NEW CIVIL CODE the fact that a covered transaction report was made, the
contents thereof, or any other information in relation thereto.
Art. 484. There is co-ownership whenever the ownership of an
undivided thing or right belongs to different persons.
Art. 405. For the concession and approval referred to in the
preceding article it is necessary:
(1) That the minor be eighteen years of age;
(2) That he consent thereto; and
(3) That the concession be deemed convenient for the
minor.
The concession shall be recorded in the Civil Register. (323a)
BSP CIRCULAR NO. 302
Sec. 9. Prevention of Money Laundering: Customer
Identification Requirements and Record Keeping – (a)
Customer identification. – Covered institutions shall establish
and record the true identity of its clients based on official
documents. They shall maintain a system of verifying the true
identity of their clients and, in case of corporate clients, require
a system of verifying their legal existence and organizational
structure, as well as the authority and identification of all
persons purporting to act on their behalf.
The provisions of existing laws to the contrary
notwithstanding, anonymous accounts, accounts under
fictitious names, and all other similar accounts shall be
absolutely prohibited. Peso and foreign currency non-checking
numbered accounts shall be allowed. The BSP may conduct
annual testing solely limited to the determination of the
existence and the identity of the owners of such accounts.
(b) Record Keeping. – All records of all transactions of covered
institutions shall be maintained and safely stored for five (5)
years from the dates of transactions. With respect to closed
accounts, the records on customer identification, account files
and business corrrespondence, shall be preserved and safely
stored for at leat five (5) years from the dates when they were
closed.
(c) Reporting of Covered Transactions. – Covered institutions
shall report to the AMLC all covered transactions within five
(5) working days from occurrence thereof, unless the
Supervising Authority concerned prescribes a longer period
not exceeding ten (10) working days.
When reporting covered transactions to the AMLC, covered
institutions and their officers, employees, representatives,
agents, advisors, consultants or associates shall not be deemed
to have violated Republic Act. No. 1405, as amended; Republic
Act. No. 6426, as amended; Republic Act. No. 8791 and other
similar laws, but are prohibited from communicating, directly
or indirectly, in any manner or by any means, to any person
In case of violation thereof, the concerned officer, employee,
representative, agent, advisor, consultant or associate of the
covered institution, shall be criminally liable. However, no
administrative, criminal or civil proceedings, shall lie against
any person for having made a covered transaction report in the
regular performance of his duties and in good faith, whether or
not such reporting results in any criminal prosecution under
this Act or any other Philippine law.
When reporting covered transactions to the AMLC, covered
institutions and their officers, employees, representatives,
agents, advisors, consultants or associates are prohibited from
communicating, directly or indirectly, in any manner or by any
means, to any person, entity, the media, the fact that a covered
transaction report was made, the contents therof, 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, employee, representative, agent,
advisor, consultant or associate of the covered institution, or
media shall be held criminally liable.
GENERAL BANKING LAW
SECTION 36. Restriction on Bank Exposure to Directors,
Officers, Stockholders and Their Related Interests. — No
director or officer of any bank shall, directly or indirectly, for
himself or as the representative or agent of others, borrow
from such bank nor shall he become a guarantor, indorser or
surety for loans from such bank to others, or in any manner be
an obligor or incur any contractual liability to the bank except
with the written approval of the majority of all the directors of
the bank, excluding the director concerned: Provided, That
such written approval shall not be required for loans, other
credit accommodations and advances granted to officers under
a fringe benefit plan approved by the Bangko Sentral. The
required approval shall be entered upon the records of the
bank and a copy of such entry shall be transmitted forthwith to
the appropriate supervising and examining department of the
Bangko Sentral.
Dealings of a bank with any of its directors, officers or
stockholders and their related interests shall be upon terms not
less favorable to the bank than those offered to others.
After due notice to the board of directors of the bank, the office
of any bank director or officer who violates the provisions of
this Section may be declared vacant and the director or officer
shall be subject to the penal provisions of the New Central
Bank Act.
The Monetary Board may regulate the amount of loans, credit
accommodations and guarantees that may be extended,
directly or indirectly, by a bank to its directors, officers,
stockholders and their related interests, as well as investments
of such bank in enterprises owned or controlled by said
directors, officers, stockholders and their related interests.
However, the outstanding loans, credit accommodations and
guarantees which a bank may extend to each of its
stockholders, directors, or officers and their related interests,
shall be limited to an amount equivalent to their respective
unencumbered deposits and book value of their paid-in capital
contribution in the bank: Provided, however, That loans, credit
accommodations and guarantees secured by assets considered
as non-risk by the Monetary Board shall be excluded from such
limit: Provided, further, That loans, credit accommodations
and advances to officers in the form of fringe benefits granted
in accordance with rules as may be prescribed by the Monetary
Board shall not be subject to the individual limit.
The Monetary Board shall define the term "related interests."
The limit on loans, credit accommodations and guarantees
prescribed herein shall not apply to loans, credit
accommodations and guarantees extended by a cooperative
bank to its cooperative shareholders. (83a)
THE NEW CENTRAL BANK ACT
Section 26. Bank Deposits and Investments. - Any director,
officer or stockholder who, together with his related interest,
contracts a loan or any form of financial accommodation from:
(1) his bank; or (2) from a bank (a) which is a subsidiary of a
bank holding company of which both his bank and the lending
bank are subsidiaries or (b) in which a controlling proportion
of the shares is owned by the same interest that owns a
controlling proportion of the shares of his bank, in excess of
five percent (5%) of the capital and surplus of the bank, or in
the maximum amount permitted by law, whichever is lower,
shall be required by the lending bank to waive the secrecy of
his deposits of whatever nature in all banks in the Philippines.
Any information obtained from an examination of his deposits
shall be held strictly confidential and may be used by the
examiners only in connection with their supervisory and
examination responsibility or by the Bangko Sentral in an
appropriate legal action it has initiated involving the deposit
account.
MANUAL OF REGULATIONS FOR BANKS
Sec. X327 Transactions Covered. The terms loans, other credit
accommodations and guarantees as used herein shall refer to
transactions of the bank which involve the grant of any loan,
advance or other credit accommodation in any form
whatsoever, whether renewal, extension or increase, and shall
include:
a. Any advance by means of an incidental or temporary
overdraft, cash item, “vale”, etc.;
b. Any advance of unearned salary or other unearned
compensation for periods in excess of thirty (30) days;
c. Any advance by means of DAUDs;
d. Outstanding availments under an established credit line;
e. Drawings against an existing letter of credit;
f. The acquisition of any note, draft, bill of exchange or other
evidence of indebtedness upon which the bank’s DOSRIs may
be liable as makers, drawers, acceptors, endorsers, guarantors
or sureties;
g. Indirect lending such as loans or other credit
accommodations granted by another financial intermediary to
said DOSRIs from funds of the bank invested in the other
institution’s trust or other department when there is a clear
relationship between the transactions;
h. The increase of an existing indebtedness, as well as
additional availments under a credit line or additional
drawings against a letter of credit;
i. The sale of assets, such as shares of stock, on credit; and
j. Any other transactions as a result of which the bank’s
DOSRIs become obligated or may become obligated to the
lending bank, by any means whatsoever to pay money or its
equivalent.
X328.1 Applicability to credit card operations. The credit card
operations of banks shall not be subject to these regulations
where the credit cardholders are bank’s DOSRI: Provided, That
(a) the privilege of becoming a credit cardholder is open to all
qualified persons on the basis of selective criteria which are
applied by the bank to all applicants thereof; and (b) the bank’s
DOSRIs reimburse/pay the bank for the billed amount in full
on or before the payment due date in the billing or statement
of account, as set by the bank for all other qualified credit card
holders on availments made for the same period on their credit
cards. However, the transaction shall be subject to applicable
DOSRI regulations if the bank’s DOSRIs:
a. fail to reimburse/pay the bank within the period mentioned
herein; or
b. on the outset, opt for deferred payment scheme, and the
availment is booked by the bank.
For purposes of this Section, stockholders and related interests
refer to individual credit card holders.
GENERAL BANKING LAW
Section 35. Limit on Loans, Credit Accommodations and
Guarantees
35.1 Except as the Monetary Board may otherwise prescribe for
reasons of national interest, the total amount of loans, credit
accommodations and guarantees as may be defined by the
Monetary Board that may be extended by a bank to any
person, partnership, association, corporation or other entity
shall at no time exceed twenty percent (20%) of the net worth
of such bank. The basis for determining compliance with single
borrower limit is the total credit commitment of the bank to the
borrower.
35.2. Unless the Monetary Board prescribes otherwise, the total
amount of loans, credit accommodations and guarantees
prescribed in the preceding paragraph may be increased by an
additional ten percent (10%) of the net worth of such bank
provided the additional liabilities of any borrower are
adequately secured by trust receipts, shipping documents,
warehouse receipts or other similar documents transferring or
securing title covering readily marketable, non-perishable
goods which must be fully covered by insurance.

35.3 The above prescribed ceilings shall include (a) the direct
liability of the maker or acceptor of paper discounted with or
sold to such bank and the liability of a general endorser,
drawer or guarantor who obtains a loan or other credit
accommodation from or discounts paper with or sells papers to
such bank; (b) in the case of an individual who owns or
controls a majority interest in a corporation, partnership,
association or any other entity, the liabilities of said entities to
such bank; (c) in the case of a corporation, all liabilities to such
bank of all subsidiaries in which such corporation owns or
controls a majority interest; and (d) in the case of a partnership,
association or other entity, the liabilities of the members
thereof to such bank.

35.4. Even if a parent corporation, partnership, association,

entity or an individual who owns or controls a majority
interest in such entities has no liability to the bank, the
Monetary Board may prescribe the combination of the
liabilities of subsidiary corporations or members of the
partnership, association, entity or such individual under
certain circumstances, including but not limited to any of the
following situations: (a) the parent corporation, partnership,
association, entity or individual guarantees the repayment of
the liabilities; (b) the liabilities were incurred for the
accommodation of the parent corporation or another
subsidiary or of the partnership or association or entity or such
individual; or (c) the subsidiaries though separate entities
operate merely as departments or divisions of a single entity.

35.5. For purposes of this Section, loans, other credit

accommodations and guarantees shall exclude: (a) loans and
other credit accommodations secured by obligations of the
Bangko Sentral or of the Philippine Government: (b) loans and
other credit accommodations fully guaranteed by the
government as to the payment of principal and interest; (c)
loans and other credit accommodations covered by assignment
of deposits maintained in the lending bank and held in the
Philippines; (d) loans, credit accommodations and acceptances
under letters of credit to the extent covered by margin
deposits; and (e) other loans or credit accommodations which
the Monetary Board may from time to time, specify as non-risk
items.

35.6. Loans and other credit accommodations, deposits

maintained with, and usual guarantees by a bank to any other
bank or non-bank entity, whether locally or abroad, shall be
subject to the limits as herein prescribed.

35.7. Certain types of contingent accounts of borrowers may be

included among those subject to these prescribed limits as may
be determined by the Monetary Board.(23a)