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> RECEIVED @
14 FEB 2012

Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

FIFTEENTH CONGRESS
Second Regular Session

ree
HOUSE BILL No. 9838

Introduced By: REP. SALVIO B. FORTUNO,

EXPLANATORY NOTE

The raging controversy generated by the issuance of a Temporary Restraining
Order (TRO) issued by the Supreme Court directing the Impeachment Court to
temporarily cease and desist from compelling the PS Bank to submit documents
pertaining to the foreign currency deposits of impeached Chief Justice Renato C. Corona
urgently calls for a need to revisit the law on the matter - Republic Act No. 6426
otherwise known as the Foreign Currency Deposit Act of the Philippines to avoid a
collision course between the two (2) separate branches of government. The Impeachment
Court voting 13-10 decided to uphold and respect the ruling of the Supreme Court.

The original law enacted by Congress on April 4, 1972 contains provisions, aside
from the short title and effectivity clause, which pertain only to authority to deposit
foreign currencies (Sec. 2), authority of banks to accept foreign currency deposits (Sec. 3)
and foreign currency cover requirements. This law was amended by Presidential Decree
No. 1035 on September 30, 1976 to expand the authority of certain depository banks and
again on November 21, 1977 by virtue of Presidential Decree No. 1246, which contains
the controversial provision on confidentiality of foreign currency deposits and also the
prohibition to exempt such deposits from attachment, garnishment or any other order or
process from any court, legislative, government agency or any administrative body

It is interesting to note however that no less than the Supreme Court, in allowing
the garnishment of the foreign currency deposit of the accused foreign national,
notwithstanding the express prohibition in the law, in the case of Salvacion vs. Central
Bank of the Phillippines (G.R. No. 94723, Aug. 21, 1997), ruled, thus:

“It is worth noting that R.A. 6426 was enacted at a time when the country’s economy was
in 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: 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,” xxx “It is evident from the above Whereas Clauses that the
Offshore Banking System and the Foreign Currency Deposit System were designed to draw
deposits from foreign lenders and investors. It is these depositors that are induced by two laws
(PD 1034 and PD 1035) and given protection and incentives by them,”


Obviously, the foreign currency deposits made by the accused in the case and
similarly by Chief Justice Corona is not the kind of deposit encourage by PDs 1034 and
1035

Notwithstanding this ruling of the Supreme Court setting aside the absolute
confidentiality of foreign currency deposits, legal experts believed that depositors can
rightly invoke R.A. 6426 as amended, in view of its crystal clear text that only upon
written permission of the depositor can any person, legislative, government agency or
administrative bodies examine, inquire or look into his foreign currency deposit

This bill therefore seeks to further amend the Foreign Currency Deposit Act as
amended, by allowing the Impeachment Court, courts of competent jurisdiction and the
Ombudsman to allow them to examine, inquire or look into the foreign currency deposits
made by public officials and employees. It also seeks to delete a proviso which states that
said deposits shall be exempt from attachment or garnishment but shall be limited only to
the Impeachment Court, courts of competent jurisdiction or the Ombudsman, This will
make the provision of the law clear and will leave no room for interpretation

If this questioned law will remain untouched, it provides a safe haven for crooks
in the government service and criminals since they could escape liabilities for their
wrongfiil acts by merely converting their money to a foreign currency and depositing it in
a foreign currency deposit account with an authorized bank

In view of the foregoing reasons, the approval of this bill is earnestly sought

l, Lad:
REP. SALYIO B. FORTUN
Fifth District, Camarines Sur



Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

FIFTEENTH CONGRESS
Second Regular Session

re:
HOUSE BILL No. 5838

Introduced By: REP. SALVIO B. FORTUNO

AN ACT
AUTHORIZING THE IMPEACHMENT COURT, REGULAR COURTS AND
THE OMBUDSMAN TO EXAMINE, INQUIRE OR LOOK INTO THE FOREIGN
CURRENCY DEPOSITS OF PUBLIC OFFICIALS AND EMPLOYEES,
AMENDING FOR THE PURPOSE SECTION 8 OF REPUBLIC ACT NO. 6426
AS AMENDED, OTHERWISE KNOWN AS THE FOREIGN CURRENCY
DEPOSIT ACT OF THE PHILIPPINES

Be it enacted by the Senate and the House of Representatives
of the Philippines in Congress assembled:

SECTION 1. Section 8 of Republic Act No. 6426 as amended, otherwise known
as the Foreign Currency Deposit Act of the Philippines is hereby amended to read as
follows

“Section 8. Secrecy of Foreign Currency Deposits. — All foreign currency
deposits authorized under this Act, as amended by Presidential Decree No. 1035, as well
as foreign currency deposits authorized under Presidential Decree No. 1034, are hereby
declared as and considered of an absolute confidential nature and except, upon written
permission of the depositor, OR UPON WRITTEN ORDER OF THE IMPEACHMENT
COURT, COURTS OF COMPETENT JURISDICTION OR THE OMBUDSMAN,
WHEN THE DEPOSITOR IS A PUBLIC OFFICIAL OR EMPLOYEE, OR WHEN
THE DEPOSIT IS THE SUBJECT MATTER OF A LITIGATION, 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. [: Provided, however, That said deposits shall
be exempt from attachment, garnishment, or any other order or process of any court,
legislative, government agency or any administrative body whatsoever ]”

SEC. 2. All laws, decrees, executive orders, circulars, rules and regulations which
are inconsistent with this Act are hereby amended, repealed or modified accordingly.

SEC. 3. This Act shall take effect after its complete publication in any newspaper
of general circulation

Approved,