PHILIPPINE DEPOSIT INSURANCE COMMISSION (PDIC)

(Republic Act No. 1'J846, approved 23 May 2016)

State Polley
To strengthen :he mandatory deposit lnsuran-:e coverage system to generate, preserve, maintai, faith
and confidence In t e country's banking system, and protect It from Illegal schemes and machinat.ors.

PDIC Is an Instrumentality of the government created by law to Insure deposits of all entitled banks. A
government agency which has the power to conduct an Independent special examination of banks and
inquire Into or examine deposit account of ailing banks in the event there Is a finding of unsafe and
unsound; banking practice.

Deposit - means the unpaid balance of money or Its equivalent received by a bank In the usual course o:
business and for which It has given or is obliged to give credit to a commercial, checking,
savings, time or thrift account, or Issued In accordance with Bangko Sentral rules and
regulation; and other applicable laws.

any obligation of a bank which Is .at the office of the bank located outside of the
Philippines shall not be a deposit for any of the purposes of this Act or Included as part of the
total deposits or of Insured deposits.
• Subject to the approval of the Board of Directors, any Insured bank which is Incorporated under
the laws of the Philippines which maintains a branch outside the Philippines may elect to include
for lnsura,ce Its deposit obligations payable only at such branch.

Insurance coverage
Deposits of a·I commercial banks, savings and mortgage banks, rura, banks, private developm nt oanks,
<.ooperatlv<! banks, savings and loan associations. as well as branches and agencies in the P,i ipp1nes of
foreign ba"1ks and all other corporations autho11zec; to perform ')anklng functions In the Phil ppines. are
insured with PDIC.

Foreign currency deposits Is also covered by the insurance. Depositors are entitled to rece ve :,ayme:i:
in the same currency in which the Insured deposits are denominated.

Membership of banks to PDIC is mandatory,

hence, all operating banks are members of PDIC.

The following are excluded from deposit Insurance coverage:

1. Investment products such as bonds and securities, trust accounts, and other similar nstruments;
2. Deposit accounts or transactions which are unfunded, or that are fictitious or fraudulent;
3. Deposits accounts or transactions co:istltutlng, and/or emanating from, unsafe and ur'\Sound
banking practice/s, as determined by the Corporation, In consultation with the BSP, after due
notice·and hearing, ·and publication of a cease and desist order Issued by the Corporation against
such deposit accounts or transactions;
4. Deposits that are determined to be the proceeds of an unlawful activity as defined under RA9160
or AMLC; and
5. Splitting of deposits or creation of fictitious loans or deposits accounts.
Spfftt'ng of deposit occurs whenever a deposit account with an outstandlrg bcilance o'
more that the statutory maximJm amount of Insured deposit maintained under t,e name
of natural or juridical persons Is broken down and transferred Into two (2) or mor
3ccounts in
the name/s of natural or Juridical persons or entitles who have no beneficial ownership on
transferred deposits In their names within one hundred twepty 020) days immed!2k!
precedlpg or during a bank-declared bank holiday. or Immediately preceding a :losure order
Issued by the Monetary Board of the Bangko Sentral ng Plllplnas for the purpose of availing
of the o,aximum deposit insurance coverage.

Insured deposit • the amount due to any bona fide depositor for legitimate deposits in an insured bank
net of any obligation of the depositor to the Insured bank as of date of clc,sure, but not
to exceed Five hundred thousand pesos (PS00,000.00).

Rules In determining Insurance coverage / Insurable amount (PDIC website):

1. Single accounts are accounts maintained sotety by a depositor (natural person •)r juridical
er,:lty/orgarlzatlon). In-Trust-For (ITF) and By Accounts are also considered single accounts. In the
case of account name: (1) Marla ITF Jose; or, (2) Jose By Marla, the owner Is Jose for tot'I
accounts

In determining the Insured deposit of single accounts, all deposits In the bank maintained in the
:;ame right andcapacity for his benefit either In his own name or in the name of others shall

Page 1 of 2.1
Advanced Review Solurons
Atty. Dianne C. Vale-Daniel, CPA, MEA
 be added together. Total Insured deposit should not exceed the Maximum Deposit Insurance
Coverage or PhpS00,000. Single accounts are Insured separately from joint accounts up to the
Maximum Deposit Insurance Coverage of PhpS00,000.

2. Joint account Is an account held jointly by two or more natural persons, or by two or rrore ,undical
perso,s or entitles. Joint account regardless of whether the conjunction "and," "or," "and/or" is used,
st-all be Insured separately from any single or singly-owned deposit account.

If tne ac::ount is held Jointly by two or mori; natural persons, or by two or m)re Jurid,ca
perso,s/entltles, the maximum insured deposit shall be divided into as many equal shares as
there are natural persons or juridical entitles, unless a different sharing Is indi:ated n tht:.
deposit document.

If the account Is held by a juridical person/entity jointly with one or more natural Je·sons. the
rraximum Insured deposit shall be presumed to belong entirely to such juridical person/entity.

T:1e aggregate of the Interests of each co-owner over several Joint accounts, whether owned by
the same or different combinations, shall likewise be subject tc the Maximum Deposit I:1surancz
Coverage or PhpS00,000.

Risk Covered
PDIC covers only the risk of a bank closure ordered by the Monetary Board. Thus, bank losses due to theft,
fire, closure by reas')n of strike or existence or public disorder, revolution or civil war, are net covered by
PDIC.

Insurance Premium
Insurance premium Is paid by the banks, not by the depositors. The bank Is assessed 1/5 of 1% per
annum of the assessment base of the bank.

Insurance Coverage and Computation - In determining the Insured amount, the outstanding balance of
each account is adjusted, such that Interests are updated, withholding taxes are deducted, accounts
maintained by a depositor In the same right and capacity are added together; and whenever applicable,
unpaid loans and other obligations of the depositor are deducted; and In no case shall Insured deposit exceed
PS00,000.

Deposits in several banks

Cepos,ts i1 different banking Institutions are insured separately. However, If a bank has one or more
branches, the ma.n office and all branch offices are considered as one bank. Thus, if you have deposits at
the main office :ind at one or more branch offices of the same bank, the de·poslts are added together when
determ ning deposit Insurance coverage, the total or which shall not exceed PS00,000.

CLAIMING THE INSURANCE

Filing of claims Is required
Depositors will be advised through the national and/or local media and posters at the premises of the
closed insured bank and other public places within the locality on the schedule of distribution of claim forms
by PDIC, receiv,ng of claim forms by PDIC, and the prescriptive date of fi Ing claims by the depositors.

The rollo·..vlng are required to rile their respective claims:

a. Depositors with valid deA,osit accounts with balancec; or more than 100,000
). Depositors who have outstanding obligations with the cosed banks regardless of amount cf
deposit
c. Depositors with account balances of less than 100,000 who have no updated address in the
bank records or who have not updated their bank address through the Mailing Address
Update Ferm (MAUF) Issued by the PDIC
d. Depositors who maintain their account under the name of business entities, reg:irdless of
type of account and account balances
e. Depositors with account not eligible for early payment, reg'ardless of type of account and
account balance per advice of the PDIC

The follc-wing are not required to file claims:

a. Depositors with valid deposit accounts with balances of 100,000 and below, provided they
have no obligations with the closed bank and have complete and updated acdresses In the
bank records of have updated these through the MAUF issued by the PDIC
t. Ceposltors with deposit balances of 100,000 and below may update their addresses using the
MAUF and submit to PDIC representatives stationed at the closed bank premises beforethe
s art of the onslte claims settlement operations.

Page 2 of 21
Advanced Re•,lcw Solunors
Atty. Dianne C. Vale-Daniel, CPA, MBO.
 'I
These depositors are entitled to immediate/early payment of deposit insurance claims as part
or POIC initiative to provide conven,ence to small depositors. Payments to these depositors
are sent as postal money orders,to the depositor's malling address.

Who should sign the Insurance Claims ,

Depositor of the account - for depositors 18 years old and above
Parent - If the depositor Is below 18 ye rs old
Agent - in the case of "by" accounts
Trustee - In the case of "In-trust-for" ( TF) accounts
E ch depositor - In cases of "and/or", ' r" andand" account

Period to file clalm

The depositor of the closed Insured bank has 4 months from dc1te of bank takeover to file his deposit
Insurance claim.

What happens when the depositor of a closed ank falls to file his claim within the 24-month period?
All rights of the depositor with respect to the Insured deposit shall no longer be honored. But he may still
make a claim against the assets of the closed ank.

Period to settle claims for Insured deposi •

PDIC aims to pay valid claims as soon as poss ble. Prior to payout, claims are examined thoroughly. This is
to protect the Oepo.;lt Insurance 1-"und (DrF) which Is the source of Insurance payments. Sometimes,
depositors mistakenly assume that the payou s are sourced from their deposits. This is not the case. The
payouts are from PDIC's own funds.

The claim for nsured deposit should be settled within six (6) months from the date of filing provided all
requ,remcnts are met but the claim must be filed within twenty-four {24) months after bank takeover. The
six-mon h ;ieriod shall not apply if the docul"(lents of the claimant are incomplete or If the va.idity of the
clcim requires the resolution of Issues of facts:and law by another office, body or agency, independently or
,-. coord nation with PDIC.

What processes are involved before PDIC starts servicing claims?

Deposit records are subjected to an examination prior to the start of servicing/settlement of claims. Claims
are evalua:ed and processed according to PDrc's standard procedures.

How long does the pre-settlement examinatiol take?

The length of time needed for the pre-settle nt examination of deposit llablllties •:>fa closed insured bank
largely de;:,e,-,ds on the completeness and accuracy of records turned over by the Bank to PDIC and the
nL.rr,ber of deposit accounts to be examined. '

r; the deposit account In a closed bank Is more than PS00,000.00, what happens to the excess of the
max1m1..'m amount of Insured deposit? •
The claim for the uninsured portion of the deposit Is a clajm against the assets of the closed hank.

The cla.m may be tiled with the Liquidator of the closed bank within sixty (60) days from publication of
notice of closure. However, payment of said claim will depend on the bank's available assets and approval
of the Liquidation Court. The schedule of payment beyond the PS00,000.00 maximum insurance shall be
basi!d on priorities set by law.

PAYMENT OF THE INSURED DEPOSITS

1: by cash; or
(2) by making available to each depositor a transferred deposit In another insured ::iank in an amount equal
to 1,sured deposit of such depositor

PD:C, In Its discretion, may require proof of claims to be filed before paying th·e Insured :leposlts,
and thot In any case where the Corporation Is not satisfied as to the validity of a claim for an insurec
depo,it, it may reculre final determination of a court of competent jurisdiction before paying such claim.

Failure to st:ttle the claim, within six (6) months from the date of filing of claim for lnsl.red
deposit, where such failure was due to grave abuse of discretion, gross negligence, bad faith, or malice,
shall, upon corvlctlor, subject the directors, officers or employees of the Corporation responsible for t,e
delay, to imprisonment from six (6) months to one (1) year: Provided, furthermore, That the period shall
not apply if t e validity of the claim requires the resolution of issues of facts and or law b·( another office,
body or agenc.y

EFFECT OF PAYMENT
The Corporation, upon payment of any depositor shall be subrogated to all rights of the depositor
against the closed bank to the extent of such payment. Such subrogation shall Include the rlg1t on the
Fage 3 oi 2.1
Advanced R vlew Solunons
Arty, Dianne C. Vale-Daniel, CPA, MBA
Part of the Corperation to receive the same dividends and payments from the proceeds of the assets of
such closed bank and recoveries on account of stockholders' liability as would have been payable to the
depositor on a claim for :he Insured deposits.

D;pos.tor s:iall retain his or her claim for any uninsured portion of his or her deposit, which legal
Preference shall be the same as that of the subrogated claim of the Corporation for its payment of
insur d deposits.

All payments b•t the PDIC of Insured deposits In closed banks partake of the nature of public funds, and
as such, must be considered a preferred credit In the order of preference under Article 224L (9) of the
Nev.• Civil Cede

Systemic Risk refers to the possibility that failure of one bank to settle net transactions with other banks
""ill trigger a c1aln reaction, depriving other banks of funds leading to a general shutdown of normal clearing
a,d settlernen: activity. Systemic risk also means the llkellhood of a· sudden, unexpected collapse of
confidence n a significant portion of the banking or financial system with potentially large real economic
effects.

Risk-based asse!.sment system pertains to a method for calculating an insured bank's assessment on
t ,e pr,1bab lit'• that the deposit insurance fund will incur a loss with respect to the bank, ar,d the likely
am:>ur.t c,f any such loss, based on its risk rating that takes into consideration the followin£:
(1) Qu;;llty and concentration of assets;
(2) Categories and concentration or llabilltles, both Insured and uninsured, contingent and
noncontlngent;
(3) ·::apltal position;
(4) Liquidity position;
(S) Management and governance; and
(6) OU-er factors relevant to assessing such probablllty, as may be determined by the Corporation:

LIQUIDATION OF A CLOSED BANK

Whenever a bank Is ordered closed by the Monetary Board, the Corporation shall be designated as
receiver 2n::I ,t st-ail p•oceed with the takeover and liquldatioA of the closed bank in accordance with this
Act. For this ourpose, banks closed by the Monetary Board shall no lon·ger be rehabilitated.

The placement of a bank under liquidation shall have the following effects:
( l) On the corporate franchise or existence
It shall continue as a body corporate until the termination of the wlndin9-up period Such
continuation as a body corporate shall only be for the purpose of liqutdating, settling and
closing Its affairs and for the dis:,osal, conveyance or distribution of its assets. The receiver
shall r present the clc,sed bank In all cases by or against the closed bank and prosecute and
defend suits by or against It. In no case shall the bank be reopened and permitted to resume
banking business after being placed under llquldatlon.

( 2) On the powers and functions of its directors, officers and stockholders

The powers, voting rights, functions and duties, JS well as the allowances_. remuneration
ano perquisites of the directors, officers, and stockholders of such bank are termina ed upo,
its closure. Accordingly, the directors, officers, and stockholders shall be barred from
interfering in any way with the assets, records, and affairs of the bank.

(3) On the assets

Upon service of notice of closure, all the assets of the closed bank shall be deemed in
custodia legls In the hands of the receiver, and as such, these assets mav not be subject to
attachment, garnishment, execution, levy or any other court processes. A judge, officer of
the court or any person who shall Issue, order, process or cause the issuance or
Implementation of the garnishment order, levy, attachment or execution, shall be liable.

Collaterals securing the loans and advances grar)ted by the Bangko Sentral ng Pilipinas shall
not be included In the assets of the 'closed bank for distribution to other creditors. Proceeds
In excess of the amount secured shall be returned by the Bangko Sentral ng P:lipinas to the
receiver.

Any preliminary attachment or garnishment on any of the assets of the closed bank existing
at the time of closure shall not give any preference to the attaching or garnishing party. Upon
motion of the receiver, the preliminary attachment or garnishment shall be lifted and/or
discharged.

Page G of 21
Advanced Review Solutions
Atty, Dianne :. Vale-Daniel, CPA, MeA
(4) Onlabor relations
The employer-employee relationship between the closed bank and its employees shall be
deemed terminated upon service of the notice of closure or the bank. Payment or separation
pay or benefits provided for by law shall be made from available assets of the ba'lk in
accordance with the Rules on Concurrence and Pre.-erence of Credits under the C,vi Coce
or
other laws.

( 5) Contractual obligations
The receiver may cancel, terminate, rescind or repudiate any contract of the closed ban..
that Is not necessary for the orderly llquldatlon or the bank, or Is grossly disadvantageous to
the closed bank, or for any ground provided by law.

(6) On interest payments

The liability of a bank to pay interest on deposits and all other obligations as of clcsure shall
cease upon Its closure by the Monetary Board.

(7) Liability for penalties and surcharges for late payment and nonpayment of taxes
From the time of closure, the closed bank shall not be liable for the payment of penalties
and surcharges arising from the late payment or nonpayment of real property tax, capital
gains tax, transfer tax and similar charges.

(8) Bank charges and fees on services

The receiver may Impose, on behalf of the closed bank, charges and fees for services rendered
after bank closure, such as, but not limited to, the execution of pertinent deeds and
certifications.

( 3) Actions pending for or against the closed bank

except for actions pending before the Supreme Court, actions pending for or against the
::losed bank In any court or QLo3SI-Judlc1al body shall, upon motion of ,he receiver, be
suspe,1ded for a per,od not exceeding one hundred eighty 080) davs and referred to
mandatory mediation. Upon termination of the mediation, the case shall be referred back to
the court or quasi-judicial body for further proceedings.

( l 0) Final decisions against the closed bank

The execution and enforcement of a final decision of a court other than the liquidation court
against the assets of a closed bank shall be stayed. The prevalilng party shall file the final
decision as a claim with the liquidation court and settled In accordance with the Ru,es on
Concurrence and Preference of Credits under the Civil Code or other laws.

( 11) Docket a:id other court fees

Payment of docket and other court fees relating to all cases or actions filed by the receiver
with any Judicial or quasi-judicial bodies shall be deferred until the action Is terminated with
nnallty. Any such fees shall constitute as a first Hen on any Judgment in favor of the closed
bank or In case of unfavorable judgment, such fees shall be paid as liquidation costs and
expenses during the dlstrlbutlbn of the assets of the closed bank. .

(12) All assets, records, and documents In the possession of the closed bank at the time of its closure
are presumed held by the bank in the concept of an owner.

( 13) The exercise of authority, functions, and duties by the receiver under this Act shall be presumed
to have been performed In the regular course of business.

(14) Assets and documents of the closed bank shall retain their private nature even if administered
by the receiver. Matters relating to the exercise by the receiver of the functions shall be subject
to visltorlal audit only by the Commission on Audit."

Page 5 of 21
Advanced Re,iew Solutiors
Atty. Dianne C. Vale-Daniel, CPA, M6t.
Illustrative Cases (PDIC website):

: ·-.; - te13' 1ja ];!.,

· 0 :siirf•ftclaf'.:Owaer •
,,·.<' i
¢.-,••
s.· •
JUAN DELA CRUZ ov gs
molnlolned In lhe H.O De oslt 100.000.00
JUANDELA CRUZ llme
molntolned tn \he H.O De oslt 2 500.000.00
JUAN DELA CRUZ Demond
(malnlalned In Bra-ich I Deposit 3 100.000.00
JUAN DELA CRUZ llme
(r,,ointalned In Bro,ch 2 Deposit 4 200.000.00
Toto\ 12 900,000.00

Explanations:

All the four deposit accounts (i.e., Account Nos. 1 to 4) are owned by the same persor, Ju n
Dela Cruz, and maintained In the same Bank (Head Office and all Its Branches), thus, thebalance
of the accounts will be added together, as they are m..in alned lh the same right and capac,tv.
rega·dless of account type and banking unit/branch. Total amount of insured deposit cannot
exceed P 500,000.00, the Maximum Deposit Insurance Coverage (MDIC).

Of t,e total balance of P 900,000.00, the amount Insured Is P 500,000.00 and the uninsured
amoLnt Is P 400,000.00

Case 2: Single Account/s ;md So_le Proprietorship • •

Savings
JUANDELA CRUZ Deposil I! I 00.CXXl.OO PIC0.000.o'o
lime
JUANDELA CRUZ Deposit 2 <00.000.00 ,,0.000.00
Demond
JUAN DELA CRUZ Deposll 3 300.CXXl.OO 300.000.00
DELA CRUZ
FlOWER SHOP
(Sole
ProprleIorship) by Savings
Juan Delo Cruz Deposit 100,CXXl.OO 100.000.00
lolol 1!900,000.00 1!900,000.00
IMw•ed Depo ls S00.000.00
Uniri\vrfrd O,po\il ,00.000.00

Explanations:

• Thefirrt three deposit accounts (I.e., Account Nos. 1 to 3) are owned by the s2me person, Ju2n
Dela Cruz, hence, the balance of the accounts will be added together.

A sole proprietor Is wholly owned by the owner, hence, the Dela Cruz Flower Shop (Account No.
4) owned by Juan Dela Cruz wlll be added to his first three accounts as all of them (Account

Page 6 of
21 Advanced R •,iew
Solutions
Atty. Dianne C. \/ale-Daniel, c>o., MBA
 Nos. 1 to 4) are maintained In the same right and capacity. The total amount Insured cannot
exceed PS00,000.00.

orthe total balance of P 900,000.00, the amount Insured Is P 500,000.00 and the uninsured
amount Is P 400,000.00.

- .. .
Case 3: Single, "ITF" and "By" Accounts

Computation of Insured and Uninsured Amount:

Account Nomo per Type of Ac:c:ounl Bolonc:o Sh01c Inlho ln;urc,d Portion ol tho
Bonk Record> Oopo&if No. Do :x,u

'
"
D mond .. Juan Antonio
e
JUA"OELA CRUZ Deposll 1 11200.000.00 11200.000.00
JUAN OELA CRUZ Savings
ITF ANTONIOOELA Deposit 2 400,000.00 - I0I
0.000.00
CRUZ
JUANDELA CRUZ SY
MARIA OELA CRUZ llme Deooslt 3 500.000.00 500.000.00
1

JUANOELA CRUZ av
MARIADELACRUZ or
P:DRO OELA CRUZ Time Deooslt 4 500.000.00 S00.000.00
lotol 111.600,000.00 111.200.000.00 11-400.000.00
tn1uredl">aposlts 500.000.00 00.000.00
Unln1ured Deposlls 700,000.00

Explanations:

Juan Dela Cruz is the principal owner of three accounts (i.e., Account Nos. 1, 3 3' 4). As these
are maintained in the same right and capacity, these accounts will be consolidated.

The single account (Account No. 1) Is under his name alone and the other two are "By"
accounts (Account Nos. 3 and 4) which are owr.ed by him as the PRINCIPAL DEPOSITOR or
BENEFlCIAL OWNER while Marla Dela Cruz and Pedro Dela Cruz ACTED AS HIS AGENTS only.
Thus, the total insured amount payable to Juan De.a Cruz Is P 500,000.00 and the uninsured
amount is P700,000.00.

Antonio Dela Cruz on the other hand has only one account (Account No. 2), an ":TF" accoJ'lt in
which Antonio Is the PRINCIPAL OR BEr EFICIAL OWNER and Juan acted as AGENT. Thus.
Antonio Dela Cruz is entitled to a separate deposit insurance c;,f P 400,000.00 for his savings
deposit.

. . •·• - ·• ..·-·-·- -. - ... ....

Case 4: Single Account and Joint Account/s

Computation of Insured and Uninsured Amount:

- - · '"'
C. PU I o
1,WJAOaA r.....
C(UI C1001lt 500. .0-, 150.000.,., mo.coo
JL1Alff>IfA

cqv1•·
•a:•o en•
Tci..C ·oo.occoc TT.=•==
,ic.oco.:,o :io.ooc.oo ••J0.0000,) IS:i»J

lll0.000.00 ••$0..000.00

'ase 7 of 21
Advanced Re•,iew ;olunon
Atty. Dianno C. 1hlo-Daniol, CPA, MB.II
Breakdown of Insured and Uninsured Amount:

,, ,., .·.•d V•oo,,1

·or )lflQle ACCOVf\l ---=.00000
• or Jo,,.1AccOut'II ·"" ...r,oo • .Jll,I.JUU',UU WJ.YJ,.AJu,uu
'-''"'•vco uapo,, •
• c• s,r.gl• -'Ceou,., •• u .
' :. JO•nl ACC'0\.1\1 QIS!>.00000

Explanations:

Juan Dela Cruz has three accounts, one Is under his name alone (Account No. 1) and th=
other two are jointly maintained by tilm and Marla or Pedro Dela Cruz (Account Nos. 2 &
3;.
For the Savings Deposit Individually-owned by Juan Dela Cruz (Account No. 1), he is entitle-:!
to a separate deposit Insurance of P 500,000.00. The uninsured deposit is Pl00,000.00.

For the two accounts (Account Nos. 2 & 3) which are jointly maintained by him and Maria
or ;:>edro Dela Cruz, each joint account Is considered equally shared among co-deposit.::rs
unless otherwise Indicated In the deposit document. The insurance coverage of PS00,000.00
wll' apply to the sum of shares 0f each co-depositor In the Insured portion of each joint
deposit account.

For Account No. 2, the maximum deposit insurance is PS00,000.00 which shall be divided
equally between Juan and Maria. The share of Juan Dela Cruz rs P250,000.00. There is n::i
i.:nirsured amount.

Fo· Account No. 3, the maximum deposit insurance Is PS00,000.00 which shall be divided
ecually between Juan and Pedro. The share of Juan Dela Cruz Is P250,000.00. The
uninsureo amount is P300,000.00, thus, his share in the uninsured amount is PlS0,000.00.

-·---·---···----·- ------ •
Case S: Accounts Jointly Owned by Individuals or Natural Persons

Computation of Insured and Unins._1,11:e L mount:

.t.ccown Y'PO O Acct. loloncc Sh010 In lho lruu,od Po,tton ol lho

Do001i4 Shcro In tho UrJN1.>red 1ortton ol lho
Mo"" •• O.pos.11 No,
&a""
ltcotdJ .. J1,1on Mono Pcdlo
7 Juon
Oeoosff

.. ..,.·. .-,;,, ··.·.,,:...-.:;.:, .......·.·- M°" ! ·J Pcdlo

• ·;.:. ,•
;_.:..:.,' .,.l.,,._,. --· . ,.
··
AJ,_,10E!.A
Cl
Sov""'QI
c.oo,il I a500.000.00
•,
9 !00.000.00
JO,,..VtLA
CRUlOI"
wAilACaA SOV1ftQI
• avz 0100,il 2 IIJIJ.()()().00 250.000.00 R2SO.COO.OO aso.000.00 aso.000,00
JUANOaA
ca.•z aro
,::A:OC)BcA. TlfT".e
CRUZ o.oo,;, ) soo.000.00 aiso.000.00 lil4.SO.OvJ.OO.
J'.N< .lS.A
CQ\ll ,,
tJJ. 1-' CHA
::·1.1;•
1';"£:;, o CHA r; c
1 : L'l o.c.c,. ' •5CCO:CC 1!0,00000 ll,l,COQ.00 15(: 000.0C
:•ol ''·"'"·=•= -.i,=,=.= 7 400.000.DO I il 4W,OOO •100.000.00 P 50.000.00

Breakdown of Insured and Uninsured Amount:

Vu,•to l.,jt ·CII•',

o• ,., tckeo"'"t "'500.0CC,:,O
fo• Jo,r.i'A:eovi
Urir.,:,;,,eo' Otc,o1•:
o, ),rore Accoi;r

f>age 8 of 21
Advanced Ri!view Solutiors
Atty. Dianne C. Vale-Daniel. CPA, MM
 Explanations:

The Individually-owned deposit or Ingle deposit of Juan Dela Cruz (Account No. 1) is
entitled t" a separate dei:,-:islt insurance of PS00,000.00.

For Savings Deposit Jointly owned by Ju·an and Marla Dela Cruz (Account No. 2), the share
of Juan and Marla In the MDIC Is P250,00.00 each while their share In the uninsured portion
Is PS0.000.00 each.

Shares of each co-owner In each of the joint accounts are added together and Insured up
to PS00,000.00 MD!C.

Juan Dela Cruz has three accounts jointly maintained with Marla and/or Pedro Dela Cruz.
All his shares In each of these accounts are added together. Hence, of the P 650,000.00
total shares of Juan, P 500,000.00 Is covered by deposit Insurance.

Marla Dela Cruz and Pedro Dela Cruz are also entitled to deposit Insurance fer their
respective shares In the accounts.

··-·.
·-· ·· ·· ·-· ·
Case 6: Accounts Jointly Ownei/by'i d;° ici als/ Natural Persons and Juridical Persons
or Entitles

Computation of Insured andUninsured Amount

Account Harne per lypJ ol Acd, ,Bolanca ,.-Wai:'!•ln th? l(uuil)p·Por!{Qn ol;tho,DcRQµ,
. .. ,.,,,t'o ;·::}1:m: e-.1;.,:o..:4;c: -
;'•
_-k lac d•::. : .o;,P,Osl ' ·Mo·/ " ,•.· : .. -.- u01.f;1'.,
·
JlJ.Jl caA CRUZ
o•MAlilA Ctl.A
C Ul
Scvinos
Oo00si1 1 Q 500.000.00 Q250.000.00 J]J0.000.00
-
X' l :::C PORAIIOtl
f,,.,..e
DePOsit 2 SJ,),/)(X/.00 00.000.00 -
Jl'AM0:1.A CRUZ
c•,ti .1oa: OeMono
C;:)iPC?.AT;.JN Oeco,it 3 S00.000.00 500.CCC.CC
10101 11'•1 .)UU,uuul,UU I' , .>v,uuY,UU I' ,.,v,vuu,UU I' .>vu,uuu.UU • ,uu,OOu.00
Irsu•,a Ue0Q;11s 4,JU,VVJ.U"J .:ou.uw.w ow.uw.00 ow.u1. o;

Explanations:

n-.e deposit insurance for Savings Deposit (Account No. l) is to be shared equal'y between
Juan and Maria Dela Cruz. H nce, each of them is entitled to P 250,000.00 deposit
in urance. • •

XYZ Corporation Is entitled to PS00,000.00 deposit Insurance for Its Time Deposit (Account
No. 2),

The Demand Deposit (Account No. 3) maintained In the name of Juan Qela Cruz and ABC
Corporation, Is presumed to belong ·entirely to ABC Corporation, Hence, ABC Corporation
is entitled to the P 500,000,00 deposit Insurance.

Page 9 oi 21 Advanced Review Solutions

Atty. Dianne C. Va •Daniel, CPA, MBA
' t I

SECRECY OF BANK DEPOSITS

Repub1ic Act No. 1405
State Policy ·
To give encouragement to the people to deposit their money In banking Institutions and to discourage pr vate
"'loarding so that the same may be properly utilized by banks in authorized loans to assist 1n the economic
jevelopment of the country.
All deposits of whatlvcr nature with banks or banking Institutions In the Philippines Including inves_tmentc
In bonds Issued by the Government of the Philippines, Its political subdivisions and Its Instrume :allt_1es, are
hereby considered as of an absolutely confidential nature and may not be examined, inquired or
looked into by any person, government official, bureau or office, except: WIO(bsup)-BUUH

l. upon written permission of the depositor;

2. in cases of Impeachment;
3. upon order of a competent court In cases of:
a) bribery or dereliction of duty of public officials;
b) where the money deposited or Invested Is the subject matter of the litigation;
c) cases lnvolvlng unexplained wealth (Anti-graft and Corrupt Practices Act); .
d) when there Is probable cause that the deposits are related to the crime of unlawful activities
under AMLA; .
4. Upon Inquiry of the BIR for the purpose of determining the net estate of a deceased depositor;
5. In case of finding of unsafe or unsound banking practices by the PDIC or BSP;
6. Disclosure pursuant to Unclaimed Balanc.es Act/ dormant deposits;
7. In cases of violation of the Human Security Act

It shall be unlawful for any official or employee of a banking Institution to disclose to any person any
information concerning said deposits.
Any violation of this law will subject orrender upon conviction, to an imprisonment of not mo·e than five
years or a fine of not more than twenty thousand pesos or both, In the discretion of the cour:.

FOREIGN CURRENCY DEPOSITS

Republic Act No. 6426

All foreign currency deposits are hereby declared as and,considered of an absolutely confidential nature
and, upon the written permjssjon of the depositor, In no Instance shall foreign currency deposits
be examined, inquired or looked into by any person, government official, bureau or office whether
Jlldic1a or administrative or legislative, or any other entity whether public or private.

Other exceptions:
probable cause established that It Is related to an unlawful activity as defined or mone·t laundering
Under Section 27 and 28 of the Human Security Act (existence of probable cause in anti-terrorism
cases and those Involving persons charged with or suspected of the crime of terrorism or conspiracy
to commit terrorism, judicially declared and outlawed terrorist organization, association, or group of
persons, or member of such organization, association, or group of persons)
Examinations made by the BSP, PDIC

Foreign currency deposits shall be exempt from attachment, garnishment, or any other orcer or process
of any court, leglslatlve body, government agency or any administrative body whatsoever.

The deposits under this Act shall be Insured under the provisions of Republic Act No. 3591, as amended
(Philippine Deposit Insurance Corporation), as well as Its Implementing rules and regulations: Provided, That
Insurance payment shall be In the same currer cy In which the Insured deposits are denominated.

Any wlllful violation of this Act or any regulation duly promulgated by the Monetary Board PLrsuant
hereto shall subject the offender upon conviction to an Imprisonment of not less than one year nor m,)re
than five years or a fine of not less than five thousand pesos nor more than twenty-five thousand pesos,
or both such fine ard Imprisonment at the discretion of the court.

Page 10 0121
Advancoc Review S lunors
Arty. Dianne C. Vale-Dinlel, CPA, MB.\
 ' \

TRUTH IN LENDING ACT

Republic Act No. 3765
State policy
To protect Its citizens from a lack of awareness of the true cost of credit to the user by assuring a ful.
disclosure of such cost with a view of preventing the uninformed use of credit to the detriment of the national
economy.

11. ny Credito· shall furnish to each person to whom credit ls extended, prior to the consummation
of the transaction, a clear statement In writing setting forth, to the extent appllcable and in accordance
'Nlth rules and re<;ulatlons prescribed by the Board, the following Information: CDDCFP
(1) the cash price or delivered price of the property or service to be acquired;
(2) the amounts, If any, to be credlteo as down payment and/or trade-in;
(3) the difference between the amounts set forth under clauses (1) and (2);
('-)the charges, Individually Itemized, which are paid or to be paid by such person In connection
with the transaction but which are not incident to the extension of credit;
(S) the total amount to be financed;
(6) the finance charge expressed in terms of pesos and centavos; and
(7) the percentage that the finance bears to the total amount to be financed expressed asa
simple annual rate on the outstanding un11ald balance of the obligation.

Finance :t-a·ge .ncludes interest, fees, service charges, discounts, and such other charges lr.:1dent to t'1-e
ex tens or of credit as the Board may be regulation prescribe.

Any cred,tc,r who In connection with any credit transaction falls tp disclose to any person any Information n
violation of this Act or any regulation Issued thereunder shall be !!fil2.!.e to such person in the amount of Pl OC
or in an amount equal to twice the finance charged required by such creditor In connectl:>n with such
transact or., whichever Is the greater, except that such llablllty shall not exceed P2,000 on any credit
transaction.

Action tc, recover such penalty may be brought by such person within one year from the date of the
occurrence of the violation, In any court of competent jurisdiction. In any action under this subsecticn,n
which any person Is entitled to a recovery, the creditor shall be liable for reasonable attorney's fees and
court costs as determined by the court.

If the borrower Is not duly Informed of the data required by the law prior to the consummation of the
avallment or drawdown, the lender will have no right to collect such charge or Increases thereof, even
if stipulated In the promissory note. However, such failure shall not affect the validity or enforceabilitv
of any contract or tq nsactlon.

The case of BPI vs Spouses Vu

In this case, alth..iugh BPI failed to state the penalty charges ir, the disclosure statement, the promisscry
note that the Yus signed, on the same date as the disclosure statement, contained a pena· ty clause that
sa,d: ·:,-vie Jointly and severally, promise to further pay a late payment charge on any overdue amoLnt
here,r at tne rate of 3% per month." The promissory note Is an acknowledgment of a debt ar,d
cor.-.mitment to repa·,· i: on the date and under the conditions that the parties agreed on. It is a valid
ontract absen:
proof of acts which might have vitiated consent.

The question Is whether or not the reference to the penalty charges In the promissory note constitutes
substan:lal compliance with the disclosure requirement of the Truth In Lending Act.

"Under Circular 158 of the Central Bank, the lender Is required to include the Information requ:red by R.A.
3765 in tt-e contract covering the credit transaction or any other document to be acknowledged and signed
by the borrower. In addition, the contract or document shall specify additional charges, if anv, which will be
collec:ed In case certain stipulations In the contract are not met by the debtor." In this case, the promissory
notes signed by the Yus contained data, including penalty charges, required by the Truth In Lending Act.
They cannot avoid liability based on a rigid Interpretation of the Truth In Lending Act that contravenes ,ts
goal.

Pace 11 oi 21
Aclvanced Review Solutions
Att•1. Dianne C. Vale-Daniel, CPA, \<ISA
 UNCLAIMED BALANCES ACT
(Act. No. 3936 as amended by P.O. No. 679)

Unclaimed Balances shall Include credits or deposits or money, bullion, security or otherevidence of
inoebtedress of any kind and interest thereon with banl<s, buildings and loanassociations, and trust
corporationsin favor of any person known to be dead or who has not made further depositserwithdrawas
1

dunno the nrececJlng ten years or more.

Itshall be the duty of the Treasurer of the Philippines to Inform the Solicitor General from time to
tirre thexistence of unclaimed balances held by banks, building and loan associations, and
trustcorporations

Dutyor the all banks, building and loan associations, and trust corporations shall forward tothe Treasurer
of thePhllip:,lnesa statement, under oath, of their respective managing officers, of all credits and deposits
held by them In favor of persons known to be dead, or who have not made further deposits or·111thdrawals
during the preceding ten years or more, arranged In amhahetlcal order according to the names of creditors
and depositors, and showing:
(a) The names and last known place of residence or post office addresses of the personsin
whose Favor such unclaimed balances stand;
(b) The amount and the date of the outstanding unclaimed balance and whether thesame is
in money or In security, and If the latter, the nature of the same;
(:) The date when the person In whose favor the unclaimed balance stands died, if known, orthe
date when he made his last deposit or withdrawal; and
(d) The Interest due on such unclaimed balance, if any, and the amount thereof.

Procedure for Escheat:

1) A. notice to the depositor will be given to his last known place of residence or post officeaddress;
2) The bankwill report through a sworn statement, to the treasurer of the Philippines theexistel"ce
of such deposits;
3) The sworn statement shall be posted Ina conspicuous place In the premises of the bank, building
and loan association or trust corporation concerned for ;.t least 60 days from the date offiling;
4) Filing of the proper escheat proceedtnys In court by the Solicitor General;
5) A copy of the complaint and summons shall be served upon the president, cashier or managing officer
cf each defendant bank, building and loan associations or trust corporation and a publication of such
summons a newspaper of general circulation;
6) Mter trial, upon determination that such balances are unclaimed, the court shall render judgment
,jeclarlng such balances escheated in favor of the government;
7) Such unclaimed balances, together with the Increase and proceeds thereof, shall be deposited with
t asyrer of the PhlUppines to the credit of the Government of the Republic of the Philippines
t,•
be use:l as Congress may direct.
Application for reactivation of unclaimed balances reported to the Treasurer of the Philippines:
I. 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.

II. Authentication. The covered Institution shall authenticate and verify the request for reactivation and
tre signature of the depositor/creditor.

III. Letter Request of the Covered Institution. The depository bank shall write the Bureau of the
Treasury through the authorized approving·offlclal, requesting authority to reactivate the deposit
account concerned attaching to Its letter the stamped verified letter of the depos!tor/credltor.

IV. Deed of Undertaking. The covered Institution, through Its responsible authorized officer shall 1

execute a Deed of Undertaking ensuring that the Bureau of the Treasury and its officials and emp
loyees shall be free and harmless from any liability once the account Is reactivated.

V. Letter of Authority to Reactivate. Finding complete documentation supporting the request, the
Bur au of the Treasury, through the authorized officer shall Issue the authority to the covered
Institution to reactivate the acr.ount.

VI. 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
Certifira·e
,sow1n_2that the signatory to the request for reactivation is fully authorized to transact with the Bur·<! U
of the I reasury relative to the reactivation or Its account.

Pace 12 of 21
Advanced F:eview Solu1on1
Atty. DianneC. Vale-Daniel, CPA, MB,
APPROVING AUTHORITY
The au:hcrlty to reactivate on unclaimed balance account/s shall be Issued by the
following :ifflcers:
a. Division Chief/Head Law & Litigation Division Legal Service
aggregate amount or unclaimed balance not exceeding Pl00,000.00
b. Director, Legal Service
aggregate amount of unclaimed balance exceeding Pl00,000.00 but not exceeding
PS00,000.00
c. :)epu:y Treasurer of the Philippines
aggregate amount exceeding PS00,000.00 but not exceeding Pl,000,000.00
d. Treasurer of the Philippines
aggrega •amount of unclaimed balances exceeding Pl,000,000.00

ANTI-MONEY LAUNDERING ACT OF 2001

Republlc Act Nv. 9160 as amended by Republlc Act No. 11521
State Polley
T:i protect and preserve the integrity and confidentiality of bank accounts.
T) ensure that the Philippines shall not be used as a money laundering site for the proceeds of
any u,.awful activity.
·' Consistent with Its foreign policy, the State shall extend cooperation in transnational Investigations
an: prosecutions of persons involved in money laundering activities wherever committed, as well
as In tre implementation of targeted financial sanctions related to the financing of the proliferation
o' weapons of mass destruction, terrorism, and financing of terrorism, pursuant to the resolutions
o' the un.ted 'liltions Security Council.

Anti-Money Laundering Council (AMLC) refers to the financial Intelligence unit of the Republic of the
Philiooires which is the government agency tasked to implement the AMLA.

Covered Persons/Institutions
1. Persons supervised or regulated by BSP, such as:
a. Banks;
b. Non-banks;
c. Quasi-banks;
d. Trust entitles;
e. Pawnshops;
f. Non-stock savings and loan associations;
g. Electronic money issuers; and
h. All other persons and their subsidiaries and afflllates supervised or regulated by the BSP.

2. :>ersons supervised or regulated by IC, such as:

a. Insurance companies;
b. Pre-need companies;
c. Insurance agents;
d. Insurance brokers;
e. Professional relnsurers;
f. Reinsurance brokers;
g. Holding companies;
h. Holding company systems;
I. Mutual benefit associations; and
J. All other persons and their subsidiaries and a!flllates supervised or regulate:l by che IC.

3. i: rsons supervised or regulated by SEC, such as:

a. Securiti s dealers,. brokers, salesmen, Investment houses, and othersimilarpersons
managing securities or rendering services, suc.h as investment agents advisors or
consultants. ' '
b. mutual funds or open-end Investment companies, close-end investmentcompanies or
Issuers, and other similar entitles;
c. other entitles, administering or otherwise dealing In commodities, or financialderivatives
based thereon, valuable objects, cash substitutes, and other sim lar monetary
Instruments or properties, supervised or regulated by the SEC.

Page 13 of
21 Advanced Review
Solunons
Atty. Dianne C. Vale•Danlel, CPA, MBA
 4, T:ie fol'owlng Designated Non-Financial Businesses and Professions (DNFBPs):
a Jewelry dealers dealers In precious metals, and dealers In precious stones.
b·. Companyservl e providers which, as a business, provide any of the followingservicesto
third parties:
1 acting as a formation agent of jurldlcal persons;
1i. acting as (or arranrlng for another person to act as) a dlre tor orcorpora e
secretary of a company, a partner of a partnership, or a s1m1larposition in
relation to other Juridical persons;
Ill. providing a registered office; business address or accommodation,
correspondence or administrative address for a company, a partne·sh1p orany
other legal person or arrangement;. and
Iv. acting as (or arranging for another person to act as) a nominee shareholderfor
another person.

c. Persons, Including lawyers and accountants, who provide any of the following services:

I. Managing of client money, securities or other assets;

II. Management or bank, savings, securities or other assets;
Ill. Organization of contributions for the creation, operation or management of
companies; and
Iv. Creation, operation or management of Juridical persons or arrangemems,and
buying and selling business entitles.
Lawyers and Accountants who are: (1) authorized to practice their profession In the
Philippines; and (2) engaged as Independent legal or accounting profe sionals,. In
relation to Information concerning their clients, or where disclosure of 1nformat1on
would compromise client confidences or the attorney-client relationship, are not
covered persons.

"Independent legal or accounting professional" are lawyers and accountants

working In a private firm or as a sole practitioner who by way of business provides
purely legal, notarial or accounting services to their clients.

5. Real estate developers and br')kers.

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 :,ffering them
for sale or lease.

Real estate broker refers to a duly registered and licensed natural person who. for a
professional fee, commission or other valuable consideration, acts as an agent of a pcrty in a
real estate transaction to offer, advertise, solicit, 11st, promote, mediate, negot ate er effect
the meeting of the minds on the sale, purchase, exchange, mortgage, lease or J•:>int venture,
or other similar transactions on real estate or any Interest therein.

6. Offshore gammlng operators, as well as their service providers, supervised, accredited, or regulatec1
by the Philippine Amusement and Gaming Corporation (PAGCOR) or any government agency.

Offshore gaming operator refers to an entity engaged In offering online games o' chance
or sporting events via the Internet using a network and software program, by themselves or
through loca-1 service providers.

Service providers refer to duly constituted business corporations who provide

components of offshore gaming operations to offshore gaming operators.

Covered transaction
1) A transaction In cash or other equivalent monetary lns,rument exceeding Five Hundred Thousand
;:,esos (PhpS00,000.00) In one banking day.
2) A transaction exceeding One MIiiion pesos (Phpl,000,000.00) In cases of jewelry dealers, dealers
In precious metals and dealers In precious stones.
3) For offshore gammlng operators and their service providers, single casino cash transaction
Involving an amount In excess of Five million pesos (PS,000,000.00) or Its equivalent in any other
currency.
4) For real estate developers and brokers, a single cash transaction Involving an amount in excess
of Seven million five hundred thousand pesos (P7,500,000.00) or Its equivalent Ir. any other
currency.
Page 14 of 21
Advanced Review Solu11ons
Atty. Dianne C. Vale-Janie!.CPA, MBA
Suspicious Transaction
Transactions vii:, covered persons, regardless of amounts Involved, where any of the follcwing
circumscanc s ex·sts:

1'.·there is no underlying legal or trade obligation, purpose or economic justification;

2:,the c'lent Is not properly identified;
3:,the a:nount Involved ls 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) anv 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) ary transaction that Is similar, analogous or Identical to any of the unlawful activit•t under this
Act.

Both covered ar.d suspicious - report as suspicious

Unlawful activity

Any act or ,:,mission or series or combination thereof involving or having direct relation to the following:
(1) ,<idnapping for ransom under Article 267 of Act No. 3815, otherwise known as the Revised
Penal Code. as amended;
(2) 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;
(3) Sectl,:,n 3 paragraphs B, C, E, G, Hand I of Republic Act No. 3019, as amended, otherwise
known as the Anti-Graft and Corrupt Practices Act;
(4) Plunder under Republic Act No. 7080, as amended;
(5) obbery and extortion under Articles 294, 295, 296, 299, 300, 301 and 302 of the Revised Penal
Code, as amended;
::6) Jue:eng and Masiao punished as illegal gambling under Presidential Decree No. 1602;
1_7)=iracv on the high seas under the Revised Penal Code, as amended and Presidenti2I Decree No.
532.;
1:8)uailfied theft under Article 310 of the Revised Penal Code, as amended;
,:9) Sw1rdling under Article 315 and Other Forms of Swindling under Article 316 of the f;.evised
Penal Code. as amended;
-:10) Smuggling under Republic Act Nos. 455 and 1937;
: 11) Vio(ations of Republic Act No. 8792, otherwise known as the Electronic Commerce Act of 2000;
:12) Hijacking and other violations under Republic Act No. 6235; destructive arson and muder, as
:lefined under the Revised Penal Code,·as amended;
(13) Terrorism and conspiracy to commit terrorism as defined and penalized under Sections 3 and 4
of Republic Act No. 9372;
(14) F,nanclng 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:
(15) Bribery under Articles 210, 211 and 211-A of the Revised Penal Code, as amended, and
Corruption of Public Officers under Article 212 of the Revised Penal Code, as amended;
(16) Frauds and Illegal Exactions and Transactions under Articles 213, 214, 215 and 216 of the
Revised Penal Code, as amended;
(17) Malversatlon of Public Funds and Property under Articles 217 and 222 "Of the Revised Penal
Code, as amended;
(lE) Forgerlr:s and Counterfeiting under Articles 163, 166, 167, 168, 169 and 176 of the Revised
Penal Cc de, as amended;
(19) Vio ations of Sections 4 to 6 of Republic Act No. 9208, otherwise known as the Anti-Trafficking
in Persons Act of 2003;
(20) V10 atlons of Sections 78 to 79 of Chapter IV, of P esldential Decree No. 705, otherv11:;e known
as t,e Revised Forestry Code of the Philippines, as amended;
(21) Violations of Sections 86 to 106 of Chapter VI, of Republic Act No. 8550, otherwise kr,own as
the Philippine Fisheries Code of 1998;
(22) Violations of Sections 101 to 107, and 110 of Republic Act No. 7942, otherwise known as the
Philippine Mining Act of 1995;
(23; Violations of Section 27(c), (e), (f), (g) and (I), of Republic Act No. 9147, otherwise known as
the WIidiife Resources Conservation and Protection Act;
(24:, Violation of Section 7(b) of Republic Act No, 9072, otherwise known as the National Caves and
Cave Resources Management Protection Act;
(25:, Vi,)lation of Republic Act No, 6539, otherwise known as the Anti-Carnapping A:t of 2002, as
ame1,jed;
Pac 1S oi 21
Advancec Review Solutions
Atty. DianneC, Vale-Daniel, :PA, MBA
.,. '

( 26)Violations of sections 1, 3 and 5 of Presidential Decree No. 1866, as amended, otherwise_known

as :he decree Codifying the Laws on Illegal/Unlawful Possession, Manufacture, Dealing In,
Acquisition or Disposition of Firearms, Ammunition or Explosives;
(27) Violation of Presidential Decree No. 1612, otherwise known as the Anti-Fencing Law;
(28)Vi:ilatlon of Section 6 of Republic Act No. 8042, otherwise known as the Migrant Workers and
Overseas Filipinos Act of 1995, as amended by Republic Ac No. 10022;
(29) Violation of Republic Act No. 8293, otherwise known as the Intellectual Property Code of the
Philippines; .
(30) Violation of Section 4 of Republic Ad No. 9995, otherwls;! known as the Antl-Photc and Video
Vo\•eurlsm Act of 2009;
(3 l:, Violation of Section 4 of Republic Act No. 9775, otherwise known as the Anti-Child Pornography
Act of 2009;
'.32j v olations of Sections S, 7, 0, 9, l0(c), (d) arid (e), 11, 12 and 14 of Republic t.ct No. 7610,
ot:1erwlse known as the Special Protection of Children Against Abuse, Explo tat1on anc
Jiscrlmlnation;
(33) Fraudulent practices and other violations under Republic Act No. 8799, otherwise kn:iwn as the
Securities Regulation Code of 2000;
(34) Violation of Section 19 (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 end it
flr.anclng pursuant to United Nations Security Council Resolution Numbers 1718 of 2'.)06 ard
223! of 2015;

Targeted financial sanctions refer to both asset freezing and prohibition to :>revert funds
or o:her assets from being made· available, directly or Indirectly, for the benefit of anv
individual, natural or legal persons or entity designated pursuant to relevant Un,ted Nation;
Security Council resolutions and its designation processes.

Proliferation financing refers when a person:

i. Makes available an asset; or
II. Provides a financial service; or
Ill. Conducts a financial transaction; and the person knows that, or Is reckless as to
whether, the asset, fin·anclal 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 Numbers 1718 of 2006 and 2231 of 2015.

(35)Violations 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 Twent-
1· five million pesos (P25,000,000.00) per taxable year, for each tax type covered and t:-iere
has been a finding of probable cause by the competent au horlty: Provided, further, That there
mt.st be a finding of fraud, willful misrepresentation or malicious lritent on the part of :he
taxpayer: Provided, finally, That In no case s all the AMLC Institute forfeiture proceedings to
recover monetary Instruments, pr')perty or proceeds representing, involving, or relating to a tax
cri1re, the same has already been recovered or collected by the Bureau of Internal Revenue
,:BIR)ir a separate proceeding; and
:36) Felonies or offenses of a similar nature that are punishable under the penal laws o' otrer
:ountries.

Money Laundering Offense

t o:1ey laundering Is committed by any person who, knowing that any monetary i-:strumen: or
;:,r,)perty sepresents, involves, or relates to the proceeds of any unlawful activity:
(a) transacts said monetary instrument or property;
(c) c:,nverts, transfers, disposes of, moves, acquires, possesses or uses said moneta:-y inst·um;!nt
er property;
(c) c nceals or disguises the true nature, source, location, disposition, movement or ov..-nership of
or nghts with respect to said monetary Instrument or property;
(d) attempts or conspires to commit money laundering offenses referred to In parag aphs fa). (b)
or (c);
(e) aids, abets, assists In or counsels the commission of the money laundering offenses referrec
to l1 paragraphs (a), (b) or (c) above; and
(f) performs or falls to perform any act as a result of which he facilitates the offe:ise of money
laundering referred to In paragraphs (a), (b) or (c) above.

Money laundering Is also committed by any covered person who, knowing that a covered or
susp!clous transaction Is required to be reported to the Anti-Money Laundering council (AMLC) rails
to do so. '

Pac 16 of 21
Advanced Review 5olu:ions
Arty. Dianne C. Vale-Daniel, CPA, \olBA
,.,. '
Covered persons shall report to the AMLC all covered transactions and suspicious transa tions within
flve ( 5} working days from occurrence thereof, unless the AMLC prescribes a different period
notexceeding fifteen (15) working days.

Anti-Money Laundering Council

1. Governor of the Bangko Sentral ng Pllipinas as Chairman
2. ::omm ssioner of the Insurance Commission as member
3. Chairman of the Securities and Exchange Commission as member

Th functions of the AMLC are:

1. to require and receive covered or suspicious transaction reports from covered persons;
2. to Issue orders addressed to the appropriate Supervising Authority or the covered person to
determine the true Identity of the owner of any monetary instrument or property subject ofa
covered or suspicious transaction report, or request for assistance from a foreign State, or
believed by the AMLC, on the basis of substantial evidence, to be, in whole or in part,
wherever located, representing, Involving, or related to, directly or indirectly, In any manner
or by any
means, the proceeds of any unlawful activity;
3. to institute civil forfeiture proceedings and all other remedial proceedings through the Office of
the Sollcltor General;
4. to file complaints with the Department of Justice or tt-.e Office of the Ombudsman for the
prosecution of money laundering offenses and other violations under the AMLA;
5. to Investigate suspicious transactions and covered transactions deemed suspicious after
Investigation by the AMLC, money laundering activities and other violations of the AMLA;
5. to file with the Court of Appeals, ex parte, through the Office of the Solicitor General:
a. a petition for the freezing of any monetary Instrument or property that is in any
way related to an unlawful activity; or
b. an application for authority to Inquire into or examine any particular deposit or
Investment, including related accounts, with any banking Institution or non-bank
financial Institution.

7. to formulate and Implement such measures as may be necessary and justified under the
AMLA to counteract money laundering.
8. to receive and take action In respect of any request from foreign states for assistance ir their
own anti-money laundering operations as provided in the AMLA.
9. to dev'!lop educational programs, Including awareness campaign on the pernicious effe:ts, the
methods and techniques used, and the viable means of preventing money laundering end the
effective ways of prosecuting and punishing offenders.
10. to enlist the assistance of any branch, department, bureau, office, agency or instrumentality of
the government, including government-owned and -controlled corporations, in undertaking
anv and all anti-money laundering operations, which may Include the use of its personnel,
facilities and resources for the more resolute prevention, detection and investigation of money
laundering offenses and prosecution 6f offenders.
11. to impose administrative sanctions for the violation of laws, rules, regulations, orders, and
resolutions issued pursuant thereto.
12. to require the Land Registration Authority and all Its Registries of Deeds to submit to the AMLC,
reports on all real estate transactions involving an amount In excess of Five Hundred
Thousand Pesos (Php500,000.00) within fifteen (15) days from the date of registration of the
transaction, In a form to be prescribed by the AMLC. The AMLC may also require the Land
Registration Authority and all Its Registries of Deeds to submit copies of relevant documents
of all real estate
trar,sactlons.
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
testlflcandum and/or subpoena duces tecum with any competent court;
15. to im'plement 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 resolutlo-,s· as well as·any binding resolution of the Security
Counc'I; and
16. to preserve, manage or dispose assets pursuant to a freeze order, asset preservation order,
or Judgment of forfeiture: Provided, however, that pending 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.

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Advanced Resicw Solutio,
Atty. Dianne C. \!ale-Daniel, C'A, MBA
STAGES OF MONEY LAUNDERING
l. Placement - Introduction or Illegal funds to the financial system
2. L2yerlrg - transactions to hide the source of funds. Involves sending money through various financial
lrstlt.Jtlon to change Its form and make It difficult to trace
3. tn:e ratlon / Extraction - money re-enters the economy In legitimate-looking form, appeanng to
have c:;me from legitimate transaction

CUSTOMER DUE DILIGENCE

Covere::lpersons shall apply enhanced due dlllgence on the customer If It acquires Information In the course
or its custome· accJunt or transaction monitoring that:
a. Raises doubt as to the accuracy of any Information or document provided or the ownership of
the entity;
b. Justifies reclassification of the customer from low or normal risk to high risk pursuant to these
Rules;
c. Indicates that any of the circumstances for the filing of a suspicious transaction report exists.

If the covered person:

a. fails to satisfactorily complete the enhanced due diligence procedures; or
b. reasonably believes that performing the enhanced due diligence process will tip-off the
CJstomer, It shall file a suspicious transaction report, and closely monitor the account and
review the business relationship.

Co,1ered persons shall, on the basis or materiality and risk, update, no later than once every three
( 3) years, 211 customer Information and identification documents, unless enhanced ongoin£ monitoring is
warranted.

Prohibited Accounts
a) Anonymous Accounts
b) Accounts under Fictitious Names
c) Numbered Accounts except non-checking numbered accounts

Record Keeping. Covered persons shall maintain and safely store for five (5) years from the dates of
transact ons all records of customer Identification and .transaction documents.

a) Retention of Records Where the Account is the Subject of a case - If a case has been filed ir.
court involving the account, records must be· retained .:nd safely kept beyond the five (5)-year
period, until It Is officially confirmed by the AMLC Secretariat that the case has t-een resolved,
dec·::ed or terminated with finality.

b) Closed Accounts - Covered persons shall maintain and safely store for at least five (5) years from
the dates the accounts were closed, all records of customer Identification and transaction
documents.

c) Coyered persons shall, likewise, keep the electronic copies of all covered and suspicious
transaction reports for, at least, five (5) vears from the dates of submission to the AMLC.

d) For low risk customers, It Is sufficient that covered persons shall maintain and store, in whatever
forrr., a record of customer Information and transactions.

Beneflcia I Owner refers to any natural person who:

1. Jltlr:iately owns or controls the customer and/or on whose behalf a transaction or activity is being
• :onducted; or
2. tias ultimate effective control over a legal person or arrangement.

Safe Harbor - When reporting covered transactions to the AMLC, covered Institutions and their office shall
not be deemed to have violated the bank secrecy. law or any other similar laws but are
prohibited from communicating, directly or Indirectly, in any manner, to any person the fact
that a covered transaction report was made and contents thereof.

No administrative, criminal or civil proceedings shall lie against any person for t-.aving made
a covered transaction 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 Phlllpplne law.

Page18 of2!
Advanced Review Solutions
Atty. Dianne C. Vale-Daniel, CPA, MBA
Freezing of Monetary Instrument or Property
Upo,a verified ex parte petition by the AMLC, after determination that probablecauseexists
thatan y monetary instrument or property Is In any way related to an unlawful activity as defined in
1
Sectior 3( )
hereof, the court of Appeals may Issue a freeze order which shall be effective immediately, fora
oeriod cf twenty (20) days.
Within the twenty(20)-day period, the Court of Appeals shall conduct a summaryhearing,wi:h
notice to the parties, to determine whether or not to modify or lift the freeze order or extend
itseffectivity. T e total periodof thefreeze order Issued by the Court of Appeals under this provision
shall not exce'edsix
(6) months.

If there Is nocase filed against a person whose account has been frozen within theperiod deterriined
by the :ourt, not exceeding six (6) months, the freeze order shall be deemed ipso facto lifted.

In any case,the court should act on the petition to freeze within twenty-four (24)working hours
from filing of the petition. If the application is filed a day, before a nonworking day, thecomputati,:m of
ttie twenty-four (24) hour period shall exclude the nonworking days.

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

No -:ourt shallIssuea temporary restraining order or a writ of Injunction against any freeze
order,except the Su;ireme Court.

Forpurposes ofimplementing targeted financial sanctions in relation to proliferation ofweapons of

mass destru-:tlon and Its financing, as provided under Section 3(15), the AMLC shall have thepower to
issue, ex oarte, an order to freeze without delay.

The freeze order shall be effective until the basis for its issuance shall have been lifted. During the
effecti•1lty of the f·eeze order, the aggrieved party may, within twenty (20) days from Issuance, filew th the
Court :>f Appeals a petition to determine the basis of the freeze order according to the principle o'effective
judicial protection: Provided, That the person whose property or funds have been frozen maywithdraw SLCh
sums as the AMLC determines to be reasonably needed for monthly family needs and sustenance including
the services of coun el and the faml'y medical needs of such person.

The AMLC, if circumstances warrant, may initiate civil forfeiture proceedings to preserve the assetsend
to protect it from dissipation. 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.

For purposes of freeze order and bank inquiry: related and mate·lally-linked accounts.

Related Accounts refers to those accounts, the funds and sources of which originated fr,)m and/or
are materially-linked to the monetary Instruments or properties subject of the freeze o·der or an
order of Inquiry.

Materially-linked Accounts shall Include the following:

a) All accounts or monetary Instruments under the name of the person whose accounts, moneta:-y
Instruments, or properties are the subject of the freeze order or an order of Inquiry;

b) Ali accounts or monetary Instruments held, owned, or controlled by the owner or holder of the
accounts, monetary Instruments, or properties subject of the freeze order or order of inquiry,
whether such accounts are held, owned or controlled singly or jointly with another person;

c) All "In Trust For" accounts where either the trustee or the truster pertains to a person whose
accounts, monetary Instruments, or properties are the subject of the freeze order or c-rder of
Inquiry;

d) All accounts held for the benefit or In the Interest of the person whose accounts monetary
instruments, or properties are the subject of the freeze order -or oroer of Inquiry; and

e) All other accounts, share::;, units, or monetary instruments that aresimilar, analo·gous or identical
to any of the foregoing. . '

Page 19 of
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Solutions
Atty. Dianne C. Vaie-Dariel, CPA, MBA
Wi r
AMLC may In ulre Into or examine any particular deposit or Investment account, Including relatej accounts,
with any ban ing Institution or non-bank financial Institution, upon order by the Court of Appeals
based on an ex part application In cases of violation of the AMLA when It has been established
tha:probable cause exists that the deposits or Investments involved, Including related accounts, are In
any way related
lo an unlawru activity or a money laundering offense.

Period to Resolve Appllcatlon. • within twenty-four (24) hours from filing

No prl r criminal charge, pendency of or conviction for an unlawful activity or money aundering
offens Is necessary for the commencement or the resolution of an application for bank lrqulry.

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:

1. Kidnapping for ransom under Article 267 of Act No. 3815, otherwise known as the Revised
Penal Code, as amended;

2. Sections 4, S, 6, 8, 9, 10, 11, 12, 13, 14, 15 and 16 of Republic Act No. 9165, othemise known
as the Comprehensive Dangerous Drugs Act of 2002;

3. Hijacking and other violations under Republic Act No. 6235; destructive arson and murder, as
defined under the Revised Penal Code, as amended;

4. Felonies or offenses of a nature similar to those mentioned In Section 3(1) (1), (2) and (12) of
the AMLA which are punishable under the penal laws of other countries;

5. Terrorism and conspiracy to commit terrorism as defined and penalized under Republic Act No.
9372; and

6. 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
Sup resslon Act of 2012.

Duties of the Covered Persons Upon Receipt of Bank Inquiry Order

The concerned covered persons shall immediately, upon receipt of the court order or AMLC Resolution,
give the AMLC and/or Its Secretariat full access to all Information, documents or objects pertaining to the
deposit, Investment, account and/or transaction.

Certified true copies of the documents pertaining to deposit, Investment, account and/or transaction subject
of the bank inquiry shall be submitted to the AMLC Secretariat, within five (5) working days from receipt of
the court order or AMLC Resolution.

Authority of the Bangko Sentral ng Pilipinas to Inquire Into or Examine Bank Accounts
In the course of a periodic or special examination, the BSP may Inquire Into or examine bank
accounts, Including customer Identification, account opening, and transaction documents, for the
purpose of checking compliance bt covered persons under its supervision or regulation
with the requirements of the AMLA, this RIRR, and other AMLC Issuances.

Probable Cause refers to such facts and circumstances which would lead a reasonably discreet, prudent,
or cautious man to believe that any monetary Instrument or property sought to be frozen, inquired into or
preserved Is in any way related to any unlawful activity and/or money laundering offense.

Civil Forfeiture - Upon determination by the AMLC that probable cause exists, the AMLC sh.al file with the
appropriate court through the Office of the Solicitor General, a verified ex parte petition for forfeiture, and
the Rules of Court on Civil Forfeiture shall apply.

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

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Atty. Dianne C. Vale-Daniel, CPA, MBA
.,.• .-• I •

Clitim on Forfeited Assets - Where the court has Issued an order of forfeiture of the monetary lr.strument
or property In a crlmlnal prosecution for any money laundering offense, the offender or any other person
clalmlng an Interest therein may apply, by verified petition, for a declaration that the same leoltlmately
belongs to him and for segregation or exclusion of the monetary Instrument or property corresponding
thereto. The verified petition shall be filed with the court which rendered the judgment of fcrfeiture,
within fifteen (ls; days from the date of the flnallty of the order of forfeiture, In default of which the said
order
shall become final and executor. This provision shall apply In both dvll and criminal forfeiture.

Payment In Lieu of Forfeiture - Where the :curt has Issued an order of forfeiture of the monetary
instrument or propert', subject of a rr.oney laundering orfense and said order cannot be enrorced
because ary particular monetary Instrument or property cannot, with due dlllgence, be located, or it has
been substantially altered. destroyed, diminished In value or otherwise rendered worthless by any 3ct or
omission, ozrectly or Indirectly, attributable to the offender, or It has been concealed, removed, converted, or
:itherwise transferred to prevent the same from being found or to avoid forfeiture thereof, or it Is located
outside the P;"11hpp1nes or has been placed or brought outside the jurisdiction of the court, or it has
been comm,ngled 1·, th other monetary instruments or property belonging to either the offender himself
or a third person or enntv. thereby rendering the same dirficult to identify or be segregated for purposes
of forfeiture, the court rnay, instead of enforcing the order of forfeiture of the monetary instrument or
property or part hereof or i1terest therein, accordingly order the convicted offender to pay an amount
equal to the value of said
monetary instrument or property.
Information Security and Confidentiality. - The AMLC and Its Secretariat shall secur ·y 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.

Breach of Information Security and Confidentiality. The punlshmen of Imprisonment rar.glng from
three (3) to eight (8) years and a fine of not less than five hundred thousand Philippine pesos (?
hpS00,000.00) but not more than One million Phlllpplne pesos (Php 1,000,000.00), shall be imposed on a
person convicted for a violation on information security and confidentiality 'Of this Act. If the cffender is
a public official or employee, he shall. In addition on to the penalties prescribed herein, suffer the
penalty of perpetual or temporary absolute dlsquallflcatlon from public office. In the case of a breach of
confidentiality that ls published or reported by media, the responsible reporter, writer, president,
publisher, manager and editor-In-chief shall be liable under this Act.

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Advancec Review Solutions
Atty. Dianne C. vale-Daniel, CPA, MBA