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
• 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.
• 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.
Owner/Holder of negotiable certificate of deposit-No
owner/holder ng any negotiable certificate of deposit shall be
recognized as a depositor entitled sa rights na binigay ng act,
unless yung pangalan n'ya ay naka-register as owner/holder na
nasa book ng issuing bank.
• Kapag may threat daw sa monetary and financial stability ng
banking system, yung maximum deposit insurance ay pwedeng
i-adjust, pero kailangan ng unanimous vote ng BOD in a
meeting called for the purpose and chaired by the secretary of
finance, na subject sa approval ng president ng pelipens.
COVERAGE NG INSURABLE DEPOSITS:
• Savings, Demand/Checking accounts, Negotiable order of
withdrawal, Time deposits, dollar deposits.
• Hindi covered yung investments products like bonds and
securities.
c. Maximum liability - (Sec. 4)
• Yung maximum deposit insurance coverage na 500k ay kailangan
bayaran ng corporation. Provided na, for the first 3 years ng
effectivity ng act na ito, yung unang 250k na deposit insurance
coverage lang yung pwedeng ibigay ng corporation, at yung
those in excess of 250k but not more than 500k yung National
government yung magbayayad. Kada taon daw, dapat
ibibinabalik congress sa corporation yung sobra sa 250k na
binigay nila sa depositors. Example: 300k yung insured na
deposit ng mga depositors, yung 250k ibibigay ng corporation or
ng bank once na magsara sila, yung 50k naman, yung
government yung magpo-provide.
d. Requirements for claim - (See: https://www.pdic.gov.ph/di
howtofileclaims)
REQUIREMENTS IN FILLING CLAIMS
3.1. ORIGINAL EVIDENCE OF DEPOSITS such as savings passbook,
certificate of time deposit, bank statement, used or unused checks,
or ATM card.
3.2. ONE (1) VALID ORIGINAL PHOTO-BEARING IDENTIFICATION
DOCUMENT (ID) with clear signature of depositor/claimant (e.g.
Driver's License, SSS/GSIS ID, Senior Citizen's ID, Passport, PRC ID,
 OWWA/OFW ID, Seaman's ID, Alien Certificate of Registration ID,
Voter's ID) or PhilID. (IT IS RECOMMENDED TO BRING AT LEAST
TWO (2) VALID IDS IN CASE OF DISCREPANCIES IN SIGNATURE).
3.3. For depositors below eighteen (18) years old, photocopy of birth
certificate from the Philippine Statistics Authority (PSA) or a duly
certified copy issued by the local civil registrar, and valid ID of the
parent.
3.4. Original copy of a notarized Special Power of Attorney (SPA) for
claimants who are not the signatories in the bank records. In the
case of minor depositor, the SPA must be executed by the parent.
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. 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.
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
• Personal filling
• 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; ar 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
Garnishment of a bank deposit does not violate the law
The prohibition against examination or inquiry does not
preclude its being garnished for satisfaction of judgment. The
disclosure is purely incidental to the execution process and it was not
the intention of the legislature to place bank deposits beyond the reach
of judgment creditor (PCIB v. CA, G.R. No. 84526, January 28, 1991).
Garnishment of foreign currency deposits
GR:Foreign currency deposits shall be exempt from attachment,
garnishment, or any other order or process of any court, legislative
body, government agency or any administrative body whatsoever (RA
6426, Sec 8).
XPN:The application of Sec. 8 of RA 6426 depends on the extent of its
justice. The garnishment of a foreign currency deposit should be
allowed to prevent injustice and for equitable grounds, otherwise, it
would negate Article 10 of the New Civil Code which provides that “in
case of doubt in the interpretation or application of laws, it is
presumed that the lawmaking body intended right and justice to
prevail (Salvacion v. Central Bank of the Philippines, G.R. 94723,
August 21, 1997).
The foreign currency deposit of a transient foreigner who
illegally detained and raped a minor Filipina can be garnished to
satisfy the award for damages to the victim The exemption from
garnishment of foreign currency deposits under R.A. 6426 cannot be
invoked to escape liability for the damages to the victim.
The garnishment of the transient foreigner’s foreign currency
deposit should be allowed to prevent injustice and for equitable
grounds. The law was enacted to encourage foreign currency deposit
and not to benefit a wrongdoer (Salvacion v. Central Bank of the
Philippines, supra).
i. Salvacion v. Central Bank, GR No. 94723, 21 August 1997
Penalties for violation of R.A. 1405
1. Imprisonment of not more than five (5) years
2. Fine of not more than P20,000.00
3. Both, in the discretion of the court (RA 1405, Sec. 5)
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.
d. 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.
4. Anti-Money Laundering (AMLA) Law – RA No. 9160
AMLA (RA No. 9160) – AN ACT DEFINING THE CRIME OF MONEY
LAUNDERING, PROVIDING PENALTIES THEREFOR AND FOR OTHER
PURPOSES
The Anti – Money Laundering Act of 2001
AS AMENDED BY:
RA NO. 9194 – An Act Amending RA NO. 9160, Otherwise known as
the Anti- Money Laundering Act of 2001.
Approved. March 7, 2003.
AS AMENDED BY:
RA 10167 - AN ACT TO FURTHER STRENGTHEN THE ANTI-MONEY
LAUNDERING LAW, AMENDING FOR THE PURPOSE SECTIONS 10
AND 11 OF REPUBLIC ACT NO. 9160, OTHERWISE KNOWN AS THE
ANTI-MONEY LAUNDERING ACT OF 2001, AS AMENDED, AND FOR
OTHER PURPOSES
Approved. June 6, 2012
AS AMENDED BY:
RA NO. 10365 - AN ACT FURTHER STRENGTHENING THE ANTI-
MONEY LAUNDERING LAW, AMENDING FOR THE PURPOSE
REPUBLIC ACT NO. 9160, OTHERWISE KNOWN AS THE “ANTI-
MONEY LAUNDERING ACT OF 2001”, AS AMENDED.
Approved. Feb 6, 2013
a. PURPOSE of the law:
SEC. 2. Declaration of Policy. — It is hereby declared the policy of the
State:
(1) to protect and preserve the integrity and confidentiality of bank
accounts and
(2) to ensure that the Philippines shall not be used as a money
laundering site for the proceeds of any unlawful activity.
(3) Consistent with its foreign policy, the State shall extend cooperation
in transnational investigations and prosecutions of persons involved in
money laundering activities wherever committed. (RA 9160)
b. ANTI-MONEY LAUNDERING COUNCIL
“SEC. 7. Creation of Anti-Money Laundering Council (AMLC). — The
Anti-Money Laundering Council is hereby created and shall be
composed of the Governor of the Bangko Sentral ng Pilipinas as
chairman, the Commissioner of the Insurance Commission and the
Chairman of the Securities and Exchange Commission as members.
The AMLC shall act unanimously in the discharge of its functions as
defined hereunder:
“(1) to require and receive covered or suspicious transaction reports
from covered institutions;
“(2) to issue orders addressed to the appropriate Supervising Authority
or the covered institution to determine the true identity of the owner of
any monetary instrument or property subject of a covered transaction
or suspicious transaction report or request for assistance from a
foreign State, or believed by the Council, on the basis of substantial
evidence, to be, in whole or in part, wherever located, representing,
involving, or related to, directly or indirectly, in any manner or by any
means, the proceeds of an unlawful
activity.
“(3) to institute civil forfeiture proceedings and all other remedial
proceedings through the Office of the Solicitor General;
“(4) to cause the filing of complaints with the Department of Justice or
the Ombudsman for the prosecution of money laundering offenses;
“(5) to investigate suspicious transactions and covered transactions
deemed suspicious after an investigation by AMLC, money laundering
activities, and other violations of this Act;
“(6) to apply before the Court of Appeals, ex parte, for the freezing of
any monetary instrument or property alleged to be the proceeds of any
unlawful activity as defined in Section 3(i) hereof;
“(7) to implement such measures as may be necessary and justified
under this Act to counteract money laundering;
“(8) to receive and take action in respect of, any request from foreign
states for assistance in their own anti-money laundering operations
provided in this Act;
“(9) to develop educational programs on the pernicious effects of money
laundering, the methods and techniques used in money laundering,
the viable means of preventing money laundering and the effective
ways of prosecuting and punishing offenders;
“(10) to enlist the assistance of any branch, department, bureau, office,
agency or instrumentality of the government, including government-
owned and -controlled corporations, in undertaking any and all anti-
money laundering operations, which may include the use of its
personnel, facilities and resources for the more resolute prevention,
detection and investigation of money laundering offenses and
prosecution of offenders; and
“(11) to impose administrative sanctions for the violation of laws, rules,
regulations and orders and resolutions issued pursuant thereto.”
i. Republic of the Philippines v. Sandiganbayan, GR Nos. 232724-
27, 15 February 2021
c. Definition of Terms – (Sec. 3)
i. Unlawful Activity – (Sec. 3C-4I)
SEC. 2. Section 3(i) of the same Act is hereby amended to read as
follows:
“(i) ‘Unlawful activity’ 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;
“(2) Sections 4, 5, 6, 8, 9, 10, 11, 12, 13, 14, 15 and 16 of Republic
Act No. 9165, otherwise known as the Comprehensive Dangerous
Drugs Act of 2002;
“(3) Section 3 paragraphs B, C, E, G, H and I of Republic Act No.
3019, as amended, otherwise known as the Anti-Graft and Corrupt
Practices Act;
“(4) Plunder under Republic Act 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
Presidential Decree No. 1602;
“(7) Piracy on the high seas under the Revised Penal Code, as
amended and Presidential Decree 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 Republic Act Nos. 455 and 1937;
“(11) Violations of Republic Act No. 8792, otherwise known as the
Electronic Commerce Act of 2000;
“(12) Hijacking and other violations under Republic Act 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 Republic Act No. 9372;
“(14) Financing of terrorism under Section 4 and offenses
punishable under Sections 5, 6, 7 and 8 of Republic Act 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 Presidential
Decree 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 Republic Act
No. 8550, otherwise known as the Philippine Fisheries Code of 1998;
 “(22) Violations of Sections 101 to 107, and 110 of Republic Act No.
7942, otherwise known as the Philippine Mining Act of 1995;
“(23) Violations of Section 27(c), (e), (f), (g) and (i), of Republic Act No.
9147, otherwise known as the Wildlife Resources Conservation and
Protection Act;
“(24) Violation of Section 7(b) of Republic Act No. 9072, otherwise
known as the National Caves and Cave Resources Management
Protection Act;
“(25) Violation of Republic Act No. 6539, otherwise known as the
Anti-Carnapping Act of 2002, as amended;
“(26) Violations of Sections 1, 3 and 5 of Presidential Decree 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 Presidential Decree No. 1612, otherwise known as
the Anti-Fencing Law;
“(28) Violation of Section 6 of Republic Act No. 8042, otherwise
known as the Migrant Workers and Overseas Filipinos Act of 1995, as
amended by Republic Act No. 10022;
“(29) Violation of Republic Act No. 8293, otherwise known as the
Intellectual Property Code of the Philippines;
“(30) Violation of Section 4 of Republic Act No. 9995, otherwise
known as the Anti-Photo and Video Voyeurism Act of 2009;
“(31) Violation of Section 4 of Republic Act 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 Republic Act No. 7610, otherwise known as the Special
Protection of Children Against Abuse, Exploitation and Discrimination;
“(33) Fraudulent practices and other violations under Republic Act
No. 8799, otherwise known as the Securities Regulation Code of 2000;
and
“(34) Felonies or offenses of a similar nature that are punishable
under the penal laws of other countries.
SEC. 3. Section 3 of the same Act shall have new paragraphs (j) and (k).
“(j) Precious metals’ shall mean gold, silver, platinum, palladium,
rhodium, ruthenium, iridium and osmium. These include alloys of
precious metals, solders and plating chemicals such as rhodium and
palladium plating solutions and potassium gold cyanide and
potassium silver cyanide and silver cyanide in salt solution.
“(k) ‘Precious stones’ shall mean diamond, ruby, emerald, sapphire,
opal, amethyst, beryl, topaz, and garnet that are used in jewelry
making, including those formerly classified as semi-precious stones.”
ii. Covered institutions – (Sec. 3A)
SECTION 1. Section 3(a) of Republic Act No. 9160, as amended, is
hereby amended to read as follows:
“(a) ‘Covered persons’, natural or juridical, refer to:
“(1) banks, non-banks, quasi-banks, trust entities, foreign exchange
dealers, pawnshops, money changers, remittance and transfer
companies and other similar entities and all other persons and their
subsidiaries and affiliates supervised or regulated by the Bangko
Sentral ng Pilipinas (BSP);
“(2) insurance companies, pre-need companies and all other persons
supervised or regulated by the Insurance Commission (IC);
“(3) (i) securities dealers, brokers, salesmen, investment houses and
other similar persons managing securities or rendering services as
investment agent, advisor, or consultant,
(ii) mutual funds, close-end investment companies, common trust
funds, and other similar persons, and
(iii) 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 the Securities and Exchange Commission
(SEC);
“(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.
• 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
iii. Covered transactions – (Sec. 3B)
1. Covered transaction is a transaction in cash or other
equivalent monetary instrument involving a total amount
in excess of Five hundred thousand pesos (P500,000.00)
within one (1) banking day. (RA 9160 as amended by Section 1
of RA 9194)
2. Jewelry dealers in precious stones, who, as a business, trade in
precious stones, for transactions in excess of Php1,000,000.
3. The Land Registration Authority and all its Registers of
Deeds to submit to the AMLC reports on all real estate
transactions involving an amount in excess of Php500,000
within 15 days from the date of registration of the transaction,
in a form prescribed by the AMLC. (RA 9160 as amended by
Section 6, RA 10365)
4. A single casino transaction involving an amount in excess of
five million pesos (Php5,000,000) or its equivalent in any
currency. (Section 2, RA 10927).
d. Money Laundering Offense – (Sec. 4)
SEC. 4. Money Laundering Offense. — 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:
(a) Any person knowing that any monetary instrument or property
represents, involves, or relates to, the proceeds of any unlawful activity,
transacts or attempts to transact said monetary instrument or
property.
(b) Any person knowing that any monetary instrument or property
involves the proceeds of any unlawful activity, performs or fails to
perform any act as a result of which he facilitates the offense of money
laundering referred to in paragraph (a) above.
(c) Any person knowing that any monetary instrument or property is
required under this Act to be disclosed and filed with the Anti-Money
Laundering Council (AMLC), fails to do so.
e. Prevention of Money Laundering – (Sec. 9)
Prevention of money laundering is done thru:
(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. The BSP
may conduct annual testing solely limited to the determination of the
existence and true identity of the owners of such accounts.
(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.
“(c) Reporting of Covered and Suspicious Transactions. – Covered
persons shall report to the AMLC all covered transactions and
suspicious transactions within five (5) working days from occurrence
thereof, unless the AMLC prescribes a different period not exceeding
fifteen (15) working days.
“Lawyers and accountants acting as independent legal professionals
are not required to report covered and suspicious transactions if the
relevant information was obtained in circumstances where they are
subject to professional secrecy or legal professional privilege.
“When reporting covered or suspicious transactions to the AMLC,
covered persons and their officers and employees are prohibited from
communicating, directly or indirectly, in any manner or by any means,
to any person or entity, the media, the fact that a covered or
suspicious transaction has been reported or is about to be reported,
the contents of the report, or any other information in relation thereto.
Neither may such reporting be published or aired in any manner or
form by the mass media”, electronic mail, or other similar devices. In
case of violation thereof, the concerned officer and employee of the
covered person and media shall be held criminally liable.”
Conviction of the unlawful activity is not necessary before a report is
made.
f. Authority to Freeze – (Sec. 10)
A. The Court of Appeals may issue a Freeze Order under the
following conditions:
1. There must be a verified ex parte petition by the AMLC.
2. Court of Appeals must determine that probable cause exists that
any monetary instrument or property is in any way related to an
unlawful activity as defined in Section 3 of RA 9160.
3. The freeze order shall be effective immediately.
4. The freeze order shall be for a period not exceeding six (6) months.
(Section 10, RA 9160, as amended by RA10167 and RA 10365).
B. The Court of Appeals should act on the petition to freeze within 24
hours from 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.
C. A person whose account has been frozen may file a motion to lift
the freeze order and the court must resolve this motion before the
expiration of freeze order.
D. No court shall issue a temporary restraining order or a writ of
injunction against any freeze order, except the Supreme Court.
i. Republic of the Philippines v. Solaire, GR No. 02 September
2020
g. Authority to Inquire into Banks – (Sec. 11)
The AMLC may inquire into or examine any particular deposit or
investment, including related accounts with any banking institution or
non-bank financial institution. This can be either upon order of the
court or even without court order in exceptional cases.
Inquiry into deposits under Section 11 does not require a pre-existing
criminal case.
A. COURT ORDER REQUIRED:
Examination by AMLC based on a Court order upon ex parte
application - is applicable in cases of violations of RA 9160, as
amended, when it has been established that there is probable cause
that the deposits or investments, including related accounts involved,
are related to:
(1) an Unlawful Activity (see enumeration)
(2) a money laundering offense.
Related Accounts shall refer to accounts, the funds and sources of
which originated from and/or are materially linked to the monetary
instruments or properties subject of the freeze order.
A court order ex parte must first be obtained before the AMLC can
inquire into related accounts.
The Court of Appeals must act on the application within 24 hours from
the filing.
B. NO COURT ORDER REQUIRED:
Court order is not required for the examination of bank deposits by
AMLC in cases involving:
1. Kidnapping for ransom under Art. 267 of the Revised Penal Code.
2. Violations of RA 9165 otherwise known as Comprehensive
Dangerous Drugs Act of 2002 (Sections 4,5,7,8,9,10,12,13,14 and 16).
3. Hijacking and other violations under RA 6235; destructive arson
and murder, as defined under the Revised Penal Code, including those
perpetrated by terrorists under non-combatant persons and similar
targets,
4. Felonies or offenses of a nature similar to those mentioned in
Section 3(i)(1), (2), and (12), which are Punishable under the penal
laws of other countries.
5. Terrorism and conspiracy to commit terrorism as defined and
penalized under Republic Act No. 9372
i. Republic of the Philippines v. Bolante, GR No. 186717, 17 April
2017
h. Forfeitures – (Sec. 12)
SEC. 9. Section 12 of the same Act is hereby amended to read as
follows:
“(a) Civil Forfeiture. – Upon determination by the AMLC 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) or a money
laundering offense under Section 4 hereof, the AMLC shall file with the
appropriate court through the Office of the Solicitor General, a verified
ex parte petition for forfeiture, and the Rules of Court on Civil
Forfeiture shall apply.
“The forfeiture shall include those other monetary instrument or
property having an equivalent value to that of the monetary
instrument or property found to be related in any way to an unlawful
activity or a money laundering offense, when with due diligence, the
former cannot be located, or it has been substantially altered,
destroyed, diminished in value or otherwise rendered worthless by any
act or omission, or it has been concealed,
removed, converted, or otherwise transferred, or it is located outside
the Philippines or has been placed or brought outside the jurisdiction
of the court, or it has been commingled with other monetary
instrument or property belonging to either the offender himself or a
third person or entity, thereby rendering the same difficult to identify
or be segregated for purposes of forfeiture.

“(b) Claim on Forfeited Assets. – Where the court has issued an order of
forfeiture of the monetary instrument or property in a criminal
prosecution for any money laundering offense defined under Section 4
of this Act, the offender or any other person claiming an interest
therein may apply, by verified petition, for a declaration that the same
legitimately belongs to him and for segregation or exclusion of the
monetary instrument or property corresponding thereto. The verified
petition shall be filed with the court which rendered the judgment of
forfeiture, within fifteen (15) days from the date of the finality of the
order of forfeiture, in default of which the said order shall become final
and executory. This provision shall apply in both civil and criminal
forfeiture.

i. Beneficial Ownership
j. Safe Harbor