even disbarment. In another
lesson in the future, we will cover the causes and procedure in filing complaints against a lawyer.

Dishonoring a Check

The laws and cases mentioned only tell the gravity of the act of issuing checks and forging the
same. Quickly, you must know the causes of dishonoring a check. The following are the causes
of dishonoring a check on account of the issuer or drawer:

1. The account is closed;

2. No account at all;
3. Drawn against uncollected deposit;
4. Drawn against insufficient funds; and
5. Stop payment order.

Prescription of Crimes

Is the period within which a criminal case be filed against the person. Who violated the
following criminal laws mentioned:

 A criminal complaint about the violation of BP 22.

o Must be filed within a period of 4 years from the time of the commission of the
crime;
 For violation of Article 315; and 166 and 167 of the Revised Penal Code
o The prescriptive period shall be determined by the amount allegedly swindled by
the accused. And the penalties involved respectively;
 Article 25 of the Revised Penal Code
o Provides that prision mayor and reclusion Perpetua are afflictive penalties and
that prision correccional is a correctional penalty; and
 Based on Article 90 of the Revised Penal Code
o Reclusion temporal prescribes in twenty years, other afflictive penalties such as
prision mayor prescribe in fifteen years, and correctional penalties prescribe in ten
years.
You must remember that the civil liability based on a contractual obligation still continues even
the filing of the criminal cases. And the civil case based on contracts prescribed in ten years from
last demand. If you plan to have a lawyer disciplined for issuing a worthless check, the right to
file a complaint is not prescribed at all. This means anytime one can file a complaint.

Remedial Law Aspect of Checks

As to the remedial law aspect of checks, the filing of the complaint goes through the same
process as that of other criminal cases filed. We need to address two basic questions.

1. The first question is where to file the case?

o You have to remember that the criminal case may be filed in any of the places.
Where many of its elements occurred. Like the place where the check was drawn,
issued, delivered, or dishonored.
2. The second question, which court takes jurisdiction of the case?
o For BP 22 cases, the information is filed before the proper municipal trial court.
o For violation of Article 315 of the Revised Penal Code. Depending on the amount
involved, the case could be filed before the Municipal Trial Court of the Regional
Trial Court.
o Refer to this lesson Jurisdiction of courts based on BP 129 and other related laws.
o For cases against a lawyer, you can file your complaint before the IBP Chapter in
which the lawyer is a member, or the Supreme Court directly.

Defenses Available to the Accused

Aside from when and where to file the cases, we must know the defenses available to the
accused. These are as follows:
The Notice of Dishonor

The most common defense for violation of BP 22 is the lack of notice of dishonor. The Notice of
Dishonor must be proven to have been actually received by the accused. So, if you are for the
prosecution, you must make sure that the notice was received. The following persons should
send the notice:

 a) Personal service, or
 b) By registered mail. If done through registered mail. The fact of sending the notice is
justified by the registry receipt. The registry return card, and the affidavit executed by the
person who mailed the notice of dishonor. Establishing the circumstances surrounding the
mailing of the notice.
Relative to this, actual receipt of the notice must be proven by the prosecutor by the signature of
the accused. Or his duly authorized representative appearing on the registry return card. And that
such signature belongs to the accused or his duly authorized representative. Not only that, but the
prosecution must also establish that the representative indeed has the capacity and authority to
sign for and on behalf of the accused during the service of the notice. Thus, a security guard of
the subdivision or a child of the accused could not be considered a duly authorized
representative. While considering all these factors, we must remember the quantum of
proof required in every case. In another lesson, we will talk about the different quantum of
proof.

Basically, we must take note that one should be cautious in issuing checks and must make sure
that the check is funded from the time it is issued. That is why, on the checkbook, there is a table
that helps you trace the checks that the issuer/drawer issues or draws. It looks like this for BDO
checking account holders.

Again, these laws and cases that you know now only tell the gravity of the crime or offense of
issuing worthless checks. Even if there is a change of policy as regards punishment, the fact
remains, that the act itself has legal consequences.

PHILIPPINE BANK SECRECY LAW:

On 09 September 1955, Republic Act No. 1405, otherwise known as An Act Prohibiting
Disclosure of or Inquiry into, Deposits with any Banking Institution (“Bank Secrecy Law”), was
approved. This law was enacted to encourage individuals to deposit their money in banks instead
of hoarding them.
 

You may ask, why is there a need to protect the secrecy of bank deposits? Technically speaking,
the law prefers that money be deposited in banks so they may be properly utilized to assist in the
economic development of the country.  However, it is more relevant on a practical matter.  Let’s
use you dear reader as an example.  Suppose that you only have P1,000 in your bank account.
Surely, you do not want any person (such as your friend, employer or any stranger) to find that
out.  Either you do not want others to know that you do not have sufficient money or you simply
do not feel comfortable in people prying in your financial affairs.  On the other hand, if you have
P100,000,000.00 in your bank account, you also do not want others to find that out for fear that
you might be kidnapped, or relatives might borrow from you, or simply, it’s your personal affair.
In all these cases, one’s financial status is a private matter. Transactions happening in your bank
account are not just empty figures. There are stories affixed to such transactions.  Thus, these
financial transactions are akin to your personal activities which should not be easily accessible to
anyone.

The Bank Secrecy Law protects all deposits of whatever nature in banks or banking institutions
in the Philippines as well as investments in government bond.  This law prohibits any person,
subject to the exceptions below, from disclosing to any person any information, relative to the
funds or properties belonging to the depositors in the custody of the bank. Simply put, no one
can just go to your bank and ask for your bank balance.

However, the rule is not absolute.  The following are the exceptions to the bank secrecy law:

1.  Written permission or consent in writing by the depositor;

2.  In cases of impeachment;

3.  Upon order of the court in cases of bribery or dereliction of duty of public officials;

4.  Upon order of the court in cases where the money deposited or invested is the subject matter
of the litigation;

5.  Upon a subpoena  issued by the Ombudsman concerning an investigation it is conducting,

provided that there must already be a case pending in court, the account be clearly identified, the
inspection be limited to the subject matter of the pending case; and the bank personnel and the
depositor must be notified to be present during the inspection;
6.  The BIR can inquire into bank deposits in an application for compromise of tax liability or
determination of a decedent’s gross estate;

7.  The Anti-Money Laundering Council (“AMLC”) can examine bank accounts pursuant to a
court order, where there is probable cause that the deposits are related to an unlawful activity or
money laundering offense;

8.  The AMLC can examine bank accounts, WITHOUT a court order, where there is probable
cause that the deposits are related to certain crimes such as kidnapping for ransom, violation of
the Dangerous Drugs Act, hijacking, destructive arson, murder and violations of RA 6235 (acts
inimical to civil aviation);

9.  The Bangko Sentral can examine bank accounts in the course of its periodic or special
examination regarding compliance with Anti-Money Laundering Law.

As you can see, although there are many exceptions, securing such exceptions is not an easy
task.  The easiest way to waive the secrecy of bank deposits is through a written waiver. 
Although there is no prescribed form for a waiver, it is necessary that the waiver be made
voluntarily, knowingly and with sufficient awareness of relevant circumstances and
consequences. Thus, as a matter of practice, banks will require the depositor to state in his
waiver the specific bank account, bank branch, name of depositor, period covered by the
transactions and the name of the person authorized to access the bank account.

How about dollar deposits? Now, foreign currency deposits are governed by a different law,
namely Republic Act No. 6426 and has fewer exceptions.  This will be discussed in a separate
article.

You may be curious if there is any criminal liability for violating the bank secrecy law. Yes,
there is criminal liability.  Any person violating this law may be imprisoned for not more than
five (5) years, or meted a fine not exceeding P20,000.00 or both.

PHILIPPINE COMPETION ACT -Kayo na lang ang maghanap ng law na ito, but it is
included in the exam.