Bouncing Checks (BP 22): An Extended Discussion

Checks will always be an integral part of business, which is why we have a number of discussions
regarding checks (see Bouncing Checks [BP 22]). This time lets have a more extensive discussion on
bouncing checks.
What is the law that punishes bounced checks?
The Bouncing Checks Law, or Batas Pambansa (BP) Blg. 22, is a law that governs the criminal
liability arising from the issuance of bounced checks. The full title of BP 22: An Act Penalizing the
Making or Drawing and Issuance of a Check Without Sufficient Funds or Credit and for Other
Purposes (see full text here). In certain instances, the same acts may also give rise to another
criminal liability for estafa under the Revised Penal Code (see discussion in part 4 below).
Whats the reason or rationale for BP 22?
BP 22 is intended to prohibit the making of worthless checks and putting them in circulation. Even
years ago, the approximate value of bouncing checks was about 200 million pesos per day. The
issuance of bouncing checks is a crime not only against property. The magnitude of the crime has an
adverse effect on the greater public interest. The stability and commercial value of checks as currency
substitutes will be seriously affected. This, of course, has serious repercussions in trade and in
banking communities.
Does BP 22 violate the Constitutional mandate that no person shall be imprisoned for
debt?
It has been argued that BP 22 in reality punishes the non-payment of debt. However, while it is true
that no person can be imprisoned for debt, what BP 22 punishes is the act of issuing bad checks, and
not the failure to pay a debt. Its not a bad debt law; its rather a bad check law. Its not designed
to coerce a debtor to pay his debt.
Does BP 22 impairs the freedom of people to enter into contracts?
The Constitution also guarantees the right to enter into contract. Each one should be responsible for
the contracts entered into. If you get into a bad bargain, if you get a bad check, then its your fault for
not making sure that the other person is trustworthy. Checks, however, are not simple contracts
between two persons. It is a commercial instrument which, in this modem day and age, has become
a convenient substitute for money. It is an integral part of the banking system. Besides, what the law
protects are lawful contracts.
What are the acts punished under BP 22?
Section 1 of the Bouncing Checks Law penalizes two distinct acts:
1.

Making or drawing and issuing any check to apply on account or for value, knowing at the
time of issue that the drawer does not have sufficient funds in or credit with the drawee bank.

2. Having sufficient funds in or credit with the drawee bank 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 90
days from the date appearing thereon, for which reason it is dishonored by the drawee bank.
What are the differences between the two?

In the first paragraph, the drawer knows that he does not have sufficient funds to cover the
check at the time of its issuance, while in the second paragraph, the drawer has sufficient
funds at the time of issuance but fails to keep sufficient funds or maintain credit within ninety
(90) days from the date appearing on the check. In both instances, the offense is
consummated by the dishonor of the check for insufficiency of funds or credit.

The check involved in the first offense is worthless at the time of issuance since the drawer had
neither sufficient funds in nor credit with the drawee bank at the time, while that involved in
the second offense is good when issued as drawer had sufficient funds in or credit with the
drawee bank when issued.

Under the first offense, the 90-day presentment period is not expressly provided, while such
period is an express element of the second offense.

What are the general elements of Bouncing Checks?

drawing and issuance of any check to apply on account or for value;

2. knowledge by the maker, drawer, or issuer that at the time of issue he did not have sufficient
funds in or credit with the drawee bank for the payment of such check in full upon
presentment; and
3. said 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.
What are the applicable penalties?
Courts have a discretion of imposing the following: (1) imprisonment only; (2) fine only; or (3) fine
and imprisonment.
What is the second element of the offense, i.e., knowledge of insufficiency of fund?
Its presumed that the issuer knew that about the insufficiency of funds if, after 5 days from notice of
dishonor, he fails to pay or make arrangement for the payment of the check. It must be proved that
the accused was actually notified that the check was dishonored, and that he or she failed, within 5
banking days from receipt of the notice, to pay the holder of the check the amount due thereon or to
make arrangement for its payment.
What is the 5-day grace period and why is this provided?
The debtor-accused has 5 days to make good the check or pay its value. The debtor may also make
arrangements for the payment of the check (e.g., bank transfers) within the same period. The law
gives the accused an opportunity to satisfy the amount indicated in the check to avoid a potential
criminal case.
When does the 5-day period start to run?
The period starts to run from receipt of the notice of dishonor. This is why many debtors hide so that
they wont be served with a notice of dishonor.
What is the form of the notice of dishonor?
The notice of dishonor must be in writing. A mere oral notice to the drawer or maker of the dishonor
of his check is not enough. Without a written notice of dishonor of the checks, there is no way of
determining when the 5-day grace period would start and end.
Is the rule on written notice absolute?
A verbal and indirect notice, however, was found to be sufficient in a subsequent case. Myrna [the
complainant] did not know the address of the accused. Myrna immediately informed Josefina [the
"best friend of the accused] about the dishonored checks. Josefina told Myrna not to worry and
repeated her assurance that the accused is her best friend and a good payer. Myrna tried to get the
address from Josefina, but the latter refused and instead made the assurance that she will inform
petitioner that the checks were dishonored.
It is clear that there was no written notice given to the accused. It is also clear that no notice, even a
verbal notice, was given directly to the accused. Still, the court found that the verbal notice was
sufficient.
What is the third element, i.e., fact of dishonor?
The introduction in evidence of any unpaid and dishonored check, having the drawees 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.
For instance, the prosecution presented the checks which were stamped with the words ACCOUNT
CLOSED, supported by the returned check tickets issued by the depository bank stating that the
checks had been dishonored. The documents constitute prima facie evidence that the drawee bank
dishonored the checks, and no evidence was presented to rebut the claim.
Could the same check give rise to a separate charge for estafa?
Yes. Estafa by means of bouncing checks is separately punished under under Article 315 of the
Revised Penal Code. An issuer of one worthless check could be separately charged with two offenses.
What are the elements of this kind of estafa?
For a person to be convicted with estafa by issuing a worthless check, the following must be present:
(1) postdating or issuance of a check in payment of an obligation contracted at the time the check was
issued; (2) insufficiency of funds to cover the check; and (3) damage to the payee.
How is this estafa different from BP 22?
The mere issuance of a worthless check is core of BP 22. It doesnt require deceit or fraud. In estafa,
the issuance of the worthless check must be the very reason for the release of the goods or
performance of a service (or some other obligation). Deceit must be present, which is why there
could be no estafa if the bounced check was issued as payment of a pre-existing obligation (for
instance, payment of a past debt or past delivery).
(Sources: Bautista vs. Court of Appeals, Lozano vs. Martinez, Caras vs. Court of Appeals, Bax vs.
People, King vs. People, Yulo vs. People)