FINANCIAL REHABILITAION AND INSOLVENCY ACT (RA
10142) other provisional remedies against the debtor;
SECTION 4. Definition of Terms
a) Debtor shall refer to, unless specifically excluded by a
provision of this Act, a sole proprietorship duly registered
with the Department of Trade and Industry (DTI), a
partnership duly registered with the Securities and
Exchange Commission (SEC), a corporation duly
organized and existing under Philippine laws, or an
individual debtor who has become insolvent as defined
herein.
b) Ordinary course of business shall refer to transactions in
the pursuit of the individual debtor's or debtor's business
operations prior to rehabilitation or insolvency proceedings
and on ordinary business terms.
c) Rehabilitation shall refer to the restoration of the debtor to
a condition of successful operation and solvency, if it is
shown that its continuance of operation is economically
feasible and its creditors can recover by way of the present
value of payments projected in the plan, more if the debtor
continues as a going concern than if it is immediately
liquidated.
d) Rehabilitation receiver shall refer to the person or persons,
natural or juridical, appointed as such by the court pursuant
to this Act and which shall be entrusted with such powers
and duties as set forth herein.
e) Rehabilitation Plan shall refer to a plan by which the
financial well-being and viability of an insolvent debtor can
be restored using various means including, but not limited
to, debt forgiveness, debt rescheduling, reorganization or
quasi-reorganization, dacion en pago, debt-equity
conversion and sale of the business as a going concern, or
setting-up of new business entity as prescribed in Section
62 hereof, or other similar arrangements as may be
approved by the court or creditors.
SECTION. 5 Exclusions The term debtor does not include banks,
insurance companies, pre-need companies, and national and local
government agencies or units.
For purposes of this section:
(a) Bank shall refer to any duly licensed bank or quasi-bank that
is potentially or actually subject to conservatorship, receivership or
liquidation proceedings under the New Central Bank or successor
legislation;
(b) Insurance company shall refer to those companies that are
potentially or actually subject to insolvency proceedings under the
Insurance Codeor successor legislation; and
(c) Pre-need company shall refer to any corporation
authorized/licensed to sell or offer to sell pre-need plans.
Provided, That government financial institutions other than banks and
government-owned or -controlled corporations shall be covered by
this Act, unless their specific charter provides otherwise.
SEC 16 Action on Petition --- Stay Order
Effect of Stay Order with respect to Creditor/s
a) suspend all actions or proceedings, in court or otherwise,
for the enforcement of claims against the debtor;
b) suspend all actions to enforce any judgment, attachment or
Effect of Stay Order with respect to Debtor/s
c) prohibit the debtor from selling, encumbering, transferring
or disposing in any manner any of its properties except in
the ordinary course of business; and
d) prohibit the debtor from making any payment of its
liabilities outstanding as of the commencement date except
as may be provided herein.
SECTION 12 Contents of Petition for Rehabilitation
a) Identification of the debtor, its principal activities and its
addresses;
b) Statement of the fact of and the cause of the debtor's
insolvency or inability to pay its obligations as they
become due;
c) The specific relief sought pursuant to this Act;
d) The grounds upon which the petition is based;
e) Other information that may be required under this Act
depending on the form of relief requested;
f) Schedule of the debtor's debts and liabilities including a list
of creditors with their addresses, amounts of claims and
collaterals, or securities, if any;
g) An inventory of all its assets including receivables;
h) A Rehabilitation Plan;
i) The names of at least three (3) nominees to the position of
rehabilitation receiver; and
j) Other documents required to be filed with the petition
pursuant to this Act and the rules of procedure as may be
promulgated by the Supreme Court.
SECTION 62 Contents of a Rehabilitation Plan. The
Rehabilitation Plan shall, as a minimum:
a) specify the underlying assumptions, the financial goals
and the procedures proposed to accomplish such
goals;
b) establish classes of voting creditors;
c) establish subclasses of voting creditors if prior
approval has been granted by the court;
d) provide for equal treatment of all claims within the
same class or subclass, unless a particular creditor
voluntarily agrees to less favorable
e) identify the debtor's role in the implementation of the
Plan;
SECTION 28 Who May Serve as a Rehabilitation Receiver Any
qualified natural or juridical person may serve as a rehabilitation
receiver appointed by the court: Provided, That if the rehabilitation
receiver is a juridical entity, it must designate a natural person/s who
possess/es all the qualifications and none of the disqualifications as
its representative, it being understood that the juridical entity and the
representative/s are solidarily liable for all obligations and
responsibilities of the rehabilitation receiver.
SECTION 29 Qualifications of a Rehabilitation Receiver. The
rehabilitation receiver shall have the following minimum
qualifications:
(a) A citizen of the Philippines or a resident of the Philippines in
the six (6) months immediately preceding his nomination;
(b) Of good moral character and with acknowledged integrity,
impartiality and independence;
(c) Has the requisite knowledge of insolvency and other relevant
commercial laws, rules and procedures, as well as the relevant
training and/or experience that may be necessary to enable him to
properly discharge the duties and obligations of a rehabilitation
receiver; and
(d) Has no conflict of interest: Provided, That such conflict of
interest may be waived, expressly or impliedly, by a party who may
be prejudiced thereby.
SECTION 31 Powers, Duties and Responsibilities of the
Rehabilitation Receiver. The rehabilitation receiver shall be
deemed an officer of the court with the principal duty of preserving
and maximizing the value of the assets of the debtor during the
rehabilitation proceedings, determining the viability of the
rehabilitation of the debtor, preparing and recommending a
Rehabilitation Plan to the court, and implementing the approved
Rehabilitation Plan. To this end, and without limiting the generality
of the foregoing, the rehabilitation receiver shall have the following
powers, duties and responsibilities:
a) To verify the accuracy of the factual allegations in the
petition and its annexes;
b) To verify and correct, if necessary, the inventory of all of
the assets of the debtor, and their valuation;
c) To verify and correct, if necessary, the schedule of debts
and liabilities of the debtor;
d) To evaluate the validity, genuineness and true amount of all
the claims against the debtor;
e) To take possession, custody and control, and to preserve the
value of all the property of the debtor;
PDIC LAW (RA 9576 & 3591)
SECTION 4. Definition of Terms
a) 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 issued in accordance with Bangko Sentral 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:
Provided, That any obligation of a bank which is payable at
the office of the bank located outside of the Philippines
shall not be a deposit for any of the purposes of this Act or
included as part of the total deposits or of insured deposit:
Provided, further, That, 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 insurance
its deposit obligations payable only at such branch.
The Corporation shall not pay deposit insurance for the following
accounts or transactions, whether denominated, documented,
recorded or booked as deposit by the bank:
(1) Investment products such as bonds and securities, trust accounts,
and other similar instruments;
(2) Deposit accounts or transactions which are unfunded, or that are
fictitious or fraudulent;
(3) Deposit accounts or transactions constituting, and/or emanating
from, unsafe and unsound 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; and
(4) Deposits that are determined to be the proceeds of an unlawful
activity as defined under Republic Act 9160, as amended.
b) Insured deposit means the amount due to any depositor for
legitimate deposits in an insured bank net of any obligation
of the depositor to the insured bank as of the date of
closure, but not to exceed Five Hundred Thousand Pesos
(P500,000.00).
c) Joint account regardless of whether the conjunction "and,"
"or," "and/or" is used, shall be insured separately from any
individually-owned deposit account:
Provided, That (1) If the account is held jointly by two or
more natural persons, or by two or more juridical persons
or entities, the maximum insured deposit shall be divided
into as many equal shares as there are individuals, juridical
persons or entities, unless a different sharing is stipulated in
the document of deposit, and (2) if the account is held by a
juridical person or entity jointly with one or more natural
persons, the maximum insured deposit shall be presumed to
belong entirely to such juridical person or entity: Provided,
further, That the aggregate of the interest of each co-owner
over several joint accounts, whether owned by the same or
different combinations of individuals, juridical persons or
entities, shall likewise be subject to the maximum insured
deposit of Five Hundred Thousand Pesos (P500,000.00):
Provided, furthermore, That the provisions of any law to
the contrary notwithstanding, no owner/holder of any
negotiable certificate of deposit shall be recognized as a
depositor entitled to the rights provided in this Act unless
his name is registered as owner/holder thereof in the books
of the issuing bank:
Provided, finally, That, in case of a condition that threatens
the monetary and financial stability of the banking system
that may have systemic consequences, as defined in Section
17 hereof, as determined by the Monetary Board, the
maximum deposit insurance cover may be adjusted in such
amount, for such a period, and/or for such deposit products,
as may be determined by a unanimous vote of the Board of
Directors in a meeting called for the purpose and chaired by
the Secretary of Finance, subject to the approval of the
President of the Philippines.
d) Splitting of deposits occurs whenever a deposit account
with an outstanding balance of more than the statutory
maximum amount of insured deposit maintained under the
name of natural or juridical persons is broken down and
transferred into 2 or more accounts in the name/s of natural
or juridical persons or entities who have no beneficial
ownership on transferred deposits in their names within 120
days immediately preceding or during a bank declared bank
holiday, or immediately preceding a closure order issued by
the Monetary Board of the Bangko Sentral ng Pilipinas for
the purpose of availing of the maximum deposit insurance
coverage.
THE NEW CENTRAL BANK ACT (RA 7653)
SECTION. 29. Appointment of Conservator. _ Whenever, on the basis
of a report submitted by the appropriate supervising or examining
department, the Monetary Board finds that a bank or a quasi-bank is
in a state of continuing inability or unwillingness to maintain a
condition of liquidity deemed adequate to protect the interest of
depositors and creditors, the Monetary Board may appoint a
conservator with such powers as the Monetary Board shall deem
necessary to take charge of the assets, liabilities, and the management
thereof, reorganize the management, collect all monies and debts due
said institution, and exercise all powers necessary to restore its
viability.
The conservator should be competent and knowledgeable in bank
operations and management. The conservatorship shall not exceed
one (1) year.
The Monetary Board shall terminate the conservatorship when it is
satisfied that the institution can continue to operate on its own and the
conservatorship is no longer necessary. The conservatorship shall
likewise be terminated should the Monetary Board, on the basis of
the report of the conservator or of its own findings, determine that the
continuance in business of the institution would involve probable loss
to its depositors or creditors.
SECTION. 30. Proceedings in Receivership and Liquidation. _
Whenever, upon report of the head of the supervising or examining
department, the Monetary Board finds that a bank or quasi-bank:
(a) is unable to pay its liabilities as they become due in the ordinary
course of business: Provided, That this shall not include inability to
pay caused by extraordinary demands induced by financial panic in
the banking community;
(b) has insufficient realizable assets, as determined by the Bangko
Sentral, to meet its liabilities; or
(c) cannot continue in business without involving probable losses to
its depositors or creditors; or
(d) has willfully violated a cease and desist order under Section 37
that has become final, involving acts or transactions which amount to
fraud or a dissipation of the assets of the institution; in which cases,
the Monetary Board may summarily and without need for prior
hearing forbid the institution from doing business in the Philippines
and designate the Philippine Deposit Insurance Corporation as
receiver of the banking institution.
For a quasi-bank, any person of recognized competence in banking or
finance may be designated as receiver.
SECTION. 52. Legal Tender Power. _ All notes and coins issued by
the Bangko Sentral shall be fully guaranteed by the Government of
the Republic of the Philippines and shall be legal tender in the
Philippines for all debts, both public and private: Provided, however,
That, unless otherwise fixed by the Monetary Board, coins shall be
legal tender in amounts not exceeding Fifty pesos (P50) for
denominations of twenty-five centavos and above, and in amounts
not exceeding Twenty pesos (P20) for denominations of ten centavos
or less.
SECTION. 53. Characteristics of the Currency. _ The Monetary
Board, with the approval of the President of the Philippines, shall
prescribe the denominations, dimensions, designs, inscriptions and
other characteristics of notes issued by the Bangko Sentral: Provided,
however, That said notes shall state that they are liabilities of the
Bangko Sentral and are fully guaranteed by the Government of the
Republic of the Philippines. Said notes shall bear the signatures, in
facsimile, of the President of the Philippines and of the Governor of
the Bangko Sentral.
Similarly, the Monetary Board, with the approval of the President of
the Philippines, shall prescribe the weight, fineness, designs,
denominations and other characteristics of the coins issued by the
Bangko Sentral. In the minting of coins, the Monetary Board shall
give full consideration to the availability of suitable metals and to
their relative prices and cost of minting.
SECTION. 54. Printing of Notes and Minting of Coins. _ The
Monetary Board shall prescribe the amounts of notes and coins to be
printed and minted, respectively, and the conditions to which the
printing of notes and the minting of coins shall be subject. The
Monetary Board shall have the authority to contract institutions,
mints or firms for such operations.
All expenses incurred in the printing of notes and the minting of
coins shall be for the account of the Bangko Sentral.
SECTION. 56. Replacement of Currency Unfit for Circulation. _ The
Bangko Sentral shall withdraw from circulation and shall demonetize
all notes and coins which for any reason whatsoever are unfit for
circulation and shall replace them by adequate notes and coins:
Provided, however, That the Bangko Sentral shall not replace notes
and coins the identification of which is impossible, coins which show
signs of filing, clipping or perforation, and notes which have lost
more than two-fifths (2/5) of their surface or all of the signatures
inscribed thereon. Notes and coins in such mutilated condition shall
be withdrawn from circulation and demonetized without
compensation to the bearer.
SEC. 57. Retirement of Old Notes and Coins. _ The Bangko Sentral
may call in for replacement notes of any series or
denomination which are more than five (5) years old and coins which
are more than ten (10) years old.
Notes and coins called in for replacement in accordance with this
provision shall remain legal tender for a period of one (1) year from
the date of call. After this period, they shall cease to be legal tender
but during the following year, or for such longer period as the
Monetary Board may determine, they may be exchanged at par and
without charge in the Bangko Sentral and by agents duly authorized
by the Bangko Sentral for this purpose. After the expiration of this
latter period, the notes and coins which have not been exchanged
shall cease to be a liability of the Bangko Sentral and shall be
demonetized. The Bangko Sentral shall also demonetize all notes and
coins which have been called in and replaced.
GENERAL BANKING LAW (RA 8791)
SECTION 3 Definition and Classification of Banks
3.1 Banks shall refer to entities engaged in the lending of funds
obtained in the form of deposits.
3.2 Banks shall be classified into:
a) Universal Banks
b) Commercial Banks
c) Thrift Banks, composed of:
i. Savings and mortgage banks
ii. Stock savings and loan associations
iii. Private development banks
d) Rural Banks are created to make needed credit available
and readily accessible in the rural areas for purposes of
comprehensive rural development.
e) Cooperative Banks provide financial banking and credit
services to cooperative organizations and to its members.
f) Islamic Banks the Al-Amanah Islamic Bank, which aims to
provide banking under the Sharia principles governing
banking.
Primary purpose is to promote ad accelerate the socio-
economic development of Autonomous Region by
performing banking, financing and investment
operations and to establish and participate in
agricultural, commercial and industrial ventures based
on Islamic Concept of Banking
Principal place of business is in Zamboanga
Philippines is based on European Concept of Banking
g) Quasi-banks shall refer to entities engaged in the borrowing
of funds through the issuance, endorsement, or assignment
with recourse or acceptance of deposit substitutes.
SECTION 4 Supervisory Powers - The operations and activities of
banks shall be subject to supervision of the Bangko Sentral.
"Supervision" shall include the following:
a) The issuance of rules of conduct or the establishment of
standards of operation for uniform application to all
institutions or functions covered, taking into consideration
the distinctive character of the operations of institutions and
the substantive similarities of specific functions to which
such rules, modes or standards are to be applied;
b) The conduct of examination to determine compliance with
laws and regulations if the circumstances so warrant as
determined by the Monetary Board;
c) Overseeing to ascertain that laws and regulations are
complied with; 4.4. Regular investigation which shall not
be oftener than once a year from the last date of
examination to determine whether an institution is
conducting its business on a safe or sound basis: Provided,
That the deficiencies/irregularities found by or discovered
by an audit shall be immediately addressed;
d) Inquiring into the solvency and liquidity of the institution
or
e) Enforcing prompt corrective action.
Note: The Bangko Sentral shall also have supervision over the
operations of and exercise regulatory powers over quasi-banks, trust
entities and other financial institutions which under special laws are
subject to Bangko Sentral supervision.
No person or entity shall engage in banking operations or quasi-
banking functions without authority from the Bangko Sentral:
Provided, however, That an entity authorized by the Bangko Sentral
to perform universal or commercial banking functions shall likewise
have the authority to engage in quasi-banking functions.
SECTION 23. Powers of a Universal Bank. A universal bank shall
have the authority to exercise, the powers of an investment house as
provided in existing laws and the power to invest in non-allied
enterprises.
SECTION 29. Powers of a Commercial Bank. A commercial bank
shall have, in addition to the general powers incident to corporations,
all such powers as may be necessary to carry on the business of
commercial banking, such as accepting drafts and issuing letters of
credit; discounting and negotiating promissory notes, drafts, bills of
exchange, and other evidences of debt; accepting or creating demand
deposits; receiving other types of deposits and deposit substitutes;
buying and selling foreign exchange and gold or silver bullion;
acquiring marketable bonds and other debt securities; and extending
credit
KINDS OF LOANS
1. Single Borrowers Limit (SBL)
2. DOSRI (Directors, Officers, Stockholders, and other
Related Interest)
3. Loans and Credit Accommodations against Real Estate
4. Loans and Credit Accommodations on Security of Chattels
and Intangible Properties
1. Single Borrowers Limit
General rule: The total loans, credit accommodations and guarantees
that may be extended by a bank to any person, partnership,
association, or corporation or other entity shall at no time exceed
25% of the net worth of such bank.
Exceptions: The Monetary Board may increase the limit prescribed
by an additional 10% of the net worth, when:
(1) The additional liabilities of any borrower are adequately
secured by trust receipts, shipping documents, warehouse
receipts or other similar documents transferring or securing
title;
(2) Covering readily marketable, nonperishable goods; and
(3) Which must be fully covered by insurance
To whom: any person, partnership, association, corporation or other
entities.
* The basis for determining compliance with the SBL is the total
credit commitment of the bank to the borrower
2. DOSRI (Directors, Officers, Stockholders, and other Related
Interest)
General rule: No director or officer of any bank
(1) Shall, directly or indirectly, for himself or as the representative or
agent of others, borrow from such bank, nor
(2) Shall he become a guarantor, endorser or surety for loans from
such bank to others, or in any manner be an obligor or incur any
contractual liability to the bank
Exception: There is a written approval of the majority of all the
directors of the bank, excluding the director concerned.
3. Loans and other Credit Accommodations against Real Estate
-Shall not exceed 75% of the appraise value of the respective real
estate security PLUS 60% of the appraised value of the insured
improvements.
4. Loans and Other Credit Accommodations on Security of
Chattels and Intangible Properties.
Loans and other credit accommodations on security of chattels and
intangible properties, such as, but not limited to,
a) patents,
b) trademarks,
c) trade names, and
d) copyrights
shall not exceed seventy-five percent (75%) of the appraised value of
the security
THE LAWS ON SECRECY BANK DEPOSITS
RA 1405
SECTION 2. All deposits of whatever nature with banks or banking
institutions in the Philippines including investments in bonds issued
by the Government of the Philippines are hereby considered as of an
absolutely confidential nature.
Exceptions Section 2 of Republic Act No. 1405 provides that bank
deposits and government bond investments may be examined,
inquired and looked into in the following instances:
(a) Upon written permission or consent in writing by the depositor
(b) In cases of impeachment of the President, Vice President,
members of the Supreme Court, members of the Constitutional
Commission and the Ombudsman for culpable violation of the
Constitution, treason, bribery, graft and corruption, other high crimes
or betrayal of public trust.
(c) Upon order of a competent court in cases of bribery5 or
dereliction of duty of public officials.6
(d) In cases where the money deposited or invested is the subject
matter of the litigation.
SECTION. 3. It shall be unlawful for any official or employee of a
bank to disclose to any person other than those mentioned in Section
Two hereof, or for an independent auditor hired by a bank to conduct
its regular audit to disclose to any person other than a bank director,
official or employee authorized by the bank, any information
concerning said deposits.
UNCLAIMED BALANCES ACT
SECTION. 1. Unclaimed balances shall include:
credits or deposits of money, bullion, security or other
evidence of indebtedness of any kind, and interest
with banks, buildings and loan associations, and trust
corporations
Of any person known to be dead or who has not made
further deposits or withdrawals during the preceding ten
years or more.
Effect: Such unclaimed balances shall be deposited with the
Treasurer of the Philippines to the credit of the Government of the
Republic of the Philippines to be used as the National Assembly may
direct.
ANTI-MONEY LAUNDERING ACT
Unlawful activity refers to any act or omission or series or
combination thereof involving or having direct relation to the
following:
"(1) Kidnapping for ransom;
"(2) Comprehensive Dangerous Drugs Act of 2002;
"(3) Anti-Graft and Corrupt Practices Act;
"(4) Plunder;
"(5) Robbery and extortion;
"(6) Jueteng and Masiao punished as illegal;
"(7) Piracy on the high seas;
"(8) Qualified theft;
"(9) Swindling;
"(10) Smuggling;
"(11) Violations of Electronic Commerce Act of 2000;
"(12) Hijacking and other violations; destructive arson and
murder,;
"(13) Terrorism and conspiracy to commit terrorism;
"(14) Financing of terrorism;
"(15) Bribery and Corruption of Public Officers;
"(16) Frauds and Illegal Exactions and Transactions;
"(17) Malversation of Public Funds and Property;
"(18) Forgeries and Counterfeiting;
"(19) Violations of Anti-Trafficking in Persons Act of 2003;
"(20) Violations of Forestry Code of the Philippines, as
amended;
"(21) Violations of Philippine Fisheries Code of 1998;
"(22) Violations of Philippine Mining Act of 1995;
"(23) Violations of Wildlife 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) Violation of Republic Act No. 6539, otherwise known as the
Anti-Carnapping Act of 2002, as amended;
"(26) Violations of Sections 1, 3 and 5 of Presidential Decree No.
1866, as amended, otherwise known as the 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) Violation of Migrant Workers and Overseas Filipinos Act;
"(29) Violation of Intellectual Property Code of the Philippines;
"(30) Violation of Anti-Photo and Video Voyeurism Act of 2009;
"(31) Violation of Anti-Child Pornography Act of 2009;
"(32) Violations of Special Protection of Children Against
Abuse, Exploitation and Discrimination;
"(33) Fraudulent practices and other; and
"(34) Felonies or offenses of a similar nature that are punishable
under the penal laws of other countries."
Money Laundering Offense. Money laundering is committed by any
person who, knowing that any monetary instrument or property
represents, involves, or relates to the proceeds of any unlawful
activity:
(a) transacts said monetary instrument or property;
(b) converts, transfers, disposes of, moves, acquires, possesses
or uses said monetary instrument or property;
(c) conceals or disguises the true nature, source, location,
disposition, movement or ownership of or rights with respect to
said monetary instrument or property;
(d) attempts or conspires to commit money laundering offenses
referred to in paragraphs (a), (b) or (c);
(e) aids, abets, assists in or counsels the commission of the
money laundering offenses referred to in paragraphs (a), (b) or
(c) above; and
(f) performs or fails to perform any act as a result of which he
facilitates the offense of money laundering referred to in
paragraphs (a), (b) or (c) above.
(g) Money laundering is also committed by any covered person
who, knowing that a covered or suspicious transaction is
required under this Act to be reported to the Anti-Money
Laundering Council (AMLC), fails to do so.
Covered transaction' is a transaction in cash or other equivalent
monetary instrument involving a total amount in excess of Five
hundred thousand pesos (PhP 500,000.00) within one (1) banking
day.
Suspicious transaction' are transactions with covered institutions,
regardless of the amounts involved, where any of the following
circumstances exist:
1. there is no underlying legal or trade obligation, purpose or
economic justification;
2. the client is not properly identified;
3. the amount involved is not commensurate with the business or
financial capacity of the client;
4. taking into account all known circumstances, it may be
perceived that the client's transaction is structured in order to
avoid being the subject of reporting requirements under the Act;
5. any circumstances relating to the transaction which is
observed to deviate from the profile of the client and/or the
client's past transactions with the covered institution;
6. the transactions is in a way related to an unlawful activity or
offense under this Act that is about to be, is being or has been
committed; or
7. any transactions that is similar or analogous to any of the
foregoing.
Reporting of Covered and Suspicious Transactions. -- Covered
institutions shall report to the AMLC all covered transactions and
suspicious transactions within five(5) working days from occurrences
thereof, unless the Supervising Authority prescribes a longer period
not exceeding ten (10) working days.
Should a transaction be determined to be both a covered transaction
and a suspicious transaction, the covered institution shall be required
to report the same as a suspicious transaction.
When reporting covered or suspicious transactions to the AMLC,
covered instituting and their officers and employees are prohibited
from communicating directly or indirectly, in any manner or by any
means, to any person or entity, the media, the fact that a covered or
suspicious transaction report was made, the contents thereof, or any
other information in relation thereto. Neither may such reporting be
published or aired in any manner or form by the mass media,
electronic mail, or other similar devices. In case of violation thereof,
the concerned officer and employee of the covered institution and
media shall be held criminally liable.
INTELLECTUAL PROPERTY RIGHTS
Section 21. Patentable Inventions. - Any technical solution of a
problem in any field of human activity which is new, involves an
inventive step and is industrially applicable shall be Patentable. It
may be, or may relate to, a product, or process, or an improvement of
any of the foregoing.
Section 22. Non-Patentable Inventions. - The following shall be
excluded from patent protection:
a) Discoveries, scientific theories and mathematical methods;
b) Schemes, rules and methods of performing mental acts,
playing games or doing business, and programs for
computers;
c) Methods for treatment of the human or animal body by
surgery or therapy and diagnostic methods practiced on the
human or animal body. This provision shall not apply to
products and composition for use in any of these methods;
d) Plant varieties or animal breeds or essentially biological
process for the production of plants or animals. This
provision shall not apply to micro-organisms and non-
biological and microbiological processes.
Provisions under this subsection shall not preclude
Congress to consider the enactment of a law providing sui
generis protection of plant varieties and animal breeds and
a system of community intellectual rights protection:
e) Aesthetic creations; and
f) Anything which is contrary to public order or morality.
Section 23. Novelty. . - An invention shall not be considered new if it
forms part of a prior art. (Sec. 9, R.A. No. 165a)
Section 24. Prior Art. - Prior art shall consist of:
a) Everything which has been made available to the public
anywhere in the world, before the filing date or the priority
date of the application claiming the invention; and
b) The whole contents of an application for a patent, utility
model, or industrial design registration, published in
accordance with this Act, filed or effective in the
Philippines, with a filing or priority date that is earlier than
the filing or priority date of the application: Provided, That
the application which has validly claimed the filing date of
an earlier application under Section 31 of this Act, shall be
prior art with effect as of the filing date of such earlier
application: Provided further, That the applicant or the
inventor identified in both applications are not one and the
same.
Section 121. Definitions. - As used in Part III, the following terms
have the following meanings:
"Mark" means any visible sign capable of distinguishing the goods
(trademark) or services (service mark) of an enterprise and shall
include a stamped or marked container of goods;
"Collective mark" means any visible sign designated as such in the
application for registration and capable of distinguishing the origin or
any other common characteristic, including the quality of goods or
services of different enterprises which use the sign under the control
of the registered owner of the collective mark;
"Trade name" means the name or designation identifying or
distinguishing an enterprise;
Section 123. Registrability. - 123.1. A mark cannot be registered if it:
(a) Consists of immoral, deceptive or scandalous matter, or
matter which may disparage or falsely suggest a connection with
persons, living or dead, institutions, beliefs, or national symbols,
or bring them into contempt or disrepute;
(b) Consists of the flag or coat of arms or other insignia of the
Philippines or any of its political subdivisions, or of any foreign
nation, or any simulation thereof;
(c) Consists of a name, portrait or signature identifying a
particular living individual except by his written consent, or the
name, signature, or portrait of a deceased President of the
Philippines, during the life of his widow, if any, except by
written consent of the widow;
(d) Is identical with a registered mark belonging to a different
proprietor or a mark with an earlier filing or priority date, in
respect of:
(i) The same goods or services, or
 (ii) Closely related goods or services, or
(iii) If it nearly resembles such a mark as to be likely to
deceive or cause confusion;
(e) Is identical with, or confusingly similar to, or constitutes a
translation of a mark which is considered by the competent
authority of the Philippines to be well-known internationally and
in the Philippines, whether or not it is registered here, as being
already the mark of a person other than the applicant for
registration, and used for identical or similar goods or services:
Provided, That in determining whether a mark is well-known,
account shall be taken of the knowledge of the relevant sector of
the public, rather than of the public at large, including
knowledge in the Philippines which has been obtained as a result
of the promotion of the mark;
(f) Is identical with, or confusingly similar to, or constitutes a
translation of a mark considered well-known in accordance with
the preceding paragraph, which is registered in the Philippines
with respect to goods or services which are not similar to those
with respect to which registration is applied for: Provided, That
use of the mark in relation to those goods or services would
indicate a connection between those goods or services, and the
owner of the registered mark: Provided further, That the interests
of the owner of the registered mark are likely to be damaged by
such use;
(g) Is likely to mislead the public, particularly as to the nature,
quality, characteristics or geographical origin of the goods or
services;
(h) Consists exclusively of signs that are generic for the goods
or services that they seek to identify;
(i) Consists exclusively of signs or of indications that have
become customary or usual to designate the goods or services in
everyday language or in bona fide and established trade practice;
(j) Consists exclusively of signs or of indications that may serve
in trade to designate the kind, quality, quantity, intended
purpose, value, geographical origin, time or production of the
goods or rendering of the services, or other characteristics of the
goods or services;
(k) Consists of shapes that may be necessitated by technical
factors or by the nature of the goods themselves or factors that
affect their intrinsic value;
(l) Consists of color alone, unless defined by a given form; or
(m) Is contrary to public order or morality.
Section 172. Literary and Artistic Works. - 172.1. Literary and artistic
works, hereinafter referred to as "works", are original intellectual
creations in the literary and artistic domain protected from the
moment of their creation and shall include in particular:
(a) Books, pamphlets, articles and other writings;
(b) Periodicals and newspapers;
(c) Lectures, sermons, addresses, dissertations prepared for oral
delivery, whether or not reduced in writing or other material
form;
(d) Letters;
(e) Dramatic or dramatico-musical compositions; choreographic
works or entertainment in dumb shows;
(f) Musical compositions, with or without words;
(g) Works of drawing, painting, architecture, sculpture,
engraving, lithography or other works of art; models or designs
for works of art;
(h) Original ornamental designs or models for articles of
manufacture, whether or not registrable as an industrial design,
and other works of applied art;
(i) Illustrations, maps, plans, sketches, charts and three-
dimensional works relative to geography, topography,
architecture or science;
(j) Drawings or plastic works of a scientific or technical
character;
(k) Photographic works including works produced by a process
analogous to photography; lantern slides;
(l) Audiovisual works and cinematographic works and works
produced by a process analogous to cinematography or any
process for making audio-visual recordings;
(m) Pictorial illustrations and advertisements;
(n) Computer programs; and
(o) Other literary, scholarly, scientific and artistic works.
Section 173. Derivative Works. - 173.1. The following derivative
works shall also be protected by copyright:
(a) Dramatizations, translations, adaptations, abridgments,
arrangements, and other alterations of literary or artistic works;
and
(b) Collections of literary, scholarly or artistic works, and
compilations of data and other materials which are original by
reason of the selection or coordination or arrangement of their
contents.
The works shall be protected as new works: Provided however, That
such new work shall not affect the force of any subsisting copyright
upon the original works employed or any part thereof, or be
construed to imply any right to such use of the original works, or to
secure or extend copyright in such original works.
Section 175. Unprotected Subject Matter. - Notwithstanding the
provisions of Sections 172 and 173, no protection shall extend, under
this law, to any idea, procedure, system, method or operation,
concept, principle, discovery or mere data as such, even if they are
expressed, explained, illustrated or embodied in a work; news of the
day and other miscellaneous facts having the character of mere items
of press information; or any official text of a legislative,
administrative or legal nature, as well as any official translation
thereof (n)
Section 176. Works of the Government. - 176.1. No copyright shall
subsist in any work of the Government of the Philippines. However,
prior approval of the government agency or office wherein the work
is created shall be necessary for exploitation of such work for profit.
Such agency or office may, among other things, impose as a
condition the payment of royalties. No prior approval or conditions
shall be required for the use of any purpose of statutes, rules and
regulations, and speeches, lectures, sermons, addresses, and
dissertations, pronounced, read or rendered in courts of justice, before
administrative agencies, in deliberative assemblies and in meetings of
public character.
The author of speeches, lectures, sermons, addresses, and
dissertations mentioned in the preceding paragraphs shall have the
exclusive right of making a collection of his works. (n)
Notwithstanding the foregoing provisions, the Government is not
precluded from receiving and holding copyrights transferred to it by
assignment, bequest or otherwise; nor shall publication or
republication by the Government in a public document of any work
in which copyright is subsisting be taken to cause any abridgment or
annulment of the copyright or to authorize any use or appropriation
of such work without the consent of the copyright owner.

Section 177. Copyright or Economic Rights. - Subject to the

provisions of Chapter VIII, copyright or economic rights shall consist
of the exclusive right to carry out, authorize or prevent the following
acts:

Reproduction of the work or substantial portion of the work;

Dramatization, translation, adaptation, abridgment, arrangement or

other transformation of the work;

The first public distribution of the original and each copy of the work
by sale or other forms of transfer of ownership;

Rental of the original or a copy of an audiovisual or cinematographic

work, a work embodied in a sound recording, a computer program, a
compilation of data and other materials or a musical work in graphic
form, irrespective of the ownership of the original or the copy which
is the subject of the rental; (n)

Public display of the original or a copy of the work;

Public performance of the work; and

Other communication to the public of the work. (Sec. 5, P. D. No.

49a)