LAW ON SECRECY OF BANK DEPOSITS

Purposes:
1. To encourage people to deposit their money in banks
2. To discourage private hoarding so that the banks may lend out the money and
assist in the economic development of the country

Prohibited Acts:
1. The EXAMINATION AND INQUIRY OR LOOKING into all deposits of whatever
nature with
banks or banking institutions in the Philippines (including investments in bonds
issued by the Governments or its political subdivisions and instrumentalities) by:
i. any person or
ii. any government official or
iii. any bureau or
iv. any office
2. the DISCLOSURE by:
i. Any OFFICIAL of any banking institution or
ii. Any EMPLOYEE of any banking institution to ANY UNAUTHORIZED
PERSON of any information concerning the said deposit.

Instances When Examination or Disclosure of Information about Bank Deposits

is Allowed
1. upon WRITTEN PERMISSION OF THE DEPOSITOR
2. in cases of IMPEACHMENT
3. upon order of a competent court in cases of
i. BRIBERY of public officials or
ii. DERELICTION of duty of public officials
4. in cases where the money deposited or invested is the subject matter of the
litigation

Garnishment of Bank Deposits

 garnishment of bank deposits will not violate the bank secrecy law

Application of the Secrecy of Bank Deposits on Safety Deposit Boxes

 the prohibition against inquiry or disclosure of bank accounts under the Secrecy of
Bank Deposits Law does NOT to apply to safety deposit boxes2

Special Note on Foreign Currency Deposits

 the Foreign Currency Deposit Act (RA 6426) allows any person to deposit,, and
banks to accept for deposit ANY foreign currency ACCEPTABLE AS PART OF OUR
INTERNATIONAL RESERVE
 unlike ordinary bank deposits, foreign currency deposits enjoy the following unique
privileges:

1. absolute confidentiality
 EXCEPT UPON WRITTEN PERMISSION OF THE DEPOSITOR, a foreign currency
deposit cannot be examined, inquired, or looked into by any person or office,
whether public or private, or judicial, administrative or legislative
2. numbered accounts
 authorized banks may adopt a numbered account system for recording and
servicing the said deposits
3. rate of interest
 authorized banks are free to pay any rate of interest
4. taxes
 the interest received by an individual residents, domestic and resident
foreign corporations from such deposits are subjected to a 7.5% final income
tax
 there is NO final income tax on the interest received by non-resident
individuals and non-resident
foreign corporations
5. court order or process
 EXEMPT from attachment, garnishment or any other order or process of any
court, legislative or administrative body, or government agency whatsoever
6. new enactment or regulation
 in the event that a new enactment or regulation is issued decreasing the
rights granted under the law, such new enactment or regulation

 SHALL NOT APPLY TO FOREIGN CURRENT DEPOSITS ALREADY MADE or existing at

the time of issuance of such new enactment or legislative

PHILIPPINE DEPOSIT INSURANCE CORPORATION ACT

Purposes:
1. to protect depositors from bank failures and other similar situations preventing banks
from paying out deposits
2. to encourage people to deposit in banks

PDIC
 the government-owned entity mandated by law to insure the depositors of all banks
entitled to the benefits of insurance under this Act

Deposit Liabilities Required to be Insured by the PDIC

 the following deposits are required to be insured with the PDIC:
1. deposit liabilities of ANY BANK engaged in the business of receiving deposits
2. deposit liabilities of ANY BANKING INSTITUTION engaged in the business of
receiving deposits

Deposit - the unpaid balance of MONEY or its equivalent RECEIVED BY A BANK in the usual course
of business and for which it has given or is obliged to give credit to a commercial, checking,
savings, time or thrift account for which is evidenced by a passbook, check and/or certificate of
deposit, printed or issued in accordance with Central Bank rules and regulations and other
applicable laws

General Rule: Any obligation of a bank which is payable at the office of the bank LOCATED
OUTSIDE of the Philippines shall NOT BE A DEPOSIT for any purpose of this Act or included as part
of the total deposits or of insured deposit
Exception: any insured bank incorporated under Philippine law which maintains a branch outside
the Philippines if approved by the PDIC Board of Directors may elect to include for insurance its
deposit obligations payable only at such branch
 trust funds are not considered as insured deposits
 a safety deposit box is not insured under the PDIC Law for 2 reasons
1. it is not within the definition of deposit
2. a moral hazard is created if the safety deposit box is covered; it would encourage
morally honest people to be dishonest since only they would know what’s inside the box

Termination of Insured Status

1. when the banks fails or refuse to pay assessment
 the bank has 30 days from the written notice given by the PDIC to correct such failure or
refusal, otherwise, the insured status of the bank shall be terminated
a) written notice of such termination shall be given to each depositor by the bank
b) PDIC shall publish the notice of termination of the insured status of the bank
 after termination of the insured status of the bank, deposits shall continue to be insured for
a period of 90 days

2. when the banks become insolvent

Instance When PDIC Becomes Liable to Pay the Insured Deposit
 PDIC is liable to pay the insured deposits in a bank when the bank is closed on account of
INSOLVENCY
 a bank is ordered closed on account of insolvency when ORDERED CLOSED by the Monetary
Board of the Bangko Sentral ng Pilipinas pursuant sec. 30 of the BSP Law

Extent of PDIC’s Liability to a Bank Depositor

 maximum coverage of P100,000 per depositor per capacity
 all these types of deposit are covered: demand, savings, and time deposits; if a depositor
has all 3 types of accounts, he can only recover up to P100,000 being considered as one
depositor
 in determining the amount due to any depositor, all deposits in the bank maintained in the
same capacity and the same right for his benefit either in his own name or in the name of
others shall be added together
 the liability of the PDIC is per bank and NOT per branch

Deposits in Foreign Currency

 deposit obligations in foreign currency of any insured bank are insured

Manner of Payment of the Insured Deposits

1. cash
2. making available to each depositor a transferred deposit in another insured bank in an
amount equal to the insured deposit of such depositor
Rules Regarding Deposits in Foreign Currency
1. the deposit in foreign currency shall be CONVERTED TO ITS EQUIVALENT
amount in Philippine pesos at the interbank rate obtaining on the DATE THE BANK WAS
CLOSED OR ON INSOLVENCY
 2. insurance coverage shall NOT EXCEED P40,000 for each depositor
3. liability of PDIC to each depositor shall be payable in Philippine pesos

Transferred Deposit
 a deposit in an insured bank made available to a depositor by the PDIC as payment of the
insured deposit of such depositor in a closed bank and ASSUMED BY ANOTHER INSURED
BANK
 in a transferred deposit, it is actually PDIC’s money which is used to pay except that it is
coursed through another bank
 this is done for 2 reasons
1. in order to keep the money within the banking system keeping your money hidden
under your mattress
2. if the amounts are substantial, for safety

Bar of Claim by Depositor

 must file a claim for the insured deposit with the PDIC within 18 months after the Monetary
Board ordered its closure
 the claimant must enforce the claim against the PDIC within 1 year after the 18 month
period mentioned
Effect of Payment to the Depositor of His Insured Deposit
1. PDIC shall be SUBROGATED to all rights of the depositor against the closed bank TO THE
EXTENT OF SUCH PAYMENT
 subrogation shall include the right on the part of PDIC to receive the dividends and
payments from the proceeds of the assets of such closed bank and recoveries on
account of stockholder’s liability as would have been payable to the depositor as a claim
for the insured deposits, but such depositor shall retain his claim for any insured portion
of his deposit
2. PDIC is DISCHARGED from liability of the insured deposit

Other Powers of PDIC

1. issue CEASE AND DESIST ORDERS to
a) an insured bank or
b) any of its directors or agents to correct
i. unsafe or unsound banking practices in conducting the business of the bank
 refers to any action or lack of action which in contrary to the generally accepted
standards of prudent operation, the possible consequences of which, if continued,
would result in abnormal risk of loss or damage to a bank, depositors and its
shareholders or even the depletion of the Insurance fund administered by the PDIC
ii. violations of any law or regulation to which the insured bank is subject
iii. violations of the provisions of the provisions of the PDIC Law as amended, or nay
order, rule or instruction issued by the PDIC or any written condition imposed by the
PDIC in connection with any transaction with the PDIC
 the purpose of the Cease and Desist order is to protect the depositors and the
PDIC against existing or potential risk exposures from the said practices or
violations

2. provide FINANCIAL ASSISTANCE to an insured bank in danger of closing

3. BORROW from the BSP and from any bank designated as depository or fiscal agent of the
Philippine Government

4. ISSUE BONDS, DEBENTURES AND OTHER OBLIGATIONS with the approval of the President of
the Philippines

5. act as RECEIVER of any banking corporation

UNCLAIMED BALANCES LAW (R.A. 3936) Amended by

PD No. 679
Elements of Unclaimed Balances

1.Includes credits or deposits of:

a.Money

b.Bullion

c.Security

d.Other evidence of indebtedness of any kind, and interest thereon

2.The credit or deposit is made with banks, buildings and loan associations, and
trust corporations

3.The credit or deposit is in favor of any person known to be a.dead or b.who has
not made further deposits or withdrawals during the preceding ten years or more.

 Unclaimed Balances shall be forwarded to the Treasurer of the Philippines with

a statement, under oath, showing the:

(a) The names and last known place of residence or post office addresses of
the
persons in whose favor such unclaimed balances stand;

(b) The amount and the date of the outstanding unclaimed balance and
whether the same is in money or in security, and if the latter, the nature of
the same;

(c) The date when the person in whose favor the unclaimed balance stands
died, if known, or the date when he made his last deposit or withdrawal; and

(d) The interest due on such unclaimed balance, if any, and the amount
thereof. A copy of the above sworn statement shall be posted in a
conspicuous place in the premises of the bank, building and loan association,
or trust corporation concerned for at least sixty days from the date of filing
thereof.

 It shall be the duty of the Treasurer of the Philippines to inform the Solicitor
General from time to time the existence of unclaimed balances held by banks,
building and loan associations, and trust corporations.

 Whenever the Solicitor General shall be informed of such unclaimed balances,

he shall commence an action or actions in the name of the People of the
Republic of the Philippines in the Court of First Instance of the province or city
where the bank, building and loan association or trust corporation is located.

 If the president, cashier or managing officer of the bank, building and loan
association, or trust corporation neglects or refuses to make and file the sworn
statement required by this action, such bank, building and loan association, or
trust corporation shall pay to the Government the sum of five hundred pesos a
month for each month or fraction thereof during which such default shall
continue.
 THE ANTI-MONEY LAUNDERING ACT REPUBLIC ACT 9160, AS
AMENDED

What is money laundering?

 It is the act of transferring monetary proceeds derived from illicit activities into
funds with an apparently legal source.
 Under the AMLA, it is defined as a crime whereby the proceeds of an unlawful
activity are transacted thereby making them appear to have come from legitimate
sources (Sec. 4)

What is an unlawful activity?

 Unlawful activity refers to any act or omission or series or combination thereof
involving or having direct relation to the crimes enumerated under Sec. 3(i) of the
AMLA.

Why do we need such a law?

 Money laundering compromises the stability, transparency, and efficiency of the
financial system and it undermines economic prosperity.
 Without a law against money laundering, crime rates will continually increase
because the success of a criminal enterprise is based on its ability to sanitize ill-
gotten gains by moving them through lax and corrupt financial systems.
 The Philippines is included in the list of Non-Cooperative Countries and Territories
issued by the Financial Action Task Force prior to the enactment of the law. This
situation is not good for the economy

Declaration of State 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 prosecution of persons involved in money laundering activities
wherever committed (Sec. 2).

Covered institutions are classified as follows:

 Entities supervised and/or regulated by the Bangko Sentral ng Pilipinas
 Entities supervised and/or regulated by the Insurance Commission
 Entities supervised and/or regulated by the Securities and Exchange Commission
 Persons included under RA 10365
Specifically, Sec. 3 (a) Covered persons’, natural or juridical, refer to:
1. banks, non-banks, quasi-banks, trust entities, foreign exchange dealers,
pawnshops, money changers, remittance and transfer companies and other
 similar entities and all other persons and their subsidiaries and affiliates
supervised or regulated by the Bangko Sentral ng Pilipinas (BSP);
2. insurance companies, pre-need companies and all other persons
supervised
or regulated by the Insurance Commission (IC);
3. (i) securities dealers, brokers, salesmen, investment houses and other
similar
persons managing securities or rendering services as investment agent,
advisor, or consultant,(ii) mutual funds, close-end investment companies,
common trust funds, and other similar persons, and (iii) other entities
administering or otherwise dealing in currency, commodities or financial
derivatives based thereon, valuable objects, instruments or property
supervised or regulated by the Securities and Exchange Commission (SEC);
4. jewelry dealers in precious metals, who, as a business, trade in precious
metals,
for transactions in excess of One million pesos (P1,000,000.00);
5. jewelry dealers in precious stones, who, as a business, trade in precious
stones,
for transactions in excess of One million pesos (P1,000,000.00);
6. company service providers which, as a business, provide any of the
following
services to third parties: (i) acting as a formation agent of juridical persons;
(ii) acting as (or arranging for another person to act as) a director or
corporate secretary of a company, a partner of a partnership, or a similar
position in relation to other juridical persons; (iii) providing a registered office,
business address or accommodation, correspondence or administrative
address for a company, a partnership or any other legal person or
arrangement; and (iv) acting as (or arranging for another person to act as) a
nominee shareholder for another person; and
7. persons who provide any of the following services:
(i) managing of client money, securities or other assets;
(ii management of bank, savings or securities accounts;
(iii) organization of contributions for the creation, operation or
management of companies; and
(iv) creation, operation or management of juridical persons or
arrangements, and buying and selling business entities.

Note: the term ‘covered persons’ shall exclude lawyers and accountants 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: Provided, they are authorized to practice in the Philippines and shall continue
to be subject to the provisions of their respective codes of conduct and/or professional
responsibility or any of its amendments.
What are the obligations of covered institutions?
Under Sec. 9 of the AMLA, the following are their obligations:
 Customer Identification
 Record Keeping
 Reporting of Covered and Suspicious Transactions Customer Identification

 Covered institutions shall establish and record the true identity of their clients
based on official documents and shall maintain a system of verifying the true
identity of their clients.
 For natural persons, specified minimum information and documents such as
personal and work information and government-issued identification documents are
required.
 For juridical persons, their legal existence, organizational structure, and identity and
authority of all persons acting on their behalf should be verified. Specified minimum
information and documents such as articles of incorporation or partnership by laws,
list of directors, and principal stockholders are required.

Record Keeping
 All records of transactions of covered institutions shall be maintained and safely
stored for 5 years from the date of transactions.
 With respect to closed accounts, records on customer identification, account files,
and business correspondence shall be preserved and safely stored for at least 5
years from the date the account was closed.
 However, if a money laundering case has been filed, the records of the transaction
shall be retained beyond 5 years until the case has been finally resolved or
terminated by the court.

Reporting of Covered and Suspicious Transactions

What is a transaction?
 It refers to any act establishing any right or obligation or giving rise to any
contractual or legal relationship between the parties thereto. It also includes any
movement of funds by any means with covered institutions (Sec. 30). Only covered
and suspicious transactions are subject to the AMLA.

What is a covered transaction?

 It is a transaction in cash or other equivalent monetary instrument involving a total
amount in excess of Five Hundred Thousand Pesos within one banking day.
What are suspicious transactions?
 These are transactions, regardless of amount, where any of the following
circumstances exists:
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 to 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 institution;
6. The transaction is in any way related to an unlawful activity or any money
laundering activity or offense under the AMLA that is about to be, is being, or
has been committed; or
7. Any transaction similar, analogous, or identical to any of the foregoing.

 Covered institutions shall report to the Anti-Money Laundering Council (AMLC) all
covered and suspicious transactions within 5 working days from the date of the
transaction unless the AMLC prescribes a longer period not exceeding 15 days.
 Reports shall be made in the forms prescribed by the AMLC and submitted
electronically.

Is there a violation of the Secrecy of Bank Deposits (SBD) and similar laws when
reporting covered or suspicious transactions?
 None. When reporting covered or suspicious transactions to the AMLC, covered
institutions and their officers and employees, shall not be deemed to have violated
the SBD and similar laws.
 In fact, no administrative, criminal, or civil proceedings shall lie against any person
for having made a covered or suspicious 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 law. This is a safe harbor
provision.
 Covered institutions and their officers and employees are however prohibited from
communicating, directly or indirectly, in any manner or by any means, to any
person, entity, the media, that a covered or suspicious transaction report was
made, the contents thereof, or any information in relation thereto. Neither may such
reporting be published or aired in any manner or form by the mass media,
electronic mail, or other similar devices. In case of violation, the concerned officers
and employee of the covered institutions or media shall be held criminally liable.
 RA 8293 INTELLECTUAL PROPERTY CODE

 Approved by President Fidel Ramos

 January 1, 199
 It has no retroactive effect

State Policies

 It shall protect and secure the exclusive rights of scientists, inventors, artists and
other gifted citizen to their intellectual property and creations, particularly when
beneficial to the people
 The state shall promote the diffusion of knowledge and information for the
promotion of national development and progress and the common good.
 To streamline administrative procedures of registering patents, trademarks and
copyright
 To liberalize the registration on the transfer of technology
 To enhance the enforcement of intellectual property rights in the Philippines.

Intellectual Property Rights

1. Copyright and related rights

2. Trademarks and service marks

3. Geographic indications

4. Industrial designs

5. Patents

6. Layout designs of integrated circuits

7. Protection of undisclosed information

 Trademarks – any visible sign capable of distinguishing the goods or services of an

enterprise and shall include a stamped or marked container of goods.
 Tradename – the name or designation identifying or distinguishing an enterprise.
 Copyright- confined to literary and artistic works which are original intellectual
creations in the literary and artistic domain protected from the moment of their
creation.
 Patentable invention – any technical solution of a problem in any field of human
activity which is new involves an inventive step & is industrially applicable.

Doctrine of secondary meaning

- A word or phrase originally incapable of exclusive appropriation with reference to an

article in the market might nevertheless have been used for so long & so exclusively by
one producer with reference to his article that, in the trade and to that branch of the
purchasing public, the word or phrase has come to mean that the article was his property.

Technology Transfer Agreement

 Contracts or agreements involving the transfer of systematic knowledge for the

manufacture of a product, the application of a process, or rendering of a service
including management contracts.
 A licensing contract between an intellectual property right owner, as the licensor
and a second party as the licensee who was granted the authority to commercially
exploit the same intellectual property right under specified terms and conditions.
 Failure to comply with the mandatory and prohibited clauses would automatically
render the TTA, UNENFORCEABLE.
 Except in certain cases, it may still be valid if the same is approved and registered
with the DITT Bureau.

Patents (Sec. 21- 120)

 Patent- A set of exclusive rights granted by a state to an individual or his assignee

for a fixed period of time in exchange for a disclosure of an invention.

Three-fold purpose

1. To foster and reward invention

2. It promotes disclosures of inventions to stimulate further invention and to permit

the public to practice the invention once the patent expires;

3. The stringent requirements for patent protection seek to ensure that ideas in the
public domain remain there for the free use of the public.

 Ultimate goal of a patent system: To bring new designs and technologies into the
public domain through disclosures.

Patentable Invention – any technical solution of a problem in any field of human activity
which is new, involves an inventive step and is industrially acceptable.

Non-Patentable inventions- inventions which are not patentable and are excluded from
patent protection.

1. Discoveries, scientific theories and mathematical methods, and in the case of drugs and
medicines, the mere discovery of a new form or new property of a known substance which
does not result in the enhancement of the known efficacy of that substance, or the mere
discovery of any new property or new use for a known substance, or the mere use of a
known process unless such known process results in a new product that employs at least
one reactant.

2. Schemes, rules and methods of performing mental acts, playing games or doing
business, and programs for computers;

3. Methods for treatment of the human or animal body by surgery or therapy and
diagnostic methods practiced on the human or animal body. This provision shall not apply
to products and composition for use in any of these methods;

4. Plant varieties or animal breeds or essentially biological process for the production of
plants or animals. This provision shall not apply to microorganisms and non-biological and
microbiological processes.

5. Aesthetic creations

6. Anything which is contrary to public order or morality.

Elements Of Patentability

1. Novelty- an invention shall not be considered new if it forms part of a prior art;

2. Inventive step

3. Industrially acceptable

Filing Date – only when all the requirements provided under Section 40 are complied
with:

a. An express or implicit indication that a Philippines patent is sought;

b. Information identifying the applicant

c. Description of the invention and one more claims in Filipino or English

 Failure to comply with the requirements, the application shall be considered

withdrawn.
 If the date of filing cannot be accorded, the applicant shall be given an opportunity
to correct the deficiencies, otherwise it shall be considered as withdrawn.

Priority Date

 A person who has previously applied for the same invention in another country
which by treaty, convention or law affords similar privileges to Filipino citizens shall
be considered as filed as of the date of filing the foreign application (sec.31)
o The local application expressly claims priority
o Filed within 12 months from the date the earliest foreign application was filed
 o A certified copy of the foreign application together with an English translation
is filed within 6 months from the date of filing in the Philippines.
 “First to file” Rule
 -In case of two or more applications for patent over the same invention, an
application with latter local filing date may still be the preferred application over a
previous local filing date provided that it has an earlier foreign application assuming
that the requirements are all complied with.

Non-Prejudicial Disclosure

 Novelty requires that the thing is not yet known to anyone besides the inventor.
There are however disclosure which will not prejudice the application:

1. Made during the 12 months preceding the filing date or the priority of the
application;

2. The disclosure was made by any of the ff. persons:

a. The inventor

b. Patent office and the information was contained in i.) another application
filed by the inventor and should not have been disclosed by the office. Ii) in
an application filed without the knowledge or consent of the inventor by a
third party which obtained the information directly or indirectly from the
inventor;

c. A third party which obtained the information directly or indirectly from the
inventor.

Ownership of Patent

1. If two or more persons have made the invention separately and independently of each
other, the right to the patent shall belong to the person who filed an application for such
invention

2. If there are two or more application for the same invention, to the applicant who has the
earliest filing date, or the earliest priority date.

Inventions Created Pursuant To A Commission Or Employment

1. Where the invention is made pursuant to a commission, the person who commissions
the work shall be the owner of the patent, unless there was an agreement to the contrary

2. When an invention is made by an employee in the course of the employment contract:

a. The employee, if the inventive step is not part of his regular duties even if the
employee uses the time and materials of the employer
 b. The employer, if the invention is the result of the performance of his regularly
assigned duties, unless there is an agreement, express or implied to the contrary.

Right of Priority

 A person who has previously applied for the same invention in another country
which by treaty, convention or law affords similar privileges to Filipino citizens shall
be considered as filed as of the date of filing the foreign application (sec.31)
 The local application expressly claims priority
 Filed within 12 months from the date the earliest foreign application was filed
 A certified copy of the foreign application together with an English translation is
filed within 6 months from the date of filing in the Philippines

Procedure For The Grant Of Patent

1. Filing of the application

 Must be in Filipino or English and shall contain the ff:

o A request for the grant of a patent;

o A description of the invention

o Drawings necessary for the understanding of the invention

o One or more claims

o An abstract

 No patent may be granted, unless the application identifies the inventor. If the
applicant is not the inventor, the office may require the submission of said authority.
 The application must disclose the invention is such a manner sufficiently clear and
complete for it to be carried out by a person skilled in the art.
 An application which concerns a microbiological process and involves the use of
microorganism which cannot be sufficiently disclose in the application and such
material is not available to the public, such application must be supplemented by a
deposit of such material.

RECTO LAW
What is the Recto Law?

 People who purchase personal property, as opposed to real property, on installment

are protected by the Recto Law. Authored in 1933 by the “Great Academician,”
Senator Claro M. Recto, the statute was called Act No. 4122, otherwise known as
the Installment Sales Law. Its main purpose is to prevent potential abuses by the
 seller in the event that the buyer is unable to make further installments for a
property.
 It was passed by the Philippine Legislature on December 9, 1933. The law amended
a certain portion of the Civil Code of 1889 (Código Civil) through the insertion of
Section 1454-A.
 The Civil Code of 1889 itself was repealed by Republic Act No. 386 which took effect
in 1950. It became known as the Civil Code of the Philippines. This expanded
Section 1454-A into what are now Articles 1484 to 1486 of the Civil Code. These are
the provisions that currently contain the precepts of the Recto Law.
 Although primarily for buyers of personal property in installments, it was used in a
particular case involving a contract of lease even without a clear option to buy. The
agreement was not actually to lease the personal property but to acquire it upon
the fulfillment of the purported contract.

 The Recto Law, on the other hand, gives the latter three alternatives instead of cumulative
choices to terminate a contract:
1. Demand payment
2. Cancel the sale
3. Foreclose the mortgage
4. Note that the buyer must be in default by two or more installments before any of
the remedies may be exercised.

To whom does the Recto Law apply?

 It applies to both the buyer and the seller. In some cases, the parties can also be
regarded as the lessor and lessee. It can also govern certain transactions entered
into by a mortgagor and mortgagee of personal properties.

 The buyer (or lessee or mortgagor) can select from the three alternatives as well,
insofar as they are applicable. This law will also govern leases with an option to
purchase, such as in the aforementioned case. However, the Recto Law does not
cover straight sales wherein a down payment is given and the remaining balance is
agreed to be fulfilled through a single payment.

 Even if the Recto Law was authored to prevent abuses by mortgagees (lenders), it is
quite possible that a mortgagor in default may increase his liability. This happens
when the mortgagor fails to pay two or more installments and refuses to return the
personal property upon the seller’s demand. Should there be an action for replevin
to recover such property and the court rules in favor of the seller, the buyer might
have to pay costs and attorney’s fees as well.

 The seller could likely be penalized in similar fashion should the Recto Law be
violated. One remedy would prevent the seller from exercising the others. For
 instance, if the buyer has already returned the personal property to the seller, the
seller can no longer try to collect the remaining installments. This would be viewed
as an unnecessary legal proceeding should the seller pursue more than one remedy
in court. It would cause the buyer to make additional needless expenses which will
likely be paid for by an erring seller.

 Although a great deal of effort and research was put into the creation of this article,
Lamudi Philippines always advises home buyers and future property owners to
consult with professionals, such as licensed real estate brokers and attorneys, to
ensure their real estate transactions are properly and promptly processed.

How is it different from the Maceda Law?

The main contrast between the two statutes lies in its application. Articles 1484 to 1486 of
the Civil Code govern sales on installment of personal property. On the other hand, the
Maceda Law or Republic Act No. 6552 applies to purchasers of real property on an
installment basis. The latter is also known as the Realty Installment Buyer Act and
contemplates residential properties in particular.

MACEDA LAW
 The Maceda Law requires certain requisites before a purchaser of real property can
benefit from its provisions. Those who have paid less than two years’ worth of
installments only have a sixty-day grace period to satisfy an installment that has
become due. Failure to pay allows the seller to send the buyer a notice to rescind
the contract, which may be cancelled after thirty days from its receipt.

 A buyer who has paid more than two years’ worth of installments can have a grace
period of one month for every year paid, provided that this is exercised only once
every five years. If cancelled, the purchaser may recover 50% of the payments
made with an additional 5% for every year after five years.

ELECTRONIC COMMERCE ACT

 Republic Act 8792, was signed into law last June 14, 2000. It is a landmark
legislation in the history of the Philippines. Not only has this bill made the
country a legitimate player in the global marketplace. The Philippine Internet
community has played a major role in pushing for its passage. The law took
effect last June 19, 2000.
  With the Philippines relaxed stock market listing rules plus a proposed
vibrant investment priorities program in place, Filipinos here and abroad, and
its foreign partners, have something to look forward for.

Here Are The Salient Features Of Republic Act 8792:

1. It gives legal recognition of electronic data messages, electronic documents,

and electronic signatures. (section 6 to 13)

2. Allows the formation of contracts in electronic form. (section 16)

3. Makes banking transactions done through ATM switching networks absolute

once consummated. (section 16)

4. Parties are given the right to choose the type and level of security methods that
suit their needs. (section 24)

5. Provides the mandate for the electronic implementation of transport documents

to facilitate carriage of goods. This includes documents such as, but not limited to,
multi-modal, airport, road, rail, inland waterway, courier, post receipts, transport
documents issued by freight forwarders, marine/ocean bill of lading, non-
negotiable seaway bill, charter party bill of lading. (section 25 and 26)

6. Mandates the government to have the capability to do e-commerce within 2

years or before June 19, 2002. (section 27)

7. Mandates RPWeb to be implemented. RPWeb is a strategy that intends to

connect all government offices to the Internet and provide universal access to the
general public. The Department of Transportation and Communications, National
Telecommunications Commission, and National Computer Center will come up with
policies and rules that shall lead to substantial reduction of costs of
telecommunication and Internet facilities to ensure the implementation of RPWeb.
(section 28)

8. Made cable, broadcast, and wireless physical infrastructure within the activity of
telecommunications. (section 28)

9. Empowers the Department of Trade and Industry to supervise the development

of e-commerce in the country. It can also come up with policies and regulations,
when needed, to facilitate the growth of e-commerce. (section 29)

10. Provided guidelines as to when a service provider can be liable. (section 30)
11. Authorities and parties with the legal right can only gain access to electronic
documents, electronic data messages, and electronic signatures. For
confidentiality purposes, it shall not share or convey to any other person. (section
31 and 32)

12. Hacking or cracking, refers to unauthorized access including the introduction of

computer viruses, is punishable by a fine from 100 thousand to maximum
commensurating to the damage. With imprisonment from 6 months to 3 years.
(section 33)

13. Piracy through the use of telecommunication networks, such as the Internet,
that infringes intellectual property rights is punishable. The penalties are the same
as hacking. (section 33)

14. All existing laws such as the Consumer Act of the Philippines also applies to e-
commerce transactions. (section 33)

EASE OF DOING BUSINESS AND EFFICIENT

GOVERNMENT DELIVERY ACT

A) POLICY

Amending Republic Act No. 9485 or the Anti-Red Tape Act of 2007, Republic Act No. 11032
also known as Ease of Doing Business and Efficient Government Service Delivery Act of
2018 mandates all government offices and agencies including local government units
(LGUs), Government-Owned or -Controlled Corporations (GOCCs) and other government
instrumentalities to provide services covering business and non-business related
transactions, which adopts simplified procedures that will reduce red tape and expedite
transactions in government.
B) CITIZEN’S CHARTER

Government agencies and instrumentalities shall set up the most current and updated
service standards to be known as the Citizen’s Charter in the form of information
billboards, which shall be posted at the main entrance of offices or at the most
conspicuous place, in their respective websites and in the form of published materials
written in English, Filipino, on in the local dialect.

C) DEFINITION OF TERMS

(1) Action— refers to the written approval or disapproval made by a government office or
agency on the application or request submitted by an applicant or requesting party for
processing;

(2) Business-related transactions— a set of regulatory requirements that a business

entity must comply with to engage, operate or continue to operate a business, such as,
but not limited to, collection or preparation of a number of documents, submission to
national and local government authorities, approval of application submitted, and receipt
of a formal certificate or certificates, permits, licenses which include primary and
secondary, clearances and such similar authorization or documents which confer eligibility
to operate or continue to operate as a legitimate business;

(3) Complex transactions—applications or requests submitted by applicants or

requesting parties of a government office which necessitate evaluation in the resolution of
complicated issues by an officer or employee of said government office, such transactions
to be determined by the office concerned;

(4) Fixer—any individual whether or not officially involved in the operation of a

government office or agency who has access to people working therein, and whether or
not in collusion with them, facilitates speedy completion of transactions for pecuniary gain
or any other advantage or consideration;

(5) Government service—the process or transaction between applicants or requesting

parties and government offices or agencies involving applications for any privilege, right,
reward, license, clearance, permit or authorization, concession, or for any modification,
renewal or extension of the enumerated applications or requests which are acted upon
in the ordinary course of business of the agency or office concerned;

(6) Highly technical application—an application which requires the use of technical
knowledge, specialized skills and/or training in the processing and/or evaluation thereof;

(7) Nonbusiness transactions— all other government transactions not falling under
Definition (2);
(8) Officer or employee—a person employed in a government office or agency required
to perform specific duties and responsibilities related to the application or request
submitted by an applicant or requesting party for processing;

(9) Processing time—the time consumed by an LGU or national government agency

(NGA) from the receipt of an application or request with complete requirements,
accompanying documents and payment of fees to the issuance of certification or such
similar documents approving or disapproving an application or request;

(10) Red tape—any regulation, rule, or administrative procedure or system that is

ineffective or detrimental in achieving its intended objectives and, as a result, produces
slow, suboptimal, and undesirable social outcomes;

(11) Regulation—any legal instrument that gives effect to a government policy

intervention and includes licensing, imposing information obligation, compliance to
standards or payment of any form of fee, levy, charge or any other statutory and
regulatory requirements necessary to carry out activity; and

(12) Simple transactions—applications or requests submitted by applicants or

requesting parties of a government office or agency which only require ministerial actions
on the part of the public officer or employee, or that which present only inconsequential
issues for the resolution by an officer or employee of said government office.”