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HOUSE OF REPRESENTATIVES (> RECEIVED Fs
‘Quezon City Eye OG FEB 2011
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FIFTEENTH CONGRESS
Second Regular Session
5809
HOUSE BILLNO.

Introduced by :
ACT Teachers Party-List Representative Antonio L. Tinio

EXPLANATORY NOTE

In 1977, Presidential Decree 1246 conferred an “absolute cloak of confidentiality" over foreign
currency deposits and exempted them from “attachment, garnishment, or any other order or
process of any court, legislative body, government agency or any administrative body" to “better
encourage the inflow of foreign currency deposits” into Philippine banks that could channel these
funds into loans and investments, and thereby contribute to the country's economic development.

Subsequent developments have rendered obsolete these special protections provided by law to
foreign currency deposits. While there may have been a relative scarcity of foreign currency in the
domestic banking and financial system in the 1970s, this is clearly no longer the case today.
Remittances by Overseas Filipino Workers, totaling over US$ 18.3 billion in the first 11 months of
2011, on top of traditional sources of foreign currency, ensure that the country's foreign exchange
reserves are at an all-time high.

Furthermore, recent events have shown how the absolute and unqualified secrecy of foreign
currency deposits, and their exemption from government orders or processes, may be exploited to
cloak financial transactions by individuals and entities involved in illegal activities. For instance,
government officials, including those conferred with immunity from suit during their incumbency
and removable only through impeachment, may make use of foreign currency deposits to amass ill-
gotten wealth with the assurance that these will be virtually beyond the reach of the State.

This bill proposes amendments to Republic Act 6426 (the Foreign Currency Deposit Act of the
Philippines) that, while maintaining the secrecy and confidentiality of foreign currency deposits,
allows their examination in certain exceptional cases, such as impeachment, or upon the order of a
‘competent court. In addition, it proposes that their exemption from governmental orders or
processes be removed. If this bill is enacted into law, foreign currency deposits will, in these
respects, enjoy the same level of protection as deposits in the national currency.



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
‘Second Regular Session

5809

HOUSE BILL NO.

Introduced by
ACT Teachers Party-List Representative Antonio L. Tinio

AN ACT AMENDING SECTION 8 OF REPUBLIC ACT 6426, OTHERWISE KNOWN AS THE “FOREIGN
CURRENCY DEPOSIT ACT OF THE PHILIPPINES”

Section 1, Section 8 of Republic Act 6426 ("Foreign Currency Deposit Act of the Philippines"), as
amended by Presidential Decree No. 1035, and further amended by Presidential Decree No. 1246, is
hereby amended as follows:

Section 8. Secrecy of foreign currency deposits. ~ All foreign currency deposits authorized
under this Act, as amended by PD No. 1035, as well as foreign currency deposits authorized
under PD No. 1034, are hereby declared as and considered of an absolutely confidential
nature [and, except upon the written permission of the depositor, in no instance shall
foreign currency deposits be examined, inquired or looked into by any person, government
official, bureau or office whether judicial or administrative or legislative, or any other entity
whether public or private;]. IN NO INSTANCE SHALL FOREIGN CURRENCY DEPOSITS BE
EXAMINED, INQUIRED OR LOOKED INTO BY ANY PERSON, GOVERNMENT OFFICIAL,
BUREAU OR OFFICE WHETHER JUDICIAL OR ADMINISTRATIVE OR LEGISLATIVE, OR ANY
OTHER ENTITY WHETHER PUBLIC OR PRIVATE, EXCEPT UPON THE 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. [Provided, however, That said foreign currency deposits shall be exempt from
attachment, garnishment, or any other order or process of any court, legislative body,
istrative body whatsoever.)

government agency or any admi

Section 2. All laws, decrees, resolutions, orders, or ordinances or parts thereof inconsistent with this
Act are hereby repealed, amended or modified accordingly.

Section 3. This Act shall take effect fifteen (15) days after its publ
(1) newspaper of general circulation.

nin the Official Gazette or one

Approved,