PDIC vs. Aquero

SUPREME COURT REPORTS ANNOTATED VOLUME 283 1/19/22, 8:59 PM
462 SUPREME COURT REPORTS ANNOTATED

Philippine Deposit Insurance Corp. vs. Court of Appeals
*
G.R. No. 118917. December 22, 1997.
PHILIPPINE DEPOSIT INSURANCE CORPORATION,

petitioner, vs. COURT OF APPEALS, ROSA AQUERO,
GERARD YU, ERIC YU, MINA YU, ELIZABETH
NGKAION, MERLY CUESCANO, LETICIA TAN, FELY
RUMBANA, LORNA ACUB, represented by their Attorney-
in-Fact, JOHN FRANCIS COTAOCO, respondents.
Banks and Banking; Philippine Deposit Insurance Corporation

(PDIC); The liability of the PDIC for insured deposits is statutory
and, under Republic Act No. 3591, as amended, such liability rests
upon the existence of deposits with the insured bank, not on the
negotiability or non-negotiability of the certificates evidencing these
deposits.·Whether the CTDs in question are negotiable or not is,
however, immaterial in the present case. The Philippine Deposit
Insurance Corporation was created by law and, as such, is governed
primarily by the provisions of the special law creating it. The
liability of the PDIC for insured deposits therefore is statutory and,
under
_______________
* FIRST DIVISION.
463
VOL. 283, DECEMBER 22, 1997 463
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Republic Act No. 3591, as amended, such liability rests upon the
existence of deposits with the insured bank, not on the negotiability
or non-negotiability of the certificates evidencing these deposits.
Same; Same; The deposit liability of PDIC is determined by the

provisions of R.A. No. 3591, and statements in the certificates that
the same are insured by PDIC are not binding upon the latter.·We
disagree with respondent courtÊs rationale. The fact that the
certificates state that the certificates are insured by PDIC does not
ipso facto make the latter liable for the same should the contingency
insured against arise. As stated earlier, the deposit liability of PDIC
is determined by the provisions of R.A. No. 3519, and statements in
the certificates that the same are insured by PDIC are not binding
upon the latter. x x x The mere fact that a certificate recites on its
face that a certain sum has been deposited, or that officers of the
bank may have stated that the deposit is protected by the guaranty
law, does not make the guaranty fund liable for payment, if in fact a
deposit has not been made x x x. The banks have nothing to do with
the guaranty fund as such. It is a fund raised by assessments
against all state banks, administered by officers of the state to
protect deposits in banks. x x x
Same; Same; In order that a claim for deposit insurance with

the PDIC may prosper, a corresponding deposit must be placed in the
insured bank.·In order that a claim for deposit insurance with the
PDIC may prosper, the law requires that a corresponding deposit be
placed in the insured bank. This is implicit from a reading of the
following provisions of R.A. 3519: SECTION 1. There is hereby
created a Philippine Deposit Insurance Corporation x x x which
shall insure, as provided, the deposits of all banks which are
entitled to the benefits of insurance under this Act x x x. (Italics
supplied). x x x SEC. 10 (a) x x x x x x (c) Whenever an insured
bank shall have been closed on account of insolvency, payment of
the insured deposits in such bank shall be made by the Corporation
as soon as possible x x x. (Italics supplied.)
Same; Same; Words and Phrases; A deposit as defined in

Section 3(f) of R.A. 3591, may be constituted only if money or the
equivalent of money is received by a bank.·A deposit as defined in
Section 3(f) of R.A. 3591, may be constituted only if money or

equivalent of money is received by a bank: SEC. 3. As used in this
Act·(f) The term „deposit‰ means the unpaid balance of money or
equivalent
464
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 or which is evidenced by passbook,
check and/or certificate of deposit printed or issued in accordance
with Central Bank rules and regulations and other applicable laws,
together with such other obligations of a bank which, consistent
with banking usage and practices, the Board of Directors shall
determine and prescribe by regulations to be deposit liabilities of
the Bank x x x. (Italics ours.)
Same; Same; Judgment; Appeals; Findings of the Court of

Appeals entirely grounded on speculation cannot bind the Supreme
Court.·Did RSB receive money or its equivalent when it issued the
certificates of time deposit? The Court of Appeals, in resolving who
between RSB and PFC issued the certificates to private
respondents, answered this question in the negative. A perusal of
the impugned decision, however, reveals that such finding is
grounded entirely on speculation, and thus, cannot bind this Court.
Same; Same; Where no deposit as defined in Section 3(f) of R.A.

No. 3591 came into existence, PDIC cannot be held liable for the
value of time deposit certificates.·These pieces of evidence
convincingly show that the subject CTDs were indeed issued
without RSB receiving any money therefor. No deposit, as defined
in Section 3(f) of R.A. No. 3591, therefore came into existence.
Accordingly, petitioner PDIC cannot be held liable for value of the
certificates of time deposit held by private respondents.
PETITION for review of a decision of the Court of Appeals.
The facts are stated in the opinion of the Court.

The Government Corporate Counsel for petitioner.
Cesar M. Cariño for Regent Savings & Loan Bank,
Inc.
David E, Calvario for Rosa Aquero, et al.
KAPUNAN, J.:
Petitioner Philippine Deposit Insurance Corporation

(PDIC) seeks the reversal of the decision of the Court of Ap-
465
VOL. 283, DECEMBER 22, 1997 465

peals affirming with modification the decision of the

Regional Trial Court holding petitioner liable for the value
of thirteen (13) certificates of time deposit (CTDs) in the
possession of private respondents.
The facts, as found by the Court of Appeals, are as
follows:
On September 22, 1983, plaintiffs-appellees invested in money

market placements with the Premiere Financing Corporation (PFC)
in the sum of P10,000.00 each for which they were issued by the
PFC corresponding promissory notes and checks. On the same date
(September 22, 1983), John Francis Cotaoco, for and in behalf of
plaintiffs-appellees, went to the PFC to encash the promissory notes
and checks, but the PFC referred him to the Regent Saving Bank
(RSB). Instead of paying the promissory notes and checks, the RSB,
upon agreement of Cotaoco, issued the subject 13 certificates of time
deposit with Nos. 09648 to 09660, inclusive, each stating, among
others, that the same certifies that the bearer thereof has deposited
with the RSB the sum of P10,000.00; that the certificate shall bear
14% interest per annum; that the certificate is insured up to
P15,000.00 with the PDIC; and that the maturity date thereof is on
November 3, 1983 (Exhs. „B,‰ „B-1‰ to „B-12‰).
On the aforesaid maturity dated (November 3, 1983), Cotaoco
went to the RSB to encash the said certificates. Thereat, RSB
Executive Vice President Jose M. Damian requested Cotaoco for a
deferment or an extension of a few days to enable the RSB to raise
the amount to pay for the same (Exh. „D‰). Cotaoco agreed. Despite
said extension, the RSB still failed to pay the value of the
certificates. Instead, RSB advised Cotaoco to file a claim with the
PDIC.
Meanwhile, on June 15, 1984, the Monetary Board of the Central
Bank issued Resolution No. 788 (Exh. Â2Ê, Records, p. 159)
suspending the operations of the RSB. Eventually, the records of
RSB were secured and its deposit liabilities were eventually
determined. On December 7, 1984, the Monetary Board issued
Resolution No. 1496 (Exh. Â1Ê) liquidating the RSB. Subsequently, a
masterlist or inventory of the RSB assets and liabilities was
prepared. However, the certificates of time deposit of plaintiffs-
appellees were not included in the list on the ground that the
certificates were not funded by the PFC or duly recorded as
liabilities of RSB.
On September 4, 1984, plaintiffs-appellees filed with the PDIC
their respective claims for the amount of the certificates (Exhs. „C,‰
„C-1‰ to „C-12‰). Sabina Yu, James Ngkaion, Elaine Ngkaion and
466

Jeffrey Ngkaion, who have similar claims on their certificates of

time deposit with the RSB, likewise filed their claims with the
PDIC. To their dismay, PDIC refused the aforesaid claims on the
ground that the Traders Royal Bank Check No. 299255 dated
September 22, 1983 for the amount of P125,846.07 (Exh. „B‰) issued
by PFC for the aforementioned certificates was returned by the
drawee bank for having been drawn against insufficient funds; and
said check was not replaced by the PFC, resulting in the
1
cancellation of the certificates as indebtedness or liabilities of RSB.
Consequently, on March 31, 1987, private respondents filed

an action for collection against PDIC, RSB and the Central
Bank.
On September 14, 1987, the trial court, declared the
Central Bank in default for failing to file an answer.
On May 29, 1989, the trial court rendered its decision
ordering the defendants therein to pay plaintiffs, jointly
and severally, the amount corresponding to the latterÊs
certificates of time deposit.

Both PDIC and RSB appealed. The Central Bank, on the
other hand, filed a petition for certiorari, prohibition and
mandamus before the Court of Appeals praying that the
writ of execution issued by the trial court against it be set
aside.
On February 8, 1995, the Court of Appeals rendered its
decision granting the Central BankÊs petition but
dismissing the appeals of PDIC and RSB. Hence, this
petition by PDIC assigning the following errors:
THE CA ERRED IN HOLDING THAT THE SUBJECT CTDS ARE

NEGOTIABLE INSTRUMENTS
II
THE CA ERRED IN HOLDING THAT THE CTDS WERE

ACQUIRED FOR VALUE AND CONSIDERATION
_______________
1 Rollo, pp. 30-31.
467
VOL. 283, DECEMBER 22, 1997 467

III
THE CA ERRED WHEN IT HELD THAT BECAUSE THE CTDS

STATE THAT THESE WERE INSURED, PETITIONER SHOULD
BE HELD LIABLE FOR THE SAME.
We deal jointly with petitionerÊs first and third assigned

errors.
Relying on this CourtÊs ruling in Caltex (Philippines),
Inc. v. Court
2
of Appeals and Security Bank and Trust
Company, the Court of Appeals concluded that the subject
CTDs are negotiable. Petitioner, on the other hand,
contends that the CTDs are non-negotiable since they do
not contain an unconditional promise or order to pay a sum

certain in money nor are they made payable to order or
bearer, as required by Section 1 of the Negotiable
Instruments Law.
Whether the CTDs in question are negotiable or not is,
however, immaterial in the present case. The Philippine
Deposit Insurance Corporation was created by law and, as
such, is governed3 primarily by the provisions of the special
law creating it. The liability of the PDIC for insured
deposits
4
therefore is statutory and, under Republic Act No.
3591, as amended, such liability rests upon the existence
of deposits with the insured bank, not on the negotiability
or nonnegotiability of the certificates evidencing these
deposits.
The authority for this conclusion finds support in
decisions by American state courts applying their
respective bank guaranty laws. Invariably, the plaintiffs in
these cases argued that the negotiability of the certificates
of deposit in their possession entitled them to be paid out of
the bank guaranty fund, a contention that the courts
uniformly rejected.
_______________
2 212 SCRA 448 (1992).

3 Section 4, Corporation Code.
4 Entitled „An Act Establishing The Philippine Deposit Insurance
Corporation, Defining Its Powers And Duties And For Other Purposes.‰
468

Thus, 5the plaintiffs in Fourth Nat. Bank of Wichita v.

Wilson argued that:
x x x the court should hold the certificates to be guaranteed because

they are negotiable instruments, and were acquired by the present
holders in due course; otherwise it is said certificates of deposit will
be deprived of the quality of commercial paper. Certificates of
deposit have been regarded as the highest form of collateral. They
are of wide currency in the banking and business worlds, and are
particularly useful to persons of small means, because they bear
interest, and may be readily cashed; therefore to deprive them of
the benefit of the guaranty fund would be a calamity. x x x
The Supreme Court of Kansas, however, found the

plaintiffsÊ contention to be without merit, ruling thus:
x x x The argument confuses negotiability of commercial paper with

statutory guaranty of deposits. The guaranty is something extrinsic
to all forms of evidence of bank obligation; and negotiability of
instruments has no dependence on existence or nonexistence of the
guaranty.
x x x Whatever the status of the plaintiffs may be as holders in
due course under the Negotiable Instruments Law, they cannot be
assignees of a deposit which was not made, and cannot be entitled
to the benefit of a guaranty which did not come into existence. x x x
In arriving at the above decision, the Kansas Supreme

Court relied
6
on its earlier ruling in American State Bank v.
Foster, which arose from the same facts as the Fourth
National Bank case. There, the Court held:
x x x Even if the plaintiff were to be regarded as an innocent

purchaser of the certificates as negotiable instruments, its situation
would be in no wise bettered so far as relate to a claim against the
guaranty fund. The fund protects deposits only. And if no deposit is
made, or no deposit within the protection of the guaranty law, the
transfer of a certificate cannot impose a liability on the fund. x x x
_______________
5 204 Pac. 715 (1922), 110 Kan. 380.

6 204 Pac. 709, 110 Kan. 520 (1922).
469
VOL. 283, DECEMBER 22, 1997 469

where a certificate of deposit is given under such circumstances

that it is not protected by the guaranty fund, although that fact is
not indicated by anything on its face, its indorsement to an innocent
holder cannot confer that quality upon it.
In like fashion did the Supreme Court of Nebraska brush 7

aside a similar contention in State v. FarmersÊ State Bank:
In this contention we think the appellants fail to distinguish

between the liability of the maker of a negotiable instrument, which
rests upon the law pertaining to negotiable paper, and the liability
of the guaranty fund, which is purely statutory. The circumstances
under which the guaranty fund may be liable are entirely apart
from the law pertaining to negotiable paper. A holder of a certificate
of deposit in a bank who seeks to hold the guaranty fund liable for
its payment must show that the transaction leading up to the
issuance of the certificate was such that the law holds the guaranty
fund liable for its payment. x x x
The FarmersÊ State Bank ruling was reiterated by the

Nebraska8 Supreme Court in State v. Home State 9
Bank of
Dunning and in State v. Kilgore State Bank. The same
ruling was adopted by the10Supreme Court of South Dakota
in Mildenstein v. Hirning.
In the case at bar, the Court of Appeals initially found
the subject CTDs to be negotiable. Subsequently, however,
respondent court deemed the issue immaterial, albeit for
entirely different reasons.
x x x Besides, whether the certificates are negotiable or not is of no

moment. The fact remains that the certificates categorically state
that their bearer [sic] have a deposit in the RSB; that the same will
mature on November 3, 1993; and that the certificates are insured
11
by PDIC.
_______________
7 196 N.W. 908, 111 Neb. 117 (1923).

8 201 N.W. 971, 113 Neb. 93 (1925).
9 205 N.W. 297 (1925).
10 207 N.W. 979 (1926).
11 Rollo, p. 38.
470
We disagree with respondent courtÊs rationale. The fact

that the certificates state that the certificates are insured
by PDIC does not ipso facto make the latter liable for the
same should the contingency insured against arise. As
stated earlier, the deposit liability of PDIC is determined
by the provisions of R.A. No. 3519, and statements in the
certificates that the same are insured by PDIC are not
binding upon the latter.
x x x The mere fact that a certificate recites on its face that a

certain sum has been deposited, or that officers of the bank may
have stated that the deposit is protected by the guaranty law, does
not make the guaranty fund liable for payment, if in fact a deposit
has not been made x x x. The banks have nothing to do with the
guaranty fund as such. It is a fund raised by assessments against
all state banks, administered by officers of the state to protect
12
deposits in banks. x x x
We come now to petitionerÊs second assigned error.

In order that a claim for deposit insurance with the
PDIC may prosper, the law requires that a corresponding
deposit be placed in the insured bank. This is implicit from
a reading of the following provisions of R.A. 3519:
SECTION 1. There is hereby created a Philippine Deposit

Insurance Corporation x x x which shall insure, as provided, the
deposits of all banks which are entitled to the benefits of insurance
under this Act x x x. (Italics supplied).
xxx
SEC. 10 (a) x x x
xxx
(c) Whenever an insured bank shall have been closed on account
of insolvency, payment of the insured deposits in such bank shall be
made by the Corporation as soon as possible x x x. (Italics supplied.)
_______________
12 State v. FarmersÊ State Bank, supra, note 6.
471
VOL. 283, DECEMBER 22, 1997 471

A deposit as defined in Section 3(f) of R.A. No. 3591, may be

constituted only if money or the equivalent of money is
received by a bank:
SEC. 3. As used in this Act·

(f) The term „deposit‰ means 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 or which is evidenced by
passbook, check and/or certificate of deposit printed or issued in
accordance with Central Bank rules and regulations and other
applicable laws, together with such other obligations of a bank
which, consistent with banking usage and practices, the Board of
Directors shall determine and prescribe by regulations to be deposit
liabilities of the Bank x x x. (Italics ours.)
Did RSB receive money or its equivalent when it issued the

certificates of time deposit? The Court of Appeals, in
resolving who between RSB and PFC issued the certificates
to private respondents, answered this question in the
negative. A perusal of the impugned decision, however,
reveals that such finding is grounded 13 entirely on
speculation, and thus, cannot bind this Court:
Equally unimpressive is the contention of PDIC and RSB that the

certificates were issued to PFC which did not acquire the same for
value because the check issued by the latter for the certificates
bounced for insufficiency of funds. First, granting arguendo that the
certificates were originally issued in favor of PFC, such issuance
could only give rise to the presumption that the amount stated in
the certificates have been deposited to RSB. Had not PFC deposited
the amount stated therein, then RSB would have surely refused to
issue the certificates certifying to such fact. Second, why did not
RSB demand that PFC pay the certificates or file a claim against
PFC on the ground that the latter failed to pay for the value of the
certificates? It could very well be that the reason why RSB did not
run after PFC for payment of the value of the certificates was be-
_______________
13 Cuizon vs. Court of Appeals, G.R. No. 102096, August 22, 1996.
472

cause the instruments were issued to the latter by RSB for value or
were already paid to RSB by plaintiffs-appellees. Third, if it is true
that at the time RSB issued the certificates to PFC, the instruments
were paid for with checks still to be encashed, then why did not
RSB specifically state in the certificates that the validity thereof
hinges on the encashment of said check? Fourth, even if it is true
that PFC did not deposit with or pay the RSB the amount stated in
the certificates, the latter is not for such reason freed from civil
liability to plaintiffs-appellees. For, by issuing the certificates, RSB
bound itself to pay the amount stated therein to whoever is the
bearer upon its presentment for encashment. Truly, there is no
reason to depart from the established principle that where a bank
issues a certificate of deposit acknowledging a deposit made with a
third person or an officer of the bank, or with another bank
representing it to be the certificate of the bank, upon which
assurance the depositor accepts it, the bank is liable for the amount
of the deposit (Michis, Banks and Banking, Vol. 5A, pp. 48-49, as
14
cited in the Decision on p. 3 thereof).
Moreover, such finding totally ignores the evidence

presented by defendants. Cardola de Jesus, RSB Deputy
Liquidator, testified that RSB received three (3) checks in
consideration for the issuance of several CTDs, including
the ones in dispute. The first check amounted to
P159,153.93, the second, P121,665.95, and the third,
P125,846.07. In consideration of the third check, private
respondents received thirteen (13) certificates of deposit
with Nos. 09648 to 09660, inclusive, with a value of
P10,000.00 each or a total of P130,000.00. To conform with
the value of the third check, CTD No. 09648 was „chopped,‰
and only the sum of P5,846.07 was credited in favor of
private respondents. The first two checks „made good in the
clearing‰ while the third was returned for being „drawn
against insufficient funds.‰
The check in question appears on the records as Exhibit
15
„3‰ (for Regent), and is described in RSBÊs offer of
evidence as „Traders Royal Bank Check No. 292555 dated
September 22, 1983 covering the amount or P125,846.07 x
x x issued by
_______________
14 Id., at 39-40.
15 Records, p. 161.
473
VOL. 283, DECEMBER 22, 1997 473

16
Premiere Financing Corporation.‰ At 17
the back of said
check are the words „Refer to Drawer,‰ indicating that the
drawee bank (Traders Royal Bank) refused to pay the value
represented by said check. By reason of the checkÊs
dishonor, RSB cancelled the corresponding 18
as evidenced by
an RSB „ticket‰ dated November 4, 1983.
These pieces of evidence convincingly show that the
subject CTDs were indeed issued without RSB receiving
any money therefor. No deposit, as defined in Section 3(f) of
R.A. No. 3591, therefore came into existence. Accordingly,
petitioner PDIC cannot be held liable for value of the
certificates of time deposit held by private respondents.
ACCORDINGLY, the instant petition is hereby
GRANTED and the decision of the Court of Appeals
REVERSED. Petitioner is absolved from any liability to
private respondents.
SO ORDERED.
Davide, Jr. (Chairman), Bellosillo and Vitug, JJ.,

concur.
Petition granted; Reviewed decision reversed.
Notes.·Where the promissory notes signed by the

borrowers do not contain any stipulation on the payment of
handling charges, the bank cannot collect the same.
(Consolidated Bank and Trust Company [Solidbank] vs.
Court of Appeals, 246 SCRA 193 [1995])

Galloping increases in interest rate unilaterally imposed
by a bank on a customerÊs loan, over the latterÊs vehement
protests, are arbitrary. (Almeda vs. Court of Appeals, 256
SCRA 292 [1996])
A local bank, while acting as local correspondent bank,
does not have the right to intercept funds being coursed
through it by its foreign counterpart for transmittal and
deposit to the
_______________
16 Id., at 155.
17 Exhibit 3-1 (Regent).
18 Exhibits „5‰ and „5-A‰ (Regent); records, p. 163.
474

Estate of the Late Mercedes Jacob vs. Court of Appeals
account of an individual with another local bank, and

thereafter apply the said funds to certain obligations owed
to it by the said individual. (Philippine National Bank vs.
Court of Appeals, 259 SCRA 174 [1996])
··o0o··
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SUPREME COURT REPORTS ANNOTATED VOLUME 283 1/19/22, 8:59 PM

462 SUPREME COURT REPORTS ANNOTATED

PHILIPPINE DEPOSIT INSURANCE CORPORATION,

Banks and Banking; Philippine Deposit Insurance Corporation

VOL. 283, DECEMBER 22, 1997 463

Philippine Deposit Insurance Corp. vs. Court of Appeals

Same; Same; The deposit liability of PDIC is determined by the

Same; Same; In order that a claim for deposit insurance with

Same; Same; Words and Phrases; A deposit as defined in

Section 3(f) of R.A. 3591, may be constituted only if money or

464 SUPREME COURT REPORTS ANNOTATED

Philippine Deposit Insurance Corp. vs. Court of Appeals

received by a bank in the usual course of business and for which it

Same; Same; Judgment; Appeals; Findings of the Court of

Same; Same; Where no deposit as defined in Section 3(f) of R.A.

PETITION for review of a decision of the Court of Appeals.

The facts are stated in the opinion of the Court.

Petitioner Philippine Deposit Insurance Corporation

VOL. 283, DECEMBER 22, 1997 465

peals affirming with modification the decision of the

On September 22, 1983, plaintiffs-appellees invested in money

466 SUPREME COURT REPORTS ANNOTATED

Jeffrey Ngkaion, who have similar claims on their certificates of

Consequently, on March 31, 1987, private respondents filed

certificates of time deposit.

THE CA ERRED IN HOLDING THAT THE SUBJECT CTDS ARE

THE CA ERRED IN HOLDING THAT THE CTDS WERE

1 Rollo, pp. 30-31.

VOL. 283, DECEMBER 22, 1997 467

THE CA ERRED WHEN IT HELD THAT BECAUSE THE CTDS

We deal jointly with petitionerÊs first and third assigned

not contain an unconditional promise or order to pay a sum

2 212 SCRA 448 (1992).

468 SUPREME COURT REPORTS ANNOTATED

Thus, 5the plaintiffs in Fourth Nat. Bank of Wichita v.

x x x the court should hold the certificates to be guaranteed because

The Supreme Court of Kansas, however, found the

x x x The argument confuses negotiability of commercial paper with

In arriving at the above decision, the Kansas Supreme

x x x Even if the plaintiff were to be regarded as an innocent

5 204 Pac. 715 (1922), 110 Kan. 380.

VOL. 283, DECEMBER 22, 1997 469

where a certificate of deposit is given under such circumstances

holder cannot confer that quality upon it.

In like fashion did the Supreme Court of Nebraska brush 7

In this contention we think the appellants fail to distinguish

The FarmersÊ State Bank ruling was reiterated by the

x x x Besides, whether the certificates are negotiable or not is of no

7 196 N.W. 908, 111 Neb. 117 (1923).

470 SUPREME COURT REPORTS ANNOTATED

Philippine Deposit Insurance Corp. vs. Court of Appeals

We disagree with respondent courtÊs rationale. The fact

x x x The mere fact that a certificate recites on its face that a

We come now to petitionerÊs second assigned error.

SECTION 1. There is hereby created a Philippine Deposit

12 State v. FarmersÊ State Bank, supra, note 6.

VOL. 283, DECEMBER 22, 1997 471

A deposit as defined in Section 3(f) of R.A. No. 3591, may be

SEC. 3. As used in this Act·