CHAPTER 5 depositor, or in cases of impeachment, or upon order of a
SECRECY OF BANK DEPOSITS AND competent court in cases of bribery or dereliction of duty of
CONFIDENTIALITY OF BANK TRANSACTION
 GENERAL RULE OF SECRECY
 The law on Secrecy of Bank Deposits ( RA 1405 as amended)
Provides that:
All deposits of whatever nature with banks or banking institutions in
the Philippines including investments in bonds issued by the
Government of the Philippines, its political subdivisions and its
instrumentalities, 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.
 The law was passed to encourage the infusion of adequate capital
to propel more speedily the country's economic development.
 the author of the law believe that the approval of the law will inject
into the bloodstream of our anemic economy the capital which we
need for greater agricultural and industrial production.
 THE LAW
RA 1405: Secrecy of Bank Deposits Act, originally passed by Congress
in 1955:
REPUBLIC ACT No. 1405
AN ACT PROHIBITING DISCLOSURE OF OR INQUIRY
INTO, DEPOSITS WITH ANY BANKING INSTITUTION
AND PROVIDING PENALTY THEREFOR.
Section 1. It is hereby declared to be the policy of the
Government to give encouragement to the people to
deposit their money in banking institutions and to
discourage private hoarding so that the same may be
properly utilized by banks in authorized loans to assist in
the economic development of the country.
Section 2. 1 All deposits of whatever nature with banks or
banking institutions in the Philippines including
investments in bonds issued by the Government of the
Philippines, its political subdivisions and its
instrumentalities, 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 upon written permission of the
public officials, or 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 banking institution to disclose to any person other
than those mentioned in Section two hereof any
information concerning said deposits.
Section 4. All Acts or parts of Acts, Special Charters,
Executive Orders, Rules and Regulations which are
inconsistent with the provisions of this Act are hereby
repealed.
Section 5. Any violation of this law will subject offender
upon conviction, to an imprisonment of not more than five
years or a fine of not more than twenty thousand pesos or
both, in the discretion of the court.
Section 6. This Act shall take effect upon its approval.
 RA 1405 was amended by PD 1792 but Section 135 of RA
7653 ( New Central Bank Act expressly repealed PD 1792
 PROHIBITED ACTS
Under Section 2 and 3 of RA 1405, the ff cannot be done
in connection with the bank deposits:
1. Bank deposits may not be examined, inquired or
looked into by any person, government official
bureau, or office
2. Any official or employee of a banking institution
may not disclose to any person other than those
mentioned in section 2 any information
concerning said deposits.
 COVERED DEPOSITS
 All bank accounts of whatever nature, including trust
accounts, are absolutely confidential under RA 1405 as
amended.
 If the money deposited under an account may be used by
banks for authorized loans to third persons, then such
account, Regardless of whether it creates a creditor-
 debtor relationship between the depositor and the bank,
Falls under the category of accounts that the law precise
the seeks to protect for the purpose of boosting the
economy development of the country.
SC: A trust account is covered by the special law where the trust
agreement between the bank and account holder our owner
provides that the trust account covers “deposits, placement or
investment of funds” by the bank for and in behalf of the account
holder.
 The money deposited in the trust account was intended
not merely to the to remain with the bank but to be
invested by it elsewhere.
 To that RA 1405 does not protect this type of account
would encourage private hoarding of funds that could
otherwise be invested by banks in other ventures, contrary
to the policy behind the law.
 Section 2 of RA 1405 clearly shows that the term deposits
was intended to be understood broadly and shall include
deposits of whatever nature.
 section 2 provides as an exception cases where the
money deposited or invested is the subject matter of
litigation
 the phrase “of whatever nature” proscribes any restrictive
interpretation of deposits
 The law applies not only to money that is deposited but
also to those that are invested.
 it is a basic rule that anybody who claims that the bank
violated ra 1405 must prove such allegation.
 SC: since petitioner failed to adduce evidence with
respect to the bank's purported disclosure of confidential
information as regards his accounts petitioner cannot be
awarded any damages arising from an unsubstantiated
and unprobed violation of the bank secrecy act.
 the secrecy is not limited to deposits, it also covers
investments in government bonds
 Section 5504 of the GBL: “Consistent with the provisions
of Republic Act No. 1405, otherwise known as the Banks
Secrecy Law, no bank shall employ casual or nonregular
personnel or too lengthy probationary personnel in the
conduct of its business involving bank deposits. “
 CREDIT INFORMATION SYSTEM
 RA 9510 ( Credit Information System Act)
o Section 2:
 The State recognizes the need to establish a
comprehensive and centralized credit information system
for the collection and dissemination of fair and accurate
information relevant to, or arising from, credit and credit-
related activities of all entities participating in the financial
system
 Section 12
Embodies an express recognition of the inviolable nature
of the secrecy of bank deposits and/or client funds
pursuant to
 RA 1405 ( Law on Secrecy of Bank Deposit),
 RA 6426 ( Foreign Currency Deposits Act )
 RA 8791 ( General Banking Law of 2000)
 RA 9160 ( Anti-Money Laundering Act) and their
amendatory laws.
 Nothing in the laws shall impair the secrecy of
bank deposits and investment in government
securities funds.
 Under the Credit Information System Act, entities that
provide credit facilities, including banks and quasi banks
and their subsidiaries and affiliates, are required to submit
to the central credit information corporation, created under
section 5 of the law, what is known as the basic credit
data.
 BASIC CREDIT DATA
 positive and negative information provided by a borrower
to a submitting entity in connection with the application for
and availment of a credit facility and any information on the
borrower’s creditworthiness in the possession of the
submitting entity and other factual and objective information
related or relevant thereto in the submitting entity’s data
files or that of other sources of information.
  in the absence of a written waiver duly accomplished by the
borrower, basic credit data shall exclude confidential
information on bank deposits and/or clients funds.
 EXCEPTIONS TO THE SECRECY RULES
1. When there is a written permission of the depositor or
investor
2. impeachment cases
3. up on the order of a competent court in cases of bribery or
dereliction of duty of public officials
4. on the order of a competent court in cases where the
money deposited or invested is the subject of litigation
5. order of the competent court or tribunal in cases involving
and explained well under the anti graft and corrupt
practices Act ( RA 3019)
6. an inquiry by the CIR for the purpose of determining the
net estate of a deceased depositor
7. report to the Anti-Money Laundering Council by banks of
covered and suspicious transactions
8. Examination by the AMLC, on the order of the Court of
Appeals where there is probable cause of money
laundering.
9. examination by the AMLC even without court order, in the
cases mentioned in section 11 of anti-money laundering
act
 RA 1405, as amended; Law on Secrecy of Bank
Deposit
 RA 6426, as amended Foreign Currency Deposits
Act;
 RA. 8791, General Banking Law of 2000
10. disclosure to the Treasurer of the Philippines for dormant
deposits for at least 10 years and there the Unclaimed
Balances Act
11. disclosure to the BSP in the course of examination to
ensure compliance with anti-money laundering Act
12. Examination upon order of the court of appeals when there
is probable cause and their human security act.
13. investigation under Section 10 of ra 10168( The Terrorism
Financing Prevention and Suppression Act of 2012) where
AMLC is authorized to inquire into or examine deposits
and investments with any banking institution or non-bank
financial institution and their subsidiaries and affiliates
without a court order
14. Philippine Deposit Insurance Corporation’s inquiry Into and
examination of deposit accounts and all information
related thereto in case there is a finding of unsafe or
unsound banking practice under the 8th paragraph of
section 8 of ra 3591 as amended by ra 9576.
15. Disclosure to the rehabilitation receiver upon the issuance
of the commencement order rehabilitation proceeding.
 WAIVER
 Necessarily it should be the depositor himself or his duly
authorized representative who must execute the written
waiver or permission
 the written permission is in the nature of waiver of rights
which must comply with the following:
1. the person making the waiver possesses the right
2. he has the capacity and power to dispose of the right
3. waiver must be clear and unequivocal although it may
be made expressly or impliedly
4. the waiver must not only be voluntary
5. the waiver must have been made
knowingly, intelligently, and with sufficient awareness
of the relevant circumstances and likely
consequences
6. the waiver is not contrary to public policy, public order,
morals, good customs or Prejudicial to a third person
with a right recognized by law
 a waiver of the confidentiality of bank deposit that was
inserted in an agreement between creditors in
an insolvency proceeding is not binding on the
insolvent depositor
 the depositor is also not deemed to have consented by
the mere fact that the said deposit or did not object to the
motion for the approval of the agreement between the
creditors
SC: It is an elementary rule that the existence of a waiver must be
positively demonstrated since a waiver by implication is not
normally countenanced. The norm is that a waiver must not only be
voluntary, but must have been made knowingly, intelligently, and
with sufficient awareness of the relevant circumstances and likely
consequences. There must be a persuasive evidence to show an
actual intention to relinquish the right. Near silence on the part of
the holder of the right should not be construed as a surrender
thereof; the courts must indulge every reasonable presumption
against the existence and validity of such waiver
 EXAMINATION BY THE OMBUDSMAN
 Section 15 of RA 677. ( Ombudsman Act of 1989): empowers
the Office of the Ombudsman to “ administer oath, issue
subpoena and subpoena duces tecum, and take testimony in
any investigation or inquiry, including the power to examine
and have access to bank accounts and records.
 Limitation in this power is impose by SC in the Marquez vs
Desierto.
 Although the SC recognized that an “in camera inspection” of
the Documents pertaining to a bank account may be ordered
by the ombudsman, the court restricted this power by ruling
that before an in camera inspection may be allowed,
o there must be a pending case before court of competent
jurisdiction.
o the account must be clearly identified the inspection limited
to the subject matter of the pending case before the court of
competent jurisdiction
o the bank personal and the account holder must be notified
to be present during the inspection and such inspection
makeover only the count identified in the pending cases
 Thus, the inspection cannot be made while the case is still
pending only before the ombudsman.
The SC observed in Ejercito vs Sandiganbayan that the case of
Marquez reversed the earlier decision in Banco Filipino savings and
mortgage bank Vs Purisima which Sustained the power of that then
Tanodbayan to issue subpoena duces tecum 4 bank accounts prior
to the filing of the case before a court of competent jurisdiction.
 in Marquez, the SC imposed a requirement that there must
already be a pending court case
 in Ejercito, although no criminal case for plunder has been
filed when the examination of the subject accounts was
made, the supreme court sustained examination because
the same examination was done before the promulgation of
the decision in Marquez.
 the court concluded that marcos decision cannot be applied
retroactively.
 WHEN DEPOSIT IS SUBJECT MATTER OF LITIGATION
 The court may require into a bank deposit if the deposit is
the subject matter of litigation.
 To be covered by this exception, the inquiry into bank
deposits allowable under RA 1405 must be premised on
the fact that the money deposited in the account is itself
the subject of the action.
 SC: “subject matter of the litigation” : the subject of the
action is neither of these since it is not the wrong or the
relief demanded, the subject of the action is the matter or
thing with respect to which the controversy has arisen,
concerning which the wrong has been done, and this
ordinarily is the property or the contract and its subject
matter, or the thing in dispute.
 Union bank of the Philippines vs CA: SC sustained the
dismissal the dismissal. And ruled that the amount
contained in the deposit was not the subject matter of
litigation.
o The depositary bank was fishing for information so it
can determine the culpability of the of the drawee
bank and the amount of damages it can recover.
o The depositary bank does not seek to recover the
amount contained in the checking amount.
o The subject matter of the dispute may be the amount
of P999,000.00 that the depositary bank seeks from
the drawee bank but it is not the P999,000.00
deposited in the drawer’s account.
 Melllon Bank Vs Magsino: the court sanctioned the
examination of the bank accounts where part of the money
was subsequentlycaused to be deposited holding that
Section 2 RA 1405 allows the disclosure of bank deposits
in case where the money deposited is the subject matter
of the litigation.
o An inquiry into the whereabouts of the illegally
acquired amount extends to whatever is concealed
by being held or recorded in the name of persons
other than the one responsible for the illegal
acquisition
o Mellon bank involved a case where the money
deposited was the subject matter of the litigation
since the money deposited was very thing in
dispute.
 Ejecrcito vs Sandiganbayan: case involved a plunder case
that was pending with the Sandiganbayan.
 o SC concluded that the subject matter of the litigation
cannot be limited to bank accounts under the name of
the accused alone, but must include those accounts to
which the money purportedly acquired illegally or a
portion thereof was alleged to have been transferred.
 BSB Group Inc vs Sally Go: there is a violation of the lawn
on secrecy of bank deposits
o The High Court explained that the admission of
testimonial and documentary evidence relative to
respondent’s security bank account serves no other
purpose than to establish the existence of such
account, its nature and the amount kept in it.
o It constitutes as attempt by the prosecution at an
impermissible inquiry into a bank deposit account the
privacy and confidentiality of which is protected by
law.
UNEXPLAINED WEALTH AND PLUNDER
 Philippine National Bank vs Gancayco: cases unexplained
wealth are similar to cases of bribery or dereliction of duty
and there is no reason why these 2 classes of cases cannot
be excepted from the rule making bank deposits confidential.
 While RA 1405 provides that bank deposits are “absolutely
confidential.. and therefore may not be examined, inquired, or
looked into except in those cases enumerated therein, the
Anti-Graft law directs in mandatory terms that bank deposits
“shall be taken into consideration in the enforcement of this
section, notwithstanding any provision of law to the contrary
o The only conclusion possible is that section 8 of Anti-
graft law is intended to amend section 2 of RA 1405 by
providing an additional exception to the rule against the
disclosure of bank deposits.
 PLUNDER CASES:
 Exception to RA 1405 must apply to the criminal case of
plunder because it is analogous to bribery.
 Cases of plunder involve unexplained wealth.
 Bribery is even included among criminal acts that
constitute overt acts of Plunder under Section 1(d) of RA
7080 ( An Act Defining and Penalizing the crime of plunder
 RATIONALE IN UNEXPLAINED WEALTH CASES
 The provision of RA 3019 (Anti-Graft and corrupt Practices
act) that is invoked to justify disclosure of information
regarding bank deposits in section 8 thereof
 SECTION 8
Dismissal due to unexplained wealth. If in accordance with the
provisions of Republic Act Numbered One thousand three hundred
seventy-nine, a public official has been found to have acquired
during his incumbency, whether in his name or in the name of other
persons, an amount of property and/or money manifestly out of
proportion to his salary and to his other lawful income, that fact
shall be a ground for dismissal or removal. Properties in the name
of the spouse and unmarried children of such public official may be
taken into consideration, when their acquisition through legitimate
means cannot be satisfactorily shown. Bank deposits shall be taken
into consideration in the enforcement of this section,
notwithstanding any provision of law to the contrary.
DEPOSIT IN ANOTHER PERSON’S NAME
 Banco Filipino Savings and Mortgeg Bank vs. Hon. Fidel
Purisima:
 The inquiry into illegally acquired property extends to cases where
such property is concealed by being held or recorded in the name of
the other person.
 SC: The inquiry into illegally acquired property—or property NOT
“legitimately acquired"—extends to cases where such property is
concealed by being held by or recorded in the name of other
persons.
 This proposition is made clear by R.A. No. 3019 which quite
categorically states that the term, “legitimately acquired property of a
public officer or employee shall not include x x property unlawfully
acquired by the respondent, but its ownership is concealed by its
record in the name of, or held by, respondent’s spouse, ascendants,
descendants, relatives or any other persons.”
 To sustain the petitioner’s theory, and restrict the inquiry only to
property held by or in the name of the government official or
employee, or his spouse and unmarried children, is unwarranted in
the light of the provisions of the statutes in question, and would
make available to persons in government who illegally acquire
property an easy and fool-proof means of evading investigation and
prosecution; all they would have to do would be to simply place the
property in the possession or name of persons other than their
 spouse and unmarried children. This is an absurdity that we will not
ascribe to the lawmakers.
AUTHORITY OF THE BIR COMMISSIONER
 SECTION 6(F) of RA 8424 (NATIONAL REVENUE CODE OF 1997),
as amended by RA 10021 – EXCHANGE OF INFORMATION ON
TAX MATTGERS ACT OF 2009.
(F) Authority of the Commissioner to Inquire into Bank Deposit
Accounts and Other Related Information Held by Financial
Institutions. - Notwithstanding any contrary provision of Republic Act
No. 1405, Republic Act No. 6426, otherwise known as the Foreign
Currency Deposit Act of the Philippines, and other general and special
laws, the Commissioner is hereby authorized to inquire into the bank
deposits and other related information held by financial institutions of:
(1) A decedent to determine his gross estate.
(2) Any taxpayer who has filed an application for compromise of his tax
liability under Sec. 204 (A)(2) reason of financial incapacity to pay his
tax liability.
In case a taxpayer files an application to compromise the payment of his
tax liabilities on his claim that his financial position demonstrates a clear
inability to pay the tax assessed, his application shall not be considered
unless and until he waives in writing his privilege under Republic Act No.
1405, Republic Act No. 6426, otherwise known as the Foreign Currency
Deposit Act of the Philippines, or under other general or special laws,
and such waiver shall constitute the authority of the Commissioner to
inquire into the bank deposits of the taxpayer.
(3) A specific taxpayer or taxpayers subject of a request for the supply
of tax information from a foreign tax authority pursuant to an
international convention or agreement on tax matters to which the
Philippines is a signatory or a party of: Provided, That the information
obtained from the banks and other financial institutions may be used by
the Bureau of Internal Revenue for tax assessment, verification, audit
and enforcement purposes.
In case of request from a foreign tax authority for tax information held by
banks and financial institutions, the exchange of information shall be
done in a secure manner to ensure confidentiality thereof under such
rules and regulations as may be promulgated by the Secretary of
Finance, upon recommendation of the Commissioner.
DORSI LOAN
 The borrowers who are directors, officers or stockholders of the
lending-bank shall be required by the lending bank to waive the
secrecy of his deposits of whatever nature.
BANK EXAMINATION
 Section 25 of the New Central Bank Act
 The powers of the examiners are “subject to the provision of existing
laws protecting or safeguarding the secrecy or confidentiality of bank
deposits as well as investments of private persons, natural or
juridical, in debt instruments issued by the government.
 There will be disclosure to the authorized examiners of the BSP as
provided under Section 11 of RA 9160, as amended.
 Said provision does not expressly authorized inquiry or examination
of deposit.
 Section 11 provides that: to ensure compliance with this Act, the
BSP may, in the course of periodic or special examination, check the
compliance of a Covered institution with the requirements of the
AMLA and its implementing rules and regulations.
 There is authority to disclose to BBSP information regarding deposit.
 Under AMLA, BSP may also conduct annual testing of numbered
account for the purpose of determining the existence and true
identity of the owners of such accounts.
 This may involve disclose to BSP of information regarding the
deposit.
SECRECY OF DEPOSITS IN NON-STOCK SAVINGS AND LOAN
ASSOCIATION
 RA 8367- REVISED NON-STOCK SAVINGS AND LOAN
ASSOCIATION ACT OF 1997
Section 6. Prohibition against inquiry into or disclosure of
deposits. – All deposits of whatever nature with an Association in the
Philippines 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 upon written
permission of the depositor, or in cases of impeachment, or upon
order of a competent court in cases of bribery or dereliction of duty of
 public officials, or in cases where the money deposited or invested is
the subject matter of litigation.
It shall be unlawful for any official or employee of an Association to
disclose to any person any information concerning said deposits,
except in the cases mentioned in the preceding paragraph of this Sec..
Any official or employee of an Association who violates this Sec. shall
be punished under Republic Act No. 1405, as amended.
INAPPLICABILITY OF EXCLUSIONARY RULE
 EJERCITO VS SANDIGANBAYAN
 The execlusionary rule does not apply to cases involcing RA 1405.
 Nowhere in RA 1045 provides that an unlawful examination of bank
accounts shall render the evidence obtained therefrom inadmissible
in evidence.
 Sec 5 of RA 1405 only states that any violation of this law will
subject the offender upon conviction, to an imprisonment of not more
than 5 years or a fine of nor more than P20,000 or both in the
discretion of the court.
 The case of U.S. v. Frazin, involving the Right to Financial Privacy
Act of 1978 (RFPA) of the United States, is instructive. Because the
statute, when properly construed, excludes a suppression remedy, it
would not be appropriate for us to provide one in the exercise of our
supervisory powers over the administration of justice. Where
Congress has both established a right and provided exclusive
remedies for its violation, we would “encroach upon the
prerogatives” of Congress were we to authorize a remedy not
provided for by statute.
 US VS THOMPSON
 When Congress specifically designates a remedy for one of its acts,
courts generally presume that it engaged in the necessary balancing
of interests in determining what the appropriate penalty should be.
Absent a specific reference to an exclusionary rule, it is not
appropriate for the courts to read such a provision into the act.
FOREIGN CURRENCY DEPOSITS
 Not all exceptions under the Law on Secrecy Deposits Act are
specified in Section 8 of the Foreign Currency Deposits Act, as
amended by PD 1246.
 There is only one exception to the rule on confidentiality under the
FCDA that is when the depositor consents.
 The exception under the Law of Secrecy Bank Deposits do not apply
to foreign currency deposits.
 Government Service Insurance System vs. 15th Division of the
Court of Appeals – THAT FOREIGN SURRECY DEPOSITS, SUCH
AS US DOLLAR DEPOSITS SHALL BE GOVERNED BY RA 6426.
 These two laws both support the confidentiality of bank deposits.
There is no conflict between them. Republic Act No. 1405 was
enacted for the purpose of giving encouragement to the people to
deposit their money in banking institutions and to discourage
private hoarding so that the same may be properly utilized by banks
in authorized loans to assist in the economic development of the
country. It covers all bank deposits in the Philippines and no
distinction was made between domestic and foreign deposits. Thus,
Republic Act No. 1405 is considered a law of general application.
On the other hand, Republic Act No. 6426 was intended to
encourage deposits from foreign lenders and investors. It is a
special law designed especially for foreign currency deposits in the
Philippines.
 A general law does not nullify a specific or special law. Generalia
specialibus non derogant. Therefore, it is beyond cavil that Republic
Act No. 6426 applies in this case. Intengan v. Court of Appeals,
affirmed the above-cited principle and categorically declared that for
foreign currency deposits, such as U.S. dollar deposits, the
applicable law is Republic Act No. 6426.
 SECTION 8 OF RA 6426, AS AMENDED BY PD 1246.
Section 8. Secrecy of foreign currency deposits. – All foreign
currency deposits authorized under this Act, as amended by PD No.
1035, as well as foreign currency deposits authorized under PD No.
1034, are hereby declared as and considered of an absolutely
confidential nature and, except upon the written permission 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 judicial or administrative or legislative, or any other
entity whether public or private; Provided, however, That said foreign
currency deposits shall be exempt from attachment, garnishment, or
any other order or process of any court, legislative body, government
agency or any administrative body whatsoever.
  The operation of the rule on secrecy bank deposit under the FCDA
CASES: or RA 6426 is limited to foreign currency deposits accounts that are
 INTENGAN VS CA opened within the PH.
 Since the accounts in question are U.S. Dollar deposits, the  Hence RA 6426, including its penal provisions, does not apply to
applicable law is not RA 1405, but RA 6426. bank accounts opened abroad.
 Hence, no crime was committed when the documents pertaining to
 CHINA BANKING CORP VS CA deposits in other countries were submitted as evidence in the
 SC highlighted the exception to the non-disclosure of foreign criminal case.
currency deposits, in the case of a written permission of the
depositor, and rules that respondent, as owner of the funds EFFECT OF OTHER SPECIAL LAWS
unlawfully taken and which are indisputably now deposited with  Additional exceptions on the confidentiality of Foreign Currency
China Bank, he has the right to inquire into the said deposits. Deposits are provided in:
 ANTI-MONEY LAUNDERING ACT (RA 9160, as amended)
 GSIS VS THE HONORBALE 15TH DIVISION OF THE CA  HUMAN SECURITY ACT (RA 9372)
 Applying Section 8, RA 6426, absent the written permission from TERRORISM FINANCING PREVENTION, SUPPRESSION ACT
the depositor, the bank cannot be legally compelled to disclose the (RA 10168)
bank dollar deposits, otherwise, it might expose itself to criminal  NATIONAL INTERNAL REVENUE CODE.
liability under the same act.  OTHER SPECIAL LAWS.

 Violation of RA 6426 shall be subject to imprisonment of not less  Thus, the exceptions on the secrecy foreign deposits are:
than 1 year nor more than 5 years, or a fine of not less than P5,000 1. When there is written consent of the depositor (Sec, 8 FCDA)
nor more than P25,000, or both. 2. When there is probable cause of money laundering (Sec 11 of
AMLA)
PROBLEM: 3. Upon order of the CA (Sec 27, when there is probable cause of
terrorism (HSA)
 Hi Yielding Corporation filed a complaint against five of its officers for
4. Where the AMLC is authorized to inquire into or examine deposits
violation of Section 31 of the Corporation Code. The corporation
and investments with any banking institution or non-bank financial
claimed that the said officers were guilty of advancing their personal
institution and their subsidiaries and affiliates without a court order
interests to the prejudice of the corporation, and that they were grossly
(Sec 10 of RA 10168)
negligent in handling its affairs. Aside from documents and contracts,
5. Examination by and disclosure to the Commissioner of Internal
the corporation also submitted in evidence records of the officers’ U.S.
Revenue (Sec, 6(F) of RA 8424)
Dollar deposits in several banks overseas - Boston Bank, Bank of
6. Disclosure to the BSP in the course of examination to ensure
Switzerland, and Bank of New York. For their part, the officers filed a
compliance with the AMLA.
criminal complaint against the directors of Hi Yielding Corporation for
7. Philippine Deposit Insurance Corporation’s inquiry into and
violation of Republic Act No. 6426, otherwise known as the Foreign
examination of deposit accounts and all information related
Currency Deposit Act of the Philippines. The officers alleged that their
thereto in case there is a finding of unsafe or unsound banking
bank deposits were illegally disclosed for want of a court order, and
practice under the 8th par. of Sec 8 of RA 3591, as amended by
that such deposits were not even the subject of the case against them.
RA 9576.
 Will the complaint filed against the directors of Hi Yielding
Corporation prosper? Explain.
 NO. The complaint against the directors will not prosper.
 COVERAGE OF FCDA
 Section 8 of RA 6426 does not distinguish if the depositor is an alien
or Filipino citizen.
 Does not provide that the absolutely confidential nature of foreign
currency deposits applies only to deposits of non-residents aliens.
 The confidentiality rule applies to all foreign currency deposits whether
owned by Filipino or Aliens, resident or not.
 Section 2 of RA 6426 makes it clear that the law gives the authority to
deposit foreign currency to any person, natural or juridical; the word
any does not permit a restrictive interpretation. The law is not
exclusively for non-residents but for any person.
GARNISHMENT: NO VIOLATION OF SECRECY BANK DEPOSITS
 Garnishment of bank deposits does not violate RA 1405.
 When a bank account is garnished, no real inquiry is made on the
account and the disclosure of the deposit made by the bank is purely
incidental.
 CHINA BANK VS ORTEGA
 We do not view the situation in that light. The lower court did not
order an examination of or inquiry into the deposit of B & B Forest
Development Corporation, as contemplated in the law. It merely
required Tan Kim Liong to inform the court whether or not the
defendant B & B Forest Development Corporation had a deposit in
the China Banking Corporation only for purposes of the garnishment
issued by it, so that the bank would hold the same intact and not
allow any withdrawal until further order. It will be noted from the
discussion of the conference committee report on Senate Bill No.
351 and House Bill No. 3977, which later became Republic Act No.
1405, that it was not the intention of the lawmakers to place bank
deposits beyond the reach of execution to satisfy a final judgment.
 PH COMMERCIAL AND INDUSTRIAL BANK VS CA, ET AL.
 The bank was absolved from any liability for the disclosure and
release of the respondent’s deposit to the custody of the deputy
sheriff in satisfaction of the final judgment for the laborer’s back
wages.
 There is no evidence that the petitioner themselves divulged the
information that the respondent had an account with the said bank
and it is undisputed that the said account was properly the object of
the notice of garnishment and writ of execution carried out by the
deputy sheriff, a duly authorized officer of the court, we cannot
therefore hold the petitioners liable under RA 1405.
 If there will be a violation if the bank itself disclosed the existence of
the deposit even before writ of execution or notice of garnishment is
served.
CONFIDENTIALITY OF BANK TRANSACTIONS
 MORB, provides for rules on the protection of client information.
§ X1002.2 Protection of client information. Financial consumers
have the right to expect that their financial transactions, as well as
relevant personal information disclosed in the course of a transaction,
are kept confidential. Towards this end, BSFIs must ensure that they
have well-articulated information security guidelines, well-defined
protocols, a secure database, and periodically re-validated procedures
in handling the personal information of their financial consumers. This
should be an end-to-end process that should cover, among others, the
array of information that will be pre-identified and collected, the
purpose of gathering each information, how these will be sourced from
the client, the IT-security infrastructure of the BSFI, and the protocols
for disclosure, both within the BSFI and especially to third parties.
RULE UNDER THE GBL ANF OTHER LAWS
 Section 55(b) of GBL complements Law on Secrecy of Bank
Deposits by making the ff a prohibited act:
(b) Without order of a court of competent jurisdiction, disclose to any
unauthorized person any information relative to the funds or properties
in the custody of the bank belonging to private individuals,
corporations, or any other entity: Provided, That with respect to bank
deposits, the provisions of existing laws shall prevail.
 Said provisions allows disclosure of information upon order of a court
of competent jurisdiction w/o reference as to the type of case involved.
 However, the said law provides that provisions of existing law shall
apply w/ respect to bank deposits.
 This means that bank deposits shall continue to be governed by the
Law on Secrecy of Bank Deposits.
 There is similar prohibition that applies to Thrift Banks and Rural
Banks to disclose information on funds as provided under Sec
21(a)(2) of RA 7906 and Sec (a)(2) of RA 7353.