Duterte-Trillanes-BPI hoolabaloo: Basics of Bank Secrecy Law

In consideration of Senator Trillanes’ accusations against Mayor Duterte (nor President-elect), let us first familiarize ourselves with the 61-year old “BANK SECRECY LAW,” also known as “R.A. 1405.”

Section 1 thereof provides:

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.

As we can see, the Government encourages the people to deposit their money into the banking system so that the money will be utilized, and “make it grow,” instead of it being hoarded in privately. It is elementary knowledge that circulation of money is the bloodline of the economy. An impeded or constricted flow of money across the nation is akin to constricted blood flow in a living being. In other words, a person suffering the same can survive, but he is unhealthy. Hence, the law is created to protect the depositors from other people who may inquire about their money deposited in banks. This is to increase the confidence of depositors, local or foreign, to invest (entrust) their money in the banks for the benefit of both parties.

It is said that our banking secrecy law is one of the most stringent banking laws in the world. It is said to be the most “strict.” Even stricter than banks in Europe! See R.A. 1405’s counterpart on foreign deposits: RA 6426. You may be surprised seeing a modified, more strict secrecy on foreign currencies. Yes, stricter than R.A. 1405’s. (Read The Inquirer’s report)

What then is the scope of R.A. 1405?

SECTION 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 the litigation.

Section 2 provides the body of the said law. It said that all types of deposits shall never be examined, even by the government, except in the following instances:

  1. Written permission of the depositor
  2. In cases of impeachment
  3. Order of a competent court
  4. The money is subject to litigation (trial)

It is therefore, easy to understand that sans any extra-judicial (out of court) controversy, a deposit may only be inquired should there be an expressed waiver that satisfies the first condition: “written permission of the depositor.” In this vein, this is the only way, and nothing else. Remember also that the permission of the depositor may be general in scope or specific. Again, the sole prerogative as to how far a depositor would want to reveal the details of his deposits belongs to him and nobody else. Waivers, as a general rule must be entered with an expressed resolve to voluntary relinquish one’s own rights, claims or privileges.

Is R.A. 1405 (and other secrecy laws) constitutional?

Definitely, yes. Let us visit the 1987 Constitution. The Law on Privacy of communication and correspondence, section 3, art. 3 provides:

Section 3. (1) The privacy of communication and correspondence shall be inviolable except upon lawful order of the court, or when public safety or order requires otherwise, as prescribed by law.

(2) Any evidence obtained in violation of this or the preceding section shall be inadmissible for any purpose in any proceeding.

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Is publicizing someone else’ bank accounts, sans the permission of the owner unlawful?

SECTION 4. All Acts or parts of Acts, Special Charters, Executive Orders, Rules and Regulations which are inconsistent with the provisions of this Act are hereby repealed. (supra.)

Yes.

What are the penalties?

SECTION 5. Any violation of this law will 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.

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