RA 1405 LAW ON SECRECY OF BANK DEPOSITS

PURPOSE: (Sec. 1)
1.) To discourage private hoarding;
2.) To encouragement the people to deposit their money in banking
institutions so that the same may be properly utilized by banks
in authorized loans to assist in the economic development of the
country.
PROHIBITED ACTS: (Sec. 3)

1.) Examination and inquiry or looking into all deposits of whatever
nature with banks or banking institutions in the Philippines
including investments in bonds issued by the Government.
2.) Any disclosure by any official or employee of any bank to any
unauthorized person of any information concerning the said
deposits.

*Note: any official or employee of a banking institution can only be
penalized.

DEPOSITS COVERED:

General Rule: 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.

EXCEPTIONS:

A.) From RA 1405

1.) Where the depositor consents in writing;
2.) In impeachment cases;
3.) By court order in bribery or dereliction of duty cases against public
officials;
4.) Deposit is subject of litigation

B.) Additional Exceptions Under Other Laws:

1.) Sec. 8 Anti-Graft and Corrupt Practices Act RA 3019 ill-gotten
wealth; added by analogy in PNB vs. Gancayco

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.

2.) Sec 15 (8) RA 6770 Ombudsman Act;

Section 15. Powers, Functions and Duties. The Office of
the Ombudsman shall have the following powers, functions
and duties:
(8) Administer oaths, 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;

3.) Sec 6 (F) of the National Internal Revenue Code of 1997 RA 8424
<a &b>;

Section 6. Power of the Commissioner to Make assessments
and Prescribe additional Requirements for Tax Administration
and Enforcement.
(F) Authority of the Commissioner to inquire into Bank
Deposit Accounts. - Notwithstanding any contrary provision
of Republic Act No. 1405 and other general or special laws,
the Commissioner is hereby authorized to inquire into the
bank deposits of:
(1) a decedent to determine his gross estate; and
(2) any taxpayer who has filed an application for
compromise of his tax liability under Sec. 204 (A)
(2) of this Code by 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 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.

4.) Sec 9 (c) Anti-Money Laundering Act of 2001 RA 9160 & Sec 11;

Section 9. Prevention of Money Laundering; Customer
Identification Requirements and Record Keeping.
(c) Reporting of Covered Transactions. Covered
institutions shall report to the AMLC all covered
transactions within five (5) working days from occurrence
thereof, unless the Supervising Authority concerned
prescribes a longer period not exceeding ten (10) working
days.
When reporting covered transactions to the AMLC, covered
institutions and their officers, employees, representatives,
agents, advisors, consultants or associates shall not be
deemed to have violated Republic Act No. 1405, as amended;
Republic Act No. 6426, as amended; Republic Act No. 8791
and other similar laws, but are prohibited from
communicating, directly or indirectly, in any manner or by
any means, to any person the fact that a covered transaction
report was made, the contents thereof, or any other
information in relation thereto. In case of violation thereof,
the concerned officer, employee, representative, agent,
advisor, consultant or associate of the covered institution,
shall be criminally liable. However, no administrative,
criminal or civil proceedings, shall lie against any person for
having made a covered transaction report in the regular
performance of his duties and in good faith, whether or not
such reporting results in any criminal prosecution under
this Act or any other Philippine law.
When reporting covered transactions to the AMLC, covered
institutions and their officers, employees, representatives,
agents, advisors, consultants or associates are prohibited
from communicating, directly or indirectly, in any manner or
by any means, to any person, entity, the media, the fact that
a covered transaction report was made, the contents thereof,
or any other information in relation thereto. Neither may
such reporting be published or aired in any manner or form
by the mass media, electronic mail, or other similar devices.
In case of violation thereof, the concerned officer, employee,
representative, agent, advisor, consultant or associate of the
covered institution, or media shall be held criminally liable.

Section 11. Authority to inquire into Bank Deposits.
Notwithstanding the provisions of Republic Act No. 1405, as
amended; Republic Act No. 6426, as amended; Republic Act
No. 8791, and other laws, the AMLC may inquire into or
examine any particular deposit or investment with any
banking institution or non-bank financial institution upon
order of any competent court in cases of violation of this Act
when it has been established that there is probable cause
that the deposits or investments involved are in any way
related to a money laundering offense: Provided, That this
provision shall not apply to deposits and investments made
prior to the effectivity of this Act.

5.) Unclaimed Balances Law Act No. 3696 Disclosure of Dormant
Accounts -10 years;

6.) The NCBA Sec. 26 RA 7653

Section 26. Bank Deposits and Investments. - Any director,
officer or stockholder who, together with his related
interest, contracts a loan or any form of financial
accommodation from: (1) his bank; or (2) from a bank (a)
which is a subsidiary of a bank holding company of which
both his bank and the lending bank are subsidiaries or (b) in
which a controlling proportion of the shares is owned by the
same interest that owns a controlling proportion of the
shares of his bank, in excess of five percent (5%) of the
capital and surplus of the bank, or in the maximum amount
permitted by law, whichever is lower, shall be required by
the lending bank to waive the secrecy of his deposits of
whatever nature in all banks in the Philippines. Any
information obtained from an examination of his deposits
shall be held strictly confidential and may be used by the
examiners only in connection with their supervisory and
examination responsibility or by the Bangko Sentral in an
appropriate legal action it has initiated involving the deposit
account.

GARNISHMENT OF DEPOSITS, INCLUDING FOREIGN DEPOSITS:

Foreign Currency Deposit Act RA 6426 Sec 8

Intengan vs CA Gr no. 128996 Feb 15, 2002

Facts: two employees engaged in anamolous activities that were in
contrast to citbanks aim. Violation of the corporation code. In their annexes,
they included the bank accounts.

Held: this should have been under foreign nd not RA 1405. Ideally,
cannot divulged, it has prescribed. They did not use the correct charge.
Prescriptive period has elapsed after 11 years.
In essence, it should not been divulged, because of the written exemption and
also Sec 11 AMLA

Estrada vs. Desierto GR No. 156160

Whereas clause RA 6426
- they wanted to encourage foreign depositors; aimed to invite
foregin investors
- except non residents and are not engaged in trade or business
in the philippines
Garnishment of Deposits
- A legal proceeding whereby money or property due a debtor but
in the possession of another is applied to the payment of the
debt owed to the plaintiff
- China Bank Corp vs. Ortega
- However Sec 8 RA 6426:
General Rule:
-However Sec 8 RA 6426; forgein currency deposits
shall be exempt from attachment, garnishment, or any other
order or process of any court, legilative body, governement
agency or any administrative body whatsoever.

Exception:
- Salvacion vs Central Bank of the Philippines
Section 11 of AMLA: When it has been established that there
is probable cause that the deposits or investments involved
are in any way related to a money laundering offense.

PENALTIES: 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. (Sec. 5)


CASES:

1.) Mellon vs. Bank Magsino

FACTS:
This case involves the erroneous transfer of $1M to
Victoria Javier instead of $1K. First National bank requested
the petitioner, Mellon Bank, to effect the transfer.
Unfortunately, the wire sent by Mellon Bank to
manufacturer Hanover Bank transferred the amount of S1M
less bank charges to the account of Victoria Javier.
The Javier spouses wasted no time and opened a
new dollar account, the withdrew the money and converted
it to 6 cashiers check with a payee of different companies,
these were delivered to Marquez and Poblador.
The husband requested Marquez to look a real
property in USA as an agent of Poblador, the husband
purchased the lot of Poblador, a 160-acre in California City.
For the payment, Poblador requested it shall not be directed
to him, instead to the companies.
Mellon filed a complaint for the recovery of the lot.
In order to trace the whereabouts of the portion of
the funds, witnesses Red and Boylasis were made to testify
that in PVB there was a transaction made by Azada w/c
involved 2 checks and this was transferred to Hagedorn, one
of the companies w/c is in connection w/ Poblador. The
defendants invoked RA 1405 claiming that the testimonies
must be off the record as it is against secrecy of bank
deposit.

ISSUE: Whether or not an account deposit w/c is relevant
and material to the resolution of the case may be covered
under RA 1405.

HELD:
No. Sec 2 of RA 1405 allows the disclosure of bank
deposits in cases where the money deposited is the subject
matter of the litigation.
Inasmuch as the civil case is aimed at recovering the
amount converted by the Javiers for their own benefit,
necessarily, 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.

2.) PNB vs. Gancayco

DOCTRINE: Sec. 8 of RA 3019 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.

FACTS:
Prosecutor Gancayao required PNB to produce the
records of the bank deposits of Jimenez, the former administrator of
the Agricultural Credit and Cooperative Administration. Jimenez was
under investigation for unexplained wealth. PNB refused to produce
the records of the bank deposits for fear of prosecution under RA
1405 (Bank Secrecy Law). Gancayao on the other hand relied on the
provisions of RA 3019 (Anti Graft and Corrupt Practices Act), stating

Sec. 8. Dismissal due to unexplained wealth. xx xx xx Bank
deposits shall be taken into consideration in the enforcement of this
section, notwithstanding any provision of law to the contrary.

ISSUE: Whether RA 3019 prevails over RA 1405?

RULING:
YES. Anti Graft and Corrupt Practices Act prevails over the
Bank Secrecy Law. 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.
The only conclusion possible is that Section 8 of the Anti Graft Law is
intended to amend Section 2 of the Bank Secrecy Law by providing
an additional exception to the rule against the disclosure of bank
deposits.

3.) China Bank vs. Ortega

DOCTRINE: Garnishment of bank deposit judgment debtor is
not violative of RA 1405. The Court merely required the cashier of
the bank to inform the court whether or not the defendant had a
deposit in said bank 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.

FACTS:
In 1968, Acaban filed a complaint against Bautista Logging Co.,
Inc., B & B Forest Development Corporation and Marino Bautista for
the collection of sum of money. RTC declared the defendants in
default for failure to file their responsive pleadings within the
reglementary period.
To satisfy the judgment, Acaban sought the garnishment of the
bank deposit of B & B Forest Development Corporation with China
Banking Corporation. Accordingly, a notice of garnishment was
issued and served on the banks cashier, Tan Kim Liong.
In reply, Tan Kim Liong invoked the provisions of the Bank
Secrecy Law prohibiting the disclosure of any information relative to
bank deposits. RTC, in denying Acabans motion to cite Tan Kim
Liong in contempt, nevertheless ordered the latter to inform the
court whether or not there is a deposit with China Banking
Corporation of B & B Forest Development Corporation, and if any, to
hold the same intact and not to allow any withdrawal until further
orders.

ISSUE: Whether there was a violation of the provisions of the Bank
Secrecy Law prohibiting the disclosure of any information relative to
bank deposits

HELD:
NO. The lower court did not order an examination of or inquiry
into the deposit of B&B Forest Development Corporation. It merely
required Tan Kim Liong to inform the court of the existence of B&B
Forest Development Corporations deposit in said bank only for the
purpose of the garnishment issued by it, so that the bank would hold
the same intact and not allow any withdrawal until further order.
It is clear from the discussion of the conference committee
report of the 2 houses of Congress that the prohibition against
examination of or inquiry into a bank deposit under RA 1405 does
NOT preclude its being garnished to insure satisfaction of a
judgment. There is no real inquiry in this case, and if the existence of
the bank account is disclosed, the disclosure is purely incidental to
the execution process.


4.) Intengan vs. CA

DOCTRINE: Where the accounts in question are US dollar deposits, the
applicable law is RA 6426 (FCDA), not RA 1405 (Bank Secrecy Law).
Under the applicable law, the only exception to the secrecy of foreign
currency deposits is upon the written permission of the depositor.

FACTS:
In 1993, Citibank filed a complaint for violation of Sec. 31, in
relation to Sec. 144 of the Corporation Code against its 2 officers,
Santos and Genuino. It was alleged in the affidavit executed by its VP
Vic Lim that Santos and Genuino managed or caused existing bank
clients/depositors to divert their money from Citibank NA to products
offered by other companies (Torrance Development Corporation and
Global Pacific Corporation) that were yielding higher interest rates. In
return, Santos and Genuino derived substantial financial gains. It was
also determined that the bank clients accommodated by Santos and
Genuino include Intengan, Neri and Brawner, who have long standing
accounts with Citibank NA in savings/dollar deposits and/or in trust
accounts and/or money placements.
As evidence, Lim annexed bank records, including dollar
deposits of Intengan, Neri and Brawner, to establish the deception
practiced by Santos and Genuino.
In turn, Global Consumer Banking Group of Citibanks
VP/Business Manager Reyes admitted to having authorized Lim to
state the names of the clients involved and to attach said bank records.
Intengan, Neri and Brawner filed their respective motions for
the exclusion and physical withdrawal of their bank records, which
was initially dismissed by 2nd Asst. Provincial Prosecutor Ubana, Sr.
However, Provincial Prosecutor Castro directed the filing of
informations against Rajkotwala, Ferguson, Reyes and Lim for alleged
violation of the Bank Secrecy Law. On appeal before the DOJ, this was
reversed.

ISSUE: Whether the Bank Secrecy Law, RA 1405 applies in this case

HELD:
NO. The accounts in question are US dollar deposits. Consequently, the
applicable law is RA 6426 known as the Foreign Currency Deposit Act of the
Philippines, and not RA 1405 (Bank Secrecy Law).
Under Sec. 8 of RA 6426, there is only a single exception to the secrecy
of foreign currency deposits, that is, disclosure is allowed only upon the
written permission of the depositor. Incidentally, the acts of the Citibank
officials complained of happened before the enactment of RA 9160, Anti-
Money Laundering Act of 2001.
A case for violation of RA 6426 should have been the proper case brought
against the banks officials. Lim and Reyes admitted that they had disclosed
details of petitioners dollar deposits without the latters written permission.
It does not matter if that such disclosure was necessary to establish the
banks case against Santos and Genuino. Lims act of disclosing details of
petitioners bank records regarding their foreign currency deposits, with the
authority of Reyes, would appear to belong to the species of criminal acts
punishable under special lawsmalum prohibitum.

5.) Estrada vs. Desierto
Finally, with respect to the complaint for violation of Section 8 of Rep. Act
No. 6426 (Foreign Currency Deposits Act of the Philippines), public
respondents ratiocinated[30] --
At this point, it is worth stressing, that this office in its previous Order
dated 20 February 2001, ruled that the absolute confidentiality of foreign
currency deposit account provided for under R.A. 6426 does not apply to the
foreign currency deposit accounts of herein complainant, since the protection
under the said law is intended only for depositors who are non residents and
are not engaged in trade and business in the Philippines. In coming out with
such ruling, this office has as its basis one of the Whereas clauses of P.D. 1246
which amended Sec. 8 of R.A. 6426. For emphasis, the pertinent provision of
the said law is hereby quoted:
WHEREAS, in order to assure the development and speedy growth of the
Foreign Currency Deposit System and offshore Banking System in the
Philippines, certain incentives were provided for under the two systems such
as confidentiality of deposits subject to certain exceptions and tax
exemptions on the interest of the income of depositors who are nonresidents
and are not engaged in trade or business in the Philippines.
Considering the previous Order of this Office, it necessarily follows that
the accusation for violation of Sec. 8 of R.A. 6426 against herein respondents
has no leg to stand on, thus, the dismissal of the charge for violation of Sec. 8
of R.A. 6426 is therefore in order.
In Salvacion v. Central Bank and China Bank, 278 SCRA 27 (1997), the
Highest Tribunal adopted the opinion of the Office of the Solicitor General
(OSG) that only foreign currency deposits of foreign lenders and investors are
given protection and incentives by the law, and further ruled that the Foreign
Currency Deposits Act cannot be utilized to perpetuate injustice.[32]
Following such pronouncements, it is respectfully submitted that foreign
currency deposits of Filipino depositors, including herein complainant, are
not covered by the Foreign Currency Deposits Act, and are thus not exempt
from the processes duly-issued by the BIR.
With respect specifically to the resolution for violation of Section 8 of
Rep. Act. No. 6426, public respondents relied on the whereas clause of P.D.
No. 1246 which amended Rep. Act No. 6426 and on the Salvacion case to
conclude that only non-residents who are not engaged in trade and business
are under the mantle of protection of Section 8 of Rep. Act. No.
6426. Assuming that such reliance is erroneous as contended by
petitioner,[36] this Court, on petition for certiorari, cannot correct the same
as the error is not of a degree that would amount to a clear case of abuse of
discretion of the grave and malevolent kind. It is axiomatic that not every
erroneous conclusion of law or fact is abuse of discretion.[37] As adverted to
earlier, this Court will interfere in the Ombudsmans findings of fact and
conclusions of law only in clear cases of grave abuse of discretion.

6.) Salvacion vs. Central Bank

DOCTRINE: Sec. 113 of CB Circular No. 960, which exempts from
garnishment, attachment or any other order or process of any court,
legislative body, government agency or any administrative body
whatsoever foreign currency deposits, is NOT applicable to a foreign
transient, but only to foreign lenders and investors to the development
of the Foreign Currency Deposit System and Offshore Banking System
in the Philippines.

FACTS
On February 4, 1989, Greg Bartelli y Northcott, an American
tourist, coaxed and lured petitioner Karen Salvacion, then 12 years old
to go with him to his apartment. Therein, Greg Bartelli detained Karen
Salvacion for four days, or up to February 7, 1989 and was able to rape
the child. Greg was eventually apprehended but he escaped from
detention.
The Deputy Sheriff of Makati served a Notice of Garnishment on
China Banking Corporation. In a letter dated March 13, 1989 to the
Deputy Sheriff of Makati, China Banking Corporation invoked Republic
Act No. 1405 as its answer to the notice of garnishment served on it.
On March 15, 1989, Deputy Sheriff of Makati Armando de Guzman sent
his reply to China Banking Corporation saying that the garnishment
did not violate the secrecy of bank deposits since the disclosure is
merely incidental to a garnishment properly and legally made by
virtue of a court order which has placed the subject deposits in
custodia legis. In answer to this letter of the Deputy Sheriff of Makati,
China Banking Corporation, in a letter dated March 20, 1989, invoked
Section 113 of Central Bank Circular No. 960 to the effect that the
dollar deposits of defendant Greg Bartelli are exempt from attachment,
garnishment, or any other order or process of any court, legislative
body, government agency or any administrative body, whatsoever.
After hearing the case ex-parte, the court rendered judgment in
favor of petitioners on March 29, 1990. But China Bank still refuses to
garnish the foreign denominated deposits of Greg.

ISSUE: Should Section 113 of Central Bank Circular No. 960 and
Section 8 of R.A. 6426, as amended by P.D. 1246, otherwise known as
the Foreign Currency Deposit Act be made applicable to a foreign
transient?

RULING:

NO. The SC ruled provisions of Sec 113 of CB Circ No. 960 and
PD 1246 to be inapplicable to the case at bar because of its peculiar
circumstance. Respondents are required to comply.
There would be a result of unjust to a citizen aggrieved by a
foreign guest like Bertelli to use as a device those provision to shield
them from any wrongdoings.
If Karen's sad fate had happened to anybody's own kin, it would
be difficult for him to fathom how the incentive for foreign currency
deposit could be more important than his child's rights to said award
of damages; in this case, the victim's claim for damages from this alien
who had the gall to wrong a child of tender years of a country where he
is a mere visitor. This further illustrates the flaw in the questioned
provisions.
It is worth mentioning that R.A. No. 6426 was enacted in 1983
or at a time when the country's economy was in a shambles; when
foreign investments were minimal and presumably, this was the
reason why said statute was enacted. But the realities of the present
times show that the country has recovered economically; and even if
not, the questioned law still denies those entitled to due process of law
for being unreasonable and oppressive. The intention of the
questioned law may be good when enacted. The law failed to anticipate
the iniquitous effects producing outright injustice and inequality such
as the case before us.
There would be a result of injustice to a citizen aggrieved by a
foreigner guest like Bertelli to use as a device those provision to shield
them form any wrongdoings.

7.) Banco Filipino Savings & Mortgage Bank vs. Purisma

FACTS:
Customs special agent Manuel Caturla is accused by the Bureau of Internal
Revenue of having violated R.A. No. 3019 of the "Anti-Graft and Corrupt
Practices Act" for having allegedly acquired property manifestly out of
proportion to his salary and other lawful income. In the course of the
preliminary investigation thereof, the Tanodbayan issued a subpoena duces
tecum to the Banco Filipino Savings & Mortgage Bank, commanding its
representative to appear at a specified time at the Office of the Tanodbayan
and furnish the latter with duly certified copies of the records in all its
branches and extension offices, of the loans, savings and time deposits and
other banking transactions, dating back to 1969, appearing in the names of
Caturla, his wife, Purita Caturla, their children Manuel, Jr., Marilyn and
Michael and/or Pedro Escuyos.

Caturla moved to quash the subpoena duces tecum but was denied by
Tanodbayan Vicente Ericta. Petitioner Banco Filipino filed a complaint for
declaratory relief with the Court of First Instance of Manila but was denied
for lack of merit by respondent Judge Purisima.

ISSUE:
Whether or not the RA 1405 "Law on Secrecy of Bank Deposits" precludes
production by subpoena duces tecum of bank records of transactions by or in
the names of the wife, children and friends of a special agent of the Bureau of
Customs, accused before the Tanodbayan of having allegedly acquired
property manifestly out of proportion to his salary and other lawful income,
in violation of the "Anti-Graft and Corrupt Practices Act".

HELD:
No. 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 .. property unlawfully acquired by the respondent, but its ownership
is concealed by its being recorded in the name of, or held by, respondent's
spouse, ascendants, descendants, relatives or any other persons."

The provisions of R.A. No. 1405 subject of BF's declaratory action, read as
follows:
Sec. 2. 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 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.
Sec. 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
The other provision involved in the declaratory action is Section 8 of R.A. No.
3019. It reads:
Sec. 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 this 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 prohibition of law to the
contrary.
In our decision in Philippine National Bank v. Gancayco, rendered on
September 30, 1966,
11
we upheld the judgment of the Trial Court "sustaining
the power of the defendants (special prosecutors of the Department of
Justice) to compel the disclosure (by PNB) of bank accounts of ACCFA
Administrator Jimenez (then under investigation for unexplained wealth), ..
(it being ruled) that, by enacting section 8 of the Anti-Graft and Corrupt
Practices Act, Congress clearly intended to provide an additional ground for
the examination of bank deposits .. (for) without such provision, the ..
prosecutors would be hampered if not altogether frustrated in the prosection
of those charged with having acquired unexplained wealth while in public
office.
12
We ourselves declared in said case that
13

.. while Republic Act No. 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." The only conclusion possible is that section 8 of the Anti-Graft Law
is intended to amend section 2 of Republic Act No. 1405 by providing an
additional exception to the rule against the disclosure of bank desposits.
xxx xxx xxx
... Cases of unexplained wealth
14
are similar to cases of bribery or dereliction
of duty
15
and no reason is seen why these two classes of cases cannot be
excepted from the rule making bank deposits confidential.
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

8.) Marquez vs. Desierto

Facts:

Respondent Ombudsman Desierto ordered petitioner Marquez to produce
several bank documents for purposes of inspection in camera relative to
various accounts maintained at Union Bank of the Philippines, Julia Vargas
Branch, where petitioner is the branch manager.

The order is based on a pending investigation at the Office of the Ombudsman
against Amado Lagdameo, et. al. for violation of R.A. No. 3019, Sec. 3 (e) and
(g) relative to the Joint Venture Agreement between the Public Estates
Authority and AMARI.

Petitioner wanted to be clarified first as to how she would comply with the
orders without her breaking any law, particularly RA. No. 1405.

Issue:

Whether the order of the Ombudsman to have an in camera inspection of the
questioned account is allowed as an exception to the law on secrecy of bank
deposits (R.A. No.1405).

Held:

No. We rule that before an in camera inspection may be allowed, there must
be a pending case before a court of competent jurisdiction. Further, the
account must be clearly identified, the inspection limited to the subject
matter of the pending case before the court of competent jurisdiction. 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

The order of the Ombudsman to produce for in camera inspection the
subject accounts with the Union Bank of the Philippines, Julia Vargas Branch,
is based on a pending investigation at the Office of the Ombudsman against
Amado Lagdameo, et. al. for violation of R.A. No. 3019, Sec. 3 (e) and (g)
relative to the Joint Venture Agreement between the Public Estates Authority
and AMARI.
We rule that before an in camera inspection may be allowed, there must be a
pending case before a court of competent jurisdiction. Further, the account
must be clearly identified, the inspection limited to the subject matter of the
pending case before the court of competent jurisdiction. 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.
In Union Bank of the Philippines v. Court of Appeals, we held that "Section 2
of the Law on Secrecy of Bank Deposits, as amended, declares bank deposits
to be "absolutely confidential" except:
(1) In an examination made in the course of a special or general examination
of a bank that is specifically authorized by the Monetary Board after being
satisfied that there is reasonable ground to believe that a bank fraud or
serious irregularity has been or is being committed and that it is necessary to
look into the deposit to establish such fraud or irregularity,
(2) In an examination made by an independent auditor hired by the bank to
conduct its regular audit provided that the examination is for audit purposes
only and the results thereof shall be for the exclusive use of the bank,
(3) Upon written permission of the depositor,
(4) In cases of impeachment,
(5) Upon order of a competent court in cases of bribery or dereliction of duty
of public officials, or
(6) In cases where the money deposited or invested is the subject matter of
the litigation".
27

In the case at bar, there is yet no pending litigation before any court of
competent authority. What is existing is an investigation by the Office of the
Ombudsman. In short, what the office of the ombudsman would wish to do is
to fish for additional evidence to formally charge Amado Lagdameo, et. al.,
with the Sandiganbayan. Clearly, there was no pending case in court which
would warrant the opening of the bank account for inspection.

------ Specific requirements on a Ombudsmans
1.) Only in camera inspection is allowed,
2.) There must be pending case before a court of competent jurisdiction,
3.) The account must be clearly identified,
4.) The inspection is limited to the account subject of the court case, and
5.) The bank personnel is limited to the account holder must be notified to be
present during the inspection