Philippines Deposit Insurance Corporation Law
Negotiable Order of Withdrawal (NOW)
(RA 3591 as amended 10846)
A. Description of Philippine Deposit Insurance
Corporation
PDIC is government instrumentality created in
1963 by virtue of Republic Act 3591 to insure the
deposit of all banks which are entitled to the benefits of
insurance. the PDIC is an attached agency of the
Department of Finance.
The latest amendments to RA 3591 are
contained in RA 10846 signed into law on May 23, 2016.
RA 10846 empowered PDIC with stronger authorities to
protect the depositing public and promote financial
stability. the new law also includes important provisions
to ensure that the PDIC remains financially and
institutionally strong to fulfill its mandate under its
Charter.
The PDIC now has the authority to help
depositors have quicker access to their insured deposits
should their bank close; resolve problem banks while
open; hasten the liquidation process for closed bank;
and mete out stiffer sanctions and penalties against
those who engage in unsafe and unsound banking
practices.
Under amendment, depositors would have
quicker access to their insured deposits in the event of
bank closure since PDIC now has the authority to pay
insured deposits without netting out depositors' loan
obligations with the closed bank, and based on evidence
of deposits and not on the closed bank's records alone.
With its enhanced resolution authorities, PDIC
would also be able to more effectively promote
financial inclusion through early intervention in problem
banks or open bank resolution. In cases where bank
closure becomes inevitable, the new law enhanced the
chances of recovery by creditors of their claims against
the assets of the closed bank by preventing the further
dissipation of these assets through seamless transition
from bank closure to liquidation.
The new law does away with the 90-day
receivership period and allows PDIC to proceed directly
to liquidation. The immediate assignment of
encumbered assets to closed bank creditors, adoption of
purchase of assets and assumption of liabilities as a
mode of liquidation, and express prohibition on
reopening of banks ordered closed by the Monetary
Board of the Bangko Sentral ng Pilipinas would help
enhance recovery rate for creditors of closed banks.
B. Insurable Deposits under PDIC Law (Covered by PDIC
Insurance)
1. By Deposit Type:
a. Savings Deposit
b. Special Savings
c. Demand/ Checking Account
d.
e. Certificate of Time Deposits
2. By Deposit Account:
a. Single Accounts - are individually-owned
accounts or accounts held under one name,
either as natural person (single proprietorship
or individual) or juridical entity (corporation,
partnership or cooperative).
b. Joint Accounts - are accounts held under more
than one name.
i. A joint account regardless of whether the
conjunction "and", "or" or "and/or" is used
shall be insured separately from single
accounts.
ii. Unless a different sharing is stipulated in the
deposit documents, the insured amount up
to the Maximum Deposit Insurance
Coverage of Php500,000 shall be divided
equally between or among co-owners of
joint account.
iii. The total shares of a co-owner in several joint
accounts may exceed Php500,000 but will
only be insured up to the Maximum Deposit
Insurance Coverage of Php500,000.
iv. Joint accounts held in the names of juridical
entity and natural person shall be presumed
to belong solely to the juridical entity.
c. Account "By", "In Trust For" (ITF) or "For the Account
of" (FAO) another person
i. In a "By" account, Ana by Ben, Ana is the
depositor
ii. In a "In Trust For" (ITF) account, Ana In Trust
For Ben, Ben is the depositor.
iii. In a "For the Account of" (FAO) account, Ana
For the Account of Ben, Ben is the depositor.
d. Explanatory Notes
i. To simplify: In the case where a depositor is the
sole beneficial owner of a single, "For the
Account of", "By", and "In Trust For"
accounts, the consolidated balances of these
accounts shall be insured up to Php500,000.
ii. The depositor's total shares in his/her joint
accounts shall be separately insured up to
Php500,000.
iii. A depositor with single accounts and joint
accounts may have insured deposits of up to
Php1,000,000.
C. Items that are not covered by PDIC Deposit Insurance
The following, whether denominated, documented,
recorded or booked as deposit by the bank, are
excluded from PDIC deposit insurance (Section 4(f) of
the PDIC Charter):
a. Investment products such as bonds and securities,
trust accounts and other similar instrument
b. Deposit accounts or transactions that:
Page 1 of 21
 i. Are unfunded, fictitious or fraudulent Account Name Deposit Insured
ii. Constitute and/or emanate from unsafe and (in PHP) Deposit
unsound banking practices as determined by of Fe
the PDIC, in consultation with the BSP, after due Santos
notice and hearing and publication of PDIC's Fe Santos or Ben Santos 500,000 250,000
cease & desist order against such deposit Fe Santos and Charlie 1,000,000 250,000
accounts/transactions Santos
iii. Are determined to be proceeds of an unlawful Fe Santos and/or Divina 1,000,000 0*
activity as defined in the AntiMoney Laundering Santos
Act (Republic Act 9160, as amended) Total 2,500,000 500,000
Note: Unsafe and unsound deposit-related activities *Note: Mrs. Fe Santos does not have any insured
include, among others: (PDIC Regulatory Issuance No. 2011- deposit share since she already has P500,000 in total
01) shares in the two joint accounts she has with Ben and
 Deposit-related practice/activity/transaction without Charlie Santos.
the approval or adequate controls required under 3. How much is Fe Santos's insured deposit for all her
existing laws, rules and regulations single and joint accounts in the same bank?
 Failure to keep bank records within bank premises Account Name Deposit Insured
 Granting high interest rates, when bank has: (i) (in PHP) Deposit
negative unimpaired capital, or (ii) liquid assets to of Fe
deposit ratio less than 10% Santos
 Non-compliance with PDIC regulations All single accounts of Fe 1,000,000 500,000
D. Maximum Liability (Maximum Deposit Insurance Santos in BDO Branch 1
Coverage) All joint accounts of Fe 2,500,000 500,000
PDIC Shall pay deposit insurance on all valid Santos in BDO Branch 2
deposits up to the Maximum Deposit Insurance Total 3,500,000 1,000,000
Coverage of Php500,000., per depositor, of closed bank.
Accounts maintained in the same right and capacity for Note: For purposes of computing the insured deposits,
a depositor's benefit, whether in his own name or in the
all obligations or loans of the depositor with the
name of others, are covered by deposit insurance. closed bank, as of bank closure, shall be deducted
However, a depositor with single accounts and joint from the depositor's total deposits with the said bank.
accounts may have insured deposits of up to (PDIC Regulatory Issuance No. 2011-01)
Php1,000,000.
Deposits are considered valid upon the E. Requirement for Claims of Insured Deposits
determination by the PDIC, based on bank records, that 1. When are claims filed?
the deposits were. Claims are filed during the claims
settlement operations period, as announced in
Illustrative examples: the Notice to Depositors published in national or
1. How much is Fe Santos's insured deposit if she has the local newspapers, or posted in the bank premises
following four deposit accounts in the same bank? and conspicuous places within the locality, and in
Account Name Deposit Insured the PDIC website
(in PHP) Deposit Depositors have two (2) years from
of Fe PDIC's takeover of the closed bank to file their
Santos deposit insurance claims.
Fe Santos 100,000 100,000
2. Who are required to file deposit insurance claims?
Ben Santos For the Account 100,000 100,000
a. Depositors with valid deposit accounts with
of Fe Santos
balances of more than Php100,000.
Charlie Santos In Trust For Fe 100,000 100,000
b. Depositors who have outstanding obligations
Santos
with the closed bank regardless of amount of
Fe Santos' Store (Sole 700,000 200,000
deposits.
Proprietorship)
c. Depositors with account balances of less than
Total 1,000,000 500,000
Php100,000 who have no updated addresses in
the bank records or who have not updated their
2. How much is Fe Santos's insured deposit if she has the
addresses through the Mailing Address Update
following three joint accounts in the same bank?
Form (MAUF) issued by the PDIC.

Page 2 of 21
 d. Depositors who maintain their accounts under
the name of business entities, regardless of type
of account and account balance.
e. Depositors with accounts not eligible for early
payment, regardless of type of account and
account balance per advice of PDIC.
3. Who are depositors not required to file deposit
insurance claims?
Depositors with valid deposit accounts
with balances of Php100,000 and below are not
required to file claims provided they have no
obligations with the closed bank and have
complete and updated addresses in the bank
records or have updated these through the
Mailing Address Update Form (MAUF) issued by
the PDIC. Depositors with balances of
Php100,000 and below may update their
addresses using the MAUF and submit to PDIC
representatives stationed at the closed bank
premises before the start of the onsite claims
settlement operations
These depositors are entitled to
immediate/early payment of deposit insurance
claim as part of PDIC's initiative to provide
convenience to small depositors. Payments to
these depositors are sent as postal money orders
to the depositors' mailing addresses.
4. Steps in filing deposit insurance claims
a. Prepare the following documents:
i. Original evidence of deposits such as savings
passbook, certificate of time deposit, bank
statement, unused checks, and ATM card.
ii. Original copy of ONE (1) VALID PHOTO-
BEARING IDENTIFICATION DOCUMENTS (ID)
with clear signature of depositor/claimant
such as Driver's license, SSS/ GSIS ID, Senior
Citizen’s ID, Passport, PRC ID, OWWA/ OFW
ID, Seaman's ID, Alien Certification of
Registration ID, Voter's ID, IBP. Please
ensure that the ID number is clear and
legible.
iii. If the depositor is below 18 years old,
photocopy of his/her birth certificate from
the Philippine Statistics Authority (PSA) or
duly certified copy from the local civil
registrar and valid IDs of the parent.
iv. Original copy of a notarized Special Power of
Attorney (SPA) for claimants who are not the
signatories in the bank records. In the case
of minor depositor, the SPA must be
executed by the parent.
b. Submit to:
i. If filing personality: The PDIC representatives at
the premises of the closed bank during
Claims Settlement Operations (CSO) or to
the PDIC Public Assistance Center at the 3rd
Floor, SSS Bldg., 6782 Ayala Avenue corner
V.A. Rufino Street, Makati City after the
onsite CSO.
ii. If filing through Mail: Send the accomplished
and notarized Claim Form and requirements
to The Claims Processing Department of
PDIC 4/F SSS Building, 6782 Ayala Avenue
corner V.A. Rufino St. 1226 Makati City
5. Who should sign the deposit insurance claim form?
a. Depositor of the account - for depositors 18
years old and above
b. Parent - if the depositor is below 18 years old
c. Agent - in the case of "By" accounts
d. Trustee - in the case of "In Trust For" (ITF
accounts)
e. Each Depositor - in the case of joint accounts
such as "Or", "And/Or" or "And" accounts
6. Procedures for Claiming Insurance Proceeds
a. Period for Payment
i. Whenever an insured bank is closed by
Monetary Board
ii. Payment shall be made by PDIC as soon as
possible
b. Mode of payment
i. By Cash
ii. By making available to each depositor a
transferred deposit in another insured bank
in an amount equal to insured deposit of
such depositor
c. Requirement before payment
i. PDIC may require proof of claims before paying
the insured deposit
ii. If PDIC is not satisfied as to the validity of a
claim for an insured deposit, it may require
final determination of a court of competent
jurisdiction before paying such claim
d. Period for payment - It must be made within 6
months from the date of filing otherwise the
officers of PDIC will be liable for failure to pay if
due to grave abuse of discretion, gross
negligence, bad faith or malice.
e. Rights of PDIC upon payment of insured
deposits - PDIC shall be subrogated to all rights
of depositor against the closed bank to the
extent of such payment.
Bank Secrecy Laws
A. AN ACT PROHIBITING DISCLOSURE OF OR INQUIRY
INTO DEPOSITS WITH ANY BANKING INSTITUTION
(REPUBLIC ACT NO. 1405)
a. Absolute Confidentiality of Bank Deposits and
Investments in Government Bonds. All deposits of
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 whatever nature in banks or banking institutions in
the Philippines and investments in government
bonds are absolutely confidential in nature. (Sec 2,
Rep. Act No. 1405)
1. Deposits refer to money or funds placed with a
bank that can be withdrawn on the depositor's
order or demand, such as deposit accounts in
the form of savings, current, and time deposits.
Deposits are characterized as being in the
nature of simple loan. the placing of deposits in
a bank creates a creditor-debtor relationship
between the depositor and the bank. as such,
the bank, being the debtor, has the obligation
to pay a certain sum of money to the depositor,
being the creditor.
2. Investment in Government Bonds refer to
investments in bonds issued by the Government
of the Philippines, its political subdivisions and
its instrumentalities. Government bonds are
debt securities which are unconditional
obligations of the State, and backed by its full
taxing power. Government bonds include
treasury bills, treasury notes, retail treasury
bonds, dollar linked peso notes, and other risk-
free bonds.
3. The General Banking Law prohibits bank
directors, officers, employees or agents from
disclosing to any unauthorized person, without
order of a competent court, for any information
relative to funds or properties belonging to
private individuals, corporations, or any other
entity in the custody of the bank. (Sec 55[b],
Rep. Act No. 8791) The Thrift Banks Act and the
Rural Banks Act likewise prohibit any bank
officer, employee or agent from disclosing any
information on such funds or properties. (Sec.
21[a][2], Rep. Act No. 7906 & Sec 26[a][2], Rep.
Act No. 7353) Prohibited Acts and Persons
Liable
b. The following are criminally liable under this law:
i. Any person or government official who, or any
government bureau or office that, examines,
inquires or looks into a bank deposit or
government bond investment in any of the
instances not allowed in Section 2;
ii. An official or employee of a banking institution
who makes a disclosure concerning bank
deposits to another in any instance not allowed
by law (Sec. 3, Rep. Act No. 1405); and
iii. Any person who commits a violation of any of
the provisions of the law (Sec. 5, Rep. Act No.
1405).
iv. Any bank official, director, employee or agent
who discloses information relative to funds or
properties in the custody of the bank may also
be held liable under the applicable provisions of
the General Banking Law, Thrift Banks Act and
Rural Banks Act.
c. Instances when Confidentiality of Domestic Bank
Deposits is Not Absolute. Banks deposits and
investment in government bonds may be examined,
inquired or looked into under limited exceptions in
Republic Act No. 1405 and in other laws as
enumerated below:
1. Exceptions under the Law on Secrecy of Bank
Deposits. Section 2 of Republic Act No. 1405
provides that bank deposits and government
bond investments may be examined, inquired
and looked into in the following instances:
a. Upon written permission or consent in
writing by the depositor. For consent to be
valid, it should be made knowingly,
voluntarily and with sufficient awareness of
the relevant circumstances and likely
consequences.
b. In cases of impeachment of the President,
Vice President, members of the Supreme
Court, members of the Constitutional
Commission (Commission on Elections, Civil
Service Commission and Commission on
Audit) and the Ombudsman for culpable
violation of the Constitution, treason,
bribery, graft and corruption, other high
crimes or betrayal of public trust. (Art XI, Sex.
2, 1987 Philippine Constitution)
c.Upon order of a competent court in cases of
bribery or dereliction of duty of public
officials.
d. In cases where the money deposited or
invested is the subject matter of the
litigation. The money deposited should be
the very thing in dispute. (Mellon Bank, N.A.
v. Magsino, 190 S.C.R.A. 633[1990])
2. Exceptions under Other Laws. Banks deposits
and investments may be examined, inquired or
looked into as provided for under other laws in
the following instances:
a. The Ombudsman has the power to issue
subpoena and subpoena duces tecum, take
testimony in any investigation or inquiry, as
well as examine and access bank accounts
and records. The power of the Ombudsman
to subpoena deposit information of a
government official may be exercised when
the following conditions concur: (1) there
must be a case pending before a court of
competent jurisdiction; (2) the account must
be clearly identified; (3) the inspection must
be limited to the subject matter of the
pending case; and (4) the bank personnel
Page 4 of 21
 and the account holder must be notified to
be present during the inspection. (Marquez v.
Desierto, 359 S.C.R.A. 772 [2001])
b. Bank deposits of public official, his spouse
and unmarried children may be taken into
consideration in the enforcement of Section
8 of The Anti-Graft and Corrupt Practices Act
(Rep. Act No. 3019)
c.Directors, officers, stockholders and related
interests who contract a loan or any form of
financial accommodation with their bank or
related bank are required to execute a
written waiver of secrecy of deposits
pursuant to The New Central Bank Act. (Sec
26, Rep. Act No. 7653)
d. The Commissioner of Internal Revenue is
authorize to inquire into bank deposit
accounts in relation to: (1) an application for
compromise of tax liability or determination
of a decedent's gross estate under The
National Internal Revenue Code (Rep. Act No.
8424, as amended by Rep. Act No. 10021);
and (2) a request for tax information for
specific taxpayers made by a foreign tax
authority pursuant to a tax treaty under The
Exchange of Information on Tax Matters Act
of 2009 (Rep. Act No. 8424, as amended by
Rep. Act No. 10021).
e. The Anti-Money Laundering Council may be
authorized to examine and inquire into bank
deposits or investments with banks or
nonbank financial institutions - (1) with court
order, when there is probable cause that the
deposits or investments are related to an
unlawful activity or a money laundering
offense (Secs. 3[i] and 4 of Rep. Act No.
9160); and (2) without need of court order,
when probable cause exists that a particular
deposit or investment with any banking
institution is related to certain predicate
crimes, such as kidnapping for ransom,
violations of the Comprehensive Dangerous
Drugs Act, hijacking and other violations
under Republic Act No. 6235, destructive
arson and murder (Sec. 11 of Republic Act
No. 9160).
f. The Bangko Sentral is authorized to - (1)
inquire into or examine bank deposits or
investments in the course of a periodic or
special examination to ensure compliance
with the The AntiMoney Laundering Law, in
accordance with the rule of examination of
the Bangko Sentral (Sec. 11, Rep. Act No.
9160, as amended); and (2) conduct annual
testing which is limited to the determination
of the existence and true identity of the
owners of numbered accounts (Sec. 9, Rep.
Act No. 9160, as amended 12).
g. The Philippines Deposit Insurance
Commission and the Bangko Sentral may
inquire into bank deposits when there is a
finding of unsafe or unsound banking
practices. (Sec. 8, Rep. Act No. 3591, as
amended)
h. The Court of Appeals, designated as a special
court, may issue an order authorizing law
enforcement officers to examine and gather
information on the deposits, placements,
trust accounts, assets and records in a bank
or financial institution in connection with
anti-terrorism case. (Rep. Act No. 9372)
i. The Commission on Audit is authorized to
examine and audit government deposits
pertaining to the revenue and receipts of,
and expenditures or uses of funds and
properties, owned or held in trust by, or
pertaining to the Government or any of its
subdivisions, agencies or instrumentalities,
including government-owned and controlled
corporations with original charters. (See Art.
IX-D, 1987 Constitution and Pres Dec. No.
1445)
j. The Presidential Commission on Good
Government, in the conduct of its
investigations to recover ill-gotten wealth
accumulated by former President Ferdinand
E. Marcos, his immediate family, relatives,
subordinates and close associates, may issue
subpoena requiring the attendance and
testimony of witnesses and/or the
production of books, papers, contracts,
records, statement of accounts and other
documents. (Sec. 3 [e}, Exec Order No. 1
[1986])
3. Exceptions under Jurisprudence or Decision by
Supreme Court
a. Plunder us analogous to bribery. The
exception in the law that is applicable in
bribery also applies to plunder. The overt or
criminal acts as described in Section 1(d) of
Republic Act No. 7080 would make
similarity between plunder and bribery even
more pronounced since bribery is essentially
included among these criminal acts. (Ejercito
v. Sandiganbayan, 509 S.C.R.A. 190 [2006])
b. Cases of unexplained wealth are similar to
cases of bribery or dereliction of duty and no
reason is seen why these two classes of
cases cannot be excepted from the rule
making bank deposits confidential. (Phil.
Page 5 of 21
 National Bank v. Gancayco, 122 Phil. 503
[1965])
4. Authorized Disclosures by authorized and
responsible bank officials are allowed in the
following instances:
a. reporting of unclaimed balances to the
Treasurer of the Philippines (Secs. 1 & 2, Act
No. 3936);
b. turn-over to the Commissioner of Internal
Revenue of the amount in bank accounts as
may be sufficient to satisfy the writ of
garnishment issued to collect delinquent
taxes (Secs. 205 & 208, Rep. Act No. 8424);
and
c.submission of report, and turn-over to, the
court officer or executing sheriff of
garnished amounts pursuant to a writ of
garnishment in satisfaction of a judgement
(Sec. 9[c], Rule 39, Rules of Court; See China
Banking Corporation v. Ortega, 49 SCRA
355[1973]).
d. disclosure by a bank officer or employee
upon order of the court in connection with a
deposit in a closed bank that was used in the
perpetration of anomalies. (Soriano v.
Manuzon, C.A. G.R.-S.P. No. 87634)
d. Penalties Violation of Republic Act No. 1405 will be
subject the offender, upon conviction, to the
following penalties:
i. Imprisonment of not more than five years;
ii. fine of not more than P20,000.00; or
iii. both imprisonment or fine.
B. FOREIGN CURRENCY DEPOSIT ACT OF THE PHILIPPINES
(REPUBLIC ACT NO. 6426)
Absolute Confidentiality of Foreign Currency Deposits
a. All foreign currency deposits are absolutely
confidential and cannot be examined, inquired, or
looked into by any person, government official,
bureau or office whether judicial or administrative or
legislative, or any other private or public entity.
b. Foreign currency deposits are also exempt from
attachment, garnishment, or any other order or
process of any court, legislative body, government
agency or any administrative body whatsoever. (Sec.
8, Rep. Act No. 6426) Foreign currency deposits refer
to funds in foreign currencies which are accepted
and held by authorized banks in the regular course of
business with the obligation to return an equivalent
amount to the owner thereof, with or without
interest.
c. Prohibited Acts and Persons Liable. The following are
liable under this law:
i. Any person or government official who, or any
government bureau or office that, examines,
inquires or looks into a foreign currency deposit
without the written permission of the depositor
(Sec. 8 Rep. Act No. 6426);
ii. Any official or employee of a banking institution
who makes a disclosure concerning foreign
currency deposits to another, in any instance
not allowed by law (See Sec. 10, Rep. Act No.
6426);
iii. Anyone who shall attach, garnish, or subject the
foreign currency deposit to any other order or
process of any court, legislative body,
government agency or any other administrative
body (Sec. 8, Rep. Act No. 6426); and
iv. Any person who commits a willful violation of
any of the provisions of Republic Act. No. 6426
or regulation issued by the Monetary Board
pursuant to the said law (Sec 10, Rep Act No.
6426).
d. Instances when Confidentiality of Foreign Currency
Deposits is Not Absolute. Foreign currency deposits
may be examined, inquired or looked into under the
limited exceptions in Republic Act No. 6426 and in
other laws.
i. Exceptions under The Foreign Currency
Deposits Act. Foreign currency deposits may be
examined, inquired or looked into when there is
written permission of the depositor. (Only one
exception under R.A. 6426)
ii. Exceptions under Other Laws
1. Directors, officers, stockholders and related
interest who contract a loan or any form of
financial accommodation with their banks or
related bank are required to execute a
written waiver of secrecy of deposits
pursuant to The New Central Bank Act. (Sec.
26, Rep. Act No. 7653)
2. The Commissioner of Internal Revenue is
authorized to inquire into bank deposit
accounts in relation to: (1) an application for
compromise of tax liability or a
determination of decedent's gross estate
under The National Internal Revenue Code
(Rep Act No. 8424, as amended by Rep. Act
No. 10021); and (2) a request for tax
information of specific taxpayers made by a
foreign tax authority pursuant to a tax
treaty under The Exchange of Information on
Tax Matters Act of 2009 (Rep Act No. 8424,
as amended by Rep Act. No. 10021).
3. The Anti-Money Laundering Council may be
authorized to examine and inquire into bank
deposits or investments with banking or
non-bank financial institutions - (1) with
court order, when there is probable cause
that the deposits or investments are related
to an unlawful activity or a money
Page 6 of 21
 laundering offense (Secs. 3(i) and 4 of Rep
Act No. 9160); and (2) without need of court
order, when probable cause exists that a
particular deposit or investment with any
banking institution is related to certain
predicate crimes, such as kidnapping for
ransom, violation of the Comprehensive
Dangerous Drugs Act, hijacking and other
violations under Republic Act No. 6235,
destructive arson and murder (Sec. 11 of
Republic Act No. 9160).
4. The Bangko Sentral is authorized to - (1)
inquire into or examine bank deposits and
investments in the course of a periodic or
special examination to ensure compliance
with The AntiMoney Laundering Act, in
accordance with the rules of examination of
the Bangko Sentral (Sec. 11, Rep. Act No.
9160, as amended); and (2) conduct annual
testing which is limited to the determination
of the existence and true identity of the
owners of numbered accounts (Sec. 9, Rep.
Act No. 9160, as amended).
5. The Philippine Deposit Insurance
Commission and the Bangko Sentral may
inquire into bank deposits when there is a
finding of unsafe or unsound banking
practices. (Sec. 8, Rep. Act No. 3591, as
amended)
6. The Commission on Audit is authorized to
examine and audit government deposits
pertaining to the revenue and receipts of,
and expenditures or uses of funds and
properties, owned or held in trust by, or
A. Definition of Terms
pertaining to, the Government or any of its
subdivisions, agencies or instrumentalities,
including government-owned and controlled
corporations with original charters. (See Art.
IX-D, 1987 Constitution and Pres. Dec. No.
1445)
7. The Presidential Commission on Good
Government, in the conduct of its
investigations to recover ill-gotten wealth
accumulated by former President Ferdinand
E. Marcos, his immediate family, relatives,
subordinates and close associates, may issue
subpoenas requiring the attendance and
testimony of witnesses and/or the
production of books, papers, contracts,
records, statement of accounts and other
documents. (Sec. 3 [e], Exec. Order No. 1
[1986])
iii. Exceptions under Jurisprudence on Grounds of
Equity
1. (a) Account of Non-resident Alien. The
garnishment of foreign currency deposit
account of a non-resident alien found guilty
of raping a minor was allowed on the basis
of equity. (Salvacion v. Central Bank of the
Philippines, 278 S.C.R.A. 27 [1997])
2. (b) Account of a Co-payee of a Check. A co-
payee of a check who filed a suit for
recovery of sum of money was considered,
in a pro hac vice ruling by the Supreme Court,
as a depositor in view of the distinctive
circumstances of the case. (China Banking
Corporation v. Court of Appeals, 511 S.C.R.A.
110 [2006])
e. Penalties of Violation of Republic Act No. 6426:
i. imprisonment of not less than one (1) year but
not more than five (5) years; or
ii. fine of not less than Five Thousand Pesos
(P5,000.00) but not more than Twenty-Five
Thousand Pesos (P25,000.00); or
iii. both imprisonment and fine
f. The following sanctions may also be imposed against
a bank or any bank director and officer for violation
of the provisions of Republic Act No. 6426 and
Bangko Sentral regulation issued pursuant to said
law:
i. revocation of the authority of the bank to
accept new foreign currency deposits; and
ii. administrative sanctions provided under Section
37 of the New Central Bank Act (Rep. Act No.
7653), as may be applicable.
Unclaimed Balances Law
a. "Unclaimed Balances" shall include credits or deposits
of money, bullion, security or other evidence of
indebtedness of any kind, and interest thereon with
banks in favor of any person known to be dead or
who has not made further deposits or withdrawal
during the preceding ten (10) years or more
b. "Applicant" pertains to the depositor or his successor-
in-interest who requests for the reactivation of the
account which was reported by his depository bank
to the Treasurer of the Philippines pursuant to the
Unclaimed Balances Law.
c. "Procedure" refers to the course of action to be
complied with by the applicant in order that his
request be given due course.
d. "Covered Institution" refers to all banks, trust
companies, savings and mortgage banks, mutual
building and loan associations, all banking
institutions of every kind, covered under Act No.
3936, as amended by P.D. 679, which reported to the
Page 7 of 21
 Treasurer of the Philippines as unclaimed the iv. Treasurer of the Philippines - aggregate amount
account being applied for reactivation. of unclaimed balance exceeding P1,000,000.00
e. "Affidavit of Undertaking" is a sworn statement
executed by the responsible authorized officer of the C. Escheat Proceedings for Unclaimed Balances
bank absolving the Bureau of Treasury from any a. Section 1. Of Rule 91 When an by whom petition filed
liability that may arise due to the granting of the - When a person dies intestate, seized of real
Applicant's request for reactivation. property in the Philippines, leaving no heir or person
by law entitled to the same, the Solicitor General or
B. Procedure for Reactivation of Unclaimed Balances his representative in behalf of the Republic of the
Reported to the Treasurer of the Philippines Philippines, may file a petition in the Court of First
a. Letter Request of Depositor/Creditor. The Instance of the province where the deceased last
depositor/creditor shall write his depository bank resided or in which he had estate, if he resided out of
requesting for the reactivation of his account which the Philippines, setting forth the facts, and praying
was included in the report of unclaimed balances to that the estate of the deceased be declared
the Bureau of the Treasury. escheated.
b. Authentication. The covered institution shall
authenticate and verify the request for reactivation General Banking Law (R.A. 8791)
and the signature of the depositor/creditor.
A. Definition of Terms
c. Letter Request of the Covered Institution. The
a. "Banks" shall refer to entities engaged in the lending
depository bank shall write the Bureau of the
of funds obtained in the form of deposits.
Treasury through the authorized approving official,
b. "Quasi-banks" shall refer to entities engaged in the
requesting authority to reactivate the deposit
borrowing of funds through the issuance,
account concerned attaching to its letter the
endorsement or assignment with recourse or
stamped verified letter of the depositor/creditor.
acceptance of deposit substitutes.
d. Deed of Undertaking. The covered institution, through
c. "Deposits" refer to money or funds placed with a
its responsible authorized officer, shall execute a
bank that can be withdrawn on the depositor's order
Deed of Undertaking ensuring that the Bureau of the
or demand, such as deposit accounts in the form of
Treasury and its officials and employees shall be free
savings, current and time deposits. Deposits are
and harmless from any liability once the account is
characterized as being in the nature of simple loan.
reactivated.
The placing of deposits in a bank creates a creditor-
e. Letter of Authority to Reactivate. Finding complete
debtor relationship between the depositor and the
documentation supporting the request, the Bureau
bank. As such, the bank, being the debtor, has the
of the Treasury, through the authorized officer shall
obligation to pay a certain sum of money to the
issue the authority to the covered institution to
depositor, being the creditor.
reactivate the account.
d. The term "deposit substitutes" is defined as an
f. Entity Requirements. In case the requesting
alternative form of obtaining funds from the public,
party/deposit/creditor is a judicial entity/person, the
other than deposits, through the issuance,
request must be accompanied with corresponding
endorsement, or acceptance of debt instruments for
board resolutions and/or Secretary's Certificate
the borrower's own account, for the purpose of
showing that the signatory to the request for
relending or purchasing of receivables and other
reactivation is fully authorized to transact with the
obligations. These instruments may include, but need
Bureau of the Treasury relative to the reactivation of
not be limited to, banker’s acceptances, promissory
its account.
notes, participations, certificates of assignment and
g. APPROVING AUTHORITY. The authority to reactivate
similar instruments with recourse, and repurchase
on unclaimed balance account/s shall be issued by
agreements.
the following officers:
i. Division Chief/Head Law & Litigation Division
B. Types of Banks
Legal Service - aggregate amount of unclaimed
a. "Commercial bank" is a bank which shall have, in
balance not exceeding P100,000.00
addition to the general powers incident to
ii. Director, Legal Service - aggregate amount of
corporations, all such as may be necessary to carry
unclaimed balance exceeding P100,000.00 but
on the business of commercial banking, such as
not exceeding P500,000.00
accepting drafts and issuing letters of credit;
iii. Deputy Treasurer of the Philippines - aggregate
discounting and negotiating promissory notes, drafts,
amount exceeding P500,000.00 but not
bills of exchange, and other evidences of debt;
exceedingP1,000.000.00
Page 8 of 21
 accepting or creating demand deposits; receiving
other types of deposits and deposit substitutes;
buying and selling foreign exchange and gold or silver
bullion; acquiring marketable bonds and other debt
securities; and extending credit, subject to such rules
as the Monetary Board may promulgate. These rules
may include the determination of bonds and other
debt securities eligible for investment, the maturities
and aggregate amount of such investment.
b. "Universal bank" is a bank which shall have the
authority to exercise, in addition to the powers
authorized for a commercial bank under the law, the
powers of an investment house as provided in the
existing laws and the power to invest in non-allied
enterprises as provided in this law.
c. "Thrift banks" shall include savings and mortgage
banks, private development banks, and stock savings
and loans associations organized under existing laws,
and any banking corporation that may be organized
for the following purposes: (1) Accumulating the
savings of depositors and investing them, together
with capital loans secured by bonds, mortgages in
real estate and insured improvements thereon,
chattel mortgage, bonds and other forms of security
or in loans for personal or household finance,
whether secured or unsecured, or in financing for
homebuilding and home development; in readily
marketable and debt securities; in commercial
papers and accounts receivables, drafts, bills of
exchange, acceptances or notes arising out of
commercial transactions; and in such other
investments and loans which the Monetary Board
may determine as necessary in the furtherance of
national economic objectives; (2) Providing short-
term working capital, medium- and long-term
financing, to businesses engaged in agriculture,
services, industry and housing; and (3) Providing
diversified financial and allied services for its chosen
market and constituencies specially for small and
medium enterprises and individuals.
d. "Rural Banks" are banks that extend loan primarily for
the purpose of meeting the normal credit needs of
farmers, fishermen or farm families owning or
cultivating land dedicated to agricultural production
as well as the normal credit needs of cooperatives
and merchants. In granting of loans, the rural bank
shall give preference to the application of farmers
and merchant whose cash requirements are small.
e. “Cooperative Bank” is one organized by the majority
shares of which is owned and controlled by
cooperatives primarily to provide financial and credit
services to cooperatives. The term “cooperative
bank” shall include cooperative rural banks.
f. “Islamic Bank” is a bank created to promote and
accelerate the socio-economic development of the
Autonomous Region of Muslim Mindanao (ARMM)
by performing banking, financing and investment
operations and to establish and participate in
agricultural, commercial and industrial ventures
based on the Islamic concept of banking.
g. “Government-owned Banks” are those banks
controlled and owed by the national government.
They are created by special law to achieve a
particular public purpose. They include Lank Bank of
the Philippines and Development Bank of the
Philippines.
Note: A bank other than a universal or commercial
bank cannot accept or create demand deposits
except upon prior approval of, and subject to such
conditions and rules as may be prescribe by the
Monetary Board.
C. Loans made by Bank
a. Risk-Based Capital
i. The Monetary Board shall prescribe the
minimum ratio which the net worth of a bank
must bear to its total risk assets which may
include contingent accounts.
ii. The Monetary Board may require that such ratio
be determined on the basis of the net worth
and risk assets of a bank and its subsidiaries,
financial or otherwise, as well as prescribe the
composition and the manner of determining the
net worth and total risk assets of banks and
their subsidiaries: Provided, That in the exercise
of this authority , the Monetary Board shall, to
the extent feasible, conform to internationally
accepted standards, including those of the Bank
for International Settlements (BIS), relating to
risk-based capital requirements: Provided,
further, That it may alter or suspend compliance
with such ratio whenever necessary for a
maximum period of one (1) year: Provided,
finally, That such ratio shall be applied
uniformly to banks of the same category.
iii. In case a bank does not comply with the
prescribed minimum ratio, the Monetary Board
may limit or prohibit the distribution of net
profits by such bank and may require that part
or all of the net profits be used to increase the
capital accounts of the bank until the minimum
requirement has been met. The Monetary
Board may, furthermore, restrict or prohibit the
acquisition of major assets and the making of
new investments by the bank, with the
exception of purchases of readily marketable
evidences of indebtedness of the Republic of
the Philippines and of the Bangko Sentral and
any other evidences of indebtedness or
obligations the servicing and repayment of
Page 9 of 21
 which are fully guaranteed by the Republic of
the Philippines, until the minimum required
capital ratio has been restored.
b. Single Borrower’s Limit (SBL)
i. Maximum Limit of Loan to be granted by a
bank to single borrower
Except as the Monetary Board may otherwise
prescribe for reasons of national interest, the total
amount of loans, credit accommodations and
guarantees as may be defined by the Monetary
Board that may be extended by a bank to any
person, partnership, association, corporation or
other entity shall at no time exceed twenty percent
(20%) of the net worth of such bank. The basis for
determining compliance with single-borrower limit
is the total credit commitment of the bank to the
borrower.
ii. Additional Limit of Loan that may be granted
by a bank to a single borrower in addition to
the initial maximum limit
Unless the Monetary Board prescribes
otherwise, the total amount of loans, credit
accommodations and guarantees prescribed in the
preceding paragraph may be increased by an
additional ten percent (10%) of the net worth of
such bank provided the additional liabilities of any
borrower are adequately secured by trust receipts,
shipping documents, warehouse receipts of other
similar documents transferring or securing title
covering readily marketable, non-perishable goods
which must be fully covered by insurance.
iii. Loans and other credit accommodations
included in the computation of Single
Borrower’s Limit
a) The direct liability of the maker or acceptor
of paper discounted with or sold to such
bank and the liability of a general indorser,
drawer or guarantor who obtains a loan or
other credit accommodation from or
discounts paper with or sells paper to such
bank;
b) In the case of an individual who owns or
controls a majority interest in a corporation,
partnership, association or any other entity,
the liabilities of said entities to such bank;
c) In the case of a corporation, all liabilities to
such bank of all subsidiaries in which such
corporation owns or controls a majority
interest; and
d) In the case of a partnership, association or
other entity, the liabilities of the members
thereof to such bank.
e) Loans and other credit accommodations,
deposits maintained with, and usual
guarantees by a bank to any other bank or
non-bank entity, whether locally or abroad,
shall be subject to the limits as herein
prescribed.
Even if a parent corporation, partnership,
association, entity or an individual who owns or
controls a majority interest in such entities has no
liability to the bank, the Monetary Board may
prescribe the combination of the liabilities of
subsidiary corporations or members of the
partnership, association, entity or such individual
under certain circumstances, including but not
limited to any of the following situations: (a) the
parent corporation, partnership, association, entity
or individual guarantees the repayment of the
liabilities; (b) the liabilities were incurred for the
accommodation of the parent corporation or
another subsidiary or of the partnership or
association or entity or such individual; or (c) the
subsidiaries though separate entities operate
merely as departments or divisions of a single entity.
iv. Loans and other credit accommodations
excluded in the computation of Single
Borrower’s Limit
a) Loans and other credit accommodations
secured by obligations of the Bangko Sentral
or of the Philippine Government;
b) Loans and other credit accommodations fully
guaranteed by the government as to the
payment of principal and interest;
c) Loans and other credit accommodations
covered by assignment of deposits
maintained in the lending bank and held in
the Philippines
d) Loans, credit accommodations and
acceptances under letters of credit to the
extent covered by margin deposits; and
e) Other loans or credit accommodations which
the Monetary Board may from time to time,
specify as non-risk items.
v. The Limit on loans, credit accommodations and
guarantee prescribed herein shall not apply to
loans, credit accommodations and guarantees
extended by a cooperative bank to its
cooperative shareholders.
c. Restriction on Bank Exposure to Directors, Officers,
Stockholders, and Their Related Interests (DOSRI)
i. Requirements for validity of loan granted by
bank to DOSRI
a) No director or officer of any bank shall,
directly or indirectly, for himself or as the
representative or agent of others, borrow
from such bank nor shall he become a
guarantor, indorser or surety for loans from
such bank to others, or in any manner be an
obligor or incur any contractual liability to
Page 10 of 21
 the bank except with the written approval of
the majority of all the directors of the bank,
excluding the director concerned
b) The required approval shall be entered upon
the records of the bank and a copy of such
entry shall be transmitted forthwith to the
appropriate supervising and examining
department of the Bangko Sentral.
c) Dealings of a bank with any of its directors,
officers or stockholders and their related
interests shall be upon terms not less
favorable to the bank than those offered to
others.
ii. Power of Monetary Board to regulate loans or
credit accommodations made by bank to
DOSRI
a) The Monetary Board may regulate the
amount of loans, credit accommodations
and guarantees that may be extended,
directly or indirectly, by a bank to its
directors, officers, stockholders and their
related interests, as well as investments of
such bank in enterprises owned or
controlled by said directors, officers,
stockholders and their related interest.
b) Limitations of outstanding loans, credit
accommodations and guarantees which a
bank may extend to each of its DOSRI
The outstanding loans, credit accommodations
and guarantees which a bank may extend to each of
its stockholders, directors, or officers and their
related interests, shall be limited to an amount
equivalent to their respective unencumbered
deposits and book value of their paid-in capital
contribution in the bank; Provided, however, That
loans, credit accommodations and guarantees
secured by assets considered as non-risk by the
Monetary Board shall be excluded from such limit:
Provided, further, That loans, credit
accommodations and advances to officers in the
form of fringe benefits granted in accordance with
rules as may be prescribed by the Monetary Board
shall not be subject to the individual limit.
d. Loans and other credit accommodations against real
estate
Except as the Monetary Board may otherwise
prescribe, loans and other credit accommodations
against real estate shall not exceed seventy-five
(75%) percent of the respective real estate security,
plus sixty percent (60%) of the appraised value of the
insured improvement, and such loans may be made
to the owner of the real estate to his assignees.
e. Loans and other credit accommodations on Security
of Chattels and Intangible Properties
Except as the Monetary Board may otherwise
prescribe, loans, and other credit accommodations
on security of chattels and intangible properties,
such as, but not limited to, patents, trademarks,
trade names, and copyrights shall not exceed
seventy-five percent (75%) of the appraised value of
the security, and such loans and other credit
accommodations may be made to the title-holder of
the chattels and intangible properties or his
assignees.
f. Requirement for grant of loans or other credit
accommodations
Before granting a loan or other credit
accommodation, a bank must ascertain that the
debtor is capable of fulfilling his commitments to
the bank. Toward this end, a bank may demand
from its credit applicants a statement of their assets
and liabilities and of their income and expenditures
and such information as may be prescribed by law
or by rules and regulations of Monetary Board to
enable the bank to properly evaluate the credit
application which includes the corresponding
financial statements prove to be false or incorrect in
any material detail, the bank may terminate any
loan, or other credit accommodation granted on the
basis of said statements and shall have the right to
demand immediate repayment or liquidation of the
obligation.
g. Provisions for losses and write-offs
All debts due to any bank on which interest is past
due and unpaid for such period as may be
determined by the Monetary Board, unless the
same are well-secured and in the process of
collection shall be considered bad debts within the
meaning of this Section. The Monetary Board may
fix, by regulation or by order in a specific case, the
amount of reserves for bad debts or doubtful
accounts or other contingencies
h. Ceiling on Investment in Certain Assets
Any bank may acquire real estate as shall be
necessary for its own use in the conduct of its
business: Provided, however, That the total
investment in such real estate and improvements
thereof, including bank equipment, shall not exceed
fifty percent (50%) of combined capital accounts:
Provided, further, That the equity investment of a
bank in another corporation engaged primarily in
real estate shall be considered as part of the bank’s
total investment in real estate, unless otherwise
provided by the Monetary Board.
D. Other Banking Services
a. Receive in custody funds, documents and valuable
objects;
Page 11 of 21
 b. Act as financial agent and buy and sell, by order of
and for the account of their customers, shares,
evidences of indebtedness and all types of securities;
c. Make collections and payments for the account of
others and perform such other services for their
customers as are not incompatible with banking
business;
d. Upon prior approval of the Monetary Board, act as
managing agent, adviser, consultant or administrator
of investment management/advisory/consultancy
accounts; and
e. Rent out of safety deposit boxes.
E. Prohibition to a bank
A bank shall not directly engage in insurance
business as the insurer
F. Diligence required by law to be observed by bank
a. For demand deposit, savings deposit and time deposit
High standards of integrity and performance or
extraordinary diligence
b. For other services and contracts
Ordinary diligence or diligence of good father
of a family
G. Limitation of foreign ownership of domestic bank and
Filipinos and domestic non-bank corporations.
a. Foreign individuals and non-bank corporations may
own or control up to forty percent (40%) of the voting
stock of a domestic bank. This rule shall apply to
Filipinos and domestic non-bank corporations.
b. The percentage of foreign-owned voting stocks in a
bank shall be determined by the citizenship of the
individual stockholders in that bank. The citizenship
of the corporation which is a stockholder in a bank
shall follow the citizenship of the controlling
stockholders of the corporations, irrespective of the
place of incorporation.
The New Central Bank Act (R.A. 7653)
A. Characteristics and Nature of Bangko Sentral ng
Pilipinas (BSP)
a. It is a public corporation created by special law
particularly RA 7653.
b. It is a fully government-owned and controlled
corporation with original capital stock of P50B.
c. It is an independent central monetary authority which
is governed by the Monetary Board.
d. It enjoys fiscal and administrative autonomy
e. The BSP shall be exempt for a period of five (5) year
from the approval RA 7653 from all national,
provincial, municipal and city taxes, fees, charges and
assessments.
f. The provision of any general or special law to the
contrary notwithstanding, the importation and
exportation by the Bangko Sentral of notes and coins,
and of gold 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.
g. Appointments in the Bangko Sentral, except as to
those which are policy-determining, primarily
confidential or highly technical in nature, shall be
made only according to the Civil Service Law and
regulations: Provided, That no qualification
requirements for positions in the Bangko Sentral
shall be imposed other than those set by the
Monetary Board: Provided, further, That, the
Monetary Board or Governor, in accordance with
Sections 15(c) and 17(d) RA 7653, respectively, may
without need of obtaining prior approval from any
other government agency, appoint personnel in the
Bangko Sentral whose services are deemed
necessary in order not to unduly disrupt the
operations of the Bangko Sentral.
h. Officers and employees of the Bangko Sentral,
including all members of the Monetary Board, shall
not engage directly or indirectly in partisan activities
or take part in any election except to vote.
i. 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.
j. The Bangko Sentral shall not engage in development
banking or financing: Provided, however, That
outstanding loans obtained or extended for
development financing shall not be affected by the
prohibition of this section.
B. Primary Responsibility and Objective of BSP
a. It shall provide policy directions in the areas of money,
banking, and credit.
b. It shall have supervision over the operations of banks
and exercise such regulatory powers as provided in
RA 7653 and other pertinent laws over the
operations of finance companies and non-bank
financial institutions performing quasi-banking
functions, hereafter referred to as quasi-banks, and
institutions performing similar functions.
c. Its primary objective is to maintain price stability
conclusive to a balanced and sustainable growth of
the economy.
d. It shall also promote and maintain monetary stability
and the convertibility of the peso.
C. Governing Body of BSP (BSP Monetary Board)
Page 12 of 21
a. Composition of BSP Monetary Board
i. It is composed of seven (7) members appointed by
the President of the Philippines for a term of six (6)
years.
ii. The BSP governor shall serve as chairman of the
monetary board.
iii. Another member of the Cabinet shall be
designated by the President of the Philippines
iv. Fiver (5) members who shall come from private
sector, all of whom shall serve full-time.
b. Qualifications of members of the BSP Monetary
Board
i. Natural-citizens of the Philippines
ii. 35 years of age with the exception of BSP
governor who must be 40 years of age
iii. Of good moral character, of unquestionable
integrity, of known probity and patriotism,
iv. With recognized competence in social and
economic disciplines
c. Inhibitions and disqualifications of members of the
BSP Monetary Board
i. Disqualifications imposed by RA 6713
ii. A member of the Monetary Board is disqualified
from being a director, officer, employee,
consultant, lawyer, agent or stockholder of any
bank, quasi-bank or any other institution which is
subject to supervision of examination by the
Bangko Sentral.
iii. The members of the Monetary Board coming from
the private sector shall not hold any other public
office or public employment during their tenure.
iv. No person shall be a member of the Monetary
Board if he has been connected directly with any
multilateral banking or financial institution or has
a substantial interest in any private bank in the
Philippines, within one (1) year prior to his
appointment; likewise, no member of the
Monetary Board shall be employed in any such
institution within two (2) years after the
expiration of his term except when he serves as
an official representative of the Philippine
Government to such institution.
d. Grounds for Removal of Member of BSP Monetary
Board by President of the Philippines
i. If the member is subsequently disqualified under
the provisions of RA 7653.
ii. If he is physically or mentally incapacitated that he
cannot properly discharge his duties and
responsibilities and such incapacity has lasted for
more than six (6) months.
iii. If the member is guilty of acts or operations which
are fraudulent or illegal character or which are
manifestly opposed to the aims and interests of
the Bangko Sentral.
iv. If the member no longer possesses the
qualifications specified in Section 8 RA 7653.
D. Legal Tender Power over Coins and Note
a. Unit of Monetary Value
i. The Peso – The unit of monetary value in the
Philippines is the “peso,” which is represented by
the sign “P.”
ii. The peso is divided into one hundred (100) equal
parts called “centavos,” which are represented by
the sign “c.”
b. Definition of Currency
The word “currency” is hereby defined, for
purposes of this Act, as meaning all Philippine notes
and coins issued or circulating in accordance with
the provisions of RA 7653.
c. Exclusive Issue Power of BSP
i. The Bangko Sentral shall have the sole power and
authority to issue currency, within the territory of
the Philippines.
ii. No other person or entity, public or private, may
put into circulation notes, coins or any other
object or document which, in the opinion of the
Monetary Board, might circulate as currency, nor
reproduce or imitate the facsimiles of Bangko
Sentral notes without prior authority from the
Bangko Sentral
iii. 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 as well as to prevent the reproduction
of facsimiles of Bangko Sentral notes.
iv. The Bangko Sentral shall have the authority to
investigate, make arrest, conduct searches and
seizures in accordance with law, for the purpose
of maintaining the integrity of the currency.
v. Violation of this provision or any regulation issued
by the Bangko Sentral pursuant thereto shall
constitute an offense punishable by imprisonment
of not less than five (5) years but not more than
ten (10) years. In case the Revised Penal Code
provides for a greater penalty, then that penalty
shall be imposed.
d. Liability for Notes and Coins
i. 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.
ii. 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.
Page 13 of 21
e. Legal Tender Power of BSP
i. All notes and coins 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.
ii. Legal Tender – It refers to the type of currency
which a debtor can compel a creditor to accept in
case of obligation to pay a sum of money.
1. 5 centavos, 10 centavos, and 25 centavos –
Up to P100 only.
2. P1 Coin, P5 Coin, and P10 Coin – Up to
P1,000 only.
3. P20, P50, P100, P200, P500, and P1,000 bills
or notes – unlimited legal tender.
4. 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 has been cleared and credited to the
account to the creditor shall be equivalent to
a delivery to the creditor of cash in an
amount equal to the amount credited to his
account. Checks produce payment only
when encashed or when they are impaired
through the fault of creditor.
iii. The Monetary Board, with the approval of the
President of the Philippines, shall prescribe the
denominations, dimensions, design, 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.
iv. Similarly, The Monetary Board, with the approval
of the President of the Philippines, shall prescribe
the weight, fitness, 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.
f. Printing of Notes and Minting of Coins
i. 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.
ii. All expenses incurred in the printing of notes and
the minting of coins shall be for the account of the
Bangko Sentral.
g. Interconvertibility of Currency
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.
h. Replacement of Currency Unfit for Circulation
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.
i. Retirement of Old Notes and Coins
i. 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 ten (10) years old.
ii. 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.
E. Supervision and examination of banks and quasi-
banking institutions
a. 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,
Page 14 of 21
 may deem expedient and to make a report on the
same to the Monetary Board: Provided, That there
shall be an interval of at least twelve (12) months
between annual examinations.
b. The bank concerned shall afford to the head of the
appropriate supervising and examining departments
and to his authorized deputies full opportunity to
examine its books, cash and available assets and
general condition at any time during banking hours
when requested to do so by the Bangko Sentral:
Provided, however, That none of the reports and
other papers relative to such examinations shall be
open to inspection by the public except insofar as
such publicity is incidental to the proceedings
hereinafter authorized or is necessary for the
prosecution of violations in connection with the
business of such institutions.
c. Banking and quasi-banking institutions which are
subject to examination by the Bangko Sentral shall
pay to the Bangko Sentral, within the first thirty (30)
days of each year, an annual fee in an amount equal
to a percentage as may be prescribed by the
Monetary Board of its average total assets during the
preceding year as shown on its end-of-month
balance sheets, after deducting cash on hand and
amounts due from banks, including the Bangko
Sentral and banks abroad.
F. Conservatorship of Banks
a. Grounds for placing a bank or quasi-bank under
conservatorship
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.
b. Responsibilities of Bank Conservator appointed by
BSP Monetary Board
i. To take charge of the assets, liabilities, and the
management of the bank.
ii. To reorganize the management of the bank.
iii. To collect all monies and debts due said
institution.
iv. To exercise all powers necessary to restore its
viability
v. To report and be responsible to the Monetary
Board
vi. To have the power to overrule or revoke the
actions of the previous management and board of
directors of the bank or quasi-bank.
c. Qualifications of Bank Conservator
He should be competent and knowledgeable in bank
operations and management.
d. Period of Conservatorship
The Conservatorship shall not exceed one (1) year.
e. Grounds for termination of Conservatorship
i. The Monetary Board shall terminate the
conservatorship when it is satisfied that the
institution can continue to operate on its own and
the conservatorship is no longer necessary.
ii. The conservatorship shall likewise be terminated
should the Monetary Board, on the bases of the
report of the conservator or of its own findings,
determine that the continuance in business of the
institution would involve probable loss to its
depositors, or creditors, in which case the
provisions or receivership and liquidation shall
apply.
G. Proceedings in Bank Receivership
a. Grounds for Bank Receivership and Liquidation
i. Bank is unable to pay its liabilities as they become
due in the ordinary course of business: Provided,
That this shall not include inability to pay caused
extraordinary demands induced by financial panic
in the banking community.
ii. Bank has insufficient realizable assets, as
determined by the Bangko Sentral, to meet its
liabilities; or
iii. Bank cannot continue in business without
involving probable losses to its depositors or
creditors; or
iv. Bank has willfully violated a cease and desist order
under Section 37 that has become final, involving
acts or transactions which amount to fraud or a
dissipation of the asserts of the institution; in
which cases, the Monetary Board may summarily
and without need for prior hearing forbid the
institution from doing business in the Philippines
and designate the Philippine Deposit Insurance
Corporation as receiver of the banking institution.
b. Receivers of Bank and Quasi Banks
i. PDIC for Banking institution
ii. For a quasi-bank, any person of recognized
competence in banking or finance may be
designated as receiver
c. Procedures for Bank or Quasi-Bank Receivership
i. 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: Provided, That the receiver may
deposit or place the funds of the institution in
non-speculative investments.
Page 15 of 21
 ii. The receiver shall determine as soon as possible,
but not later than ninety (90) days from takeover,
whether the institution may be rehabilitated or
otherwise place in such a condition so that it may
be permitted to resume business with safety to its
depositors and creditors and the general public:
Provided, That any determination for the
resumption of business of the institution shall be
subject to prior approval of the Monetary Board.
H. Proceedings for Bank Liquidation
a. Ground for Bank Liquidation
If the receiver determines that the institution
cannot be rehabilitated or permitted to resume
business in accordance with the next preceding
paragraph, the Monetary Board shall notify in
writing the board of directors of its findings and
direct the receiver to proceed with the liquidation of
the institution.
b. Procedures for Bank Liquidation
i. The receiver shall file ex parte with the proper
regional trial court, and without requirement of
prior notice or any other action, a petition for
assistance in the liquidation of the institution
pursuant to a liquidation plan adopted by the
Philippine Deposit Insurance Corporation for
general application to all closed banks. In case of
quasi-banks, the liquidation plan shall be adopted
by the Monetary Board. Upon acquiring
jurisdiction, the court shall be adopted by the
Monetary Board. Upon acquiring jurisdiction, the
court shall, upon motion by the receiver after due
notice, adjudicate disputed claims against the
institution, assist the enforcement may be
material to implement the liquidation plan
adopted. The receiver shall pay the cost of the
proceedings from the assets of the institution.
ii. The receiver shall convert the assets of the
institutions to money, dispose of the same to
creditors and other parties, for the purpose of
paying the debts of such institution in accordance
with the rules on concurrence and preference of
credit under the Civil Code of the Philippines and
he may, in the name of the institution, and with
the assistance counsel as he may retain, institute
such actions as may be necessary to collect and
recover accounts and assets of, or defend any
action against, the institution. The assets of an
institution under receivership or liquidation shall
be deemed in custodia legis in the hands of the
receiver and shall, from the moment the
institution was placed under such receivership or
liquidation, be exempt from any order of
garnishment, levy, attachment, or execution.
I. Nature of actions of Monetary Board for
Conservatorship, Receivership and Liquidation
a. The actions of the Monetary Board taken for
conservatorship, receivership and liquidation shall be
final and executory, and may not be restrained or set
aside by the court except on petition for certiorari on
the ground that the action taken was in excess of
jurisdiction or with such grave abuse of discretion as
to amount to lack or excess of jurisdiction. The
petition for certiorari may only be filed by the
stockholders of records representing the majority of
the capital stock within ten (10) days from receipt by
the board of directors of the institution of the order
directing receivership, liquidation or conservatorship.
b. The designation of a conservator or the appointment
of a receiver under this section shall be vested
exclusively with the Monetary Board.
c. The designation of a conservator is not a precondition
to the designation of a receiver.
J. “Close Now Hear Later Order by BSP Monetary Board”
a. The “close now, hear later” doctrine has already been
justified as a measure for the protection of the public
interest. Swift action is called for on the part of the
BSP when it finds that a bank is in dire straits. Unless
adequate and determined efforts are taken by the
government against distressed and mismanaged
banks, public faith in the banking system is certain to
deteriorate to the prejudice of the national economy
itself, not to mention the losses suffered by the bank
depositors, creditors and stockholders, who all
deserve the protection of the government
b. Due process does not necessarily require a prior
hearing; a hearing or an opportunity to be heard may
be subsequent to the closure. One can just imagine
the dire consequences of a prior hearing: bank runs
would be the order of the day, resulting in panic and
hysteria. In the process, fortunes may be wiped out
and disillusionment will run the gamut of the entire
banking community.
c. The doctrine is founded on practical and legal
considerations to obviate unwarranted dissipation of
the bank’s assets and as a valid exercise of police
power to protect the depositors, creditors,
stockholders, and the general public. Swift, adequate
and determined actions must be taken against
financially distressed and mismanaged banks by
government agencies lest the public faith in the
banking system deteriorate to prejudice of national
economy.
d. Accordingly, the MB can immediately implement its
resolution prohibiting a banking institution to do
business in the Philippines and, thereafter, appoint
the PDIC as receiver. The procedure for the
involuntary closure of a bank is summary and
Page 16 of 21
 expeditious in nature. Such action of the MB shall be
final and executory, but may be later subjected to a
judicial scrutiny via a petition for certiorari to be filed
by the stockholders of record of the bank
representing majority of the capital stock. Obviously,
this procedure is designed to protect the interest of
all concerned, that is, the depositors, creditors and
stockholders, the bank itself and the general public.
The protection afforded public interest warrants the
exercise of a summary closure.
K. Administrative sanctions on Banks and Quasi-Banks
a. Grounds for sanctioning Banks and Quasi-Banks
i. Willful violation of banking laws and rules and
regulations of BSP.
ii. Willful delay in submission of reports to BSP
iii. Refusal to permit examination into the affairs of
the institution
iv. Willful making of false or misleading statement to
the Board or the appropriate supervising and
examining department or its examiners
v. A false or misleading statement to the Board or
the appropriate supervising and examining
department or its examiners; any willful failure or
refusal to comply with, or violation of, any
banking law or any order, instruction or regulation
issued by the Monetary Board, or any order
instruction or ruling by the Governor
vi. Commission of irregularities
vii. Conducting business in an unsafe or unsound
manner as may be determined by the Monetary
Board
b. Administrative sanctions that may be imposed
i. 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;
ii. Suspension of rediscounting privileges or access to
Bangko Sentral credit facilities;
iii. Suspension of lending or foreign exchange
operations or authority to accept new deposits or
make new investments;
iv. Suspension of interbank clearing privileges;
and/or
v. Revocation of quasi-banking license.
Anti-Money Laundering Law (AMLA) (R.A. 9160
a.k.a. Anti Money Laundering Act of 2001 as
amended by R.A. 9194 and R.A. 10168 a.k.a.
Terrorism Financing Prevention and Suppression Act
of 2012) and RA 10365 a.k.a. AN ACT FURTHER
STRENGTHENING THE ANTI-MONEY LAUDERING
LAW)
A. Declaration of Policy: 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.
B. Definition of Money Laundering – 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: (Acts
punishable as Money Laundering)
1. Transacts said monetary instrument or property;
2. Converts, transfers, disposes of, moves, acquires,
possesses or uses said monetary instruments or
property or proceeds of any unlawful activity
3. Conceals or disguises the true nature, source, location,
disposition, movement or ownership of or rights with
respect to said monetary instruments or property or
proceeds of unlawful activity;
4. Attempts to conspires to commit Money Laundering
referred to in par. 1), 2) & 3);
5. Aids, abets, assists in or counsels the commission of
the Money Laundering offenses referred to in par. 1),
2) & 3) above;
6. Performs or fails to perform any act as a result of
which he facilitates the offense of Money Laundering
referred to in par. 1), 2) & 3) above;
7. 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.
C. Predicate Crimes of Money Laundering (34 Crimes)
1. Kidnapping for ransom under the Revised Penal Code
(RPC)
2. Drug Trafficking and other violations of the
Comprehensive Drugs Act of 2002
3. Graft and Corruption (R.A. No. 3019, as amended)
4. Plunder (R.A. No. 7080, as amended)
5. Robbery and extortion (RPC)
6. Jueteng and Masiao (PD 1602)
7. Piracy (RPC & PD 532)
8. Qualified Theft (RPC)
9. Swindling/Estafa (RPC)
10. Smuggling (R.A. Nos. 455 & 1937)
11. Violations of Electronic Commerce Act of 2000 (R.A.
No. 8792)
12. Hijacking (R.A. No. 6235), Destructive Arson and
Murder (RPC)
Page 17 of 21
 13. Terrorism and Conspiracy to Commit Terrorism (R.A.
No. 9372);
14. Financing of Terrorism (R.A. No. 10168)
15. Bribery and Corruption of Public Officers (RPC);
16. Frauds and Illegal Exactions and Transactions (RPC);
17. Malversation of Public Funds (RPC);
18. Forgeries and Counterfeiting (RPC);
19. Trafficking in Persons (R.A. No. 9208)
20. Violations of the Revised Forestry Code (PD 705);
21. Violations of the Philippine Fisheries Code of 1998
(R.A. No. 8550);
22. Violations of the Philippine Mining Act of 1995 (R.A.
No. 7942);
23. Violations of the Wildfire Resouces Conservation and
Protection Act (R.A. No. 9147);
24. Violations of the National Caves and Cave Resources
Management Protection Act (R.A. No. 9072)
25. Carnapping (R.A. No. 6539);
26. Illegal/Unlawful Possession, Manufacture, Dealing In,
Acquisition or Disposition of Firearms, Ammunitions
and Explosive (PD 1866); Amendments of AMLA: on
27. Fencing (PD 1612)
28. Illegal Recruitment (R.A. No. 8042);
29. Violations of the Intellectual Property Code;
30. Voyeurism (R.A. No. 9995);
31. Child Pornography (R.A. No. 9775);
32. Child Prostitution, Trafficking, and other forms of
Abuse (R.A. No. 7610);
33. Fraudulent practices and other violations of the
Securities Regulation Code (R.A. No. 8799); and
Felonies or offenses of a similar nature that are
punishable under the penal laws of other countries.
D. Amount of Covered Transaction for Reporting to AMLC
1. A transaction in cash or other equivalent monetary
instrument exceeding Five Hundred Thousand pesos
(Php500,000.00)
2. A transaction exceeding One Million Pesos
(Php1,000,000.00) in cases of jewelry dealers, dealers
in precious metals and dealers in precious stones.
E. Suspicious Transactions that shall also be reported to
AMLC
1. There is no underlying legal or trade obligation,
purpose or economic justification;
2. The client is not properly identified;
3. The amount involved is not commensurate with the
business or financial capacity of the client;
4. Taking into account all known circumstances, it may
be perceived that the client’s transaction is structure
in order to avoid being the subject or reporting
requirements under the AMLA;
5. 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;
6. 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 any transaction that is similar,
analogous or identical to any of the foregoing.
F. Covered persons, natural, or juridical, required to
report to AMLC covered transactions and suspicious
transactions
1. Under Bangko Sentral ng Pilipinas
a. Banks
b. Non-banks
c. Quasi-banks
d. Trust entities
e. Nonstock savings and loan associations
f. Foreign exchange dealers,
g. Electronic money issuers
h. Pawnshops,
i. Money changers,
j. Remittance and transfer companies
k. All other persons and their subsidiaries and
affiliated supervised or regulated by the BSP.
2. Under Insurance Commission
a. Insurance companies
b. Pre-need companies
c. Insurance Agents
d. Insurance Brokers
e. Professional reinsurers
f. Holding companies
g. Holding company system
h. Mutual benefit associations
i. All other persons and their subsidiaries and
affiliated supervised or regulated by the
Insurance Commission
3. Under Securities and Exchange Commission
a. Securities dealers, brokers, salesmen,
investment houses, and other similar persons
managing securities or rendering services such
as investment agents.
b. Mutual funds or open-end companies, close-
end investment, investment companies or
issuers and other similar
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. Other Designated Non-Financial Business and
Professionals
a. Jewelry dealers, dealers in precious metals, and
dealers in precious stones for transactions in
excess of P1M.
Page 18 of 21
 b. Land Registration Authority and all of its
Register of Deeds on all real estate transaction
with price exceeding P500,000.
1. Jewelry dealer in precious metals, who, as a
business, trade in precious metals, for
transaction in excess of P1M.
2. Company service provider to 3rd parties
a. Acting as a formation agent of juridical
persons;
b. Acting as (or arranging for another person to
act as) a director or corporate secretary of a
company, partner of a partnership, or a
similar position in relation to other juridical
persons;
c. 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
d. Acting as (or arranging for another person to
act as) a nominee shareholder for another
person.
3. Person providing the following services
a. Managing of client money, securities or
other assets;
b. Management of bank, savings or securities
accounts;
c.Organization of contributions for the creation,
operation or management of companies;
and creation, operation or management of
juridical persons or arrangements, and
buying and selling business entities.
5. Persons excluded to report covered transactions or
suspicious transactions to AMLC
a. Lawyers if acting as independent legal
professionals in relation to information
concerning their clients or where disclosure of
information would compromise client
confidences or the attorney-client relationship
b. Certified public accountants if acting as
independent legal professionals in relation to
information concerning their clients or where
disclosure of information would compromise
client confidences or the CPA-client relationship
G. Jurisdiction over Money Laundering Cases
1. 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.
2. 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.
H. Prosecution of Money Laundering Cases
1. Independent Proceedings – The prosecution of
money laundering and the unlawful activity shall
proceed independently. Any person may be charged
with and convicted of both money laundering and
the unlawful activity.
2. Separate and Distinct Elements – The elements of
money laundering are separate and distinct from the
elements of the unlawful activity. The elements of
the unlawful activity, including the identity of the
perpetrator and the details of the commission of the
unlawful activity, need not be established by proof
beyond reasonable doubt in the case for money
laundering.
3. Knowledge – the element of knowledge may be
established by direct or circumstantial evidence.
I. Anti-Money Laundering Council
1. Composition of Anti-Money Laundering Council
a. Chairperson – BSP Governor
b. Member – Insurance Commissioner
c. Member – SEC Chairperson
2. Unanimous Decision – The AMLC shall act
unanimously in discharging its functions. In case of
incapacity, absence, or disability of any member, the
officer duly designated or authorized to discharge
the functions of the Governor of the BSP, the
Commissioner of the IC, and the Chairperson of the
SEC, as the case may be, shall act in his stead in the
AMLC.
J. Preventive Measures
1. Customer Due Diligence – Covered persons shall
establish and record the true identity of their clients
based on official documents, as defined under Rule 3
of RIRR of AMLA.
2. Customer Identification
a. Face-to-Face Contact – Covered persons shall
conduct face-to-face contact at the
commencement of the relationship, or as
reasonably practicable so as not to interrupt the
normal conduct of business
b. Minimum Customer information and
Identification Documents
i. Name of customer;
ii. Date and place of birth;
iii. Name of beneficial owner, if applicable;
iv. Name of beneficiary (in case of insurance
contracts or remittance transactions);
v. Present address;
vi. Permanent addresses;
vii. Contact number or information;
Page 19 of 21
 viii. Nationality;
ix. Specimen signatures or biometrics of the
customer;
x. Nature of work and name of employer or
nature of self-employment, business, if
applicable;
xi. Sources of funds or property; and
xii. Tax Identification Number (TIN), Social Security
System (SSS) number or Government Service
Insurance System (GSIS) number, if
applicable.
3. Prohibited Accounts
a. Anonymous Accounts and Accounts under
Fictitious Names. – Covered persons shall
maintain customers’ account only in the true
and full name of the account owner or holder.
Anonymous accounts, accounts under fictitious
names, and all other accounts shall be
absolutely prohibited.
b. Numbered Accounts. Numbered accounts,
except non-checking numbered accounts, shall
not be allowed. Covered and suspicious
transaction reports involving non-checking
numbered accounts shall contain the true name
of the account holder.
B. Record Keeping – Covered persons shall maintain and
safely store for five (5) years form the dates of
transactions all records of customer identification
and transaction documents of their customers or five
(5) years from the date the account is closed.
C. 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.
D. For Suspicious transactions, “occurrence” refers to
the date of determination of the suspicious nature of
the transaction, which determination should be
made not exceeding ten (10) calendar days from the
date of transaction. However, if the transaction is in
any way related to, or the person transacting is
involved in or connected to, an unlawful activity or
money laundering offense, the la-day period for
determination shall be reckoned from the date the
covered person know or should have known the
suspicious transaction indicator.
E. Freeze Order – Upon verified ex parte petition by the
AMLC and after determination that probable cause
exists that any monetary instrument or property is in
any way related to an unlawful activity, the Court of
Appeals may issue a freeze order, which shall be
effective immediately, directing the concerned
covered persons and government agency to desist
from allowing any transaction, withdrawal, transfer,
removal, conversion, concealment, or other
disposition of the subject monetary instrument or
property.
a. Freezing of Related Accounts and Materially-
Linked Accounts – Considering the intricate and
diverse web of interlocking accounts that a
person may create in different covered persons,
and the high probability that these accounts are
utilized to divert, move, conceal, and disguise
the monetary instrument or property subject of
the freeze order, the AMLC may include in its
petition the freezing of related and materially-
linked accounts
b. Period to Resolve Petition – The Court of
Appeals shall resolve the petition to freeze
within twenty-four (24) hours from filing thereof
c. Effectivity of Freeze Order – The freeze order
shall be effective immediately and shall not
exceed six (6) months depending upon the
circumstances of the case. On motion of the
AMLC filed before the expiration of the original
period of the freeze order, the court may, for
good cause shown, extend its effectivity. Upon
the timely filing of such motion and pending
resolution by the Court of Appeals, the freeze
order shall remain effective.
F. Bank Inquiry with Court Order – Notwithstanding the
provisions of Republic Act No. 8791, and other laws,
the AMLC may require into or examine any particular
deposit or investment account, including related
accounts, with any banking institution or non-bank
financial institution, upon order by the Court of
Appeals based on an ex parte application in cases of
violation of the AMLA when it has been established
that probable cause exists that the deposits or
investments involved, including related accounts, are
in any way related to an unlawful activity or a money
laundering offense.
a. Period to Resolve Application – The Court of
Appeals shall resolve the application within
twenty-four (24) hours from filing thereof.
b. Inquiry Into or Examination of Related Accounts
– A court order ex parte be obtained before the
AMLC can inquire into the related accounts. The
procedure for the ex parte application for an
order of inquiry into the principal account shall
be the same for that of the related accounts.
c. Compliance with Article III, Section 2 and 3 of
the Constitution – The authority to inquire into
or examine the main account and the related
accounts shall comply with the requirements of
Article III, Section 2 and 3 of the 1987
Constitution.
G. Bank Inquiry without Court Order – The AMLC shall
issue a resolution authorizing the AMLC Secretariat
Page 20 of 21
 to inquire into or examine anyparticular deposit or
investment account, including related accounts, with
any banking institution or non-bank financial
intitution and their subsidiaries and affiliates when it
has been established that probable cause exists that
the deposits or investments involved, including
related accounts, are in any way related to any of the
following unlawful activities: (Predicate crimes that
may authorize AMLC to inquire bank accounts even
without Court Order from Court of Appeals)
a. Kidnapping for ransom under Article 267 of Act
No. 3815, otherwise known as the Revised
Penal Code, as amended;
b. Section 4, 5, 6, 8, 9, 10, 11, 12, 13, 14, 15 and 16
of Republic Act No. 9165, otherwise known as
the Comprehensive Dangerous Drugs Act of
2002;
c. Hijacking and other violations under Republic
Act No. 6235; desctructive arson and murder, as
defined under the Revised Penal Code, as
amended;
d. Felonies or offenses of a nature similar to those
mentioned in Section 3(i) (1), (2) and (12) of the
AMLA which are punishable under the penal
laws of other countries;
e. Terrorism and conspiracy to commit terrorism
as defined and penalized under Republic Act No.
9372; and
f. Financing of terorism under Section 4 and
offenses punishable under Sections 5, 6, 7 and 8
of Republic Act No. 10168, otherwise known as
the Terrorism Financing Prevention and
Suppression Act of 2012.

H. Asset Forfeiture
a. Civil Forfeture – Upon determination that
probable cause exists that any monetary
instrument or property is in any way related to
an unlawful activity or a money laundering
offense, the AMLC shall file with the regional
trial court, through the Office of the Solicitor
General, a verified petition for civil forfeiture.
b. No Prior Criminal Charge, Pendency of or
Conviction Necessary – No prior criminal charge,
pendency of or conviction for an unlawful
activity or money laundering offense is
necessary for the commencement or the
resolution of a petition for civil forfeiture
c. Asset Forfeiture in Money Laundering Cases –
Where there is conviction for money laundering,
the court shall issue a judgment offorfeiture in
favor of the Government of the Philippines with
respect to the monetary intrument or property
found to be proceedds of an unlawful activity.

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