Body of Synthesis Research

A Research Paper regarding Anti-Money Laundering Act, Intellectual Property Law, and New Central
Bank Act
ANTI-MONEY LAUNDERING ACT
DECLARATION
It is hereby declared the policy of the State to protect and preserve the integrity and confidentiality of
bank accounts and to ensure that the Philippines shall not be used as a money laundering site for the
proceeds of any unlawful activity.
Consistent with its foreign policy, the Philippines shall extend cooperation in transnational investigations
and prosecutions of persons involved in money laundering activities wherever committed.
ANTI-MONEY LAUNDERING ACT
Money laundering is an act or series or combination of acts whereby proceeds of an unlawful activity,
whether in cash, property or other assets, are converted, concealed or disguised to make them appear to
have originated from legitimate sources. One way of laundering money is through the financial system.
Republic Act No. 9160, otherwise known as the Anti-Money Laundering Act of 2001 (AMLA), as
amended, defined money laundering as a scheme whereby proceeds of an unlawful activity are transacted
or attempted to be transacted, thereby making them appear to have originated from legitimate sources.
Money laundering allows criminals to preserve and enjoy the proceeds of their crimes, thus providing
them with the incentives and the means to continue their illegal activities. At the same time, it provides
them the opportunity to appear in public like legitimate entrepreneurs. Organized crime, through money
laundering, is known to have the capacity to destabilize governments and undermine their financial
systems. It is thus a threat to national security.
The Bureau of Internal Revenue shall not intervene nor participate in any manner in the operations of the
Bureau of Internal Revenue.
DEFINITIONS:
COVERED PERSONS refer to the following:
1. Persons supervised or regulated by BSP, such as:
a. Banks;
b. Non-banks;
c. Quasi-banks;
d. Trust entities;
e. Pawnshops;
f. Non-stock savings and loan associations;
g. Electronic money issuers; and
h. All other persons and their subsidiaries and affiliates supervised or regulated by the BSP.
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For purposes of this RIRR, foreign exchange dealers, money changers, and remittance and transfer
companies are covered persons under the regulation of the BSP.
2. Persons supervised or regulated by IC, such as:

a. Insurance companies;
b. Pre-need companies;
c. Insurance agents;
d. Insurance brokers;
e. Professional reinsurers;
f. Reinsurance brokers;
g. Holding companies;
h. Holding company systems;
i. Mutual benefit associations; and
j. All other persons and their subsidiaries and affiliates supervised or regulated by the IE.
3. Persons supervised or regulated by SEC, such as:
a) Securities dealers, brokers, salesmen, investment houses, and other similar persons
managing securities or rendering services such as investment agents, advisors, or
consultants.
b) Mutual funds or open-end investment companies, close-end Investment companies or
issuers and other similar entities;
c) Other entities administering or otherwise dealing in commodities, or financial derivatives
based thereon, valuable objects, cash substitutes and other similar monetary instruments
or properties supervised and regulated by the SEC.
4. The following Designated Non-Financial Businesses and Professions (DNFBPs):
a) Jewelry dealers, dealers in precious metals, and dealers in precious stones.
"Dealer" refers to an individual or entity who buys and/or sells precious metals, precious
stones and/or jewelry in the course of its business activities. The purchases or sales of
precious metals, precious stones and/or jewelry as referred to herein exclude those carried
out for, connected with, or for the purpose of extracting precious metals or precious
stones from a mine, or cutting or polishing precious stones.
b) 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;
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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.
c) Persons, including lawyers and accountants, who provide any of the following services:
i. Managing of client money, securities or other assets;

ii. Management of bank, savings, securities or other assets;
iii. Organization of contributions for the creation, operation or management of
companies; and
iv. Creation, operation or management of juridical persons or and buying
arrangements, and selling business entities.
TRANSACTIONS refers to any act establishing any right or obligation, or giving rise to any contractual
or legal relationship between the parties thereto. It also includes any movement of funds by any means
with a covered person.
COVERED TRANSACTIONS refers to:

A transaction in cash or other equivalent monetary instrument exceeding Five Hundred Thousand pesos
(Php500, 000.00)
A transaction exceeding One Million pesos (Php1,000,000.00) in cases of jewelry dealers, dealers in
precious metals and dealers in precious stones.
SUSPICIOUS TRANSACTIONS refers to a transaction, regardless of amount, where any of the

following circumstances exists:
a) There is no underlying legal or trade obligation, purpose or economic justification;

b) The client is not properly identified;
c) The amount involved is not commensurate with the business or financial capacity of the client;
d) Taking into account all known circumstances, it may be perceived that the client's transaction is
structured in order to avoid being the subject of reporting requirements under the AMLA;
e) Any circumstance relating to the transaction which is observed to deviate from the profile of the
client and/or the client's past transactions with the covered person;
f) The transaction is in any way related to an unlawful activity or any money laundering activity or
offense that is about to be committed, is being or has been committed; or
g) Any transaction that is similar, analogous or identical to any of the foregoing.
CLIENT / CUSTOMER refers to any person who keeps an account, or otherwise transacts business with
a covered person. It includes the following:
a) Any person or entity on whose behalf of an account is maintained or a transaction is conducted,

as well as the beneficiary of said transactions;
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b) Beneficiary of a trust, an investment fund or a pension fund;
c) A company or person whose assets are managed by an asset manager;
d) A grantor of a trust; and
e) Any insurance policy holder, whether actual or prospective.
POLITICALLY EXPOSED PERSON (PEP) refers to an individual who is or has been entrusted with
prominent public position in (a) the Philippines with substantial authority over policy, operations or the
use or allocation of government-owned resources; (b) a foreign State; or (c) an international organization.
The term PEP shall include immediate family members, and close relationships and associates that are
reputedly known to have:
1. Joint beneficial ownership of a legal entity or legal arrangement with the main/principal PEP; or
2. Sole beneficial ownership of a legal entity or legal arrangement that is known to exist for the
benefit of the main/principal PEP.
IMMEDIATE FAMILY MEMBER refers to spouse or partner; children and their spouses; and parents
and parents-in-law.
"Beneficial Owner" refers to any natural person who:
1. Ultimately owns or controls the customer and/or on whose behalf a transaction or activity is being
conducted; or,
2. Has ultimate effective control over a legal person or arrangement.
OFFICIAL DOCUMENT refers to any of the following identification documents:
For Filipino citizens: Those issued by any of the following official authorities:
1. Government of the Republic of the Philippines, including its political subdivisions, agencies, and
instrumentalities
2. Government-Owned or Controlled Corporations (GOCCs)
3. Covered persons registered with and supervised or regulated by the BSP, SEC or IC
For foreign nationals: Passport or Alien Certificate of Registration
For Filipino students: School ID signed by the school principal or head of the educational institution
For low risk customers: Any document or information reduced in writing such the covered person
deems sufficient to establish the clients identity.
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MONETARY INSTRUMENT shall include, but is not limited to the following:
1. Coins or currency of legal tender of the Philippines, or of any other country;

2. Credit instruments, including bank deposits, financial interest, royalties, commissions and other
intangible property;
3. Drafts, checks and notes;
4. Stocks or shares, participation or interest in a corporation or in a commercial enterprise or profit-
making venture and evidenced by a certificate, contract, instrument, whether written or electronic
in character, including those enumerated in Section 3 of the Securities Regulation Code;
5. A participation or interest in any non-stock, non-profit corporation;
6. Securities or negotiable instruments, bonds, commercial papers, deposit certificates, trust
certificates, custodial receipts or deposit substitute instruments, trading orders, transaction tickets
and confirmations of sale or investments and money market instruments;
7. Contracts or policies of insurance, life or non-life, contracts of surety-ship, pre-need plans and
member certificates issued by mutual benefit association; and
8. Other similar instruments where title thereto passes to another by endorsement, assignment or
delivery.
PROPERTY refers to anything or item of value, real or personal, tangible or intangible, or any interest
therein, or any benefit, privilege, claim, or right with respect thereto, including:
1. Personal property, including proceeds derived therefrom, traceable to any unlawful activity, such
as, but not limited to:
a) Cash;
b) Jewelry, precious metals, and other similar items;
c) Works of art such as paintings, sculptures, antiques, treasures and other similar precious
objects;
d) Perishable goods; and
e) Vehicles, vessels or aircraft, or any other similar conveyance.
2. Personal property, used as instrumentalities in the commission of any unlawful activity, such as:
a) Computers, servers and other electronic information and communication systems; and
b) Any conveyance, including any vehicle, vessel and aircraft.
3. Real estate, improvements constructed or crops growing thereon, or any interest therein, standing
upon the record of the registry of deeds in the name of the party against whom the asset
preservation order is issued, or not appearing at all upon such records, or belonging to the party
against whom the asset preservation order is issued and held by any other person, or standing on
the records of the registry of deeds in the name of any other person, which are:
a) Derived from, or traceable to, any unlawful activity; or

b) Used as an instrumentality in the commission of any unlawful activity.
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PROCEEDS refers to an amount derived or realized from any unlawful activity.
MONETARY INSTRUMENT OR PROPERTY RELATED TO UNLAWFUL ACTIVITY refers to:
a) All proceeds of an unlawful activity;

b) All monetary, financial or economic means, devices, accounts, documents, papers, items or things
used in or having any relation to any unlawful activity;
c) All moneys, expenditures, payments, disbursements, costs, outlays, charges, accounts, refunds
and other similar items for the financing, operations, and maintenance of any unlawful activity;
and
d) For purposes of freeze order and bank inquiry: related and materially-linked accounts.
RELATED ACCOUNTS refers to those 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 or an order of
inquiry.
MATERIALLY-LINKED ACCOUNTS shall include the following:
a) All accounts or monetary instruments under the name of the person whose accounts, monetary
instruments or properties are the subject of the freeze order or an order of inquiry;
b) All accounts or monetary instruments held, owned or controlled by the owner or holder of the
accounts, monetary instruments or properties subject of the freeze order or order of inquiry,
whether such accounts are held, owned or controlled singly or jointly with another person;
c) All "In Trust For" accounts where either the trustee or the trustor pertains to a person whose
accounts, monetary instruments or properties are the subject of the freeze order or order of
inquiry;
d) All accounts held for the benefit or in the interest of the person whose accounts, monetary
instruments or properties are the subject of the freeze order or order of inquiry; and
e) All other accounts, shares, units or monetary instruments that are similar, analogous or identical
to any of the foregoing.
OFFENDER refers to any person who commits a money laundering offense.
PROBABLE CAUSE refers to such facts and circumstances which would lead a reasonably discreet,
prudent or cautious man to believe that any monetary instrument or property sought to be frozen, inquired
into or preserved is in any way related to any unlawful activity and/or money laundering offense.
There are 14 unlawful activities or predicate crimes covered by the AMLA. These are, in the order
enumerated in the law:
Kidnapping for ransom

Drug offenses
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Graft and corrupt practices
Plunder
Robbery and extortion
Jueteng and Masiao
Piracy on the high seas
Qualified theft
Swindling
Smuggling
Electronic Commerce crimes
Hijacking, destructive arson and murder, including those perpetrated against non-combatant
persons (terrorist acts)
Securities fraud
Felonies or offenses of a similar nature punishable under penal laws of other countries
HOW IS MONEY LAUNDERED THROUGH FINANCIAL SYSTEM?
Placement involves initial placement or introduction of the illegal funds into the financial system.
Financial institutions are usually used at this point.
Layering involves a series of financial transactions during which the dirty money is passed through a
series of procedures, putting layer upon layer of persons and financial activities into the laundering
process. Ex. wire transfers, use of shell corporations, etc.
Integration the money is once again made available to the criminal with the occupational and
geographic origin obscured or concealed. The laundered funds are now integrated back into the legitimate
economy through the purchase of properties, businesses and other investments.
SALIENT FEATURES OF THE LAW
It criminalizes money laundering, meaning it makes money laundering a crime, and provides
penalties for its commission, including hefty fines and imprisonment.
It states clearly the determination of the government to prevent the Philippines from becoming a
haven for money laundering, while ensuring to preserve the integrity and confidentiality of good
bank accounts.
It creates an Anti-Money Laundering Council (AMLC) that is tasked to oversee the
implementation of the law and to act as a financial intelligence unit to receive and analyse
covered and suspicious transaction reports.
It establishes the rules and the administration process for the prevention, detection and
prosecution of money laundering activities.
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Bank Act
It relaxes the bank deposit secrecy laws authorizing the AMLC and the Bangko Sentral ng
Pilipinas access to deposit and investment accounts in specific circumstances.
It requires covered institutions to report covered and suspicious transactions and to cooperate
with the government in prosecuting offenders. It also requires them to know their customers and
to safely keep all records of their transactions.
It carries provisions to protect innocent parties by providing penalties for causing the disclosure
to the public of confidential information contained in the covered and suspicious transactions.
It establishes procedures for international cooperation and assistance in the apprehension and
prosecution of money laundering suspects.
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 (1), (2) or (3) above;
e) Aids, abets, assists in or counsels the commission of the money laundering offenses referred to in
(1), (2) or (3) 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 (1), (2) or (3) above.
Any covered person who, knowing that a covered or suspicious transaction is required under the AMLA
to be reported to the AMLC, fails to do so.
ANTI-MONEY LAUNDERING COUNCIL AND ITS POWER
The AMLC is the Philippines financial intelligence unit, which is tasked to implement the AMLA. It is
composed of the Governor of the Bangko Sentral ng Pilipinas (BSP) as Chairman & the Commissioner of
the Insurance Commission (IC) and the Chairman of the Securities and Exchange Commission (SEC) as
members.
FUNCTIONS:
To require and receive covered or suspicious transaction reports from covered persons;
To issue orders addressed to the appropriate Supervising Authority or the covered person to
determine the true identity of the owner of any monetary instrument or property subject of a
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covered or suspicious transaction report, or request for assistance from a foreign State, or
believed by the AMLC, 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 any unlawful activity;
To institute civil forfeiture proceedings and all other remedial proceedings through the Office of
the Solicitor General;
To file complaints with the Department of Justice or the Office of the Ombudsman for the
prosecution of money laundering offenses and other violations under the AM LA;
To investigate suspicious transactions and covered transactions deemed suspicious after
investigation by the AMLC, money laundering activities and other violations of
the AMLA;
To file with the Court of Appeals, ex parte, through the Office of the Solicitor General:
a) A petition for the freezing of any monetary instrument or property that is in any way
related to an unlawful activity; or
b) An application for authority to inquire into or examine any particular deposit or
investment, including related accounts, with any banking institution or non-bank
financial institution.
To formulate and implement such measures as may be necessary and justified under the AMLA to
counteract money laundering.
To receive and take action in respect of any request from foreign states for assistance in their own
anti-money laundering operations as provided in the AMLA.
To develop educational programs, including awareness campaign on the pernicious effects, the
methods and techniques used, and the viable means of preventing money laundering and the
effective ways of prosecuting and punishing offenders;
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.
To impose administrative sanctions for the violation of laws, rules, regulations, orders, and
resolutions issued pursuant thereto.
To require the Land Registration Authority and all its Registries of Deeds to submit to the AMLC,
reports on all real estate transactions involving an amount in excess of Five hundred thousand
pesos (P500, 000.00) within fifteen (15) days from the date of registration of the transaction, in a
form to be prescribed by the AMLC. The AMLC may also require the Land Registration
Authority and all its Registries of Deeds to submit copies of relevant documents of all real estate
transactions.
JURISDICTION OVER MONEY LAUNDERING CASES
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Regional Trial Court. - The regional trial courts shall have the jurisdiction to try money laundering cases
committed by private individuals, and public officers not covered by the jurisdiction of the
Sandiganbayan.
Sandiganbayan. - The Sandiganbayan shall have jurisdiction to try money laundering cases committed
by public officers under its jurisdiction, and private persons who are in conspiracy with such public
officers.
AMLC SECRETARIAT
The AMLC shall be assisted by the AMLC Secretariat in the discharge of its functions.
Executive Director. - The AMLC Secretariat shall be headed by an Executive Director who shall be
appointed by the AMLC for a term of five (5) years. He must be a member of the Philippine Bar, at least
thirty-five (35) years of age, must have served for at least five (5) years either at the
BSP, the SEC or the IC, and of good moral character, unquestionable integrity and known probity. He
shall be considered a full-time, permanent employee of the BSP with the rank of Assistant Governor, and
shall be entitled to such benefits and subject to rules and regulations, as well as prohibitions, as are
applicable to officers of similar rank.
Composition. - In organizing the Secretariat, the AMLC may choose from those who have served,
continuously or cumulatively, for at least five (5) years in the BSP, the SEC or the IC. All members of the
Secretariat shall be considered regular employees of the BSP and shall be entitled to such benefits and
subject to such rules and regulations as are applicable to BSP employees of similar rank.
Detail and Secondment. - The AMLC may enlist the assistance of the BSP, the SEC or the IC, or any
other 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. This includes the use of any member of their personnel who may be detailed or seconded to
the AMLC, subject to existing laws and Civil Service Rules and Regulations. Detailed personnel shall
continue to receive their salaries, benefits and emoluments from their respective mother units. Seconded
personnel shall receive, in lieu of their respective compensation packages from their respective mother
units, the salaries, emoluments and all other benefits which their AMLC Secretariat positions are entitled
to.
PREVENTIVE MEASURES
CUSTOMER DUE DILIGENCE. - Covered persons shall establish and record the true identity of their
clients based on official documents, as defined under Rule 3.M of this RIRR. They shall maintain a
system of verifying the true identity of their clients based on reliable, independent source data, documents
of information 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. Covered persons shall establish appropriate systems and methods and adequate internal controls,
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compliant with the AMLA, this RIRR, other AMLC issuances, the guidelines issued by the Supervising
Authorities and internationally accepted anti-money laundering standards, for verifying and recording the
true and full identity of their customers.
1. Customer Identification
a) Face-to-face Contact
b) Minimum Customer Information and Identification Document
c) Third Party Reliance
d) Outsourcing the Conduct of Customer Identification
e) Identification and Verification of the Beneficial Owner, Trustee, Nominee, or Agent
2. Risk Assessment Covered persons shall develop clear, written and graduated customer
acceptance policies and procedures including a set of criteria for customers that are likely to pose
low, normal or high risk to their operations. The criteria may include: (1) the nature of the service
or product to be availed of by the customers; (2) the purpose of the account or transaction; (3) the
amount of funds to be deposited by a customer or the size of transactions undertaken; (4) the
regularity or duration of the transaction; (5) the fact that a customer came from a high risk
jurisdiction; (6) the existence of suspicious transaction indicators; and (7) such other factors the
covered persons may deem reasonable or necessary to consider in assessing the risk of a customer
to money laundering. Covered persons shall set the standards in applying reduced, normal and
enhanced customer due diligence, including a set of conditions for the denial of account opening
or services.
a) Reduced Due Diligence

b) Enhanced Due Diligence
3. Ongoing Monitoring of Customers, Accounts and Transactions - Covered persons shall, on the
basis of materiality and risk, update all customer information and identification documents of
existing customers required to be obtained under the AM LA, as amended, and this RIRR.
Covered persons shall establish a system that will enable them to understand the normal and
reasonable account or business activity of customers to ensure that the customers' accounts and
transactions are consistent with the covered person's knowledge of its customers, and the latter's
commercial activities, risk profile, and source of funds.
Covered persons shall apply enhanced due diligence on the customer if it acquires information in
the course of its customer account or transaction monitoring that:
a) Raises doubt as to the accuracy of any information or document provided or the

ownership of the entity;
b) Justifies reclassification of the customer from low or normal risk to high risk
pursuant to these Rules;
c) Indicates that any of the circumstances for the filing of a Suspicious Transaction
Report exists.
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If the covered person:
a) Fails to satisfactorily complete the enhanced due diligence procedures; or

b) Reasonably believes that performing the enhanced due diligence process will tip-off
the customer,
it shall file a Suspicious Transaction Report, and closely monitor the account and review the
business relationship.
4. Prohibited Accounts - The following accounts shall be prohibited and may be the subject of the
Supervising Authorities' annual testing for the sole purpose of determining the existence and true
identity of their owners:
a) Anonymous Accounts and Accounts Under Fictitious Name
b) Numbered Accounts
RECORD KEEPING
Covered persons shall maintain and safely store for five (5) years from the dates of transactions all
records of customer identification and transaction documents of their customers.
1. Retention of Records Where the Account is the subject of the Case

If a case has been filed in court involving the account, records must be retained and safely kept
beyond the five (5)-year period, until it is officially confirmed by the AMLC Secretariat that the
case has been resolved, decided or terminated with finality.
2. Closed Accounts
Covered persons shall maintain and safely store for at least five (5) years from the dates the
accounts were closed, all records of customer identification and transaction documents.
3. Form of Records
Covered persons shall retain all records as originals or in such forms as are admissible in court.
Covered persons shall, likewise, keep the electronic copies of all covered and suspicious
transaction reports for, at least, five (5) years from the dates of submission to the
AMLC. For low risk customers, it is sufficient that covered persons shall maintain and store, in
whatever form, a record of customer information and transactions.
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TRANSACTION REPORTING
Covered persons shall report to the AMLC all covered transactions and suspicious transactions within five
(5) working days, unless the AMLC prescribes a different period not exceeding fifteen (15) working days,
from the occurrence thereof.
Should a transaction be determined to be both a covered and a suspicious transaction, the same shall be
reported as a suspicious transaction.
1. Substance and Form of Reports

Covered persons shall ensure the accuracy and completeness of Covered Transaction Report
(CTR) and Suspicious Transaction Report (STR), which shall be filed in the forms prescribed by
the AMLC and shall be submitted in a secured manner to the AMLC in electronic form.
2. Confidentiality of Reporting
When reporting covered or suspicious transactions, 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, or the media, the fact that a covered or suspicious transaction has
been or is about to be reported, the contents of the report, or any other information in relation
thereto.
3. Safe Harbor Provision

No administrative, criminal or civil proceedings shall lie against any person for having made a
CTR or STR 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.
4. Enrolment with the AMLCs Reporting System

All covered persons shall register with the AMLC's electronic reporting system within ninety (90)
days from the effectivity of this RIRR.
PREVENTIVE MEASURES FOR SPECIFIC CUSTOMERS AND ACTIVITIES
Politically Exposed Persons. - Covered persons shall establish and record the true and full identity of
PEPs, as well as their immediate family members and the entities related to them.
In case of domestic PEPs or persons who have been entrusted with a prominent function by an
international organization, in addition to performing the applicable due diligence measures under Rule 9,
covered persons shall:
a) Take reasonable measures to determine whether a customer or the beneficial owner is a PEP; and
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b) In cases when there is a higher risk business relationship, adopt measures under b to d below.
In relation to foreign PEPs, in addition to performing the applicable customer due diligence measures
under Rule 9, covered persons shall:
a) Put in place risk management systems to determine whether a customer or the beneficial owner is
a PEP;
b) Obtain senior management approval before establishing (or continuing, for existing customers)
such business relationships;
c) Take reasonable measures to establish the source of wealth and the source of funds of customers
and beneficial owners identified as
d) PEPs; and
e) Conduct enhanced ongoing monitoring on that relationship.
Correspondent Banking. - Covered persons shall adopt policies and procedures to prevent
correspondent banking. Activities from being utilized for money laundering activities, and designate an
officer responsible in ensuring compliance with these policies and procedures.
A covered person may rely on the customer identification process undertaken by the respondent bank
pursuant to the circulars and guidelines that may be promulgated by the BSP.
In relation to cross-border correspondent banking and other similar relationships, covered persons are
required to:
a) Gather sufficient information about a respondent institution to understand fully the nature of the
respondent's business, and to determine from publicly available information the reputation of the
institution and the quality of supervision, including whether it has been subject to a ML/TF
investigation or regulatory action;
b) Assess the respondent institution's anti-money laundering and combating the financing of
terrorism (AML/CFT) controls;
c) Obtain approval from senior management before establishing new correspondent relationships;
and
d) Clearly understand the respective AML/CFT responsibilities of each institution.
With respect to "payable-through accounts," covered persons are required to satisfy themselves that the
respondent bank:
a) Has performed customer due diligence obligations on its customers that have direct access to the
accounts of the correspondent bank; and
b) Is able to provide relevant customer due diligence information upon request to the correspondent
bank.
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Shell Company/Bank and Bearer Share Entities. -A covered person shall always apply enhanced due
diligence on both the entity and its beneficial owners when dealing with a shell company.
No shell bank shall be allowed to operate or be established in the Philippines. Covered persons shall
refuse to deal, or enter into, or continue, correspondent banking relationship with shell banks. They shall
likewise guard against establishing relations with foreign financial institutions that permit their accounts
to be used by shell banks.
Wire/Fund Transfers. - Covered persons shall establish policies and procedures designed to prevent
wire/fund transfers from being utilized for money laundering activities.
Customer from High Risk Jurisdiction. - A customer from a foreign jurisdiction that is recognized as
having inadequate internationally accepted anti-money laundering standards, or presents greater risk for
money laundering or its associated predicate offenses, shall be subject to enhanced customer due
diligence.
Foreign Branches and Subsidiaries. - Covered persons shall ensure that their foreign branches and
majority-owned subsidiaries apply the requirements under the AMLA, as amended, and this RIRR, where
the minimum AML/CFT requirements of the host county are less strict, to the extent that the laws and
regulations of the host country permit.
SAMPLE CASES FOR ANTI-MONEY LAUNDERING ACT
CASE I: GLASGOW CREDIT AND COLLECTION SERVICES, INC. and CITYSTATE

SAVINGS BANK, INC.
On July 18, 2003, the Republic, as represented by the Anti-Money Laundering Council (AMLC) filed a
complaint in the Manila Regional Trial Court for civil forfeiture of assets (with urgent plea for issuance of
a temporary restraining order (TRO) and a writ of preliminary investigation) against the bank deposits in
an account maintained by Glasgow in Citystate Savings Bank, Inc (CSBI). While the trial court granted
the TRO and the writ of preliminary injunction, the summons to Glasgow was returned unserved since
it can no longer be found at its last known address.
On May 31, 2004, the trial court ordered the reinstatement of the case directing the Republic to serve the
alias summons to Glasgow and CSBI within 15days.On July 12, 2004, the Republic received a copy of
the sheriffs return stating that the alias summons was returned unserved as GLASGOW was no longer
holding office at the given address since July 2002.On August 11, 2005, the Republic filed a
manifestation and ex parte motion to resolve its motion for leave of court to serve summons by
publication.
On August 12, 2005, the Office of the Solicitor General (OSG) received a copy of GLASGOWs motion
to dismiss by way of special appearance alleging that 1) the court had no jurisdiction over its person as
summons had not yet been served on it 2) the complaint was premature and stated no cause of action and
3) there was failure to prosecute on the part of the Republic.
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On October 17, 2005, the trial court dismissed the case on the grounds of 1) improper venue 2)
insufficiency of the complaint in form and substance and 3) failure to prosecute and lifted the writ of
preliminary injunction. Petitioner filed a petition for review.
The issue in this case is whether or not the complaint for civil forfeiture was properly instituted.
RULING
Sec. 12 (a) of RA 9160 provides two conditions when applying for civil forfeiture: 1. when there is
suspicious transaction report or a covered transaction report deemed suspicious after investigation by the
AMLC; 2. the court has, in a petition filed for the purpose; ordered the seizure of any monetary
instrument or property, in whole or in part, directly or indirectly, related to said report.
It is the preliminary seizure of the property in question which brings it within the reach of the judicial
process. It is actually within the courts possession when it is submitted to the process of the court. The
injunctive writ issued on August 8, 2003 removed account no. CA-005-10-000121-5 from the effective
control of either Glasgow or CSBI or their representatives or agents and subjected it to the process of the
court.
Whether or not there is truth in the allegation that account no. CA-005-10-000121-5 contains the proceeds
of unlawful activities is an evidentiary matter that may be proven during trial. The complaint, however,
did not even have to show or allege that Glasgow had been implicated in a conviction for, or the
commission of, the unlawful activities of estafa and violation of the Securities Regulation Code.
A criminal conviction for an unlawful activity is not a prerequisite for the institution of a civil forfeiture
proceeding. Stated otherwise, a finding of guilt for an unlawful activity is not an essential element of civil
forfeiture.
CASE II: RCBC GRILLED ANEW OVER FAKE ACCOUNTS IN ALLEGED MONEY
LAUNDERING
This news have been released last March 29, 2016 by CNN Philippines.
RCBC President Lorenzo Tan admitted he knew of the alleged $81 million bank heist only "after the
funds had left already.
Metro Manila (CNN Philippines) Sen. Sergio Serge Osmea, chair of the Senate committee on banks,
once again slammed Rizal Commercial Banking Corp. (RCBC) officials for failing to stop the entry of the
$81 million stolen from Bangladesh Bank.
During the third senate hearing on the money laundering case on Tuesday (March 29), RCBC President
Lorenzo Tan admitted he knew of the alleged $81 million bank heist only "after the funds had left
already.
Osmea asked, what threshold amount could have prompted RCBC to stop an anomalous transaction?
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At that time it was one billion pesos (around $20 million), RCBC Legal and Regulatory Affairs Head
Macel Estavillo said.
This means high ranking bank officers would only be informed when such an amount enters the bank in a
single transaction but that is still not a guarantee that the transaction would be referred to senior
management.
After a series of questionings, Tan said he would be forewarned probably when instincts kick in, and
that his employees would surely inform him at the end of the day.
Osmea called this very poor compliance, saying the money could have been remitted already by that
time, like what happened with the $81 million.
Estavillo maintained that banks can stop anomalous transactions but for a temporary period only, citing
several laws such as the Bank Secrecy Law and the Anti-Money Laundering Act. She said all the banks
could do was file a suspicious transaction report.
She also called for amendment to the laws to give more teeth to the banks.
Osmea insisted that there is no secrecy to protect if the persons who own the bank accounts "doesn't
exist."
However, Estavillo said that "even if the account holder would be fictitiousfirst there has to be a court
order determining that the bank secrecy law still applies to the deposit.
RCBC Legal and Regulatory Affairs Head Macel Estavillo: "Even if the account holder would be
fictitiousfirst there has to be a court order determining that the bank secrecy law still applies to the
deposit."
But Osmea said he interviewed other banks who say they would stop a bank transaction if they knew the
money was stolen. Estavillo maintained, RCBC alone could not tell whether the money was really
laundered.
Estavillo said the RCBC management is willing to divulge the banks procedures "but if possible in an
executive session because there are so many security measures that we will be discussing and it would be
difficult to discuss without compromising the security of our bank.
RCBC urged to submit records of fictitious accounts or be cited for contempt.
Heated debates ensued as the five-hour Senate hearing dragged on.
Sen. Aquilino Pimentel III disputed RCBCs use of the Bank Secrecy Law and compelled the banks
management to submit all documents relating to the five fictitious dollar accounts that received the $81
million.
The fake accounts were under the names Michael Francisco Cruz, Jessie Christopher Lagrosas, Ralph
Picache, Enrico Teodoro Vasquez and Alfred Santos Vergara.
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If the depositors have been determined by the bank itself as fictitious depositors, there is no point in
invoking or applying the bank secrecy law, Pimentel said. He said fake accounts are not entitled to any
protection.
Estavillo said RCBC had already furnished copies of the requested documents to the AMLC, but Pimentel
maintained that it should submit the same directly to the Senate.
We do not have any legal jurisprudence Your honor, we cannot comply," Estavillo said.
Pimentel was supposed to move to cite the RCBC for contempt, but the AMLC confirmed that the bank
had already submitted necessary documents to the council.
AMLC added the documents were attached to the criminal complaints it filed at the Department of Justice
(DOJ), making these public records.
Pimentel said he is willing to suspend his motion, depending on the completeness of the documents
submitted by RCBC.
Sen. Koko Pimentel: I'm willing to suspend my motion. I'm not abandoning my motion. We can confront
this issue again in the future. Because I sincerely believe that a fictitious account already determined by
the bank as fictitious is not entitled to any protection.
INTELLECTUAL PROPERTY LAW RESEARCH
INTRODUCTION
Intellectual Property is a property that arises from the human intellect. It is a product of human creation. It
can be an invention, an original design, a practical application of a good idea, and a mark of ownership
such as trademark, literary and artistic works, among other things. The term intellectual property rights
consists of (1) copyrights and related rights; (2) trademarks and service marks; (3) geographic indications;
(4) industrial designs; (5) patents; (6) layout-designs (topographies) of integrated circuits; and (7)
protection of undisclosed information. In 1980, the Philippines became a member of the World
Intellectual Property Organization (WIPO). It was a signatory to a number of significant multilateral
international agreements and treaties for the protection and promotion of intellectual property rights.
The Philippines has long recognized the importance of intellectual property protection. In fact, as early as
June 20, 1947, we have had a Republic Act 165 which is the Patent Law of the Philippines and Republic
Act 166 which is the Trademark Law. However, even before Republic Act 166 (Trademark Law of 1947),
trademarks were protected in the Philippines through registration as early as 1888 during the Spanish
regime. During the American occupation of the Philippines, we had Act No. 666 which based trademark
protection on use, a principle, which was adopted in Republic Act 166. On copyright, since December 15,
1972, Presidential Decree No. 49 has been in effect.
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This leads us to the importance of protecting intellectual property rights. Safeguarding the rights of
scientists, artists, and other holders of IP encourages more intellectual property creations. This means
more inventions, innovations, discoveries, and scientific discussions that will develop our indigenous
science and technology (Optical Media Bill FAQ Primer). In addition, the creative geniuses of Filipinos in
the fields of arts and music are also promoted to emerge and thrive. Therefore, by protecting the IPRs, we
not only develop our economy though the economic revenues generated by the endeavors, but we also
support the growth of our culture.
The Law
Republic Act No. 8293 [An Act Prescribing the Intellectual Property Code and Establishing the
Intellectual Property Office, Providing for Its Powers and Functions, and for Other Purposes] otherwise
known as the Intellectual Property Code of the Philippines.
State Policy Declaration
The State recognizes that an effective intellectual and industrial property system is vital to the
development of domestic and creative activity, facilitates transfer of technology, attracts foreign
investments, and ensures market access for our products. It shall protect and secure the exclusive rights
of scientists, inventors, artists and other gifted citizens to their intellectual property and creations,
particularly when beneficial to the people, for such periods as provided in this Act.
The use of intellectual property bears a social function. To this end, the State shall promote the diffusion
of knowledge and information for the promotion of national development and progress and the common
good.
It is also the policy of the State to streamline administrative procedures of registering patents, trademarks
and copyright, to liberalize the registration on the transfer of technology, and to enhance the enforcement
of intellectual property rights in the Philippines.
Effect on International Conventions and on Principles of Reciprocity
Any person who is a national or who is domiciled or has a real and effective industrial establishment in a
country which is a party to any convention, treaty or agreement relating to intellectual property rights or
the repression of unfair competition, to which the Philippines is also a party, or extends reciprocal rights
to nationals of the Philippines by law, shall be entitled to benefits to the extent necessary to give effect to
any provision of such convention, treaty or reciprocal law, in addition to the rights to which any owner of
an intellectual property right is otherwise entitled by this Act.
SIGNIFICANT FEATURES OF THE LAW
1. A shift was made from the "first-to-invent system" under R. A. 165 [old law] to "first-to-file
system" under the new law.
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2. In the case of inventions, the period of the grant was increased from 17 years from grant under
the old law to 20 years from date of filing under the new law.
3. In the case of utility models, the previous grant of 5 years plus renewals of 5 years each under the
old law was changed to 7 years without renewal under the new law.
4. In the case of industrial designs, the previous grant of 5 years plus renewals of 5 years each was
maintained.
5. Under the old law, there was no opposition proceedings and the examination is mandatory; under
the new law, the examination is made only upon request [possibly with or without examination].
6. Under the old law, publication is made after the grant; under the new law, publication is effected
after 18 months from filing date or priority date.
7. Under the old law, the penalties for repetition of infringement are: PhP10, 000 and/or 5 years of
imprisonment and the offense prescribes in 2 years; under the present law, the penalties range
from PhP100, 000 to PhP300, 000 and/or 6 months to 3 years of imprisonment and the offense
prescribes in 3 years.
PARTS OF LAW
The Intellectual Property Code of the Philippines is divided into five [5] parts, to wit:
PART I - The Intellectual Property Office

PART II - The Law on Patents
PART III - The Law on Trademarks, Service Marks and Trade Names
PART IV - The Law on Copyright
PART V - Final Provisions
In this research paper, we will only emphasize the important matters regarding every parts of the
Intellectual Property Law.
Part I: THE INTELLECTUAL PROPERTY OFFICE
The Philippines has long recognized the importance of intellectual property protection. In fact, as early as
June 20, 1947, we have had a Republic Act 165 which is the Patent Law of the Philippines and Republic
Act 166 which is the Trademark Law. However, even before Republic Act 166 (Trademark Law of 1947),
trademarks were protected in the Philippines through registration as early as 1888 during the Spanish
regime. During the American occupation of the Philippines, we had Act No. 666 which based trademark
protection on use, a principle, which was adopted in Republic Act 166. On copyright, since December 15,
1972, Presidential Decree No. 49 has been in effect.
Intellectual Property is a property that arises from the human intellect. It is a product of human creation. It
can be an invention, an original design, a practical application of a good idea, a mark of ownership such
as trademark, literary and artistic works, among other things. The term intellectual property rights consists
of (1) copyrights and related rights; (2) trademarks and service marks; (3) geographic indications; (4)
industrial designs; (5) patents; (6) layout-designs (topographies) of integrated circuits; and (7) protection
of undisclosed information .Republic Act No. 8293, was created in order to protect intellectual property
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In 1980, the Philippines became a member of the World Intellectual Property Organization (WIPO). It
was a signatory to a number of significant multilateral international agreements and treaties for the
protection and promotion of intellectual property rights.
The State recognizes that an effective intellectual and industrial property system is vital to the
development of domestic and creative activity, facilitates transfer of technology, attracts foreign
investments, and ensures market access for our products. It shall protect and secure the exclusive rights of
scientists, inventors, artists and other gifted citizens to their intellectual property and creations,
particularly when beneficial to the people, for such periods as provided in this Act.
The use of intellectual property bears a social function. To this end, the State shall promote the diffusion
of knowledge and information for the promotion of national development and progress and the common
good. It is also the policy of the State to streamline administrative procedures of registering patents,
trademarks and copyright, to liberalize the registration on the transfer of technology, and to enhance the
enforcement of intellectual property rights in the Philippines.
The International Conventions and Reciprocity states that any person who is a national or who is
domiciled or has a real and effective industrial establishment in a country which is a party to any
convention, treaty or agreement relating to intellectual property rights or the repression of unfair
competition, to which the Philippines is also a party, or extends reciprocal rights to nationals of the
Philippines by law, shall be entitled to benefits to the extent necessary to give effect to any provision of
such convention, treaty or reciprocal law, in addition to the rights to which any owner of an intellectual
property right is otherwise entitled by this Act. The term "technology transfer arrangements" refers to
contracts or agreements involving the transfer of systematic knowledge for the manufacture of a product,
the application of a process, or rendering of a service including management contracts; and the transfer,
assignment or licensing of all forms of intellectual property rights, including licensing of computer
software except computer software developed for mass market. The term "Office" refers to the
Intellectual Property Office created by this Act. The term "IPO Gazette" refers to the gazette published by
the Office under this Act.
PART II: THE LAW OF PATENTS

PATENTABILITY
A patent shall confer on its owner the following exclusive rights:
Where the subject matter of a patent is a product, to restrain, prohibit and prevent any
unauthorized person or entity from making, using, offering for sale, selling or importing that
product
Where the subject matter of a patent is a process, to restrain, prevent or prohibit any unauthorized
person or entity from using the process, and from manufacturing, dealing in, using, selling or
offering for sale, or importing any product obtained directly or indirectly from such process.
Patent owners shall also have the right to assign, or transfer by succession the patent, and to
conclude licensing contracts for the same.
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The Patentable Inventions is any technical solution of a problem in any field of human activity which is
new, involves an inventive step and is industrially applicable shall be patentable. It may be, or may relate
to, a product, or process, or an improvement of any of the foregoing. Non-Patentable Inventions. The
following shall be excluded from patent protection: Discoveries, scientific theories and mathematical
methods; Schemes, rules and methods of performing mental acts, playing games or doing business, and
programs for computers; Methods for treatment of the human or animal body by surgery or therapy and
diagnostic methods practiced on the human or animal body. This provision shall not apply to products and
composition for use in any of these methods; Plant varieties or animal breeds or essentially biological
process for the production of plants or animals. This provision shall not apply to micro-organisms and
non-biological and microbiological processes.
LIMITATION OF PATENT RIGHTS
The owner of a patent has no right to prevent third parties from performing, without his authorization, the
acts referred to in Section 71 hereof in the following circumstances:
(1) Using a patented product which has been put on the market in the Philippines by the owner of the
product, or with his express consent, insofar as such use is performed after that product has been so put on
the said market;
(2) Where the act is done privately and on a non-commercial scale or for a non-commercial purpose:
Provided, that it does not significantly prejudice the economic interests of the owner of the patent;
(3) Where the act consists of making or using exclusively for the purpose of experiments that relate to the
subject matter of the patented invention;
(4) Where the act consists of the preparation for individual cases, in a pharmacy or by a medical
professional, of a medicine in accordance with a medical prescription or acts concerning the medicine so
prepared;
(5)Where the invention is used in any ship, vessel, aircraft, or land vehicle of any other country entering
the territory of the Philippines temporarily or accidentally: Provided, that such invention is used
exclusively for the needs of the ship, vessel, aircraft, or land vehicle and not used for the manufacturing
of anything to be sold within the Philippines.
EFFECTIVE DATE OF PATENT
If the application meets the requirements of this Act, the Office shall grant the patent: Provided, that all
the fees are paid on time. If the required fees for grant and printing are not paid in due time, the
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application shall be deemed to be withdrawn. A patent shall take effect on the date of the publication of
the grant of the patent in the IPO Gazette.
TERM OF PATENT
The term of a patent shall be twenty (20) years from the filing date of the application.
CANCELLATION OF PATENT
Any interested person may, upon payment of the required fee, petition to cancel the patent or any claim
thereof, or parts of the claim, on any of the following grounds:
a. That what is claimed as the invention is not new or Patentable;

b. That the patent does not disclose the invention in a manner sufficiently clear and complete for it
to be carried out by any person skilled in the art; or
c. That the patent is contrary to public order or morality.
Where the grounds for cancellation relate to some of the claims or parts of the claim, cancellation may be
effected to such extent only.
RIGHT TO A PATENT
The right to a patent belongs to the inventor, his heirs, or assigns. When two (2) or more persons have
jointly made an invention, the right to a patent shall belong to them jointly.
PATENTABLE MATTERS
Patentable Inventions. Any technical solution of a problem in any field of human activity which is
new, involves an inventive step and is industrially applicable shall be Patentable. It may be, or may relate
to, a product, or process, or an improvement of any of the foregoing. (Section 21)
Non-Patentable Inventions. The following shall be excluded from patent protection:
Discoveries, scientific theories and mathematical methods; Schemes, rules and methods of
performing mental acts, playing games or doing business, and programs for computers; Methods
for treatment of the human or animal body by surgery or therapy and diagnostic methods practiced on the
human or animal body. This provision shall not apply to products and composition for use in any of
these methods; Plant varieties or animal breeds or essentially biological process for the production of
plants or animals. This provision shall not apply to micro-organisms and non-biological and
microbiological processes.
Provisions under this subsection shall not preclude Congress to consider the enactment of a law providing
sui generis protection of plant varieties and animal breeds and a system of community intellectual rights
protection: Aesthetic creations; and anything which is contrary to public order or morality.
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PART III: THE LAW OF TRADEMARKS, SERVICE MARKS AND TRADE NAMES
"Mark" means any visible sign capable of distinguishing the goods (trademark) or services (service mark)
of an enterprise and shall include a stamped or marked container of goods;
"Collective mark" means any visible sign designated as such in the application for registration and
capable of distinguishing the origin or any other common characteristic, including the quality of goods or
services of different enterprises which use the sign under the control of the registered owner of the
collective mark;
"Trade name" means the name or designation identifying or distinguishing an enterprise;
"Bureau" means the Bureau of Trademarks;

"Director" means the Director of Trademarks;
"Regulations" means the Rules of Practice in Trademarks and Service Marks formulated by the Director
of Trademarks and approved by the Director General;
"Examiner" means the trademark examiner.

Trademark infringement is the unauthorized use in commerce of a registered trademark or a copy or
colourable imitation thereof, which results in the likelihood of confusion among the consuming public.
The elements of trademark infringement are: (1) a registered trademark in the Philippines, (2) plaintiffs
ownership of said mark, and (3) use of the trademark or imitation thereof by a third person, which results
in likelihood of confusion.
REGISTRABILITY
A Mark cannot be registered if it:
a. Consists of immoral, deceptive or scandalous matter, or matter which may disparage or falsely
suggest a connection with persons, living or dead, institutions, beliefs, or national symbols, or
bring them into contempt or disrepute;
b. Consists of the flag or coat of arms or other insignia of the Philippines or any of its political
subdivisions, or of any foreign nation, or any simulation thereof;
c. Consists of a name, portrait or signature identifying a particular living individual except by his
written consent, or the name, signature, or portrait of a deceased President of the Philippines,
during the life of his widow, if any, except by written consent of the widow;
d. Is identical with a registered mark belonging to a different proprietor or a mark with an earlier
filing or priority date, in respect of:
i. The same goods or services, or

ii. Closely related goods or services, or
iii. If it nearly resembles such a mark as to be likely to deceive or cause confusion;
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e. Is identical with, or confusingly similar to, or constitutes a translation of a mark which is

considered by the competent authority of the Philippines to be well-known internationally and in
the Philippines, whether or not it is registered here, as being already the mark of a person other
than the applicant for registration, and used for identical or similar goods or
services: Provided, That in determining whether a mark is well-known, account shall be taken of
the knowledge of the relevant sector of the public, rather than of the public at large, including
knowledge in the Philippines which has been obtained as a result of the promotion of the mark;
f. Is identical with, or confusingly similar to, or constitutes a translation of a mark considered well-
known in accordance with the preceding paragraph, which is registered in the Philippines with
respect to goods or services which are not similar to those with respect to which registration is
applied for: Provided, That use of the mark in relation to those goods or services would indicate a
connection between those goods or services, and the owner of the registered mark: Provided
further, That the interests of the owner of the registered mark are likely to be damaged by such
use;
g. Is likely to mislead the public, particularly as to the nature, quality, characteristics or geographical
origin of the goods or services;
h. Consists exclusively of signs that are generic for the goods or services that they seek to identify;
i. Consists exclusively of signs or of indications that have become customary or usual to designate
the goods or services in everyday language or in bona fide and established trade practice;
j. Consists exclusively of signs or of indications that may serve in trade to designate the kind,
quality, quantity, intended purpose, value, geographical origin, time or production of the goods or
rendering of the services, or other characteristics of the goods or services;
k. Consists of shapes that may be necessitated by technical factors or by the nature of the goods
themselves or factors that affect their intrinsic value;
l. Consists of color alone, unless defined by a given form; or
m. Is contrary to public order or morality.
REQUIREMENTS OF APPLICATION
a. A request for registration;
b. The name and address of the applicant;
c. The name of a State of which the applicant is a national or where he has domicile; and the name
of a State in which the applicant has a real and effective industrial or commercial establishment,
if any;
d. Where the applicant is a juridical entity, the law under which it is organized and existing;
e. The appointment of an agent or representative, if the applicant is not domiciled in the Philippines;
f. Where the applicant claims the priority of an earlier application, an indication of:
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i. The name of the State with whose national office the earlier application was filed or it
filed with an office other than a national office, the name of that office,
ii. The date on which the earlier application was filed, and
iii. Where available, the application number of the earlier application;
g. Where the applicant claims color as a distinctive feature of the mark, a statement to that effect as
well as the name or names of the color or colors claimed and an indication, in respect of each
color, of the principal parts of the mark which are in that color;
h. Where the mark is a three-dimensional mark, a statement to that effect;
i. One or more reproductions of the mark, as prescribed in the Regulations;
j. A transliteration or translation of the mark or of some parts of the mark, as prescribed in the
Regulations;
k. The names of the goods or services for which the registration is sought, grouped according to the
classes of the Nice Classification, together with the number of the class of the said Classification
to which each group of goods or services belongs; and
l. A signature by, or other self-identification of, the applicant or his representative.
RIGHTS CONFERRED
The owner of a registered mark shall have the exclusive right to prevent all third parties not having the
owners consent from using in the course of trade identical or similar signs or containers for goods or
services which are identical or similar to those in respect of which the trademark is registered where such
use would result in a likelihood of confusion. In case of the use, of an identical sign for identical goods or
services, a likelihood of confusion shall be presumed.
The exclusive right of the owner of a well-known mark which is registered in the Philippines, shall extend
to goods and services which are not similar to those in respect of which the mark is
registered: Provided, That use of that mark in relation to those goods or services would indicate a
connection between those goods or services and the owner of the registered mark: Provided, further, That
the interests of the owner of the registered mark are likely to be damaged by such use.
RENEWAL
A certificate of registration may be renewed for periods of ten (10) years at its expiration upon payment
of the prescribed fee and upon filing of a request. The request shall contain the following indications:
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a. An indication that renewal is sought;
b. The name and address of the registrant or his successor-in-interest, hereafter referred to as
the "right holder";
c. The registration number of the registration concerned;

d. The filing date of the application which resulted in the registration concerned to be renewed;
e. Where the right holder has a representative, the name and address of that representative;
f. The names of the recorded goods or services for which the renewal is requested or the names of
the recorded goods or services for which the renewal is not requested, grouped according to the
classes of the Nice Classification to which that group of goods or services belongs and presented
in the order of the classes of the said Classification; and
g. A signature by the right holder or his representative.
CANCELLATION
A petition to cancel a registration of a mark under this Act may be filed with the Bureau of Legal Affairs
by any person who believes that he is or will be damaged by the registration of a mark under this Act as
follows:
a. Within five (5) years from the date of the registration of the mark under this Act.
b. At any time, if the registered mark becomes the generic name for the goods or services, or a
portion thereof, for which it is registered, or has been abandoned, or its registration was obtained
fraudulently or contrary to the provisions of this Act, or if the registered mark is being used by, or
with the permission of, the registrant so as to misrepresent the source of the goods or services on
or in connection with which the mark is used. If the registered mark becomes the generic name
for less than all of the goods or services for which it is registered, a petition to cancel the
registration for only those goods or services may be filed. A registered mark shall not be deemed
to be the generic name of goods or services solely because such mark is also used as a name of or
to identify a unique product or service. The primary significance of the registered mark to the
relevant public rather than purchaser motivation shall be the test for determining whether the
registered mark has become the generic name of goods or services on or in connection with which
it has been used.
c. At any time, if the registered owner of the mark without legitimate reason fails to use the mark
within the Philippines, or to cause it to be used in the Philippines by virtue of a license during an
uninterrupted period of three (3) years or longer.
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UNFAIR COMPETITION, RIGHTS, REGULATION AND REMEDIES
A person who has identified in the mind of the public the goods he manufactures or deals in, his business
or services from those of others, whether or not a registered mark is employed, has a property right in the
goodwill of the said goods, business or services so identified, which will be protected in the same manner
as other property rights.
Unfair Competition is a form of copying and making false statements by one which passes off its own
goods for those of another that has an established goodwill. The copying and or passing off may include
copying of the trademark or giving ones own goods the general appearance of another, which causes
likelihood of confusion. The elements of unfair competition are: (1) confusing similarity in the
appearance of the goods involved, and (2) intent to deceive the public.
SIGNIFICANT CHANGES IN THE TRADEMARK LAW
The significant changes in the trademark law under the old law [R. A. No. 166] and the present law are as
follows:
1. Under the former, the element of use before filing a local application is a requirement although
this is not required when the application is based on foreign registration; while under the latter,
the element of use has been eliminated as a requirement for application.
2. Under the former, the term granted is 20 years renewable for 20-year periods; while under the
latter, the term is for 10 years, renewable for 10-year periods.
3. Under the former, the affidavit of use or non-use is required on the 5th, 10th and 15th
anniversaries; while under the latter, proof of use within 3 years from the filing of the application
is required and the affidavit of use should be filed within 1 year from the 5th anniversary.
4. Under the former, a Supplemental Register is required to be maintained; while under the latter, it
is no longer required.
5. Under the former law, penalties for infringement, unfair competition, false designation of origin
and false description or representation range from fine of PhP500 to PhP2, 000 and/or 6 months
to 3 years and 4 months of imprisonment; while under the latter law, the penalties range from fine
of PhP50, 000 to PhP200, 000 and/or 2 to 5 years of imprisonment.
RELATED FAQS
What is False Designation of Origin and False Description of Goods?
False designation of origin or false description is committed when one who in the course of trade uses any
word, term, symbol or device, which is likely to cause confusion or mistake on the consuming public as to
the affiliation, connection, association of such person with another person, sponsorship or approval of his
or her goods, services or commercial activities by another person. It is also committed by misrepresenting
the nature, characteristic, quality and geographic origin of the goods or services in advertising or
promotion of said goods and services.
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Can a foreign company file an action for trademark infringement, unfair competition or false
designation of goods in the Philippines?
Yes. A foreign national or corporation, whether or not licensed to do business in the Philippines, may
bring a civil or administrative action for trademark infringement, unfair competition or false designation
so long as such individual or corporation is domiciled in a country which is a party to any convention,
treaty or agreement relating to intellectual property rights or the repression of unfair competition, to
which the Philippines is also a party, or extends reciprocal rights to the nationals of the Philippines by
law.
What enforcement actions are available to intellectual property owners whose rights are being
infringed in the Philippine market?
The intellectual property owner may work with government agencies to conduct a raid action pursuant to
a valid search warrant or a visit/inspection pursuant to some of the government agencies visitorial
powers.
A raid action is usually conducted by the National Bureau of Investigation (Intellectual Property Rights
Division) and the Philippine National Police (Criminal Investigation and Detection Group).
The Optical Media Board and the Intellectual Property Enforcement Office can conduct an inspection and
issue warning letters through their visitorial powers.
The course of action depends on the end goal of the intellectual property owner. If the owner wants to
seize a huge inventory of counterfeit items, it is best to conduct a raid action. If the aim is to deter
continuing infringing acts done in a small scale, a visit/inspection by the Intellectual Property
Enforcement Office or the Optical Media Board may suffice.
How can one seize counterfeit products or infringing items from the market?
A raid pursuant to a court issued search warrant may be conducted to ensure that the counterfeit products
are seized and removed from the market. The IP owner may file a letter complaint with the enforcement
agency, usually the National Bureau of Investigation or the Philippine National Police, who will conduct
an independent investigation to ascertain the validity and truthfulness of the complaint and the scope of
the infringement.
Once the infringement is confirmed, the enforcement agent will apply for the issuance of a search
warrant. If there are valid grounds, the court will issue a search warrant, which must be served within 10
days. The raiding team will then conduct a search and seizure operation whereby all counterfeit and
infringing items will be confiscated and will be placed under the courts custody and stored in a bonded
warehouse. An inventory and a return of the search warrant should be submitted to the court after the raid.
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How is trademark infringement, unfair competition and false designation prosecuted?
An IP owner may file a criminal, civil, or administrative action against an infringer.
Criminal Action
A criminal action may be initiated by filing a complaint with the prosecutor. The Prosecutor then conducts
the preliminary investigation to determine if there are reasonable grounds for infringement. If there are
reasonable grounds, the Prosecutor will issue an Order recommending the filing of Criminal Information
in Court.
After the filing of the Criminal Information, the Court will issue a warrant of arrest. The Accused has the
option to post bail. Once the Accused is arrested and/or posts bail, he or she will be arraigned. The Court
will then proceed to try the criminal case and if the accused is found guilty of infringement beyond a
reasonable doubt, it will issue a decision of conviction.
The IP owner will participate in the civil aspect of the criminal action if he is claiming damages.
A person found guilty in a criminal case for trademark infringement, unfair competition and/or false
designation will be imprisoned for a term of 2 years to 5 years, and will be ordered to pay a fine ranging
from Php 50,000 to Php 200,000.
Civil Action
An IP owner may file a civil action to recover damages from any person who infringes his or her rights.
The award of damages shall be either the reasonable profit the plaintiff would have made, had a defendant
not infringed his rights, or the profit that the defendant actually received from the infringement. In the
event that such damages cannot be ascertained with reasonable certainty, the Court may award as
damages a reasonable percentage based upon the amount of gross sales received by the defendant in
connection with the use of plaintiffs trademark. In cases where actual intent to mislead the public or to
defraud the plaintiff is shown, the damages may be doubled upon the discretion of the Court.
Other forms of relief, such as injunction and the impounding of the counterfeit products, sales invoices
and other documents evidencing sales, are also available as remedies to plaintiff.
Administrative Action
An administrative action for trademark infringement, unfair competition and/or false designation may be
filed with the Bureau of Legal Affairs (BLA) of the Intellectual Property Office (IPO). The total amount
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of damages claimed should be Php 200,000 or more. Provisional remedies, such as an injunction are
available.
The administrative penalties available may include the issuance of a cease and desist order; condemnation
and seizure of infringing products; imposition of administrative fines ranging from Php 5,000 to Php
150,000 and an additional fine of up to Php 1,000 for each day of continuing violation; cancellation or
withholding of any permit, license or registration granted or being secured from the IPO; the assessment
of damages; censure; and other analogous penalties or sanctions.
Can a foreign corporation or trademark owner enforce its trademark rights even if the trademark
is not registered in the Philippines?
Yes. An action for unfair competition may be filed by owners of trademarks, which are not registered in
the Philippines.
Is actual use of a trademark necessary before one can file for a trademark infringement or unfair
competition action?
Yes. Likelihood of confusion is an element of trademark infringement and unfair competition. To prove
likelihood of confusion, the mark being infringed upon should be used on goods or services that are
available in the Philippines. An exception to this rule is if the mark being infringed upon is an
internationally well-known trademark that is also a well-known trademark in the Philippines.
Can one prevent counterfeit goods from entering the Philippines?
Yes. The Bureau of Customs has a system of recording intellectual property rights, where it alerts owners
of shipment of counterfeit and/or original goods imported by unauthorized importers or distributors. If the
goods are confirmed as counterfeit, they will be seized accordingly.
The recordation of IP rights or products covered therein is valid for two (2) years from the date of
recordation, and shall be renewable every two (2) years thereafter.
PART IV: LAW ON COPYRIGHT
Copy right is the legal protection extended to the owner of the rights in an original work . In the
Intellectual Property (IP) Code of the Philippines, literary and artistic works include books, writings,
musical works, films, paintings, and other works including computer programs.
Under the Philippine Law the following are considered copyrightable
According to Section 172 of the Intellectual Property Code: literary and artistic works refer to the original
and intellectual creations protected from the moment of their creation. This include:
a) Books, pamphlets, articles and other writings;

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b) Periodicals and newspapers;
c) Lectures, sermons, addresses, dissertations prepared for oral delivery, whether or not reduced in
writing or other material form;
d) Letters;
e) Dramatic or dramatic-musical compositions; choreographic works or entertainment in dumb
shows;
f) Musical compositions, with or without words;
g) Works of drawing, painting, architecture, sculpture, engraving, lithography or other works of art;
models or designs for works of art;
h) Original ornamental designs or models for articles of manufacture, whether or not registrable as
an industrial design, and other works of applied art;
i) Illustrations, maps, plans, sketches, charts and three-dimensional works relative to geography,
topography, architecture or science;
j) Drawings or plastic works of a scientific or technical character;
k) Photographic works including works produced by a process analogous to photography; lantern
slides;
l) Audio-visual works and cinematographic works and works produced by a process analogous to
cinematography or any process for making audio-visual recordings;
m) Pictorial illustrations and advertisements;
n) Computer programs; and
o) Other literary, scholarly, scientific and artistic works
According to Section 173.2 of the Intellectual Property Code, derivative works are defines as new works
provided that they do not violate any subsisting copyright upon the original works employed or any part
thereof, or to imply any right to such use of the original works, or to secure or extend copyright in such
original works. The following derivative works include:
a) Dramatizations, translations, adaptations, abridgments, arrangements, and other alterations of

literary or artistic works; and
b) Collections of literary, scholarly or artistic works, and compilations of data and other materials
which are original by reason of the selection or coordination or arrangement of their contents.
Works not protected by copyright under Philippine Law
1. Idea, procedure, system method or operation, concept, principle, discovery of mere data as such,
even if they are expressed, explained, illustrated or embodied in a work;
2. News of the day and other miscellaneous facts having the character of mere items of press
information;
3. Official text of a legislative, administrative or legal nature, as well as any official translation
thereof;
4. Work of the Philippine Government, unless there was a prior approval by the appropriate
government agency; and
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5. Statutes, rules and regulations, and speeches, lectures, sermons, addresses, and dissertations,
pronounced, read or rendered in courts of justice, before administrative agencies, in deliberative
assemblies and in meetings of public character.
Ownership of Copyright
In the case of original literary and artistic works, copyright shall belong to the author of the work.
In the case of works of joint authorship, the co-authors shall be the original owners of the copyright, and
in the absence of agreement, their rights shall be governed by the rules on co-ownership. If, however, a
work of joint authorship consists of parts that can be used separately and the author of each part can be
identified, the author of each part shall be the original owner of the copyright in the part that he has
created;
In the case of work created by an author during and in the course of his employment, the copyright shall
belong to:
a) The employee, if the creation of the object of copyright is not a part of his regular duties even
if the employee uses the time, facilities and materials of the employer.
b) The employer, if the work is the result of the performance of his regularly assigned duties,
unless there is an agreement, express or implied, to the contrary.
In the case of a work commissioned by a person other than an employer of the author and who pays for
it, and the work is made in pursuance of the commission, the person who so commissioned the work shall
have ownership of the work, but the copyright thereto shall remain with the creator, unless there is a
written stipulation to the contrary;
In the case of audio-visual work, the copyright shall belong to the producer, the author of the scenario, the
composer of the music, the film director, and the author of the work so adapted. However, subject to
contrary or other stipulations among the creators, the producers shall exercise the copyright to an extent
required for the exhibition of the work in any manner, except for the right to collect performing license
fees for the performance of musical compositions, with or without words, which are incorporated into the
work; and In respect of letters, the copyright shall belong to the writer subject to the provisions of the
Civil Code of the Philippines.
Types of the Rights under the Law of Copyright
The author of a work has copy or economic rights, as well as moral rights over the work.
The author has the exclusive right to carry out, authorize or prevent the:
1. Reproduction of the work or substantial portion of the work;

2. Dramatization, translation, adaptation, abridgment, arrangement or other transformation of the
work;
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3. The first public distribution of the original and each copy of the work by sale or other forms of
transfer of ownership;
4. Rental of the original or a copy of an audio-visual or cinematographic work, a work embodied in

a sound recording, a computer program, a compilation of data and other materials or a musical
work in graphic form, irrespective of the ownership of the original or the copy which is the
subject of the rental;
5. Public display of the original or a copy of the work;
6. Public performance of the work; and
7. Other communication to the public of the work.
This allows the author to ask for or obtain payment for the use of his or her work by third parties.
Moral rights confer the following on the author of a work:
1. To require that the authorship of the works be attributed to him, in particular; the right that his
name, as far as practicable, be indicated in a prominent way on the copies, and in connection with
the public use of his work;
2. To make any alterations of his work prior to, or to withhold it from publication;
3. To object to any distortion, mutilation or other modification of, or other derogatory action in
relation to, his work which would be prejudicial to his honor or reputation; and
4. To restrain the use of his name with respect to any work not of his own creation or in a distorted
version of his work.
These rights allow the author of the work to maintain his or her personal connection to the work, and to
undertake measures in order to protect this connection.
Limitations on Copyright

The recitation or performance of a work, if it had been made accessible to the public, and if
done in private and free of charge. Performance of a work done under a charitable or
religious institution shall also fall under this.[14]

The quotation of published works if they are compatible with fair use and only to an extent.
This includes quotations from newspaper articles and periodicals provided that the source
and the name of the author, if available, are mentioned. [15]

The reproduction of articles or communication by the mass media on current political, social,
economic, scientific, or religious topics, lectures, addresses, and other works of the same
nature, which are delivered in public and will only be used for information purposes. [16]

The reproduction and communication to the public of literary, scientific, or artistic works for
reporting current events.
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The inclusion of a work in a publication, broadcast, or other forms of communication, if it
will be used as aids in teaching and if it is compatible with fair use. Also, the author and the
name of the author shall be mentioned.

The recording of a work made in educational institutions for the use of that education
institution. In accordance to this, the recording should be deleted after the first broadcast.
Also, the said recording should not be from works which are part of a film except for brief
excerpts of the work.

The making of recordings by a broadcast organization for its own broadcasting purposes.

The use of a work under the direction or control of the government or other institutions for
the purpose of informing and public. It must also be compatible with fair use.

The public performance of a work in a place without admission fee and for other purposes
that does not include profit making.

The public display of a work not made on screen or by other devices.

The use of a work for judicial proceedings or for legal advice.
What constitutes copyright infringement in the Philippines?
Under Philippine law, copyright infringement occurs when there is a violation of any of the exclusive
economic or moral rights granted to the copyright owner.
What are the remedies available to an owner of a copyright against an infringer?
The copyright owner can file a criminal, civil or administrative action for copyright infringement. A
criminal case for copyright infringement must be filed in the court situated in the place where the
violation occurred. The administrative suit is filed at the Bureau of Legal Affairs at the Intellectual
Property Office of the Philippines. A civil infringement lawsuit is filed in the appropriate court located at
the place where the defendant resides/is located, or where the plaintiff resides/is located, at the option of
the plaintiff.
What are the penalties provided by Philippine law for copyright infringement?
Under Philippine law, copyright infringement is punishable by the following:
1) Imprisonment of between 1 to 3 years and a fine of between 50,000 to 150,000 pesos for the first
offense.
2) Imprisonment of 3 years and 1 day to six years plus a fine of between 150,000 to 500,000 pesos
for the second offense.
3) Imprisonment of 6 years and 1 day to 9 years plus a fine ranging from 500,000 to 1,500,000 pesos
for the third and subsequent offenses.
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4) The offending party may also be ordered to pay civil damages.
5) Injunction and destruction of the infringing goods or products can also be obtained.
REQUIREMENTS FOR COPYRIGHT REGISTRATION
1. Application should be accomplished in duplicate, typewritten and the affidavit at the back should
be duly notarized and affixed with Fifteen Pesos (P15.00) documentary stamp. Another set of
Fifteen Pesos (Php 15.00) worth of documentary stamps, should be stapled to the application
form to be affixed by the office to the copyright certificate.
2. Application should be accompanied by two (2) copies of the work as deposit, Two Hundred Pesos
(P200.00) as registration fee. If through mail, registration fee should be in postal money order
addressed to the Director, The National Library.
3. If the work applied for registration is an original ornamental design (classification H), it should
be accompanied by a technical description of the design.
4. If the work applied for registration is published work, two (2) printed copies with copyright
notice printed in front or at the back of the title page if it is a book and on any clear space thereof
if non-book material, shall accompany the application
The copyright notice shall be in the form Philippine Copyright 20__ (year of publication) by
____________ (name of copyright owner.)
No. 8 of the application should be filled up by stating the specific date when the work is finished
and likewise No. 9 be filled up to indicate when the work is published.
A published work for purposes of registration means that the work has been disseminated to the
public prior to its registration with the Copyright Office.
5. If the work applied for registration is unpublished work, two (2) manuscript and/or xerox copies
of the work without the copyright notice shall accompany the application.
Unpublished work for purposes of registration means that the work has not been disseminated
to the public at the time of registration.
6. If the applicant is non-resident foreigner, he/she should appoint a local authorized agent by a
special power of attorney to complete the copyright application for and in his/her behalf.
7. If the claimant is not the author, a document supporting the claim such as a deed of assignment or
a waiver of copyright ownership;
8. If the applicant is a proprietor or a corporation, a photocopy of the certificate of business name or

SEC certificate (whichever is applicable) should be attached to the application.
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PART V FINAL PROVISION
Equitable Principles to Govern Proceedings
In all inter partes proceedings in the Office under this Act, the equitable principles of laches, estoppel, and
acquiescence where applicable, may be considered and applied.
Reverse Reciprocity of Foreign Laws

Any condition, restriction, limitation, diminution, requirement, penalty or any similar burden imposed by
the law of a foreign country on a Philippine national seeking protection of intellectual property rights in
that country, shall reciprocally be enforceable upon nationals of said country, within Philippine
jurisdiction.
Appeals
Appeals from decisions of regular courts shall be governed by the Rules of Court. Unless
restrained by a higher court, the judgment of the trial court shall be executory even pending
appeal under such terms and conditions as the court may prescribe.
Unless expressly provided in this Act or other statutes, appeals from decisions of administrative
officials shall be provided in the Regulations.
Organization of the Office; Exemption from the Salary Standardization Law and the Attrition Law
The Office shall be organized within one (1) year after the approval of this Act. It shall not be
subject to the provisions of Republic Act No. 7430.
The Office shall institute its own compensation structure: Provided, that the Office shall make its
own system conform as closely as possible to the principles provided for under Republic Act No.
6758.
Abolition of the Bureau of Patents, Trademarks, and Technology Transfer

The Bureau of Patents, Trademarks, and Technology Transfer under the Department of Trade and Industry
is hereby abolished. All unexpended funds and fees, fines, royalties and other charges collected for the
calendar year, properties, equipment and records of the Bureau of Patents, Trademarks and Technology
Transfer, and such personnel as may be necessary are hereby transferred to the Office. Personnel not
absorbed or transferred to the Office shall enjoy the retirement benefits granted under existing law,
otherwise, they shall be paid the equivalent of one month basic salary for every year of service, or the
equivalent nearest fractions thereof favorable to them on the basis of the highest salary received.
Applications Pending on Effective Date of Act
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All applications for patents pending in the Bureau of Patents, Trademarks and Technology
Transfer shall be proceeded with and patents thereon granted in accordance with the Acts under
which said applications were filed, and said Acts are hereby continued to be enforced, to this
extent and for this purpose only, notwithstanding the foregoing general repeal thereof: Provided,
That applications for utility models or industrial designs pending at the effective date of this Act,
shall be proceeded with in accordance with the provisions of this Act, unless the applicants elect
to prosecute said applications in accordance with the Acts under which they were filed.
All applications for registration of marks or trade names pending in the Bureau of Patents,
Trademarks and Technology Transfer at the effective date of this Act may be amended, if
practicable to bring them under the provisions of this Act. The prosecution of such applications so
amended and the grant of registrations thereon shall be proceeded with in accordance with the
provisions of this Act. If such amendments are not made, the prosecution of said applications
shall be proceeded with and registrations thereon granted in accordance with the Acts under
which said applications were filed, and said Acts are hereby continued in force to this extent for
this purpose only, notwithstanding the foregoing general repeal thereof.
Preservation of Existing Rights

Nothing herein shall adversely affect the rights on the enforcement of rights in patents, utility models,
industrial designs, marks and works, acquired in good faith prior to the effective date of this Act.
Notification on Berne Appendix

The Philippines shall by proper compliance with the requirements set forth under the Appendix of the
Berne Convention (Paris Act, 1971) avail itself of the special provisions regarding developing countries,
including provisions for licenses grantable by competent authority under the Appendix.
Appropriations
The funds needed to carry out the provisions of this Act shall be charged to the appropriations of the
Bureau of Patents, Trademarks, and Technology Transfer under the current General Appropriations Act
and the fees, fines, royalties and other charges collected by the Bureau for the calendar year pursuant to
Sections 14.1 and 234 of this Act. Thereafter such sums as may be necessary for its continued
implementations shall be included in the annual General Appropriations Act.
Repeals
All Acts and parts of Acts inconsistent herewith, more particularly Republic Act No. 165, as
amended; Republic Act No. 166, as amended; and Articles 188 and 189 of the Revised Penal
Code; Presidential Decree No. 49, including Presidential Decree No. 285, as amended, are hereby
repealed.
Marks registered under Republic Act No. 166 shall remain in force but shall be deemed to have
been granted under this Act and shall be due for renewal within the period provided for under this
Act and, upon renewal, shall be reclassified in accordance with the International Classification.
Trade names and marks registered in the Supplemental Register under Republic Act No. 166 shall
remain in force but shall no longer be subject to renewal.
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The provisions of this Act shall apply to works in which copyright protection obtained prior to the
effectivity of this Act is subsisting: Provided, that the application of this Act shall not result in the
diminution of such protection.
Separability
If any provision of this Act or the application of such provision to any circumstances is held invalid, the
remainder of the Act shall not be affected thereby.
Effectivity
This Act shall take effect on 1 January 1998.
SAMPLE CASES OF INTELLECTUAL PROPERTY LAW IN THE PHILIPPINES
Case 1: Law on Copyright
La Concepcion College vs. Catabijan
Mr. Raymund Sta Maria Catabijan, through St. Matthews Publishing, is an author and publisher, who
filed a complaint against La Concepcion College, Inc. for copyright infringement.
On June 11, 2009, Joyce B. Carino visited Mr. Catabijan to ask whether the books that she bought from
La Concepcion College when she enrolled her son were published by St. Matthews Publishing. She
showed Mr. Catabijan the books she bought for kinder level. Mr. Catabijan discovered after comparing
the books from his copyrighted works that numerous portions of St. Matthews Publishings copyrighted
works were being lifted and incorporated by the school and published.
Mr. Catabijan requested Ms. Carino if she could do a test buy in order to determine what other
copyrighted works of St. Matthews were being reproduced without his knowledge, consent and authority.
Ms. Carino bought 4 nursery level books and 6 prep level books then she brought these books to St.
Matthews Publishing so that Mr. Catabijan can compare it again.
After comparing, Mr. Catabijan found out that his works were photocopied and sold by the school to its
student as required reading material.
The following are Mr. Catabijan books/titles that reproduced by La Consolacion College:
1. Language Enrichment Program

2. The New Reading Program for Nursery
3. New Integrated Science and Health for Pre-School
4. Writing Made Fun and Easy
5. The New Reading Program for Kinder
6. Creative Art Experiences
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Section 177. Copyright or Economic Rights. Subject to the provisions of Chapter VIII, copyright or
economic rights shall consist of the exclusive right to carry out, authorize or prevent the following acts:
177.1. Reproduction of the work or substantial portion of the work;

177.2. Dramatization, translation, adaptation, abridgment, arrangement or other transformation of
the work;
177.3. The first public distribution of the original and each copy of the work by sale or other
forms of transfer of ownership.
177.4. Rental of the original or a copy of an audio visual or cinematographic work, a work
embodied in a sound recording, a computer program, a compilation of data and other materials or
a musical work in graphic form, irrespective of the ownership of the original or the copy which is
the subject of the rental;
177.5. Public display of the original or a copy of the work;
177.6. Public performance of the work; and
177.7. Other communication to the public of the work.
In this regard, Mr. Catabijan submitted evidence to prove that the school violated his copyright or
economic rights over his works or books. The La Consolacion College is found guilty of violating the
rights of the Mr. Catabijan under Part IV (Law on Copyright of the IP Code), ordered the school to cease
from publishing, selling and distributing the books that contained the copied materials and is liable for the
total amount of Php 608,450.00 as damages.
Conclusion
To conclude, the rights of the author and the publisher should always be considered when photocopying
copyrighted material. These rights, however, must be balanced with the public's interest in education.
Even though the books are used for teaching purposes, it is not considered limitations to copyright nor
compatible for fair use. Considering that the school sells the books and the authors books are also for sale.
Asking consent and authorization letter from the author should be always observed before copying any
materials.
Case 2: Law on Trademarks
McDonalds Corporation and McGeorge Food Industries vs. L.C. Big Mak Burger, Inc.
McDonald's Corporation ("McDonald's") is a US corporation that operates a global chain of fast-food

restaurants, with McGeorge Food Industries ("McGeorge"), as the Philippine franchisee. McDonald's
owns the "Big Mac" mark for its "double-decker hamburger sandwich." with the US Trademark Registry
on 16 October 1979. Based on this Home Registration, McDonald's applied for the registration of the
same mark in the Principal Register of the then Philippine Bureau of Patents, Trademarks and Technology
("PBPTT") (now IPO). On 18 July 1985, the PBPTT allowed registration of the "Big Mac."
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L.C. Big Mak Burger, Inc. is a domestic corporation which operates fast-food outlets and snack vans in
Metro Manila and nearby provinces. Corporation's menu includes hamburger sandwiches and other food
items. On 21 October 1988, corporation applied with the PBPTT for the registration of the "Big Mak"
mark for its hamburger sandwiches, which was opposed by McDonald's. McDonald's also informed LC
Big Mak chairman of its exclusive right to the "Big Mac" mark and requested him to stop from using the
"Big Mac" mark or any similar mark.
Having received no reply from Big Mak. McDonalds on June 6 1990 sued the corporation in the
Regional Trial Court of Makati (RTC), for trademark infringement and unfair competition. RTC rendered
a Decision finding respondent corporation liable for trademark infringement and unfair competition. CA
reversed RTC's decision on appeal.
A trademark is any distinctive word, name, symbol, emblem, sign, or device, or any combination thereof,
adopted and used by a manufacturer or merchant on his goods to identify and distinguish them from those
manufactured, sold, or dealt by others. Inarguably, a trademark deserves protection.
Under Section 22 of Republic Act No. 166, as amended, defines trademark infringement as follows:
Infringement, what constitutes. - Any person who [1] shall use, without the consent of the registrant, any
reproduction, counterfeit, copy or colorable imitation of any registered mark or trade-name in connection
with the sale, offering for sale, or advertising of any goods, business or services on or in connection with
which such use is likely to cause confusion or mistake or to deceive purchasers or others as to the source
or origin of such goods or services, or identity of such business; or [2] reproduce, counterfeit, copy, or
colorably imitate any such mark or trade-name and apply such reproduction, counterfeit, copy, or
colorable imitation to labels, signs, prints, packages, wrappers, receptacles or advertisements intended to
be used upon or in connection with such goods, business or services, shall be liable to a civil action by the
registrant for any or all of the remedies herein provided.
To establish trademark infringement, the following elements must be shown: (1) the validity of plaintiff's
mark; (2) the plaintiff's ownership of the mark; and (3) the use of the mark or its colorable imitation by
the alleged infringer results in "likelihood of confusion." Of these, it is the element of likelihood of
confusion that is the gravamen of trademark infringement.
Case III: Law on Patents
ROBERTO L. DEL ROSARIO vs. COURT OF APPEALS AND JANITO CORPORATION
On 18 January 1993 Roberto L. Del Rosario filed a complaint for patent infringement against Janito
Corporation. Del Rosario alleged that he was a patentee of an audio equipment and improved audio
equipment commonly known as the sing-along system or karaoke which was issued in June 1988 for
five years and was renewed in November 1991 for another five years as there were improvement
introduced to his minus one karaoke. He described his sing-along system as a handy multi-purpose
compact machine which incorporates an amplifier speaker, one or two tape mechanisms, optional tuner or
radio and microphone mixer with features to enhance ones voice, such as the echo or reverb to stimulate
an opera hall or a studio sound, with the whole system enclosed in one cabinet casing.
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In the early part of 1990 Del Rosario learned that Janito Corp. was manufacturing a sing-along system
bearing the trademark miyata or miyata karaoke substantially similar if not identical to the sing-along
system covered by the patents issued in his favor. Thus he sought from the trial court the issuance of a
writ of preliminary injunction to enjoin Janito Corp., its officers and everybody elsewhere acting on its
behalf, from using, selling and advertising the miyata or miyata karaoke brand, the injunction to be
made permanent after trial, and praying for damages, attorneys fees and costs of suit.
On 5 February 1993 the trial court temporarily restrained Janito Corp. from manufacturing, using and/or
selling and advertising the miyata sing-along system or any sing-along system substantially identical to
the sing-along system patented by Del Rosario until further orders.
On 24 February 1993 the trial court issued a writ of preliminary injunction upon a bond on the basis of its
finding that Del Rosario was a holder of a utility model patent for a sing-along system and that without
his approval and consent Janito Corp. was admittedly manufacturing and selling its own sing-along
system under the brand name miyata which was substantially similar to the patented utility model of
Del Rosario.
On 15 November 1993 respondent appellate court granted the writ and set aside the questioned order of
the trial court. It expressed the view that there was no infringement of the patents of petitioner by the fact
alone that private respondent had manufactured the miyata karaoke or audio system, and that the karaoke
system was a universal product manufactured, advertised and marketed in most countries of the world
long before the patents were issued to petitioner. The motion to reconsider the grant of the writ was
denied: hence, the instant petition for review.
Under Sec. 55 of R.A. 165 as amended, known as The Patent Law, provides
Sec. 55. Design patents and patents for utility models. - (a) Any new, original, and ornamental
design for an article of manufacture and (b) new model or implements or tools or of any
Industrial product or of part of the same, which does not possess the quality of invention but
which is of practical utility by reason of its form, configuration, construction or composition, may
be protected by the author thereof, the former by a patent for a design and the latter by a patent
for a utility model, in the same manner and subject to the same provisions and requirements as
relate to patents for inventions insofar as they are applicable, except as otherwise herein provide.
NEW CENTRAL BANK ACT
INTRODUCTION
The New Central Bank Act serves as the governing document of the Bangko Sentral ng Pilipinas. In June
1993, or roughly 21 years after substantially amending the original charter of the CBP, Republic Act No.
42 | P a g e
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7653, otherwise known as the New Central Bank Act, was passed creating a new central bank, called
Bangko Sentral ng Pilipinas (BSP), and transforming the old
Central Bank into the Central Bank Board of Liquidators (CB-BoL). The BSP is completely different
from the old CBP in that it is conceived as a truly independent central bank. It has been recognized that a
central bank must at all times maintain monetary policy credibility to enhance the effectiveness of its
monetary policy instruments. An independent central bank is key to a credible monetary policy.
New Central Bank Act No. 7653 of 1993 is the governing document of the Bangko Sentral Ng Pilipinas.
The act governs the creation, responsibilities, governance, and operations of the Bangko Sentral Ng
Pilipinas.
RA 7653 defines a clear and highly focused primary objective of the BSP, which is to maintain price
stability conducive to a balanced and sustainable growth of the economy. Making price stability as the
primary objective of the BSP was one of the few portions of the bill that got unanimous endorsement
from resource persons who were invited to give their opinions on said bill during public hearings. Indeed,
putting price stability as the primary objective of monetary policy can help the BSP in avoiding the time-
inconsistency problem.
The act is organized as follows:
Creation, Responsibilities and Corporate Powers;

Monetary Board;
Governor and Deputy Governors of the Bangko Sentral;
Operations of the Bangko Sentral;
Reports;
Profits, Losses and Special Accounts;
Auditing functions;
Monetary Unit;
Currency;
Monetary Stabilization;
Instruments of Action;
Operations of Gold and Foreign Exchange;
Regulation of Foreign Exchange Operations of the Banks;
Loans to Banking and other Financial Institutions;
Open Market Operations;
Bank Reserves;
Selective Regulation of Bank Operations;
Coordination of Credit Policies;
Functions as Banker and Financial Advisor of the Government; and
Marketing and Stabilization of Securities.
CHAPTER I: ESTABLISHMENT AND ORGANIZATION OF THE BANGKO SENTRAL NG

PILIPINAS
43 | P a g e
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DECLARATION
The State shall maintain a central monetary authority that shall function and operate as an
independent and accountable body corporate in the discharge of its mandated responsibilities concerning
money, banking and credit. In line with this policy, and considering its unique functions and
responsibilities, the central monetary authority established under this Act, while being a government-
owned corporation, shall enjoy fiscal and administrative autonomy.
CREATION OF THE BANGKO SENTRAL NG PILIPINAS
The capital of the Bangko Sentral shall be Fifty billion pesos (P50, 000,000,000), to be fully
subscribed by the Government of the Republic, hereafter referred to as the Government, Ten billion pesos
(P10, 000,000,000) of which shall be fully paid for by the Government upon the effectivity of this Act and
the balance to be paid for within a period of two (2) years from the effectivity of this
Act in such manner and form as the Government, through the Secretary of Finance and the Secretary of
Budget and Management, may thereafter determine.
RESPONSIBILITIES AND PRIMARY OBJECTIVE
The Bangko Sentral shall provide policy directions in the areas of money, banking, and credit.
It shall have supervision over the operations of banks and exercise such regulatory powers as
provided in this Act.
The primary objective of the Bangko Sentral is to maintain price stability conducive to a balanced
and sustainable growth of the economy.
It shall also promote and maintain monetary stability and the convertibility of the peso.
PLACE OF BUSINESS
The Bangko Sentral shall have its principal place of business in Metro Manila, but may maintain
branches, agencies and correspondents in such other places as the proper conduct of its business may
require.
CORPORATE POWERS
The Bangko Sentral is hereby authorized:

1. To adopt, alter, and use a corporate seal which shall be judicially noticed;
2. To enter into contracts;
3. To lease or own real and personal property, and
4. To sell or otherwise dispose of the same;
5. To sue and be sued; and
44 | P a g e
Bank Act
Otherwise to do and perform any and all things that may be necessary or proper to carry out the purposes
of this Act. The Bangko Sentral may acquire and hold such assets and incur such liabilities in connection
with its operations or as are essential to the proper conduct of such operations.
The Bangko Sentral may compromise, condone or release, in whole or in part, any claim of or settled
liability to the Bangko Sentral, regardless of the amount involved, under such terms and conditions as
may be prescribed by the Monetary Board to protect the interests of the Bangko Sentral.
THE MONETARY BOARD
The powers and functions of the Bangko Sentral shall be exercised by the Bangko Sentral Monetary
Board, hereafter referred to as the Monetary Board, composed of seven (7) members appointed by the
President of the Philippines for a term of six (6) years.
The Members Details of Appointment

The Governor of the Bangko Sentral, The Governor of the BSP shall be head of a department
who shall be the Chairman of the and his appointment and his appointment shall be subject
Monetary Board. to confirmation by the Commission on Appointments.
Whenever the Governor is unable to attend a meeting of
the Board, he shall designate a Deputy Governor to act as
his alternate.
A member of the Cabinet Whenever the designated Cabinet Member is unable to
attend a meeting of the Board, he shall designate an
Undersecretary in his Department to attend as his
alternate.
Five (5) members who shall come Provided, however, that of the members first appointed
from the private sector, all of whom under the provisions of this subsection, three (3) shall
shall serve full-time have a term of six (6) years, and the other two (2), three
(3) years.
No member of the Monetary Board may be reappointed
more than once.
QUALIFICATIONS, VACANCIES, AND DISQUALIFICATIONS
Qualifications Vacancies Disqualifications

Must be natural-born Any vacancy in the Monetary A member of the Monetary
citizens of the Philippines Board created by: Board is disqualified from any
At least 35 years of age, position of any bank, quasi-bank
with the exception of the Death or any other institution which is
Governor who should be at Resignation subject to supervision or
least 40 years of age Removal of member examination by the BSP, in which
Of good moral character case such member shall from,
45 | P a g e
Bank Act
Of unquestionable integrity Shall be filled by the and divest himself of any and all
Of known probity and appointment of a new member interests in such institution before
patriotism to complete unexpired period assumption of office as member
With recognized of term of the member of the Monetary Board.
competence in social and concerned.
economic disciplines
REMOVAL
The President may remove any member for any of the following reasons:
a) If the member is subsequently disqualified under the provisions of Section 8 of this Act
b) If he is physically or mentally incapacitated that he cannot properly discharge his duties and
responsibilities and such incapacity has lasted for more than 6 months
c) If the member is guilty of acts or operations which are of fraudulent or illegal character or which
are manifestly opposed to the aims and interests of the BSP
d) If the member no longer possesses the qualifications specified in Section 8 of this Act.
RESPONSIBILITY
Members of the Monetary Board, officials, examiners, and employees of the Bangko Sentral who wilfully
violate this Act or who are guilty of negligence, abuses or acts of malfeasance or misfeasance or fail to
exercise extraordinary diligence in the performance of his duties shall be held liable for any loss or injury
suffered by the Bangko Sentral or other banking institutions as a result of such violation, negligence,
abuse, malfeasance, misfeasance or failure to exercise extraordinary diligence.
Similar responsibility shall apply to members, officers, and employees of the BSP for:
1) The disclosure of any information of a confidential nature, or any information on the discussions
or resolutions of the Monetary Board, or about the confidential operations of the Bangko Sentral,
unless disclosure is in connection with the performance of official functions with the Bangko
Sentral, or is with prior authorization of the Monetary Board of Governor
2) The use of such information for personal gain or to the detriment of the Government, the BSP or
third parties: Provided, however, that any data or information required to be submitted to the
President and/or the Congress, or to be published under the provisions of this Act shall not be
considered confidential.
THE GOVERNOR AND THE DEPUTY GOVERNORS OF THE BANGKO SENTRAL
The Governor of the Bangko Sentral shall be the principal representative of the Monetary Board and of
the Bangko Sentral.
Powers and Duties of the Governor
46 | P a g e
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a. Prepare the agenda for the meetings of the Monetary Board and to submit for the consideration of
the Board the policies and measures which he believes to be necessary to carry out the purposes
and provisions of this Act;
b. Execute and administer the policies and measures approved by the Monetary Board;
c. Direct and supervise the operations and internal administration of the Bangko Sentral. The
Governor may delegate certain of his administrative responsibilities to other officers or may
assign specific tasks or responsibilities to any fulltime member of the Monetary Board without
additional remuneration or allowance whenever he may deem fit or subject to such rules and
regulations as the Monetary Board may prescribe;
d. Appoint and fix the remunerations and other emoluments of personnel below the rank of a
department head in accordance with the position and compensation plans approved by the
Monetary Board, as well as to impose disciplinary measures upon personnel of the Bangko
Sentral, subject to the provisions of Section 15(c) of this Act: Provided, That removal of
personnel shall be with the approval of the Monetary Board;
e. Render opinions, decisions, or rulings, which shall be final and executory until reversed or
modified by the Monetary Board, on matters regarding application or enforcement of laws
pertaining to institutions supervised by the Bangko Sentral and laws pertaining to quasi-banks, as
well as regulations, policies or instructions issued by the Monetary Board, and the
implementation thereof; and
f. Exercise such other powers as may be vested in him by the Monetary Board.
AUTHORITY OF THE GOVERNOR IN CASE OF EMERGENCY
In case of emergencies where time is insufficient to call a meeting of the Monetary Board, the Governor
of the Bangko Sentral, with the concurrence of two (2) other members of the Monetary Board, may
decide any matter or take any action within the authority of the Board.
The Governor shall submit a report to the President and Congress within seventy-two (72) hours after the
action has been taken.
At the soonest possible time, the Governor shall call a meeting of the Monetary Board to submit his
action for ratification.
DEPUTY GOVERNORS
In the absence of the Governor, a Deputy Governor designated by the Governor shall act as chief
executive of the Bangko Sentral and shall exercise the powers and perform the duties of the Governor.
Whenever the Governor is unable to attend meetings of government boards or councils in which he is an
ex officio member pursuant to provisions of special laws, a Deputy Governor as may be designated by the
Governor shall be vested with authority to participate and exercise the right to vote in such meetings.
OPERATIONS OF THE BANGKO SENTRAL

47 | P a g e
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Research and Statistics

Prepare data and conduct economic research for the guidance of the Monetary Board in the
formulation and implementation of its policies.
Authority to Obtain Data and Information

Bangko Sentral shall have the authority to request from government offices and instrumentalities,
or government-owned or controlled corporations, any data which it may require for the proper
discharge of its functions and responsibilities.
Training of Technical Personnel

The Bangko Sentral shall promote and sponsor the training of technical personnel in the field of
money and banking.
Supervision and Examination

The Bangko Sentral shall have supervision over, and conduct periodic or special examinations of,
banking institutions and quasi-banks, including their subsidiaries and affiliates engaged in allied
activities.
Bank Deposits and Investments

Any director, officer or stockholder who, together with his related interest, contracts a loan or any
form of financial accommodation from: (1) his bank; or (2) from a bank (a) which is a subsidiary
of a bank holding company of which both his bank and the lending bank are subsidiaries or (b) in
which a controlling proportion of the shares is owned by the same interest that owns a controlling
proportion of the shares of his bank, in excess of five percent (5%) of the capital and surplus of
the bank, or in the maximum amount permitted by law, whichever is lower, shall be required by
the lending bank to waive the secrecy of his deposits of whatever nature in all banks in the
Philippines.
Prohibitions
a) Being an officer, director, lawyer or agent, employee, consultant or stockholder, directly or

indirectly, of any institution subject to supervision or examination by the Bangko Sentral, except
non-stock savings and loan associations and provident funds organized exclusively for employees
of the Bangko Sentral, and except as otherwise provided in this Act;
b) Directly or indirectly requesting or receiving any gift, present or pecuniary or material benefit for
himself or another, from any institution subject to supervision or examination by the Bangko
Sentral;
c) Revealing in any manner, except under orders of the court, the Congress or any government
office or agency authorized by law, or under such conditions as may be prescribed by the
Monetary Board, information relating to the condition or business of any such institution.
d) Borrowing from any institution subject to supervision or examination by the Bangko Sentral shall
be prohibited unless said borrowings are adequately secured, fully disclosed to the Monetary
Board
48 | P a g e
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Examinations and Fees
The supervising and examining department head, personally or by deputy, shall examine the
books of every banking institution once in every twelve (12) months, and at such other times as
the Monetary Board by an affirmative vote of five (5) members, may deem expedient and to
make a report on the same to the Monetary Board
Appointment of Conservator
Whenever, on the basis of a report submitted by the appropriate supervising or examining

department, the Monetary Board finds that a bank or a quasi-bank is in a state of continuing
inability or unwillingness to maintain a condition of liquidity deemed adequate to protect the
interest of depositors and creditors, the Monetary Board may appoint a conservator with such
powers as the Monetary Board shall deem necessary to take charge of the assets, liabilities, and
the management thereof, reorganize the management, collect all monies and debts due said
institution, and exercise all powers necessary to restore its viability.
Proceedings in Receivership and Liquidation
The 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.
Distribution of Assets
In case of liquidation of a bank or quasi-bank, after payment of the cost of proceedings, including
reasonable expenses and fees of the receiver to be allowed by the court, the receiver shall pay the
debts of such institution, under order of the court, in accordance with the rules on concurrence
and preference of credit as provided in the Civil Code.
Disposition of Revenues and Earnings
All revenues and earnings realized by the receiver in winding up the affairs and administering the
assets of any bank or quasi-bank within the purview of this Act shall be used to pay the costs, fees
and expenses mentioned in the preceding section, salaries of such personnel whose employment
is rendered necessary in the discharge of the liquidation together with other additional expenses
caused thereby.
Disposition of Banking Franchise

49 | P a g e
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The Bangko Sentral may, if public interest so requires, award to an institution, upon such terms
and conditions as the Monetary Board may approve, the banking franchise of a bank under
liquidation to operate in the area where said bank or its branches were previously operating.
ADMINISTRATIVE SANCTIONS ON BANKS AND QUASIBANKS
Fines in amounts as may be determined by the Monetary Board to be appropriate, but in no case
to exceed Thirty thousand pesos (P30,000) a day for each violation, taking into consideration the
attendant circumstances, such as the nature and gravity of the violation or irregularity and the size
of the bank or quasi-bank;
Suspension of rediscounting privileges or access to Bangko Sentral credit facilities;
Suspension of lending or foreign exchange operations or authority to accept new deposits or
make new investments;
Suspension of interbank clearing privileges; and/or
Revocation of quasi-banking license.
Resignation or termination from office shall not exempt such director or officer from
administrative or criminal sanctions.
OPERATING DEPARTMENTS OF THE BANGKO SENTRAL
The Monetary Board shall, in accordance with its authority under this Act, determine and provide
for such operating departments and other offices, including a public information office, of the
Bangko Sentral as it deems convenient for the proper and efficient conduct of the operations and
the accomplishment of the objectives of the Bangko Sentral. The functions and duties of such
operating departments and other offices shall be determined by the Monetary Board.
REPORTS AND PUBLICATIONS
The Bangko Sentral shall publish a general balance sheet showing the volume and composition of its
assets and liabilities as of the last working day of the month within sixty (60) days after the end of each
month except for the month of December, which shall be submitted within ninety (90) days after the end
thereof.
ANNUAL REPORT
Before the end of March of each year, the Bangko Sentral shall publish and submit to the President and
the Congress an annual report on the condition of the Bangko Sentral including a review of the policies
and measures adopted by the Monetary Board during the past year and an analysis of the economic and
financial circumstances which gave rise to said policies and measures.
The annual report shall also include a statement of the financial condition of the Bangko Sentral and a
statistical appendix which shall present, as a minimum, the following data:
50 | P a g e
Bank Act
The monthly movement of monetary aggregates and their components;
The monthly movement of purchases and sales of foreign exchange and of the international
reserves of the Bangko Sentral;
The balance of payments of the Philippines;
Monthly indices of consumer prices and of import and export prices;
The monthly movement, in summary form, of exports and imports, by volume and value;
The monthly movement of the accounts of the Bangko Sentral and of other banks;
The principal data on government receipts and expenditures and on the status of the public debt,
both domestic and foreign; and
The texts of the major legal and administrative measures adopted by the Government and the
Monetary Board during the year which relate to the functions or operations of the Bangko Sentral
or of the financial system.
SIGNATURES ON STATEMENTS
The balance sheets and other financial statements of the Bangko Sentral shall be signed by the
officers responsible for their preparation, by the Governor, and by the auditor of the Bangko
Sentral.
PROFITS, LOSSES, AND SPECIAL ACCOUNTS
Fiscal Year
The fiscal year of the Bangko Sentral shall begin on January first and end on December thirty-first of
each year.
Computation of Profits and Losses
Within the first thirty (30) days following the end of each year, the Bangko Sentral shall determine its net
profits or losses. In the calculation of net profits, the Bangko Sentral shall make adequate allowance or
establish adequate reserves for bad and doubtful accounts.
Distribution of Net Profits
Within the first sixty (60) days following the end of each fiscal year, the Monetary Board shall determine
and carry out the distribution of the net profits, in accordance with the following rule:
Fifty percent (50%) of the net profits shall be carried to surplus and the remaining fifty percent (50%)
shall revert back to the National Treasury, except as otherwise provided in the transitory provisions of this
Act.
Revaluation Profits and Losses
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Profits or losses arising from any revaluation of the Bangko Sentral's net assets or liabilities in gold or
foreign currencies with respect to the Philippine peso shall not be included in the computation of the
annual profits and losses of the Bangko Sentral. Any profits or losses arising in this manner shall be offset
by any amounts which, as a consequence of such revaluations, are owed by the Philippines to any
international or regional intergovernmental financial institution of which the Philippines is a member or
are owed by these institutions to the Philippines. Any remaining profit or loss shall be carried in a special
frozen account which shall be named "Revaluation of International Reserve" and the net balance of which
shall appear either among the liabilities or among the assets of the Bangko Sentral, depending on whether
the revaluation have produced net profits or net losses.
The Revaluation of International Reserve account shall be neither credited nor debited for any purposes
other than those specifically authorized in this section.
Suspense Accounts
Sections 43 and 43-A of Republic Act No. 265, as amended, creating the Monetary Adjustment Account
(MAA) and the Exchange Stabilization Adjustment Account (ESAA), respectively, are hereby repealed.
Amounts outstanding as of the effective date of this Act based on these accounts shall continue to be for
the account of the Central Bank and shall be governed by the transitory provisions of this
Act. The Revaluation of International Reserve (RIR) account as of the effective date of this Act of the
Central Bank shall continue to be for the account of the same entity and shall be governed by the
provisions of Section 44 of Republic Act No. 265, as amended, until otherwise provided for in accordance
with the transitory provisions of this Act.
THE AUDITOR
Appointment and Personnel
The Chairman of the Commission on Audit shall act as the ex officio auditor of the Bangko Sentral and, as
such, he is empowered and authorized to appoint a representative who shall be the auditor of the Bangko
Sentral and, in accordance with law, fix his salary, and to appoint and fix the salaries and number of
personnel to assist said representative in his work. The salaries and other emoluments shall be paid by the
Commission. The auditor of the Bangko Sentral and personnel under him may be removed only by the
Chairman of the Commission.
The representative of the Chairman of the Commission must be a certified public accountant with at least
ten (10) years experience as such. No relative of any member of the Monetary
CHAPTER II: THE BANGKO SENTRAL AND THE MEANS OF PAYMENT

52 | P a g e
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ARTICLE I - THE UNIT OF MONETARY VALUE
The unit of monetary value in the Philippines is the "peso," which is represented by the sign "P." The peso
is divided into one hundred (100) equal parts called "centavos," which are represented by the sign "c."
ARTICLE II - ISSUE OF MEANS OF PAYMENT
A. CURRENCY
The word "currency" is defined, as meaning all Philippine notes and coins issued or circulating in
accordance with the provisions of R.A. No. 5693.
The Bangko Sentral shall have the sole power and authority to issue currency, within the territory of the
Philippines. No other person or entity, public or private, may put into circulation notes, coins or any other
object or document which, might circulate as currency, nor reproduce the exact copy of Bangko Sentral
notes without authority from the Bangko Sentral. The Monetary Board may issue such regulations as it
may deem advisable in order to prevent the circulation of foreign currency or of currency substitutes. The
Bangko Sentral shall have the authority to investigate, make arrests, and conduct searches and seizures in
accordance with law, for the purpose of maintaining the integrity of the currency. Violation of this
provision or any regulation issued by the Bangko Sentral shall constitute an offense punishable by
imprisonment of not less than five (5) years but not more than ten (10) years.
Notes and coins issued by the Bangko Sentral shall be liabilities of the Bangko Sentral and may be issued
only against, and in amounts not exceeding, the assets of the Bangko Sentral. Said notes and coins shall
be a first and paramount lien on all assets of the Bangko Sentral. The Bangko Sentral's holdings of its
own notes and coins shall not be considered as part of its currency issue and, accordingly, shall not form
part of the assets or liabilities of the Bangko Sentral.
All notes and coins issued by the Bangko Sentral shall be fully guaranteed by the Government of the
Republic of the Philippines and shall be legal tender in the Philippines for all debts, both public and
private: Provided, however, That, unless otherwise fixed by the Monetary Board, coins shall be legal
tender in amounts not exceeding Fifty pesos (P50.00) for denominations of Twenty-five centavos and
above, and in amounts not exceeding Twenty pesos (P20.00) for denominations of Ten centavos or less.\
The Monetary Board, with the approval of the President of the Philippines, shall prescribe the
denominations, dimensions, designs, inscriptions and other characteristics of notes issued by the Bangko
Sentral: Provided, however, that said notes shall state that they are liabilities of the Bangko Sentral and
are fully guaranteed by the Government of the Republic of the Philippines. Said notes shall bear the
signatures, in facsimile, of the President of the Philippines and of the Governor of the Bangko Sentral.
Similarly, the Monetary Board, with the approval of the President of the Philippines, shall prescribe the
weight, fineness, designs, denominations and other characteristics of the coins issued by the Bangko
Sentral. In the minting of coins, the Monetary Board shall give full consideration to the availability of
suitable metals and to their relative prices and cost of minting.
53 | P a g e
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The Monetary Board shall prescribe the amounts of notes and coins to be printed and minted,
respectively, and the conditions to which the printing of notes and the minting of coins shall be subject.
The Monetary Board shall have the authority to contract institutions, mints or firms for such operations.
All expenses incurred in the printing of notes and the minting of coins shall be for the account of the
Bangko Sentral.
The Bangko Sentral shall exchange, on demand and without charge, Philippine currency of any
denomination for Philippine notes and coins of any other denomination requested. If for any reason the
Bangko Sentral is temporarily unable to provide notes or coins of the denominations requested, it shall
meet its obligations by delivering notes and coins of the denominations which most nearly approximate
those requested.
The Bangko Sentral shall withdraw from circulation and shall demonetize all notes and coins which for
any reason whatsoever are unfit for circulation and shall replace them by adequate notes and coins:
Provided, however, That the Bangko Sentral shall not replace notes and coins the identification of which
is impossible, coins which show signs of filing, clipping or perforation, and notes which have lost more
than two-fifths (2/5) of their surface or all of the signatures inscribed thereon. Notes and coins in such
mutilated conditions shall be withdrawn from circulation and demonetized without compensation to the
bearer.
The Bangko Sentral may call in for replacement notes of any series or denomination which are more than
five (5) years old and coins which are more than (10) years old.
Notes and coins called in for replacement in accordance with this provision shall remain legal tender for a
period of one (1) year from the date of call. After this period, they shall cease to be legal tender but during
the following year, or for such longer period as the Monetary Board may determine, they may be
exchanged at par and without charge in the Bangko Sentral and by agents duly authorized by the Bangko
Sentral for this purpose. After the expiration of this latter period, the notes and coins which have not been
exchanged shall cease to be a liability of the Bangko Sentral and shall be demonetized. The Bangko
Sentral shall also demonetize all notes and coins which have been called in and replaced.
B. DEMAND DEPOSITS
Demand deposit means all those liabilities of the Bangko Sentral and of other banks which are
denominated in Philippine currency and are subject to payment in legal tender upon demand by the
presentation of checks.
Only banks duly authorized to do so may accept funds or create liabilities payable in pesos upon demand
by the presentation of checks, and such operations shall be subject to the control of the Monetary Board in
accordance with the powers granted it with respect thereto under this Act.
Checks representing demand deposits do not have legal tender power and their acceptance in the payment
of debts, both public and private, is at the option of the creditor: Provided, however, That a check which
54 | P a g e
Bank Act
has been cleared and credited to the account of the creditor shall be equivalent to a delivery to the creditor
of cash in an amount equal to the amount credited to his account.
CHAPTER III: GUIDING PRINCIPLES OF MONETARY ADMINISTRATION BY THE

BANGKO SENTRAL
ARTICLE I - DOMESTIC MONETARY STABILIZATION
The Monetary Board shall endeavour to control any expansion or contraction in monetary aggregates
which is prejudicial to the attainment or maintenance of price stability.
The Monetary Board shall formulate definitions of monetary aggregates, credit and prices and shall make
public such definitions and any changes thereof. Whenever abnormal movements in the monetary
aggregates, in credit, or in prices endanger the stability of the Philippine economy or important sectors
thereof, the Monetary Board shall:
a) Take such remedial measures as are appropriate and within the powers granted to the Monetary
Board and the Bangko Sentral under the provisions of R.A. No. 7653.
b) Submit to the President of the Philippines and the Congress, and make public, a detailed report
which shall include, as a minimum, a description and analysis of:
1. The causes of the rise or fall of the monetary aggregates, of credit or of prices;
2. The extent to which the changes in the monetary aggregates, in credit, or in prices have
been reflected in changes in the level of domestic output, employment, wages and
economic activity in general, and the nature and significance of any such changes; and
3. The measures which the Monetary Board has taken and the other monetary, fiscal or
administrative measures which it recommends to be adopted.
Whenever the monetary aggregates, or the level of credit, increases or decreases by more than fifteen
percent (15%), or the cost of living index increases by more than ten percent (10%), in relation to the
level existing at the end of the corresponding month of the preceding year, or even though any of these
quantitative guidelines have not been reached when in its judgment the circumstances so warrant, the
Monetary Board shall submit the reports mentioned in this section, and shall state therein whether, in the
opinion of the Board, said changes in the monetary aggregates, credit or cost of living represent a threat to
the stability of the Philippine economy or of important sectors thereof.
The Monetary Board shall continue to submit periodic reports to the President of the Philippines and to
Congress until it considers that the monetary, credit or price disturbances have disappeared or have been
adequately controlled.
ARTICLE II - INTERNATIONAL MONETARY STABILIZATION

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The Bangko Sentral shall exercise its powers to preserve the international value of the peso and to
maintain its convertibility into other freely convertible currencies primarily for, although not necessarily
limited to, current payments for foreign trade and invisibles.
In order to maintain the international stability and convertibility of the Philippine peso, the Bangko
Sentral shall maintain international reserves adequate to meet any foreseeable net demands on the Bangko
Sentral for foreign currencies. In judging the adequacy of the international reserves, the Monetary Board
shall be guided by the prospective receipts and payments of foreign exchange by the Philippines. The
Board shall give special attention to the volume and maturity of the Bangko Sentral's own liabilities in
foreign currencies, to the volume and maturity of the foreign exchange assets and liabilities of other banks
operating in the Philippines and, insofar as they are known or can be estimated, the volume and maturity
of the foreign exchange assets and liabilities of all other persons and entities in the Philippines.
The international reserves of the Bangko Sentral may include but shall not be limited to the following
assets:
a) Gold; and
b) Assets in foreign currencies in the form of: documents and instruments customarily employed for
the international transfer of funds; demand and time deposits in central banks, treasuries and
commercial banks abroad; foreign government securities; and foreign notes and coins.
The Monetary Board shall endeavour to hold the foreign exchange resources of the Bangko Sentral in
freely convertible currencies; moreover, the Board shall give particular consideration to the prospects of
continued strength and convertibility of the currencies in which the reserve is maintained, as well as to the
anticipated demands for such currencies. The Monetary Board shall issue regulations determining the
other qualifications which foreign exchange assets must meet in order to be included in the international
reserves of the Bangko Sentral.
Whenever the international reserve of the Bangko Sentral falls to a level which the Monetary Board
considers inadequate to meet prospective net demands on the Bangko Sentral for foreign currencies, or
whenever the international reserve appears to be in imminent danger of falling to such a level, or
whenever the international reserve is falling as a result of payments or remittances abroad which, in the
opinion of the Monetary Board, are contrary to the national welfare, the Monetary Board shall:
a) Take such remedial measures as are appropriate and within the powers granted to the
Monetary Board and the Bangko Sentral under the provisions R.A. No. 7653; and
b) Submit to the President of the Philippines and to Congress a detailed report which shall
include, as a minimum, a description and analysis of:
1. The nature and causes of the existing or imminent decline;
2. The remedial measures already taken or to be taken by the Monetary Board;
3. The character and extent of the cooperation required from other government agencies
for the successful execution of the policies of the Monetary Board.
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If the resultant actions fail to check the deterioration of the reserve position of the Bangko Sentral, or if
the deterioration cannot be checked except by chronic restrictions on exchange and trade transactions or
by sacrifice of the domestic objectives of a balanced and sustainable growth of the economy, the
Monetary Board shall propose to the President, with appropriate notice of the Congress, such additional
action as it deems necessary to restore equilibrium in the international balance of payments of the
Philippines.
The Monetary Board shall submit periodic reports to the President and to Congress until the threat to the
international monetary stability of the Philippines has disappeared.
CHAPTER IV: INSTRUMENTS OF BANGKO SENTRAL ACTION
GENERAL CRITERION
In order to achieve the primary objective of price stability, the Monetary Board shall rely on its moral
influence and the powers granted to it under this Act for the management of monetary aggregates.
OPERATIONS IN GOLD AND FOREIGN EXCHANGE
The Bangko Sentral may buy and sell gold in any form, subject to such regulations as the Monetary Board
may issue. The purchases and sales of gold authorized by this section shall be made in the national
currency at the prevailing international market price as determined by the Monetary Board. The Bangko
Sentral may buy and sell foreign notes and coins, and documents and instruments of types customarily
employed for the international transfer of funds. The Bangko Sentral may engage in future exchange
operations. The Bangko Sentral may engage in foreign exchange transactions with the following entities
or persons only;
(a) Banking institutions operating in the Philippines;
(b) The Government, its political subdivisions and instrumentalities;
(c) Foreign or international financial institutions;
(d) Foreign governments and their instrumentalities; and
(e) Other entities or persons which the Monetary Board is hereby empowered to authorize as foreign
exchange dealers, subject to such rules and regulations as the Monetary Board shall prescribe.
In order to maintain the convertibility of the peso, the Bangko Sentral may, at the request of any banking
institution operating in the Philippines, buy any quantity of foreign exchange offered, and sell any
quantity of foreign exchange demanded by such institution, provided that the foreign currencies so
offered or demanded are freely convertible into gold or United States dollars. This requirement shall not
apply to demands for foreign notes and coins.
The Bangko Sentral shall effect its exchange transactions between foreign currencies and the Philippine
peso at the rates determined in accordance with the provisions of Section 74 of this Act.
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The Bangko Sentral shall endeavour to maintain at all times a net positive foreign asset position so that its
gross foreign exchange assets will always exceed its gross foreign liabilities. In the event that the
equivalent amount in pesos of the foreign exchange liabilities of the Bangko Sentral exceed twice the
equivalent amount in pesos of the foreign exchange assets of the bank, the Bangko Sentral shall, within
sixty (60) days from the date the limit is exceeded, submit a report to the Congress stating the origin of
these liabilities, and the manner in which they will be paid.
In order to achieve the primary objective of the Bangko Sentral or protect the international reserves of the
Bangko Sentral in the imminence of, or during an exchange crisis, or in time of national emergency and to
give the Monetary Board and the Government time in which to take constructive measures to forestall,
combat, or overcome such a crisis or emergency, the Monetary Board, with the concurrence of at least
five (5) of its members and with the approval of the President of the Philippines, may temporarily
suspend or restrict sales of exchange by the Bangko Sentral, and may subject all transactions in gold and
foreign exchange to license by the Bangko Sentral, and may require that any foreign exchange thereafter
obtained by any person residing or entity operating in the Philippines be delivered to the Bangko Sentral
or to any bank or agent designated by the Bangko Sentral for the purpose, at the effective exchange rate or
rates: Provided, however, That foreign currency deposits made under Republic Act No. 6426 shall be
exempt from these requirements.
The Bangko Sentral shall avoid the acquisition and holding of currencies which are not freely convertible,
and may acquire such currencies in an amount exceeding the minimum balance necessary to cover current
demands for said currencies only when, and to the extent that, such acquisition is considered by the
Monetary Board to be in the national interest. The Monetary Board shall determine the procedures which
shall apply to the acquisition and disposition by the Bangko Sentral of foreign exchange which is not
freely utilizable in the international market.
The Monetary Board shall determine the exchange rate policy of the country. The Monetary Board shall
determine the rates at which the Bangko Sentral shall buy and sell spot exchange, and shall establish
deviation limits from the effective exchange rate or rates as it may deem proper. The Bangko Sentral shall
not collect any additional commissions or charges of any sort, other than actual telegraphic or cable costs
incurred by it. The Monetary Board shall similarly determine the rates for other types of foreign exchange
transactions by the Bangko Sentral, including purchases and sales of foreign notes and coins, but the
margins between the effective exchange rates and the rates thus established may not exceed the
corresponding margins for spot exchange transactions by more than the additional costs or expenses
involved in each type of transactions.
The Monetary Board may authorize the Bangko Sentral to grant loans to and receive loans from foreign
banks and other foreign or international entities, both public and private, and may engage in such other
operations with these entities as are in the national interest and are appropriate to its character as a central
bank. The Bangko Sentral may also act as agent or correspondent for such entities. Upon authority of the
Monetary Board, the Bangko Sentral may pledge any gold or other assets which it possesses as security
against loans which it receives from foreign or international entities.
REGULATION OF FOREIGN EXCHANGE OPERATIONS OF THE BANKS
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In order that the Bangko Sentral may at all times have foreign exchange resources sufficient to enable it to
maintain the international stability and convertibility of the peso, or in order to promote the domestic
investment of bank resources, the Monetary Board may require the banks to sell to the Bangko Sentral or
to other banks all or part of their surplus holdings of foreign exchange. Such transfers may be required for
all foreign currencies or for only certain of such currencies, according to the decision of the Monetary
Board. The transfers shall be made at the rates established under the provisions of Section 74 of this Act.
The Monetary Board may, whenever warranted, determine the net assets and net liabilities of banks and
shall, in making such a determination, take into account the bank's net worth, outstanding liabilities,
actual and contingent, or such other financial or performance ratios as may be appropriate under the
circumstances. Any such determination of net assets and net liabilities shall be applied to all banks
uniformly and without discrimination.
The Monetary Board may require the banks to maintain a balanced position between their assets and
liabilities in Philippine pesos or in any other currency or currencies in which they operate. The banks shall
be granted a reasonable period of time in which to adjust their currency positions to any such
requirement. The powers granted under this section shall be exercised only when special circumstances
make such action necessary, in the opinion of the Monetary Board, and shall be applied to all banks alike
and without discrimination.
In order to restrain the banks from taking speculative positions with respect to future fluctuations in
foreign exchange rates, the Monetary Board may issue such regulations governing bank purchases and
sales of non-spot exchange as it may consider necessary for said purpose. The banks shall bear the risks
of non-compliance with the terms of the foreign exchange documents and instruments which they buy or
sell, and shall also bear any other typically commercial or banking risks, including exchange risks not
assumed by the Bangko Sentral under the provisions of the preceding section.
The banks shall report to the Bangko Sentral the volume and composition of their purchases and sales of
gold and foreign exchange each day, and must furnish such additional information as the Bangko Sentral
may request with reference to the movements in their accounts in foreign currencies. The Monetary Board
may also require other persons and entities to report to it currently all transactions or operations in gold,
in any shape or form, and in foreign exchange whether entered into or undertaken by them directly or
through agents, or to submit such data as may be required on operations or activities giving rise to or in
connection with or relating to a gold or foreign exchange transaction. The Monetary Board shall prescribe
the forms on which such declarations must be made. The accuracy of the declarations may be verified by
the Bangko Sentral by whatever inspection it may deem necessary.
LOANS TO BANKING AND OTHER FINANCIAL INSTITUTIONS
The rediscounts, discounts, loans and advances which the Bangko Sentral is authorized to extend to
banking institutions under the provisions of the present article of this Act shall be used to influence the
volume of credit consistent with the objective of price stability. Subject to the principle stated in the
preceding section of this Act, the Bangko Sentral may normally and regularly carry on the following
credit operations with banking institutions operating in the Philippines.
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(a) Commercial credits. - The Bangko Sentral may rediscount, discount, buy and sell bills,
acceptances, promissory notes and other credit instruments with maturities of not more than one
hundred eighty (180) days from the date of their rediscount, discount or acquisition by the
Bangko Sentral and resulting from transactions related to: (1) the importation, exportation,
purchase or sale of readily saleable goods and products, or their transportation within the
Philippines; or (2) the storing of non-perishable goods and products which are duly insured and
deposited, under conditions assuring their preservation, in authorized bonded warehouses or in
other places approved by the Monetary Board.
(b) Production credits. - The Bangko Sentral may rediscount, discount, buy and sell bills,
acceptances, promissory notes and other credit instruments having maturities of not more than
three hundred sixty (360) days from the date of their rediscount, discount or acquisition by the
Bangko Sentral and resulting from transactions related to the production or processing of
agricultural, animal, mineral, or industrial products. Documents or instruments acquired in
accordance with this subsection shall be secured by a pledge of the respective crops or products:
Provided, however, That the crops or products need not be pledged to secure the documents if the
original loan granted by the Bangko Sentral is secured by a lien or mortgage on real estate
property seventy percent (70%) of the appraised value of which equals or exceeds the amount of
the loan granted.
(c) Other credits. - Special credit instruments not otherwise re-discountable under the immediately
preceding subsections (a) and (b) may be eligible for rediscounting in accordance with rules and
regulations which the Bangko Sentral shall prescribe. Whenever necessary, the Bangko Sentral
shall provide funds from noninflationary sources: Provided, however, that the Monetary Board
shall prescribe additional safeguards for disbursing these funds.
(d) Advances. - The Bangko Sentral may grant advances against the following kinds of collaterals
for fixed periods which, with the exception of advances against the collateral named in clause (4)
of the present subsection, shall not exceed one hundred eighty (180) days: (1) gold coins or
bullion; (2) securities representing obligations of the Bangko Sentral or of other domestic credit
institutions of recognized solvency; (3) the credit instruments to which reference is made in
subsection (a) of this section; (4) the credit instruments to which reference is made in subsection
(b) of this section, for periods which shall not exceed three hundred sixty (360) days; (5) utilized
portions of advances in current account covered by regular overdraft agreements related to
operations included under subsections (a) and (b) of this section, and certified as to amount and
liquidity by the institution soliciting the advance; (6) negotiable treasury bills, certificates of
indebtedness, notes and other negotiable obligations of the Government maturing within three (3)
years from the date of the advance; and (7) negotiable bonds issued by the Government of the
Philippines, by Philippine provincial, city or municipal governments, or by any Philippine
Government instrumentality, and having maturities of not more than ten (10) years from the date
of the advance.
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The rediscounts, discounts, loans and advances made in accordance with the provisions of this section
may not be renewed or extended unless extraordinary circumstances fully justify such renewal or
extension. Advances made against the collateral named in clauses (6) and (7) of subsection (d) of this
section may not exceed eighty percent (80%) of the current market value of the collateral. The
Bangko Sentral may extend loans and advances to banking institutions for a period of not more than
seven (7) days without any collateral for the purpose of providing liquidity to the banking system in
times of need.
In periods of national and/or local emergency or of imminent financial panic which directly threaten
monetary and banking stability, the Monetary Board may, by a vote of at least five (5) of its members,
authorize the Bangko Sentral to grant extraordinary loans or advances to banking institutions secured
by assets as defined hereunder: Provided, That while such loans or advances are outstanding, the
debtor institution shall not, except upon prior authorization by the Monetary Board, expand the total
volume of its loans or investments. The Monetary Board may, at its discretion, likewise authorize the
Bangko Sentral to grant emergency loans or advances to banking institutions, even during normal
periods, for the purpose of assisting a bank in a precarious financial condition or under serious
financial pressures brought by unforeseen events, or events which, though foreseeable, could not be
prevented by the bank concerned: Provided, however, That the Monetary Board has ascertained that
the bank is not insolvent and has the assets defined here under to secure the advances: Provided,
further, That a concurrent vote of at least five (5) members of the Monetary Board is obtained. The
amount of any emergency loan or advance shall not exceed the sum of fifty percent (50%) of total
deposits and deposit substitutes of the banking institution and shall be disbursed in two (2) or more
tranches. The amount of the first tranche shall be limited to twenty-five percent (25%) of the total
deposit and deposit substitutes of the institution and shall be secured by government securities to the
extent of their applicable loan values and other unencumbered first class collaterals which the
Monetary Board may approve: Provided, That if as determined by the Monetary Board, the
circumstances surrounding the emergency warrant a loan or advance greater than the amount
provided hereinabove, the amount of the first tranche may exceed twenty-five percent (25%) of the
bank's total deposit and deposit substitutes if the same is adequately secured by applicable loan values
of government securities and unencumbered first class collaterals approved by the Monetary Board,
and the principal stockholders of the institution furnish an acceptable undertaking to indemnify and
hold harmless from suit a conservator whose appointment the Monetary Board may find necessary at
any time. Prior to the release of the first tranche, the banking institution shall submit to the Bangko
Sentral a resolution of its board of directors authorizing the Bangko Sentral to evaluate other assets of
the banking institution certified by its external auditor to be good and available for collateral purposes
should the release of the subsequent tranche be thereafter applied for.
The Monetary Board may, by a vote of at least five (5) of its members, authorize the release of a
subsequent tranche on condition that the principal stockholders of the institution:
(a) Furnish an acceptable undertaking to indemnify and hold harmless from suit a conservator whose
appointment the Monetary Board may find necessary at any time; and .
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(b) Provide acceptable security which, in the judgment of the Monetary Board, would be adequate to
supplement, where necessary, the assets tendered by the banking institution to collaterize the
subsequent tranche.
In connection with the exercise of these powers, the prohibitions in Section 128 of this Act shall not
apply insofar as it refers to acceptance as collateral of shares and their acquisition as a result of
foreclosure proceedings, including the exercise of voting rights pertaining to said shares: Provided,
however, That should the Bangko Sentral acquire any of the shares it has accepted as collateral as a
result of foreclosure proceedings, the Bangko Sentral shall dispose of said shares by public bidding
within one (1) year from the date of consolidation of title by the Bangko Sentral. Whenever a
financial institution incurs an overdraft in its account with the Bangko Sentral, the same shall be
eliminated within the period prescribed in Section 102 of this Act.
The Bangko Sentral shall collect interest and other appropriate charges on all loans and advances it
extends, the closure, receivership or liquidation of the debtor-institution notwithstanding. This
provision shall apply prospectively. The Monetary Board shall fix the interest and rediscount rates to
be charged by the Bangko Sentral on its credit operations in accordance with the character and term
of the operation, but after due consideration has been given to the credit needs of the market, the
composition of the Bangko Sentral's portfolio, and the general requirements of the national monetary
policy. Interest and rediscount rates shall be applied to all banks of the same category uniformly and
without discrimination.
The documents rediscounted, discounted, bought or accepted as collateral by the Bangko Sentral in
the course of the credit operations authorized in this article shall bear the endorsement of the
institution from which they are received. Documents rediscounted, discounted or accepted as
collateral by the Bangko Sentral must be withdrawn by the borrowing institution on the dates of their
maturities, or upon liquidation of the obligations which they represent or to which they relate
whenever said obligations have been liquidated prior to their dates of maturity. Banks shall have the
right at any time to withdraw any documents which they have presented to the Bangko Sentral as
collateral, upon payment in full of the corresponding debt to the Bangko Sentral, including interest
charges.
The Monetary Board may prescribe, within the general powers granted to it under this Act, additional
conditions which borrowing institutions must satisfy in order to have access to the credit of the
Bangko Sentral. These conditions may refer to the rates of interest charged by the banks, to the
purposes for which their loans in general are destined, and to any other clearly definable aspect of the
credit policy of the bank. The Bangko Sentral may make direct provisional advances with or without
interest to the National Government to finance expenditures authorized in its annual appropriation:
Provided, That said advances shall be repaid before the end of three (3) months extendible by another
three (3) months as the Monetary Board may allow following the date the National Government
received such provisional advances and shall not, in their aggregate, exceed twenty percent (20%) of
the average annual income of the borrower for the last three (3) preceding fiscal years.
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The open market purchases and sales of securities by the Bangko Sentral shall be made exclusively in
accordance with its primary objective of achieving price stability. In order to achieve the objectives of
the national monetary policy, the Bangko Sentral may, in accordance with the principle stated in
Section 90 of this Act and with such rules and regulations as may be prescribed by the Monetary
Board, buy and sell in the open market for its own account: (a) evidences of indebtedness issued
directly by the Government of the Philippines or by its political subdivisions; and (b) evidences of
indebtedness issued by government instrumentalities and fully guaranteed by the Government. The
evidences of indebtedness acquired under the provisions of this section must be freely negotiable and
regularly serviced and must be available to the general public through banking institutions and local
government treasuries in denominations of a thousand pesos or more.
In order to provide the Bangko Sentral with effective instruments for open market operations, the
Bangko Sentral may, subject to such rules and regulations as the Monetary Board may prescribe and
in accordance with the principles stated in Section 90 of this Act, issue, place, buy and sell freely
negotiable evidences of indebtedness of the Bangko Sentral: Provided, That issuance of such
certificates of indebtedness shall be made only in cases of extraordinary movement in price levels.
Said evidences of indebtedness may be issued directly against the international reserve of the Bangko
Sentral or against the securities which it has acquired under the provisions of Section 91 of this Act,
or may be issued without relation to specific types of assets of the Bangko Sentral. The Monetary
Board shall determine the interest rates, maturities and other characteristics of said obligations of the
Bangko Sentral, and may, if it deems it advisable, denominate the obligations in gold or foreign
currencies. Subject to the principles stated in Section 90 of this Act, the evidences of indebtedness of
the Bangko Sentral to which this section refers may be acquired by the Bangko Sentral before their
maturity, either through purchases in the open market or through redemptions at par and by lot if the
Bangko Sentral has reserved the right to make such redemptions. The evidences of indebtedness
acquired or redeemed by the Bangko Sentral shall not be included among its assets, and shall be
immediately retired and cancelled.
COMPOSITION OF BANGKO SENTRAL'S PORTFOLIO
At least once every month the Monetary Board shall review the portfolio of the Bangko Sentral in
relation to its future credit policy. In reviewing the Bangko Sentral's portfolio, the Monetary Board
shall especially consider whether a sufficiently large part of the portfolio consists of assets with early
maturities, in order that a contraction in Bangko Sentral credit may be effected promptly whenever
the national monetary policy so requires.
BANK RESERVES
In order to control the volume of money created by the credit operations of the banking system, all
banks operating in the Philippines shall be required to maintain reserves against their deposit
liabilities: Provided, That the Monetary Board may, at its discretion, also require all banks and/or
quasi-banks to maintain reserves against funds held in trust and liabilities for deposit substitutes as
defined in this Act. The required reserves of each bank shall be proportional to the volume of its
deposit liabilities and shall ordinarily take the form of a deposit in the Bangko Sentral. Reserve
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requirements shall be applied to all banks of the same category uniformly and without discrimination.
Reserves against deposit substitutes, if imposed, shall be determined in the same manner as provided
for reserve requirements against regular bank deposits, with respect to the imposition, increase, and
computation of reserves. The Monetary Board may exempt from reserve requirements deposits and
deposit substitutes with remaining maturities of two (2) years or more, as well as interbank
borrowings. Since the requirement to maintain bank reserves is imposed primarily to control the
volume of money, the Bangko Sentral shall not pay interest on the reserves maintained with it unless
the Monetary Board decides otherwise as warranted by circumstances.
The term "deposit substitutes" is defined as an alternative form of obtaining funds from the public,
other than deposits, through the issuance, endorsement, or acceptance of debt instruments for the
borrower's own account, for the purpose of relending or purchasing of receivables and other
obligations. These instruments may include, but need not be limited to, bankers acceptances,
promissory notes, participations, certificates of assignment and similar instruments with recourse, and
repurchase agreements. The Monetary Board shall determine what specific instruments shall be
considered as deposit substitutes for the purposes of Section 94 of this Act: Provided, however, That
deposit substitutes of commercial, industrial and other nonfinancial companies issued for the limited
purpose of financing their own needs or the needs of their agents or dealers shall not be covered by
the provisions of Section 94 of this Act.
The Monetary Board may fix and, when it deems necessary, alter the minimum reserve ratios to peso
deposits, as well as to deposit substitutes, which each bank and/or quasi-bank may maintain, and such
ratio shall be applied uniformly to all banks of the same category as well as to quasi-banks. The
Monetary Board is similarly authorized to prescribe and modify the minimum reserve ratios
applicable to deposits denominated in foreign currencies.
In order to facilitate Bangko Sentral control over the volume of bank credit, the Monetary Board may
establish minimum reserve requirements for unused balances of overdraft lines. The powers of the
Monetary Board to prescribe and modify reserve requirements against unused balances of overdraft
lines shall be the same as its powers with respect to reserve requirements against demand deposits.
Whenever in the opinion of the Monetary Board it becomes necessary to increase reserve
requirements against existing liabilities, the increase shall be made in a gradual manner and shall not
exceed four percentage points in any thirty-day period. Banks and other affected financial institutions
shall be notified reasonably in advance of the date on which such increase is to become effective.
The reserve position of each bank or quasi-bank shall be calculated daily on the basis of the amount,
at the close of business for the day, of the institution's reserves and the amount of its liability accounts
against which reserves are required to be maintained: Provided, That with reference to holidays or
nonbanking days, the reserve position as calculated at the close of the business day immediately
preceding such holidays and nonbanking days shall apply on such days. For the purpose of computing
the reserve position of each bank or quasi-bank, its principal office in the Philippines and all its
branches and agencies located therein shall be considered as a single unit.
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Whenever the reserve position of any bank or quasi-bank, computed in the manner specified in the
preceding section of this Act, is below the required minimum, the bank or quasi-bank shall pay the
Bangko Sentral one-tenth of one percent (1/10 of 1%) per day on the amount of the deficiency or the
prevailing ninety-one-day treasury bill rate plus three percentage points, whichever is higher:
Provided, however, That banks and quasi-banks shall ordinarily be permitted to offset any reserve
deficiency occurring on one or more days of the week with any excess reserves which they may hold
on other days of the same week and shall be required to pay the penalty only on the average daily
deficiency during the week. In cases of abuse, the Monetary Board may deny any bank or quasi-bank
the privilege of offsetting reserve deficiencies in the aforesaid manner. If a bank or quasi-bank
chronically has a reserve deficiency, the Monetary Board may limit or prohibit the making of new
loans or investments by the institution and may require that part or all of the net profits of the
institution be assigned to surplus. The Monetary Board may modify or set aside the reserve deficiency
penalties provided in this section, for part or the entire period of a strike or lockout affecting a bank or
a quasi-bank as defined in the Labor Code, or of a national emergency affecting operations of banks
or quasi-banks. The Monetary Board may also modify or set aside reserved deficiency penalties for
rehabilitation program of a bank.
The Bangko Sentral shall establish facilities for interbank clearing under such rules and regulations as
the Monetary Board may prescribe: Provided, that the Bangko Sentral may charge administrative and
other fees for the maintenance of such facilities. The deposit reserves maintained by the banks in the
Bangko Sentral in accordance with the provisions of Section 94 of this Act shall serve as basis for the
clearing of checks and the settlement of interbank balances, subject to such rules and regulations as
the Monetary Board may issue with respect to such operations: Provided, That any bank which incurs
on overdrawing in its deposit account with the Bangko Sentral shall fully cover said overdraft,
including interest thereon at a rate equivalent to one-tenth of one percent (1/10 of 1%) per day or the
prevailing ninety-one-day treasury bill rate plus three percentage points, whichever is higher, not later
than the next clearing day: Provided, further, That settlement of clearing balances shall not be effected
for any account which continues to be overdrawn for five (5) consecutive banking days until such
time as the overdrawing is fully covered or otherwise converted into an emergency loan or advance
pursuant to the provisions of Section 84 of this Act: Provided, finally, That the appropriate clearing
office shall be officially notified of banks with overdrawn balances. Banks with existing overdrafts
with the Bangko Sentral as of the effectivity of this Act shall, within such period as may be prescribed
by the Monetary Board, either convert the overdraft into an emergency loan or advance with a plan of
payment, or settle such overdrafts, and that, upon failure to so comply herewith, the Bangko Sentral
shall take such action against the bank as may be warranted under this Act. SEC. 103. Exemption
from Attachment and other Purposes. _ Deposits maintained by banks with the Bangko Sentral as part
of their reserve requirements shall be exempt from attachment, garnishment, or any other order or
process of any court, government agency or any other administrative body issued to satisfy the claim
of a party other than the Government, or its political subdivisions or instrumentalities.
SELECTIVE REGULATION OF BANK OPERATIONS
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The Monetary Board shall use the powers granted to it under this Act to ensure that the supply,
availability and cost of money are in accord with the needs of the Philippine economy and that bank
credit is not granted for speculative purposes prejudicial to the national interests. Regulations on bank
operations shall be applied to all banks of the same category uniformly and without discrimination.
The Monetary Board may at any time prescribe minimum cash margins for the opening of letters of
credit, and may relate the size of the required margin to the nature of the transaction to be financed.
SEC. 106. Required Security Against Bank Loans. _ In order to promote liquidity and solvency of the
banking system, the Monetary Board may issue such regulations as it may deem necessary with
respect to the maximum permissible maturities of the loans and investments which the banks may
make, and the kind and amount of security to be required against the various types of credit
operations of the banks.
Whenever the Monetary Board considers it advisable to prevent or check an expansion of bank credit,
the Board may place an upper limit on the amount of loans and investments which the banks may
hold, or may place a limit on the rate of increase of such assets within specified periods of time. The
Monetary Board may apply such limits to the loans and investments of each bank or to specific
categories thereof. In no case shall the Monetary Board establish limits which are below the value of
the loans or investments of the banks on the date on which they are notified of such restrictions. The
restrictions shall be applied to all banks uniformly and without discrimination. The Monetary Board
may prescribe minimum ratios which the capital and surplus of the bank must bear to the volume of
their assets, or to specific categories thereof, and may alter said ratios whenever it deems necessary.
CHAPTER V: FUNCTIONS AS BANKER AND FINANCIAL ADVISOR OF THE

GOVERNMENT FUNCTIONS AS BANKER OF THE GOVERNMENT
The Bangko Central shall act as the banker of the government and shall represent the
Government in all dealings, negotiations and transactions with the International Monetary Fund and shall
carry such accounts as may result from Philippine membership. The Bangko Central may be authorized
by the government to represent it in dealings, negotiations or transactions with the International Bank for
Reconstruction and Development and with other foreign or international financial institutions or agencies.
However, the president may designate any of his other financial advisors to jointly represent the
Government in such dealings, negotiations or transactions.
Bangko Central functions as a banker to the governmentboth central and state governments. It carries
out all banking business of the government. Government keeps their cash balances in the current account
with the central bank. Similarly, central bank accepts receipts and makes payment on behalf of the
governments.
Other Banks as Agents of the Bangko Sentral.
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The Bangko Sentral may engage the services of other government-owned and controlled banks and of
other domestic banks for operations in localities at home or abroad in which the Bangko Sentral does not
have offices or agencies adequately equipped to perform said operations. The Bangko Sentral may charge
equitable rates, commissions or fees for services which it renders to the Government, its political
subdivisions and instrumentalities.
Also, central bank carries out exchange, remittance and other banking operations on behalf of the
government. Central bank gives loans and advances to governments for temporary periods, as and when
necessary and it also manages the public debt of the country. Remember, the central government can
borrow any amount of money from RBI by selling its rupees securities to the latter
BANGKO SENTRAL AS BANKER AND AGENT OF THE GOVERNMENT
BANKER
Conducts banking accounts of government agencies and instrumentalities

Provides FX to the government for the importation of goods and services.
Pays foreign debts
Borrows from international financial institutions such as the World Bank and International
Monetary Fund
AGENT
Performs financial services for the government

Lends money to the Government
Buys and sells securities
Administers and manages national debts
THE MARKETING AND STABILIZATION OF SECURITIES FOR THE ACCOUNT OF

THE GOVERNMENT
A. THE ISSUE AND PLACING OF GOVERNMENT SECURITIES
Issue of Government Obligations
The issue of securities representing obligations of the Government may be made through the Bangko
Sentral which may act as agent of, and for the account of, the Government or its respective subdivisions
or instrumentality. However, the BSP shall not guarantee the placement of the securities and shall not
subscribe to their issue except to replace its maturing holdings of securities with the same type as the
maturing securities.
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Methods of Placing Government Securities
The Bangko Sentral may place the securities through direct sale to financial institutions and the public.
The BSP shall not be a member of any stock exchange, but may intervene therein for the sole purpose of
regulating their operations in the placing of government securities. The Government shall reimburse the
Bangko Central for the expenses incurred in placing the securities.
Servicing and Redemption of the Public Debt
The servicing and redemption shall be effected through the Bangko Sentral
B. BANGKO SENTRAL SUPPORT OF THE GOVERNMENT SECURITIES MARKET
The Securities Stabilization Fund
There must be established a Securities Stabilization Fund for the account of the Government. The
Securities Stabilization Fund. Consist of purchases and sales, in the open market, of bonds and other
evidences of indebtedness issued or fully guaranteed by the Government.
The Monetary Board shall use the resources of the Fund to prevent, or moderate, sharp fluctuations in the
quotations of said government obligations, but shall not endeavour to alter movements of the market
resulting from basic changes in the pattern or level of interest rates.
The resources of the Securities Stabilization Fund shall come from the balance of the fund has held by the
Central Bank.
The Securities Stabilization Fund shall retain any net profits which it may make on its operations,
regardless of whether said profits arise from capital gains or from interest earnings
FUNCTIONS AS FINANCIAL ADVISOR OF THE GOVERNMENT
Before undertaking any credit operation abroad, the Government, through the Secretary of Finance, shall
request the opinion, in writing, of the Monetary Board on the monetary implications of the contemplated
action. The opinion of the Monetary Board shall be based on the gold and foreign exchange resources
and obligations of the nation and on the effects of the proposed operation on the balance of payments and
on monetary aggregates.
Informs top officials of the government like the President and Finance Secretary about the monetary and
financial condition of the country.
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CHAPTER VI: PRIVILEGES AND PROHIBITIONS
PRIVILEGES
Tax Exemption
The Bangko Sentral shall be exempt for a period of five (5) years from the approval of this Act from all
national, provincial, municipal and city taxes, fees, charges and assessments. The exemption includes to
all the property of the Bangko Central, to the resources, receipts, expenditures, profits and income of the
Bangko Sentral, as well as to all contracts, deeds, documents and transactions related to the conduct of the
business of the Bangko Sentral.
Exemptions shall apply only to such taxes, fees, charges and assessments for which the Bangko Sentral
itself would otherwise be liable, and shall not apply to taxes, fees, charges, or assessments payable by
persons or other entities doing business with the Bangko Sentral.
Exemption from Customs Duties
The importation and exportation by the Bangko Sentral of notes and coins, and of gold and other metals
to be used for purposes authorized under this Act, and the importation of all equipment needed for bank
note production, minting of coins, metal refining and other security printing operations shall be fully
exempt from all customs duties and consular fees and from all other taxes, assessments and charges
related to such importation or exportation.
PROHIBITIONS
The Bangko Sentral shall not acquire shares of any kind or accept them as collateral, and shall not
participate in the ownership or management of any enterprise either directly or indirectly and shall
not engage in development banking or financing
CHAPTER VII: TRANSITORY PROVISIONS
Phase-out of Fiscal Agency Function
Unless circumstances warrant otherwise and approved by the Congress Oversight Committee, the Bangko
Sentral shall, within a period of three (3) years but in no case longer than five (5) years from the approval
of this Act, phase out all fiscal agency functions provided for in Sections 117, 118, 119, and 120 as well
as in other pertinent provisions of this Act and transfer the same to the Department of Finance.
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Bank Act
Phase-out of Regulatory Powers over the Operations of Finance Corporations and Other
Institutions Performing Similar Functions
The Bangko Sentral shall, within a period of five (5) years from the effectivity of this Act, phase out its
regulatory powers over finance companies without quasi-banking functions and other institutions
performing similar functions as provided in existing laws, the same to be assumed by the Securities and
Exchange Commission.
Implementing Details
The Bangko Sentral shall be made operational by the performance of the following acts:
(a) The President shall constitute the Monetary Board by appointing the members thereof within sixty
(60) days from the effectivity of this Act; and
(b) The transfer of such assets and liabilities from the Central Bank to the Bangko Sentral as provided in
Section 132 shall be completed within ninety (90) days from the constitution of the Monetary Board.
All incumbent personnel in the Central Bank as of the date of the approval of this Act shall continue to
exercise their duties and functions as personnel of the Bangko Sentral subject to the provisions of Section
133: Provided, That such personnel in the Central Bank as may be necessary for the purpose of
implementing Section 132 may be assigned by the Bangko Sentral Monetary Board to the Central Bank.
Transfer of Assets and Liabilities
Upon the effectivity of this Act, three (3) members of the Monetary Board, which may include the
Governor, in representation of the Bangko Sentral, the Secretary of Finance and the Secretary of Budget
and Management in representation of the National Government, and the Chairmen of the Committees on
Banks of the Senate and the House of Representatives shall determine the assets and liabilities of the
Central Bank which may be transferred to or assumed by the Bangko Sentral. The Committee shall
complete its work within ninety (90) days from the constitution of the Monetary Board submitting a
comprehensive report with all its findings and justification.
The following guidelines shall be strictly observed in the determination of which assets and liabilities
shall be transferred to the Bangko Sentral:
a) The Monetary Board and the Secretary of Finance shall have primary responsibility for working
out creative monetary and financial solutions to retire the Central Bank liabilities and losses at the
least cost to the Government;
b) The Bangko Sentral shall remit seventy-five percent (75%) of its net profits to a special deposit
account (sinking fund) until such time as the net liabilities of the Central Bank shall have been
liquidated through generally accepted finance mechanisms such as, but not limited to, write-offs,
set-offs, condonation, collections, reappraisal, revaluation and bond issuance by the National
Government, or to the National Government as dividends;
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c) The assets and liabilities to be transferred shall be limited to an amount that will enable the
Bangko Sentral to perform its responsibilities adequately and operate on a viable basis: Provided,
That the assets shall exceed the liabilities as certified by the Commission on Audit (COA), by an
initial amount of Ten billion pesos (P10,000,000,000);
d) Liabilities to be assumed by the Bangko Sentral shall include liability for notes and coins in
circulation as of the effective date of this Act; and
e) Any asset or liability of the Central Bank not transferred to the Bangko Sentral shall be retained
and administered, disposed of and liquidated by the Central Bank itself which shall continue to
exist as the CB Board of Liquidators only for the purposes provided in this paragraph but not later
than twenty-five (25) years or until such time that liabilities have been liquidated: Provided, That
the Bangko Sentral may financially assist the Central Bank of Liquidators in the liquidation of
CB liabilities: Provided, finally, That upon disposition of said retained assets and liquidation of
said retained liabilities, the Central Bank shall be deemed abolished.
All actions taken by the Bangko Sentral Monetary Board under this section shall be reported to Congress
and the President within thirty (30) days.
Mandate to Organize
The Bangko Sentral shall be organized by the Monetary Board without being subject to the provisions of
Republic Act No. 7430, by adopting if it so desires, an entirely new staffing pattern on organizational
structure to suit the operations of the Bangko Sentral under this Act. No preferential or priority right shall
be given to or enjoyed by any personnel for appointment to any position in the new staffing pattern, nor
shall any personnel be considered as having prior or vested rights with respect to retention in the Bangko
Sentral or in any position which may be created in the new staffing pattern, even if he should be the
incumbent of a similar position prior to organization. The formulation of the program of organization
shall be completed within six (6) months after the effectivity of this Act, and shall be fully implemented
within a period of six (6) months thereafter. Personnel who may not be retained are deemed separated
from the service.
Separation Benefits
Pursuant to Section 15 of this Act, the Monetary Board is authorized to provide separation incentives, and
all those who shall retire or be separated from the service on account of reorganization under the
preceding section shall be entitled to such incentives, which shall be in addition to all gratuities and
benefits to which they may be entitled under existing laws.
Repealing Clause
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Bank Act
Except as may be provided for in Section 46 and 132 of this Act, Republic Act No. 265, as amended, the
provisions of any other law, special charters, rule or regulation issued pursuant to said Republic Act No.
265, as amended, or parts thereof, which may be inconsistent with the provisions of this Act are hereby
repealed. Presidential Decree No. 1792 is likewise repealed.
Transfer of Powers
All powers, duties and functions vested by law in the Central Bank of the Philippines not inconsistent
with the provisions of this Act shall be deemed transferred to the Bangko Sentral ng Pilipinas. All
references to the Central Bank of the Philippines in any law or special charters shall be deemed to refer to
the Bangko Sentral.
Separability Clause
If any provision or section of this Act or the application thereof to any person or circumstance is held
invalid, the other provisions or sections of this Act, and the application of such provision or section to
other persons or circumstances, shall not be affected thereby.
Effectivity Clause
This Act shall take effect fifteen (15) days following its publication in the Official Gazette of the House of
Representatives and the Senate on June 10, 1993.
72 | P a g e

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A Research Paper regarding Anti-Money Laundering Act, Intellectual Property Law, and New Central

ANTI-MONEY LAUNDERING ACT

COVERED PERSONS refer to the following:

1. Persons supervised or regulated by BSP, such as:

2. Persons supervised or regulated by IC, such as:

3. Persons supervised or regulated by SEC, such as:

4. The following Designated Non-Financial Businesses and Professions (DNFBPs):

a) Jewelry dealers, dealers in precious metals, and dealers in precious stones.

i. Acting as a formation agent of juridical persons;

i. Managing of client money, securities or other assets;

COVERED TRANSACTIONS refers to:

SUSPICIOUS TRANSACTIONS refers to a transaction, regardless of amount, where any of the

a) There is no underlying legal or trade obligation, purpose or economic justification;

a) Any person or entity on whose behalf of an account is maintained or a transaction is conducted,

"Beneficial Owner" refers to any natural person who:

OFFICIAL DOCUMENT refers to any of the following identification documents:

For foreign nationals: Passport or Alien Certificate of Registration

1. Coins or currency of legal tender of the Philippines, or of any other country;

a) Derived from, or traceable to, any unlawful activity; or

PROCEEDS refers to an amount derived or realized from any unlawful activity.

MONETARY INSTRUMENT OR PROPERTY RELATED TO UNLAWFUL ACTIVITY refers to:

a) All proceeds of an unlawful activity;

MATERIALLY-LINKED ACCOUNTS shall include the following:

Kidnapping for ransom

HOW IS MONEY LAUNDERED THROUGH FINANCIAL SYSTEM?

SALIENT FEATURES OF THE LAW

MONEY LAUNDERING is committed by:

a) Transacts said monetary instrument or property;

ANTI-MONEY LAUNDERING COUNCIL AND ITS POWER

JURISDICTION OVER MONEY LAUNDERING CASES

a) Reduced Due Diligence

a) Raises doubt as to the accuracy of any information or document provided or the

If the covered person:

a) Fails to satisfactorily complete the enhanced due diligence procedures; or

1. Retention of Records Where the Account is the subject of the Case

1. Substance and Form of Reports

3. Safe Harbor Provision

4. Enrolment with the AMLCs Reporting System

PREVENTIVE MEASURES FOR SPECIFIC CUSTOMERS AND ACTIVITIES

CASE I: GLASGOW CREDIT AND COLLECTION SERVICES, INC. and CITYSTATE

RCBC urged to submit records of fictitious accounts or be cited for contempt.

Heated debates ensued as the five-hour Senate hearing dragged on.

INTELLECTUAL PROPERTY LAW RESEARCH

State Policy Declaration

Effect on International Conventions and on Principles of Reciprocity

SIGNIFICANT FEATURES OF THE LAW

PART I - The Intellectual Property Office

Part I: THE INTELLECTUAL PROPERTY OFFICE

PART II: THE LAW OF PATENTS

A patent shall confer on its owner the following exclusive rights:

LIMITATION OF PATENT RIGHTS

EFFECTIVE DATE OF PATENT

a. That what is claimed as the invention is not new or Patentable;

c. That the patent is contrary to public order or morality.

Non-Patentable Inventions. The following shall be excluded from patent protection:

"Trade name" means the name or designation identifying or distinguishing an enterprise;

"Bureau" means the Bureau of Trademarks;

"Examiner" means the trademark examiner.

A Mark cannot be registered if it:

i. The same goods or services, or

e. Is identical with, or confusingly similar to, or constitutes a translation of a mark which is

a. A request for registration;

b. The name and address of the applicant;

h. Where the mark is a three-dimensional mark, a statement to that effect;