3. Coverage and Exceptions

Grounds to allow examination of a bank account under Section 2 of RA No. 1405:

• Where the depositor consents in writing.

Note: A waiver of rights (RA 1405¹) must be voluntary, knowingly, intelligently, and with sufficient awareness of the relevant circumstances and likely consequences. There must be evidence to show an actual intention to relinquish the right. Mere silence on the part of the holder of the right should not be construed as a surrender thereof. (Doña Adela Export International, Inc. v. TIDCORP, G.R. No. 201931)²

Examples of waiver: Waiver in case of DOSRI loans (NCBA, Sec. 26³) and waiver of a taxpayer in case of compromise of tax liability. (Tax Code, Sec. 6[f]⁴)

• Impeachment Cases. It is necessary that there be an order issued by the impeachment court or by its authorized officer to allow examination.

It is limited to Peso deposits, as it is not an exemption to the absolute confidentiality of foreign currency deposits under RA 6426⁵. (Philippine Savings Bank v. - Senate Impeachment Court, G.R. No. 200238, 20 November 2012)⁶

• By Court Order in cases of;
• Bribery
• Dereliction of duty of public officials
• Money invested or deposited is subject of litigation (RA 1405 – An Act Prohibiting Disclosure of or Inquiry into Deposits with any Banking Institution, Sec. 2⁷).

Fishing for information as to the amount of damages it can recover does not fall within the exception. Since the subject matter of the dispute is not the money deposited in the drawer's account, it does not, by itself, warrant the examination of the bank deposits. (Union Bank of the Philippines v. Court of Appeals and Allied Bank Corporation, G.R. No. 134699, 6 August 2001)⁸

The subject matter of the action is to be determined from the indictment that charges respondent with the offense, and not from the evidence sought. The information charges qualified theft. There was no mention of the supposed bank account in which the funds represented by the checks have allegedly been kept to allow testimony on the bank account. (BSB Group, Inc. v. Go-Bangayan, G.R. No. 168644, 16 February 2010)⁹

Inquiry into the whereabouts of the amount converted necessarily extends to whatever is concealed (being in the name of persons other than the one responsible for the illegal acquisition) inasmuch as the case is aimed at recovering the amount converted. (Mellon Bank v. Magsino, G.R. No. 71479, 18 October 1990)¹⁰

Additional exceptions to the Secrecy of Bank Deposits Act

• Violations of Anti-Graft and Corrupt Practices Act. Section 8 of RA 3019¹¹ directs that bank deposits shall be taken into consideration in its enforcement, notwithstanding any provision of the law to the contrary. (PHILIPPINE NATIONAL BANK and EDUARDO Z. ROMUALDEZ v. Gancayco, G.R. No. L-18343, 30 September 1965)¹²

The Courts are authorized to examine bank deposits of spouses and unmarried children of government officials found to have unexplained wealth under RA 3019 – Anti-Graft and Corrupt Practices Act. (RA 3019, Sec. 8)¹³

• Commissioner of Internal Revenue (CIR). The CIR can inquire into the bank accounts of the following taxpayers:
• A decedent to determine his gross estate;
• Any taxpayer who has filed an application for compromise of his tax liability on the ground of financial incapacity; and
• A taxpayer, information on whose account is requested by a foreign tax authority. (NIRC, Sec. 6(f))¹⁴
• Unclaimed balances. Disclosure to the Treasurer of the Philippines for dormant deposits for at least 10 years. (Act 3936, Sec. 2)¹⁵
• BSP periodic or special examination. To ensure compliance of the covered institution with the Anti Money Laundering Act. (NCBA, Sec. 25¹⁶; RA 9160 – Anti-Money Laundering Act (AMLA), Sec. 11¹⁷)

Annual testing solely limited to the determination of the existence and true identity of the owners of the accounts. (AMLA, Sec. 9[a])¹⁸

• Human Security Act (RA 9372). After determining existence of probable cause, the Court of Appeals may authorize examination of and gathering of information on deposits, placements, trust accounts, assets, and records in a bank or financial institution; (RA 9372, Sec. 27)¹⁹ of the following:
• A person charged with or suspected of the crime of terrorism or conspiracy to commit terrorism;
• Any judicially declared and outlawed terrorist organizations, associations, or group of persons; or
• Any member of such organization, association, or group of persons in a bank or financial institution and the gathering of any relevant information about the same from said bank or financial institution. (RA 9372, Sec. 28)²⁰
• Anti-Money Laundering Act (AMLA). Upon order of a competent court in cases of violation of the AMLA where there is probable cause of money laundering, except that no court order is required in cases of:
• Kidnapping for ransom
• Drug trafficking
• Hijacking, destructive arson, and murder including those perpetrated by terrorists against non-combatants and similar targets. (AMLA, Sec. 11)²¹
• Plunder. Sec. 1(d) and 4 of the Plunder Law (RA 7080)²².

Plunder (RA 7080, Sec. 2)²³, which is amassing or accumulating ill-gotten wealth by series of overt or criminal acts, is also analogous to bribery. Therefore, the exception to R.A. 1405²⁴ applicable in cases of bribery must also apply to cases of plunder. (Ejercito v. Sandiganbayan, G.R. Nos. 157294-95, 30 November 2006)²⁵

• Unsafe and unsound banking practices. BSP and PDIC may inquire into bank deposits (both Peso and Foreign Currency Deposits) and all information related thereto if there is a finding of unsafe or unsound banking practice. (New PDIC Charter, Sec. 9)²⁶
• In-Camera Inspection. The Ombudsman is granted the express powers to examine and have access to bank accounts and records. (RA 6770 – Ombudsman Act, Sec. 15)²⁷

Requisites:

• Pending case before a court of competent jurisdiction;
• Account must be clearly identified;
• The inspection is limited to the subject matter of the pending case;
• The bank personnel and the account holder must be notified to be present during the inspection, and such inspection may cover only the account identified in the pending case. (Marquez v. Desierto, G.R. No. 135882, 27 June 2001)²⁸

Note: An investigation by the Office of the Ombudsman is not a pending litigation to allow examination of a bank account. (Marquez v. Desierto)

• Terrorism Financing Prevention and Suppression Act (RA 10168). The AntiMoney Laundering Council (AMLC), without a court order, is authorized to inquire into or examine bank deposits and investments with any banking institution or non-bank financial institution and their subsidiaries and affiliates concerning:
• Any property or funds that are in any way related to financing of terrorism or acts of terrorism; or
• Any property or funds of any person or persons in relation to whom there is probable cause to believe that such person or persons are committing or attempting or conspiring to commit or participating in or facilitating the financing of terrorism or acts of terrorism. (RA 10168, Sec. 10)
• Bank Resolution. When there is a failure of Prompt Corrective Action as declared by the Monetary Board due to capital deficiency, the PDIC or its duly authorized officers or employers may examine, inquire, or look at the deposit records of the bank. (New PDIC Charter, Sec. 11[c])

The information cannot be shared by PDIC to other persons, including the BSP.

• Presidential Commission on Good Governance (PCGG). Investigation by the PCGG to recover ill-gotten wealth (EO 1, Sec. 3[e])
• Commission on Audit (COA). Audit on government deposits by the COA. (1987 Constitution, Art. IX (D), Sec. 2[1])

Grounds for Disclosure of Foreign Currency Deposits.

• Upon written permission of depositor
• Under Other Laws (as discussed)
• CIR. (NIRC, Sec. 6[f]²⁹)
• AMLC – with or without a court order, as permitted by the applicable law, under the AMLA and Terrorism Financing Prevention and Suppression Act. (AMLA, Sec. 11³⁰; RA 10168, Sec. 10³¹)
• BSP in limited examination to ensure compliance of supervised institutions to AMLA. (AMLA, Sec. 11³²)
• PDIC in banking resolution when there is failure of PCA. (New PDIC Charter, Sec. 11[c]³³)
• BSP and PDIC when there is a finding of unsafe or unsound banking practice. (Id., Sec. 8³⁴
• COA and PCGG. (1987 Constitution, Art. IX (D), Sec. 2(1)³⁵; EO 1, Sec. 3[e]³⁶)
• Jurisprudence (equity). The following exceptions are provided on grounds of equity.
• Account of non-resident alien found guilty of raping a minor was allowed on the basis of equity. (Salvacion v. Central Bank of the Philippines, G.R. No. 94723, 21 August 1997)³⁷
• A co-payee of a check who filed a suit for recovery of a sum of money was considered as a depositor because of the distinctive circumstances of the case. (China Banking Corporation v. Court of Appeals and Jose "Joseph" Gotianuy As Substituted by Elizabeth Gotianuy, G.R. No. 140687, 18 December 2006)³⁸

DEPOSITS COVERED

Peso Deposits. All (peso) deposits of whatever nature with banks or banking institutions in the Philippines including trust accounts. (Ejercito v. Sandiganbayan)³⁹

Deposits refer to money or funds placed in a bank which can be withdrawn on depositor’s order or demand. It is characterized as being in the nature of a simple loan and creates a creditor-debtor relationship between the depositor and the bank. (NCC, Art. 1980)⁴⁰ While trust funds are different, by jurisprudence, this is included in the broad category of deposits under RA 1405⁴¹.

Investment in bonds issued by the Government of the Philippines, its political subdivisions, and its instrumentalities. (RA 1405, Sec. 2)⁴²

Foreign currency deposits (RA No. 6426)⁴³ and deposits in offshore banking units (PD No. 1246, Sec. 8)⁴⁴ are considered as absolutely confidential. RA No. 6426 only provided for written permission of the depositor as an exception. However, other exceptions evolved by jurisprudence and statutes.

Note: Other funds or properties in the bank which are not in the nature of deposits are still confidential. No director, officer, employee, or agent of any bank shall, 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 entities. (GBL, Sec. 55(1)(b))⁴⁵