Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
TWENTIETH CONGRESS 
First Regular Session 
HOUSE BILL NO. ____ 
Introduced by HON. MIGUEL LUIS R. VILLAFUERTE, HON. VINCENZO 
RENATO LUIGI R. VILLAFUERTE, HON. TSUYOSHI ANTHONY G. HORIBATA, AND 
HON. TERRY L. RIDON 
EXPLANATORY NOTE 
This bill aims to promote transparent governance and institute anti-corruption 
mechanisms in the operation of banks and other financial institutions by amending Republic 
Act No. 1405 (R.A. No. 1405) otherwise known as the “Secrecy of Bank Deposits Law.” It aims 
to exempt the Bangko Sentral ng Pilipinas (BSP) in the exercise of their supervisory powers 
to inquire or examine on the deposit of certain individuals or entities or corporations if there is 
a reasonable ground to believe that there is an existing fraud, serious irregularity or unlawful 
activity.  
R.A. No. 1405 was enacted in 1955 to protect the currencies of Filipinos by declaring 
their deposits as confidential 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 the order of a competent court in cases of bribery or dereliction 
of duty of public officials. In 1981, former President Ferdinand E. Marcos signed Presidential 
Decree No. 1792 to amend R.A. No. 1405 giving the Monetary Board of the then Central Bank 
of the Philippines to examine banks for bank frauds or serious irregularities. In 1993, P.D. 
1792 was expressly repealed by Republic Act No. 7653 (R.A. No. 7653) otherwise known as 
“The New Central Bank Act.” 
R.A. No. 7653 established the BSP which replaced the Central Bank of the Philippines 
due to accumulated massive amount of debts and had a reputation of being heavily influenced 
by political pressures. Therefore, the law was enacted to reform and revitalize the Philippine 
Central Banking System.  
With the advancement of technology, financial transactions became easier, faster, 
efficient, and accessible through mobile banking, agent banking, and fintech platforms. In fact, 
there are even banks who allow online deposits of their checks, which meant that depositing 
money into their bank accounts can now be accessible with just a few clicks of their mobile 
phones. This made money flow in the economy faster as well.  
However, there are those who use the law to their advantage. They are aware that 
even if they deposit bank checks fraudulently, they are protected by the law with its provision 
on the bank’s secrecy, especially on the specific provision stating that no one can examine a 
deposit without the depositor’s consent.  
Therefore, as the country’s measure to fight corruption, this bill amends R.A. No. 1405 
to give BSP the authority to investigate deposits even without the consent of the depositor 
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within their supervisory powers. This Act likewise guarantees that confidential details of the 
bank and any financial transactions made within their accounts shall remain confidential. 
 
This is a re-filed bill from the 19th Congress, was approved on Third and Final Reading, 
and was transmitted to Senate. Thus, in light of the foregoing, the immediate passage of this 
bill is earnestly sought. 
 
 
 
 
 
 
 
HON. MIGUEL LUIS R. VILLAFUERTE    
 
 
 
 
 
HON. VINCENZO RENATO LUIGI R. VILLAFUERTE  
  
 
 
 
 
 
HON. TSUYOSHI ANTHONY G. HORIBATA  
 
 
 
 
 
HON. TERRY L. RIDON 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City 
TWENTIETH CONGRESS 
First Regular Session 
HOUSE BILL NO. ____ 
Introduced by HON. MIGUEL LUIS R. VILLAFUERTE, HON. VINCENZO 
RENATO LUIGI R. VILLAFUERTE, HON. TSUYOSHI ANTHONY G. HORIBATA, AND 
HON. TERRY L. RIDON 
AN ACT PROMOTING TRANSPARENT GOVERNANCE AND INSTITUTING ANTI-
CORRUPTION MECHANISMS IN THE OPERATION OF BANKS AND OTHER FINANCIAL 
INSTITUTIONS, AMENDING FOR THE PURPOSE REPUBLIC ACT NO. 1405, ENTITLED 
"AN ACT PROHIBITING DISCLOSURE OF OR INQUIRY INTO, DEPOSITS WITH ANY 
BANKING INSTITUTION AND PROVIDING PENALTY THEREFOR" 
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled: 
SECTION 1. Section 2 of Republic Act No. 1405, entitled: "An Act Prohibiting Disclosure of or 
Inquiry Into, Deposits With Any Banking Institution And Providing Penalty Therefor" is hereby 
amended to read, as follows: 
"SECTION 2. All deposits 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 is the subject matter of the litigation, OR IN CASES WHERE THE 
INQUIRY OR EXAMINATION IS MADE BY THE BANGKO SENTRAL NG 
PILIPINAS (BSP), IN THE EXERCISE OF ITS SUPERVISORY POWERS, ON 
THE DEPOSIT OF THE STOCKHOLDER, OWNER, DIRECTOR, TRUSTEE, 
OFFICER OR EMPLOYEE OF AN ENTITY THAT IS SUBJECT TO THE 
SUPERVISION 
OR 
REGULATORY 
POWER 
OF 
THE 
BSP, 
THE 
REPRESENTATIVE OR AGENT, THE RELATED PARTY, OR ANY OF THE 
CONSPIRATORS, OF THE PERSON INVOLVED: PROVIDED, THAT, UPON 
DETERMINATION BY THE MONETARY BOARD, THERE IS A REASONABLE 
GROUND TO BELIEVE THAT FRAUD, SERIOUS IRREGULARITY OR 
UNLAWFUL ACTIVITY HAS BEEN OR IS BEING COMMITTED BY THE 
ABOVEMENTIONED PERSONS, AND THAT IT IS NECESSARY TO LOOK 
INTO 
THE 
DEPOSIT 
TO 
ESTABLISH 
SUCH 
FRAUD, 
SERIOUS 
IRREGULARITY OR UNLAWFUL ACTIVITY. THE AUTHORITY OF THE BSP 
TO INQUIRE AND EXAMINE DEPOSITS SHALL ALSO APPLY IN THE 
COURSE OF ITS INVESTIGATION OF CLOSED BANKS. 
AS USED IN THIS ACT, DEPOSITS SHALL REFER TO MONEY OR ITS 
EQUIVALENT RECEIVED BY A BANK IN THE USUAL COURSE OF 
BUSINESS, AND FOR WHICH IT HAS GIVEN OR IS OBLIGED TO GIVE 
CREDIT TO A COMMERCIAL, CHECKING, SAVINGS, TIME OR THRIFT 
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ACCOUNT, EVIDENCED BY A PASSBOOK, CERTIFICATE OF DEPOSIT, OR 
OTHER EVIDENCE OF DEPOSIT, ISSUED IN ACCORDANCE WITH BSP 
RULES AND REGULATIONS AND OTHER APPLICABLE LAWS, AS WELL AS 
SUCH OTHER OBLIGATION OF A BANK THAT FORMS PART OF ITS 
DEPOSIT LIABILITIES PURSUANT TO BSP RULES AND REGULATIONS. 
THE RESULTS OF THE INQUIRY OR EXAMINATION CONDUCTED BY THE 
BSP SHALL BE FOR ITS EXCLUSIVE USE AND SHALL NOT BE MADE 
AVAILABLE TO ANY PERSON OR ENTITY, WHETHER PUBLIC OR PRIVATE, 
EXCEPT TO THE SECURITIES AND EXCHANGE COMMISSION, PHILIPPINE 
DEPOSIT 
INSURANCE 
CORPORATION, 
ANTI-MONEY 
LAUNDERING 
COUNCIL, DEPARTMENT OF JUSTICE, AND THE COURTS: PROVIDED, 
THAT THE SHARING OF THE RESULTS OF THE ABOVEMENTIONED 
INQUIRY OR EXAMINATION IS NECESSARY TO PREVENT OR PROSECUTE 
ANY OFFENSE OR CRIME. THE EXEMPTIONS UNDER THIS SECTION 
SHALL APPLY TO FOREIGN CURRENCY DEPOSITS IN BANKS OPERATING 
IN THE PHILIPPINES INCLUDING OFF-SHORE BRANCHES OF DOMESTIC 
BANKS: PROVIDED, THAT THESE EXEMPTIONS SHALL NOT APPLY TO 
NON-STOCK SAVINGS & LOAN ASSOCIATIONS (NSSLAS) THAT ARE 
CATERING ONLY TO THEIR MEMBERS." 
 
SECTION 2. Section 3 of the same Act, is hereby amended to read as follows: 
 
"SECTION 3. NO BANK OR FINANCIAL INSTITUTION, OR ANY OF ITS 
DIRECTORS, OFFICERS OR EMPLOYEES, SHALL BE SUBJECT TO ANY 
ACTION, CLAIM OR DEMAND IN CONNECTION WITH, AND SHALL BE HELD 
FREE AND HARMLESS FROM LIABILITY FOR, ANY ACT DONE IN 
COMPLIANCE WITH AN ORDER FOR INQUIRY OR EXAMINATION OF 
DEPOSITS FROM THE BSP. 
 
HOWEVER, it shall be unlawful for any official OR employee, of a banking 
institution OR THE BSP, to disclose ANY INFORMATION CONCERNING SAID 
DEPOSITS to any person AND UNDER SUCH CONDITIONS other than those 
mentioned in Section two 2 hereof. IT SHALL ALSO BE UNLAWFUL FOR ANY 
PERSON TO USE THIS ACT FOR PERSECUTION OR HARASSMENT OR AS 
AN INSTRUMENT TO HAMPER COMPETITION IN TRADE AND COMMERCE." 
 
SECTION 3. Section 5 of the same Act, is hereby amended to read as follows: 
 
"SECTION 5. Any violation of this law will subject THE offender upon conviction, 
to imprisonment of not LESS THAN TWO (2) YEARS NOR more than five TEN 
(10) YEARS or a fine of not LESS THAN FIFTY THOUSAND PESOS (P50,000) 
NOR MORE THAN twenty thousand TWO MILLION PESOS (P2,000,000), or 
both, in AT the discretion of the court." 
 
SECTION 4. Separability Clause. – If any provision or section of this Act is held to be 
unconstitutional or invalid, the other provisions or sections hereof, which are not affected 
thereby shall continue to be in full force and effect. 
 
SECTION 5. Repealing Clause. 
 
(a) Sections 2, 3 and 5 of Republic Act No. 1405 are hereby amended; 
 
(b) Sections 8 and 12-A of Republic Act No. 6426, as amended, also known 
as the "Foreign Currency Deposit Act of the Philippines," with respect to 
foreign currency deposits, are hereby amended; 


 
 
 
(c) Section 33 of Republic Act No. 6848, also known as "The Charter of the 
Al-Amanah Islamic Investment Bank of the Philippines", is hereby 
amended; 
 
(d) Section 26(a)(2) of Republic Act No. 7353, also known as the "Rural Act of 
1992" is hereby amended; and 
 
 
(e) Section 21(a)(2) of Republic Act No. 7906, also known as the "Thrift Banks 
Act of 1995" is hereby amended. 
 
All other Acts or parts of Acts, Special Charters, Executive Order, Rules and 
Regulations, which are inconsistent with the provisions of this Act, are hereby 
repealed. 
 
SECTION 6. Effectivity. – This Act shall take effect fifteen (15) days following its publication 
in the Official Gazette or in a newspaper of general circulation in the Philippines. 
 
 
Approved,