LAW ON OTHER BUSINESS TRANSACTIONS

BY: Atty. AAS, CPA, JD

1. Philippine Deposit Insurance Corporation – As amended by RA No.9576

a. What is purposed of PDIC? (144) LAWS 1043 PDIC Law (RA 3591, as
amended) - YouTube
- Protektahan yung small investors or depositors at to ensure na yung
mga deposits sa bangko ay entitled to the benefits ng insurance.
Pwedeng makuha yung investment kung sakaling yung bank ay mag-
close.
- Mapataas yung deposit insurance coverage at mapalakas yung
regulatory and administrative authority at financial capability ng
Philippine Deposit Insurance Corporation (PDIC)
- To strengthen the mandatory deposit insurance coverage system to
generate, preserve, maintain faith and confidence in the country’s
banking system, and protect it from illegal schemes and machinations.
- Increase maximum deposit insurance coverage to 500k
- Nag-provide ng mga provisions para ma-ensure na yung PDIC ay
financially and institutionally strong to fulfill its mandate.

b. Insurable Deposits – (Sec. 3)

- Yung insured deposit daw ay yung pera na utang ng bangko sa
depositor noong nagsara ito.
- Hindi covered yung investments products like bonds and securities.

MGA INSURABLE DEPOSITS

o Single Accounts- Yung amount ay calculated by the BOD pero
dapat hindi lalagpas sa 500k. Maximum na 500k lang makukuha
ng per depositors per bank. Kapag may more than 1 na
accounts sa same bank yung depositor, 500k pa rin yung
maximum na makukuha nya.
o Joint Account ng parehong natural persons or parehong
juridical persons or entities- Yung joint account ay insured
separately sa individually-owned deposit account. Kapag yung
joint account ay pagmamay-ari ng 2 or more natural persons, or
by 2 or more juridical persons or entities, yung maximum
insured deposit ay hahatiin into as many equal shares as there
are individuals, juridical persons or entities, unless merong
different sharing na naka-stipulate sa document of deposit.
o Joint account ng isang juridical entity tsaka 2 or more natural
persons- Kapag yung account naman ay pagmamay-ari ng
 juridical person or entity at 2 or more natural persons, yung
maximum insured deposit ay entirely mapupunta sa juridical
person lang.
- In any case sa joint account, yung interest na kinita nila sa deposit ay
kasama na sa 500k na maximum na makukuha nila.
o Owner/Holder of negotiable certificate of deposit- No
owner/holder ng any negotiable certificate of deposit shall be
recognized as a depositor entitled sa rights na binigay ng act,
unless yung pangalan n’ya ay naka-register as owner/holder na
nasa book ng issuing bank.

- Kapag may threat daw sa monetary and financial stability ng banking

system, yung maximum deposit insurance ay pwedeng i-adjust, pero
kailangan ng unanimous vote ng BOD in a meeting called for the
purpose and chaired by the secretary of finance, na subject sa approval
ng president ng pelipens.

COVERAGE NG INSURABLE DEPOSITS:

- Savings, Demand/Checking accounts, Negotiable order of
withdrawal, Time deposits, dollar deposits.
- Hindi covered yung investments products like bonds and securities.

c. Maximum liability - (Sec. 4)

- Yung maximum deposit insurance coverage na 500k ay kailangan
bayaran ng corporation. Provided na, for the first 3 years ng effectivity
ng act na ito, yung unang 250k na deposit insurance coverage lang
yung pwedeng ibigay ng corporation, at yung those in excess of 250k
but not more than 500k yung National government yung magbayayad.
Kada taon daw, dapat ibibinabalik congress sa corporation yung sobra
sa 250k na binigay nila sa depositors. Example: 300k yung insured na
deposit ng mga depositors, yung 250k ibibigay ng corporation or ng
bank once na magsara sila, yung 50k naman, yung government yung
magpo-provide.

d. Requirements for claim – (See:

https://www.pdic.gov.ph/di_howtofileclaims)
REQUIREMENTS IN FILLING CLAIMS
3.1. ORIGINAL EVIDENCE OF DEPOSITS such as savings passbook, certificate of time deposit,
bank statement, used or unused checks, or ATM card.
3.2. ONE (1) VALID ORIGINAL PHOTO-BEARING IDENTIFICATION DOCUMENT (ID) with
clear signature of depositor/claimant (e.g. Driver's License, SSS/GSIS ID, Senior Citizen's ID,
Passport, PRC ID, OWWA/OFW ID, Seaman's ID, Alien Certificate of Registration ID, Voter's ID)
or PhilID. (IT IS RECOMMENDED TO BRING AT LEAST TWO (2) VALID IDs IN CASE OF
DISCREPANCIES IN SIGNATURE).

3.3. For depositors below eighteen (18) years old, photocopy of birth certificate from the Philippine
Statistics Authority (PSA) or a duly certified copy issued by the local civil registrar, and valid ID of
the parent.

3.4. Original copy of a notarized Special Power of Attorney (SPA) for claimants who are not the
signatories in the bank records. In the case of minor depositor, the SPA must be executed by the
parent. (please click to download the sample Form of SPA).

3.5. Claim Form:

When filing claim during the onsite CSO period, or during personal filing at the PDIC PAC, a
system generated Claim Form shall be printed by PDIC representative after interview/processing.

When filing through mail, please download the PDIC Claim Form (Please click to download the
Claim Form). The Claim Form needs to be accomplished, signed, and notarized. Depositors are
required to check one (1) preferred payment option in the Deposit Insurance Payment Option
(DIPO). Depositors must ensure that the signature on the Claim Form and DIPO is similar with the
signature in the bank records and the valid IDs submitted.

DEPOSITORS NOT REQUIRED TO FILE DEPOSIT INSURANCE

CLAIMS
- Yung depositors na may valid deposit accounts na may balance na
100k and below ay hindi na require mag-file for claims, provided they:
(1) Wala silang obligations sa nagsarang bangko, or have not acted as
co-makers of these obligations, or hindi sila asawa ng mga may
utang sa bangko.
(2) Merong complete mailing address sa bank records or have updated
their addresses through Mailing Address Update Form (MAUF) of
PDIC before mag-start yung onsite settlement operation.
(3) Have not maintained the account under the name ng business
entities.
o Yung postal money orders ay is-send sa depositors kung saan
yung mailing addresses nila na makikita sa bank records or sa
MAUF.

DEPOSITORS WHO REQUIRED TO FILE DEPOSIT INSURANCE

CLAIMS
 (1) Depositors with valid deposit accounts with balances of more
than 100k
(2) Depositors who have outstanding obligation with the closed
bank regardless of amount of deposits. (depositors na may
utang sa closed banks)
(3) Depositors with account balance na less than 100k pero hindi
updated yung address sa bank records or hindi nagpasa ng
updated address sa MAUF.

WAYS OF FILLING FOR CLAIMS

o Personal filling
o Filling through mail

WHO ARE REQUIRED TO FILE DEPOSIT INURANCE

CLAIMS?
- Depositors:

  2.1. With valid deposit accounts with balances of more than P100,000.00;

  2.2. With outstanding obligations with the closed bank either as borrower, co-maker, or as spouse
of borrower;

  2.3. With incomplete mailing address found in the bank records, or failed to update them through
the MAUF issued by the PDIC;

  2.4. With accounts maintained under the name of business entities;

  2.5. With accounts not eligible for early payment, regardless of type of account and account
balance per advice of PDIC; and

  2.6. Who are deceased whose filing of claim is thru the legal heirs.

Remember!

1. Claims should be filed within the two-year prescriptive period after PDIC's takeover of the closed
bank.

2. For depositors below 18 years old, a parent should sign on the Claim form. For By or ITF accounts,
the agent as disclosed in the bank records may sign on the Claim Form. For joint accounts "OR,
AND/OR, AND" each depositor in the joint account should sign separate Claim Form. For business
entities, deceased depositors, and depositors who executed a Special Power of Attorney (SPA), only
the authorized representative/s should sign on the Claim Form

3. The PDIC will not accept claims that are incomplete or lacking in requirements.

4. The PDIC may also require additional documents in the course of claims processing.

5. All documents originated or executed abroad should be apostillized by Competent Authority of the
Apostille country; or the documents may be notarized by the Philippine Embassy or Consulate in a
foreign country.
6. The PDIC, as Receiver, has the authority to adjust the interest rate on unpaid interests on deposits if
such rate is deemed unreasonably higher compared to market rates.

7. The standard procedures for claims settlement may not apply if the closed bank fails to properly turn
over to the PDIC the closed bank's complete records. Without the complete records, the PDIC will not
be able to conduct the validation process for bank deposits, a requirement before deposit insurance
claims are paid.

e. Calculation of Liability
i. Per depositor, per capacity rule
- 500 maximum na makukuha ng depositor.
ii. Joint accounts
- 500 maximum, pero pwedeng umabot ng 1M yung makukuha ng
depositor, kung meron syang single account sa same na bangko, kasi
hiwalay yung settlement ng joint sa single.
- Hahatiin yung 500k kung ilan sila.
Example:
2. Secrecy of Bank Deposits – RA No. 1405 ((144) LAWS 1043 - Bank Secrecy Law,
Unclaimed Balances Act - YouTube)
a. Purpose – (Sec. 1)
- I-encourage yung mga tao na i-deposit yung pera nila sa bangko at
‘wag ipunin sa bahay, para yung pera umikot at magamit ng banks for
loans para ma-improve yung economic development ng country.
b. Prohibited Acts – (Sec. 3)
- It shall be unlawful daw for any official or employee ng banking
institutions na i-disclose or ibigay sa kahit sino man yung kahit anong
information concerning said deposits, other than those mentioned sa
section 2 (like government, bureau or office). Bawal i-disclose yung
information.
c. Deposits Covered – (Sec. 2)
- Covered yung government bonds and its instrumentalities, sa PDIC
law hindi. (Peso deposit)
- Yung mga covered ng law na ito ay ang lahat ng deposit of whatever
nature with banks or banking institution na nasa Pilipinas, kasama
yung investments in bonds na in-issue ng government, its political
subdivision and its instrumentalities. Yung mga nabanggit ay
considered na confidential at bawal tignan at malaman ng kahit sino
mang tao.

d. Exceptions – (Sec. 2)
- Merong written permission ng depositor, or
- Merong impeachment, or
- Merong order ng court in cases of bribery or dereliction of duty of
public officials (hindi ginawa yung duty), or
 - In cases na yung pera na dineposit or ininvest ay subject matter ng
litigation (lawsuit).
-

i. Other Laws where examination of deposits is allowed

- Upon order ng competent court or tribunal in cases involving
unexplained wealth under RA 3019, or the anti-graft and corrupt
Practices Act.
- Upon inquiry by the Commissioner of BIR for the purpose of
determining the net estate of a deceased depositor.
- Upon order of a competent court or in proper cases by AMLC (anti-
money laundering council) where there is probable cause of money
laundering and in some cases even without court order.
- Disclosure to the Treasurer of the Philippines for dormant deposits for
at least 10 years under the Unclaimed Balances Act (RA 3936)
- Report of banks to AMLC of covered and/or suspicious transactions.
- Upon order of the CA, examination by law enforcement officers in
terrorism cases under the Human Security Act of 2007 (RA 9372)
- Examination is made in the course of a special or general examination
of bank and is specifically authorized by the Monetary Board after
being satisfied that there is reasonable ground to believe that a bank
fraud or serious irregularity has been or is being committed and that is
necessary to look into the deposit to establish such fraud and
irregularity.
- Examination is made by an independent author hired by the bank to
conduct its regular audit provided that the examination is for audit
purposes only and the result thereof shall be for the exclusive use of
the bank.

e. Secrecy of foreign deposits – (Sec. 8 of RA No. 6426)

- Lahat ng foreign currency deposits authorized under this Act, as well
as foreign currency deposits, are hereby declared as and considered of
an absolutely confidential nature, at except merong written
permission yung depositor, no instance shall foreign currency
deposits be examined, inquired or looked into by any person,
government official, bureau or office whether judicial or administrative
or legislative, or any other entity whether public or private. It means
na walang instances na pwedeng i-examine yung foreign currency
deposits, aside kung merong written permission yung depositor. Yung
foreign deposits din ay exempt from being taken or seized by any
 court, legislative body, or government agency through any legal
process.

Instances na pwedeng tignan yung foreign deposits

- May written consent
- AMLA
- Terrorism Act
f. Garnishment of deposits including foreign deposits
i. Salvacion v. Central Bank, GR No. 94723, 21 August 1997
- Si Greg Bartelli y Northcott, an American tourist, ay inakit at
pinapunta yung petitioner na si Karen Salvacion, na labindalawang
taong gulang pa lang sa apartment nito, at doon idinetain nya si Karen
ng 4 na araw, at ni-rape nang sampung beses. Na-rescue si Karen ng
isang pulis na nakatira malapit doon, at inaresto at dinetain si Greg.
Na-recover kay Greg ang Dollar Check, COCOBANK Bank Book,
Dollar Account- China Banking Corp, ID, Pera, Mga susi, at Teddy
Bear. Kinasuhan si Greg Bartelli ng serious illegal detention at 4 counts
of rape. On the same date rin, nag-file yung petitioner sa RTC ng civil
case for damages. Nakapagpyansa si Bartelli at hindi nakulong. Pero
noong feb. 28, 1989, yung fiscal ay nag-issue ng warrant of arrest and
hold departure order laban kay Bartelli. Meanwhile, yung civil case
about sa damages ay grinant, at nagbigay ng notice of Garnishment sa
China Banking Corporation, pero ininvoke ng China Bank yung RA
1405 (secrecy of bank deposit) bilang sagot nila sa notice of
garnishment (ih-hold yung pera tapos ibibigay sa other party). Ang
sagot naman ng Deputy Sheriff ng Makati na si Armando de Guzman,
na yung garnishment ay hindi viniolate yung secrecy of bank deposit,
since yung disclosure is merely incidental to a garnishment properly at
may court order daw na binigay. Ininvoke naman ng China Bank
yung Section 113 of Central Bank Circular no, 960, na sinasabing,
yung dollar deposits or si Greg Batelli raw ay exempt from
attachment, garnishment, or any other order or process ng court,
legislative body, whatsoever. So, humingi na nang tulong yung
petitioner sa court. Sabi ng mga petitioner na yung Sec.113 ng Central
Bank Circular No.960 ay unconstitutional daw kasi raw viniviolate nito
yung substantive due process, equal protection clause, at nagp-provide
raw ito ng safe haven para sa mga kriminal para matakasan yung civil
liability, at yung Monetary Board daw ay nag-exceed sa quasi-
legislative power na bingay rito. Ang sagot naman ng bank na yung
law daw mismo yung nag-grant ng exemption kaya hindi raw nito
viniolate yung substansive due process at hindi ito unconstitutional.
 Ang sabi ng court ia-award sa petitioner yung damages, kasi ang
pinakasinabi, yung RA 6426 noong inenact yung law na ito, yung
intention noon ay maganda (para ma-improve yung economy ng
Pilipinas), pero hindi nila na-anticipate yung effect non, na nagp-
produce ito ng outright injustices and inequality, na nagr-result ng
violatio sa constitution. Sabi rin ng court na yung foreign currency
deposit made by a transient or a tourist is not the kind of deposit na
ine-encourage ng PD 1034 at 1035, kasi raw yung pera na yung ay
mags-stay lang sa country for few days. AT yung sa ginawa ni Bartelli,
dineposit nya lang yung pera for safekeeping during his temporary
stay in the PH. So hindi sya entitled sa protection na binibigay ng
Section 113

3. Truth in Lending Act – RA No. 3765 ((144) RFBT 8.3 Truth in Lending Act -
YouTube)
AN ACT TO REQUIRE THE DISCLOSURE OF FINANCE CHARGES IN CONNECTION
WITH EXTENSIONS OF CREDIT.
a. Purpose – (Sec. 2)
- Protektahan yung mga citizen from a lack of awareness kung ano
talaga yung totoong cost ng credit or nang uutangin nila by assuring a
full disclosure. Kapag magpapautang daw dapat lahat ng cost na
babayaran ng debtor ay id-disclose, like interest rate, penalties, and the
likes.

b. Obligation of creditors to whom credit is extended – (Sec. 4)

- Yung nagpapautang, prior to the consummation of the transaction
dapat magbigay sa umuutang ng clear statement in writing ng mga
sumusunod:
1. Yung cash price or delivered price (installment) ng property or
service na maa-acquire;
2. Yung amount, kung meron man, na ic-credit as downpayment
and/or trade-in;
3. Yung difference between sa amount na sinabi under the clauses 1
and 2; )Lilinawin yung difference ng cash price sa downpayment)
4. Yung mga charges, individually itemized, na nabayaran na at
babayaran pa lang ng taong umuutang in connection with the
transaction, but which yung mga charges na ito ay hindi incident sa
extension of credit; (Shipping charges)
5. The total amount to be financed;
 6. Finance charge (mga interest fees, service charges, discounts, and
such other charges incident to the extension of credit) expressed in
terms of pesos and centavos; and
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. (interest rate)

c. Covered Transactions – (Sec. 3)

- “Credit” Any loan, mortgage, deed of trust, advance, or discount.
(Contract of loan)
- 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 (rent to own);
- Any contract or arrangement for the hire, bailment, or leasing of
property.
- Any option, demand, lien, pledge, or other claim against, or for the
delivery of, property or money. (Sangla).
- 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.

- (1) the cash price or delivered price of the property or service to be acquired;

- (2) the amounts, if any, to be credited as down payment and/or trade-in;

- (3) the difference between the amounts set forth under clauses (1) and (2);

- (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;

- (5) the total amount to be financed;

- (6) the finance charge expressed in terms of pesos and centavos; and

- (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.

-
 EXCLUDED TRANSACTION: Credit line, kasi hindi pa s’ya utang,
preparatory pa lang sya.

- “Finance Charge” mga interest fees, service charges, discounts, and

such other charges incident to the extension of credit.
- “Creditor” lahat ng tao na nag-engaged sa business of extending
credit, kasama yung mga person na ginagawa yung pautang as part od
regular business practice, na nagr-require na as an incident to the
extension credit, kailangan magbayad ng finance charge.
- “Person” lahat ng individual, corporation, partnership, association, or
other organized group of persons, or legal successor or representative
of the foregoing, and includes the Philippine Government or any
agenecy, or any other government, or of any of its political
subdivisions, or any agency of the foregoing.

Consequences of non-compliance with the obligations – (Sec. 6)

- Kapag yung nagpapautang ay hindi nya raw na-disclose yung kahit
ano sa mga information nag magv-violate sa act na ito, liable raw sya
sa umuutang ng P100 or in an amount equal to twice the finance
charge na ni-require ng creditor para magkaroon ng transaction,
whichever is the greater, except yung liability daw dapat ay hindi
lalagpas ng P2,000 on any credit transaction. Yung pag-recover ng
penalty ay pwede lang gawin ng umuutang within 1 year from the
date of the occurrence of the violation, sa kahit saang court of
competent jurisdiction.
- Kahit sinong tao raw na kusangloob na viniolate yung any provision of
this Act or any regulation issued threunder shall be fined ng hindi
bababa sa P1,00 o hindi lalagpas sa P5,000 o pagkakakulong ng hindi
bababa sa 6 na buwan hanggang isang taon, or perehas. May criminal
and civil liabilities.
- Hindi applicable yung punishment or penalty na binigay ng act na ito
sa Ph Government or any agency or any political subdivision.