PHILIPPINE DEPOSIT INSURANCE The powers and duties of the President of the

CORPORATION Corporation are:

RA. NO. 3591 (a) To prepare the agenda for the meeting of the
Board and to submit for the consideration of the
There is hereby created a Philippine Board the policies and measures which he
Deposit Insurance Corporation hereinafter believes to be necessary to carry out the purposes
referred to as the “Corporations” which shall and provisions of this Act;
insure, as herein provided, the deposits of all
banks which are entitled to the benefits of (b) To execute and administer the policies and
insurance under this Act, and which shall have the measures approved by the Board;
powers hereinafter granted.
(c) To direct and supervise the operations and
5 BOARD OF DIRECTORS internal administration of the Corporation in
accordance with the policies established by the
(1) The Secretary of Finance Board.
(2) The Governor of the Bangko Sentral ng (d) To represent the Corporation, upon prior
Pilipinas authority of the Board, in all dealings with other
offices, agencies and instrumentalities of the
(3) The President of the Corporation
government and with all other persons or entities,
(4-5) The 2 members from Private Sector public or private, whether domestic, foreign or
international;
The Board of Directors shall have the Authority:
(e) To authorize with his signature, upon prior
(1) To prepare and issue rules and regulations as it authority of the Board, contracts entered into by
considers necessary for the effective discharge of the Corporation, notes and securities issued by the
its responsibilities; Corporation, and the annual reports, balance
sheets, profit and loss statements, correspondence
(2) To direct the management, operations and and other documents of the Corporation;
administration of the Corporation;
(f) To represent the Corporation, either personally
(3) To establish a human resource management or through counsel, in all legal proceedings or
system which shall govern the selection, hiring, actions;
appointment, transfer, promotion, or dismissal of
all personnel. (g) To delegate with the prior approval of the
Board of Directors, his power to represent the
(4) To appoint, establish the rank, fix the Corporation, as provided in subjections (d) and (f)
remuneration, approve local and foreign training of this Section, to other officers of the
of, and remove any officer or employee of the Corporation; and
Corporation.
(h) To exercise such other powers as may be
(5) To adopt an annual budget for, and authorize vested in him by the Board.
such expenditures by the Corporation as are in the
interest of the effective administration and Sec. 4 As used in this Act
operation of the Corporation;
a. The term “Board of Directors” means the
(6) To approve the methodology for determining Board of directors of the Corporation.
the level and amount of provisioning for insurance
and financial assistance losses, which shall b. The term “Bank” and “Banking Institution”
establish reasonable levels of deposit insurance shall be synonymous and interchangeable.
reserves;
Ex. Commercial banks, savings bank, mortgage
(7) To review the organizational set-up of the banks, rural banks, development banks,
Corporation and adopt a new or revised cooperative banks, stock savings and loan
organizational structure as it may deem necessary associations.
of the Corporation to undertake its mandate and
c. The term “Receiver” includes a commission
functions.
person or other agency charged by law with the
duty to take charge of the assets and liabilities of a Sec. 6 The assessment rate shall be determined by
bank which has been forbidden from doing the board of directors;
business in the Philippines.
• Assessment rate shall not exceed (1/5) of
d. The term “Insured bank” means any bank the one per centum (1%) per annum.
deposits of which are insured in accordance with
the provisions of this Act. • Semi-annual assessment for each insured
bank shall be in the amount of the product of (1/2)
e. The term “non-insured bank” means any bank the assessment rate multiplied by the assessment
the deposits of which not insured. base but in no case shall it be less than (5,000).
f. The term “Deposit” means the unpaid balance - All assessment collections and income from
of money or its equivalent received by a bank in operations after expenses and charges shall be
the usual course of business. added to the Deposit Insurance Fund.
g. The term “insured deposit” means that the
amount due to any bona fide depositor for
legitimate deposits in an insured bank net of any Expenses and charges:
obligation of the depositor to the insured bank as
(1) Operating costs and expenses of the
of date of closure, not exceeding 500,000.
Corporation for the Calendar Year.
h. The term “transfer deposit” means a deposit in
(2) Additions to reserve to provide for insurance
an insured bank made available to a depositor by
and financial assistance losses, net recoverable
the Corporation as payment of insured deposit of
amounts from applicable assets and collateral,
such depositor in a closed bank and assumed by
during calendar year.
another insured bank.
(3) Net insurance and financial assistance losses
i. The term “Trust Funds” means funds held by
sustained in said calendar year.
an insured bank in a fiduciary capacity and
includes without being limited to, funds held as The Corporation:
trustee, executor, administrator, guardian or agent.
(1) May refund to an insured bank any payment of
The Corporation shall not pay deposit insurance assessment in excess of the amount due to the
for the following accounts or transactions: Corporation.
(1) Investment products such as bonds and (2) May credit such excess toward the payment of
securities, trust accounts, and other similar the assessment next becoming due from such bank
instruments and upon succeeding assessments until the credit
is exhausted.
(2) Deposit accounts or transactions which are
unfunded, or that are fictitious or fraudulent; SANCTIONS AGAINST UNSAFE AND
UNSOUND BANKING PRACTICES
(3) Deposit accounts or transactions constituting,
and/or emanating from, unsafe and unsound Sec. 7 The Board of Directors shall submit the
banking practices, as determined by the report of the examination to the Monetary Board
Corporation. to secure corrective action within 45 days, if
there’s no submission of the report within the
(4) Deposits that are determined to be the
grace period, the Board of Directors shall, motu
proceeds of an unlawful activity as defined under
proprio, institute corrective action which it deem
RA. No. 9160, as amended.
necessary.
DEPOSIT INSURANCE COVERAGE
POWER AS A CORPORATE BODY
Sec. 5 The deposit liabilities of any bank or
(1) To adopt and use a corporate seal;
banking institution, which is engaged in the
business of receiving deposits as herein defined on (2) To have succession until dissolved by an Act
the effective date of this act. of Congress;
ASSESSMENT OF MEMBER BANKS (3) To make contracts;
(4) To sue and be sued, complain and defend, in (1) Being an officer, director consultant,
any court of law in the Philippines. employee or stockholder, directly or indirectly, of
any bank or banking institution except as
(5) To appoint by its Board of Directors such otherwise provided in this Act;
officers and employees as are not otherwise
provided for in this Act to define duties. (2) Receiving any gift or thing of value
from any officer, director or employee thereof.
(6) To prescribe, by its Board of Directors by-laws
not inconsistent with law, regulating the manner (3) Revealing in any manner, except as
in which its general business may be conducted. provided in this Act or under order of the court,
information relating to the condition or business
(7) To exercise by its Board of Directors, or duly of any such institution.
authorized officers or agents, all powers
specifically granted by the provisions of this Act. (f) The Corporation shall underwrite or advance
litigation cost and expenses.\
(8) To conduct examination of banks with prior
approval of the Monetary Board. (g) The costs and expenses incurred in defending
the aforementioned action.
(9) To act as receiver
(h) Unless the actions of the Corporation or any of
(10) To prescribe by its Board of Directors such its officers and employees are found to be in
rules and regulations as it may deem necessary to willful violation of this Act.
carry out the provisions of this act.
(i) Legal assistance shall include the grant or
(11) The Corporation may establish its own advance of reasonable legal fees as determined by
provident fund which shall consists of the Board of Directors to enable concerned
contributions made both by the Corporation and directors.
by its officers and employees to a common fund
for the payment of benefits to such officers or In addition to the powers of a receiver pursuant to
employees or their heirs. existing laws, the Corporation id empowered to:
(12) To compromise, condone or release, in whole (1) Bring suits to enforce liabilities to or
or in part, any of claim or settled liability to the recoveries of the closed bank.
Corporation.
(2) Appoint and hire persons or entities of
POWERS AND REPONSIBILITIES AND recognized competence in banking or finance as
PROHIBITION its deputies and assistants, to perform such powers
and functions of the Corporation as receiver or
(a) The Board of Director shall administer the liquidator of the closed bank;
affairs of the Corporation fairly and impartially
and without discrimination. (3) Suspend or terminate the employment of
officers and employees of the closed bank.
(b) The Board of Directors shall appoint
examination who shall have power, on behalf of (4) Pay accrued utilities, rentals and salaries of
the Corporation to examine any insured bank. personnel of the closed banks, for a period not
exceeding 3 months, from available funds of the
(c) Each insured bank shall make to the closed bank.
Corporation reports of condition in such form and
at such times as the Board of Directors may (5) Collect loans and other claims of the closed
require such reports to be published. bank, and for the purpose, modify, compromise or
restructure the terms and conditions of such loans
(d) The Corporation shall have access to reports of or claims.
examination made by, and reports of condition
made to the Bangko Sentral ng Pilipinas or its (6) Hire or retain private counsels as may be
super-vising departments. necessary.
(e) Personnel of the Corporation are hereby (7) Borrow or obtain a loan, or mortgage, pledge
prohibited from: or encumber any asset of the closed bank.
(8) If the stipulated interest on deposits is Reports
unusually high compared with the prevailing
interest rate. The Corporation shall annually make a report of
its operations to the Congress as soon as
(9) Exercise such other powers as are inherent and practicable after the 1st day of January in each
necessary for the effective discharge of the duties year.
of the Corporation as a receiver.
Sanction and Penalties
Permanent Insurance Fund- Three Billion Pesos
(P3B) Every insured bank shall display at each place of
business maintained by it a sign or signs, and shall
Deposit Insurance Fund shall be the capital include a statement in all its advertisements to
account of the Corporation and shall effect that its deposits are insured by the
principally consist of the ff; Corporation.
(1) The Permanent Insurance Fund Penalty of Prison Mayor
(2) Assessment collections Not less than (P50,000) but not more than
(P2,000,000) or both, at the discretion of the
(3) Reserves for insurance and financial assistance court.
losses
(4) Retained Earnings
Shall be imposed upon any director, officer,
Payment of Insured Deposits employee or agent of a bank:
(1) by cash 1) for any willful refusal to submit reports as
required by law, rules and regulations;
(2) by making available to each depositor a
transferred deposit of such depositor 2) any unjustified refusal to permit examination
and audit of the deposit records or the deposit
- Failure to settle the claim within 6 months from
records or the affairs of the institution;
the date of the filing claim for insured deposit
shall be imprisonment from 6 months to 1 year. 3) any willful making of a false statement or entry
in any bank report or document required by the
Corporate Funds
Corporation;
Money of the Corporation not otherwise
4) submission of false material information in
employed shall be invested in obligation of the
connection with or in relation to any financial
Republic of the Philippines or in obligations
assistance of the Corporation extended to the
guaranteed as to principal and interest by the
bank;
Republic Act of the Philippines.
5) splitting of deposits or creation of fictitious
Ability to Borrow
loans or deposits accounts.
The Corporation is authorized to borrow from the
6) refusal to allow the Corporation to take over a
Bangko Sentral ng Pilipinas and the Bangko
closed bank placed under its receivership or
Sentral is authorized to lend the Corporation on
obstructing such action of the Corporation;
such terms as may be agreed upon by the
Corporation and the Bangko Sentral. 7) refusal to turn over or destroying or tampering
bank records;
Issuance of Bonds, Debenture and Other
Obligations 8) fraudulent disposal, transfer or concealment of
any asset, property or liability of the closed bank
With the approval of the President of the
under receivership of the Corporation;
Philippines, the Corporation is authorized to issue
bonds, debentures, and other obligations, both 9) violation of, or causing any person to violate,
local and foreign, as may be necessary for the exemption from garnishment, levy, attachment
purposes of providing liquidity for settlement of or execution provided under this Act;
insured deposits in closed banks.
10) any willful failure or refusal to comply with, For the purposes of implementing this Act, the
or violation of any provision of this Act, or following definitions shall apply:
commission of any other irregularities, and/or
conducting business in an unsafe or unsound a) Non-stock savings and loan association shall
manner as may be determined by the Board of mean a non-stock, non-profit corporation engaged
Directors. in the business of accumulating the savings of its
members and using such accumulations for loans
to members to service the needs of households by
providing long term financing for home building
BANK SECRECY LAW and development and for personal finance;
Republic Act no. 1405 b) Association shall refer only to non-stock
savings and loan associations organized under this
It is hereby declared to be the policy of the
Act and the Corporation Code of the Philippines;
government to give encouragement to the people
to deposit their money in banking institutions and c) Monetary Board shall mean the Monetary
to discourage private hoarding so that the same Board of the Bangko Sentral ng Pilipinas; and
may be properly utilized by banks in authorized
loans to assist in the economic development of the d) Bangko Sentral shall mean the Bangko Sentral
country. ng Pilipinas.
Sec 5. Any violation of this law will subject The application for a license, signed by a
offender upon conviction, to an imprisonment of majority of the incorporators and verified by
not more than 5 years or a fine of not more than one of the trustees, shall include:
(P20,000) or both, in the discretion of the court.
a) the proposed articles of incorporation and
REVISED NON-STOCK SAVINGS AND bylaws together with names and addresses of the
LOAN ASSOCIATION ACT of 1997 incorporators, trustees and officers, with a
statement of their character, experience and
REPUBLIC ACT NO. 8367 general fitness to engage in the non-stock savings
and loan business;
it is hereby declared the policy of the State to:
b) an itemized statement of the estimated receipts
a) encourage industry, frugality and the
and expenditures of the proposed Association for
accumulation of savings, and judicious utilization
the first year;
of credit among the members of non-stock savings
and loan associations; c) a filing fee in such amount as may be
determined by the Monetary Board; and
b) regulate and supervise the activities of non- d) such other information as the Monetary Board
stock savings and loan associations in order to may require.
place their operations on a sound, stable, and
efficient basis to the end that they may be able to A "well-defined group" shall be defined by the
better provide for the establishment of additional Monetary Board, and shall consist of, but not
savings and credit facilities in a fair manner to be limited to, any of the following:
their members and to curtail or prevent acts or
practices of these Associations which are 1) employees, officers, and directors of one
prejudicial to their members' interest; company, including member-retirees;

c) lay down the minimum requirements and the 2) government employees belonging to the same
standards under which non-stock savings and loan department/branch/office, including member-
Associations may organize and operate; and retirees; and

d) maximize the protection of members of non- 3) immediate members of the families (up to
stock savings and loan associations against second degree of consanguinity or affinity) of
misfeasance and malfeasance of the trustees and those falling under paragraphs 1 and 2 above.
officers thereof.
In addition to the powers granted it by this Act
and existing laws, any Association may:
a) charge reasonable interest and collect such a) receipt or payment of salaries of trustees,
necessary fees and charges incidental to the grant officers and employees;
of loans;
b) receipt of payment of commissions to agents
b) invest its funds in any sound non-speculative whether or not based on the volume or number of
enterprises as well as in bonds, security, and other loans or on the interest or fees collected thereon;
obligations issued by the Government of the and
Philippines, or any of its political subdivisions,
instrumentalities, or corporations including c) receipt or payment of bonuses to trustees,
government-owned or -controlled corporations, officers or employees if such bonuses are based
subject to the rules and regulations of the on the performance and not on the volume or
Monetary Board; number of loans made or on the interest or fees
collected thereon.
c) allow members to participate in the profits of
the Association; SECTION 15. Limitations on lending
authority. a) An Association shall not commit
d) borrow money or incur such obligations not itself to make any loans for amounts in excess of
exceeding twenty percent (20%) of the total assets the total of the following amounts:
of the Association, from any lending institution.
The Monetary Board, may, in meritorious cases, 1) amount of cash available for loan
raise the ceiling on the borrowing capacity of an purposes;
Association to an amount not exceeding thirty
2) amount of cash which can be readily
percent (30%) of its total assets.
realized upon the sale or redemption of
e) maintain deposits with banks: Provided, That permissible investments made by the Association;
the amount of such deposits shall be subject to the and
loan limit to a single borrower as prescribed
3) amount of credit available for loan
herein or by other special laws or regulations;
purposes from government or private financing
f) require the employer-entity or corporation to institutions.
provide it with adequate office space within which
b) No Association shall directly or indirectly make
it can conduct its business; and
any loans to any trustee or officer of such
g) engage in death benefit program meant Association, either for himself or as agent or as
exclusively for the mutual benefit of its members. partner of another, except with the written
approval of the majority of the trustees of the
Restrictions on Associations Association, excluding the trustee concerned.
a) No Association shall have or carry upon its SECTION 18. Limitations on investment
books for any person any demand, commercial or
checking account, or any credit to be withdrawn a) No Association at any one time shall invest in
upon the presentation of any negotiable check or bonds and securities in a total amount in excess of
draft. ten percent (10%) of the total assets of such
Association without prior written approval of the
b) No Association shall advertise or represent Bangko Sentral.
itself to the public as a bank.
b) No Association at any one time shall invest in
c) No Association shall issue, publish or cause or real property in a total amount in excess of five
permit to be issued or published, any percent (5%) of the total assets of such
advertisement that it is doing or permitted to do Association.
any business which is prohibited by law for an
Association. c) No Association at any one time shall invest in
furniture, fixture, furnishings and equipment and
leasehold improvements for its offices, in an
SECTION 14. Compensation of trustees, amount more than ten percent (10%) of its total
officers and employees capital contribution.
Nothing in this section prohibits or limits any of
the following:
SECTION 23. Penalties. standards under which they may be established
and do business.
a) The provisions of Section 34 of Republic Act
No. 7653 shall apply to any agent, manager, or For purposes of implementing this Act:
other officer-in-charge of any Association who
willfully refuses any lawful examination into the (a) Lending company shall refer to a corporation
affairs of such Association. engaged in granting loans from its own capital
funds or from funds sourced from not more than
b) The willful making of a false statement or nineteen (19) persons. It shall not be deemed to
misleading statement on a material fact to the include banking institutions, investment houses,
Monetary Board or to the director of the savings and loan associations, financing
department of the Bangko Sentral charged with companies, pawnshops, insurance companies,
the regulation of Associations or to his examiners cooperatives and other credit institutions already
shall be punished in accordance with Section 35 regulated by law. The term lending company shall
of Republic Act No. 7653. be synonymous with lending investor.
c) Whenever any Association, person or entity (b) Debtor shall refer to a borrower or person
willfully violates this Act or any order, granted a loan by a lending company.
instruction, rule or regulation issued by the
Monetary Board applicable to Associations, the (c) Quasi-Bank shall refer to a non-bank financial
persons responsible for such violation shall be institution authorized by the BSP to engage in
punished in accordance with Section 36 of quasi-banking functions and to borrow funds from
Republic Act No. 7653. more than nineteen (19) lenders through the
issuance, endorsement or assignment with
d) Whenever any officer, employee, or agent of an recourse or acceptance of deposit substitutes as
Association accepts gifts, fees or commissions or defined in Section 95 of 4 Republic Act No.7653
any other form of remuneration in connection with (the “New Central Bank Act”) for purposes of
the approval of a loan from said Association; relending or purchasing of receivables and other
Association on any loan, such officer, employee obligations.
or agent shall be punished by a fine of not more
than (P10,000) or three times the loan amount (d) Subsidiary shall refer to a corporation more
involved, whichever is higher, or imprisonment than fifty percent (50%) of the voting stock of
for not more than (1) year, at the discretion of which is owned by a bank or quasi-bank.
the court.
(e) Affiliate shall refer to a corporation, the voting
e) Whenever any applicant for a loan, or borrower stock of which, to the extent of fifty percent
of an Association fraudulently overvalues (50%) or less, is owned by a bank or quasi-bank
property offered as security for loan from the said which is related or linked to such institution
Association: such applicant or borrower shall be through common stockholders or such other
punished by a fine of not more than (P5,000) or factors as may be determined by the Monetary
three times the loan amount involved, whichever Board of the BSP.
is higher, or imprisonment for not more than (1)
(f) SEC or Commission shall refer to the
year, at the discretion of the court.
Securities and Exchange Commission.
(g) BSP shall refer to the Bangko Sentral ng
LENDING COMPANY REGULATION ACT Pilipinas.
OF 2007 (RA No. 9474)
Sec 12 Penalty- A fine of not less than (P10,000)
It is hereby declared the policy of the State and not more than (P50,000) or imprisonment of
to regulate the establishment of lending not less than 6 months but not more than 10
companies and to place their operation on a sound, years or both, at the discretion of the court, shall
efficient and stable condition to derive the be imposed upon.
optimum advantages from them as an additional
source of credit; to prevent and mitigate, as far as
practicable, practices prejudicial to public interest;
and to lay down the minimum requirements and
THE SPECIAL PURPOSE VEHICLE ACT of (5) government financial institutions
2002 (RA no. 9182) (GFIs),
It is hereby declared the policy of the state: (6) other institutions licensed by the BSP
to perform quasi-banking functions.
(a) To develop and maintain a sound financial
sector for the country;
(b) To address the non-performing asset problems (f) "Investment Unit Instruments or IUIs" refers
of the financial sector; to participation certificates, debt instruments or
similar instruments issued by the SPV and
(c) To encourage private sector investments in subscribed by Permitted Investors as provided in
non-performing assets; Section 11 hereof, pursuant to an Approved Plan
(d) To eliminate existing barriers in the (g) "Non-Performing Assets or NPAs" consist of
acquisition of non-performing assets the Non-Performing Loans and Real and Other
Properties Owned or Acquired by FIs.
(e) To help in the rehabilitation of distressed
business with the end in view of contributing to (h) "Non-Performing Loans or NPLs" refers to
economic value added; and loans and receivables such as mortgage loans,
unsecured loans, consumption loans, trade
(f) To improve the liquidity of the financial
receivables, lease receivables, credit card
system this can be harnessed to propel economic
receivables and all registered and unregistered
growth.
security and collateral instruments
For Purpose of this Act, the term:
(i) "ROPOAs" refers to real and other properties
(a) "Approval Certificate" means the certificate owned or acquired by an FI in settlement of loans
of approval or authority issued by the Commission and receivables, including real properties, shares
to an application by an SPV to issue Investment of stocks, and chattels formerly constituting
Unit Instruments (IUIs), pursuant to the provisions collateral's for secured loans which have been
of this Act. acquired by way of dation in payment (dacion en
pago) or judicial or extra-judicial foreclosure or
(b) "Approved Plan" means an SPV Plan for execution of judgement.
which an Approval Certificate has been issued by
the Commission. (j) "SPV" means the special Purpose Vehicle
created pursuant to the provisions of this Act.
(c) "BSP" refers to the Banko Sentral ng
Pilipinas. (k) "SPV Plan" refers to the plan submitted to
and approved by the Commission as pre-requisite
(d) "Commission" refers to the Securities and to the issuance of an IUI.
Exchange Commission
(l) "True Sale" refers to a sale wherein the selling
(e) "Financial Institutions or Ifs" means credit- FI transfers or sells its NPAs without recourse for
granting institutions which shall be limited to the cash or property to an SPV
following:
An SPV shall have the following powers:
(1) the BSP;
(a) To invest in, or acquire NPAs of FIs;
(2) a bank as defined under Republic Act
No.8791, also known as "The General Banking (b) To engage third parties to manage, operate,
Law"; collect and dispose of NPAs acquired from an FI;

(3) a financing company as defined under (c) To rent, lease, hire, pledge, mortgage, transfer,
Republic Act No. 8556, also known as "The sell, exchange, usufruct, secure, securitize, collect
Financing Company Act of 1998"; rents and profits, and other similar acts concerning
its NPAs acquired from an FI;
(4) an investment house as defined in
Presidential Decree No. 129, also known as "The
Investment Houses Law"
SPV Plan shall be submitted to the - Securities or negotiable instruments
Commission for approval, which shall include - Other similar instruments
the following:
(d) Offender, refers to any person who commits a
(a) Investment policies of the SPV; money laundering offense.
(b) Contribution plan including the amounts and (e) Person, refers to any natural or juridical
draft of subscription documents; person
(c) Features of the IUIs including the specific (f) Proceeds, refers to an amount derived or
amounts issued and/or to be issued; realized from an unlawful activity.
(d) Rights of the holders of the IUIs; (g) Supervising Authority, refers to the
appropriate supervisory or agency, department or
(e) Draft agreements for the appointment of office supervising or regulating the covered
trustees and agents with respect to the IUIs and institution.
the NPLs acquired from an FI.
(h) Transaction, refers to any act establishing any
Sec 25. Penalties- A fine of not less than (P50, right or obligation or giving rise to any contractual
000.00) nor more than (P1, 000,000.00) or or legal relationship between the parties thereto.
imprisonment of not less than (6) years and one
(1) day nor more than (12) years, or both, in the (i) Unlawful Activity, refers to any act or
discretion of the court, without prejudice to the omission or series or combination thereof
penalties provided under Section 18 hereof and involving or direct relation to the ff:
other applicable laws.
- Kidnapping for ransom Act no. 3815
- Comprehensive Drugs Act of 2002
- Anti-Graft and Corrupt Practices Act
ANTI-MONEY LAUNDERING ACT OF 2001 - Plunder under RA no. 7080
- Robbery and Extortion under Art. 294
It is hereby declared the policy of the State
- Jueteng and Masiao
to protect and preserve the integrity and
- Piracy on the high seas
confidentiality of bank accounts and to ensure that
- Qualified Theft under Art 310
the Philippines shall not be used as a money
- Swindling under Art 315
laundering site for the proceeds of unlawful
- Smuggling under RA no. 455
activity.
(j) Precious Metals
Purpose of this Act
(k) Precious Stones
(a) Covered person, natural or juridical:
Sec 4. Money Laundering Offense- is committed
- banks, non-banks, quasi banks, trust
by any person who, knowing that any monetary
entities
instrument or property represents, involves, or
- insurance companies, pre-need companies
relates to the proceeds of any unlawful activity:
- securities dealers, brokers, salesmen
- jewelry dealers in precious metals a) Transacts said the monetary instrument or
- company service providers property
- management of the bank b) Converts, transfers, disposes of, moves,
acquires
(b) Covered Transaction, is a transaction in cash
c) Conceals or disguises the true nature,
or other equivalent monetary instrument involving
source, location, disposition, movement or
a total amount in excess of (P500,000) within one
ownership
banking day.
d) Attempts or conspire to commit money
(c) Monetary Instrument refers to: laundering offenses
e) Aids, abets, assists in or counsels the
- coins or currency of legal tender of the commission of the money laundering
Philippines offenses
- Drafts, checks and notes
 f) Performs or fails to perform any act as a Freezing of Monetary Instrument or Property-
result of which he facilitates the offense of shall not exceed 6 months depending upon the
money laundering circumstances of the case
Sec 5. Jurisdiction of Money Laundering Forfeiture Provisions
Cases- those committed by public officers and
private persons who are in conspiracy with such a) Civil Forfeiture
public officers shall be under the jurisdiction of b) Claim on Forfeited Assets
the Sandiganbayan. c) Payment in Lieu of Forfeiture

Sec 6. Prosecution of Money Laundering Mutual Assistance among States

a) Any person may be charged with and a) Request for Assistance from a Foreign
convicted of both the offense of money State
laundering and the unlawful activity as b) Power of the AMLC to Act on a Request
herein defined. for Assistance from a Foreign State.
b) The prosecution of any offense or c) Obtaining Assistance from Foreign State
violation under this act shall proceed d) Limitations on Request for Mutual
independently of any proceeding relating Assistance
to the unlawful activity/ e) Requirements for Request for Mutual
Assistance from a Foreign State
Sec 7. Creation of Anti-Money Laundering f) Authentication of Documents
Council g) Extradition
The AMLC shall act unanimously in the discharge Penal Provisions
of its functions:
a) Penalties for the Crime of Money
1) To require and receive covered or Laundering- penalty of imprisonment
suspicious transaction reports from ranging from 7 to 14 years and a fine of
covered institutions. not less than (P3,000,000)
2) To issue orders addressed to the b) Penalties for Failure to keep Records-
appropriate Supervising Authority or the penalty of imprisonment from 6 months to
covered institutions to determine the true 1 year or fine not less than (P100,000) but
identity of the owner of any monetary not more than (P500,000)
instrument. c) Malicious Reporting- any person shall be
3) To institute civil forfeiture proceedings subject to a penalty to 6 months to 4 years
and all other remedial proceedings imprisonment and a fine of not less than
through the Office of the Solicitor (P100,000) but not more than (P500,000)
General. d) Breach of Confidentiality- the punishment
4) To cause the filing of complaints with the of imprisonment ranging from 3 to 8 years
Department of Justice or the Ombudsman and a fine of not less than (P500,000) but
for the prosecution of money laundering not more than (P1,000,000)
offenses. e) Imposition of Administrative Sanctions
5) To investigate suspicious transactions and
covered transactions deemed suspicious Sec 16. Prohibition against Political
after an investigation AMLC, money Harassment- this Act shall not be used for
laundering activities and other violations political prosecution or harassment or as an
of this Act. instrument to hamper competition in trade and
commerce.
Prevention of Money Laundering
Sec 17. Restitution- for any grieved party shall be
a) Customer Identification governed by the provision of the New Civil Code.
b) Record Keeping (stored 5 years)
c) Reporting of Covered And Suspicious Sec 18. Implementing Rules and Regulations-
Transaction Within 30 days from the effectivity of this Act,
the Bangko Sentral ng Pilipinas, the Insurance
Commission and the Securities and Exchange
Commission shall promulgate the rules and
regulations to implement effectivity the provisions (c) "Electronic Data Message" refers to
of this Act. information generated, sent, received or stored by
electronic, optical or similar means.
(d) "Information and Communications System"
ELECTRONIC COMMERCE ACT (Republic refers to a system intended for and capable of
Act No. 8792) - Corporate/Commercial Law generating, sending, receiving, storing, or
"An Act Providing For The Recognition otherwise processing electronic data messages or
And Use of Electronic Commercial And Non- electronic documents and includes the computer
Commercial Transactions, Penalties For Unlawful system or other similar device by or in which data
Use Thereof, And Other Purposes, also known as is recorded or stored and any procedures related to
the "Electronic Commerce Act." the recording or storage of electronic data
message or electronic document.
Sec. 3. Objective - This Act aims to facilitate
domestic and international dealings, transactions, (e) "Electronic Signature" refers to any
arrangements, agreements, contracts and distinctive mark, characteristic and/or sound in
exchanges and storage of information through the electronic form, representing the identity of a
utilization of electronic, optical and similar person and attached to or logically associated with
medium, mode, instrumentality and technology to the electronic data message or electronic
recognize the authenticity and reliability of document or any methodology or procedures
electronic data messages or electronic documents employed or adopted by a person and executed or
related to such activities and to promote the adopted by such person with the intention of
universal use of electronic transactions in the authenticating or approving an electronic data
government and by the general public. message or electronic document.

Sec. 4. Sphere of Application - This Act shall (f) "Electronic Document" refers to information
apply to any kind of electronic data message and or the representation of information, data, figures,
electronic document used in the context of symbols or other modes of written expression,
commercial and non-commercial activities to described or however represented, by which a
include domestic and international dealings, right is established or an obligation extinguished,
transactions, arrangements, agreements, contracts or by which a fact may be prove and affirmed,
and exchanges and storage of information. which is receive, recorded, transmitted, stored,
processed, retrieved or produced electronically.
(g) "Electronic Key" refers to a secret code which
The new law defines in Section 5 thereof what secures and defends sensitive information that
constitutes "electronic data message", cross over public channels into a form
"electronic signature" and "electronic decipherable only with a matching electronic key.
document", as follows:
(h) "Intermediary" refers to a person who in
(a) "Addressee" refers to a person who is behalf of another person and with respect to a
intended by the originator to receive the electronic particular electronic document sends, receives
data message or electronic document. The term and/or stores provides other services in respect of
does not include a person acting as an that electronic data message or electronic
intermediary with respect to that electronic data document.
message or electronic data document.
(i) "Originator" refers to a person by whom, or
(b) "Computer" refers to any device or apparatus on whose behalf, the electronic document purports
which, by electronic, electro-mechanical, or to have been created, generated and/or sent. The
magnetic impulse, or by other means, is capable term does not include a person acting as an
of receiving, recording, transmitting, storing, intermediary with respect to that electronic
processing, retrieving, or producing information, document.
data, figures, symbols or other modes of written
expression according to mathematical and logical (j) "Service provider" refers to a provider of -
rules or of performing any one or more of these i. On-line services or network access or the
functions. operator of facilities therefor, including entities
offering the transmission, routing, or providing of electronic document necessary for his consent or
connections for online communications, digital or approval through the electronic signature
otherwise, between or among points specified by a
user, of electronic documents of the user's b) Said method is reliable and appropriate for the
choosing; or purpose for which the electronic document was
generated or communicated, in the light of all
ii. The necessary technical means by circumstances, including any relevant agreement
which electronic documents of an originator may
be stored and made accessible to designated or c) It is necessary for the party sought to be bound,
undesignated third party. in order to proceed further with the transaction, to
have executed or provided the electronic
signature; and
A) Legal Recognition / Admissibility As d) The other party is authorized and enabled to
Evidence verify the electronic signature and to make the
decision to proceed with the transaction
Sec. 6. Legal Recognition of Electronic Data authenticated by the same.
Message - Information shall not be denied validity
or enforceability solely on the ground that it is in Sec. 10. Original Documents –
the form of an electronic data message purporting
to give rise to such legal effect, or that it is merely (1) Where the law requires information to be
incorporated by reference in that electronic data presented or retained in its original form, that
message. requirement is met by an electronic data message
or electronic document
Sec. 7. Legal Recognition of Electronic
Documents - Electronic documents shall have the a) The integrity of the information from
legal effect, validity or enforceability as any other the time when it was first generated in its final
document or legal writing, and form, as an electronic data message or electronic
document is shown by evidence allude or
(a) Where the law requires a document to be in otherwise; and
writing, that requirement is met by an electronic
document if the said electronic document b) Where it is required that information be
maintains its integrity and reliability and can be presented, that the information is capable of being
authenticated so as to be usable for subsequent displayed to the person to whom it is to be
reference, in that presented.

(b) Paragraph (a) applies whether the requirement (2) Paragraph (1) applies whether the requirement
therein is in the form of an obligation or whether therein is in the form of an obligation or whether
the law simply provides consequences for the the law simply provides consequences for the
document not being presented or retained in its information not being presented or retained in its
original form. original form.

(c)Where the law requires that a document be (3) For the purposes of subparagraph (a) of
presented or retained in its original form, that paragraph (1):
requirement is met by an electronic document if
a) The criteria for assessing integrity shall
Sec. 8. Legal Recognition of Electronic be whether the information has remained
Signatures - An electronic signature on the complete and unaltered, apart from the addition of
electronic documents shall be equivalent to the any endorsement and any change which arises in
signature of a person on a written document if the the normal course of communication, storage and
signature is an electronic signature and proved by display; and
showing that a prescribed procedure, not alterable
b) The standard of reliability required shall
by the parties interested in the electronic
be assessed in the light of the purpose for which
document, existed under which
the information was generated and in the light of
a) A method is used to identify the party sought to all the relevant circumstances.
be bound and to indicate said party’s access to the
Sec. 11. Authentication of Electronic Data
Messages and Electronic Documents - Until the
Supreme Court by appropriate rules shall have so
provided, electronic documents, electronic data
messages and electronic signatures, shall be c)
authenticated by demonstrating, substantiating and
 claiming delivery of goods;
validating a claimed identity of a user, device, or
another entity in an information or communication  authorizing release of goods;
system, among other ways.  giving notice of loss, or damage to goods;

Sec. 14. Admissibility and Evidential Weight of d) Giving any other notice or statement in
Electronic Data Messages or Electronic connection with the performance of the contract;
Documents- In any legal proceedings, nothing in e) Undertaking to deliver goods to a named person
the application of the rules on evidence shall deny or a person authorized to claim delivery;
the admissibility of an electronic data message or
electronic document in evidence f) Granting, acquiring, renouncing surrendering,
transferring or negotiating rights in goods;
a. On the sole ground that it is in electronic
form; or g) Acquiring or transferring rights and obligations
under the contract.
b. On the ground that it is not in the
standard written form, and the electronic data (B) Electronic Transactions In Government
message or electronic document meeting, and
complying with the requirements under Sections 6 SEC. 27. Government Use of Electronic Data
or 7 hereof shall be the best evidence of the Messages, Electronic Documents and
agreement and transaction contained therein. Electronic Signatures. – Notwithstanding any
law to the contrary, within two (2) years from the
Carriage Of Goods date of the effectivity of this Act, all departments,
bureaus, offices and agencies of the government,
With reference to electronic commerce in carriage as well as all government-owned and controlled
of goods, the new law provides in Section 26 corporations, that pursuant to law require or
thereof that "where the law requires that any accept the fling of documents, require that
action (in connection with a contract of carriage of documents be created, or retained and/or
goods) be carried out in writing or by using a submitted, issue permits, licenses or certificates or
paper document, that requirement is met if the registration or approval, or provide for the method
action is carried out by using one or more and manner of payment or settlement of fees and
electronic data or electronic documents." other obligations to the government, shall-
Thus, electronic messages or electronic a) Accept the creation, fling or retention of
documents may be used as "functional such documents in the form of electronic data
equivalents" of written or paper documents in messages or electronic documents;
connection with the following instances:
b) Issue permits, licenses, or approval in
a) the form of electronic data messages or electronic
 furnishing the marks, number, quantity documents;
or weight of goods; c) Require and/or accept payments, and
 stating or declaring the nature or value issue receipts acknowledging such payments,
of goods; through systems using electronic data messages or
 issuing a receipt for goods; electronic documents; or
 confirming that goods have been
loaded;
b) d) Transact the government business
and/or perform governmental functions using
 notifying a person of terms and conditions electronic data messages or electronic documents,
of the contract and for the purpose, are authorized to adopt and
 giving instructions to a carrier; promulgate, after appropriate public hearing and
with due publication in newspapers of general
circulation, the appropriate rules, regulations, or and a maximum commensurate to the damage
guidelines, to among others. incurred and a mandatory imprisonment of six
(6) months to three (3) years;
(C) Confidentiality
c.) Violation of the Consumer Act or Republic Act
Section 32. Obligation of Confidentiality. – No. 7394 and other relevant or pertinent laws
Except for the purposes authorized under this Act, through transactions covered by or using
any person who obtained access to any electronic electronic data messages or electronic documents,
key, electronic data message or electronic shall be penalized with the same penalties as
document, book, register, correspondence, provided in those laws;
information, or other material pursuant to any
powers conferred under this Act, shall not convey d.) Other violations of the provisions of this Act,
to or share the same with any other person. shall be penalized with a maximum penalty of
(P1,000,000.00) or six (6) years imprisonment.
(D) Illegal Activities / Penalties
To protect internet users, consumers and
owners of computer systems / servers and
copyright owners, the new law defines what
constitutes illegal activities and provides penalties
thereof.
SEC. 33. Penalties. – The following Acts shall be
penalized by fine and/or imprisonment, as
follows:
a.) Hacking or cracking which refers to
unauthorized access into or interference in a
computer system/server or information and
communication system; or any access in order to
corrupt, alter, steal, or destroy using a computer or
other similar information and communication
devices, without the knowledge and consent of the
owner of the computer or information and
communications system, including the
introduction of computer viruses and the like,
resulting in the corruption, destruction, alteration,
theft or loss of electronic data messages or
electronic documents shall be punished by a
minimum fine of (P100,000.00) and a maximum
commensurate to the damage incurred and a
mandatory imprisonment of six (6) months to
three (3) years;
b.) Piracy or the unauthorized copying,
reproduction, dissemination, distribution,
importation, use, removal, alteration, substitution,
modification, storage, uploading, downloading,
communication, making available to the public, or
broadcasting of protected material, electronic
signature or copyrighted works including legally
protected sound recording or phonograms or
information material on protected works, through
the use of telecommunication networks, such as,
but not limited to, the internet, in a manner that
infringes intellectual property rights shall be
punished by a minimum fine of (P100,000.00)