2023 Pre-Week Banking

2023 PRE-WEEK NOTES IN BANKING LAW
Dean Nilo T. Divina
A. The New Central Bank Act
h. Monetary Board; powers and functions
i. How the Bangko Sentral ng Pilipinas handles banks in distress

a. Conservatorship
May a conservator revoke a valid contract of the bank?
The vast and far-reaching powers of the conservator of a bank must be related to the
preservation of the assets of the bank, the reorganization of the management thereof,
and the restoration of its viability. Such powers cannot extend to the post-facto
repudiation of perfected transactions, otherwise they would infringe against the non-
impairment clause of the Constitution. The law merely gives the conservator power
to revoke contracts that are, under existing law, deemed to be defective. Hence, the
conservator merely takes the place of a bank’s board of directors, so what the board
cannot do, the conservator cannot do either.1
When may the Monetary Board of the BSP appoint a receiver?
Whenever, upon report of the head of the supervising or examining department, the
Monetary Board finds that a bank or quasi-bank:
(a) Has notified the Bangko Sentral or publicly announced a unilateral closure,
or has been dormant for at least sixty (60) days or in any manner has
suspended the payment of its deposit/deposit substitute liabilities, or is
unable to pay its liabilities as they become due in the ordinary course of
business: Provided, that this shall not include inability to pay caused by
extraordinary demands induced by financial panic in the banking
community;
(b) Has insufficient realizable assets, as determined by the Bangko Sentral, to
meet its liabilities; or
(c) Cannot continue in business without involving probable losses to its
depositors or creditors; or
(d) Has willfully violated a cease and desist order under Section 37 of the
Central Bank Act that has become final, involving acts or transactions which
amount to fraud or a dissipation of the assets of the institution; in which
cases, the Monetary Board may summarily and without need for prior
1First Philippine International Bank v. Court of Appeals, G.R. No. 115849, January 24, 1996.
©2023 Dean Nilo T. Divina, All Rights Reserved. | 1

hearing forbid the institution from doing business in the Philippines and
designate the Philippine Deposit Insurance Corporation (PDIC) as receiver
in the case of banks and direct the PDIC to proceed with the liquidation of
the closed bank pursuant to this section and the relevant provisions of R.A.
No. 3591, as amended. The Monetary Board shall notify in writing, through
the receiver, the board of directors of the closed bank of its decision.2
Note that unilateral closure, dormancy for at least six (6) months and suspension in
the payment of deposit and deposit substitute liabilities are new grounds under the
amendatory law.
Note further that determination of the sufficiency of the realizable assets is lodged
with the BSP. BSP is not required to consult with the bank or secure its approval, as
previously required under the old law, and held in the Banco Filipino case.3
The authority of the Monetary Board to summarily and without need for prior
hearing forbid the bank or quasi-bank from doing business in the Philippines as
provided above may also be exercised over non-stock savings and loan associations,
based on the same applicable grounds. For quasi-banks and non-stock savings and
loan associations, any person of recognized competence in banking, credit or finance
may be designated by the Bangko Sentral as a receiver.4
What is the nature of power of the receiver?
Section 30 of the New Central Bank Act expressly provides that “[t]he receiver shall
immediately gather and take charge of all the assets and liabilities of the institution,
administer the same for the benefit of its creditors, and exercise the general powers
of a receiver under the Revised Rules of Court but shall not, with the exception of
administrative expenditures, pay or commit any act that will involve the transfer or
disposition of any asset of the institution.” This means that a bank receiver only has
powers of administration. It cannot exercise acts of strict ownership. The properties
of the bank may be sold only to pay its debts.
What are the legal effects when a bank is placed under receivership?
a. The appointment of a receiver operates to suspend the authority of the bank

and of its directors and officers over its property and effects, such authority
being reposed in the receiver, and in this respect, the receivership is
equivalent to an injunction to restrain the bank officers from intermeddling
2Section 30, ibid.

3Supra.
4Section 30, ibid.

with the property of the bank in any way. Since the bank officers were no
longer authorized to transact business in connection with the bank’s assets
and property, the exclusive option to purchase granted by the President of
the Bank is unenforceable against the bank.5
b. The bank shall be forbidden to do business. As such, it is not liable to pay
interest on deposits. It is however liable for obligations that accrued before
the order forbidding it to do business.6 It was also held that the period during
which the bank cannot do business due to insolvency is not a fortuitous
event, unless it is shown that the government’s action to place a bank under
receivership or liquidation proceedings is tainted with arbitrariness, or that
the regulatory body has acted without jurisdiction.7
c. A criminal case for violation of BP 22 against a bank placed under
receivership by the Monetary Board may be dismissed for the demandability
of the obligation to be performed has been suspended. The filing of a petition
for assistance in liquidation by PDIC as receiver as a result of the Monetary
Board’s order for closure made it legally impossible for the officer who signed
the check to comply with his obligation with the payee.8
Can a bank under receivership be rehabilitated?
Under Section 30 of R.A. No. 7653, the receiver has 90 days from appointment to
rehabilitate the bank. If it fails, it shall recommend to BSP the bank’s closure and
liquidation. If it succeeds, it shall recommend to BSP the resumption of bank’s
business.
However, R.A. No. 11211, which became effective on March 1, 2019, removed the
authority of the receiver to rehabilitate the closed bank. Upon its appointment for
any of the statutory grounds, the receiver must proceed with the liquidation of the
closed bank.9
Who is the statutory receiver for closed banks?
The PDIC under the charter that created it is considered the receiver of closed
banks.
5Abacus Real Estate Development v. Manila Banking Corporation, G.R. No. 162270, April 6,
2005.
6Overseas Bank of Manila v. Court of Appeals, et al., G.R. No. L-45866, April 19, 1989.
7Spouses Jaime and Matilde Poon v. Prime Savings Bank, represented by the Philippine Deposit
Insurance Corporation as Statutory Liquidator, G.R. No. 183794, June 13, 2016.
8Cu v. Small Business Guarantee and Finance Corporation, G.R. No. 211222, August 7, 2017.
9Section 30(d), R.A. No. 11211.

May a closed bank under receivership sue or be sued?
A closed bank under receivership can only sue or be sued through its receiver,
the PDIC. Hence, the petition filed by the petitioner bank which has been placed
under receivership is dismissible if it did not join PDIC as a party to the case.10
Banco Filipino filed a Petition for Certiorari and Mandamus with prayer
for issuance of temporary restraining order (TRO) and writ of preliminary
injunction ( WPI ) against Bangko Sentral ng Pilipinas (BSP) and the
Monetary Board ( MB ). The RTC granted the application which was
subsequently assailed by the BSP through a Petition for Certiorari with the
Court of Appeals ( CA ).
Meanwhile, the Monetary Board issued MB Resolution 372.A, placing Banco

Filipino under receivership and designating the PDIC as its receiver. Banco
Filipino thereafter assailed the MB Resolution via a petition
for certiorari and mandamus with the CA.
The CA reversed and set aside the RTC's grant of the TRO and WPI. Banco
Filipino moved for reconsideration but was denied. Hence, Banco Filipino
filed a Petition for Review on Certiorari before the SC.
Can Banco Filipino file the said Petition for Review without securing an
authorization from the PDIC?
NO. The PDIC, as the fiduciary of the properties of a closed bank, may prosecute
or defend the case by or against the said bank as a representative party while the
bank will remain as the real party in interest, and that actions should be brought for
or against the closed bank through the statutory receiver. The mandatory inclusion
of the PDIC as a representative party is grounded on its statutory role as the fiduciary
of the closed bank which, under the New Central Bank Act, is authorized to conserve
the latter's property for the benefit of its creditors.
A closed bank under receivership can only sue or be sued through its
receiver, the PDIC.11
10Banco Filipino Savings and Mortgage Bank v. Bangko Sentral ng Pilipinas, G.R. No. 200678,
June 4, 2018.
11Banco Filipino Savings and Mortgage Bank v. Bangko Sentral ng Pilipinas, G.R. No. 200642,
April 26, 2021.

Distinguish conservator from receiver.
A conservator is appointed if the bank is in a continuing state of lack of liquidity

adequate to protect the interest of the bank’s creditors and depositors (meaning, its
assets are more than liabilities but are not in cash or readily convertible to cash),
whereas a receiver is generally appointed if the bank is insolvent.
A conservator takes charge of the assets, liabilities and management of the bank
in distress, whereas a receiver shall immediately gather and take charge of all the
assets and liabilities of the institution, administer the same for the benefit of its
creditors, and exercise the general powers of the receiver under the Rules of Court.
The bank is allowed to do business if it is only under conservatorship but cannot

do business if it is placed under receivership.
A conservator has one (1) year from appointment to restore the bank’s financial
viability, whereas the receiver, upon its appointment based on any of the statutory
grounds, must proceed with the liquidation of the closed bank.12
Is BSP required to conduct an audit of the bank before ordering its closure?
It is not required to conduct a thorough audit of the bank before ordering its
closure. Under R.A. No. 7653, only a report of the head of the supervising or
examining department is necessary. Needless to say, the decision of the MB and BSP,
like any other administrative body, must have something to support itself and its
findings of fact must be supported by substantial evidence. But it is clear under R.A.
No. 7653 that the basis need not arise from an examination as required in the old
law.13
It was likewise held that the bank is not entitled to a copy of the report of
examination that the Supervision and Examination Department of BSP has prepared
nor can the bank be validly entitled to injunction to restrain BSP from adopting such
report.14
The Supreme Court likewise ruled that the Monetary Board is not required to
make its own independent finding that the bank could no longer be rehabilitated but
may rely on the findings of the PDIC as statutory receiver, in ordering the liquidation
of a bank. Once the receiver determines that rehabilitation is no longer feasible, the
Monetary Board is simply obligated to: (a) notify in writing the bank›s board of
12BAR 2015 as revised to conform with Section 30, R.A. No. 7693, as amended by R.A. No. 11211.
13Rural Bank of San Miguel v. Monetary Board, G.R. No. 150886, February 16, 2007.
14Ibid.

directors of the same; and (b) direct the PDIC to proceed with liquidationThis case 15.
should now be construed in relation to R.A. No. 11211 which, as previously stated,
removed the option of rehabilitation once a bank is placed under receivership.
What is clear under R.A. No. 11211 is that the receiver does not have the 90-day
period under R.A. No. 7653 to rehabilitate the bank. After its appointment, PDIC, as
the statutory receiver, must proceed to liquidation but there is nothing in the law
that precludes rehabilitation in the course of the liquidation.
Maharlikang Pilipino Banking Corporation (MPBC) operates several

branches of Maharlikang Pilipino Rural Bank in Eastern Visayas. Almost all
the branch managers are close relatives of the members of the Board of
Directors of the corporation. Many undeserving relatives of the branch
managers were granted loans. In time, the branches could not settle their
obligations to depositors and creditors.
Receiving reports of these irregularities, the Supervising and

Examining Department (SED) of the Monetary Board prepared a detailed
report (SED Report) specifying the facts and the chronology of events
relative to the problems that beset MPBC rural bank branches. The report
concluded that the bank branches were unable to pay their liabilities as
they fell due, and could not possibly continue in business without incurring
substantial losses to its depositors and creditors.
[a] May the Monetary Board order the closure of the MPBC rural banks
relying only on the SED Report, without need of an examination?
Explain. (2009 Bar)
Yes. Under Republic Act No. 7653, otherwise known as the New Central Bank Act,
prior notice and hearing are no longer required and a report made by the head of he
SED suffices for a bank to be closed. The purpose of the law is to make the closure of
the bank summary and expeditious for the protection of the public interest (Rural
Bank of San Miguel vs Monetary Board, GR No. 150886, February 16, 2007)
[b] If MPBC hires you as lawyer because the Monetary Board has
forbidden it from carrying on its business due to its imminent insolvency,
what action will you institute to question the Monetary Board’s order?
Explain.
15Apex Bancrights Holdings, Inc. v. Bangko Sentral ng Pilipinas, G.R. No. 214866, October 2,
2017.

The order of the Monetary Board may be questioned on a petition for certiorari with
the Court of Appeals on the ground that the action was arbitrary and made in bad
faith tantamount to grave abuse of discretion amounting to lack or excess of
jurisdiction. The petition for certiorari may only be filed by the stockholders of record
representing at least majority of the outstanding capital stock within 10 days from
receipt by the board of directors of the MPBC of the order directing the closure of the
bank or the appointment of a conservator or receiver. (Central Bank of the
Philippines vs Court of Appeals, 208 SCRA 652 )
What is the remedy available to the bank to set aside the order of BSP
designating a conservator, appointing a receiver, or directing the closure
and liquidation of the bank?
The remedy available to the bank is to file a petition for certiorari with the Court
of Appeals on the ground that the action taken by BSP was in excess of jurisdiction
or with such grave abuse of discretion as to amount to lack or excess of jurisdiction.
The petition for certiorari may only be filed by the stockholders of record representing
the majority of the capital stock within 10 days from receipt by the board of directors
of the institution of the order directing receivership, closure/liquidation or
conservatorship16.
There must be convincing proof, after hearing, that the resolution of BSP is
plainly arbitrary and made in bad faith.17
The Board of Directors of a bank may also question the validity of the
conservator’s (or receiver’s) fraudulent acts and abuses and the arbitrary action of
the Monetary Board but subject to the same requisites above-mentioned.18
In a recent case, the Supreme Court ruled that the RTC, acting as a liquidation
court, has no power to overrule the findings of the Monetary Board. In fact, the
liquidation court’s authority is limited to adjudicating disputed claims against the
institution, assisting the enforcement of individual liabilities of the stockholders,
directors and officers and deciding on other issues to implement the liquidation plan.
The exclusivity of the Monetary Board’s power is highlighted by the absence of appeal
from its actions under Section 30 of R.A. No. 7653. The MB’s actions are final and
executory and can only be set aside by filing a petition for certiorari within 10 days
from receipt by the BSP resolution.
B
16Section30, ibid.; Yuseco v. PDIC, as the statutory liquidator of the Unitrust Development Bank,
G.R. No. 217899, September 28, 2016.
17Central Bank v. Court of Appeals, supra.
18Ibid.

Development Bank of the Philippines (DBP) obtained a loan from NEDA
through the Industrial Guarantee and Loan Fund (IGLF). DBP made the
IGLF proceeds available to participating financial institutions by way of
subsidiary loans. Hermosa Bank applied for and was accredited by DBP as
a participating financial institution. Hermosa Bank, executed Subsidiary
Loan Agreements in favor of DBP. DBP filed a complaint before Branch 136,
RTC, Makati City against Hermosa Bank as the latter failed to remit the
amortizations due on its IGLF loans despite demand. DBP discovered that
there were several fraudulent, deceitful, and unlawful acts in the
preparation and execution of the loans and their collateral documents. RTC
Branch 136 issued a Writ of Preliminary Attachment upon DBP's posting of
a bond. The Monetary Board of the BSP closed Hermosa Bank and placed it
under receivership with PDIC as the appointed receiver. PDIC filed a
petition for assistance in the liquidation of Hermosa Bank which was raffled
to Branch 5, RTC, Dinalupihan, Bataan (Liquidation Court).
Did RTC Branch 136 retain jurisdiction over the complaint despite the
pendency of the petition for assistance in the liquidation of Hermosa Bank
before the Liquidation Court?
No. The rule on adherence of jurisdiction is not absolute. One of the exceptions
to this rule is when the change in jurisdiction is curative in character. Section 30 of
RA 7653 "is curative in character when it declared that the liquidation court shall
have jurisdiction in the same proceedings to assist in the adjudication of the disputed
claims against the Bank ." The rationale for consolidating all claims against the bank
with the liquidation court is "to prevent multiplicity of actions against the insolvent
bank and x x x to establish due process and orderliness in the liquidation of the bank,
to obviate the proliferation of litigations and to avoid injustice and arbitrariness . "
The Court stated that it was the intention of the lawmaking body "that for
convenience only one court, if possible, should pass upon the claims against the
insolvent bank and that the liquidation court should assist the Superintendent of
Banks and regulate his operations .19
It was similarly held that Pursuant to R.A. No. 7653, if there is a judicial
liquidation of an insolvent bank, all claims against the bank should be lodged in a
liquidation proceeding. This is true whether or not the claim is first contested in a
court or agency before being submitted with the liquidation court. Thus, it is
established that the claim for the payment of the checks is, for all intents and
purposes, a claim within the scope of R.A. 7653. Holding otherwise would give
19Hermosa Savings and Loan Bank v. Development Bank of the Philippines, G.R. No. 222972,
February 10, 2021.

preferential treatment to creditors whose debts are secured by checks and who may
have to resort to criminal action to collect the money due.
Hence, as a result of the resolution issued by the BSP placing G7 Bank under
receivership, the obligation to pay the amounts covered by the checks is suspended.
Thus, there could be no criminal liability because the petitioners were unable to fulfill
their commitment to fund the checks due to a supervening fact beyond their control.20
Law on Secrecy of Philippine Currency Deposits
X, a government official, has a number of bank accounts in T Bank

containing millions of pesos. He also opened several trust accounts in the
same bank which specifically covered the placement and/or investment of
funds. X was later charged with graft and corruption before the
Sandiganbayan (SB) by the Ombudsman. The Special Prosecutor filed a
motion praying for a court order authorizing it to look into the savings and
trust accounts of X in T Bank. X opposed the motion arguing that the trust
accounts are not "deposits" under the Law on Secrecy of Bank Deposits (Rep.
Act No. 1405). Is the contention of X correct? Explain. (2016 Bar)
The contention of X is not correct. Deposits in the context of the Secrecy of Philippine
currency deposits include deposits of whatever nature and kind. They include funds
deposited in the bank giving rise to creditor-debtor relationship, as well as funds
invested in the bank like trust accounts. (Ejercito v Sandiganbayan, GR No.
157294-95, November 30, 2006)
In what cases may information on Philippine currency bank deposits, as

well as investment in government securities, be disclosed, examined or
looked into without violating the law?
a. Written permission of the depositor;21

b. In case of impeachment;22
c. In case of order of a competent court in any of the following cases:
i. In case of bribery or dereliction of duty of public officials;23
ii. Where the subject matter of litigation is the money deposited;24
20 Allan S. Cu v. Small Business Guarantee and Finance Corporation, G.R. No. 218381, July 14,
2021.
21Section 2, R.A. No. 1405.
22Ibid.
23Ibid.
24Ibid.

iii. Prosecution for unexplained wealth (plunder is akin to unexplained
wealth);25
iv. Prosecution for violation of the anti-graft and corrupt practices act;
v. In case of violation of the anti-money laundering law; and,
vi. Garnishment of bank deposits.
NB. Under R.A. No. 1405, the issuance of court order is limited to bribery or
dereliction of duty of public officials and where the subject matter of litigation is the
money deposited. The rest of the enumeration is based on jurisprudence and the other
laws.
d. The BIR may inquire into the deposit and other related information to
determine the gross estate of the deceased taxpayer for computation of estate
tax;26
e. The BIR may also inquire into bank deposits if there is an offer of
compromise of tax liability on account of financial incapacity to pay his tax
liability;27
f. Disclosure by the bank to the National Treasurer of information concerning
dormant deposits under the Unclaimed Balances law;28
g. PDIC and/or BSP may inquire into or examine deposit accounts and all
information related thereto in case there is a finding of unsafe and unsound
banking practice;29
h. BSP may, the course of a periodic or special examination, check the
compliance of a covered institution with the requirements of AMLA and its
implementing rules and regulations;30
i. In case of amendment or repeal of the law.
Written permission of the depositor
Debtor filed a petition for voluntary insolvency. The appointed receiver

filed a motion for the parties to enter into compromise agreement. Two of
the creditors of the insolvent debtor filed a joint motion to approve
agreement which contains their authority to have access to the bank
account of the insolvent debtor. The court approved the joint motion.
25PNB v. Gancayco but see discussion on effects of the Marques v. Desierto ruling, infra.
26Section 6(F)(1) of the Tax Code, as amended.
27Section 6(F)(2), Tax Code, as amended.
28Act No. 3936, as amended.
29Section 8, R.A. No. 3591, as amended.

Was the approval by the court of the joint motion sufficient to allow the
creditors access to the bank account of the insolvent debtor?
No, the Joint Motion to Approve Agreement executed by the parties on waiver of
confidentiality of the insolvent debtor’s deposits does not bind the latter who was not
a party and signatory to the said agreement.31
Order of a competent court
Elizabeth, through her daughter Ruby, charged Norlina of unauthorized

deduction of her ABC Savings Account, as well as for failure to post certain
check deposits to the said account, with the Office of Special Investigation
of the Bangko Sentral ng Pilipinas (OSI-BSP). During the investigation,
Norlina filed a Motion for Production of Documents praying that the she be
allowed to inspect and copy the Statement of Account of other depositors
with two others, claiming that resort to discovery process is part of her right
to due process and Ruby signed a document allowing Norlina and ABC
access to these deposit accounts. The OSI-BSP denied the motion ruling that
the action is an administrative proceeding aimed at determining
respondent’s liability, if any, for violation of banking laws and that a deposit
account may only be examined or looked into if it is the subject matter of a
pending litigation.
Did the OSI-BSP abuse its discretion in denying the motion?
No, other than OSI-BSP is not a competent court, records show that the account
holders or depositors of the two other banks are different from the complainant.
Perforce, the documents executed by Ruby purportedly granting ABC access to the
foregoing accounts do not equate to their permissions to allow access to their bank
account. 32
Bribery or dereliction of duty of public officials; prosecution for unexplained wealth;

prosecution for violation of the Anti-Graft and Corrupt Practices Act
TRUE or FALSE. If the Ombudsman is convinced that there is a violation of

law after investigating a complaint alleging illicit bank deposits of a public
31Doña Adela Export International, Inc. v. Trade and Investment Development Corporation, G.R.
No. 201931, February 11, 2015.
32Sibayan v. Alda, G.R. No. 233395, January 17, 2018.

officer, the Ombudsman may order the bank concerned to allow in camera
inspection of bank records and documents.33
False. In the case of Marquez v. Desierto,34 the Supreme Court held that the
Ombudsman can only examine bank deposit accounts upon compliance with the
following requisites:
a. There is a case pending before a court of competent jurisdiction;

b. The account holder and the bank official must be informed of the
examination;
c. The account to be examined must be clearly identified; and,
d. The examination must be limited to the account specified.
If there is no pending case yet, but only an investigation by the Ombudsman, any
order for the examination of the bank account is premature.
“D” issued a check drawn against ABC Bank payable to the order of “P” for
P1,000,000.00 who, in turn, deposited the check in his account with XYZ
Bank. XYZ sent the check for clearing through the Philippine Clearing
House Corporation (PCHC) but XYZ’s clearing staff committed a clearing
discrepancy when he erroneously under-encoded the charge slip to
P1,000.00. While XYZ credited the account of “P” for P1,000,000.00, it only
recovered P1,000.00 from ABC. After discovery of the under-encoding, XYZ
notified ABC of the discrepancy, by way of a charge slip of P999,000.00 for
automatic debiting of ABC’s clearing account with PCHC. ABC refused to
accept the charge slip. XYZ filed a complaint against ABC with the PCHC
Arbitration Committee. It also filed with the court a petition for the
examination of the account of “D.” Should the court grant the petition?
The petition should be denied. It does not seek recovery of the very money
contained in the deposit. The subject matter of the dispute may be the amount of
P999,000.00 that XYZ seeks from ABC as a result of the discrepancy; but it is not the
P999,000.00 deposited in the drawer’s account. By the terms of R.A. No. 1405, the
“money deposited” itself should be the subject matter of the litigation.
That XYZ feels a need for such information in order to establish its case against
ABC does not, by itself, warrant the examination of the bank deposits. The necessity
of the inquiry, or the lack thereof, is immaterial since the case does not come under
any of the exceptions allowed by the Bank Deposits Secrecy Act.35
33BAR 2009.
34G.R.No. 135882, June 27, 2001.
35Union Bank of the Philippines v. Court of Appeals, G.R. No. 134699, December 23, 1999.

Violation of the anti-money laundering law
Does AMLC need a court order to be able to inquire into such deposits, funds
or investments?
Yes, AMLC needs to obtain a bank inquiry order from the Court of Appeals. The
application can be done ex-parte.36 However, AMLC must establish probable cause
that the deposits, funds or investments relate to unlawful activity under AMLA and
the Court of Appeals, independently of AMLC, must make itself a finding that such
probable cause exists before the bank inquiry order may be issued. 37
Court order shall not be necessary in the following cases:
a. Kidnapping for ransom under Article 267 of Act No. 3815 (RPC);
b. Violations of Sections 4, 5, 6, 8, 9, 10, 12, 13, 14, 15, and 16 of R.A. No. 9165
(Comprehensive Dangerous Drugs Act of 2002);
c. Hijacking and other violations under R.A. No. 6235; destructive arson and
murder, as defined under the RPC, as amended, including those perpetrated
by terrorists against non-combatant persons and similar targets;
d. Felonies and offenses similar to the foregoing which are punishable under
the penal laws of other countries;
e. Terrorism and conspiracy to commit terrorism as defined under R.A. No.
9372, as amended.38
Through various acts of graft and bribery, Mayor Ycasiano accumulated a

large amount of wealth which he converted into U.S. dollars and deposited
in a Foreign Currency Deposit Unit (FCDU) account with the Yuen Bank
(YB). On a tip given by the secretary of the mayor, the Anti-Money
Laundering Council (AMLC) sent an order to YB to confirm the amount of
U.S. dollars that Mayor Ycasiano had in his FCDU account. YB claims that,
under the Foreign Currency Deposit Act (R.A. No. 6426, as amended), a
written permission from the depositor is the only instance allowed for the
examination of FCDU accounts. YB alleges that AMLC on its own cannot
order a banking institution to reveal matters relating to bank accounts.
Is the legal position of YB, in requiring written permission from the

depositor, correct?39
36Section 11, ibid.

37Subido Pagente Certez Mendoza and Binay Law Offices v. Court of Appeals, G.R. No. 216914,
December 6, 2016.
39BAR 2018.

Yes, the legal position of YB in requiring written permission from the depositor
is correct. The AMLC cannot order the bank to inquire into the bank account of any
depositor on mere suspicions of acts of graft and bribery without his written consent
or a bank inquiry order issued by the competent
Garnishment of bank deposits
May the bank disclose information about Philippine currency bank deposits
pursuant to a writ of garnishment?
The Bank may disclose information about Philippine currency bank deposits
pursuant to a writ of garnishment. The disclosure in this case is only incidental to
the execution process. There is nothing in the records of Congress that would show
the intention of legislature to place Philippine currency bank deposits beyond the
reach of judgment creditor.40
Is the rule allowing garnishment of Philippine currency bank deposit

similar to foreign currency deposits?
No, the rule is different. Foreign currency deposits are exempt from attachment,
garnishment or any other order or process of any court, legislative body, government
agency or any administrative
C. General Banking Law (R.A. No. 8791)
a. Definition and classification of banks
What is a bank?
A bank is an entity engaged in the lending of funds obtained from the public in
the form of deposits.41 It has three elements: a) it is engaged in the lending of funds;
b) the funds are obtained from the public, which means, 20 or more lenders; and c)
the funds are obtained from the public in the form of deposits. Note that unlike the
old law, these activities need not be performed with habituality.
40ChinaBank v. Ortega, G.R. No. L-34964, January 31, 1973; PCIB v. Court of Appeals, G.R. No.
84526, January 28, 1991.
41Section 3.1, R.A. No. 8791, otherwise known as the General Banking Law (GBL).

d. Diligence required of banks in view of the fiduciary nature of
banking
What is the kind of diligence required of banks?
The diligence required of banks is more than that of a good father of a family
where the fiduciary nature of their relationship with their depositors is concerned.
The highest degree of diligence is based on the General Banking Law which requires
of banks the highest standards of integrity and performance. A banking institution
owes it to its clients to observe the high standards of integrity and performance in all
its transactions because its business is imbued with public interest. The high
standards are also necessary to ensure public confidence in the banking system, for
the stability of banks largely depends on the confidence of the people in the honesty
and efficiency of banks.42
It was held that the bank failed in its duty to exercise the highest degree of
diligence by prematurely foreclosing the mortgages and unwarrantedly causing the
foreclosure sale of the mortgaged properties despite the mortgagor not being yet in
default.43
Cruz and Tay obtained various loans from Metrobank. To determine their
total outstanding obligation, they requested from the Bank their statement
of account. They subsequently hired an accountant, who after checking the
records, determined certain unaccounted payments. Thereafter, Cruz and
Tay filed a complaint for accounting before the competent Regional Trial
Court praying for the production of all pertinent loan records. Metrobank
averred that the production of all loan documents, especially those
executed as early as 1994 is impossible. Pursuant to its five-year retention
policy, it only keeps ledgers for active accounts, and disposes of the ledgers
and documents of closed accounts.
Should Metrobank should be ordered to (i) render a full and detailed

accounting of the r44espondents' payments; and (ii) furnish the respondents
all pertinent loan documents?
42Philippine National Bank v. Spouses Eduardo and Ma. Rosario Tajonera, G.R. No. 195889,
September 24, 2014; Comsavings Bank v. Sps. Capistrano, G.R. No. 170942, August 28, 2013.
43Development Bank of the Philippines v. Guarina Agricultural and Realty Development

Corporation, G.R. No. 160758, January 15, 2014.

In view of the fiduciary nature of the banking business, banks are mandated to
comply with two essential and fundamental obligations- to treat their clients'
accounts with utmost fidelity and meticulous care, and to record all transactions
accurately and promptly.
It bears emphasis that the documents respondents requested are not simply
general records, but documents that are essential to their existing loan with
Metrobank. Although the loans have been restructured, the accuracy of the
outstanding obligation depends on a full and complete computation of the previous
loans. Metrobank cannot hide behind its five-year policy to renege on its obligation to
render an accurate accounting of the respondents' payments. As between its five-year
holding policy versus its legal and jurisprudential fiduciary duty to exercise the
highest degree of care in conducting its affairs, the latter consideration certainly
prevails.45
Antonio and Remedios were husband and wife. Remedios discovered that
her husband, using her forged signature executed in favor of Equitable
Bank a Deed of Real Estate Mortgage over real properties under their
names. The real estate mortgage secured the loan which was supposedly
extended to them by the bank. Remedios initiated a Complaint for
Annulment of Deed of Real Estate Mortgage with Damages before the RTC
which eventually declared the mortgage as null and void in view of the
Remedios’ forged signature therein.
Can the Bank be held jointly and severally liable with Antonio despite the
absence of showing that it is guilty of bad faith?
Yes, it is required and expected of banks to exercise the highest degree of

diligence, along with high standards of integrity and performance in view of its
significant role in commercial transactions, not to mention its contribution, to the
economy in general.
The Bank's failure to observe the degree of diligence expected of it clearly

constitutes negligence. Verily, the Bank was not able to prove that Remedios
participated in the loan application or in the execution of the documents relative to
it. There was no showing that any of the Bank's employees had dealt with her
regarding the loan or the mortgage despite her being one of the registered owners of
the mortgaged properties. More importantly, the Bank had not demonstrated how it
took steps or what safety measures were adopted and actually practiced to ascertain
the authenticity of the signature of Remedios in the "Amendment to Real Estate
Mortgage." 46
45Metrobank v. Cruz and Tay, G.R. No. 221220, January 19, 2021.
46 Remedios Banta v. Equitable Bank, Inc., G.R. No. 223694, February 10, 2021.

In another case, it was held that a bank cannot obliquely repudiate the
resulting banking relationship with the account holders and the fiduciary nature
thereof when it accepted the deposit. It cannot belatedly claim ignorance of its
performance of a core banking function, i.e., accepting or creating demand deposits.
It is presumed that the money deposited in a bank account belongs to the person in
whose name the deposit account is opened. With its acceptance of the deposit and the
opening of an account, the bank explicitly recognized the depositor’s ownership and
title over the funds deposited. Notably, the bank repeatedly acknowledged the
creditor-debtor relationship and its obligation to pay the depositors on demand when
the latter withdrew money from the said account on three separate occasions.47
e. Nature of bank funds and bank deposits
iii. Restrictions on bank exposure to directors, officers,

stockholders and their related interest
What are the restrictions on a bank’s exposure to directors, officers,

stockholders and their related interests?
No director or officer of any bank shall, directly or indirectly, for himself or as

the representative or agent of others, borrow from such bank nor shall he become a
guarantor, endorser or surety for loans from such bank to others, or in any manner
be an obligor or incur any contractual liability to the bank except with the written
approval of the majority of all the directors of the bank, excluding the director
concerned: Provided, that such written approval shall not be required for loans, other
credit accommodations and advances granted to officers under a fringe benefit plan
approved by the Bangko Sentral. The required approval shall be entered upon the
records of the bank and a copy of such entry shall be transmitted forthwith to the
appropriate supervising and examining department of the Bangko Sentral.48
The outstanding loans, credit accommodations and guarantees which a bank may
extend to each of its stockholders, directors, or officers and their related interests,
shall be limited to an amount equivalent to their respective unencumbered deposits
and book value of their paid-in capital contribution in the bank: Provided, however,
that loans, credit accommodations and guarantees secured by assets considered as
non-risk by the Monetary Board shall be excluded from such limit: Provided, further,
that loans, credit accommodations and advances to officers in the form of fringe
47 Allied Banking Corporation v. Spouses Mario and Rose Macam, G.R. No. 200635, February
1, 2021.
48Section 36, GBL.

benefits granted in accordance with rules as may be prescribed by the Monetary
Board shall not be subject to the individual limit.
The Monetary Board shall define the term “related interests.”
The limit on loans, credit accommodations and guarantees prescribed herein

shall not apply to loans, credit accommodations and guarantees extended by a
cooperative bank to its cooperative shareholders.49
The rule on DOSRI transaction covers loan obtained or guaranteed by the

director, officer, stockholder or their related interest and not to loans both obtained
and guaranteed by them. The rule in fact covers any transaction where the DOSRI
may incur contractual obligations with their bank. Thus, it is not limited to loan
transactions. It may include the purchase by the DOSRI of a bank property. In this
case, though, only the approval and reportorial requirements should be observed.
In other words, DOSRI transactions are subject to the following

rules/restrictions:
1. The transactions must be approved by at least majority of the entire board

excluding the director concerned (“approval requirement”);
2. The required approval shall be entered upon the records of the bank and
copy of such entry shall be submitted to the BSP (“reportorial requirement”);
and
3. Unless the loan is non-risk, the loan must not exceed the book value of the
paid-up shares of the borrowing DOSRI and the amount of unencumbered
deposits (“ceiling requirement”).50
However, if there is no loan component to the transaction, as when a director,

officer or stockholder buys a property of the bank, only the first two restrictions shall
apply.
How many criminal offenses are committed by the failure to observe the
approval, reporting and ceiling requirements?
DOSRI transactions are subject to approval, reportorial and ceiling

requirements. Approval requirement means that the DOSRI transaction must be
approved by at least majority of the directors excluding the director concerned.
Reportorial requirement means that the transaction must be recorded in the books of
the bank and reported to BSP. Ceiling requirement means that the amount of the
49Ibid.
50Section 36, R.A. No. 8791.

loan shall not exceed the book value of the paid-in contribution and the amount of
unencumbered deposits. Three different offenses are committed by those who fail to
observe the board approval, reporting and ceiling requirements.51
A criminal information alleged that spouses Enrico and Amalia appeared to

have an outstanding loan of P8 million with the RBSM Bank, but had never
applied for nor received such loan; that it was HS, who was then president
of RBSM, who had ordered, facilitated, and received the proceeds of the
loan; and that the P8 million loan had never been authorized by RBSM’s
Board of Directors and no report thereof had ever been submitted to the
Department of Rural Banks, Supervision and Examination Sector of the
BSP.
HS moved to quash the information contending that the commission of

estafa is inherently incompatible with the violation of DOSRI law, hence a
person cannot be charged for both offenses. He argued that a violation of
DOSRI law requires the offender to obtain a loan from his bank, without
complying with procedural, reportorial, or ceiling requirements. On the
other hand, estafa requires the offender to misappropriate or convert
something that he holds in trust, or on commission, or for administration,
or under any other obligation involving the duty to return the same.
He theorized that the characterization of possession is different in the two

offenses. If HS acquired the loan as DOSRI, he owned the loaned money and
therefore, cannot misappropriate or convert it as contemplated in the
offense of estafa. Conversely, if he committed estafa, then he merely held
the money in trust for someone else and therefore, did not acquire a loan in
violation of DOSRI rules.
Discuss whether the loan transaction within the ambit of the DOSRI law
could also be the subject of estafa under Article 315(1)(b) of the Revised
Penal Code.
The information filed against HS for estafa and violation of DOSRI law do not
negate each other.
The bank money which came to the possession of HS was money held in trust or
administration by him for the bank, in his fiduciary capacity as the President of said
bank. It is not accurate to say that he became the owner of the P8 million because it
was the proceeds of a loan. That would have been correct if the bank knowingly
extended the loan to him. But that is not the case here. Through fraudulent device,
51Go v. BSP, October 23, 2009.

he made it appear that other persons were the borrowers but he obtained the loan
proceeds and converted the same. Under these circumstances, it cannot be said that
he became the legal owner of the P8 million. Thus, he remained the bank’s fiduciary
with respect to that money, which makes it capable of misappropriation or conversion
in his hands.
The prohibition under the DOSRI law is broad enough to cover various modes of
borrowing. It covers loans by a bank director or officer (like herein HS) which are
made either: (1) directly, (2) indirectly, (3) for himself, (4) or as the representative or
agent of others. It applies even if the director or officer is a mere guarantor, indorser
or surety for someone else’s loan or is in any manner an obligor for money borrowed
from the bank or loaned by it. Directors, officers, stockholders, and their related
interests cannot be allowed to interpose the fraudulent nature of the loan as a defense
to escape culpability for their circumvention of the law.52
What are the legal effects of non-compliance with the DOSRI rules and
regulations?
After due notice to the board of directors of the bank, the office of any bank
director or officer who violates the DOSRI rules and regulations may be declared
vacant and the director or officer shall be subject to the penal provisions of the New
Central Bank Act.53
What is the nature of the loan that does not comply with the rules on DOSRI
and/or Single Borrower’s limit?
Loans, assuming that they were of a DOSRI nature or without the benefit of the
required approvals or in excess of the Single Borrower’s Limit, would not be void for
those reasons. Instead, the banks or the officers responsible for the approval and
grant of DOSRI loan would be subject only to the sanctions under the law.54
In other words, the loan transaction is valid but without prejudice to criminal
prosecution against the erring DOSRI.
v. Floating interest rate and escalation clause
What is an escalation clause in a loan agreement? Is it a valid stipulation?
52Soriano v. People of the Philippines, et al., G.R. No. 162336, February 1, 2010.
53Ibid.
54Republic v. Sandiganbayan, G.R. No. 166859, April 12, 2011.

An escalation clause refers to the stipulation allowing increases in the interest
rates agreed upon by the contracting parties. Such stipulation shall be valid provide
that there should be a corresponding de-escalation clause that authorizes a reduction
in the interest rates corresponding to downward changes made by law or by the
Monetary Board. The escalation clause should specifically provide: (1) that there can
be an increase in interest rates if allowed by law or by the Monetary Board; and (2)
that there must be a stipulation for the reduction of the stipulated interest rates in
the event that the applicable maximum rates of interest are reduced by law or by the
Monetary Board. The latter stipulation ensures the mutuality of contracts.
The purpose of the law in mandating the inclusion of a de-escalation clause is to

prevent one-sidedness in favor of the lender which is considered repugnant to the
principle of mutuality of contracts. A de-escalation clause is an indispensable
requisite to the validity and enforceability of an escalation clause in the contract. In
other words, in the absence of a corresponding de-escalation clause, the escalation
clause shall be considered null and void.
However, the absence of a de-escalation clause in the loan agreement would not
invalidate the repricing of the interest rates, if in actuality, the lender did reduce the
interest on certain repricing dates. Such actual reduction or downward adjustment
by the lender bank eliminated any one-sidedness of its contracts with the borrower.55
What interest rate should be imposed on a loan transaction if the stipulated

interest rate is judicially determined to be excessive or unconscionable?
The legal rate of interest shall be applied if the stipulated interest in a loan
transaction is judicially determined to be excessive or unconscionable. Under BSP
Circular 799, dated July 1, 2013, such legal rate of interest is 6% per annum.
Petitioner sued respondents Spouses Leoncio Ho and Judy Cham Ho for

sum money and damages. She alleged that respondents obtained a
P700,000.00 loan from her for three percent (3%) monthly interest. After
several demands, Respondent Judy Hoy issued two (2) crossed checks from
her joint account. Before the maturity dates, respondents pleaded not to
deposit the checks as they planned to redeem them in cash.
Respondents denied the allegation that they obtained a loan from

petitioner. They further countered that petitioner requested Judy to issue
the subject checks for discounting by financiers known to petitioner.
55Villa
Crista Monte Realty & Development Corp. v. Equitable PCI Bank, G.R. No. 208336,
November 21, 2018.

Failing to find one, petitioner returned and requested that Judy write
petitioner's name in the checks.
Was petitioner able to establish her cause of action for sum of money
against the respondents?
Yes. The Negotiable Instrument Law provides for a presumption n that when
negotiable instruments such as checks are delivered to their intended payees, such
instruments have been issued for value. The same law recognizes a pre-existing debt
as valid consideration to support the issuance of a negotiable instrument like a check.
Respondents admitted the genuineness and due execution of the crossed checks they
issued in petitioner's name. Notably, respondents failed to rebut this presumption.
All they offered was a bare denial that they incurred the loans in exchange for their
checks. Surely, bare denial, without more, is not sufficient to overthrow the
presumption.
The fact that the subject checks are crossed checks in the name of petitioner, by
itself, negates respondents' theory of a rediscounting arrangement. It is not possible
to rediscount a crossed check in the name of a particular payee. For check
rediscounting requires the re-indorsement of the negotiable instrument; an act
precluded by the crossing of a check.
However, the Supreme Court denied the claim of petitioner for the stipulated interest of 3% per
annum. Article 1956 ordains that no interest shall be due unless it has been expressly stipulated in
writing. Thus, in the absence of any written proof of the supposed stipulation, petitioner's claim of
interest has no factual basis. At any rate, even if proved, it would be struck down for being
unconscionable. Instead, the legal interest rates were imposed in accordance with pertinent
jurisprudence. Consequently, legal interest of twelve percent (12%) per annum was imposed from extra
judicial demand on September 21, 2001 until June 30, 2013. Thereafter, the legal interest rate is
reduced to six percent ( 6%) per , annum from July 1, 2013 until finality of the decision.56
ANTI-MONEY LAUNDERING LAW (R.A. No. 9160, as amended)

b. Covered institutions/persons and their obligations
Who are the covered institutions/persons under the Anti-Money Laundering

law?
“Covered institutions” refer to:

(1) Banks, non-banks, quasi-banks, trust entities, and all other institutions and
their subsidiaries and affiliates supervised or regulated by the Bangko
Sentral ng Pilipinas (BSP);
56 Sally Go-Bangayan v. Spouses Leoncio and Judy Cham Ho, G.R. No., 203020, June 28, 2021.

(2) Insurance companies and all other institutions supervised or regulated by
the Insurance Commission; and
(3) (i) Securities dealers, brokers, salesmen, investment houses and other
similar entities managing securities or rendering services as investment
agent, advisor, or consultant; (ii) mutual funds, closed-end investment
companies, common trust funds, pre-need companies and other similar
entities; (iii) foreign exchange corporations, money changers, money
payment, remittance, and transfer companies and other similar entities; and
(iv) other entities administering or otherwise dealing in currency,
commodities or financial derivatives based thereon, valuable objects, cash
substitutes and other similar monetary instruments or property supervised
or regulated by Securities and Exchange Commission.
(4) Jewelry dealers in precious metals, who, as a business, trade in precious
metals, for transactions in excess of one million pesos (P1,000,000.00);
(5) Jewelry dealers in precious stones, who, as a business, trade in precious
stones, for transactions in excess of one million pesos (P1,000,000.00);
(6) Company service providers which, as a business, provide any of the following
services to third parties: (i) acting as a formation agent of juridical persons;
(ii) acting as (or arranging for another person to act as) a director or
corporate secretary of a company, a partner of a partnership, or a similar
position in relation to other juridical persons; (iii) providing a registered
office, business address or accommodation, correspondence or
administrative address for a company, a partnership or any other legal
person or arrangement; and (iv) acting as (or arranging for another person
to act as) a nominee shareholder for another person; and
(7) Persons who provide any of the following services:
(i) managing of client money, securities or other assets;
(ii) management of bank, savings or securities accounts;
(iii) organization of contributions for the creation, operation or management
of companies; and
(iv) creation, operation or management of juridical persons or
arrangements, and buying and selling business entities.57
Notwithstanding the foregoing, the term ‘covered persons’ shall exclude lawyers
and accountants acting as independent legal professionals in relation to information
concerning their clients or where disclosure of information would compromise client
confidences or the attorney-client relationship: Provided, that these lawyers and
accountants are authorized to practice in the Philippines and shall continue to be
subject to the provisions of their respective codes of conduct and/or professional
responsibility or any of its amendments.58
57Section 3(a), R.A. No. 9160, as amended.
58Supra.

(8) Casinos, including internet and ship-based casinos, with respect to their
casino cash transactions related to their gaming operations;59
(9) Real estate developers and brokers;
(10) Offshore gaming operators, as well as their: service providers, supervised,
accredited or regulated by the Philippine Amusement and Gaming
Corporation (PAGCOR) or any government agency.60
What are the obligations of covered institutions/persons?
The obligations of covered institutions/persons under AMLA are as follows:
a. Customer identification
Covered institutions shall establish and record the true identity of its clients
based on official documents. They shall maintain a system of verifying the true
identity of their clients and, in case of corporate clients, require a system of verifying
their legal existence and organizational structure, as well as the authority and
identification of all persons purporting to act on their behalf.
The provisions of existing laws to the contrary notwithstanding, anonymous

accounts, accounts under fictitious names, and all other similar accounts shall be
absolutely prohibited. Peso and foreign currency non-checking numbered accounts
shall be allowed.61
b. Record keeping
All records of all transactions of covered institutions shall be maintained and

safely stored for five (5) years from the dates of transactions. With respect to closed
accounts, the records on customer identification, account files and business
correspondence, shall be preserved and safely stored for at least five (5) years from
the dates when they were closed.62
c. Reporting of covered and suspicious transactions

Covered institutions shall report to the AMLC all covered transactions within
five (5) working days from occurrence thereof, unless the Supervising Authority
concerned prescribes a longer period not exceeding ten (10) working days.63
59Section 1(a)(8), R.A. No. 9160, as amended by R.A. No. 10927.

60Section 3(a), R.A. No. 9160, as further amended by R.A. No. 11521.
61Section 9(a), R.A. No. 9160.
62Section 9(b), ibid.
63Section 9(c), ibid.

Lionair, Inc sold the helicopters as brand new to the Philippine National
Police even if they were already used. Lionair’s president, however,
testified that Arroyo the real owner of the helicopters Lionair imported
the helicopters from the United States and sold them to Arroyo, who, in
turn, deposited partial payment to Lionair’s account with the Union Bank.
The Office of the Special Prosecutor (OSP) presented the Manager of the
Union Bank branch where the account was maintained to verify the source
of deposits. The manager further testified that the account was closed and
as five years had lapsed since, the bank had already disposed the account
records. She suggested that the Bangko Sentral ng Pilipinas or the AMLC
may have reports on the transaction. Thus, the Sandiganbayan, upon the
request of the Office of the Special Prosecutor, issued a subpoena duces
tecum and ad testificandum directing the Secretariat of the AMLC, to testify
and to produce Lionair’s bank records. The AMLC moved to quash the
subpoena, arguing that whatever information it has on Lionair’s bank
account is confidential under RA 9160. AMLC argues that the prohibition
under RA 9160 extends to it. It claims that as a covered institution, it cannot
be forced to disclose such prohibited information. Is the AMLC’s argument
tenable?
A: NO. According to the wording of RA 9160, the AMLC "is not one of the covered
institutions prohibited from disclosing information on covered and suspicious
transactions," and that the rationale for the prohibition does not extend and apply to
the AMLC. Unlike covered institutions, the AMLC is mandated to investigate and
file a case against violators based on the information it obtains. Furthermore, the
prohibition and confidentiality provisions cannot apply to the AMLC; otherwise, it
would contravene its direct mandate under Section 7 of RA 9160.
AMLC is not merely a repository of reports and information on covered and

suspicious transactions. It is created precisely to investigate and institute charges
against the offenders. Section 7 clearly states that it is tasked to institute civil
forfeiture proceedings and other remedial proceedings, and to file complaints with
the Department of Justice or the Office of the Ombudsman for anti-money laundering
offenses. The criminal prosecution of such offenses would be unduly hampered if it
were to be prohibited from disclosing such information. For the Anti-Money
Laundering Council to refuse disclosing the information required of it would be to go
against its own functions under the law.64
d. Money laundering-how committed and unlawful activities
When is money laundering committed?
64Republic of the Philippines v. Sandiganbayan, G.R. No. 232724-27, February 15, 2021

Money laundering is a crime whereby the proceeds of an unlawful activity are
transacted thereby making them appear to have originated from legitimate sources.
It is committed by the following:
Money laundering is committed by any person who, knowing that any monetary
instrument or property represents, involves, or relates to the proceeds of any
unlawful activity:
a. Transacts said monetary instrument or property;

b. Converts, transfers, disposes of, moves, acquires, possesses or uses said
monetary instrument or property;
c. Conceals or disguises the true nature, source, location, disposition,
movement or ownership of or rights with respect to said monetary
instrument or property;
d. Attempts or conspires to commit money laundering offenses referred to in
paragraphs (a), (b) or (c);
e. Aids, abets, assists in or counsels the commission of the money laundering
offenses referred to in paragraphs (a), (b) or (c) above; and
f. Performs or fails to perform any act as a result of which he facilitates the
offense of money laundering referred to in paragraphs (a), (b) or (c) above.
Money laundering is also committed by any covered person who, knowing that a
covered or suspicious transaction is required under this Act to be reported to the Anti-
Money Laundering Council (AMLC), fails to do so.65
What are the predicate crimes under the Anti-Money Laundering law?
Save for the omission to report covered and suspicious transactions, a money
laundering offense, by definition, assumes the commission of an unlawful activity.
For instance, kidnapping is an unlawful activity. If the kidnapper deposits the
ransom money with a bank, another offense is committed—money laundering. There
is money laundering because the proceeds of the unlawful activity were transacted to
make it appear that they originated from lawful sources. To constitute money
laundering, however, the predicate crime must be based on any of the unlawful
activities enumerated by law.
Unlawful activity, as defined by AMLA, refers to any act or omission or series or
combination thereof involving or having direct relation to the following:
1. Kidnapping for ransom under Article 267 of Act No. 3815, otherwise known
as the Revised Penal Code, as amended;
65Section 4, R.A. No. 9160, as amended by R.A. No. 10365.

2. Sections 4, 5, 6, 8, 9, 10, 11, 12, 13, 14, 15, and 16 of R.A. No. 9165, otherwise
known as the Comprehensive Dangerous Drugs Act of 2002;
3. Section 3 paragraphs B, C, E, G, H and I of R.A. No. 3019, as amended,
otherwise known as the Anti-Graft and Corrupt Practices Act;
4. Plunder under R.A. No. 7080, as amended;
5. Robbery and extortion under Articles 294, 295, 296, 299, 300, 301 and 302 of
the Revised Penal Code, as amended;
6. Jueteng and masiao punished as illegal gambling under P.D. No. 1602;
7. Piracy on the high seas under the Revised Penal Code, as amended and P.D.
No. 532;
8. Qualified theft under Article 310 of the Revised Penal Code, as amended;
9. Swindling under Article 315 and Other Forms of Swindling under Article
316 of the Revised Penal Code, as amended;
10. Smuggling under R.A. Nos. 455 and 1937;
11. Violations of R.A. No. 8792, otherwise known as the Electronic Commerce
Act of 2000;
12. Hijacking and other violations under R.A. No. 6235; destructive arson and
murder, as defined under the Revised Penal Code, as amended;
13. Terrorism and conspiracy to commit terrorism as defined and penalized
under Sections 3 and 4 of R.A. No. 9372;
14. Financing of terrorism under Section 4 and offenses punishable under
Sections 5, 6, 7 and 8 of R.A. No. 10168, otherwise known as the Terrorism
Financing Prevention and Suppression Act of 2012;
15. Bribery under Articles 210, 211 and 211-A of the Revised Penal Code, as
amended, and Corruption of Public Officers under Article 212 of the Revised
Penal Code, as amended;
16. Frauds and Illegal Exactions and Transactions under Articles 213, 214, 215
and 216 of the Revised Penal Code, as amended;
17. Malversation of Public Funds and Property under Articles 217 and 222 of
the Revised Penal Code, as amended;
18. Forgeries and Counterfeiting under Articles 163, 166, 167, 168, 169 and 176
of the Revised Penal Code, as amended;
19. Violations of Sections 4 to 6 of Republic Act No. 9208, otherwise known as
the Anti-Trafficking in Persons Act of 2003;
20. Violations of Sections 78 to 79 of Chapter IV, of P.D. No. 705, otherwise
known as the Revised Forestry Code of the Philippines, as amended;
21. Violations of Sections 86 to 106 of Chapter VI, of R.A. No. 8550, otherwise
known as the Philippine Fisheries Code of 1998;
22. Violations of Sections 101 to 107, and 110 of R.A. No. 7942, otherwise known
as the Philippine Mining Act of 1995;
23. Violations of Section 27(c), (e), (f), (g) and (i), of R.A. No. 9147, otherwise
known as the Wildlife Resources Conservation and Protection Act;
24. Violation of Section 7(b) of R.A. No. 9072, otherwise known as the National
Caves and Cave Resources Management Protection Act;

25. Violation of R.A. No. 6539, otherwise known as the Anti-Carnapping Act of
2002, as amended;
26. Violations of Sections 1, 3 and 5 of P.D. No. 1866, as amended, otherwise
known as the decree Codifying the Laws on Illegal/Unlawful Possession,
Manufacture, Dealing In, Acquisition or Disposition of Firearms,
Ammunition or Explosives;
27. Violation of P.D. No. 1612, otherwise known as the Anti-Fencing Law;
28. Violation of Section 6 of R.A. No. 8042, otherwise known as the Migrant
Workers and Overseas Filipinos Act of 1995, as amended by R.A. No. 10022;
29. Violation of R.A. No. 8293, otherwise known as the Intellectual Property
Code of the Philippines;
30. Violation of Section 4 of R.A. No. 9995, otherwise known as the Anti-Photo
and Video Voyeurism Act of 2009;
31. Violation of Section 4 of R.A. No. 9775, otherwise known as the Anti-Child
Pornography Act of 2009;
32. Violations of Sections 5, 7, 8, 9, 10(c), (d) and (e), 11, 12 and 14 of R.A. No.
7610, otherwise known as the Special Protection of Children Against Abuse,
Exploitation and Discrimination;
33. Fraudulent practices and other violations under R.A. No. 8799, otherwise
known as ‘The Securities Regulation Code of 2000’;
34. Violation of Section 19 (a)(3) of R.A. No. 10697, otherwise known as the
‘Strategic Trade Management Act’, in relation to the proliferation of weapons
of mass destruction and its financing pursuant to United Nations Security
Council Resolution Numbers 1718 of 2006 and 2231 of 2015”;
35. Violations of Section 254 of Chapter II, Title X of the National
Internal Revenue Code of 1997, as amended, where the deficiency
basic tax due in the final assessment is in excess of twenty-five
million pesos (P25,000,000.00) per taxable year, for each tax type
covered and there has been a finding of probable cause by the
competent authority: Provided, further, that there must be a finding
of fraud, willful misrepresentation or malicious intent on the part
of the taxpayer: Provided, finally, that in no case shall the AMLC
institute forfeiture proceedings to recover monetary instruments,
property or proceeds representing, involving, or relating to a tax
crime, if the same has already been recovered or collected by the
Bureau of Internal Revenue (BIR) in a separate proceeding; and
36. Felonies and offenses of a similar nature that are punishable under
the penal laws of other countries.66
f. Application for a freeze order
What is a freeze order? Distinguish it from a bank inquiry order?
66Section 7(I), R.A. No. 9160, as amended by R.A. No. 10365 and R.A. No. 11521.

A freeze order is an extraordinary and interim relief issued by the CA to prevent
the dissipation, removal, or disposal of properties that are suspected to be the
proceeds of, or related to, unlawful activities as defined in Section 3 (i) of RA No. 9160,
as amended. The primary objective of a freeze order is to temporarily preserve
monetary instruments or property that are in any way related to an unlawful activity
or money laundering, by preventing the owner from utilizing them during the
duration of the freeze order. The relief is pre-emptive in character, meant to prevent
the owner from disposing his property and thwarting the State's effort in building its
case and eventually filing civil forfeiture proceedings and /or prosecuting the owner.
A freeze order is meant to have a temporary effect; it was never intended to

supplant or replace the actual forfeiture cases where the provisional remedy - which
means, the remedy is an adjunct of or an incident to the main action - of asking for
the issuance of an asset preservation order from the court where the petition is filed
is precisely available. For emphasis, a freeze order is both a preservatory and
preemptive remedy.67
A bank inquiry order, on the other hand, is an order which authorizes the
examination of particular deposits or investments in banking institutions or non-
bank financial institutions." Its function is to allow the Anti-Money Laundering
Council to acquire information on the movement of funds into and from a bank
account, but it does not prevent further deposits or withdrawals from the account. A
freeze order is needed precisely to freeze, that is, to prevent movement of funds from
and into the account. It keeps a bank account intact to allow forfeiture should it be
found related to any of the predicate crimes under the Anti-Money Laundering Act.
Further, it is possible that a freeze order is first filed before an application for
bank inquiry is availed of. Nowhere in Republic Act No. 9160, as amended by
Republic Act No. 10167, does it state that a petition for freeze order may be filed only
after an application for bank inquiry has been previously availed of. In other words,
the Anti-Money Laundering Council may file a petition for freeze order without the
benefit of a bank inquiry if it is confident that the information it has at hand is
sufficient to justify a finding of probable cause. In the end, it is a matter of strategy
on what it should file first. 68
67Edgardo Yambao v. Republic of the Philippines, represented by the Anti-Money Laundering

Council, G.R. No. 171054, January 26, 2021.
68Republic of the Philippines, represented by the Anti-Money Laundering Council v. Roberto V.

Ongpin, et. al, G.R. No. 207078, June 20, 2022.

Does the Anti-Money Laundering Council have the authority to freeze
deposits? Explain.69
No. The authority to freeze deposits is lodged with and based upon the order of
the Court of Appeals.70
Similarly, the bank does not have the unilateral right to freeze the accounts of
its clients on mere suspicion that the depositor does not have a right over them.71
However, a bank has the authority to temporarily freeze the bank account of a
deceased depositor under Section 97, R.A. No. 8424 or the Tax Reform Act of 1997.
The second paragraph of Section 97 provides that, “If a bank has knowledge of the
death of a person, who maintained a bank deposit account alone, or jointly with
another, it shall not allow any withdrawal from the said deposit account.”
Under what conditions may a freeze order be issued?
Upon a verified ex parte petition by the AMLC and after determination that
probable cause exists that any monetary instrument or property is in any way related
to an unlawful activity as defined in Section 3(i) of the AMLA, the Court of Appeals
may issue a freeze order.
What is the period of effectivity of the freeze order?
The freeze order shall be effective immediately for a period of 20 days. Within
the 20-day period, the Court of Appeals shall conduct a summary hearing, with notice
to the parties, to determine whether or not to modify or lift the freeze order, or extend
its effectivity. The total period of the freeze order issued by the Court of Appeals
under this provision shall not exceed six (6) months. This is without prejudice to an
asset preservation order that the Regional Trial Court having jurisdiction over the
appropriate anti-money laundering case or civil forfeiture case may issue on the same
account depending upon the circumstances of the case, where the Court of Appeals
will remand the case and its records: Provided, that if there is no case filed against a
person whose account has been frozen within the period determined by the Court of
Appeals, not exceeding six (6) months, the freeze order shall be deemed ipso facto
lifted; Provided further, that this new rule shai1 not apply to pending cases in the
courts. In any case, the court should act on the petition to freeze within 24 hours from
69BAR 2015.
71Philippine Commercial Bank v. Balmaceda, September 12, 2011.

filing of the petition. If the application is filed a day before a non-working day, the
computation of the 24-hour period shall exclude the non-working days.
The freeze order or asset preservation order issued under the law shall be limited
only to the amount of cash or monetary instrument or value of property that the court
finds there is probable cause to be considered as proceeds of a predicate offense and
the freeze order or asset preservation order shall not apply to amounts in the same
account in excess of the amount or value of the proceeds of the predicate offense.72
As a rule, the effectivity of a freeze order may be extended by the CA for a period
not exceeding six months. Before or upon the lapse of this period, ideally, the Republic
should have already filed a case for civil forfeiture against the property owner with
the proper courts and accordingly secure an asset preservation order or it should have
filed the necessary information. Otherwise, the property owner should already be able
to fully enjoy his property without any legal process affecting it.
A freeze order cannot be issued for an indefinite period. In fact the continued
extension of the freeze order beyond the six-month period will violate the account
holder’s right to due process.73
Is the authority of the AMLC to undertake an inquiry into certain bank

accounts or deposits arbitrary and as such, unconstitutional?
Taking into account Section 11 of the AMLA, the Court found nothing arbitrary
in the allowance and authorization to AMLC to undertake an inquiry into certain
bank accounts or deposits. Instead, the Court found that it provides safeguards before
a bank inquiry order is issued, ensuring adherence to the general state policy of
preserving the absolutely confidential nature of Philippine bank accounts:
a. The AMLC is required to establish probable cause as basis for its ex-parte
application for bank inquiry order;
b. The CA, independent of the AMLC’s demonstration of probable cause, itself
makes a finding of probable cause that the deposits or investments are
related to an unlawful activity under Section 3(i) or a money laundering
offense under Section 4 of the AMLA;
c. A bank inquiry court order ex-parte for related accounts is preceded by a
bank inquiry court order ex-parte for the principal account which court order
ex-parte for related accounts is separately based on probable cause that such
related account is materially linked to the principal account inquired into;
and the authority to inquire into or examine the main or principal account
72Section 10, R.A. No. 9160, as amended by R.A. No. 10927.

73Edgardo Yambao, v. Republic of the Philippines, represented by the Anti-Money Laundering
Council, G.R. No. 171054, January 26, 2021.

and the related accounts shall comply with the requirements of Article III,
Sections 2 and 3 of the Constitution.74
Deltaventure Resources, Inc. (Deltaventure) is a stock corporation engaged

in real estate. It applied for various credit lines with the Development Bank
of the Philippines, including a P510 million line to acquire from DBP 50
million shares of Philex Mininc Corporation (Philex). The shares were
registered in the name of Goldenmedia Corporation (Goldenmedia) and
were pledged back to DBP. Deltaventure and Goldenmedia are beneficially
owned by Roberto Ongpin, a former member of the DBP Board of Directors.
DBP, through its board, later sold 50 million of its Philex shares to
Deltaventure at P12.75 per share, totaling P637,500,000.00. Later, DBP sold
all of its 59,339,000 Philex shares to Two Rivers Pacific Holdings
Corporation (Two Rivers), while Goldenmedia similarly sold to Two Rivers
123,221,372 of its Philex shares on the same day.
As a result of the transactions, DBP Chair Jose Nuñez and President

Francisco F. Del Rosario filed a Complaint-Affidavit before the Office of the
Ombudsman, contending that the approval of the loans to Deltaventure
violated R.A. No. 8791 on ascertaining the creditworthiness of credit
applicants, and Secs. 3(e), (g), and (h) of R.A. No. 3019.
Later, the Anti-Money Laundering Council (AMLC) found in a resolution

that the loans to Deltaventure were anomalous, as DBP did not conduct
credit investigations and loaned substantial amounts to a corporation with
an unstable financial standing such as Deltaventure. It then authorized its
Secretariat to file actions under the Anti-Money Laundering Act to recover
the purportedly illegally tainted money and prosecute those involved in
deriving it.
Accordingly, the Republic, through the AMLC, filed an Urgent Ex Parte

Petition seeking for a freeze order to be issued against 179 bank accounts
probably related to the grant of the loans to Deltaventure. Finding a well-
founded belief that the bank accounts were indeed involved in an unlawful
activity as defined in Republic Act No. 9160, the Court of Appeals granted
the Petition for Freeze Order effective for 20 days.
74Subido Pagente Certeza Mendoza and Binay Law Offices v. The Court of Appeals, G.R. No.
216914, En Banc, December 6, 2016.

The AMLC then filed an ex parte application for bank inquiry before the
CA. The application was docketed under the same docket number for the
petition for freeze order.
A day after, the Anti-Money Laundering Council moved to have the

Freeze Order extended for six months. It said that it was conducting further
investigation on the frozen bank accounts for the possible filing of other
appropriate legal actions, including forfeiture of funds.
The CA granted the application for bank inquiry and later extended the
effectivity of the freeze order for six months after hearing the motions to lift
freeze order by the parties. However, it added a colatilla such that it was
“constrained to extend the freeze order for a period of six (6) months,
without prejudice to the Court's action/s on the individual motion[/s] to lift
as soon as it considers the motion/s submitted for resolution.”
In the meantime, during post-issuance hearings, the AMLC prayed that

the proceedings on the petition for freeze order be severed from the
proceedings on the application for bank inquiry, arguing that these
remedies are "separate and distinct" and "with different objectives."
Further, it argued that the proceedings on the motions to lift the freeze
order are already moot since the freeze order was already extended. It
contended that by extending the Freeze Order, the Court of Appeals
effectively denied the Motions.
The AMLC also argued that the burden of proof that the accounts
involved are not linked to unlawful activity has now shifted to the account
holders, the CA having found probable cause by issuing the freeze order.
The CA denied the motion for severance and later lifted the freeze order
over the bank accounts except for one. Aggrieved, the Republic, through the
AMLC, filed a petition for review on certiorari before the Supreme Court.
Did the extension of the freeze order result in the denial of the
motions to lift the same?
YES. By extending the effectivity of the Freeze Order, the Court of Appeals is
deemed to have denied the Motions to lift it. When the Court of Appeals extends a
freeze order's effectivity, it necessarily resolves the motions to lift it — that is, the
Court of Appeals denies them. Extending the freeze order could not have meant
automatic lifting; on the contrary, its extension assumes its existence.

By placing the colatilla, what the Court of Appeals truly meant was that the
Freeze Order's extension could be reconsidered. In other words, the December 26,
2012 Resolution was without prejudice to the filing of motions for reconsideration by
respondents, and the effectivity of the extended Freeze Order may be shortened or
modified based on the substantial arguments respondents may raise should they
move to have the Resolution reconsidered.
This interpretation is consistent with the Rules of Court, which applies

suppletorily in proceedings involving the freezing of monetary instruments, property,
or proceeds representing, involving, or relating to an unlawful activity or money
laundering. Under Rule 37 of the Rules of Court, a motion for reconsideration
may be filed if the findings or conclusions in the assailed order are not supported by
the evidence or are contrary to law.
Furthermore, allowing the filing of a motion for reconsideration in freeze order

proceedings is consistent with the policy of generally allowing motions for
reconsideration, the exception being when expressly prohibited either by law or the
rules. A.M. No. 05-11-04-SC does not expressly prohibit the filing of motions for
reconsideration, unlike, for instance, the 1991 Revised Rules on Summary Procedure,
which expressly does so.
Specifically, on freeze orders, giving a party the opportunity to move for

reconsideration allows the Court of Appeals to correct any errors it may have made
in issuing the freeze order. Besides, considering that a freeze order is effective
immediately, moving for reconsideration will not result in delay. The Court of
Appeals may also lift the freeze order should it realize that the action for the freeze
order was maliciously filed.
(1) May the proceedings for a bank inquiry and freeze order be joined?
YES. Nothing in the law provides that the purely ex parte bank inquiry
proceedings cannot be conducted jointly, albeit subsequently, with the proceedings
for the freeze order.
To recall, a bank inquiry authorizes the examination of particular deposits or

investments in banking institutions or non-bank financial institutions." Its function
is to allow the Anti-Money Laundering Council to acquire information on the
movement of funds into and from a bank account, but it does not prevent further
deposits or withdrawals from the account. A freeze order is needed precisely to freeze,
that is, to prevent movement of funds from and into the account. It keeps a bank
account intact to allow forfeiture should it be found related to any of the predicate
crimes under the Anti-Money Laundering Act.

Further, it is possible that a freeze order is first filed before an application for
bank inquiry is availed of. Nowhere in Republic Act No. 9160, as amended by
Republic Act No. 10167, does it state that a petition for freeze order may be filed only
after an application for bank inquiry has been previously availed of. In other words,
the Anti-Money Laundering Council may file a petition for freeze order without the
benefit of a bank inquiry if it is confident that the information it has at hand is
sufficient to justify a finding of probable cause. In the end, it is a matter of strategy
on what it should file first.
What happened here was an error in strategy. Because the application for
bank inquiry was filed after the Freeze Order had been issued, notably with notice to
the parties, the ex parte nature of the bank inquiry proceedings was rendered useless.
Through the Freeze Order, respondents were notified of the ongoing money
laundering investigation involving their accounts. As expected, and as will be
discussed more fully later, the bank inquiry done after the Freeze Order had been
issued revealed that most of the frozen accounts were already closed.
(2) Was the burden of proof shifted to the account holders following a
finding of probable cause by the Court of Appeals?
NO. The burden of proof never shifted to respondents. In actions for the issuance
of a freeze order, the burden of proving probable cause always rests with the Anti-
Money Laundering Council.
Once it has established a prima facie case against the owner of the accounts
sought to be frozen, the "burden of evidence" shifts to the owner to present
counterevidence and prove that their accounts are funded by legitimate sources. If
the counterevidence balances the evidence of probable cause, the burden of evidence
shifts back to the Anti-Money Laundering Council to justify the continued freezing of
the accounts." Unfortunately, here, petitioner miserably failed to do so.
(4) Did the Court of Appeals correctly lift the freeze order?
YES. Most of the frozen accounts were either closed or had minimal deposits.
There were few accounts found to have been involved in covered or suspicious
transactions under the Anti-Money Laundering Act.
The accounts involved covered or suspicious transactions, and petitioner was

required under the law to present evidence of probable cause that these accounts are
related to the alleged unlawful activity. Unfortunately, petitioner miserably failed to
show that these accounts were related to the allegedly irregular loan transactions
between Deltaventure and DBP, the predicate crime for which petitioner was
authorized to commence freeze order and bank inquiry proceedings against
respondents.

For these reasons, the Supreme Coirt found no error on the Court of Appeals'
part in unfreezing the accounts except for Boerstar Corporation's Bank of Commerce
Account No. 900000028241, the only account proved to be probably related to the loan
transactions between Deltaventure and DBP. This account served as the depository
account of the balance of the sale proceeds between Goldenmedia, among others, and
Two Rivers.75
g. Safe harbor provision
What is the meaning of the safe harbor provision under AMLA?
No administrative, criminal, or civil proceedings shall lie against any person for
having made a covered transaction or suspicious transaction report in the regular
performance of his duties and in good faith, whether or not such reporting results in
any criminal prosecution under the AMLA or any other Philippine law.76
75Republic of the Philippines, represented by the Anti-Money Laundering Council, v. Roberto V.

Ongpin, et; al, G.R. No. 207078, JUNE 20, 2022,
76Section 9(c), R.A. No. 9160.

2023 Pre-Week Banking

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2023 Pre-Week Banking

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2023 PRE-WEEK NOTES IN BANKING LAW

Dean Nilo T. Divina

A. The New Central Bank Act

h. Monetary Board; powers and functions

i. How the Bangko Sentral ng Pilipinas handles banks in distress

May a conservator revoke a valid contract of the bank?

When may the Monetary Board of the BSP appoint a receiver?

©2023 Dean Nilo T. Divina, All Rights Reserved. | 1

What is the nature of power of the receiver?

a. The appointment of a receiver operates to suspend the authority of the bank

2Section 30, ibid.

©2023 Dean Nilo T. Divina, All Rights Reserved. | 2

Can a bank under receivership be rehabilitated?

Who is the statutory receiver for closed banks?

©2023 Dean Nilo T. Divina, All Rights Reserved. | 3

Meanwhile, the Monetary Board issued MB Resolution 372.A, placing Banco

April 26, 2021.

©2023 Dean Nilo T. Divina, All Rights Reserved. | 4

A conservator is appointed if the bank is in a continuing state of lack of liquidity

The bank is allowed to do business if it is only under conservatorship but cannot

©2023 Dean Nilo T. Divina, All Rights Reserved. | 5

Maharlikang Pilipino Banking Corporation (MPBC) operates several

Receiving reports of these irregularities, the Supervising and

©2023 Dean Nilo T. Divina, All Rights Reserved. | 6

©2023 Dean Nilo T. Divina, All Rights Reserved. | 7

©2023 Dean Nilo T. Divina, All Rights Reserved. | 8

Law on Secrecy of Philippine Currency Deposits

X, a government official, has a number of bank accounts in T Bank

In what cases may information on Philippine currency bank deposits, as

a. Written permission of the depositor;21

©2023 Dean Nilo T. Divina, All Rights Reserved. | 9

Written permission of the depositor

Debtor filed a petition for voluntary insolvency. The appointed receiver

©2023 Dean Nilo T. Divina, All Rights Reserved. | 10

Order of a competent court

Elizabeth, through her daughter Ruby, charged Norlina of unauthorized

Did the OSI-BSP abuse its discretion in denying the motion?

Bribery or dereliction of duty of public officials; prosecution for unexplained wealth;

TRUE or FALSE. If the Ombudsman is convinced that there is a violation of

©2023 Dean Nilo T. Divina, All Rights Reserved. | 11

a. There is a case pending before a court of competent jurisdiction;

©2023 Dean Nilo T. Divina, All Rights Reserved. | 12

Court order shall not be necessary in the following cases:

Through various acts of graft and bribery, Mayor Ycasiano accumulated a

Is the legal position of YB, in requiring written permission from the

36Section 11, ibid.

©2023 Dean Nilo T. Divina, All Rights Reserved. | 13

Garnishment of bank deposits

Is the rule allowing garnishment of Philippine currency bank deposit

C. General Banking Law (R.A. No. 8791)

a. Definition and classification of banks

©2023 Dean Nilo T. Divina, All Rights Reserved. | 14

What is the kind of diligence required of banks?

Should Metrobank should be ordered to (i) render a full and detailed

43Development Bank of the Philippines v. Guarina Agricultural and Realty Development

©2023 Dean Nilo T. Divina, All Rights Reserved. | 15

Yes, it is required and expected of banks to exercise the highest degree of

The Bank's failure to observe the degree of diligence expected of it clearly

©2023 Dean Nilo T. Divina, All Rights Reserved. | 16

e. Nature of bank funds and bank deposits

iii. Restrictions on bank exposure to directors, officers,

What are the restrictions on a bank’s exposure to directors, officers,

No director or officer of any bank shall, directly or indirectly, for himself or as

©2023 Dean Nilo T. Divina, All Rights Reserved. | 17