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REVISITING BATAS PAMBANSA BLG.

22 OR THE
BOUNCING CHECKS LAW
By Atty. Lorna Patajo-Kapunan November 16, 2015

In order to afford protection to business and the public in general, and prevent the circulation of worthless
checks, Batas Pambansa (BP) Blg. 22, also known as An Act Penalizing the Making or Drawing and Issuance of
a Check Without Sufficient Funds or Credit and For Other Purposes, was approved in April 1979. The law
punishes the acts of making and issuing a check with knowledge by the issuer that at the time the check is
issued, he does not have sufficient funds, and the failure to keep sufficient funds to cover the full amount of the
check if presented within a period of 90 days from the date appearing on the check.
More than three decades after its enactment, let us examine how the law has evolved throughout these years.

When BP 22 was passed, many questioned the statutes validity vis--vis the constitutional guarantee that no
person shall be imprisoned for nonpayment of debt. In upholding the constitutionality of BP 22, the Supreme
Court (SC) held that the gravamen of the offense punished by BP 22 is the act of making and issuing a
worthless check or a check that is dishonored upon its presentation for payment. It is not the nonpayment of an
obligation which the law punishes. The law is not intended or designed to coerce a debtor to pay his debt. The
thrust of the law is to prohibit, under pain of penal sanctions, the making of worthless checks and putting them
in circulation. Because of its deleterious effects on the public interest, the practice is proscribed by the law. The
law punishes the act not as an offense against property, but an offense against public order. (Lozano v. Martinez,
G.R. No. L-63419, 18 December 1986)

BP 22 punishes the issuer of the worthless check with imprisonment of not less than 30 days but not more than
one year or a fine of not less than but not more than double the amount of the check, which fine shall in no case
exceed P200,000 or both such fine and imprisonment at the discretion of the court. Prior to the
amendment of BP Blg. 129 by Republic Act (RA) 7691 (An Act Expanding the Jurisdiction of the Municipal
Trial Courts, Municipal Circuit Trial Courts and the Metropolitan Trial Court), the Regional Trial Court may
acquire jurisdiction over BP 22 cases depending on the penalties imposed. However, with the subsequent
amendment by RA 7691, the Metropolitan Trial Court assumes exclusive jurisdiction over BP 22 cases.

For a time, many were misled that violations of BP 22 have been decriminalized when the SC rendered decisions
modifying the penalties imposed by the lower courts by imposing only the penalty of fine. (Vaca, et al. v. Court of
Appeals [G.R. No. 131714, 16 November 1998] and Rosa Lim v. People of the Philippines [G. R. No. 130038, 18
September 2000]) In Administrative Circular 12-2000 issued on November 21, 2000, the SC required all courts
and judges concerned to take note of the policy rendered in those two cases, particularly on the matter of the
imposition of penalties, making it appear that violation of BP 22 would only merit fines. But the SC was quick to
issue another circular, A.M. 00-11-01-SC on February 13, 2001, clarifying that when A.M. 12-2000 was issued, it
was not meant to remove imprisonment as an alternative penalty, but to lay down a rule of preference in the
application of the penalties provided for in BP 22. In effect, judges are not directed to impose fine only as
penalty for BP 22, instead they are directed to exercise their sound discretion, and taking into consideration the
peculiar circumstances of each case, to determine whether the imposition of a fine alone would best serve the
interests of justice or whether non-imposition of imprisonment would be contrary to the imperatives of justice.
In April 2003 in order to facilitate an expeditious and inexpensive determination of BP 22 cases, the SC had
included the violation of BP 22 as one of the cases governed by the Rules of Summary Procedure. One notable
provision under the Summary Procedure is that the Court shall not order the arrest of a person who was
charged except for failure to appear in Court whenever required.

It is the main intention of the law to make the issuer of a worthless check liable since the introduction of
worthless checks is not just harmful to the innocent payees but the entire economy, as well. However, one must
bear in mind that the mere issuance of a worthless check would not make one liable for BP 22. It is incumbent
upon the accuser to prove not only that the accused issued a check that was subsequently dishonored, but it
must be established that the accused was actually notified that the check was dishonored. The Notice of
Dishonor must be in writing. A mere oral notice to the drawer or maker of a check is not enough to convict him
with violation of BP 22. (Bax v. People, G.R. No. 149858, 5 September 2007)

Aside from threat of imprisonment that an issuer of a bum check may face, he shall, after conviction, be
disqualified to run for public office for a certain period of time. Under the Omnibus Election Code, any person
who has been sentenced by final judgment for a crime involving moral turpitude, shall be disqualified to be a
candidate and to hold any office. As held by the SC, violation of BP 22 is considered a crime involving moral
turpitude, just like the crime of embezzlement, forgery, robbery and swindling.

More than three decades after its enactment, does BP 22 still serve its purpose? Does the law still serve as a
deterrent to those unscrupulous issuers of bum checks.

Let us consider these: (1) It is undeniable that what deters a person from committing a crime is the possibility of
arrest and imprisonment. When violation of BP 22 was included in those governed by the Summary Procedure,
a warrant of arrest is not anymore issued when the case is filed in Court. It is only when the accused fails to
appear in Court that a warrant of arrest may be issued against him; (2) Since the Metropolitan/Municipal Trial
Courts have exclusive jurisdiction over violations of BP 22, no Hold Departure Orders can be issued against
those violators since Metropolitan/Municipal Trial Courts have no power to issue the same. Accused under trial
can thus easily evade prosecution by leaving the country; and (3) The aggrieved parties have also failed to pursue
the case for BP 22 since the Courts require them to pay the corresponding filing fees. They need to shell out
amounts for filing fees after they have been duped and victimized with checks, which they cannot encash.

In the end, there appears a need to revisit the provisions of BP 22 and other laws affecting the same to afford
the fullest protection to the public and the economy in general. A check as a substitute for money plays a vital
role in commercial transactions. Any person who wishes to trample upon the smooth flow of commercial
transactions must be held liable.
SEP

SHOULD B.P. 22 BE DECRIMINALIZED?


There are moves again in Congress to decriminalize Batas Pambansa 22, otherwise known as the Bouncing Checks Law.
It has been argued that BP 22 violates the constitutional provision that no person shall be imprisoned for non-payment
of debt; and that court dockets are clogged because they have become the collecting agencies for these bounced
checks. But while this is true, it has been counter-argued that what the law punishes is not the failure to pay the debt but
the act of issuing a bad check and putting it in circulation.

Past records of the Central Bank reveal that the approximate value of bounced checks is more than 200 million pesos per
day. Checks (dated or post-dated) are the usual form of payment for goods, services and even loans. It is even issued to
guarantee certain payment of a contractual obligation, sometimes, without taking into account whether it is funded or
not. Commercially, they are considered as currency substitutes. Thus, bounced checks have serious repercussions in
trade and commerce, and the stability of banking communities. Hence, the issuer of a bounced check should be
responsible for his action, and accept the consequence thereof, whether criminally and/or civilly.

However, the criminal aspect of BP 22 never deterred people from issuing bad checks. Some are just too careless in
issuing checks without sufficient funds. After all, the law and jurisprudence are favorable to the issuer/accused, in the
following manner:

1. It is indispensable that the issuer of a bounced check must be notified in WRITING about the fact of dishonor, even
before a criminal case could be filed (This could be difficult, especially if you could no longer find the issuer anymore);

2. Although it is a criminal case, with a corresponding civil liability, a filing fee based on the value of the check/s and all
damages claimed, has to be paid by the complainant even before the courts accept the case (Thus, the higher the amount
of the check, the higher the filing fee, which could sometimes discourage the complainant from filing a case because of
he expense);

3. No warrant of arrest can now be issued against the accused, unless he/she fails to appear in court (Thus, the scare
factor of having a BP 22 case filed is no longer there);

4. The court of jurisdiction, which is the Municipal/Metropolitan Court, has no power to issue any hold-departure order
(The accused could leave the country for good);

5. Courts have the discretion of imposing either: imprisonment or a fine of not more than double the amount of the check
up to a maximum of 200,000 pesos, or both.

Lately, courts have not been imposing imprisonment for those found guilty of BP 22. Most often, a fine is just imposed, or
a subsidiary penalty of imprisonment from 30 days to one year, per bounced check, if the culprit could no longer pay the
amount of the bounced check issued. The discretion of what penalty to impose rests with the judges, and unless there is a
clear manifestation of bad faith, then, most often, no imprisonment is imposed; the accused will only be fined. But this
does not mean that BP 22 has already been decriminalized. It is still criminal in nature, even if only a fine is imposed as
penalty. The culprit will still have a criminal record.

Finally, for those charging usurious interest for loans, even if supported with checks, or promissory notes will not be
tolerated by the courts. In a recent decision of the Supreme Court a 3.5% monthly interest of a credit card company was
found too high, and was not tolerated. Ten percent monthly interest was found unconscionable and was reduced to a
mere 12% interest per annum. Now, I wonder why, banks in general, are shying away from lawyers, politicians and
policemen as creditors.
Supreme Court clarifies B.P. 22 circular
Recently, the Supreme Court came out with Administrative Circular 12-2000 which, ostensibly, removed the
penalty of imprisonment against those who are found guilty of violating B.P. 22 (The Bouncing Checks
Law). This circular caused a bit of confusion and put in jeopardy the acceptance of checks as a means of
commercial payment. To ease the worries and concerns, the Supreme Court came out with a clarification in
its official website. For the benefit of educating the general public, we now quote the said article verbatim:

When SC Administrative Circular 12-2000 concerning the penalty for violation of B.P. 22 or the Bouncing
Checks Law was issued last November 21, 2000, members of the Judiciary, as well as the general public,
asked for its clarification. Some called the Circular a form of judicial legislation which amended B.P. 22 by
deleting the penalty of subsidiary imprisonment for persons who violate this law. Administrative Circular
13-2001, issued today by Chief Justice Davide, clarifies Circular 12-2000, particularly the authority of judges
to impose the penalty of imprisonment for B.P. 22 violations and impose subsidiary imprisonment once a
person found guilty of violating the provisions of the said law is unable to pay the fine sentenced. The Circular
said that the clear tenor and intention of Administrative Circular 12-2000 is not to remove imprisonment as
an alternative penalty, but to lay down a rule of preference in the application of the penalties provided for in
B.P. 22.

This means that where the circumstances of both the offense and the offender clearly indicate good faith or
a clear mistake of fact without taint of negligence, the imposition of a fine alone should be considered as the
more appropriate penalty. The decision to impose only a fine, according to the Circular, rests solely on the
Judge. The Court stressed that should the Judge decide that imprisonment is the more appropriate penalty,
Administrative Circular 12-2000 ought not be deemed a hindrance.

Thus, Administrative Circular 12-2000 does not remove imprisonment as an alternative penalty for violations
of B.P. 22. The Court also stressed that should only a fine be imposed and the accused be unable to pay the
fine, there is no legal obstacle to the application of the Revised Penal Code provisions on subsidiary
imprisonment.

Has the issuance of bouncing checks been


decriminalized?
A LAW EACH DAY (KEEPS TROUBLE AWAY) By A LAW EACH DAY (KEEPS TROUBLE
AWAY) by Jose C. Sison | Updated October 3, 2002 - 12:00am
0 0 googleplus0 0
This is the question in the minds of many in the light of the Supreme Court Administrative Circulars
where the imposition of fine instead of imprisonment has seemingly been preferred as penalty for
violation of the Bouncing Checks Law(B.P.22). And this question has been sufficiently answered in
this case of Sammy and George. Also resolved in this case is whether or not payment through
compensation or offsetting can preclude prosecution for violation of B.P.22.

George and Sammy are the owners of a fleet of tourist and transportation buses plying the Bicol
route. To supply the lubricants and fuel needs of their buses, they purchase on credit from Mario
who owns three gasoline stations in various parts of Bicol. Mario’s gasoline station in Iriga
City has, in turn, been designated as the booking and ticketing office of Sammy and
George’s transportation company. The arrangement between them is that George and
Sammy make periodic payments of their purchases of various oil products through the issuance of
checks. Mario in turn also remit the proceeds of ticket sales to George and Sammy by issuing his
check. Also sent together with Mario’s remittances are the remittances of the ticket sales of
the booking office in Baao which is managed separately and independently by another agent.

Over a period, the purchases of George and Sammy has accumulated up to the amount of
P235,387.33 because the checks they issued in payment thereof were all dishonored by the bank
upon presentment for payment for being drawn against insufficient funds. When a subsequent
check in the amount of P58,237.75 issued in payment of the purchases of oil products and
gasoline the month before, also bounced, Mario already sent a demand letter to George and
Sammy to make good this last check for P58,237.75 or pay the amount thereof. The latter
however did not heed his demand. Instead they told Mario to wait for a while. Then they also sent
a memorandum to Mario returning the latter’s checks unencashed representing remittance
of ticket sales of booking offices located at Mario’s gasoline station in Iriga City and in Baao,
totaling P66,839.25. They asked Mario to just offset the said checks to their gasoline account so
that the balance of their obligation to be "paid on schedule" will be P226,785.83 without specifying
which of their dishonored check was being offset.

Mario however still proceeded with his threatened suit. He filed a case for violation of B.P.22
against George and Sammy covering the dishonored check for P58,237.75. At the trial, Sammy
admitted to have drawn the said check to pay Mario’s gasoline station and it was not
covered by sufficient funds at the time of its issuance due to uncollected receivables. He also
could not tell if Mario agreed to the offsetting as he did not talk to the latter.

After trial, the lower court convicted George and Sammy and sentenced them to suffer the penalty
of imprisonment of six months. This decision was affirmed by the Court of Appeals (CA). The CA
ruled that there was no clear and convincing evidence of offsetting. And even if there was, it will
not abate the prosecution for violation of the Bouncing Checks Law. So it affirmed the sentence of
George and Sammy.

Were the lower court and the CA correct?

It is correct in finding George and Sammy guilty of violating the Bouncing Checks Law but not in
sentencing them to imprisonment.

The Bouncing Checks Law has made the mere act of issuing a bum check a malum prohibitum
(wrong because it is prohibited by law not because it is inherently immoral), an act proscribed by
the legislature for being deemed pernicious and inimical to public welfare. The material part of the
offense under this law is the act of issuing a worthless check or a check that is dishonored upon its
presentment for payment. Thus even if there had been payment through compensation or some
other means, there could still be prosecution for violation of B.P.22. Besides no compensation
could take place because Sammy and George did not specify which dishonored check is being
offset. Applying the Civil Code (Art. 1289 in relation to art.1254) the unencashed checks of Mario
amounting to P66,839.25 should have been applied to the earlier dishonored checks of George
and Sammy amounting to P235,387.33 which is more onerous than the subject check amounting
to only P58,237.75. Furthermore, two checks sought to be offset represent collections from Baao
ticket sales office. Mario only acted as intermediary in remitting the ticket sales from Baao. Thus
he is not a debtor of George and Sammy as far as those remittances are concerned. So no
compensation can take place for those remittances.

While George and Sammy is guilty, the penalty of imprisonment should be deleted and instead a
fine in double the value of the subject check should be imposed, with subsidiary imprisonment in
case of insolvency. Supreme Court administrative circular no. 12-2000 as clarified by
Administrative Circular 13-2001 established a rule of preference in imposing penalties in B.P.22
cases. It would best serve the ends of criminal justice if, in fixing the penalty to be imposed for
violation of B.P.22, the same philosophy underlying the Indeterminate Sentence law is observed,
i.e. that of redeeming valuable human material and preventing unnecessary deprivation of
personal liberty and economic usefulness with due regard to the protection of social order. The
intention is not to decriminalize violation of B.P. 22 nor to delete the penalty of imprisonment. The
propriety and wisdom of decriminalizing violation of B.P.22 is best left to the legislature. The
intention of the administrative circulars is to lay down a rule of preference in the application of the
penalties provided for in B.P.22.The gist of the circulars is to consider the underlying
circumstances of the case such that if the situation calls for the imposition of the alternative
penalty of fine rather than imprisonment, the courts should not hesitate to do so. Where the
circumstances of the case, for instance indicate good faith or a clear mistake of fact without taint of
negligence, the imposition of fine alone may be considered as the more appropriate penalty.

In this case George and Sammy had exerted efforts to settle their obligations. The fact of returning
the checks of Mario representing his remittances of ticket sales, unencashed, indicates good faith
on their part. The deletion of the penalty of imprisonment is therefore proper (Tan vs. Mendez, Jr.
G.R.138669 June 6, 2002).

BOUNCING CHECKS (B.P. 22)


By: Atty.Fred | July 20, 2006 in Corporate and Investments, Criminal Law, Litigation
45 Replies | Related posts at the bottom of article

Some people still have confidence, which confidence may be regarded as misplaced by others, in the deterrent
effect of Batas Pambansa Blg. 22, also known as the Bouncing Checks Law (full text here). Here are some
things a layman should know:

1. Filing fees are generally not required for criminal cases. For B.P. 22 cases, however, the complainant is
required to pay the filing fee (based on the value of the check/s and the damages claimed, just like in civil cases)
upon filing of the case in court.

2. One major deterrent against the issuance of bouncing checks is the threat of a warrant of arrest being issued
once the criminal case is filed in court. This is no longer true. No warrant of arrest is issued unless the accused
fails to appear when required by the court.

3. Even if a criminal case under B.P. 22 is filed, the court cannot issue a hold-departure order. All violations of
the Bouncing Checks Law, regardless of the amount involved, are filed only with the municipal/metropolitan trial
courts. These courts cannot issue a hold-departure order.

4. Courts have the discretion of imposing: (a) imprisonment only; (b) fine only; OR (c) both. It is entirely possible
that only a fine, without imprisonment, will be imposed.

5. The issuer is not automatically liable simply because the check bounced. A check generally
bounces when dishonored upon presentment (reasons include: account closed, drawn against
insufficient funds or DAIF). However, it is indispensable that the issuer must be notified in WRITING about the
fact of dishonor, and he has five (5) days from receipt of the written notice within which to pay the value of the
check or make arrangements for the payment thereof. This is based on the 1999 decision of the Supreme Court
in King vs. People of the Philippines (G.R. No. 131540).

Recently, the SC appears to have relaxed this ruling in the 2005 case of Yulo vs. People of the
Philippines (G.R. 142762). In this case, the SC reiterated the elements or requisites of the offense penalized by
BP 22:

(1) the making, drawing, and issuance of any check to apply for account or for value;

(2) the knowledge of the maker, drawer, or issuer that at the time of issue he does not have sufficient funds in or
credit with the drawee bank for the payment of the check in full upon its presentment; and
(3) the subsequent dishonor of the check by the drawee bank for insufficient funds or credit or dishonor for the
same reason had not the drawer, without any valid cause, ordered the bank to stop payment.

It is immediately clear that the written notice is not an element of the crime. In fact, in the Yulo case, the High
Tribunal rejected the argument of the accused regarding the absence of a written notice, thus:

We likewise find no reason to sustain petitioners contention that she was not given any notice of dishonor.
Myrna had no reason to be suspicious of petitioner. It will be recalled that Josefina Dimalanta assured Myrna
that petitioner is her best friend and a good payer. Consequently, when the checks bounced,
Myrna would naturally turn to Josefina for help. We note that Josefina refused to give Myrna petitioners
address but promised to inform petitioner about the dishonored checks.

This ruling, however, did not categorically overturn the doctrine enunciated in the earlier King case. In other
words, at this stage, both sides could logically argue either way.

PRESS RELEASES
SOURCE: Press and Public Affairs Bureau

Decriminalize issuance of bouncing checks - Nograles


29-January-2011, 10:55:06 AM

The Bouncing Checks Law has outlived its purpose, Rep. Karlo Alexei B. Nograles stressed as he proposed the
repeal of Batas Pambansa Bilang 22, contained in House Bill No. 3954, "to serve the ends of justice."

"The repeal of the Bouncing Checks Law will not render the creditors unprotected from unscrupulous debtors under
Revised Penal code," the young Nograles said.

Nograles said creditors can still go after the unscrupulous debtors by prosecuting them for estafa or other forms of
swindling as defined in Article 315 and 316 of the Revised Penal Code or a civil action for collection of the sum of
money owed the creditor.

"It is now time to decriminalize the issuance of bouncing checks," the young lawmaker from Davao City pointed
out.

Oftentimes, creditors who lend money require the issuance of postdated checks to pay existing financial
obligations. At the time the checks were issued there was no malice or intent to defraud the creditor but the
debtor, due to financial need, was merely complying with the demand most often usurious interest rates,
otherwise he cannot seek credit, he pointed out.

"We must protect the rights of both the debtor and the creditor. We must protect creditors from deceitful debtors,
but debtors must also be shielded from opportunist usurers," Nograles said.

BP 22, enacted in 1979, states that any person who makes or draws and issues a check knowing that his or her
bank account does not have sufficient funds shall be penalized with imprisonment of 30 days to one year or a fine
of not less than but not more than double the amount of the check which fine shall in no case exceed P200,000, or
both at the discretion of the court.

The same penalty is also imposed upon any person who, having sufficient funds in or credit with the drawee bank
when he makes or draws and issues a check, fails to keep sufficient funds or to maintain a credit to cover the full
amount of the check if presented within a period of 90 days from date appearing thereon, for which reason it is
dishonored by the drawee bank.

Criminal prosecutions for violation of BP 22 involve basically the issuance of postdated checks as legal evidence of
indebtedness.

Upon effectivity of the proposed repealing law, "all criminal cases pending in court for violation of BP 22 shall be
deemed dismissed by operation of law, without prejudice to the accompanying civil action, and the prosecution to
any liability for violation of any provision of the Revised Penal Code."
One problem that many businessmen face is bouncing checks. Would you share your opinion
on bouncing checks and collection cases raised before the courts?

In recent years, the court has tended towards de- criminalizing violations of BP 22 (Batas
Pambansa 22, the Anti-Bouncing Check Law). The original purpose of the law was to jail these
people who issue these bouncing checks but situations changed over time. The human aspect of
conducting our affairs seems to be overpowering the original intent.

There was a time that when you issue a bouncing check, you go to jail. In recent years, that has
been changing. There is a tendency to decriminalize things. That has been brought about by
many factors. One is the overcongestion of jails. There are not enough jails to house people who
violate the law.

Two: the government simply does not have the funds to build them and to hire lawyers, for the
facilities, the resources that go in maintaining jails.

Its a big problem. It seems that the faith that we used to put in a check, and the word of honor
that usu- ally goes with the check seem to be disappearing.

Wont decriminalizing bouncing checks embolden people to write more of them?

Just try to see the difference between the Philip- pine and the US situation. In the United
States, why is it that people are so afraid to let their checks bounce? Because people wont
trust you anymore. Government will come after you. Youll go to jail. Its not something you can
do and walk away from.

Why is it that in the Philippines, somebody can write a check and cannot pay, and then we are
practically at the mercy of that guy? When I was with the bank (he was VP and general counsel
of Commercial Bank of Manila), we used to have a saying, If we lend you 1,000 pesos and you
dont pay, you have a problem. But if I lend you 1 million pesos and you dont pay, I have a
problem.

The solution here is not strictly legal. We need to establish a very strong, credible credit
database because people here can act with impunity because nothing gets into the record. They
do this one day. Next month, they do it again.

Corruption is not just in government. If you go to the bank and you have a bad record, if you
have connections, your bad record can be suppressed.