BOUNCING

CHECKS LAW
BP 22
June 29, 1979
 AN ACT PENALIZING THE
MAKING OR DRAWING AND
ISSUANCE OF A CHECK
WITHOUT SUFFICIENT
FUNDS OR CREDIT AND FOR
OTHER PURPOSES.
WHAT IS A CHECK?

Under Sec. 185 of the Negotiable

Instruments Law, is a bill of
exchange drawn on a bank payable
on demand.
 WHAT IS A CHECK?
In Mitra v. People, G.R. No. 191404, 5 July 2010, “a check is a
negotiable instrument that serves as a substitute for money and
as a convenient form of payment in financial transaction and
obligations. The use of checks allows commercial and banking
transactions to proceed without the actual handling of money,
thus, doing away with the need to physically count bills and
coins whenever payment is made. It permits “c and b”
transactions to be carried out quickly and efficiently. But the
convenience afforded by checks is damaged by unfunded
checks that adversely affect confidence in our “c and b”
activities, and ultimately injure public interest.
 A CHECK IS
NOT A LEGAL
TENDER.
 BANK ACT
CENTRAL
OF THE
SECTION 63
 Checks representing deposit of
payment do not have legal tender
power and their acceptance in
payment of debts, both public and
private, is at the option of the creditor,
provided, however, that a check
which has been cleared and credited
to the account of the creditor shall be
equivalent to a delivery to the creditor
in cash in an amount equal to the
amount credited to his account.
 The payment of debts in money shall be made

CODE
OF THE CIVIL
ARTICLE 1249
in the currency stipulated, and if it is not
possible to deliver such currency, then in the
currency which is legal tender in the
Philippines.
 The delivery of promissory notes payable, or
bills of exchange or other mercantile
documents shall produce the effect of payment
only when they have been cashed, or when
through the fault of the creditor they have been
impaired.
 In the meantime, the action derived from the
original obligation shall be held in abeyance.
WHAT CONSTITUTE FUNDS?

Funds may either be deposit of

money or deposit of cuurency
WHAT IS MEANT BY CREDIT?

Under Sec. 4 of BP 22, credit is an

arrangement or understanding with
the drawee bank for the payment of
the check issued.
 PURPOSE
OF THE
BOUNCING
CHECKS
LAW
 PURPOSE
 To address the problem of the continued issuance
and circulation of unfunded checks by
irresponsible persons (specific purpose). It aims
to put a stop to or curbing the practice of
issuing checks that are worthless (those that
end up being rejected and dishonored in
payment). It is proscribed by the state because
of the injury it causes to public interests.
 It considers the act as an offense property and
against public order.
 PURPOSE
To declare the issuance of an unfunded
check as malum prohibitum is
1) to punish the offender in order to stop him
and other from committing the offense,
 2) to isolate him from society,
3) to reform and rehabilitate him, and
4) to maintain social order.
BOUNCING CHECK
Drawn against a DAIF
bank account with
insufficient funds NSF
Drawn against non-
sufficient funds DAUD
Drawn against
uncollected deposit.
IS THERE A BANK CHARGE FOR
BOUNCED CHECK?
YES!
There is a service charge for amount on per
returned check pursuantg to a rule effective
November 3,1997 of the Philippine Clearing
House Corporation (PCHC).
The bank charge goes to the drawee and the
collecting bank.
CHECKS COVERED BY BP
22

ANY CHECKS!!

Except Manager’s check and

Cashier’s check
CHECKS COVERED BY BP
22
Checks in general Post-dated checks
Checks issued to Deposit check
pay a pre-existing Corporate check
obligation Memorandum
Crossed check check
Accommodation or Foreign check
guarantee check (drawn against a
Current checks foreign bank)
POST-DATED CHECK
one that is dated after it is issued
and delivered.

itis not intended to be encashed

immediately but a date after the
issuance and delivery
ACCOMODATION
CHECK

checkfor the purpose of lending a

person's name to another
GUARANTEE/DEPOSIT
CHECK
either be an accomodation or any
other kind of check drawn an
delivered to guarantee the
performance of a principal
obligation.
FOREIGN CHECK
drawn against foreign bank
either they are drawn and issued in
the Philippines though payable
outside, are within the coverage of
the law.
WHY A MANAGER’S CHECK AND A
CASHIER’S CHECK IS NOT COVERED
BY BP 22
It is a well-known and accepted practice in the business
sector that a Cashier’s Check is deemed as cash.
Moreover, since the said check had been certified by the
drawee bank, by the certification, the funds represented by
check are transferred from the credit of the maker to that of
the payee or holder, and for all intents and purposes, the
latter becomes the depositor of the drawee bank, with
rights and duties of one in such situation. Where a check
is certified by the bank on which it is drawn, the
certification is equivalent to acceptance,
WHY A MANAGER’S CHECK AND A
CASHIER’S CHECK IS NOT COVERED
BY BP 22
said certification “implies that the check is drawn upon sufficient
funds in the hands of the drawee, that they have been set apart
for its satisfaction, and that they shall be so applied whenever the
check is presented for payment. It is an understanding that the
check is good, and this agreement is as binding on the bank as its
noted in circulation, a certificate of deposit payable to the order of the
depositor, or any obligation it can assume. The object of certifying a
check, as regards both parties, is to enable the holder to use it as a
money. When the holder procures the check to be certified, the check
operates as an assignment of a part of the funds to the creditors. New
Pacific Timber and Supply Company v. Seneris, G.R. No. L-41764,
December 19, 1980.
 WHAT DOES BP 22 PUNISH?
 Theissuance of a bouncing check and not the
purpose for which it is issued.

 It
holds true for checks issued to support another
contract or any other consideration regardless of
the outcome of the contract or consideration.

 It
is not the non-payment but the mere issuance of a
check that is worthless or of a check that is
dishonored upon presentation for payment.
ACTS PUNISHABLE UNDER BP22
MAKS
 The elements of Violation under Section 1, paragraph 1
 Making , drawing and issuance of any check to apply on account
or for value;
 Knowledge of the maker, drawer, or issuer that at the time of the
issue he does not have sufficient funds in or credit with the
drawee bank for the payment of the check in full upon its
presentment; and
 Subsequent dishonor of the check by the drawee bank for
insufficiency of funds or credit, or dishonor for the same reason
had not the drawer, without any valid cause, ordered the bank to
stop payment.
 Ambito v. People, G.R. No. 127327, 13 February 2009
ACTS PUNISHABLE UNDER BP22
 Under Section 1, paragraph 2
 When the drawer fails to maintain or keep a sufficient fund to cover
the check he issued, although at the time of the issuance of the
same, he has sufficient funds in or credit with the drawee bank, when
the check has been presented for payment within 90 days from the
date appearing thereon and for which reason, the bank dishonored
the same.
 It shall be punished with
ACTS PUNISHABLE UNDER BP22
 Under Section 1, paragraph 2
 Any person who, who makes or draws and issues a check;
 The drawer had sufficient funds or credit with the drawee
bank to cover the full amount of the check;
 Failure to keep sufficient funds or to maintain a credit to
cover the full amount of the check if presented within a period
of 90 days from the date appearing thereon; and
 For which reason it is dishonored by the drawee bank.
PRIMA FACIE EVIDENCE OF
VIOLATION OF BP22
Presentment for payment within 90 days from
the date of check
Drawer or maker received the Notice of
Dishonor-must be in writing
Drawer or maker fails to pay or make an
arrangement for payment within 5 banking
days after receipt of Notice of Dishonor
DUTY OF THE DRAWEE
Stamp/print/write the reason of dishonor or
refusal
Explicitly state the fact that there are no
sufficient fund in or credit in the Notice of
Dishonor
Give the drawer 5 banking days to pay or
make an arrangement
DUTY OF THE DRAWER
pay or make an arrangement within 5
banking days after receiving the NOD.

failure to do so will make the drawer liable

for violation of BP 22.
PERSONS LIABLE FOR VIOLATION
OF BP22
Natural person
 The signatory or signatories of the bounced
checks (e.g. personal checks)

The person or persons who actually signed

the check in behalf of such drawer which is a
corporation, company or entity
 e.g. corporate checks.
WHICH COURT HAS JURISDICTION
FOR BP 22

The MTC has exclusive original

jurisdiction in the prosecution of
BP 22 cases
 WHERE DO YOU FILE(VENUE)
BP 22 CASES?
• Filed in any place where any of the principal
elements was committed.

• The venue of the offense lies at the place where the

check was executed and delivered to the payee.

• Violation of BP 22 can be filed at the places of issue,

delivery, and dishonor of the check.
HOW IS AN OFFENSE OF BP 22
CALSSIFIED?
Continuing
(continuous or
transitory) offense
PENALTIES UNDER BP 22
 imprisonment of not less than 30 days but not
more than one year or
 by a fine of not less than but not more than
double the amount of the check which shall in
no case exceed P200,000.00
 BOTH imprisonmnet and fine, at the
discretion of the court.
PRINCIPLE APPLIED FOR
IMPOSITION OF PENALTIES
 Rule of Preference
 penalty of imprisonment should not be
applied for violations of the law if the
accused is first time offender and the
issuance of check was the offshoot of a
legitimate business transaction
ESTAFA OR SWINDLING

 Committed by any person who through

confidence or deceit defrauds another.
 Fraud in estafa through deceit should
be proved by clear and positve
evidence
ESTAFA OR SWINDLING

 committed by
 pos-dating a check or issuing the same
when:
 no funds
 no sufficient funds
PRIMA FACIE EVIDENCE OF
DECEIT
 failure
to deposit the amount necessary to
fund the check within 3 days from the
receipt of the notice from bank or the
payee or holder of the dishonored check, is
prima facie evidence of deceit constituting
false pretemse or fraudulent act.
 DIFFERENCE OF ESTAFA AND
BP22
POINT OF BOUNCING CHECK ESTAFA
DISTINCTION
Nature of crime against public interest against property
mala prohibita mala in se
Elements mere issuance deceit and damage
Penalty 30 days to 1 year severe or longer
imprisonment penalty
Drawer's knowledge of required not required
insufficiency
Evidence for violation 5 days 3 days
DEFENSES IN BP 22
CASES
 Forgery
 A forged signature renders the check inoperative
 No notice of Dishonor
 Without notice giving him the chance to make payment arrangements within 5 working days, one cannot raise the issue that
he had knowledge of the insufficiency of funds
 Stop payment order with valid cause
 The right of every person to suspend payments for valid cause (e.g., dissatisfaction) shall not render him liable for BP 22.
(Sycip v. CA)
 Speedy trial act
 Under Rule 119, Section 9, Revised Rules on Criminal Procedure, and action against the accused may be dismissed if not
brought to trial within the time limit required under Sec. 1 (g), Rule 116 and Section 1 as extended by Section 6 thereof.
Failure of the accused to move for dismissal shall be a waiver of such right to dismiss.
 Prescription
 Prescribes in 4 years from the commission of the offense, or if not known, from the time of the discovery of such
 Full payment
 It is a general rule that only a full payment at the time of its presentment or during the five-day grace period shall
exonerate one from criminal liability.