No. 125 Brgy.

San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

Regulatory Framework for Business Transactions

Banking Laws

I. Philippine Deposit Insurance Corporation Law (RA 3591 as amended by RA 10846)

A. Description of Philippine Deposit Insurance Corporation

PDIC is a government instrumentality created in 1963 by virtue of Republic Act 3591 to insure the
deposits 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 still open; hasten the liquidation process for closed banks;
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. Negotiable Order of Withdrawal (NOW)
e. Certificate of Time Deposits
f. Foreign currency Deposit
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 a 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 a juridical entity and a natural person shall
be presumed to belong solely to the juridical entity.

1|P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

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 an ―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 instruments
b. Telegraphic note
c. Deposit accounts or transactions that:
i. Are unfunded, fictitious or fraudulent
ii. Constitute and/or emanate from unsafe and unsound banking practices as determined by
the PDIC, in consultation with the BSP, after due notice and hearing and publication of
PDIC’s cease & desist order against such deposit accounts/transactions
iii. Are determined to be proceeds of an unlawful activity as defined in the AntiMoney
Laundering Act (Republic Act 9160, as amended)
d. Bank Deposits in Foreign Banks operating outside the Philippine territory or Bank Deposits in
Foreign branch of domestic bank operating outside the Philippine territory
Note: Unsafe and unsound deposit-related activities include, among others: (PDIC Regulatory Issuance
No. 2011-01)
 Deposit-related practice/activity/transaction without the approval or adequate controls required
under existing laws, rules and regulations
 Failure to keep bank records within bank premises
 Granting high interest rates, when bank has: (i) negative unimpaired capital, or (ii) liquid assets
to deposit ratio less than 10%
 Non-compliance with PDIC regulations

D. Maximum Liability (Maximum Deposit Insurance Coverage)

PDIC shall pay deposit insurance on all valid deposits up to the Maximum Deposit Insurance Coverage of
Php500,000, per depositor, of a closed bank. Accounts maintained in the same right and capacity for a
depositor’s benefit, whether in his own name or in the name of others, are covered by deposit insurance.
However, A depositor with single accounts and joint accounts may have insured deposits of up to
Php1,000,000.

Illustrative examples:

1. How much is Fe Santos’s insured deposit if she has the following four deposit accounts in the same
bank?
ACCOUNT NAME Deposit (in PHP) Insured Deposit of Fe Santos
Fe Santos 100,000 100,000
Ben Santos For the Account of 100,000 100,000
Fe Santos
Charlie Santos In Trust For Fe 100,000 100,000
Santos
Fe Santos’ Store (Sole 700,000 200,000
Proprietorship)
Total 1,000,000 500,000

2|P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

2. How much is Fe Santos’s insured deposit if she has the following three joint accounts in the same
bank?
ACCOUNT NAME Deposit (in PHP) Insured Deposit of Fe Santos
Fe Santos or Ben Santos 500,000 250,000
Fe Santos and Charlie Santos 1,000,000 250,000
Fe Santos and/or Divina Santos 1,000,000 0*
Total 2,500,000 500,000
*Note: Mrs. Fe Santos does not have any insured deposit share since she already has P500,000 in total
shares in the two joint accounts she has with Ben and Charlie Santos.

3. How much is Fe Santos’s insured deposit for all her single and joint accounts in the same bank?
ACCOUNT NAME Deposit (in PHP) Insured Deposit of Fe Santos
All single accounts of Fe Santos 1,000,000 500,000
in BDO Branch 1
All joint accounts of Fe Santos in 2,500,000 500,000
BDO Branch 2
Total 3,500,000 1,000,000

Note: For purposes of computing the insured deposits, all obligations or loans of the depositor with the
closed bank, as of bank closure, shall be deducted from the depositor’s total deposits with the said bank.
(PDIC Regulatory Issuance No. 2011-04).

Note: In case of joint account involving a juridical/artificial person and a natural person, the maximum
insured deposit of P500,000 to such joint account shall be given to juridical/artificial person only.

E. Requirements for Claims of Insured Deposits

1. When are claims filed?

Claims are filed during the claims settlement operations period, as announced in the Notice to
Depositors published in national or local newspapers, or posted in the bank premises and
conspicuous places within the locality, and in the PDIC website

Depositors have two (2) years from PDIC’s takeover of the closed bank to file their deposit insurance
claims.

2. Who are required to file deposit insurance claims?

a. Depositors with valid deposit accounts with balances of more than Php100,000.
b. Depositors who have outstanding obligations with the closed bank regardless of amount
of deposits.
c. Depositors with account balances of less than Php100,000 who have no updated
addresses in the bank records or who have not updated their addresses through the
Mailing Address Update Form (MAUF) issued by the PDIC.
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 deposit 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

3|P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

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, a 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 personally:
1. 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
1. 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. 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

b. 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

c. Period for payment

i. 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. The six-month period shall not apply if the
documents of the claimant are incomplete or if the validity of the claim requires
the resolution of issues of facts and law by another office, body or agency,
independently or in coordination with PDIC.

4|P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

d. Rights of PDIC upon payment of insured deposits

i. PDIC shall be legally subrogated to all rights of depositor against the closed bank
to the extent of such payment.

II. Bank Secrecy Laws

A. AN ACT PROHIBITING DISCLOSURE OF OR INQUIRY INTO DEPOSITS WITH ANY

BANKING INSTITUTION (REPUBLIC ACT NO. 1405) a.k.a. Bank Secrecy Law on
Philippine Peso Bank Deposit

a. Absolute Confidentiality of Domestic Bank Deposits and Investments in

Government Bonds

i. All deposits of 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 a 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. Investments 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, 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. Any 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.

5|P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

c. Instances when Confidentiality of Domestic Bank Deposits is Not Absolute.

Bank deposits and investments 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,
Sec. 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. Bank 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
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 a 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 authorized to inquire
into bank deposit accounts in relation to: (1) an application for
compromise of tax liability or a 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 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).
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

6|P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

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).
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 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).
g. 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)
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 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])
3. Exceptions under Jurisprudence or Decision by Supreme Court
a. Plunder is 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 the 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. 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 judgment (Sec. 9[c], Rule 39,
Rules of Court; See China Banking Corporation v. Ortega, 49
SCRA 355 [1973]).

7|P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

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 for Violation of Republic Act No. 1405 will 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 and fine.

B. FOREIGN CURRENCY DEPOSIT ACT OF THE PHILIPPINES (REPUBLIC ACT NO. 6426)
a.k.a Foreign Currency Deposit Secrecy Law

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. Exception under The Foreign Currency Deposit 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 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)
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 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 of specific18
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

8|P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

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, 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 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. Account of a Non-resident Alien The garnishment of a foreign currency

deposit account of a non-resident alien found guilty of raping a minor
was allowed on the basis of equity. ( [1997])
2. 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.

9|P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

III. Unclaimed Balances Law

A. Definition of Terms

a. “Unclaimed Balances” shall include (1) credits, (2) deposits of money, (3) bullion, (4)
security or (5) other evidence of indebtedness of any kind, and (6) 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 (1) banks, (2) trust companies, (3) savings and
mortgage banks, (4) mutual building and loan associations, (5) all banking institutions of
every kind, covered under Act No. 3936, as amended by P.D. 679, which reported to the
Treasurer of the Philippines as unclaimed the account being applied for reactivation.
e. “Affidavit of Undertaking” is a sworn statement executed by the responsible
authorized officer of the bank absolving the Bureau of the Treasury from any liability that
may arise due to the granting of the Applicant’s request for reactivation.

B. Procedure for Reactivation of Unclaimed Balances Reported to the Treasurer of the

Philippines

a. Letter Request of Depositor/Creditor. The depositor/creditor shall write his depository

bank requesting for the reactivation of his account which was included in the report of
unclaimed balances to the Bureau of the Treasury.
b. Authentication. The covered institution shall authenticate and verify the request for
reactivation and the signature of the depositor/creditor.
c. Letter Request of the Covered Institution. The depository bank shall write the Bureau of
the Treasury through the authorized approving official, requesting authority to reactivate
the deposit account concerned attaching to its letter the stamped verified letter of the
depositor/creditor.
d. Deed of Undertaking. The covered institution, through its responsible authorized officer,
shall execute a Deed of Undertaking ensuring that the Bureau of the Treasury and its
officials and employees shall be free and harmless from any liability once the account is
reactivated.
e. Letter of Authority to Reactivate. Finding complete documentation supporting the
request, the Bureau of the Treasury, through the authorized officer shall issue the
authority to the covered institution to reactivate the account.
f. Entity Requirements. In case the requesting party/deposit/creditor is a juridical
entity/person, the request must be accompanied with corresponding board resolutions
and /or Secretary’s Certificatate showing that the signatory to the request for reactivation
is fully authorized to transact with the Bureau of the Treasury relative to the reactivation
of its account.

g. APPROVING AUTHORITY The authority to reactivate on unclaimed balance account/s

shall be issued by the following officers:

i. Division Chief/Head Law & Litigation Division Legal Service - aggregate amount
of unclaimed balance not exceeding P100,000.00
ii. Director, Legal Service - aggregate amount of unclaimed balance exceeding
P100,000.00 but not exceeding P500,000.00
iii. Deputy Treasurer of the Philippines - aggregate amount exceeding P500,000.00
but not exceeding P1,000,000.00
iv. Treasurer of the Philippines - aggregate amount of unclaimed balances
exceeding P1,000,000.00

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 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

C. Escheat Proceedings for Unclaimed Balances

a. Section 1. Of Rule 91 When an by whom petition filed. — When a person dies

intestate, seized of real property in the Philippines, leaving no heir or person by law
entitled to the same, the Solicitor General or his representative in behalf of the Republic
of the Philippines, may file a petition in the Court of First Instance of the province where
the deceased last resided or in which he had estate, if he resided out of the Philippines,
setting forth the facts, and praying that the estate of the deceased be declared
escheated in favor of the state or Republic of the Philippines.

b. Note: Demand drafts cannot be escheated, but telegraphic notes can be escheated in
favor of the state.

IV. 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 LAUNDERING 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 or 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; or
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 Dangerous 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)
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);

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Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

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 Wildlife Resources 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 Explosives (PD 1866);
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
34. Felonies or offenses of a similar nature that are punishable under the penal laws of other
countries.

D. Types of Reportable Transactions to AMLC

 Covered Transactions are those transactions involving covered persons that breached the
quantitative threshold provided by AMLA for reporting purposes to AMLC and therefore must be
reported by covered persons to AMLC.
 Suspicious Transactions are those transactions that do not breach the quantitative threshold
provided by AMLA for reporting purposes to AMLC but must still be reported to AMLC by covered
persons because of the suspicious nature of the transactions.
E. Amount of Covered Transaction for Reporting to AMLC
 A transaction in cash or other equivalent monetary instrument exceeding Five Hundred Thousand
pesos (P500,000)
 A transaction exceeding One Million pesos (P1,000,000) in cases of jewelry dealers, dealers in
precious metals and dealers in precious stones.
 Covered transaction now includes a Single Casino Cash Transaction involving an amount in
excess of Five Million Pesos (P5,000,000.00) or its equivalent in any other currency.‖

F. 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
structured in order to avoid being the subject of 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
7. any transaction that is similar, analogous or identical to any of the foregoing.

G. Politically Exposed Person (PEP) – refers to an individual who is or has been entrusted with
prominent public position in (a) the Philippines with substantial authority over policy, operations or the
use or allocation of government-owned resources; (b) a foreign State; or (c) an international
organization. The term PEP shall include immediate family members, and close relationships and
associates that are reputedly known to have:1)Joint beneficial ownership of a legal entity or legal
arrangement with the main/principal PEP; or Sole beneficial ownership of a legal entity or legal
arrangement that is known to exist for the benefit of the main/principal PEP

1. Under Implementing Rules and Regulations of AMLA issued by AMLC, the following
are the politically exposed persons (High Risk Government Personnel)
a. AFP or PNP Officials such as Colonel or General
b. Senators or Congressmen or Mayor or Governor
c. Chairman or Commissioners of COMELEC or CoA or CSC
d. President or Vice-President or Department Secretary and Undersecretary
e. Justices of Court of Appeals, Court of Tax Appeals, Sandiganbayan or Supreme Court

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Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

H. Covered persons, natural or juridical, required to report to AMLC covered transactions and
suspicious transactions
1. Under Bangko Sentral ng Pilipinas (BSP)
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 (IC)
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 (SEC)
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 1,000,000.
b. Land Registration Authority and all of its Register of Deeds on all real estate
transaction with price exceeding P500,000.
c. Casino refers to a business authorized by the appropriate government agency to engage
in gaming operations for single casino transaction in excess of P5,000,000.
i. Internet-based casino shall refer to casinos in which persons participate by
the use of remote communication facilities such as, but not limited to, internet,
telephone, television, radio or any other kind of electronic or other technology
for facilitating communication.
ii. Ship-based casino shall refer to casinos, the operation of which is undertaken
on board at vessel, ship, boat or any other water-based craft wholly or partly
intended for gambling.
d. Company service providers to 3rd parties including CPAs and Lawyers
1. acting as a formation agent of juridical persons;
2. acting as (or arranging for another person to act as) a director or corporate secretary
of a company, a partner of a partnership, or a similar position in relation to other
juridical persons;
3. 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
4. acting as (or arranging for another person to act as) a nominee shareholder for
another person.
e. Person providing the following services including CPAs and lawyers
1. managing of client money, securities or other assets;
2. management of bank, savings or securities accounts;
3. organization of contributions for the creation, operation or management of
companies; and

13 | P a g e RLACO/DSALES/NVALDERRAM A
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Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

4. creation, operation or management of juridical persons or arrangements, and buying

and selling business entities.

Note: A shell company is an incorporated company that possesses no significant assets and
does not perform any significant operations. To launder money, the shell company purports to
perform some service that would reasonably require its customers to often pay with cash. Cash
transactions increase the anonymity of customers and therefore decrease the government’s
ability to trace the initial recipient of the dirty money. Money launderers commonly select beauty
salons and plumbing services as shell companies. The launderer then deposits the money with
the shell company, which deposits it into its accounts. The shell company then creates fake
invoices and receipts to account for the cash. Such transactions create the appearance of
propriety and clean money. The shell company can then make withdrawals and either return the
money to the initial criminal or pass the money on to further shell companies before returning it
to further cloud who first deposited the money.

5. Persons excluded to report covered transactions or suspicious transactions to AMLC

1. 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
2. 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.

I. Jurisdiction over Money Laundering Cases

a. 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.
b. Sandiganbayan. - The Sandiganbayan shall have jurisdiction to try money laundering cases
committed by public officers under its jurisdiction (salary grade of 27 or higher), and private
persons who are in conspiracy with such public officers.

J. Prosecution of Money Laundering Cases

a. 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.
b. 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 perpetrators 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.
c. Knowledge. - The element of knowledge may be established by direct or circumstantial
evidence.

K. Anti-Money Laundering Council - refers to the financial intelligence unit of the Republic of the
Philippines which is the government agency tasked to implement the AMLA.
a. Composition of Anti-Money Laundering Council
i. Chairperson – BSP Governor
ii. Member – Insurance Commissioner
iii. Member – SEC Chairperson
b. 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.

14 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

L. 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;
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.
4. Record Keeping. - Covered persons shall maintain and safely store for five (5) years from the
dates of transactions all records of customer identification and transaction documents of their
customers or five (5) years from the date the account is closed.

5. 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.

6. 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 10-day period for determination shall be reckoned from the date the covered person
knew or should have known the suspicious transaction indicator.

7. Safe Harbor Provision of AMLA. No administrative, criminal or civil proceedings shall lie
against any person for having made a covered transaction report in the regular performance of
his duties and in good faith, whether or not such reporting results in any criminal prosecution
under the AMLA or any other Philippine law.

8. Freeze Order 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 for a period of 20 days. Within 20-day period, the Court of Appeals shall
conduct a summary hearing, with notice to the parties, to determine whether or not to modify or
life the freeze order or to extend its effectivity
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,

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Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

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 total period of the freeze order issued by the Court of
Appeals under this provision shall not exceed six months. This is without prejudice to an
asset preservation order that the Regional Trial Court having jurisdiction over the
appropriate money-laundering case or civil forfeiture case may issue on the same
accounting depending upon the circumstances of the case, where the Court of Appeals
will remand the case and its records: Provided, That if there is no case filed against a
person whose account has been frozen within the period determined by the Court of
Appeals, no exceeding six months, the freeze order shall be deemed ipso lifted. Provided
further, that this new rule shall not apply to pending cases in the courts. In any case, the
court should act on the petition to freeze within 24 hours from filing of the petition. If the
application is filed a day before a nonworking day, the computation of the 24-hour period
shall exclude the nonworking days. The freeze order or asset preservation order issued
under this Act shall be limited only to the amount of cash or monetary instrument or
value of property that the court finds there is probable cause to be considered as
proceeds of a predicate offense, and the freeze order or asset preservation order shall
not apply to amounts in the same account in excess of the amount or value of the
proceeds of the predicate offense
9. Bank Inquiry with Court Order. - Notwithstanding the provisions of Republic Act No. 140S, as
amended; Republic Act No. 6426, as amended; Republic Act No. 8791, and other laws, the AMLC
may inquire 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 must 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, Sections 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, Sections 2 and 3 of the 1987 Constitution.

10. Bank Inquiry without Court Order. - The AMLC shall issue a resolution authorizing the
AMLC Secretariat to inquire into or examine anyparticular deposit or investment account,
including related accounts, with any banking institution or non-bank financial institution 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. Sections 4, 5, 6, 8, 9, 10, 11, 12, 13, 14, 15 and 16 of Republic Act No. 9165, otherwise
known as the Comprehensive Dangerous Drugs Act of 2002;
c. Hijacking and other violations under Republic Act No. 6235;
d. Destructive arson and murder, as defined under the Revised Penal Code, as amended;
e. 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;
f. Terrorism and conspiracy to commit terrorism as defined and penalized under Republic
Act No. 9372; and
g. Financing of terrorism under Section 4 and offenses punishable under Sections 5, 6, 7
and 8 of Republic Act No. 10168, otherwise known as the Terrorism Financing Prevention
and Suppression Act of 2012.

11. Asset Forfeiture

h. Civil Forfeiture. - 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.

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Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

i. 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.
j. Asset Forfeiture in Money Laundering Cases. - Where there is conviction for money
laundering, the court shall issue a judgment of forfeiture in favor of the Government of
the Philippines with respect to the monetary instrument or property found to be proceeds
of an unlawful activity.

RA 11521 : AN ACT FURTHER STRENGTHENING THE ANTI-MONEY LAUNDERING LAW,

AMENDING FOR THE PURPOSE REPUBLIC ACT NO. 9160, OTHERWISE KNOWN AS THE
"ANTI-MONEY LAUNDERING ACT OF 2001", AS AMENDED

Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:

Section 1. Section 2 of Republic Act No. 9160, as amended, is hereby amended to read as follows:

"Section 2. 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 State shall extend cooperation in
transnational investigations and prosecutions of persons involved in money laundering
activities wherever committed, as well as in the implementation of targeted financial
sanctions related to the financing of the proliferation of weapons of mass destruction,
terrorism, and financing of terrorism, pursuant to the resolution of the United Nations
Security Council."

Section 2. Section 3 of the same Act is hereby amended as follows:

"Section 3. Definitions. - For purposes of this Act, the following terms are hereby
defined as follows:

"(a) Covered persons', natural or juridical refer to:

"(1) x x x;

"(9) Real estate developers and brokers;

"(10) Offshore gaming operation, as well as their service providers,

supervised, accredited or regulated by the Philippine Amusement and
Gaming Corporation (PAGCOR) or any government agency;

"(b) 'Covered transactions' is a transaction in cash or other equivalent monetary

instrument involving a total amount in excess of Five hundred thousand pesos
(P500,000.00) within one (1) banking day; for covered persons under Section
3(a)(8), a single casino cash transaction involving an amount in excess of Five
million pesos (P5,000,000.00) or its equivalent in any other currency.

"For covered persons under Section 3(a)(9) herein, a single cash transaction
involving an amount in excess of Seven million five hundred thousand pesos
(P7,500,000.00) or its equivalent in any other currency.

"(b-1) 'Suspicious transactions' are transactions with covered persons,

regardless of the amounts involved, where any of the following
circumstances exist:

"1. There is no underlying legal or trade obligation, purpose or

economic justification;

"2. The client is not properly identified;

17 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

"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 structured in order to
avoid being the subject of reporting requirements under the Act

"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 offense under this Act that is about to be, is being or has
been committed; or

"7. Any transaction that is similar or analogous to any of the

foregoing.

"x x x

"(i) 'Unlawful activity' refers to any act or omission or series or combination

thereof involving or having relation to the following:

"(1) x x x;

"(33) Fraudulent practice and other violations under Republic

Actr No. 8799, otherwise known as "The Securities Regulation
Code of 2000;

"(34) Violation of Section 9 (a)(3) of Republic Act No. 10697,

otherwise known as the "Strategic Trade Management Act", in
relation to the proliferation of weapons of mass destruction and
its financing pursuant to United Nations Security Council
Resolution Numbers 1718 of 2006 and 2231 of 2015";

"(35) Violation of Section 254 of Chapter II, Title X of the

National Internal Revenue Code of 1997, as amended, where the
deficiency basic tax due in the final assessment is in excess of
Twenty-five million pesos (P25,000,000.00) per taxable year, for
each tax type covered and there has been a finding of probable
cause by the competent authority: Provided,further, That there
must be a finding of fraud, willful misrepresenting or malicious
intent on the part of the taxpayer: Provided, finally, That in no
case shall the AMLC institute forfeiture proceedings to recover
monetary instruments, property or proceeds representing,
involving, or relating to a tax crime, if the same has already
been recovered or collected by the Bureau of Internal Revenue
(BIR) in a separate proceeding and

"(36) Felonies and offenses of a similar nature that are

punishable under the penal laws of other countries.

"x x x.

"(4) 'Offshore gaming operator' refers to an entity engaged in offering

online games of chance or sporting events via the internet using a
network and software program, by themselves or through local service
providers.

"(5) 'Service providers' refer to duly constituted business corporations

who provide components of offshore gaming operations to offshore
gaming operators.

18 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

"x x x.

"(m) 'Real estate developer' refers to any natural or juridical person engaged in
the business of developing real estate development project for the account of the
developer and offering them for sale or lease.

"(n) 'Real estate broker' refers to a duly registered and licensed natural person
who, for a professional fee, omission or other valuable consideration, acts as an
agent of a party in a real estate transaction to offer, advertise, solicit, list,
promote, mediate, negotiate, or effect the meeting of the minds on the sale,
purchase, exchange, mortgage, lease or joint venture, or other similar
transaction on real estate or any interest therein.

"(o) 'Targeted financial sanctions' refer to both asset freezing and prohibition to
prevent funds or other assets from being made available, directly or indirectly,
for the benefit of any individual, natural or legal persons or entity designated
pursuant to relevant United Nations Security Council resolution and its
designation processes.

"(p) 'Proliferation financing' refers when a person:

"(1) Makes available an asset; or

"(2) Provides a financial service; or

"(3) Conducts a financial transaction; and the person knows that, or is

reckless as to whether, the asset, financial service or financial
transaction is intended to, in whole or in part, facilitate proliferation of
weapons of mass destruction in relation to UN Security Council
Resolution Number 1718 0f 2006 and 2231 of 2015."

Section 3. Section 7 of the same Act is hereby amended to read as follows:

"Section 7. Creation of Anti-Money Laundering Council (AMLC). - The Anti-Money

Laundering Council is hereby created and shall be composed of the Governor of the
Bangko Sentral ng Pilipinas as Chairman, the Commissioner of the Insurance Commission
and the Chairman of the Securities and Exchange Commission, as members. The AMLC
shall act unanimously in the discharge of its functions as defined hereunder:

"(1) to investigate suspicious transactions and covered transactions deemed

suspicious after determination by AMLC, money laundering activities and other
violations of this Act.

"x x x;

"(13) in the conduct of its investigation, the AMLC shall apply for the issuance of
a search and seizure order with any competent court;

"(14) in the conduct of its investigation, the AMLC shall apply for the issuance
of subpoena ad testificandum and/or subpoena duces tecum with any competent
court;

"(15) to implement targeted financial sanctions in relation to proliferation of

weapons of mass destruction and its financing, including ex parte freeze, without
delay, against all funds and other assets that are owned and controlled, directly
or indirectly, including funds and assets derived or generated therefrom, by
individuals or entities designated and listed under United Nations Security Council
Resolution Numbers 1718 of 2006 and 2231 of 2015 and their successor
resolutions as well as any binding resolution of the Security Council; and

"(16) to preserve, manage or dispose assets pursuant to a freeze order, asset

preservation order, or judgment of forfeiture: Provided, however, That pending

19 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

their turnover to the national government, all expenses incurred in relation to the
duties herein mentioned shall be deducted from the amount to be turned over to
the national government."

Section 4. A new Section 8-A is hereby inserted after Section 8 (Creation of a Secretariat) of Republic
Act No. 9160, as amended to read as follows:

"SEC. 8-A. Information Security and Confidentiality. - The AMLC and its Secretariat shall securely
protect information received or processed and shall not reveal, in any manner, any information
known to them by reason of their office. This prohibition shall apply even after their separation
from the AMLC.

"The AMLC shall formulate rules governing information exchange and dissemination, the security
and confidentiality of such information, including procedures for handling, storage, and protection
of, as well as access to such information."

Section 5. Section 10 of the same Act, is hereby further amended by inserting a new paragraph to read
as follows:

"Section 10. Freezing Monetary Instrument or Property. -

"(a) Upon a verified ex parte petition by the AMLC and after determination that probable
cause exists that any monetary instrument or property is in any way related to an
unlawful activity as defined in Section 3(i) hereof, the Court of Appeals may issue a
freeze order which shall be effective immediately, for a period of twenty (20) days.
Within the twenty (20) day period, the Court of Appeals shall conduct a summary
hearing, with notice to the parties, to determine whether or not to modify or lift the
freeze order, or extend its effectivity. The total period of the freeze order issued by the
Court of Appeals under this provision shall not exceed six (6) months. This is without
prejudice to an asset preservation order that the Regional Trial Court having jurisdiction
over the appropriate anti-money laundering case or civil forfeiture case may issue on the
same account depending on the circumstances of the case, where the Court of Appeals
will remand the case and its records: Provided, That if there is no case filed against a
person whose account has been frozen within the period determined by the Court of
Appeals, not exceeding six (6) months, the freeze order shall be deemed ipso
facto lifted: Provided,further, That this new rule shall not apply to pending cases in the
courts. In any case, the court should act on the petition to freeze within twenty-four (24)
hours from filing of the petition. If the application is filed a day before a nonworking day,
the computation of the twenty-four (24) hour period shall exclude the nonworking days.

"The freeze order or asset preservation order issued under this Act shall be limited only
to the amount of cash or monetary instrument or value of property that court finds there
is probable cause to be considered as proceeds of a predicate offense, and the freeze
order or asset preservation order shall not apply tyo amounts in the same account in
excess of the amount or value of the proceeds of the predicate offense.

"A person whose account has been frozen may file a motion to lift the freeze order and
the court must resolve this motion before the expiration of the freeze order.

"No court shall issue a temporary restraining order or a writ of injunction against any
freeze order, except the Supreme Court.

"(b) For purposes of implementing targeted financial sanctions in relation to proliferation

of weapons of mass destruction and its financing, as provided under Section 3(15), the
AMLC shall have the power to issue, ex porte, an order to freeze without delay.

"The freeze order shall be effective until the basis for its issuance shall have been lifted.
During the effectivity of the freeze order, the aggrieved party may, within twenty (20)
days from issuance, file with the Court of Appeals a petition to determine the basis of the
freeze order according to the principle of effective judicial protection: Provided, That the
person whose property or funds have been frozen may withdraw such sums as the AMLC

20 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

determines to be reasonably needed for monthly family needs and sustenance including
the services of counsel and the family medical needs of such person.

"The AMLC, if circumstance warrant, may initiate civil forfeiture proceedings to preserve
the assets and to protect it from dissipation.ℒαwρhi৷ No court shall issue a temporary
restraining order or a writ of injunction against the freeze order, except the Court of
Appeals or the Supreme Court."

Section 6. Section 12 of the same Act is hereby amended by inserting a new paragraph to read as
follows:

"(d) No court shall issue a temporary restraining order (TRO) or a writ of injunction
against any provisional asset preservation order or asset preservation, except the Court
of Appeals or the Supreme Court."

Section 7. Section 14, paragraph (d) of Republic Act No. 9160, as amended, is hereby further amended
to read as follows:

"Section 14. Penal Provisions. -

"x x x

"(d) Breach of Information Security and Confidentiality. The punishment of imprisonment

ranging from three (3) to eight (8) years and a fine of not less than Five hundred
thousand Philippine pesos (P500,000.00) but not more than One million Philippine pesos
(P1,000,000.00), shall be imposed on a person convicted for a violation under Section
9(c) 0r Section 8-A on information security and confidentiality of this Act. If the offender
is public official or employee, he shall, in addition to the penalties prescribed herein,
suffer the penalty of perpetual or temporary absolute disqualification from public office,
as the case may be. In the case of a breach of confidentiality that is published or
reported by media, the responsible reporter, writer, president, publisher, manager and
editor-in-chief shall be liable under this Act."

Section 8. Section 20 of the same Act is hereby amended to read as follows:

"Section 20. Non-Intervention in the Bureau of Internal Revenue (BIR) Operations. -

Nothing contained in this Act nor in related antecedent laws or existing agreements shall
be construed to allow the AMLC to participate in any manner in the operation of the BIR.
The AMLC, may, however, coordinate with the BIR On investigations in relating to
violations of Section 254 of NIRC, as amended, as a predicate offense to money
laundering."

V. Batas Pambansa Bilang 22 (Bouncing Checks Law)

A. Punishable Acts under BP 22

1. Any person who (a) makes or draws and issues any check to apply on account or for value, (b)
knowing at the time of issue that he does not have sufficient funds in or credit with the drawee
bank for the payment of such check in full upon its presentment, (c) which check is subsequently
dishonored by the drawee bank for insufficiency of funds or credit or would have been
dishonored for the same reason had not the drawer, without any valid reason, ordered the bank
to stop payment.
2. Any person who, having sufficient funds in or credit with the drawee bank when he makes or
draws and issues a check, shall fail to keep sufficient funds or to maintain a credit to cover the
full amount of the check if presented within a period of ninety (90) days from the date appearing
thereon, for which reason it is dishonored by the drawee bank.

21 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

B. Elements of Criminal Violation of BP 22 for issuance of worthless checks

1. There must be making, drawing, and issuance of any check to apply for account or for value.
2. There must be knowledge of the maker, drawer, or issuer that at the time of issue he does not
have sufficient funds in or credit with the drawee bank for the payment of the check in full upon
its presentment.
3. There must be subsequent dishonor of the check by the drawee bank for insufficiency of funds or
creditor dishonor for the same reason had not the drawer, without any valid cause, ordered the
bank to stop payment.

C. Penalty for violation of BP 22 at the discretion of the court

1. Imprisonment of not less than thirty days but not more than one (1) year; or
2. Fine of not less than but not more than double the amount of the check which fine shall in no
case exceed Two Hundred Thousand Pesos; or
3. Both imprisonment of not less than thirty days but not more than one (1) year and Fine of not
less than but not more than double the amount of the check which fine shall in no case exceed
Two Hundred Thousand Pesos.
D. Evidence of Knowledge of Insufficiency of Funds by the Issuer of Worthless Check

The making, drawing and issuance of a check payment of which is refused by the drawee because of
insufficient funds in or credit with such bank, when presented within ninety (90) days from the date of
the check, shall be prima facie evidence of knowledge of such insufficiency of funds or credit

E. Evidence or Defense to destroy prima facie evidence of knowledge of insufficiency of

funds by the Issuer of Worthless checks

The maker or drawer pays the holder thereof the amount due thereon, or makes arrangements for
payment in full by the drawee of such check within (5) banking days after receiving notice that such
check has not been paid by the drawee.

F. Duty of Drawee Bank

It shall be the duty of the drawee of any check, when refusing to pay the same to the holder thereof
upon presentment, to cause to be written, printed, or stamped in plain language thereon, or attached
thereto, the reason for drawee's dishonor or refusal to pay the same: Provided, That where there are no
sufficient funds in or credit with such drawee bank, such fact shall always be explicitly stated in the
notice of dishonor or refusal. In all prosecutions under this Act, the introduction in evidence of any
unpaid and dishonored check, having the drawee's refusal to pay stamped or written thereon or attached
thereto, with the reason therefor as aforesaid, shall be prima facie evidence of the making or issuance of
said check, and the due presentment to the drawee for payment and the dishonor thereof, and that the
same was properly dishonored for the reason written, stamped or attached by the drawee on such
dishonored check. Notwithstanding receipt of an order to stop payment, the drawee shall state in the
notice that there were no sufficient funds in or credit with such bank for the payment in full of such
check, if such be the fact.

G. Credit Construed

The word "credit" as used herein shall be construed to mean an arrangement or understanding with the
bank for the payment of such check.

H. Evidence Required for Violation of BP 22

1. To prove violation of BP 22 or for conviction of crime of BP 22 – Proof beyond reasonable doubt
2. To prove civil damages on civil action involving BP 22 – Preponderance of evidence
3. To sue or to file a case for violation of BP 22 – Probable cause or Prima Facie evidence

22 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

I. Prosecution for Violation of BP 22 (Requirement of Receipt of Notice of Dishonor by Maker

or Drawer)

Failure to establish that a written notice of dishonor was actually received by the maker or drawer of the
check is a ground for an acquittal. Numerous BP 22 cases have been dismissed and/ or have resulted in
the acquittal of the accused on the ground that the prosecution failed to establish that the accused had
actually received a notice of dishonor.

First, the prosecution in a BP 22 case must establish that (a) notice of dishonor was sent to the issuer of
the dishonored check and (b) that the same was actually received. A notice of dishonor may be sent to
the maker or drawer of the dishonored check by (1) by personal service upon the issuer or (2) by
registered mail. If the notice of dishonor is sent by registered mail, the fact of sending the notice of
dishonor is established by the registry receipt, the registry return card, and an affidavit executed by the
person who mailed the notice of dishonor detailing the circumstances of the mailing.

As to establishing actual receipt, the prosecution must also prove that the signature appearing on the
registry return card or notice of dishonor, in case of personal service, belongs to that of the issuer of the
dishonored check or, at the very least, to his duly authorized agent. In the latter case, the prosecution
must establish the capacity and authority of such person as agent. An illegible signature, such as when a
recipient merely signs his/ her initials on the registry return card or notice of dishonor, as the case may
be, does not prove that the issuer actually received the notice of dishonor. It is also crucial that the
registry return card or the notice of dishonor indicate the date it was received in order to fix the start of
the five (5) day period within which the maker or drawer of the check must pay or make arrangements
for the payment of the amount of the check.

The notice of dishonor may be sent to the office of the maker or drawer of the dishonored check but he
must receive the notice personally or through his authorized agent. A corporation or an officer of a
corporation that receives a notice of dishonor addressed to one of its employees has no obligation to
forward the notice to the employee concerned. Thus, such receipt is not the receipt contemplated by BP
22. A notice of dishonor may also be sent to the residence of the maker or drawer of the dishonored
check and received by him/her, the housemaids or houseboys who are deemed to have a special power-
of-attorney to receive mail in behalf of the addressee, or any member of the family of sufficient age or
discretion). Notably, the notice of dishonor may be sent to, and received by, the maker or drawer of the
dishonored check wherever he may be found as long as the fact and date of receipt are established.

Quizzer in Banking Laws

1. What is the government instrumentality created in 1963 by virtue of Republic Act 3591 to insure
the deposits of all banks which are entitled to the benefits of insurance and considered as an an
attached agency of the Department of Finance?
a. Development Bank of the Philippines (DBP)
b. Landbank of the Philippines (LBP)
c. Philippine Deposit Insurance Corporation (PDIC)
d. Bangko Sentral ng Pilipinas (BSP)

2. Under the amendment to PDIC Charter, may PDIC pay the insured deposits of a depositor
without netting out depositor’s loan obligation with the closed bank?
a. No because it will violate of the right to due process of the bank.
b. No because it will violate the principles of legal compensation.
c. Yes but only using the closed bank’s records alone.
d. Yes even based on evidence of deposits and not on the closed bank’s records alone.

3. May PDIC proceed directly to liquidation of a closed bank even without undergoing 90-day
receivership period?
a. No because it is violative of right to property of the owners of the bank.
b. No because it is violative of right to procedural due process of the owners of the bank.
c. Yes because it would enhance the recovery rate for creditors of closed bank.
d. Yes because it would result to further dissipation of assets of a closed bank.

4. Which of the following deposits is not insured by PDIC?

a. Savings Deposit

23 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

b. Special Savings
c. Negotiable Order of Withdrawal
d. Certificate of Time Deposits
e. Telegraphic notes or Telegram notes

5. Which of the following is insured by PDIC?

a. Demand or Checking account
b. Investment in bonds issued by government
c. Investment in stocks of a private corporation
d. Trust account
e. Money market placement

6. Which of the following is insured by PDIC?

a. Savings deposit
b. Demand draft
c. Telegraphic notes
d. Telegram notes

7. Which of the following deposits is not insured by PDIC?

a. Savings Deposit in Metrobank Manila Branch
b. Certificate of Time Deposit in Philippine National Bank Makati Branch
c. Bank Deposit in Japan Bank Tokyo Branch
d. Special Savings in Bank of Philippine Islands Taguig Branch

8. Which of the following deposits is insured by PDIC?

a. Deposit accounts that are funded
b. Deposit accounts that are fictitious or fraudulent
c. Deposit accounts constituting or emanating from unsafe or unsound business practices
d. Deposit accounts that are determined to be proceeds from an unlawful activity as defined
in AMLA

9. What is the possible maximum deposit insurance coverage if a depositor has several valid single
accounts in a closed bank?
a. P1,000,000
b. P500,000
c. P750,000
d. P1,500,000

10. What is the possible maximum deposit insurance coverage if a depositor has several valid single
accounts and valid joint accounts in a closed bank?
a. P1,000,000
b. P500,000
c. P750,000
d. P1,500,000

11. Angel Locsin has the following four deposit accounts in a closed bank (BDO):
Angel Locsin, Savings Deposit BDO-Lipa City branch
P200,000
Kim Domingo For the Account of Angel Locsin , Time Deposit BDO-Manila City branch
100,000
Andrea Torres In Trust For Angel Locsin, Savings Deposit – BDO-Taguig City branch
300,000
Angel Locsin’s Business (Sole Proprietorship) – Checking Account – BDO-Pasay City branch
600,000
What is the maximum deposit insurance coverage by PDIC in so far as Angel Locsin is
concerned?
a. P1,000,000
b. P1,200,000
c. P500,000
d. P800,000

12. Ellen Adarna has the following deposit accounts in a closed bank (BDO):

24 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

Ellen Adarna and John Lloyd Cruz Savings Deposit BDO-Lipa City branch
P600,000
Ellen Adarna and Tom Cruz Time Deposit BDO-Manila City branch
800,000
Ellen Adarna and Mark Cruz Checking Account – BDO-Pasay City branch
900,000
What is the maximum deposit insurance coverage by PDIC in so far as Ellen Adarna is
concerned?
a. P1,000,000
b. P1,200,000
c. P500,000
d. P800,000

13. Kim Domingo has the following deposit accounts in a closed bank (BDO):
Kim Domingo’s Modeling Business (Sole Proprietorship) Checking Account – BDO-Pasay City
branch P300,000
Kim Domingo Savings Deposit – BDO-Taguig City branch
400,000
Kim Domingo and John Santos Time Deposit BDO-Manila City branch
600,000
Kim Domingo and Rey Langit Savings Deposit BDO-Lipa City branch
800,000
What is the maximum deposit insurance coverage by PDIC in so far as Kim Domingo is
concerned?
a. P1,000,000
b. P1,200,000
c. P500,000
d. P800,000

14. Colleen Garcia has the following deposit accounts in a closed bank (BDO):
Colleen Garcia’s Business (Sole Proprietorship) Checking Account – BDO-Pasay City branch
P200,000
Colleen Garcia Savings Deposit BDO-Taguig City branch
100,000
Colleen Garcia and Billy Crawford Time Deposit BDO-Manila City branch
300,000
Colleen Garcia and John Pedro and Rex Juan and James Reid Savings Deposit BDO-Lipa City
branch 600,000
What is the maximum deposit insurance coverage by PDIC in so far as Colleen Garcia is
concerned?
a. P1,000,000
b. P1,200,000
c. P500,000
d. P575,000

15. Ana is a partner of ABC Partnership. She is also a stockholder of Ana Corporation Ana has the
following deposit accounts in a closed bank (BDO):
Ana’s Business (Sole Proprietorship) Checking Account – BDO-Pasig City branch
P350,000
Ana Savings Deposit BDO-Taguig City branch
400,000
Ana and Bea and Carla and Dana Time Deposit BDO-Manila City branch
600,000

25 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

Ana and ABC Partnership Checking Account – BDO-Pasay City branch

500,000
Ana and Ana Corporation Checking Account – BDO-Makati City branch
200,000
Ana’s loan payable to BDO – Quezon City Branch
(100,000)
What is the maximum deposit insurance coverage by PDIC in so far as Ana is concerned?
a. P525,000
b. P625,000
c. P800,000
d. P1,000,000

16. A maintained the following deposits at BPI Bank:

P600,000 – savings deposit in the name of A and/or B
P200,000 – time deposit in the name ABC Partnership
P300,000 – current account in the name of A
How much can A personally recover from PDIC if BPI Bank was liquidated by BSP?
a. P900,000
b. P600,000
c. P550,000
d. P300,000

17. In case of joint account between a juridical person and a natural person, who shall be entitled to
the maximum insured deposit of P500,000 in such joint account?
a. Juridical person
b. Natural person
c. Both juridical person and natural person equally
d. Neither juridical person nor natural person

18. What is the prescriptive period for depositors to file their deposit insurance claims to PDIC from
date of takeover by PDIC of a closed bank?
a. Within 2 years from PDIC’s takeover of the closed bank
b. Within 1 years from PDIC’s takeover of the closed bank
c. Within 3 years from PDIC’s takeover of the closed bank
d. Within 4 years from PDIC’s takeover of the closed bank

19. As a general rule, what is the threshold amount of the bank deposit to be required to file deposit
insurance claims to PDIC?
a. Balance of more than P100,000
b. Balance of more than P10,000
c. Balance of more than P100
d. Balance of more than P1,000

20. The following are the depositors who are required to file deposit insurance claims to PDIC in
order to recover their claims from a closed bank, except
a. Depositors with valid deposit accounts with balances of more than Php100,000.
b. Depositors who have outstanding obligations with the closed bank regardless of amount
of deposits.
c. Depositors with account balances of less than Php100,000 who have no updated
addresses in the bank records or who have not updated their addresses through the
Mailing Address Update Form (MAUF) issued by the PDIC.
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.
f. Depositors with account balances of less than Php100,000 who have updated addresses
in the bank records or who have updated their addresses through the Mailing Address
Update Form (MAUF) issued by the PDIC.

21. What is the mode of payment by PDIC of claims of depositors from a closed bank?

26 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

a. By cash
b. By making available to each depositor a transferred deposit in another insured bank in an
amount equal to insured deposit of such depositor
c. By checks, promissory note or bill of exchange
d. Either A or B

22. What is the maximum period for payment by PDIC to depositors of their claims from a closed
bank in order not to make PDIC’s officer liable for failure to pay due to grave abuse of discretion,
gross negligence, bad faith or malice?
a. Within 2 years from the date of filing of deposit insurance claim to PDIC
b. Within 1 year from the date of filing of deposit insurance claim to PDIC
c. Within 6 months from the date of filing of deposit insurance claim to PDIC
d. Within 3 months from the date of filing of deposit insurance claim to PDIC

23. What is the effect of payment by PDIC of insured deposits to depositors?

a. PDIC may recover from the assets of the closed in so far as the payment made by PDIC
is beneficial to depositors.
b. PDIC shall be legally subrogated to all rights of depositor against the closed bank to the
extent of such payment.
c. PDIC may not recover from the assets of the closed bank if the payment is without the
knowledge or against the will of the closed bank.
d. PDIC may only recover from the assets of the closed bank if the payment is with the
consent of the closed bank.

24. Under Republic Act No. 1405, what is the nature of bank deposit and investment in government
bonds?
a. As a general rule, they are absolutely confidential in nature.
b. As a general rule, they are generally subject to any type of inspection.
c. They are exempted from any type of inquiry.
d. None of the above.

25. Under Republic Act No. 1405, the following instruments are considered absolutely confidential in
nature, except
a. Savings deposit
b. Time deposit
c. Current account or Demand account
d. Investment in government bonds
e. Money market placement or Telegraphic Notes or Telegram notes

26. They refer to money or funds placed with a bank that can be withdrawn on the depositor’s order
or demand.
a. Deposits
b. Trust funds
c. Money market placements
d. Deposit substitutes

27. Under Republic Act No. 1405 a.k.a. Philippine Peso Deposit Secrecy Law, the bank deposits and
investment in government bonds may be inquired into in the following exceptional instances,
except
a. Upon written permission or consent in writing by the depositor.
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, Sec. 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.
e. In cases of tax evasion cases filed by BIR Commissioner against a taxpayer.

28. Which of the following inquiries will be considered a violation of Philippine Peso deposit secrecy
law?

27 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

a. Periodic inquiry or special examination of bank deposits by BSP to ensure compliance

with the Anti-Money Laundering Law.
b. Inquiry of bank deposits by BIR Commissioner in relation to an application for
compromise of taxable liability or determination of a decedent’s gross estate under
National Internal Revenue Code.
c. Inquiry of bank deposits by PDIC when there is finding of unsafe or unsound banking
practices.
d. Inquiry of bank deposits by DOJ Secretary for the purpose of persecution of the
members of the opposing political party.

29. Which of the following disclosures will be considered a violation of Philippine peso deposit secrecy
law?
a. Reporting of unclaimed balances of a bank deposit to the Treasurer of the Philippines or
Bureau of Treasury by authorized bank officials.
b. Using of insider information about the bank deposits by bank employees in order to
determine the credit rating or credit standing of their depositors for purposes of offering
credit cards.
c. Turn-over by authorized bank officials to the BIR Commissioner of the amount in bank
accounts as may be sufficient to satisfy the writ of garnishment issued to collect
delinquent taxes.
d. Disclosure by a bank officer or employee upon order of a competent court in connection
with a deposit in a closed bank that was used in the perpetration of anomalies.

30. A government employee, purchased DBP Bonds with a total value of P100,000 and receives
annual interest income from his investment. Under Bank Secrecy Law, the investment of the
government employee may be inquired into even without need of a court order by the
a. Public prosecutor handling estafa case against the government employee
b. BIR officer auditing the VAT of the government employee
c. Credit investigator of a lending institution where the government employee applied for
the loan
d. None of the foregoing

31. Which act is covered by Domestic Bank Deposit Secrecy Law a.k.a. R.A. No. 1405?
a. Disclosing the amount of deposit of a judgment debtor to the court sheriff who is
executing a garnishment order against him.
b. Disclosing the name of the drawer of a check to the payee.
c. Disclosing the amount of deposit of a taxpayer to a duly authorized BIR examiner who is
examining his income tax liability.
d. Disclosing the amount of deposit exceeding P500,000 in one banking day to Anti-Money
Laundering Council.

32. The following are the exceptional cases when the BIR Commissioner may inspect bank deposits,
except
a. When there is application of compromise liability by a taxpayer on the ground of financial
incapacity
b. To determine the gross estate for computation of estate tax’s liability
c. When a request for tax information of specific18 taxpayers made by a foreign tax
authority pursuant to a tax treaty under The Exchange of Information on Tax Matters Act
of 2009
d. To determine the taxable income of politicians

33. What is the penalty provided by law for violation of RA 1405 a.k.a. Philippine Peso deposit
secrecy law?
a. Imprisonment of not more than five years or fine of not more than P20,000 or both
imprisonment and fine.
b. Imprisonment of not more than ten years or fine of not more than P200,000 or both
imprisonment and fine.
c. Imprisonment of not more than twenty years or fine of not more than P2,000,000 or
both imprisonment and fine.
d. Imprisonment of not more than one year or fine of not more than P2,000 or both
imprisonment and fine.

28 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

34. Under Foreign Currency Deposit Act of the Philippines or R.A. 6426, what is the only exception
for the absolutely confidential nature of Foreign Currency Bank Deposits?
a. Upon written permission or consent in writing by the depositor.
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, Sec. 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.

35. Which is false about Foreign Currency Deposit Act also known as R.A. No. 6426?
a. The foreign currency deposits maintained abroad by Filipino citizens are not covered by
the provisions of this act.
b. Depositary banks which have been qualified by the Monetary Board to function under
expanded foreign currency deposit system are exempt in maintain the fifteen percent
(15%) foreign currency cover for their liabilities in the form of foreign currency deposit
with BSP.
c. Foreign currency deposits are of absolutely confidential nature, except upon the written
permission of the depositor.
d. Foreign currency deposits are subject to attachment, garnishment, or any other order or
process of the court.

36. A non-resident alien was convicted beyond reasonable doubt of raping a minor. Such non-
resident alien does not have any property in the Philippines except a foreign currency deposit
with a domestic bank. May the court issue a writ of garnishment of the foreign currency deposit
of that convicted non-resident alien?
a. No because Foreign Currency Deposit Act of the Philippines provides that foreign
currency deposits are exempted from attachment or garnishment.
b. Yes but only if the non-resident alien will give his permission or consent in writing.
c. Yes because if that foreign currency deposit will be exempted from garnishment, injustice
would result especially to a citizen aggrieved by a foreign guest.
d. No because foreign currency deposits are absolutely confidential in nature and making an
exception to the confidentially of foreign currency deposits will discourage foreign
investments.

37. What is the penalty provided by R.A. No. 6426 for violation of confidentiality of foreign currency
deposit act of the Philippines?
a. Imprisonment of not less than 1 year nor more than 5 years or fine not less than P5,000
but not more than P25,000 or both imprisonment and fine.
b. Imprisonment of not less than 2 years nor more than 10 years or fine not less than
P10,000 but not more than P50,000 or both imprisonment and fine.
c. Imprisonment of not less than 3 years nor more than 15 years or fine not less than
P20,000 but not more than P100,000 or both imprisonment and fine.
d. Imprisonment of not less than 4 year nor more than 20 years or fine not less than
P50,000 but not more than P500,000 or both imprisonment and fine.

38. Which type of bank deposit of impeachable officer may be examined by impeachment court
without consent of the impeachable officer?
a. Philippine Peso Bank Deposit
b. Foreign Currency Bank Deposit
c. Both A and B
d. Neither A nor B

39. As a general rule, which type of bank deposit may not be subject to attachment, execution or
garnishment?
a. Philippine Peso Bank Deposit
b. Foreign Currency Bank Deposit
c. Both A and B
d. Neither A nor B

29 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

40. They 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.
a. Dormant accounts
b. Unclaimed balances
c. Dead accounts
d. Closed deposits

41. Which of the following credits may is not covered by Unclaimed Balances Law?
a. Credits of money
b. Deposits of money
c. Security of indebtedness
d. Bond indenture or other evidence of indebtedness of any kind
e. Telegraphic note or Telegram note
f. Patent or copyright or trademark

42. Which of the following institutions is not covered by Act No. 3936 also known as unclaimed
balances law?
a. Banks
b. Trust companies
c. Mutual building and loan association
d. Nonstock savings and loans association

43. Which government agency has the authority to reactivate an unclaimed balance account?
a. Bureau of Internal Revenue
b. Bureau of Customs
c. Bureau of Treasury
d. Bureau of Unclaimed Balance

44. What petition may be filed by the Office of Solicitor General in behalf of the Republic of the
Philippines in order to forfeit unclaimed balances of a person who, dying intestate and leaving no
heir entitled to his estate?
a. Petition for escheat
b. Petition for quo warranto
c. Petition for mandamus
d. Petition for certiorari

45. Which of the following credits may not be escheated in favor of the state under Unclaimed
Balances Law?
a. Telegraphic note
b. Money
c. Deposit
d. Demand draft

46. What is the objective of Anti-Money Laundering Law?

a. To protect and preserve the integrity and confidentiality of bank accounts
b. To ensure that the Philippines shall not be used as a money laundering site for the
proceeds of any unlawful activity
c. Consistent with its foreign policy, to extend cooperation in transnational investigations
and prosecutions of persons involved in money laundering activities wherever committed
d. All of the above

47. It refers to a crime committed by any person who knowing that any monetary instrument or
property represents, involves, or relates to the proceeds of any unlawful activity, transacts,
converts, transfers, disposes of, moves, acquires, possesses or uses said monetary instruments
or proceeds of any unlawful activity.
a. Estafa
b. Forgery
c. Money laundering
d. Bribery

30 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

48. Which of the following is not considered offense punishable as money laundering?
a. Transacting known proceeds of any unlawful activity.
b. Converting, transferring, disposing of, acquiring, possessing, moving, or using known
proceeds of any unlawful activity.
c. Concealing, disguising the true nature, source, location, movement, or ownership of
known proceeds of any unlawful activity.
d. Mere knowledge of proceeds of any unlawful activity.

49. Which of the following is not considered offense punishable as money laundering?
a. Attempting or conspiring to commit money laundering offenses punishable by Anti-Money
Laundering Law.
b. Aiding, abetting, assisting or counseling the commissions of money laundering offenses
punishable by Anti-Money Laundering Law.
c. Performing or failing to perform any act as a result of which facilitates the commission of
money laundering offenses punishable by Anti-Money Laundering Law.
d. Failing to report suspicious or reportable transactions to Anti-Money Laundering Council
by a covered institution of Anti-Money Laundering Law.
e. Mere employment in a covered institution required to report suspicious or reportable
transactions to Anti-Money Laundering Council.

50. Which of the following is not a predicate crime of Money Laundering Offense?
a. Swindling
b. Adultery
c. Fencing
d. Illegal recruitment

51. Which of the following is not a predicate crime of Money Laundering Offense?
a. Voyeurism
b. Extortion
c. Smuggling
d. Homicide

52. Which of the following is a predicate crime of Money Laundering Offense?

a. Smuggling
b. Rape
c. Act of Lasciviousness
d. Sexual harassment

53. Which of the following is a predicate crime of Money Laundering Offense?

a. Jueteng and masiao
b. Sedition
c. Libel
d. Trespassing

54. Which of the following is a predicate crime of Money Laundering Offense?

a. Violation of BP 22 a.k.a. Bouncing Check Law
b. Violation of BP 68 a.k.a. Corporation Code of the Philippines
c. Violation of Electronic Commerce Act of 2000 a.k.a. RA No. 8792
d. Violation of Data Privacy Act

55. Which of the following is not a predicate crime of Money Laundering Offense?
a. Violations of Intellectual Property Code
b. Fraudulent practices and other violations of the Securities Regulation Code
c. Forgeries and Counterfeiting
d. Rebellion

56. What is the Republic Act No. of Terrorism Financing Prevention and Suppression Act (Law
punishing Financing of Terrorim)?
a. R.A. No. 10168
b. R.A. No. 9372
c. R.A. No. 9160
d. R.A. No. 9194

31 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

57. The following are predicate crimes that may authorize Anti-Money Laundering Council to inquire
bank accounts even without court order from Court of Appeals, except
a. Carnapping
b. Violation of Section 4, 5, 6, 9, 10, 11, 12, 13, 14, 15 and 16 of Comprehensive
Dangerous Drugs Act
c. Hijacking
d. Kidnapping for Ranson

58. The following are predicate crimes that may authorize Anti-Money Laundering Council to inquire
bank accounts even without court order from Court of Appeals, except
a. Destructive arson
b. Murder
c. Financing of Terrorism, Terrorism and conspiracy to commit terrorism
d. Plunder

59. It refers to a type of transaction that shall be reported by a covered person to the Anti-Money
Laundering Council because the transaction breaches the quantitative threshold for reporting
purposes.
a. Covered transaction
b. Suspicious transaction
c. Reportable transaction
d. Exempted transaction

60. As a general rule, what is the quantitative threshold for any transaction in cash or other
equivalent of a covered person such as financial institututions to be considered reportable
transaction to Anti-Money Laundering Council?
a. A transaction with amount exceeding P1,000,000
b. A transaction with amount exceeding P100,000
c. A transaction with amount exceeding P500,000
d. A transaction with amount exceeding P5,000,000

61. What is the quantitative threshold for reportable transactions involving foreign currency dealers,
money dealers or remittance company?
a. A transaction with amount exceeding P1,000,000
b. A transaction with amount exceeding P100,000
c. A transaction with amount exceeding P500,000
d. A transaction with amount exceeding P5,000,000

62. In case of jewelry dealers, dealers of precious metals or dealers of precious stones, what is the
quantitative threshold for any transaction in cash or other equivalent to be considered reportable
transaction to Anti-Money Laundering Council?
a. A transaction with amount exceeding P1,000,000
b. A transaction with amount exceeding P100,000
c. A transaction with amount exceeding P500,000
d. A transaction with amount exceeding P5,000,000

63. In case of casino, what is the quantitative threshold for any transaction in cash or other
equivalent to be considered reportable transaction to Anti-Money Laundering Council?
a. A transaction with amount exceeding P1,000,000
b. A transaction with amount exceeding P100,000
c. A transaction with amount exceeding P500,000
d. A transaction with amount exceeding P5,000,000

64. In case of Land Registration Authority and all Registry of Deeds, what is the quantitative
threshold for any real estate transactions to be considered reportable transaction to Anti-Money
Laundering Council?
a. A transaction with amount exceeding P1,000,000
b. A transaction with amount exceeding P100,000
c. A transaction with amount exceeding P500,000
d. A transaction with amount exceeding P5,000,000

32 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

65. It refers to a type of transaction that shall still be reported by a covered person to the Anti-
Money Laundering Council even if the transaction does not breach the quantitative threshold for
reporting purposes by reason of the unusual nature of the transaction.
a. Covered transaction
b. Suspicious transaction
c. Reportable transaction
d. Exempted transaction

66. Which of the following is not a suspicious transaction and therefore shall not be reported to Anti-
Money Laundering Council?
a. Transaction that has no underlying legal or trade obligation, purpose or economic
justification.
b. Transaction in which the client is properly identified.
c. Transaction in which the amount involved is not commensurate with the business or
financial capacity of the client.
d. Transaction that deviates from the profile of the client.

67. Which of the following is not a suspicious transaction and therefore that shall not be reported to
Anti-Money Laundering Council?
a. Transaction that may be perceived that the client's transaction is structured in order to
avoid being the subject of reporting requirements under AMLA.
b. Transaction is 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.
c. Transaction that deviates from the client's transactions with the covered person.
d. Transaction entered into in the ordinary course of business of the client.

68. Under Implementing Rules and Regulations of AMLA issued by AMLC, the following are politically
exposed persons (High Risk Government Personnel), except
a. Municipal or Regional Trial Court Judge
b. AFP Official such as Colonel or General
c. Senators or Congressmen or Mayor or Governor
d. Chairman or Commissioners of COMELEC, COA and CSC
e. President or Vice-President
f. Justice of CA, CTA, Sandiganbayan or Supreme Court

69. Which of the following is not a covered person and therefore is not required to report covered
transaction or suspicious transaction to Anti-Money Laundering Council?
a. Banks, quasi-banks, trust entities, or nonstock savings and loans associations
b. Foreign exchange dealers, electronic money issuers, or pawnshops
c. Money changers or remittance and transfer companies
d. Real estate companies, real estate brokers and real estate appraisers

70. Which of the following is not a covered person and therefore is not required to report covered
transaction or suspicious transaction to Anti-Money Laundering Council?
a. Insurance companies or pre-need companies
b. Insurance agents, brokers, or professional reinsurers
c. Holding company, holding company system or mutual benefit association
d. Convenience stores, grocery stores or supermarkets

71. Which of the following is not a covered person and therefore is not required to report covered
transaction or suspicious transaction to Anti-Money Laundering Council?
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.
d. Educational institutions or hospitals or restaurants

33 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

72. Which of the following is exempted from reporting covered transaction or suspicious transaction
to Anti-Money Laundering Council?
a. Law firm or auditing firm 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. Jewelry dealers, dealers of precious metals or dealers of precious stones
c. Casino
d. Land Registration Authority or Registry of Deeds

73. When is a Certified Public Accountant considered a covered person required to report covered
transactions or suspicious transactions to Anti-Money Laundering Council?
a. When he renders audit or review of historical financial statements or other assurance
engagements.
b. When he provides management consultancy services.
c. When he acts as promoter rendering services for organization of contributions for the
creation, operation and management of companies.
d. When he provides tax advisory services.

74. When is a Certified Public Accountant exempted from reporting covered transactions or
suspicious transactions to Anti-Money Laundering Council?
a. When he renders tax compliance services to a client.
b. When he manages client's money, securities or other assets.
c. When he provides services for management of bank, savings or current accounts.
d. When he provides services for creation, operation or management of juridical persons or
arrangements, and buying and selling business entities.

75. Which of the following persons is not considered covered persons of Anti-Money Laundering Law?
a. Auditing Firm rendering audit services concerning their audit fee
b. Insurance company
c. Banking institution
d. Stock brokers

76. This principle means that No administrative, criminal or civil proceedings shall lie against any
person for having made a covered transaction report in the regular performance of his duties and
in good faith, whether or not such reporting results in any criminal prosecution under the AMLA
or any other Philippine law.
a. Safe harbor provision
b. Immunity from suit
c. Tax exemption
d. Privity of interest

77. As a general rule, which court has original jurisdiction to try money laundering cases committed
by private individuals?
a. Municipal trial court
b. Court of Tax Appeals
c. Regional Trial Court
d. Sandiganbayan

78. As an exception to the general rule, which court has original jurisdiction to try money laundering
cases committed by public officers with salary grade of at least 26 and private persons in
conspiracy with such public officers?
a. Municipal trial court
b. Court of Tax Appeals
c. Regional Trial Court
d. Sandiganbayan

34 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

79. Which of the following statements about prosecution of money laundering offenses is true?
a. The prosecution of money laundering and the unlawful activity shall proceed
independently such that any person may be charged with and convicted of both money
laundering and the unlawful activity.
b. The elements of money laundering are separate and distinct from the elements of the
unlawful activity.
c. The elements of the unlawful activity, including the identity of the perpetrators 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.
d. The element of knowledge in money laundering offense may be established by direct or
circumstantial evidence.
e. All of the above

80. It refers to the financial intelligence unit of the Republic of the Philippines which is entrusted with
the implementation of Anti-Money Laundering Law.
a. Anti-Money Laundering Council
b. Monetary Board of Bangko Sentral ng Pilipinas
c. Insurance Commission
d. Securities and Exchange Commission

81. Who among the following is not part of Anti-Money Laundering Council?
a. BSP Governor as chairperson of AMLC
b. Insurance Commissioner as member of AMLC
c. SEC Chairperson as member of AMLC
d. BIR Commissioner as member of AMLC

82. Who is the chairman of the Anti-Money Laundering Council?

a. BSP Governor
b. Insurance Commissioner
c. SEC Chairperson
d. BIR Commissioner

83. How shall the AMLC make decision in the discharge of its functions?
a. By majority vote of the three
b. By unanimous vote of the three
c. By 1/3 vote of the three
d. Any of the above

84. Which of the following statements about the preventive measures provided by Anti-Money
Laundering Law is correct?
a. 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.
b. 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.
c. Both A and B
d. Neither A nor B

85. Which of the following is not a minimum customer identification to be required by a covered
person from its client or customer?
a. Name of customer, date and place of birth and Present and permanent address
b. Nationality of customer
c. Nature of work and name of employer
d. Name of all relatives of customer

86. Which of the following is not a minimum customer identification to be required by a covered
person from its client or customer?
a. Contact number of customer
b. Specimen signature or biometrics of the customer
c. TIN, SSS or GSIS number if employed or self-employed
d. Name of all girlfriends or boyfriends of customer

35 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

87. Which of the following is not a minimum customer information or documentation that must be
obtained by covered persons of AMLA from its customers?
a. Nationality
b. SSS, TIN or GSIS number
c. Name of customer
d. Facebook page of customer

88. Which of the following accounts is not prohibited by Anti-Money Laundering Law?
a. Numbered accounts
b. Non-checking numbered accounts
c. Anonymous accounts
d. Fictitious accounts

89. What is the minimum retention period of all records of customer identification and transaction
documents of their customers by a covered person under Anti-Money Laundering Law?
a. At least 1 year from the date of transaction or from date of closure of the account
b. At least 3 years from the date of transaction or from date of closure of the account
c. At least 5 years from the date of transaction or from date of closure of the account
d. At least 10 years from the date of transaction or from date of closure of the account

90. Unless changed by the Anti-Money Laundering Council, what is the period for reporting all
covered transactions or suspicious transactions by a covered person to Anti-Money Laundering
Council?
a. Within a period of (5) five working days from the occurrence thereof
b. Within a period of (15) fifteen working days from the occurrence thereof
c. Within a period of (5) five calendar days from the occurrence thereof
d. Within a period of (15) fifteen calendar days from the occurrence thereof

91. In case the Anti-Money Laundering Council decides to change period for reporting all covered
transactions or suspicious transactions by a covered person to Anti-Money Laundering Council,
what is the maximum period it may extend the period for reporting?
a. Within a period of (5) five working days from the occurrence thereof
b. Within a period of (15) fifteen working days from the occurrence thereof
c. Within a period of (5) five calendar days from the occurrence thereof
d. Within a period of (15) fifteen calendar days from the occurrence thereof

92. In case of suspicious transactions, the word "occurrence" refers to the date of determination of
the suspicious nature of the transaction. What is the maximum period for the determination of
the suspicious nature of the transaction by a covered person?
a. Within a period of (10) ten calendar days from the date of transaction
b. Within a period of (10) ten working days from the date of transaction
c. Within a period of (5) five working days from the date of transaction
d. Within a period of (15) fifteen calendar days from the date of transaction

93. Which court has the jurisdiction to issue a freeze order on bank accounts 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?
a. Court of Appeals
b. Municipal Trial Court
c. Regional Trial Court
d. Court of Tax Appeals

94. What is the period allowed by AMLA to Court of Appeals to resolve the verified ex parte petition
filed by the AMLC for the issuance of freeze order on bank accounts related to proceeds of any
unlawful activity?
a. Within 12 hours from the filing of the petition
b. Within 24 hours from the filing of the petition
c. Within 36 hours from the filing of the petition
d. Within 48 hours from the filing of the petition

36 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

95. What is the validity period of the initial freeze order immediately issued by the Court of Appeals
upon verified ex parte petition by the AMLC?
a. Period of 10 days
b. Period of 30 days
c. Period of 20 days
d. Period of 60 days

96. What is the maximum/total period of the freeze order that may be issued by Court of Appeals for
bank accounts which is allegedly related to proceeds of any unlawful activity?
a. It shall not exceeds (2) two months.
b. It shall not exceed (3) three months.
c. It shall not exceed (1) one months.
d. It shall not exceed (6) six months.

97. Which court has the jurisdiction to issue the asset preservation order concerning the proceeds
related to any unlawful activity?
a. Court of Appeals
b. Municipal Trial Court
c. Regional Trial Court
d. Court of Tax Appeals

98. Which court has jurisdiction to issue an order authorizing the AMLC to inquire or examine any
particular deposit or investment account including related accounts with a banking institution or
non-bank financial institution based on the ex parte application by AMLC in cases of violation of
AMLA?
a. Court of Appeals
b. Municipal Trial Court
c. Regional Trial Court
d. Court of Tax Appeals

99. What is the period allowed by AMLA to Court of Appeals to resolve the verified ex parte petition
filed by the AMLC for the issuance of bank inquiry order of bank accounts or investment accounts
related to proceeds of any unlawful activity?
a. Within 12 hours from the filing of the petition
b. Within 24 hours from the filing of the petition
c. Within 36 hours from the filing of the petition
d. Within 48 hours from the filing of the petition

100. Which court has the jurisdiction to entertain a petition for civil forfeiture of any monetary
instrument or property is in any way related to an unlawful activity or a money laundering
offense?
a. Court of Appeals
b. Municipal Trial Court
c. Regional Trial Court
d. Court of Appeals

101. What quantum of evidence must be presented to AMLC before it may file with the
Regional Trial Court through Office of Solicitor General a verified petition for civil forfeiture of any
monetary instrument or property is in any way related to an unlawful activity or a money
laundering offense?
a. Probable cause
b. Preponderance of evidence
c. Proof beyond reasonable doubt
d. Clear and convincing evidence

102. What quantum of evidence is necessary for conviction of crime of Money Laundering?
a. Probable cause
b. Preponderance of evidence
c. Proof beyond reasonable doubt
d. Clear and convincing evidence

37 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

103. Which of the following is necessary or condition precedent before the commencement or
resolution of petition for civil forfeiture of any monetary instrument or property is in any way
related to an unlawful activity or a money laundering offense?
a. Prior criminal charge of unlawful activity
b. Prior conviction of unlawful activity
c. Prior criminal charge of money laundering offense
d. Prior conviction of money laundering offense
e. None of the above

104. When there is conviction for money laundering, to whom shall the monetary instrument
or property found to be proceeds of an unlawful activity go to?
a. It shall be awarded by the regional trial court to the convicted person.
b. It shall be awarded by the regional trial court to the innocent contracting party.
c. It shall be forfeited by the regional trial court in favor of the Government of the Republic
of the Philippines.
d. It shall be given to nonstock nonprofit charitable institutions.

105. What law punishes or penalizes issuance of worthless checks?

a. BP 22
b. BP 68
c. BP 45
d. BP 13

106. Which of the following is punishable act under BP 22 also known as Bouncing Checks
Law?
a. Any person who (a) makes or draws and issues any check to apply on account or for
value, (b) knowing at the time of issue that he does not have sufficient funds in or credit
with the drawee bank for the payment of such check in full upon its presentment, (c)
which check is subsequently dishonored by the drawee bank for insufficiency of funds or
credit or would have been dishonored for the same reason had not the drawer, without
any valid reason, ordered the bank to stop payment.
b. Any person who, having sufficient funds in or credit with the drawee bank when he
makes or draws and issues a check, shall fail to keep sufficient funds or to maintain a
credit to cover the full amount of the check if presented within a period of ninety (90)
days from the date appearing thereon, for which reason it is dishonored by the drawee
bank.
c. Either A or B
d. Both A and B

107. What is the minimum number of days for maintaining a balance in the checking account
to cover the check he issued for the drawer to be exempted from conviction for violation of BP
22?
a. A period of at least 90 days from the maturity date of check
b. A period of at least 120 days from maturity date of check
c. A period of at least 150 days from maturity date of check
d. A period of at least 180 days from maturity date of check

108. Which of the following is not an element of violation of BP 22 for issuance of worthless
check or no sufficient fund (NSF) check?
a. There must be making, drawing, and issuance of any check to apply for account or for
value.
b. There must be knowledge of the maker, drawer, or issuer that at the time of issue he
does not have sufficient funds in or credit with the drawee bank for the payment of the
check in full upon its presentment.
c. There must be subsequent dishonor of the check by the drawee bank for insufficiency of
funds or creditor dishonor for the same reason had not the drawer, without any valid
cause, ordered the bank to stop payment.
d. There must be criminal intent to defraud on the part of the drawer of the check.

38 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

109. What is the legal obligation on the part of the drawer of a funded check in order to
exempt himself from criminal liability for bouncing check?
a. He must keep sufficient fund or maintain credit to cover the full amount of the check
within a period of 90 days from the maturity date of the check.
b. He must keep sufficient fund or maintain credit to cover the full amount of the check
within a period of 30 days from the maturity date of the check.
c. He must keep sufficient fund or maintain credit to cover the full amount of the check
within a period of 60 days from the maturity date of the check.
d. He must keep sufficient fund or maintain credit to cover the full amount of the check
within a period of 120 days from the maturity date of the check.

110. What is the penalty for violation of BP 22 or Bouncing Checks Law?

a. Imprisonment of not less than 30 days but not more than (1) year or Fine of not less
than but not more than double the amount of the check which fine shall in no case
exceed Two Hundred Thousand Pesos or both imprisonment and fine.
b. Imprisonment of not less than 60 days but not more than (2) years or Fine of not less
than but not more than triple the amount of the check which fine shall in no case exceed
Three Hundred Thousand Pesos or both imprisonment and fine.
c. Imprisonment of not less than 90 days but not more than (3) years or Fine of not less
than but not more than the amount of the check which fine shall in no case exceed Four
Hundred Thousand Pesos or both imprisonment and fine.
d. Imprisonment of not less than 120 days but not more than (4) years or Fine of not less
than but not more than the amount of the check which fine shall in no case exceed Five
Hundred Thousand Pesos or both imprisonment and fine.

111. What is the prima facie evidence of the knowledge of insufficiency of funds or credit by
the maker or drawer of a check?
a. The making, drawing and issuance of a check payment of which is refused by the drawee
because of insufficient funds in or credit with such bank, when presented within (120)
days from the date of the check.
b. The making, drawing and issuance of a check payment of which is refused by the drawee
because of insufficient funds in or credit with such bank, when presented within (30)
days from the date of the check.
c. The making, drawing and issuance of a check payment of which is refused by the drawee
because of insufficient funds in or credit with such bank, when presented within (60)
days from the date of the check.
d. The making, drawing and issuance of a check payment of which is refused by the drawee
because of insufficient funds in or credit with such bank, when presented within (90)
days from the date of the check.

112. What act may be presented by the maker or drawer of a check to destroy prima facie
presumption of knowledge of insufficiency of funds or credit as established by the preceding
number?
a. The maker or drawer pays the holder thereof the amount due thereon, or makes
arrangements for payment in full by the drawee of such check within (10) banking days
after receiving notice that such check has not been paid by the drawee.
b. The maker or drawer pays the holder thereof the amount due thereon, or makes
arrangements for payment in full by the drawee of such check within (15) banking days
after receiving notice that such check has not been paid by the drawee.
c. The maker or drawer pays the holder thereof the amount due thereon, or makes
arrangements for payment in full by the drawee of such check within (5) banking days
after receiving notice that such check has not been paid by the drawee.
d. The maker or drawer pays the holder thereof the amount due thereon, or makes
arrangements for payment in full by the drawee of such check within (20) banking days
after receiving notice that such check has not been paid by the drawee.

39 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

113. Which of the following is not a duty of a drawee bank under BP 22?
a. When refusing to pay the check to the holder thereof upon presentment, to cause to be
written, printed, or stamped in plain language thereon, or attached thereto, the reason
for drawee's dishonor or refusal to pay the same.
b. If there are no sufficient funds in or credit with such a drawee bank regarding such
check, such fact shall always be explicitly stated in the notice of dishonor or refusal to be
given by the drawee bank.
c. Notwithstanding receipt of an order to stop payment from the drawer of check, the
drawee bank shall state in the notice that there were no sufficient funds in or credit with
such bank for the payment in full of such check, if such be the fact.
d. The drawee bank report the act of issuance of worthless check to AMLC even if the
amount does not exceed the quantitative threshold to be considered covered transaction.

114. The introduction in evidence of any unpaid and dishonored check, having the drawee's
refusal to pay stamped or written thereon or attached thereto, with the reason therefor as
aforesaid, shall be prima facie evidence of the following elements of crime of issuance of
worthless checks, except
a. The making or issuance of said check
b. The due presentment to the drawee bank of the check for payment and the dishonor
thereof
c. The check same was properly dishonored for the reason written, stamped or attached by
the drawee on such dishonored check.
d. The knowledge of the maker or drawer of the insufficiency of fund or credit of the check
he issued.

115. Under BP 22, it shall be construed as an arrangement or understanding with the bank for
the payment of such check.
a. Debit
b. Credit
c. Deposit
d. Account

116. What is the quantum of evidence required to sue or file a criminal case for criminal
offense involving violation of BP 22 for issuance of worthless checks?
a. Probable cause or prima facie evidence
b. Clear and convincing evidence
c. Preponderance of evidence
d. Proof beyond reasonable doubt

117. What is the quantum of evidence required for conviction of criminal offense involving
violation of BP 22 for issuance of worthless checks?
a. Probable cause or prima facie evidence
b. Clear and convincing evidence
c. Preponderance of evidence
d. Proof beyond reasonable doubt

118. What is the quantum of evidence required for awarding of civil damages for issuance of
worthless checks?
a. Probable cause or prima facie evidence
b. Clear and convincing evidence
c. Preponderance of evidence
d. Proof beyond reasonable doubt

119. In case of bouncing check issued in behalf of an artificial being or juridical person, who
shall be criminally liable for imprisonment?
a. Juridical person
b. Corporate officer who signed the bouncing check
c. Both a and b
d. Neither A nor b

40 | P a g e RLACO/DSALES/NVALDERRAM A
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

120. R.A. 3765 also known as Truth in Lending Act applies to:
a. Pawnshops
b. Small-loan money lenders
c. Both A and B
d. Neither A nor B

121. It refers to the affidavit that must be attached in the document evidencing the contract
of chattel mortgage in order to bind or to prejudice third persons. This affidavit in chattel
mortgages states that the mortgagor and mortgagee do severally swear that the foregoing
chattel mortgage is made for the purpose of securing the obligation specified in the conditions
thereof, and not for any other and that the same is a just and valid obligation and not entered
into for purposes of fraud.
a. Affidavit of Good Faith
b. Affidavit of Loss
c. Affidavit of Desistance
d. Affidavit of Recognition

-For the Glory of God-

41 | P a g e RLACO/DSALES/NVALDERRAM A

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