4. Special Laws on Banking and Finance

An act penalizing the making or drawing and issuance of a check without sufficient funds or credit.

• 1. A. Batas Pambansa Blg. 20 

• 1. B. Batas Pambansa Blg. 21 

• 1. C. Batas Pambansa Blg. 22

• 1. D. Batas Pambansa Blg. 23 

Answer explanation

The purpose of the law is to penalize the making or drawing and issuance of a

check without sufficient funds or credit and for other purposes. In order to afford protection to business and the public in general, and prevent the circulation of worthless checks, Batas Pambansa (BP) Blg. 22, also known as “An Act Penalizing the Making or Drawing and Issuance of a Check Without Sufficient Funds or Credit and For Other Purposes,” was approved in April 1979.

What is the minimum number of days for maintaining a balance in the checking account to cover the check he issued for the drawer to be exempted from conviction for violation of BP 22?

• 1. A. A period of at least 90 days from the maturity date of check 

• 1. B. A period of at least 90 days from the maturity date of check 

• 1. C. A period of at least 150 days from the maturity date of check

• 1. D. A period of at least 180 days from the maturity date of check

Answer explanation

Section 1. The same penalty shall be imposed upon any person who, having sufficient funds in or credit with the drawee bank when he makes or draws and issues a check, shall fail to keep sufficient funds or to maintain a credit to cover the full amount of the check if presented within a period of ninety (90) days from the date appearing thereon, for which reason it is dishonored by the drawee bank. Where the check is drawn by a corporation, company or entity, the person or persons who actually signed the check on behalf of such a drawer shall be liable under this Act.

Covered persons, natural or juridical, refer to

• 1. A. Banks, non-banks, quasi-banks, trust entities, foreign exchange dealers, pawnshops, money changers,  remittance and transfer companies and other similar entities and all other persons and their subsidiaries  and affiliates supervised or regulated by the Bangko Sentral ng Pilipinas

• 1. B. Insurance companies, pre-need companies and all other persons supervised or regulated by the  Insurance Commission

• 1. C. Securities, dealers, brokers, salesmen, investment houses and other similar persons managing securities  or rendering services as investment agent, advisor or consultant, mutual funds, closed-end investment  companies, common trust funds, and other similar persons, and other entities administering or otherwise dealing in currency, commodities or financial derivatives based thereon, valuable objects, cash  substitutes and other similar monetary instruments or property supervised or regulated by the Securities and Exchange Commission

• 1. D. Casinos, including internet and ship-based casinos, with respect to their casino cash transactions related 

• 1. E. All of the above

Answer explanation

SECTION 1. Section 3(a) of Republic Act No. 9160, as amended, is hereby amended to read as follows:

“(a) ‘Covered persons’, natural or juridical, refer to:

“(1) banks, non-banks, quasi-banks, trust entities, foreign exchange dealers, pawnshops, money changers, remittance and transfer companies and other similar entities and all other persons and their subsidiaries and affiliates supervised or regulated by the Bangko Sentral ng Pilipinas (BSP);

“(2) insurance companies, pre-need companies and all other persons supervised or regulated by the Insurance Commission (IC);

(3) (i) securities dealers, brokers, salesmen, investment houses and other similar persons managing securities or rendering services as investment agent, advisor, or consultant, (ii) mutual funds, closed-end investment companies, common trust funds, and other similar persons, and (iii) other entities administering or otherwise dealing in currency, commodities or financial derivatives based thereon, valuable objects, cash substitutes and other similar monetary instruments or property supervised or regulated by the Securities and Exchange Commission (SEC);

What is the objective of Anti-Money Laundering Law?

• 1. A. To protect and preserve the integrity and confidentiality of bank accounts

• 1. B. To ensure that the Philippines shall not be used as a money laundering site for the proceeds of any unlawful activity 

• 1. C. Consistent with its foreign policy, to extend cooperation in transnational investigations and prosecutions of persons involved in money laundering activities wherever committed

• 1. D. All of the above

Answer explanation

SEC. 2. Declaration of Policy. — It is hereby declared the policy of the State to protect and preserve the integrity and confidentiality of bank accounts and to ensure that the Philippines shall not be used as a money laundering site for the proceeds of any unlawful activity. Consistent with its foreign policy, the State shall extend cooperation in transnational investigations and prosecutions of persons involved in money laundering activities wherever committed.

Which of the following is declared to be the policy of the Government under Republic Act No. 1405 a.k.a. Philippine Peso Deposit Secrecy Law? 

I. To give encouragement to the people to deposit their money in banking institutions

II. To discourage private hoarding

• 1. A. Only Statement I

• 1. B. Only Statement II 

• 1. C. Both Statements I and II 

• 1. D. Neither Statements I nor II

Answer explanation

SECTION 1. It is hereby declared to be the policy of the Government to give encouragement to the people to deposit their money in banking institutions and to discourage private hoarding so that the same may be properly utilized by banks in authorized loans to assist in the economic development of the country.

Which act is covered by Republic Act No. 1405 a.k.a. Philippine Peso Deposit Secrecy Law?

• 1. A. Disclosing the amount of deposit of a judgment debtor to the court sheriff who is executing a garnishment order against him

• 1. B. Disclosing the name of the drawer of a check to the payee

• 1. C. Disclosing the amount of deposit of a taxpayer to a duly authorized BIR examiner who is examining his income tax liability

• 1. D. Disclosing the amount of deposit exceeding P500,000 in one banking day to Anti-Money Laundering Council

Answer explanation

REPUBLIC ACT No. 1405. AN ACT PROHIBITING DISCLOSURE OF OR INQUIRY INTO, DEPOSITS WITH ANY BANKING INSTITUTION AND PROVIDING PENALTY THEREFOR.

Section 3. It shall be unlawful for any official or employee of a banking institution to disclose to any person other than those mentioned in Section two hereof any information concerning said deposits.

The Truth in Lending Act states that the policy of the State to protect its citizens from a lack of awareness of the true cost of credit to the user by assuring a full disclosure of such cost with a view of preventing the uninformed use of credit to the detriment of the national economy. Thus TILA requires that any creditor furnish to each person to whom credit is extended, PRIOR TO THE CONSUMMATION of the transaction, a clear STATEMENT IN WRITING (Disclosure Statement) setting forth several pieces of information on the loan extended. If an item charged was omitted from the disclosure: 

I. All finance charges cannot be collected; 

II. The entire contract is rendered void; and, 

III. The total recoverable amount for all violations is Php 2000.

Which of the following is/are false?

• 1. A. Only two of the statements

• 1. B. Only one of the statements

• 1. C. All three of the statements

• 1. D. None of the statements

Answer explanation

Section 6. (a) Any creditor who in connection with any credit transaction fails to disclose to any person any information in violation of this Act or any regulation issued thereunder shall be liable to such person in the amount of P100 or in an amount equal to twice the finance charged required by such creditor in connection with such transaction, whichever is the greater, except that such liability shall not exceed P2,000 on any credit transaction. Action to recover such a penalty may be brought by such person within one year from the date of the occurrence of the violation, in any court of competent jurisdiction. In any action under this subsection in which any person is entitled to a recovery, the creditor shall be liable for reasonable attorney's fees and court costs as determined by 

the court.

All registered CGEs shall charge interest based on:

• 1. A. The amount of loan extended at the signing of the loan

• 1. B. The outstanding balance of a loan at the beginning of an interest period

• 1. C. The amount of loan extended at the signing of the loan, net of any down payment or discounts

• 1. D. The outstanding balance of a loan at the end of an interest period

Answer explanation

Sec. 4. Manner of Computing Interest. All registered CGEs shall charge interest based on the outstanding balance of a loan at the beginning of an interest period.

What is the government instrumentality created in 1963 by virtue of Republic Act 3591 to insure the deposits of all banks which are entitled to the benefits of insurance and considered as an attached agency of the Department of Finance?

• 1. A. Development Bank of the Philippines (DBP)

• 1. B. Landbank of the Philippines (LBP)

• 1. C. Philippine Deposit Insurance Corporation (PDIC)

• 1. D. Bangko Sentral ng Pilipinas (BSP)

Answer explanation

The Philippine Deposit Insurance Corporation (PDIC) is a government instrumentality created in 1963 by virtue of Republic Act No. 3591 to insure the deposits of all banks. The PDIC exists to protect depositors by providing deposit insurance coverage for the depositing public and to help promote financial stability.

It means the unpaid balance of money or its equivalent received by a bank in the usual course of business and for which it has given or is obliged to give credit to a commercial, checking, savings, time or thrift account, evidenced by a passbook, certificate of deposit, or other evidence of deposit issued in accordance with Bangko Sentral ng Pilipinas rules and regulations and other applicable laws, together with such other obligations of a bank

• 1. A. Insured Deposit

• 1. B. Insured Bank

• 1. C. Disputed Claim

• 1. D. Deposit

Answer explanation

SEC. 2. Section 4(f) of Republic Act No. 3591, as amended, is hereby amended by adding an additional paragraph, to read as follows:

“(f) The term ‘deposit’ means the unpaid balance of money or its equivalent received by a bank in the usual course of business and for which it has given or is obliged to give credit to a commercial, checking, savings, time or thrift account, or issued in accordance with Bangko Sentral rules and regulations and other applicable laws, together with such other obligations of a bank, which, consistent with banking usage and practices, the Board of Directors shall determine and prescribe by regulations to be deposit liabilities of the bank: Provided, That any obligation of a bank which is payable at the office of the bank located outside of the Philippines shall not be a deposit for any of the purposes of this Act or included as part of the total deposits or of insured deposit: Provided, further, That, subject to the approval of the Board of Directors, any insured bank which is incorporated under the laws of the Philippines which maintains a branch outside the Philippines may elect to include for insurance its deposit obligations payable only at such branch.