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 –

 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.