LAW ON OTHER BUSINESS TRANSACTIONS

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

- It is a government instrumentality to insure the deposit in all banks. It exist po to protect

depositors by providing them deposit insurance and to help promote financial stability.

a. What is purposed of PDIC? – ang purpose niya is maprotektahan yung mga depositor by
providing insurance. At mas mapalakas and mamaintain yung banking system natin and also para
maprotektahan against illegal schemes.
b. Insurable Deposits – (Sec. 3) – Ito po yung amount due to any bona fide depositor for legitimate
deposits in an insured bank net of any obligation of the depositor to the insured bank as of date
of closure, but not to exceed Five hundred thousand pesos (P500,000.00). Yung insurable deposit,
ito yung pinoprovide ng PDIC to any bona fide depositor but it will not exceed to 500,000.

Such net amount shall be determined according to such regulations as the Board of Directors
may prescribe. In determining such amount due to any depositor, there shall be added together
all deposits in the bank maintained in the same right and capacity for his benefit either in his own
name or in the name of others.

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
(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

Provided, further, That the aggregate of the interests of each co-owner over several joint
accounts, whether owned by the same or different combinations of individuals, juridical persons
or entities, shall likewise be subject to the maximum insured deposit of Five hundred thousand
pesos (P500,000.00)

Provided, furthermore, That the provisions of any law to the contrary notwithstanding, no
owner/holder of any negotiable certificate of deposit shall be recognized as a depositor entitled
to the rights provided in this Act unless his name is registered as owner/holder thereof in the
books of the issuing bank:

Provided, finally, That, in case of a condition that threatens the monetary and financial stability
of the banking system that may have systemic consequences, as defined in Section 17 hereof, 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.

c. Maximum liability - (Sec. 4) - The maximum deposit insurance coverage of Five hundred
thousand pesos (P500,000.00) provided in Section 4(g) of Republic Act 3591, as amended herein,
shall be paid by the Corporation: Provided, That, for the first three (3) years from the effectivity
of this Act, the first Two hundred fifty thousand pesos (P250,000.00) of the deposit insurance
coverage shall be for the account of the Corporation, and those in excess of Two hundred fifty
thousand pesos (P250,000.00) but not more than Five hundred thousand pesos (P500,000.00)
shall be for the account of the National Government. The Congress shall annually appropriate
the necessary funding to reimburse the Corporation for any payment to insured depositors paid
in excess of Two hundred fifty thousand pesos (P250,000.00).
d. Requirements for claim
When to file claims – during onsite claim settlement operation period as announced in notice to
depositor published in national or local newspapers, or posted in the bank premises and
conspicuous places within the locality, and in the PDIC website. 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.

Depositors who failed to file their claims during the onsite CSO may do so through any of these
options: (1) Personal Filing (2) filing through mail by sending a duly accomplished and notarized
Claim Form and requirements

Who are required to file deposit insurance claims?

Depositors:
(1) With valid deposit accounts with balances of more than P100,000.00
(2) With outstanding obligations with the closed bank either as borrower, co-maker, or as spouse
of borrower
(3) With incomplete mailing address found in the bank records, or failed to update them through
the MAUF issued by the PDIC
(4) With accounts maintained under the name of business entities
(5) With accounts not eligible for early payment, regardless of type of account and account
balance per advice of PDIC
(6) Who are deceased whose filing of claim is thru the legal heirs

What are the requirements in filing claims?

(1) ORIGINAL EVIDENCE OF DEPOSITS such as savings passbook, certificate of time deposit, bank
statement, used or unused checks, or ATM card.
(2) ONE (1) VALID ORIGINAL 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) 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.
(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.
(5) Claim Form

Who should sign the claim form?

(1) DEPOSITOR of the account - for depositor 18 years old and above
(2) PARENT - of depositor below 18 years old
(3) AGENT - in the case of "by" account
(4) TRUSTEE - in the case of "In Trust for (ITF)" account
(5) EACH DEPOSITOR/ACCOUNT HOLDER for account maintained as "Or", "And/Or" or "And" - in
the case of joint accounts
(6) AUTHORIZED REPRESENTATIVE/s - for business entities, deceased depositors and person who
has Special Power of Attorney (SPA) from the depositor.

e. Calculation of Liability
i. Per depositor, per capacity rule - Single accounts are accounts maintained solely by a depositor
(natural person or juridical entity/organization). In-Trust-For (ITF) and By Accounts are also
considered single accounts. In the case of account name: (1) Maria ITF Jose; or, (2) Jose By Maria,
the owner is Jose for both accounts. The PDIC provides a maximum deposit insurance coverage of
PhP500,000 per depositor per bank.

In determining the insured deposit of single accounts, all deposits in the bank maintained in the
same right and capacity for his benefit either in his own name or in the name of others shall be
added together. Total insured deposit should not exceed the Maximum Deposit Insurance
Coverage of Php500,000. Single accounts are insured separately from joint accounts up to the
Maximum Deposit Insurance Coverage of Php500,000.

ii. Joint accounts - is an account held jointly by two or more natural persons, or by two or more
juridical persons or entities. Joint account regardless of whether the conjunction "and," "or,"
"and/or" is used, shall be insured separately from any single or singly-owned deposit account.

If the account is held jointly by two or more natural persons, or by two or more juridical
persons/entities, the maximum insured deposit shall be divided into as many equal shares as
there are natural persons or juridical entities, unless a different sharing is indicated in the deposit
document.

If the account is held by a juridical person/entity jointly with one or more natural persons, the
maximum insured deposit shall be presumed to belong entirely to such juridical person/entity
Secrecy of Bank Deposits – RA No. 1405

a. Purpose (Sec 1.) to give encouragement to the people to deposit their money in banking
institutions and to discourage private hoarding so that the same may be properly utilized by
banks in authorized loans to assist in the economic development of the country. (Ito po yung
nagbibigay ng encouragement para magdeposit ng pera yung mga tao sa banking istitution and
to discourage private hoarding para mautilized properly ng bank in authorized loan to assist
economic development) What is the meaning of private hoarding of money in law? Hoarding is
the act of accumulating assets. Especially goods or money, over and above that needed for
immediate use based on the fear or expectation of future shortages and higher prices.
b. Prohibited Acts (Sec 3.) It shall be unlawful for any official or employee of a banking institution
to disclose to any person other than those mentioned in Section two hereof any information
concerning said deposits.
c. Deposits Covered – (Sec. 2) All deposits of whatever nature with banks or banking institutions
in the Philippines including investments in bonds issued by the Government of the Philippines,
its political subdivisions and its instrumentalities,
d. Exceptions are hereby considered as of an absolutely confidential nature and may not be
examined, inquired or looked into by any person, government official, bureau or office
Allowed except upon written permission of the depositor, or in cases of impeachment, or upon
order of a competent court in cases of bribery or dereliction of duty of public officials, or in cases
where the money deposited or invested is the subject matter of the litigation.
e. Secrecy of foreign deposits – (Sec. 8 of RA No. 6462) All foreign currency deposits authorized
under this Act, as amended by PD No. 1035, as well as foreign currency deposits authorized
under PD No. 1034, are hereby declared as and considered of an absolutely confidential nature
and, except upon the written permission of the depositor, in 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;
f. Garnishment of deposits including foreign deposits - Provided, however, That said foreign
currency deposits shall be exempt from attachment, garnishment, or any other order or process
of any court, legislative body, government agency or any administrative body whatsoever. (As
amended by PD No. 1035, and further amended by PD No. 1246, prom. Nov. 21, 1977.)

CASE 1: SALVACION vs CENTRAL BANK

Si Greg Bartelli is an American tourist na inaresto for committing rape and illegal detention against
Salvacion. Narecover ng mga Police sa kanya yung several dollar checks and dollar account in China
Banking Corp. Nakatakas siya from jail and na-avoid yung punishment. Nakatanggap naman si Salvacion
for moral damages amounting to almost 1,000,000. They tried to execute the judgment dun sa dollar
deposit of Bartelli with the China Banking Corp. but they refused kasi based sa Section 11 of Central Bank
Circular No. 960 it exempts foreign currency deposits from attachment, garnishment, or any other order
or process of any court, so they filed this action for declaratory relief in the Supreme Court.
Foreign Currency Deposit Act be made applicable to a foreign transient? It’s inapplicable po since is
Bartelli is tourist or transient lang therefore, he is not entitled to the protection against attachment,
garnishment or other court processes. So the dollar bank deposit in a Philippine bank of a foreign tourist
can be attached to satisfy the moral damages awarded in favor of the victim.
Truth in Lending Act – RA No. 3765 an act to require the disclosure of finance charges in connection
with extensions of credit

a. Purpose (Sec. 2) is 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. (Yung act po na ito yung nagpoprotect sa mga
citizen or public from lack of awareness sa true cost of credit by requiring the creditor na
idisclose yung full information about sa credit transaction. To end predatory lending
characterized by hidden charges)

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

c. Covered Transactions – (Sec. 3) As used in this Act, the term

(1) "Board" means the Monetary Board of the Central Bank of the Philippines.

(2) "Credit"
 means 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;
 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.

Excluded Transaction: Credit line (kasi hindi pa naman siya contract of loan, wala pang
consummation)
 (3) "Finance charge" includes interest, fees, service charges, discounts, and such other
charges incident to the extension of credit as the Board may be regulation prescribe.

(4) "Creditor" means 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.

(5) "Person" means any individual, corporation, partnership, association, or other organized
group of persons, or the legal successor or representative of the foregoing, and includes the
Philippine Government or any agency thereof, or any other government, or of any of its
political subdivisions, or any agency of the foregoing.

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

(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.

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.

(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 P100 or more than P5,000 or imprisonment for not
less than 6 months, nor more than one year or both.

(d) No punishment or penalty provided by this Act shall apply to the Philippine Government
or any agency or any political subdivision thereof.

(e) A final judgment hereafter rendered in any criminal proceeding under this Act to the effect
that a defendant has willfully violated this Act shall be prima facie evidence against such
defendant in an action or proceeding brought by any other party against such defendant
under this Act as to all matters respecting which said judgment would be an estoppel as
between the parties thereto.