‘SEVENTEENTH CONGRESS s)
REPUBLIC OF THE PHILIPPINES )
Second Regular Session )

HOUSE OF REPRESENTATIVES

Introduced by Representative Maximo B. Rodriguez,
House Bill No. "7635

EXPLANATORY NOTE

Batas Pambansa Big. 22 otherwise known as “An Act Penalizing the Making or
Drawing and Issuance of a Check without Sufficient Funds or Credit,” was passed to
curb the issuance of bouncing checks. However, despite the passage of the said law,
bouncing checks continue to proliferate the market. What is worse, bouncing checks
were likewise used by persons engaged in pyramid scams as payments for the
recruited investors either as a retum of their investments or commissions for recruiting
other investors. Our people have been defrauded by different pyramid scams which
involved billions of pesos such as the Multitel of Rose Baladjay in 2002, the SMFund,
Francswiss and PIPC in 2007, the Royal Manchester Five in 2008 and the most
recent, the Legacy Group of Companies.

Under the Negotiable Instruments Law which governs the issuance of checks,
itis not required that the name of the drawer should appear on the face of the checks.
Only the signature of the drawer is required. However, the victims of the pyramid
scams had difficulty in filing cases for bouncing checks because they did not know who
were the signatories/drawers of the checks especially in cases of corporations. This
bill seeks to address this problem by requiring the drawers of the checks to legibly
print his/her/their name/s before signing the check.

In view of the foregoing, the passage of this bill is earnestly sought.

Mp

MAXIMO 8. RODRIGUEZ, JR.


SEVENTEENTH CONGRESS )
REPUBLIC OF THE PHILIPPINES )
‘Second Regular Session )

HOUSE OF REPRESENTATIVES

Introduced by Representative Maximo B. Rodriguez, Jr.

7635

House Bill No.

AN ACT
AMENDING ACT NO. 2031, OTHERWISE KNOWN AS THE NEGOTIABLE
INSTRUMENTS LAW, BY REQUIRING THE DRAWER OF THE CHECK TO
LEGIBLY PRINT HIS/HER NAME BEFORE SIGNING THE SAME

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

Section 1. Declaration of Policy. — It is the declared policy of the state to protect its
people and economy from the proliferation or worthless or bouncing checks.

Section 2. Amendment. Section 1 of Act No. 2031, otherwise known as The
Negotiable Instruments Law, is hereby amended to read as follows:

“Section 1. Form of negotiable instruments. - An instrument to
be negotiable must conform to the following requirements:

(a) It must be in writing and signed by the maker or drawer,
(b) Must contain an unconditional promise or order to pay a sum
certain in money;
(c) Must be payable on demand, or at a fixed or determinable
future time;
(d) Must be payable to order or to b—earer; and
(e) Where the instrument is addressed to a drawee, he must be
named or otherwise indicated therein with reasonable certainty.

IN CASE OF A CHECK, THE DRAWER MUST LEGIBLY
PRINT HIS OR HER NAME BEFORE SIGNING THE SAME.”

Section 3. Repealing Clause. - All laws, orders, issuances, rules and regulations or
parts thereof inconsistent with this Act are hereby repealed or modified accordingly.

Section 4. Effectivity. - This Act shall take effect fifteen (15) days after its complete
publication in at least two (2) newspapers of general circulation.

Approved,