THE Bank Secrecy Law (Republic Act No. 1405) protects all deposits of whatever nature with banks or banking institutions in the Philippines.
A law of general application, RA 1405 is enacted to help encourage the public to deposit their money in banking institutions so that it may be used on loans and eventually assist in the economic development of the country. (Sec. 1, RA 1405)
Under Section 2 of the law, 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 absolutely confidential. Thus, it is unlawful for any official or employee of a banking institution to disclose to any person any information concerning said deposits. Any violation of the law will subject the 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, RA 1405)
Nevertheless, in certain cases, the law itself allows disclosure or inquiry into bank deposits by “any person, government official, bureau or office.” An examination of RA 1405 would reveal the following exceptions from the prohibition to disclose or inquire into bank deposits: (1) upon written permission of the depositor; (2) in cases of impeachment; (3) the examination of bank accounts is upon order of a competent court in cases of bribery or dereliction of duty of public officials; and (4) the money deposited or invested is the subject matter of the litigation. (Sec. 2, RA 1405)
Another exception is in cases of unexplained wealth. Cases of unexplained wealth are similar to cases of bribery or dereliction of duty. (PNB vs. Gancayco, G.R. No. L-18343, September 30, 1965) Furthermore, Section 8 of R.A. Act No. 3019, the Anti-Graft and Corrupt Practices Act, has been recognized by the Supreme Court as constituting an additional exception to the rule of absolute confidentiality.
The Anti-Money Laundering Law, as amended, also provides additional exceptions. But the authority to inquire into or examine “the principal account and related accounts” should comply with the requirements of Art. III, Sections 2 and 3 of the 1987 Constitution.
By virtue of the Bank Secrecy Law, the confidentiality of bank deposits remains a basic state policy in the Philippines.
Notably, in the landmark case of Republic of the Philippines vs. Hon. Eugenio, Jr. (G.R. No. 174629, February 14, 2008), the Supreme Court held: “Subsequent laws, including the AMLA, may have added exceptions to the Bank Secrecy Act, yet the secrecy of bank deposits still lies as the general rule. It falls within the zones of privacy recognized by our laws. The framers of the 1987 Constitution likewise recognized that bank accounts are not covered by either the right to information under Section 7, Article III or under the requirement of full public disclosure under Section 28, Article II. Unless the Bank Secrecy Act is repealed or amended, the legal order is obliged to conserve the absolutely confidential nature of Philippine bank deposits.”
The High Court further said: “Indeed, by force of statute, all bank deposits are absolutely confidential, and that nature is unaltered even by the legislated exceptions… There is disfavor towards construing these exceptions in such a manner that would authorize unlimited discretion on the part of the government or of any party seeking to enforce those exceptions and inquire into bank deposits. If there are doubts in upholding the absolutely confidential nature of bank deposits against affirming the authority to inquire into such accounts, then such doubts must be resolved in favor of the former. Such a stance would persist unless Congress passes a law reversing the general state policy of preserving the absolutely confidential nature of Philippine bank accounts.” (Ibid.)
