Regulatory Framework For Business Transactions Special Laws Q & A Notes

REGULATORY FRAMEWORK FOR BUSINESS TRANSACTIONS
SPECIAL LAWS Q & A NOTES
INSOLVENCY & CORPORATE REHABILITATION
What questions will be asked from this law?

The following points shall be asked from this topic:
 Definition of Insolvency Law
 Voluntary and involuntary insolvency
 Suspension of payments
 Corporate rehabilitation and definition of terms
 Stay order
 Receiver
 Rehabilitation plan
 Contents of petition
 Other types of rehabilitation
What is the relevant statute for this topic?

Republic Act No. 10142, also known as the Financial Rehabilitation and Insolvency Act (FRIA) of 2010,
governs this topic.
What is the State’s policy on rehabilitation and insolvency?

It is the policy of the State to encourage debtors, both juridical and natural persons, and their creditors to
collectively and realistically resolve and adjust competing claims and property rights.
How shall rehabilitation or liquidation be facilitated?

The rehabilitation or liquidation shall be made with the following views:
 to ensure or maintain certainly and predictability in commercial affairs
 to preserve and maximize the value of the assets of these debtors
 to recognize creditor rights and respect priority of claims
 to ensure equitable treatment of creditors who are similarly situated
What do you mean by insolvent?

Insolvent shall refer to the financial condition of a debtor that is generally unable to pay its or his liabilities as
they fall due in the ordinary course of business or has liabilities that are greater than its or his assets.
What is the main difference between voluntary and involuntary proceeding?

Voluntary proceedings shall refer to proceedings initiated by the insolvent debtor while involuntary
proceedings shall refer to proceedings initiated by creditors.
What is the approval requirement for voluntary proceeding?

An insolvent debtor may initiate voluntary proceeding by filing a petition for rehabilitation with the court only
if with the prior approval of the following:
 the owner in the case of a sole proprietorship
 the majority of the partners in the case of a partnership
 in the case of a stock corporation, the majority of the vote of the board of directors or trustees and
authorized by the vote of the stockholders representing at least 2/3 of the outstanding capital stock, in a
stockholder’s meeting duly called for the purpose
 in the case of a non-stock corporation, the vote of at least two-thirds (2/3) of the members, in a
member’s meeting duly called for the purpose
How is involuntary proceeding initiated?

Any creditor or group of creditors with a claim of, or the aggregate of whose claims is, at least One Million
Pesos (P1,000,000.00) or at least twenty-five percent (25%) of the subscribed capital stock or partners’
contributions, whichever is higher, may initiate involuntary proceedings against the debtor by filing a petition
for rehabilitation with the court.
What are the requirements before involuntary proceeding petition for rehabilitation can be filed with the
court?
Either of the following must be present:
 There is no genuine issue of fact on law on the claim/s of the petitioner/s, and that the due and
demandable payments thereon have not been made for at least sixty (60) days or that the debtor has
failed generally to meet its liabilities as they fall due; or
 A creditor, other than the petitioner/s, has initiated foreclosure proceedings against the debtor that will
prevent the debtor from paying its debts as they become due or will render it insolvent
What is suspension of payment?

An individual debtor who, possessing sufficient property to cover all his debts but foreseeing the impossibility
of meeting them when they respectively fall due, may file a verified petition that he be declared in the state of
suspension of payments by the court of the province or city in which he has resides for six (6) months prior to
the filing of his petition.
What should be attached in the petition for declaration of the state of suspension of payments?
As a minimum, the petition shall have the following attachments:
 A schedule of assets and liabilities
 An inventory of assets
 A proposed agreement with creditors
What is rehabilitation?
Rehabilitation shall refer to the restoration of the debtor to a condition of successful operation and solvency.
When is rehabilitation possible?

Rehabilitation is possible if it is shown that the debtor’s continuance of operation is economically feasible and
its creditors can recover by way of the present value of payments projected in the plan, more if the debtor
continues as a going concern than if it is immediately liquidated.
What is a rehabilitation plan?

Rehabilitation Plan shall refer to a plan by which the financial well-being and viability of an insolvent debtor
can be restored using various means including, but not limited to, the following:
 debt forgiveness
 debt rescheduling
 reorganization or quasi-reorganization
 dacion en pago
 debt-equity conversion
 sale of the business (or parts of it) as a going concern

 setting-up of new business entity as prescribed in the Act
 other similar arrangements as may be approved by the court or creditors
What is a stay order or suspension order?

A stay or suspension order has the following effects:
 It suspends all actions or proceedings, in court or otherwise, for the enforcement of claims against the
debtor
 It suspends all actions to enforce any judgment, attachment or other provisional remedies against the
debtor
 It prohibits the debtor from selling, encumbering, transferring or disposing in any manner any of its
properties except in the ordinary course of business
 It prohibits the debtor from making any payment of its liabilities outstanding as of the commencement
date except as may be provided in the Act
What is a receiver?
Rehabilitation receiver shall refer to the person or persons, natural or juridical, appointed as such by the court
pursuant to the Act and which shall be entrusted with such powers and duties as set forth therein.
LAW ON BOUNCING CHECKS
What specific points will be asked from this topic?

The following points will be asked:
 Checks without sufficient funds
 Evidence of knowledge of insufficient funds
 Duty of drawee
 Credit construed
What is the relevant law on this topic?

Batas Pambansa Blg. 22 is known as the “Anti-Bouncing Check Law.”
What is a bounced check?

A bounced check is a worthless check.
What does the law say on checks without sufficient funds?

A check without sufficient fund is a check:
 Upon presentment for payment, is dishonored by the bank for insufficiency of funds, and the issuer
knows at the time of issue that he does not have sufficient funds in or credit with the drawee bank
 Which would have been dishonored for insufficiency of funds, had the drawer not ordered his bank to
stop the payment of the check, without a valid reason for such order
 When presented for payment within 90 days from issue, is dishonored by the bank for insufficiency of
funds, even if the issuer has sufficient funds in or credit with the bank at the time of issue
What does credit mean?

Credit, as used in this Law, shall be construed to mean an arrangement or understanding with the bank for the
payment of such check.
Who shall be liable?

Any person making, drawing and issuing a check without sufficient fund is liable.
Who shall be liable in case the check is issued by a corporation?

Where the check is drawn by a corporation, company or entity, the person or persons who actually signed the
check in behalf of such drawer (i.e. the corporation, company or entity) shall be liable. This means that the
officers signing the check for the corporation will be the ones liable.
What is the punishment?

The punishment shall be either or both of the following:
 Imprisonment of not less than 30 days but not more than 1 year
 Fine of not less than but not more than double the amount of the check, but shall not exceed P200,000
Given that no person shall be imprisoned for non-payment of debt, is Batas Pambansa Blg. 22
constitutional?
Yes, it is constitutional. What is punished by this law is the act of making and issuing of a worthless check or a
check that is dishonored upon its presentation for payment, and NOT the non-payment of the obligation.
What is the evidence of knowledge of insufficient funds?

The making, drawing and issuance of a check payment of which is refused by the drawee because of
insufficient funds in or credit with such bank, when presented within ninety (90) days from the date of the
check, shall be prima facie evidence of knowledge of such insufficiency of funds or credit.
Is there an exception to the presumption above?

Yes. The presumption does not apply when the maker or drawer pays the holder of the check the amount due, or
makes arrangement for payment in full by the drawee of such check within 5 banking days after receiving
notice that such check has not been paid by the drawee.
What is the duty of the drawee of a bounced check?

When refusing to pay the check to its holder upon presentment, it is the drawee’s (e.g. bank) duty to cause to be
written, printed, or stamped on the check, in plain language, or attached thereto, the reason for its dishonor or
refusal to pay. Where there are no sufficient funds in or credit with such drawee bank, such fact shall always be
explicitly stated in the notice of dishonor or refusal.
GENERAL BANKING LAWS
What specific topics will be asked from this law?

The following topics are of primary concern:
 Definition of banks
 Loans
 DOSRI
 SBL
What is the relevant statute on this topic?

Republic Act No. 337 is known as “The General Banking Act.”
What is a bank or a banking institution?

A bank or a banking institution is a person or entity duly authorized to engage in the lending of funds obtained
from the public through the receipt of deposits or the sale of bonds, securities, or obligations of any kind, and
any entity regularly conducting such operations.
What does the term bank or banking institution include?

The following are considered banks or banking institutions:
 Commercial banks
 Savings banks
 Mortgage banks
 Trust companies
 Building and loan associations
 Branches and agencies in the Philippines of foreign banks
 All other corporations, companies, partnerships, and associations performing banking functions in the
Philippines
What are specifically excluded from the provisions of Republic Act No. 337?
Persons and entities which receive deposits only occasionally shall not be considered as banks.
Also, insurance companies are exempted from the provisions of RA No. 337.
How shall domestic banks be organized?

Domestic banking institutions, except building and loan associations, shall be organized in the form of stock
corporations.
What type of stocks may be issued by banks?

No banking institution shall issue no par value stock.
Can banks advertise the amount of their authorized or subscribed capital stock?
No, unless they also indicate, at the same time and with equal prominence, the amount of their capital actually
paid up.
What is the ownership requirement for banks’ stocks?
At least 60% of the capital stock of any banking institution shall be owned by citizens of the Philippines.
What is the directorship requirement for banks?

At least 2/3 of the members of the Board of Directors of any bank or banking institution shall be citizens of the
Philippines.
What is a commercial banking corporation?

A commercial banking corporation shall be any corporation which accepts or creates demand deposits subject to
withdrawal by check.
What is a savings and mortgage banks?

A savings and mortgage banks shall be any corporation organized primarily for the purpose of accumulating the
small savings of depositors and investing them, together with its capital, in bonds or in loans secured by bonds,
real estate mortgages, and other forms of security provided in the Act.
What are building and loan associations?

Building and loan associations are all corporations whose capital stock is required or is permitted to be paid in
by the stockholders in regular, equal periodical payments and with the following purposes:
 to accumulate the savings of its stockholders
 to repay to said stockholders their accumulated savings and profits upon surrender of their shares
 to encourage industry, frugality, and home building among its stockholders
 to loan its funds, and funds borrowed for the purpose, to stockholders of the security of unencumbered
real estate and with the pledge of shares of the capital stock owned by such stockholders as collateral
security
What loan is prohibited for a building and loan association?

It shall be unlawful for any building and loan association to make any loan upon property that is suitable for
only as the following:
 theater
 public hall
 church
 convent
 school
 club
 hotel
 garage
 other public building
What is a trust corporation?

A trust corporation is any corporation formed or organized for the purpose of acting as trustee or administering
any trust or holding property in trust or on deposit for the use, benefit, or behoof (advantage) of others.
Can a trust corporation engage in commercial banking?

Yes.
A trust company may, with the approval of the Monetary Board, do a commercial banking business but such
business must be kept separate and distinct from its trust business.
Can a commercial bank engage in the business of a trust company?

Yes.
A commercial banking corporation may, with the approval of the Monetary Board, be authorized to engage in
the business of a trust company, but shall be subject to the provisions related to the trust corporations as regards
its trust business.
What specific business cannot be entered into by banking institutions?

Banking institutions shall not engage in insurance business as the insurer.
What is DOSRI?
DOSRI stands for Dealings of a bank with any of its Directors, Officers, Stockholders and their Related
Interests.
What is the general policy for DOSRI?

DOSRI should meet both of the following requisites:
 Dealings should be in the regular course of business
 Dealings should be upon terms not less favorable to the bank than those offered to others
What is the DOSRI rule?

The DOSRI rule limits the loans and guarantees that can be granted by a bank to a single director, officer,
stockholder or related interest to an amount equivalent to his unencumbered deposits or the book value of his
paid-in capital contribution to the bank.
What is a substantial stockholder?

Substantial stockholder shall mean a person, or group of persons whether natural or juridical, owning such
number of shares that will allow such person or group to elect at least one (1) member of the board of directors
of a bank or who is directly or indirectly the registered or beneficial owner of more than ten percent (10%) of
any class of its equity security.
What is SBL?
SBL stands for Single Borrower’s Limit.
What is the single borrower’s limit?

Per Bangko Sentral ng Pilipinas Circular No. 425, series of 2004, consistent with national interest, the total
amount of loans, credit accommodations and guarantees that may be extended by a bank to any person,
partnership, association, corporation or other entity shall at no time exceed twenty five percent (25%) of the net
worth of such bank.
Can the single borrower’s limit be increased?

Yes. It can be increased by an additional 10%; Provided, That the additional liabilities are adequately secured
by trust receipts, shipping documents, warehouse receipts or other similar documents transferring or securing
title covering readily marketable, non-perishable goods which must be fully covered by insurance.
NEW CENTRAL BANK ACT

The following are of primary concern:
 Legal tender power over coins and notes
 Conservatorship
 Receivership and closures

Republic Act No. 7653 is known as “The New Central Bank Act”.
What is the legal tender power of the Bangko Sentral ng Pilipinas?

All notes and coins issued by the Bangko Sentral shall be fully guaranteed by the Government of the Republic
of the Philippines and shall be legal tender in the Philippines for all debts, both public and private.
What does the “legal tender power” of a currency mean?

Legal tender power means that when the currency is offered in payment of a debt, public or private, the same
must be accepted.
Is there a limit to the legal tender power of Philippine currency notes and coins?
Philippine currency notes have no limit to their legal tender power. This means that bills, in any denomination
(P20, P50, P100, P200, P500, P1,000) must be accepted up to any amount.
In the case of coins, their legal tender power shall have the following limits:
 25-centavo coins and above – acceptable up to P50
 10-centavo coins or less – acceptable up to P20
However, pursuant to BSP Circular No. 537, series of 2006, the new limits to the legal tender power of coins
are:
o P1, P5 and P10 – acceptable up to P1,000
o All centavo (sentimo) coins – acceptable up to P100
Under what authority does the BSP issue currency?

Per RA No. 7653, the Bangko Sentral ng Pilipinas is the sole government institution mandated by law to issue
notes and coins for circulation in the Philippines.
What is conservatorship?
Broadly defined, conservatorship is an attempt to save the bank from bankruptcy and eventual liquidation.
Doing so entails appointment of a conservator who will take steps such as management reforms and infusion of
additional capital.
What is a conservator?
A conservator is person appointed by the Monetary Board to perform the following functions:
 Take charge of the assets, liabilities and management of a bank or quasi-bank
 Reorganize the management
 Collect all monies and debts due to it
 Exercise all powers necessary to restore the bank or quasi-bank’s viability
When is a conservator needed?

A conservator is appointed whenever a bank or a quasi-bank is in a state of continuing inability or unwillingness
to maintain a condition of liquidity deemed adequate to protect the interest of depositors and creditors.
Who appoints the conservator?

The Monetary Board appoints the conservator.
For under what duration shall the conservatorship be?

The conservatorship shall not exceed 1 year.
What is receivership?
Receivership is the summary closure of the bank by the Bangko Sentral ng Pilipinas without the need of prior
notice and hearing.
When is a bank or quasi-bank placed under receivership?

Receivership happens upon finding by the Monetary Board that continuance in business of the bank or quasi-
bank will involve probable loss to its depositors and creditors.
What specific findings of the Monetary Board serve as bases for receivership?
The banking institution is placed under receivership upon finding of the Monetary Board of the following:
 Inability to pay liabilities
 Insufficiency of realizable assets to meet its liabilities
 Inability to continue business without involving probable loss to depositors and creditors
 Willful violation of cease and desist order under Sec. 37 of RA No. 7653 that has become final
involving acts or transactions which amount to fraud or dissipation of assets of the institution
Who shall function as the receiver?

For banks, the Monetary Board designates the Philippine Deposit Insurance Corporation as the receiver.
For quasi-banks, any person of recognized competence in banking or finance may be designated as the receiver.
What are the functions of the receiver?

Once appointed, the receiver shall perform the following functions:
 Immediately gather and take charge of all the assets and liabilities of the institution
 Administer the assets and liabilities for the benefit of its creditors
 Exercise the general powers of a receiver under the Revised Rules of Court
Is the receiver tasked to pay the claims of creditors and other liabilities?
No.
With the exception of administrative expenditures, the receiver shall not pay or commit any act that will involve
the transfer or disposition of any asset of the institution.
However, the receiver may deposit or place the funds of the institution in non-speculative investments.
For under what duration shall the receivership be?

The receivership shall not exceed 90 days.
What happens during or after the 90 days of receivership?

The receiver shall determine as soon as possible, but not later than 90 days from takeover, whether the
institution may be rehabilitated or otherwise placed in such a condition so that it may be permitted to resume
business with safety to its depositors and creditors and the general public.
What if the receiver determines that the bank or quasi-bank can no longer be rehabilitated?
If the receiver determines that the institution cannot be rehabilitated or permitted to resume business, the
Monetary Board shall notify in writing the Board of Directors of its findings and direct the receiver to proceed
with the liquidation of the institution.
What happens during liquidation of a bank or quasi-bank?

In liquidation, the claims of the bank’s creditors are determined and paid, as the bank can no longer be
rehabilitated.
When does liquidation take place?

Liquidation may be voluntary, pursuant to Sec. 68 of the General Banking Law, or, as earlier answered, upon
determination by the receiver that the bank or quasi-bank can no longer be rehabilitated and cannot continue
business after the 90-day receivership period.
For under what duration shall the liquidation be?

The law does not state a specified period. Since this involves payments of liabilities, it may take as much time
as needed to determine and pay all claims of creditors.
ANTI-MONEY LAUNDERING ACT

 Covered transactions
 Suspicious transactions
 Reportorial requirement

Republic Act No. 9160 is known as the “Anti-Money Laundering Act of 2001.”
What is the State’s policy regarding this law?

It is the policy of the State to protect and preserve the integrity and confidentiality of bank accounts and to
ensure that the Philippines shall not be used as a money laundering site for the proceeds of any unlawful
activity.
What is money laundering?

Money laundering is a crime whereby the proceeds of an unlawful activity are transacted; thereby making them
appear to have originated from legitimate sources.
How is money laundering committed?

Money laundering is committed by the following:
 Any person knowing that any monetary instrument or property represents, involves, or relates to, the
proceeds of any unlawful activity, transacts or attempts to transact said monetary instrument or property.
 Any person knowing that any monetary instrument or property involves the proceeds of any unlawful
activity, performs or fails to perform any act as a result of which he facilitates the offense of money
laundering referred to in paragraph above.
 Any person knowing that any monetary instrument or property is required under this Act to be disclosed
and filed with the Anti-Money Laundering Council (AMLC), fails to do so.
What is a covered transaction?

A covered transaction is a single, series, or combination of transactions of more than P4,000,000 or an
equivalent amount in foreign currency based on the prevailing exchange rate within 5 consecutive banking days.
It likewise refers to a single, series or combination or pattern of unusually large and complex transactions of
more than P4,000,000 especially cash deposits and investments having no credible purpose or origin,
underlying trade obligation or contract.
Are there changes to the definition of covered transactions?

Yes.
Republic Act No. 9194 amends the definition of a covered transaction as follows:
A covered transaction is a transaction in cash or other equivalent monetary instrument involving a total amount
of more than P500,000 within 1 banking day.
This is now the new definition of covered transaction.
What are suspicious transactions?

RA No. 9194 further amends RA No. 9160 to define what a suspicious transaction is.
Suspicious transactions are transactions with covered institutions, regardless of the amounts involved, where
any of the following circumstances exist:
 there is no underlying legal or trade obligation, purpose or economic justification
 the client is not properly identified
 the amount involved is not commensurate with the business or financial capacity of the client
 taking into account all known circumstances, it may be perceived that the client’s transaction is
structured in order to avoid being the subject of reporting requirements under the Act
 any circumstances relating to the transaction which is observed to deviate from the profile of the client
and/or the client’s past transactions with the covered institution
 the transaction is in a way related to an unlawful activity or offense under this Act that is about to be, is
being or has been committed
 any transactions that is similar or analogous to any of the foregoing
Who shall report suspicious transactions?

Suspicious transactions shall be reported by covered persons.
Who are covered persons?

Covered persons, natural or juridical, refer to:
 banks, non-banks, quasi-banks, trust entities, foreign exchange dealers, pawnshops, money changers,
remittance and transfer companies and other similar entities and all other persons and their subsidiaries
and affiliates supervised or regulated by the Bangko Sentral ng Pilipinas
 insurance companies, pre-need companies and all other persons supervised or regulated by the Insurance
Commission
 (i) securities dealers, brokers, salesmen, investment houses and other similar persons managing
securities or rendering services as investment agent, advisor, or consultant, (ii) mutual funds, close-end
investment companies, common trust funds, and other similar persons, and (iii) other entities
administering or otherwise dealing in currency, commodities or financial derivatives based thereon,
valuable objects, cash substitutes and other similar monetary instruments or property supervised or
regulated by the Securities and Exchange Commission
 jewelry dealers in precious metals, who, as a business, trade in precious metals, for transactions of more
than P1,000,000
 jewelry dealers in precious stones, who, as a business, trade in precious stones, for transactions of more
than P1,000,000
 company service providers which, as a business, provide any of the following services to third parties:
o acting as a formation agent of juridical persons
o acting as (or arranging for another person to act as) a director or corporate secretary of a
company, a partner of a partnership, or a similar position in relation to other juridical persons
o providing a registered office, business address or accommodation, correspondence or
administrative address for a company, a partnership or any other legal person or arrangement
o acting as (or arranging for another person to act as) a nominee shareholder for another person
 persons who provide any of the following services:
o managing of client money, securities or other assets
o management of bank, savings or securities accounts
o organization of contributions for the creation, operation or management of companies
o Creation, operation or management of juridical persons or arrangements, and buying and selling
business entities.
Are there exceptions to the definitions of covered persons?

Yes.
Notwithstanding the definitions above, covered persons shall not include lawyers and accountants acting as
independent legal professionals in relation to information concerning their clients or where disclosure of
information would compromise client confidences or the attorney-client relationship.
When should covered persons report suspicious transactions?

Per Republic Act No. 9160
Covered institutions shall report to the AMLC all covered transactions within 5 working days from occurrence
thereof, unless the Supervising Authority concerned prescribes a longer period not exceeding 10 working days.
Per Republic Act No. 10365 (amending RA No. 9160)
Covered persons shall report to the AMLC all covered transactions and suspicious transactions within 5
working days from occurrence thereof, unless the AMLC prescribes a different period not exceeding 15
working days.
PHILIPPINE DEPOSIT INSURANCE ACT (PDIC)

 Insurable deposits
 Maximum liability
 Requirements for claims

Republic Act No. 3591 established the Philippine Deposit Insurance Corporation, and defined its powers and
duties.
What is the main function of the PDIC?

PDIC is created to insure the deposits of all banks which are entitled to the benefits of insurance.
What are the specific functions of the PDIC?

The PDIC serve the following functions:
 Deposit insurer
 Co-regulator of banks
 Receiver and liquidator of closed banks
What is an insured deposit?

The term insured deposit means the amount due to any bona fide depositor for legitimate deposits in an insured
bank net of any obligation of the depositor to the insured bank as of date of closure, but not to exceed P500,000.
How shall joint accounts be insured?

A joint account shall be insured separately from any individually-owned deposit account.
What types of deposits are insured by the PDIC?

Deposits in the following banks are insured by the PDIC:
 Commercial banks
 Savings and mortgage banks
 Private development banks
 Cooperative banks
 Savings and loan associations
 Branches and agencies in the Philippines of foreign banks
 Other corporations authorized to perform banking functions in the Philippines
Are deposits in Philippine banks with branches outside the Philippines insured by the PDIC?
Subject to the approval of the Board of Directors, any insured bank with branch outside the Philippines may
elect to include for insurance its deposit obligations payable at such branch.
Are deposits in foreign currency insured?

Yes, foreign currency deposits are insured.
This is pursuant to Republic Act No. 6426 (An act instituting a foreign currency deposit system in the
Philippines, and for other purposes), and Central Bank Circular No. 1389.
Depositors may receive payment in the same currency in which the insured deposit is denominated.
Which accounts or deposits will not have deposit insurance?

Republic Act No. 9576, amending Republic Act No. 3591, enumerates that the following accounts or
transactions on which the PDIC will not pay deposit insurance:
 Investment products such as bonds, securities and trust accounts
 Deposit accounts which are unfunded, fictitious or fraudulent
 Deposit products constituting or emanating from unsafe and unsound banking practices
 Deposits that are determined to be proceeds of an unlawful activity as defined under the Anti-Money
Laundering Law
What is the maximum liability of the PDIC for insured deposits?

Effective June 1, 2009, the maximum deposit insurance coverage is P500,000 per depositor.
What if the depositor has more than one account in one bank?
All deposit accounts by a depositor in a closed bank maintained in the same right and capacity shall be added
together.
Deposit insurance coverage is not determined on a per-account basis. The type of account (whether checking,
savings, time or other form of deposit) has no bearing on the amount of insurance coverage.
What if the depositor has more than one account but in different banks?
Deposits in different banking institutions are insured separately.
What if the depositor has more than one account but in different branches of the same bank?
If a bank has one or more branches, the main office and all branch offices are considered as one bank.
Thus, if you have deposits at the main office and at one or more branch offices of the same bank, the deposits
are added together when determining deposit insurance coverage, the total of which shall not exceed P500,000.
What are the requirements for claiming the insurance?

The following are the requirements in filing claims:
 Original evidence of deposits such as savings passbook, certificate of deposit, bank statement, used or
unused checks, or ATM card
 1 valid original photo-bearing ID with clear signature of depositor/claimant (bringing 2 valid IDs is
recommended in case of discrepancies)
 For depositor below 18 years old, photocopy of birth certificate and valid ID of the parent
 Original copy of a notarized Special Power of Attorney (SPA) for claimants who are not signatories in
the bank records (SPA executed by the parent, if minor)
 Claim form
Who are not required to file deposit insurance claims?

Depositors with valid deposit accounts with balances of P100,000 and below are not required to file claims,
provided they:
 have no obligations with the closed bank, or have not acted as co-makers of these obligations, or are not
spouses of the borrowers
 have complete mailing address found in the bank records or have updated their addresses through the
Mailing Address Update Form (MAUF) of PDIC before the start of the onsite claims settlement
operation
 have not maintained the account under the name of business entities
What happens to uninsured deposit in excess of P500,000?

The claim for the uninsured portion of the deposit is a claim against the assets of the closed bank.
SECRECY OF BANK DEPOSITS ACT

Republic Act No. 1405 is entitled “An Act Prohibiting Disclosure Of or Inquiry Into, Deposits with Any
Banking Institution and Providing Penalty Therefore”.
What are the purposes of the Bank Secrecy Deposit Act?

The Bank Deposit Secrecy Law was created for the following purposes:
 To encourage people to deposit their money in banking institutions
 To discourage private hoarding of money so that the same may be utilized by banks in authorized loans
What is covered by the law on bank secrecy?

The law states that 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 considered absolutely confidential.
Does the law on secrecy also apply to foreign currency deposits?

Yes.
Republic Act No. 6426, known as the “Foreign Currency Deposit Act of the Philippines”, Sec. 8 states that all
foreign currency deposits are also considered of an absolutely confidential nature.
Are there exceptions to the confidentiality rule on deposits?

Yes.
In the following cases, the deposits may be examined, inquired or looked into by any person, government
official, bureau or office:
 With written permission of the depositor
 In cases of impeachment
 Upon order of a competent court in cases of bribery or dereliction of duty of public officials
 In cases where the money deposited or invested is the subject matter of litigation
 During special or general examination of a bank, as authorized by the Monetary Board to investigate
bank fraud or a serious irregularity
On the part of the auditor on the audit of bank’s financial statements, does it mean that the auditor can
no longer inquire into or examine bank deposits because of the law on secrecy?
Not necessarily.
Presidential Decree No. 1792, amending Republic Act No. 1405 states that, during a regular audit of a bank by
an independent auditor, the auditor may inquire, examine or look into deposits, provided that the following
conditions are satisfied:
 The examination is for audit purposes only
 The results of the examination shall be for the exclusive use of the bank
What are the sanctions for violations of the Bank Secrecy Law?
Any violation of this law will subject offender upon conviction, to either or both of the following (upon the
discretion of the court):
 Imprisonment of not more than 5 years
 Fine of not more than P20,000
UNCLAIMED BALANCES LAW

Act No. 3936, as amended by Presidential Decree No. 679, requires banks, trust corporations, and building and
loans associations, to transfer unclaimed balances held by them to the Treasurer of the Philippines and for other
purposes.
What is the meaning of “unclaimed balances”?

Unclaimed balances shall include credits or deposits of the following:
 money
 bullion
 security
 other evidence of indebtedness of any kind, and interest thereon
with banks, buildings and loan associations, and trust corporations, in favor of the following:
 any person known to be dead
 any person who has not made further deposits or withdrawals during the preceding 10 years or more
Note: the credit or deposit must be in covered institutions (i.e. banks, buildings and loan associations or trust
corporations).
What will happen to unclaimed balances?

Unclaimed balances, together with the increase and proceeds thereof, shall be deposited with the Treasurer of
the Philippines to the credit of the Government of the Republic of the Philippines to be used as the National
Assembly may direct after reclassification and procedures provided by law.
What is an escheat proceeding?

Escheat proceedings refer to the judicial process in which the state, by virtue of its sovereignty, steps in and
claims abandoned, left vacant, or unclaimed property, without there being an interested person having a legal
claim thereto.
In the case of dormant accounts, the state inquires into the status, custody, and ownership of the unclaimed
balance to determine whether the inactivity was brought about by the fact of death or absence of or
abandonment by the depositor.
If after the proceedings the property remains without a lawful owner interested to claim it, the property shall be
reverted to the state to forestall an open invitation to self-service by the first comers.
What happens if interested parties have come forward and lain claim to the unclaimed balance?
If interested parties have come forward and lain claim to the property, the courts shall determine whether the
credit or deposit should pass to the claimants or be forfeited in favor of the state.
What is the duty of the covered institution on unclaimed balances?

Immediately after the taking effect of the Act and within the month of January of every odd year, all banks,
building and loan associations, and trust corporations shall forward to the Treasurer of the Philippines a
statement, under oath, of their respective managing officers, of all credits and deposits held by them in favor of
persons known to be dead, or who have not made further deposits or withdrawals during the preceding ten years
or more, arranged in alphabetical order according to the names of creditors and depositors, and showing:
 The names and last known place of residence or post office addresses of the persons in whose favor such
unclaimed balances stand
 The amount and the date of the outstanding unclaimed balance and whether the same is in money or in
security, and if the latter, the nature of the same
 The date when the person in whose favor the unclaimed balance stands died, if known, or the date when
he made his last deposit or withdrawal
 The interest due on such unclaimed balance, if any, and the amount thereof
A copy of the above sworn statement shall be posted in a conspicuous place in the premises of the bank,
building and loan association, or trust corporation concerned for at least sixty days from the date of filing
thereof: Provided, That immediately before filing the above sworn statement, the bank, building and loan
association, and trust corporation shall communicate with the person in whose favor the unclaimed balance
stands at his last known place of residence or post office address.
What is the duty of the Treasurer of the Philippines?

It shall be the duty of the Treasurer of the Philippines to inform the Solicitor General from time to time the
existence of unclaimed balances held by banks, building and loan associations, and trust corporations.
INTELLECTUAL PROPERTY LAW

Republic Act No. 8923 is known as the Intellectual Property Code of the Philippines.
What specific items will be asked in the exam?

The following points are of primary concern:
 Patents
 Trademark, service marks, trade names
 Copyright
Which inventions are patentable?

Any technical solution of a problem in any field of human activity which:
 is new;
 involves an inventive step; and
 is industrially applicable shall be patentable.
It may be, or may relate to, a product, or process, or an improvement of any of the foregoing.
Which items shall be excluded from patent protection?

The following shall be excluded from patent protection:
 Discoveries, scientific theories and mathematical methods
 Schemes, rules and methods of performing mental acts, playing games or doing business, and programs
for computers
 Methods for treatment of the human or animal body by surgery or therapy and diagnostic methods
practiced on the human or animal body (except products and composition for use in any of these
methods)
 Plant varieties or animal breeds or essentially biological process for the production of plants or animals
(except micro-organisms and non-biological and microbiological processes)
 Aesthetic creations
 Anything which is contrary to public order or morality.
To whom does the right to a patent belong?

The right to a patent belongs to the inventor, his heirs, or assigns.
When two (2) or more persons have jointly made an invention, the right to a patent shall belong to them jointly.
If the patent is created pursuant to a commission, the person who commissions the work shall own the patent,
unless otherwise provided in the contract.
Who owns the patent for an invention made by the employee in the course of his employment contract?
In case the employee made the invention in the course of his employment contract, the patent shall belong to:
A. The EMPLOYEE – if the inventive activity is not a part of his regular duties even if the employee uses the
time, facilities and materials of the employer.
B. The EMPLOYER – if the invention is the result of the performance of his regularly-assigned duties, unless
there is an agreement, express or implied, to the contrary.
What is the “first to file rule”?

If 2 or more persons have made the invention separately and independently of each other, the right to the patent
shall belong to the person who filed an application for such invention.
Where two or more applications are filed for the same invention, to the applicant who has the earliest filing date
or, the earliest priority date.
When does a patent take effect?

A patent shall take effect on the date of the publication of the grant of the patent in the IPO (Intellectual
Property Office) Gazette.
What is the legal life of a patent?

The term of a patent shall be 20 years from the filing date of the application.
What rights are given to a patent owner?

A patent shall confer on its owner the following exclusive rights:
 Where the subject matter of a patent is a product, to restrain, prohibit and prevent any unauthorized
person or entity from making, using, offering for sale, selling or importing that product
 Where the subject matter of a patent is a process, to restrain, prevent or prohibit any unauthorized person
or entity from using the process, and from manufacturing, dealing in, using, selling or offering for sale,
or importing any product obtained directly or indirectly from such process
 The right to assign, or transfer by succession the patent, and to conclude licensing contracts for the same
What is a trademark or service mark?

A “mark” means any visible sign capable of distinguishing the goods or service of an enterprise and shall
include a stamped or marked container of goods.
What is the difference between a trademark and service mark?

Trademark refers to goods while service mark refers to service.
What is a trade name?

“Trade name” means the name or designation identifying or distinguishing an enterprise.
How are rights to a trademark or service mark acquired?

The rights in a mark shall be acquired through registration made validly in accordance with the provisions of
this law.
In what cases is the registration of a trademark or service mark not allowed?

A mark cannot be registered if it:
 Consists of immoral, deceptive or scandalous matter, or matter which may disparage or falsely suggest a
connection with persons, living or dead, institutions, beliefs, or national symbols, or bring them into
contempt or disrepute
 Consists of the flag or coat of arms or other insignia of the Philippines or any of its political
subdivisions, or of any foreign nation, or any simulation thereof
 Consists of a name, portrait or signature identifying a particular living individual except by his written
consent, or the name, signature, or portrait of a deceased President of the Philippines, during the life of
his widow, if any, except by written consent of the widow
 Is identical with a registered mark belonging to a different proprietor or a mark with an earlier filing or
priority date, in respect of
o The same goods or services, or
o Closely related goods or services, or
o If it nearly resembles such a mark as to be likely to deceive or cause confusion
 Is identical with, or confusingly similar to, or constitutes a translation of a mark which is considered by
the competent authority of the Philippines to be well-known internationally and in the Philippines,
whether or not it is registered here, as being already the mark of a person other than the applicant for
registration, and used for identical or similar goods or services
 Is identical with, or confusingly similar to, or constitutes a translation of a mark considered well-known
in accordance with the preceding paragraph, which is registered in the Philippines with respect to goods
or services which are not similar to those with respect to which registration is applied for
 Is likely to mislead the public, particularly as to the nature, quality, characteristics or geographical origin
of the goods or services
 Consists exclusively of signs that are generic for the goods or services that they seek to identify
 Consists exclusively of signs or of indications that have become customary or usual to designate the
goods or services in everyday language or in bona fide and established trade practice
 Consists exclusively of signs or of indications that may serve in trade to designate the kind, quality,
quantity, intended purpose, value, geographical origin, time or production of the goods or rendering of
the services, or other characteristics of the goods or services
 Consists of shapes that may be necessitated by technical factors or by the nature of the goods themselves
or factors that affect their intrinsic value
 Consists of color alone, unless defined by a given form
 Is contrary to public order or morality
What is the legal life of a trademark or service mark?

A certificate of registration shall remain in force for 10 years.
What rights does the owner of a registered trademark or service mark have?
The owner of a registered mark shall have the exclusive right to prevent all third parties not having the owner’s
consent from using in the course of trade identical or similar signs or containers for goods or services which are
identical or similar to those in respect of which the trademark is registered where such use would result in a
likelihood of confusion.
In case of the use of an identical sign for identical goods or services, a likelihood of confusion shall be
presumed.
What are the rules on assignment and transfer of application and registration of trademark and service
mark?
The following rules are observed:
1. An application for registration of a mark, or its registration, may be assigned or transferred with or
without the transfer of the business using the mark.
2. The assignment of the application for registration of a mark, or of its registration, shall be in writing and
require the signatures of the contracting parties. Transfers by mergers or other forms of succession may
be made by any document supporting such transfer.
3. Assignments and transfers shall have no effect against third parties until they are recorded at the Office.
What is the prohibition on the use of trade names?

A name or designation may not be used as a trade name if by its nature or the use to which such name or
designation may be put:
 it is contrary to public order or morals
 if, in particular, it is liable to deceive trade circles or the public as to the nature of the enterprise
identified by that name
What is a copyright or economic right?

Copyright or economic rights shall consist of the exclusive right to carry out, authorize or prevent the following
acts:
 Reproduction of the work or substantial portion of the work
 Dramatization, translation, adaptation, abridgment, arrangement or other transformation of the work
 The first public distribution of the original and each copy of the work by sale or other forms of transfer
of ownership
 Rental of the original or a copy of an audiovisual or cinematographic work, a work embodied in a sound
recording, a computer program, a compilation of data and other materials or a musical work in graphic
form, irrespective of the ownership of the original or the copy which is the subject of the rental
 Public display of the original or a copy of the work
 Public performance of the work
 Other communication to the public of the work
Which works are not protected by copyright?

No protection shall extend, under this law, to:
 any idea, procedure, system, method or operation, concept, principle, discovery or mere data as such,
even if they are expressed, explained, illustrated or embodied in a work
 news of the day and other miscellaneous facts having the character of mere items of press information
 any official text of a legislative, administrative or legal nature, as well as any official translation thereof
Who owns the rights to a copyright if:
The work is literary and artistic?

In the case of original literary and artistic works, copyright shall belong to the author of the work.
There is joint authorship?

In the case of works of joint authorship, the co-authors shall be the original owners of the copyright and in the
absence of agreement, their rights shall be governed by the rules on co-ownership.
If, a work of joint authorship consists of parts that can be used separately and the author of each part can be
identified, the author of each part shall be the original owner of the copyright in the part that he has created.
Pursuant to a commission?
In the case of a work commissioned by a person other than an employer of the author and who pays for it and
the work is made in pursuance of the commission, the person who so commissioned the work shall have
ownership of the work, but the copyright thereto shall remain with the creator, unless there is a written
stipulation to the contrary.
The work is an audiovisual like movies?

In the case of audiovisual work, the copyright shall belong to the producer, the author of the scenario, the
composer of the music, the film director, and the author of the work so adapted.
The author is an employee?

In the case of work created by an author during and in the course of his employment, the rules stated on patent
above apply.
Who owns the rights to a letter sent to someone?

In respect of letters, the copyright shall belong to the writer subject to the provisions of Article 723 of the Civil
Code.
What does Article 723 of the Civil Code say on letters?

Letters and other private communications in writing are owned by the person to whom they are addressed and
delivered, but they cannot be published or disseminated without the consent of the writer or his heirs.
However, the court may authorize their publication or dissemination if the public good or the interest of justice
so requires.
What is the legal duration of copyright?

Copyright protection for artistic, literary and derivative works lasts for the life of the author plus 50 years after
the author’s death.
LAW ON COOPERATIVES

The following points will be considered:
 Organization and registration of cooperatives
 Types and categories of cooperatives
 Administration
 Responsibilities, rights and privileges of cooperatives
 Capital, property of funds
 Audit, inquiry and members’ right to examine
 Allocation and distribution of funds
 Dissolution of cooperatives

Republic Act No. 9520 is known as the “Philippine Cooperative Code of 2008”.
What is a cooperative?
A cooperative is an autonomous and duly registered association of persons, with a common bond of interest,
who have voluntarily joined together to achieve their social, economic, and cultural needs and aspirations by
making equitable contributions to the capital required, patronizing their products and services and accepting a
fair share of the risks and benefits of the undertaking in accordance with universally accepted cooperative
principles.
What are the essential characteristics of cooperatives?

The following shall characterize a cooperative:
 Autonomy and due registration
 Voluntary membership
 Equitable capital contributions of members
 Patronizing by members of the products and services of the cooperative
 Share in the risks and benefits
On Organization and registration of cooperatives

What is a primary cooperative?
A primary cooperative is a cooperative whose members are natural persons.
As to membership, the other categories are:
 Secondary cooperative – the members of which are primary cooperatives
 Tertiary cooperative – the members of which are secondary cooperatives
Who may organize a primary cooperative?

Fifteen (15) or more natural persons who have the following requisites may organize a primary cooperative:
 Filipino citizens
 Of legal age
 Have a common bond of interest
 Actually residing or working in the intended area of operation
Can a primary cooperative be registered as a multi-purpose cooperative?

Any newly organized primary cooperative may be registered as multi-purpose cooperative only after
compliance with the minimum requirements for multipurpose cooperatives to be set by the Cooperative
Development Authority (CDA).
Can a single-purpose cooperative become a multi-purpose cooperative?

Yes.
A single-purpose cooperative may transform into a multipurpose or may create subsidiaries but only after at
least 2 years of operations.
What is the extent of the liability of a cooperative?

A duly registered cooperative shall have limited liability.
What is the legal life of a cooperative?

A cooperative shall exist for a period not exceeding 50 years from the date of registration unless sooner
dissolved or unless said period is extended.
What is the rule on extension of cooperative life?

The cooperative term, as originally stated in the articles of cooperation, may be extended for periods not
exceeding 50 years in any single instance by an amendment of the articles of cooperation.
However, no extension can be made earlier than 5 years prior to the original or subsequent expiry date unless
there are justifiable reasons for an earlier extension.
What is the capital requirement to register a cooperative?

No cooperative, other than a cooperative union, shall be registered unless the Articles of Cooperation is
accompanied with the bonds of the accountable officers and a sworn statement of the treasurer elected by the
subscribers showing that:
 at least 25% of the authorized share capital has been subscribed; and
 at least 25% of the total subscription has been paid
However, the paid-up share capital must be at least P15,000.
When does a cooperative acquire juridical personality?

A cooperative formed and organized under the Code acquires juridical personality from the date the CDA issues
a certificate of registration under its official seal.
What is the legal power of a certificate of registration?

A certificate of registration issued by the CDA under its official seal shall be conclusive evidence that the
cooperative therein mentioned is duly registered, unless it is proved that the registration has been cancelled.
On types of cooperatives
What are the different types of cooperatives?
Cooperatives may fall under any of the following types:
 Credit Cooperative – one that promotes and undertakes savings and lending services among its
members. It generates a common pool of funds in order to provide financial assistance to its members
for productive and provident purposes.
 Consumers Cooperative – one the primary purpose of which is to procure and distribute commodities to
members and non-members.
 Producers Cooperative – one that undertakes joint production whether agricultural or industrial. It is
formed and operated by its members to undertake the production and processing of raw materials or
goods produced by its members into finished or processed products for sale by the cooperative to its
members and non-members. Any end product or its derivative arising from the raw materials produced
by its members, sold in the name and for the account of the cooperative, shall be deemed a product of
the cooperative and its members.
 Marketing Cooperative – one which engages in the supply of production inputs to members and markets
their products.
 Service Cooperative – one which engages in medical and dental care, hospitalization, transportation,
insurance, housing, labor, electric light and power, communication, professional and other services.
 Multi-purpose Cooperative – one which combines two (2) or more of the business activities of these
different types of cooperatives.
 Advocacy Cooperative – a primary cooperative which promotes and advocates cooperativism among its
members and the public through socially-oriented projects, education and training, research and
communication, and other similar activities to reach out to its intended beneficiaries.
 Agrarian Reform Cooperative – one organized by marginal farmers majority of which are agrarian
reform beneficiaries for the purpose of developing an appropriate system of land tenure, land
development, land consolidation or land management in areas covered by agrarian reform.
 Cooperative Bank – one organized for the primary purpose of providing a wide range of financial
services to cooperatives and their members.
 Dairy Cooperative – one whose members are engaged in the production of fresh milk which may be
processed and/or marketed as dairy products.
 Education Cooperative – one organized for the primary purpose of owning and operating licensed
educational institutions notwithstanding the provisions of Republic Act No. 9155, otherwise known as
the Governance of Basic Education Act of 2001.
 Electric Cooperative – one organized for the primary purposed of undertaking power generations,
utilizing renewable energy sources, including hybrid systems, acquisition and operation of
subtransmission or distribution to its household members.
 Financial Service Cooperative – one organized for the primary purpose of engaging in savings and
credit services and other financial services.
 Fishermen Cooperative – one organized by marginalized fishermen in localities whose products are
marketed either as fresh or processed products.
 Health Services Cooperative – one organized for the primary purpose of providing medical, dental and
other health services.
 Housing Cooperative – one organized to assist or provide access to housing for the benefit of its regular
members who actively participate in the savings program for housing. It is co-owned and controlled by
its members.
 Insurance Cooperative – one engaged in the business of insuring life and poverty of cooperatives and
their members.
 Transport Cooperative – one which includes land and sea transportation, limited to small vessels, as
defined or classified under the Philippine maritime laws, organized under the provisions of the Code.
 Water Service Cooperative – one organized to own, operate and manage waters systems for the
provision and distribution of potable water for its members and their households.
 Workers Cooperative – one organized by workers, including the self-employed, who are at same time
the members and owners of the enterprise. Its principal purpose is to provide employment and business
opportunities to its members and manage it in accordance with cooperative principles.
What is a laboratory cooperative?

A laboratory cooperative is one organized by minors. It shall be governed by special guidelines to be
promulgated by the CDA.
On membership and administration of cooperatives

What are the types of members in a cooperative?
A cooperative may have 2 types of members:
 Regular members
 Associate members
What is a regular member?

A regular member is one who has complied with all the membership requirements and entitled to all the rights
and privileges of membership.
What is an associate member?

An associate member is one who has no right to vote nor be voted upon and shall be entitled only to such rights
and privileges as the bylaws may provide.
However, an associate who meets the minimum requirements of regular membership, and continues to patronize
the cooperative for 2 years, and signifies his/her intention to remain a member shall be considered a regular
member.
Who are disqualified to become members or elected as officers of a cooperative?

Any officer or employee of the CDA shall be disqualified to be elected or appointed to any position in a
cooperative.
All elective officials of the Government shall be ineligible to become officers and directors of cooperatives.
What is the extent of a member’s liability?

A member shall be liable for the debts of the cooperative to the extent of his contribution to the share of the
cooperative.
Unlike in partnership, and like in corporations, a member’s personal assets shall not answer for the debts of the
cooperative.
May a member withdraw his membership from the cooperative?

Yes.
A member of a cooperative may, for any valid reason, withdraw his membership from the cooperative by giving
a 60 day notice to the Board of Directors.
Will a withdrawing member receive a refund of his capital contribution?

Yes, with qualifications.
Subject to the bylaws of the cooperative, the withdrawing member shall be entitled to a refund of his share
capital contribution and all other interests in the cooperative.
However, the refund shall not be made if upon such payment the value of the assets of the cooperative would be
less than the aggregate amount of its debts and liabilities exclusive of his share capital contribution.
Can a member be removed from the cooperative?

Yes.
Membership in the cooperative may be terminated by a vote of the majority of all the members of the BOD for
any of the following causes:
 When a member has not patronized any of the services of the cooperative for an unreasonable period of
time as may be previously determined by the BOD
 When a member has continuously failed to comply with his obligations
 When a member has acted in violation of the bylaws and the rules of the cooperative
 For any act or omission injurious or prejudicial to the interest or the welfare of the cooperative
What is the composition of a cooperative’s General Assembly?

The General Assembly shall be composed of such members who are entitled to vote under the Articles of
Cooperation and bylaws of the cooperative
What are the powers of the General Assembly?

The General Assembly shall be the highest policy-making body of the cooperative and shall exercise such
powers as are stated in the Code.
Specifically, the following powers of the General Assembly cannot be delegated:
 To determine and approve amendments to the articles of cooperation and bylaws
 To elect or appoint the members of the board of directors, and to remove them for cause. However, in
the case of the electric cooperatives registered under the Code, election of the members of the board
shall be held in accordance with its bylaws or election guideline of such electric cooperative
 To approve developmental plans of the cooperative
When should general meetings of a cooperative be held?

A regular meeting shall be held annually by the General Assembly on a date fixed in the bylaws.
What if the bylaws do not fix a period for the regular meeting?
If not fixed in the bylaws, the regular meeting shall be on any date within 90 days after the close of each fiscal
year.
What constitutes a quorum in cooperative meetings?

A quorum shall consist of at least 25% of all the members entitled to vote.
Is the quorum the same for all types of cooperatives?

No, there are exceptions.
In the case of electric cooperatives, a quorum, unless otherwise provided in the bylaws, shall consist of 5% of
all the members entitled to vote.
In the case of cooperative banks, the quorum requirement for General Assembly meetings, whether special or
regular, shall be 1/2 plus one of the number of voting shares of all the members in good standing. In the
meetings of the BOD, whether special or regular, the quorum requirement shall be 1/2 plus one of all the
members of the BOD.
Each director shall only have 1 vote.
What is the voting system in meetings of cooperatives?

The voting system depends upon the category of cooperative.
For primary cooperatives, each member shall have 1 vote.
For secondary or tertiary cooperatives, each member shall have 1 basic vote and as many incentive votes as
provided for in the bylaws but not to exceed 5 votes.
What is the composition of the BOD of cooperatives?

Like regular corporations, the BOD of cooperatives shall be composed of not less than 5 but not more than 15
members.
Who elects the members of the BOD?

The members of the BOD are elected by the General Assembly.
What is the term of office of the members of the BOD?

BOD members shall be elected for a term of 2 years and shall hold office until their successors are duly elected
and qualified, or until duly removed for cause.
What are the powers and functions of the BOD?

The direction and management of the affairs of the cooperative shall be vested in the BOD.
Also, the BOD shall be responsible for the strategic planning, direction-setting and policy-formulation activities
of the cooperative.
What is the prohibition for BOD members on voting?

Directors cannot attend or vote by proxy at board meetings.
Who shall elect the officers of the cooperative?

The BOD shall elect from among themselves the chairperson and vice-chairperson, and elect or appoint other
officers of the cooperative from outside of the board in accordance with their bylaws.
What is the status of dealings of directors and officers with the cooperative?
A contract entered into by the cooperative with 1 or more of its directors, officers, and committee members is
voidable, at the option of the cooperative, unless all the following conditions are present:
 That the presence of such director in the board meeting wherein contract was approved was not
necessary to constitute a quorum for such meeting
 That the vote of such director was not necessary for the approval of the contract
 That the contract is fair and reasonable under the circumstances
 That in the case of an officer or committee member, the contract with the officer or committee member
has been previously authorized by the General Assembly or by the BOD
On responsibilities, rights and privileges of cooperatives

What cooperative books shall be kept open for inspection?
Every cooperative shall have the following documents ready and accessible to its members and representatives
of the CDA for inspection during reasonable office hours at its official address:
 A copy of the Cooperative Code and all other laws pertaining to cooperatives
 A copy of the regulations of the CDA
 A copy of the articles of cooperation and bylaws of the cooperative
 A register of members
 The books of the minutes of the meetings of the General Assembly, BOD and committee
 Share books, where applicable
 Financial statement
 Such other documents as may be prescribed by laws or the bylaws
The accountant or the bookkeeper of the cooperative shall be responsible for the maintenance of the cooperative
records in accordance with generally accepted accounting practices.
He shall also be responsible for the production of the same at the time of audit or inspection.
The audit committee shall be responsible for the continuous and periodic review of the books and records of
account to ensure that these are in accordance with generally accepted accounting practices.
He shall also be responsible for the production of the same at the time of audit or inspection.
For up to what period shall cooperatives keep its records?

A cooperative may dispose by way of burning or other method of complete destruction any document, record or
book pertaining to its financial and nonfinancial operations which are already more than 5 years old except
those relating to transactions which are the subject of civil, criminal and administrative proceedings.
Which cooperative members need to be bonded?

Every director, officer, and employee handling funds, securities or property on behalf of any cooperative shall
be covered by a surety bond to be issued for a duly registered insurance or bonding company for the faithful
performance of their respective duties and obligations.
Are cooperatives required to pay tax?

Duly registered cooperatives which do not transact any business with non-members or the general public shall
not be subject to any taxes and fees imposed under the internal revenue laws and other tax laws.
What if the cooperatives have transaction with both members and non-members?
Cooperatives transacting business with both members and non-members shall not be subjected to tax on their
transactions with members.
What privileges do cooperatives have?

Cooperatives enjoy the following privileges:
 The privilege of depositing their sealed cash boxes or containers, documents or any valuable papers in
the safes of the municipal or city treasurers and other government offices free of charge
 Cooperatives organized among government employees enjoy the free use of any available space in their
agency, whether owned or rented by the Government
 Cooperatives rendering special types of services and facilities such as cold storage, ice plant, electricity,
transportation shall secure a franchise therefore, and such cooperatives shall open their membership to
all persons qualified in their areas of operation
 In areas where appropriate cooperatives exist, the preferential right to supply government institutions
and agencies rice, corn and other grains, fish and other marine products, meat, eggs, milk, vegetables,
tobacco and other agricultural commodities produced by their members shall be granted to the
cooperatives concerned
 Preferential treatment in the allocation of fertilizers, including seeds and other agricultural inputs and
implements, and in rice distribution
 Preferential and equitable treatment in the allocation or control of bottomries of commercial shipping
vessels in connection with the shipment of goods and products of cooperatives
 Preferential rights in the management of public markets and/or lease of public market facilities, stalls or
spaces for cooperatives and their federations, such as farm and fishery producers and suppliers, market
vendors and such other cooperatives, which have for their primary purpose the production and/or the
marketing of products from agriculture, fisheries and small entrepreneurial industries and federations
thereof
 Cooperatives engaged in credit services and/or federations shall be entitled to loans credit lines,
rediscounting of their loan notes, and other eligible papers with the Development Bank of the
Philippines, the Land Bank of the Philippines and other financial institutions except the Bangko Sentral
ng Pilipinas
 A public transport service cooperative may be entitled to financing support for the acquisition and/or
maintenance of land and sea transport equipment, facilities and parts through the program of the
government financial institutions. It shall have the preferential right to the management and operation of
public terminals and ports whether land or sea transport where the cooperative operates and on securing
a franchise for active or potential routes for the public transport
 Cooperatives transacting business with the Government of the Philippines or any of its political
subdivisions or any of its agencies or instrumentalities, including government-owned and controlled
corporations shall be exempt from prequalification bidding requirements
 The privilege of being represented by the provincial or city fiscal or the Office of the Solicitor General,
free of charge, except when the adverse party is the Republic of the Philippines
 Preferential right in the management of the canteen and other services related to the operation of the
educational institution where they are employed for Cooperatives organized by faculty members and
employees of educational institutions
 The appropriate housing agencies and government financial institutions shall create a special window
for financing housing projects undertaken by cooperatives, with interest rates and terms equal to, or
better than those given for socialized housing projects. This financing shall be in the form of blanket
loans or long-term wholesale loans to qualified cooperatives, without need for individual processing
LAW ON COOPERATIVES
Question 1
Which of the following does not necessarily characterize a cooperative?
A. Autonomy
B. Common bond of interest
C. Voluntary involvement
D. Absence of capital
Answer: D.
Question 2
A cooperative whose members are natural persons is called
A. Primary
B. Natural
C. Parent
D. De jure
Answer: A.
Question 3
Which of the following is not a qualification for membership to a primary cooperative?
A. Natural born resident citizen
B. Of legal age
C. Common bond of interest
D. Actually residing or working in the intended area of operation
Answer: A. The law only requires citizenship.
Question 4
A single-purpose cooperative may transform into a multi-purpose cooperative only after at
least how many years of operations?
A. 2
B. 3
C. 4
D. 5
Answer: A.
Question 5
Multi-purpose cooperatives must have a minimum paid-up capital of
A. P15,000
B. P50,000
C. P100,000
D. P250,000
Answer: C. With the exception of agricultural and agrarian reform cooperatives, only
those cooperatives with a minimum paid-up capital of P100,000 may be allowed to transform
into a multi-purpose cooperative.
Question 6
Duly registered cooperatives shall have what extent of liability?
A. Unlimited
B. Limited
C. None at all
D. To the extent fixed by its by-laws
Answer: B.
Question 7
Cooperatives have maximum legal life of 50 years. This period may be extended for periods
not exceeding 50 years in any single instance by an amendment of the articles of
cooperation. However, no extension can be made earlier than ______ prior to the original
or subsequent expiry date unless there are justifiable reasons for an earlier extension.
A. 3 years
B. 5 years
C. 7 years
D. 10 years
Answer: B.
Question 8
The preferred share capital of a cooperative shall not exceed what percent of its total
authorized share capital?
A. 5%
B. 10%
C. 20%
D. 25%
Answer: D.
Question 9
No member shall own more than what percent of the subscribed share capital of a
cooperative?
A. 5%
B. 10%
C. 15%
D. 20%
Answer: B.
Question 10
When does a cooperative acquire juridical personality?
A. From the formation of all its members
B. From the transfer of funds to the cooperatives
C. From the issuance of certificate of registration by the CDA
D. From the assumption of offices by its directors
Answer: C. In addition, the certificate is conclusive evidence that the cooperative
therein mentioned is duly registered, unless it is proved that the registration has been
cancelled.
Question 11
Which type of cooperative has the primary purpose of procuring and distributing
commodities to its members and non-members?
A. Credit
B. Consumers
C. Service
D. Producers
Answer: B.
Question 12
This type of cooperative undertakes joint production whether agricultural or industrial.
A. Producers
B. Multi-purpose
C. Consumers
D. Marketing
Answer: A. It is formed and operated by its members to undertake the production and
processing of raw materials or goods produced by its members into finished or processed
products for sale by the cooperative to its members and non-members.
Question 13
This type of cooperative is organized for the primary purpose of engaging in savings and
credit services and other financial services.
A. Cooperative bank
B. Financial service cooperative
C. Lending cooperative
D. Commercial cooperative
Answer: B.
Question 14
A laboratory cooperative is one organized by
A. Scientists
B. People of scientific background
C. Minors
D. Researchers
Answer: C.
Question 15
What type of cooperative member has no right to vote or be voted upon and shall only be
entitled to any such rights and privileges as the bylaws may provide?
A. Regular member
B. Associate member
C. Loyal member
D. Disloyal member
Answer: B.
Question 16
It is the highest policy-making body of the cooperative.
A. Board of Directors
B. Board of Trustees
C. General Assembly
D. Cooperative Governance
Answer: C.
INSOLVENCY LAW
Question 1
It shall refer to the financial condition of a debtor that is generally unable to pay its
or his liabilities as they fall due in the ordinary course of business or has liabilities
that are greater than its or his assets.
A. Bankrupt
B. Insolvent
C. Indebted
D. Dissolved
Answer: B.
Question 2
Voluntary proceeding differs from involuntary proceeding in that it is initiated by the
A. Court
B. Insolvent debtor
C. Creditors
D. Receiver
Answer: B.
Question 3
Involuntary proceedings are initiated by the
A. Court
B. Insolvent debtor
C. Creditors
D. Receiver
Answer: C.
Question 4
An insolvent debtor may initiate involuntary proceeding by filing a petition for
rehabilitation with the court only if with the prior approval of the following (choose
the incorrect one):
A. the owner in the case of a sole proprietorship
B. the majority of the partners in the case of a partnership
C. the vote of at least 2/3 of the members of a nonstock corporation, in a member’s
meeting called for the purpose
D. the the majority of the vote of the board of directors or trustees and authorized by
the vote of the stockholders representing at least majority of the outstanding capital
stock, in a meeting called for the purpose
Answer: D. For the stockholders, the required vote is at least 2/3 of the outstanding
capital stock.
Question 5
Which of the following creditor or group of creditors may initiate involuntary proceeding
against the debtor by filing a petition for rehabilitation with the court?
A. A creditor with a claim of P500,000
B. Group of creditors with aggregate claim of P750,000
C. A creditor with a claim of P800,000
D. Group of creditors with aggregate claim of P1,000,000
Answer: D. Any creditor or group of creditors with a claim of, or the aggregate of whose
claims is, at least P1,000,000. or at least twenty-five percent (25%) of the subscribed
capital stock or partners’ contributions, whichever is higher, may initiate involuntary
proceedings against the debtor by filing a petition for rehabilitation with the court.
Question 6
An individual debtor who, possessing sufficient property to cover all his debts
but foreseeing the impossibility of meeting them when they respectively fall due, may
file a verified petition that he be declared in the state of __________________ by the
court of the province or city in which he has resides for six (6) months prior to the
filing of his petition.
A. bankruptcy
B. suspension of payments
C. insolvency
D. liquidation
Answer: B.
Question 7
In a petition for declaration for the state of suspension of payments, which of the
following is not required as a minimum attachment?
A. A schedule of assets and liabilities
B. An inventory of assets
C. A proposed agreement with creditors
D. A list of all loans in the last 5 years
Answer: D.
Question 8
It refers to the restoration of the debtor to a condition of successful operation and
solvency.
A. Reorganization
B. Rehabilitation
C. Reconditioning
D. Liquidation
Answer: B.
Question 9
Which of the following is least likely included as a rehabilitation plan?
A. Debt-equity conversion
B. Quasi-reorganization
C. Liquidation
D. Dacion en pago
Answer: C. Liquidation is the process of realizing the assets of the company,
distributing the proceeds to rightful claimants and bringing an end to the business, a
process opposite to rehabilitation.
Question 10
Which of the following is not an effect of a stay order or suspension order?
A. It suspends all actions or proceedings, in court or otherwise, for the enforcement of
claims against the debtor.
B. It suspends all actions to enforce any judgment, attachment or other provisional
remedies against the debtor.
C. It prohibits the debtor from selling, encumbering, transferring or disposing in any
manner any of its properties even if it is in the ordinary course of business.
D. It prohibits the debtor from making any payment of its liabilities outstanding as of
the commencement date except as may be provided in the Act.
Answer: C. A stay order or suspension order prohibits the debtor from selling,
encumbering, transferring or disposing in any manner any of its properties except in the
ordinary course of business.
CORPORATE REHABILITATION
Question 1
It shall refer to the financial condition of a debtor that is generally unable to pay its
or his liabilities as they fall due in the ordinary course of business or has liabilities
that are greater than its or his assets.
A. Bankrupt
B. Insolvent
C. Indebted
D. Dissolved
Answer: B.
Question 2
Voluntary proceeding differs from involuntary proceeding in that it is initiated by the
A. Court
B. Insolvent debtor
C. Creditors
D. Receiver
Answer: B.
Question 3
Involuntary proceedings are initiated by the
A. Court
B. Insolvent debtor
C. Creditors
D. Receiver
Answer: C.
Question 4
An insolvent debtor may initiate involuntary proceeding by filing a petition for
rehabilitation with the court only if with the prior approval of the following (choose
the incorrect one):
A. the owner in the case of a sole proprietorship
B. the majority of the partners in the case of a partnership
C. the vote of at least 2/3 of the members of a nonstock corporation, in a member’s
meeting called for the purpose
D. the the majority of the vote of the board of directors or trustees and authorized by
the vote of the stockholders representing at least majority of the outstanding capital
stock, in a meeting called for the purpose
Answer: D. For the stockholders, the required vote is at least 2/3 of the outstanding
capital stock.
Question 5
Which of the following creditor or group of creditors may initiate involuntary proceeding
against the debtor by filing a petition for rehabilitation with the court?
A. A creditor with a claim of P500,000
B. Group of creditors with aggregate claim of P750,000
C. A creditor with a claim of P800,000
D. Group of creditors with aggregate claim of P1,000,000
Answer: D. Any creditor or group of creditors with a claim of, or the aggregate of whose
claims is, at least P1,000,000. or at least twenty-five percent (25%) of the subscribed
capital stock or partners’ contributions, whichever is higher, may initiate involuntary
proceedings against the debtor by filing a petition for rehabilitation with the court.
Question 6
An individual debtor who, possessing sufficient property to cover all his debts
but foreseeing the impossibility of meeting them when they respectively fall due, may
file a verified petition that he be declared in the state of __________________ by the
court of the province or city in which he has resides for six (6) months prior to the
filing of his petition.
A. bankruptcy
B. suspension of payments
C. insolvency
D. liquidation
Answer: B.
Question 7
In a petition for declaration for the state of suspension of payments, which of the
following is not required as a minimum attachment?
A. A schedule of assets and liabilities
B. An inventory of assets
C. A proposed agreement with creditors
D. A list of all loans in the last 5 years
Answer: D.
Question 8
It refers to the restoration of the debtor to a condition of successful operation and
solvency.
A. Reorganization
B. Rehabilitation
C. Reconditioning
D. Liquidation
Answer: B.
Question 9
Which of the following is least likely included as a rehabilitation plan?
A. Debt-equity conversion
B. Quasi-reorganization
C. Liquidation
D. Dacion en pago
Answer: C. Liquidation is the process of realizing the assets of the company,
distributing the proceeds to rightful claimants and bringing an end to the business, a
process opposite to rehabilitation.
Question 10
Which of the following is not an effect of a stay order or suspension order?
A. It suspends all actions or proceedings, in court or otherwise, for the enforcement of
claims against the debtor.
B. It suspends all actions to enforce any judgment, attachment or other provisional
remedies against the debtor.
C. It prohibits the debtor from selling, encumbering, transferring or disposing in any
manner any of its properties even if it is in the ordinary course of business.
D. It prohibits the debtor from making any payment of its liabilities outstanding as of
the commencement date except as may be provided in the Act.
Answer: C. A stay order or suspension order prohibits the debtor from selling,
encumbering, transferring or disposing in any manner any of its properties except in the
ordinary course of business.
LAW ON BOUNCING CHECKS (BP Blg. 22)

Question 1
Which of the following is not one of the elements of violation of BP Blg. 22?
A. the making, drawing, and issuance of any check to apply for account or for value
B. the knowledge of the maker, drawer, or issuer that at the time of issue he does not
have sufficient funds in or credit with the drawee bank for the payment of the check in
full upon its presentment
C. the subsequent dishonor of the check by the drawee bank for insufficiency of funds or
credit or dishonor for the same reason had not the drawer, without any valid cause,
ordered the bank to stop payment
D. the subsequent payment by the drawer to the holder of the check after it was
dishonored by the drawee bank upon presentment
Answer: D.
Question 2
A bounced or worthless check is also known as a
A. Post-dated check
B. Crossed check
C. Bum check
D. Special check
Answer: C.
Question 3
Which of the are checks without sufficient fund, as contemplated by BP Blg. 22.
I. A check dishonored by the bank upon presentment, due to insufficiency of funds, and
the issuer has knowledge of insufficiency at the time of issue
II. A check which would have been dishonored for insufficiency, were it not for the
drawer’s unjustifiable order to his bank to stop the payment of the check
III. A check dishonored for insufficiency when presented for payment within 90 days from
issue, even if there was sufficient fund at the time of issue
A. I and II only
B. I and III only
C. II and III only
D. I, II and III
Answer: D.
Question 4
A issued check in favor of B. A knew at the time of issue that the check has no
sufficient fund in the drawee bank. Upon presentment by B, the bank dishonored the check
for insufficiency. B filed charges against A for violation of BP Blg. 22. A, however,
subsequently issued another check to B in payment of the amount covered by the original
check. Can A still be charged with violation of BP Blg. 22?
A. No, because the subsequent check cleared the offense
B. No, because there is no more unpaid debt
C. No, because no person shall be imprisoned for debt
D. Yes, because what is punished is the act of issuing a worthless check
Answer: D. The law has made the mere act of issuing a bum check a malum prohibitum, an
act proscribed by legislature for being deemed pernicious and inimical to public
welfare. The gravamen of the offense under this law is the act of issuing a worthless
check or a check that is dishonored upon its presentment for payment. Thus, even if there
had been payment, through compensation or some other means, there could still be
prosecution for violation of B.P. 22. (Tan vs. Mendez, GR No. 138669, June 6, 2002).
Question 5
As used in BP Blg. 22, it shall mean an arrangement or understanding with the bank for
the payment of check.
A. Debit
B. Credit
C. Deposit
D. Withdrawal
Answer: B.
Question 6
When a worthless check is issued by a corporate entity, who shall be liable?
A. the shareholders
B. the corporate officers signing the check
C. the Board of Directors
D. no one
Answer: B. Where the check is drawn by a corporation, company or entity, the person or
persons who actually signed the check in behalf of such drawer (i.e. the corporation,
company or entity) shall be liable. This means that the officers signing the check for
the corporation will be the ones liable.
Question 7
Persons guilty of issuing checks without sufficient funds face which two of the following
sanctions?
A. Imprisonment of not less than 30 days but not more than 1 year
B. Imprisonment of not less than 60 days but not more than 2 years
C. Fine equal to the amount of the check
D. Fine of not less than but not more than double the amount of the check
Answer: A and D. The punishment shall be either imprisonment of not less than 30 days but
not more than 1 year, or fine of not less than but not more than double the amount of the
check.
Question 8
The making, drawing and issuance of a check payment of which is refused by the drawee
because of insufficient funds in or credit with such bank, when presented within ninety
(90) days from the date of the check, shall be
A. prima facie evidence of knowledge of such insufficiency of funds or credit
B. conclusive evidence of knowledge of such insufficiency of funds or credit
C. indisputable evidence of knowledge of such insufficiency of funds or credit
D. proof beyond reasonable doubt of knowledge of such insufficiency of funds or credit
Answer: A. However, this presumption does not apply when the maker or drawer pays the
holder of the check the amount due, or makes arrangement for payment in full by the
drawee of such check within 5 banking days after receiving notice that such check has not
been paid by the drawee.
Question 9
When a check presented has bounced, it is the drawee bank’s duty to
A. initiate the filing of charges against the drawer for violation of BP Blg. 22
B. advise the payee of the check to file charges against the drawer for violation of BP
Blg. 22
C. cause to be written, printed, or stamped on the check, in plain language, or attached
thereto, the reason for its dishonor or refusal to pay
D. All of the above
Answer: C. Moreover, where there are no sufficient funds in or credit with such drawee
bank, such fact shall always be explicitly stated in the notice of dishonor or refusal.
GENERAL BANKING LAWS
Question 1
Which of the following does not characterize a bank or banking institution?
A. Authorized to engage in lending of funds
B. Funds for lending are obtained mainly from private institutions
C. Funds are from receipt of deposits or sale of bonds
D. It conducts banking activities on a regular basis
Answer: B. The funds used by the bank from lending are mainly from the public through the
receipt of deposits or the sale of bonds, securities, or obligations of any kind.
Question 2
Which of the following is excluded from the term “banking institution”?
A. Building and loan association
B. Money changer
C. Trust company
D. Savings bank
Answer: B. Bank or banking institutions include commercial, savings and mortgage banks,
trust companies, savings and loan associations, Philippine branches and agencies of
foreign banks and all other corporations, companies, partnerships and associations
performing banking functions in the Philippines.
Question 3
True/False. Insurance companies are included in the provisions of Republic Act No. 337 or
the General Banking Law.
Answer: False. Insurance companies are exempted from the provisions of RA No. 337.
Question 4
Which of the following security cannot be issued by banks?
A. Preferred stock
B. Common stock
C. Bonded instrument
D. No par value stock
Answer: D. No banking institution shall issue no par value stock.
Question 5
At least what percent of the capital stock of any banking institution shall be owned by
citizens of the Philippines?
A. 50%
B. 60%
C. 75%
D. 90%
Answer: B.
Question 6
What type of banking institution is one which accepts or creates demand deposits subject
to withdrawal by check?
A. Trust company
B. Mortgage bank
C. Commercial bank
D. Building and loan association
Answer: C.
Question 7
Which of the following is not a purpose of a building and loan association?
A. to accumulate the savings of its stockholders
B. to repay to stockholders their accumulated savings and profits upon surrender of their
shares
C. to loan its funds to stockholders of the security of unencumbered real estate
D. to act as trustee or administer any trust or hold property in trust or on deposit for
the benefit of others
Answer: D. What is described here is the purpose of a trust corporation.
Question 8
True/False. Commercial banking institutions cannot engage in the business of a trust
company.
Answer: False. A commercial banking corporation may, with the approval of the Monetary
Board, be authorized to engage in the business of a trust company, but shall be subject
to the provisions related to the trust corporations as regards its trust business.
Question 9
What does the D in DOSRI represent?
A. Dividends
B. Directors
C. Discounts
D. Depreciation
Answer: D. DOSRI stands dealings with Directors, Officers, Stockholders and their Related
Interests.
Question 10
DOSRI should be in the regular course of business and the dealings should be upon which
terms?
A. Not more favorable to the bank than those offered to others
B. Not less favorable to the bank than those offered to others
C. Exactly similar to those offered to others
D. Double those offered to others
Answer: B. The dealings should be upon terms not less favorable to the bank than those
offered to others.
Question 11
A substantial stockholder shall mean a person, or group of persons whether natural or
juridical, owning such number of shares that will allow such person or group to elect at
least _______________ of the board of directors of a bank or who is directly or
indirectly the registered or beneficial owner of more than _______________ of any class
of its equity security.
A. 1 member; 20%
B. 2 members; 10%
C. 1 member; 10%
D. 2 members; 20%
Answer: C.
Question 12
What does SBL stand for?
A. Standard By Laws
B. Secured Banking Legislation
C. Single Borrower’s Limit
D. See Bottom Line
Answer: C.
Question 13
Per Bangko Sentral ng Pilipinas Circular No. 425, series of 2004, consistent with
national interest, the total amount of loans, credit accommodations and guarantees that
may be extended by a bank to any person, partnership, association, corporation or other
entity shall at no time exceed ______ of the net worth of such bank.
A. 10%
B. 20%
C. 25%
D. 40%
Answer: C.
Question 14
With certain requirements, SBL can be increased by what percent?
A. 5%
B. 10%
C. 15%
D. 20%
Answer: B. It can be increased by an additional 10%; Provided, That the additional
liabilities are adequately secured by trust receipts, shipping documents, warehouse
receipts or other similar documents transferring or securing title covering readily
marketable, non-perishable goods which must be fully covered by insurance.
ANTI-MONEY LAUNDERING ACT

Question 1
As to the character of the offense, “Money Laundering” is
A. Civil
B. Criminal
C. Political
D. Natural
Answer: B. Money laundering is a crime whereby the proceeds of an unlawful activity are
transacted, thereby making them appear to have originated from legitimate sources.
Question 2
What is the threshold figure for a “covered transaction”?
A. at least P500,000
B. more than P500,000
C. at least P4,000,000
D. more than P4,000,000
Answer: B. A covered transaction is a transaction in cash or other equivalent monetary
instrument involving a total amount of more than P500,000 within 1 banking day. (Note:
the more than P4,000,000 threshold was before the amendments made under RA No. 9194).
Question 3
True/False. The “more than P500,000” threshold applies to “suspicious transactions”.
Answer: False. Suspicious transactions are transactions with covered institutions,
regardless of the amounts involved, where any of the circumstances enumerated in the law
exist.
Question 4
Suspicious transactions are transactions with covered institutions, regardless of the
amounts involved, where any of the following circumstances exist (choose the exception):
A. there is no underlying legal or trade obligation, purpose or economic justification
B. the client is not properly identified
C. the amount involved is commensurate with the business or financial capacity of the
client
D. the transactions is in a way related to an unlawful activity or offense under the Act
that is about to be, is being or has been committed
Answer: C. The phrase should read as: “not commensurate”.
Question 5
Suspicious transactions shall be reported by covered persons. Which of the following is
least likely considered as a covered person?
A. Bank or banking institution
B. Insurance company
C. Jewelry dealer in precious metal
D. Lawyer acting as independent legal counsel
Answer: D. Covered persons shall not include lawyers and accountants acting as
independent legal professionals in relation to information concerning their clients or
where disclosure of information would compromise client confidences or the attorney-
client relationship.
Question 6
To which specific body shall covered persons report the occurrence of suspicious
transactions?
A. COA – Commission on Audit
B. BSP – Bangko Sentral Ng Pilipinas
C. AMLC – Anti-Money Laundering Council
D. PDIC – Philippine Deposit Insurance Commission
Answer: C. Covered persons shall report to the AMLC all covered transactions and
suspicious transactions.
Question 7
Within how many days shall covered persons report to the AMLC the occurrence of
suspicious transactions?
A. 1 working day
B. 3 working days
C. 5 working days
D. 7 working days
Answer: C. Covered persons shall report to the AMLC all covered transactions and
suspicious transactions within 5 working days from occurrence thereof, unless the AMLC
prescribes a different period not exceeding 15 working days.
NEW CENTRAL BANK ACT

Question 1
It means that, when a currency is offered in payment of a debt, public or private, the
same must be accepted.
A. Purchasing power
B. Negotiability of instrument
C. Legal tender power
D. Liquidity of money
Answer: C.
Question 2
Which of the following does not constitute legal tender?
A. 1,000 pieces of P20-bill
B. 100 pieces of P20-bill and 100 pieces of P10-coin
C. 300 pieces of P5-coin
D. Centavo coins worth P100
Answer: C. Philippine currency notes (bills) have no limit to their legal tender power.
For coins, centavos are acceptable up to P100, while other coins (P1, P5, P10) are
acceptable up to P1,000.
Question 3
Which of the following has legal tender power?
I. Checks representing demand deposit
II. Negotiable promissory note
A. I only
B. II only
C. Both I and II
D. Neither I nor II
Answer: D. Checks representing demand deposits do not have legal tender power and their
acceptance in the payment of debts, both public and private, is at the option of the
creditor: Provided, however, That a check which has been cleared and credited to the
account of the creditor shall be equivalent to a delivery to the creditor of cash in an
amount equal to the amount credited to his account. Negotiable instruments do not have
legal tender power.
Question 4
Which government institution has the sole authority to issue notes and coins for
circulation in the Philippines?
A. Bureau of Treasury
B. Bureau of Internal Revenue
C. Bangko Sentral Ng Pilipinas
D. Landbank of the Philippines
Answer: C.
Question 5
It is an attempt to save the bank from bankruptcy and eventual liquidation.
A. Liquidation
B. Conservatorship
C. Receivership
D. Dissolution
Answer: B. Broadly defined, conservatorship is an attempt to save the bank from
bankruptcy and eventual liquidation. Doing so entails appointment of a conservator who
will take steps such as management reforms and infusion of additional capital.
Question 6
Who appoints the conservator?
A. Monetary Board
B. Commission on Audit
C. Depositor
D. Court
Answer: A.
Question 7
Which of the following is not one of the functions of the conservator?
A. Take charge of the assets, liabilities and management of a bank or quasi-bank
B. Reorganize the management
C. Collect all monies and debts due to the bank
D. Administer the bank’s assets and liabilities for the benefit of its creditors
Answer: D. Administering the bank’s assets and liabilities for the benefit of creditors
is a function of a receiver, not conservator.
Question 8
The conservatorship shall be for a period
A. Of at least 1 year
B. Of at least 2 years
C. Not to exceed 1 year
D. Not to exceed 2 years
Answer: C. The conservatorship shall not exceed 1 year.
Question 9
It is the summary closure of the bank by the Bangko Sentral ng Pilipinas without the need
of prior notice and hearing.
A. Conservatorship
B. Receivership
C. Liquidation
D. Rehabilitation
Answer: B.
Question 10
The bank or banking institution is placed under receivership upon finding of the Monetary
Board of the following (choose the exception):
A. Inability to pay liabilities
B. Insufficiency of realizable assets to meet its liabilities
C. Inability to continue business without involving probable loss to depositors and
creditors
D. Inability to declare dividends
Answer: D.
Question 11
Who among the following has the task of paying the claims of creditors and other
liabilities of the bank?
A. Conservator
B. Receiver
C. Liquidator
D. President
Answer: C.
Question 12
Receivership shall not exceed
A. 30 days
B. 90 days
C. 120 days
D. 60 days
Answer: B.
Question 13
Which of the following is not a function of a receiver?
A. Gather and take charge of all the assets and liabilities of the bank
B. Administer the assets and liabilities for the benefit of its creditors
C. Exercise the general powers of a receiver under the Revised Rules of Court
D. Pay or commit any act that will involve the transfer or disposition of any asset of
the bank
Answer: D. With the exception of administrative expenditures, the receiver shall not pay
or commit any act that will involve the transfer or disposition of any asset of the
institution. However, the receiver may deposit or place the funds of the institution in
non-speculative investments.
PHILIPPINE DEPOSIT INSURANCE ACT (PDIC)

Question 1
Which of the following is not a function of the PDIC?
A. Deposit insurer
B. Co-regulator of banks
C. Receiver and liquidator of closed banks
D. Engage in the lending of funds obtained from the public
Answer: D. This is a function of banks or banking institutions.
Question 2
What is the amount of insured deposit?
A. Minimum of P500,000, gross
B. Maximum of P500,000, gross
C. Maximum of P500,000, net
D. Minimum of P500,000 net
Answer: C. The insured deposit is net of any obligation of the depositor to the insured
bank as of the date of closure, but not to exceed P500,000.
Question 3
True/False. Joint accounts shall be insured separately from any individually-owned
deposit account.
Answer: True.
Case 1 (for questions 4 to 8)

Juan dela Cruz has the following deposits in Bank 1:
– Individual account in his name: P600,000 savings deposit
– Joint account in his name AND Maria dela Cruz: P500,000 time deposit
– Joint account in his name OR Pedro dela Cruz: P800,000 demand deposit
Assume that for the joint accounts, there is equal sharing.
(Source: PDIC)
Question 4
What is the total insured deposit of Juan dela Cruz?
A. P500,000
B. P750,000
C. P1,000,000
D. P1,250,000
Answer: C. For the single/individual account = P500,000; for the AND joint account =
P250,000 (P500,000 maximum/2); for the OR joint account = P250,000 (P500,000 maximum/2)
Question 5
What is the total uninsured deposit of Juan dela Cruz?
A. P100,000
B. P250,000
C. P500,000
D. P600,000
Answer: B. For the single account = excess of P100,000; for the AND joint account = no
excess; for the OR joint account = excess of P150,000 (P300,000/2)
Question 6
What is the total insured deposit of Maria dela Cruz?
A. Zero
B. P250,000
C. P500,000
D. None of the choices
Answer: B. P500,000/2
Question 7
What is the total insured deposit of Pedro dela Cruz?
A. Zero
B. P250,000
C. P400,000
D. P500,000
Answer: B. Maximum P500,000/2
Question 8
What is the total uninsured deposit of Pedro dela Cruz?
A. Zero
B. P100,000
C. P150,000
D. P250,000
Answer: C. Excess of P300,000/2
Case 2 (questions 9 to 10)

In addition to the accounts in Case 1, assume that, the following joint account is also
maintained by Juan dela Cruz in the same bank:
– Joint account in his name or Maria dela Cruz or Pedro dela Cruz = P450,000 (equal
sharing)
Question 9
What is the total of insured deposit of Juan dela Cruz?
A. P500,000
B. P1,000,000
C. P1,150,000
D. None of the choices
Answer: B. The joint accounts will be insured separately from the individual account.
However, the share of Juan dela Cruz in the joint accounts shall not exceed P500,000
total (which has been reached already in Case 1 Question 4). This means that the
additional P150,000 share (P450,000/3) will become uninsured deposit.
Question 10
What is the total of insured deposit of Pedro dela Cruz?
A. P250,000
B. P400,000
C. P500,000
D. P600,000
Answer: D. Share in joint OR account = P250,000 (maximum of P500,000/2); share in 3-way
joint OR account = P150,000 (P450,000/3)
Question 11
The portion of the deposit not insured shall
A. Be forfeited in favor of the bank
B. Be forfeited in favor of the Government
C. Become a claim against the asset of the closed bank
D. Be written off immediately by the depositor
Answer: C
Question 12
Deposits in which of the following banks are insured by the PDIC?
I. Commercial banks
II. Savings and mortgage banks
III. Private development banks
IV. Cooperative banks
V. Savings and loan associations
A. All except IV
B. All except V
C. All except IV and V
D. All banks enumerated above
Answer: D.
Question 13
True/False. Foreign currency deposits are also insured by the PDIC.
Answer: True. This is pursuant to RA No. 6426 and Central Bank Circular No. 1389.
Question 14
The PDIC will not pay deposit insurance on the following accounts or transactions. Which
is the exception?
A. Investments in bonds
B. Deposit products emanating from unsafe and unsound banking practices
C. Deposits from unlawful proceeds
D. Deposits in foreign currency
Answer: D.
Question 15
True/False. Deposits in different banks are added together for the purpose of the
P500,000 maximum.
True/False. Deposits in different branches of the same bank are insured separately.
A. False, True
B. True, False
C. False, False
D. True, True
Answer: C. Deposits in different banks are separately insured. Deposits in different
branches of the same bank are considered as deposits in one bank.
Question 16
To file for claims on the insured deposits, which of the following is/are not required?
A. Original evidence of deposits such as savings passbook
B. Claim form
C. For all depositors, photocopy of birth certificate and valid ID of the parent
D. 1 valid original photo-bearing ID with clear signature of depositor
Answer: C. This is only required for depositors below 18 years old.
Question 17
Depositors with valid deposit accounts with balances of ___________________ are not
required to file claims, provided they meet other qualifications, as required.
A. P100,000 and below
B. P150,000 and below
C. P200,000 and below
D. P250,000 and below
Answer: A.
Question 18
A joint demand deposit account in the name of Juan dela Cruz and ABC Corporation in the
amount of P500,000 was held in Bank 1. What is the insured deposit of Juan dela Cruz?
A. Zero
B. P250,000
C. P500,000
D. P100,000
Answer: A. The deposit is presumed to belong entirely to ABC Corporation, the juridical
person or entity in the joint account.
SECRECY OF BANK DEPOSITS ACT

Question 1
Which of the following are covered by the bank secrecy law?
A. Only demand deposits
B. All deposits of whatever nature
C. Investments in bonds issued by the Philippine Government
D. B and D
Answer: D. The law states that 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 considered
absolutely confidential.
Question 2
True/False. Foreign currency deposits are excluded from the protection of bank secrecy
laws.
Answer: False. Republic Act No. 6426, known as the “Foreign Currency Deposit Act of the
Philippines”, Sec. 8 states that all foreign currency deposits are also considered of an
absolutely confidential nature.
Question 3
In all of the following cases, the deposits may be examined, inquired or looked into by
any person, government official, bureau or office. Choose the exception.
A. When permitted (written) by the depositor
B. In cases of impeachment
C. When the depositor is a public official
D. In cases where the money deposited or invested is the subject matter of litigation
Answer: C. Being a public official does not automatically waive the right to bank
secrecy. The deposit may only be examined, inquired or looked into upon order of
competent court in cases of bribery or dereliction of duty of public officials.
Question 4
Can independent external auditors inquire into or examine bank deposits during the course
of the audit?
A. Yes, anytime.
B. Yes, in the regular audit of the bank, with conditions
C. No, because of the absolute nature of secrecy
D. No, unless the auditor has reason to believe that bank fraud exists
Answer: B. Presidential Decree No. 1792, amending Republic Act No. 1405 states that,
during a regular audit of a bank by an independent auditor, the auditor may inquire,
examine or look into deposits, provided that the following conditions are satisfied: a)
the examination is for audit purposes only, and b) the results of the examination shall
be for the exclusive use of the bank.
Question 5
Violations of the bank secrecy law subjects the offender, upon conviction, to which of
the following?
A. Imprisonment of not more than 2 years or fine of not more than P20,000 or both
B. Imprisonment of not more than 5 years or fine of not more than P20,000 or both
C. Imprisonment of not more than 2 years or fine of not more than P40,000 or both
D. Imprisonment of not more than 5 years or fine of not more than P40,000 or both
Answer: B.
INTELLECTUAL PROPERTY LAW
1. The Sogod Hotel chain reproduces DVD’s, distributes the copies thereof to its hotels
and makes them available to hotel guests for viewing in the hotel guest rooms and
charges a separate fee for the use of the DVD players. Is Sogod Hotel liable for
infringement?
A. Yes, because the reproduction of the DVD’s violate the copyright or economic rights of
the owner of the film. The hotel charge fees for the use of DVD player as well as
there are room charges, they earn gain from the use of the DVD because it entice the
guests to check-in in their hotel.
B. No, the DVD viewing is done privately in the hotel guest rooms.
C. None of the choices
D. No, the DVD viewing is part of the hotel services and it is the use of the DVD players
that is charged and not the cost of the DVD.
2. Paul, doing a cosmetics business, owns a copyright to the name of its facial cream
“chin chin suk” and patent rights for its heart shape case. John, who owns a
merchandising company advertised and sold the same product to the public. Paul filed a
petition for preliminary injunction against John for violation of his patent and
copyright. Rule.
A. A preliminary injunction under the rules of court is not the proper remedy in this
case
B. The copyright and patent of the name effectively protects Paul from unauthorized use
of the same to the exclusion of others
C. The copyright and patent registration of a trade name would not guarantee the
registrant the right to the exclusive use of the product, not being the proper
subjects thereof.
D. All choices
3. Alberto found that the theory of relativity of Einstein is wrong and the correct
formula is E=MC/2. He filed a patent for the same. A relative of Einstein learned of
the application and went here to pray for the denial of the application. Rule.
A.
A. The relative of Einstein has no personality to file the petition
B. The application should be denied since the formula has no relevance to any human
B.
activity or solves any problem
C.
D. The application should be denied since the new formula needs to be validated by the
science community
4. Narciso Planas invented a gas-saving device, manufactured and sold it to the market
without securing a patent. San Miguel Co., a rich and well-known company, bought one
gadget, dismantled the device and studied it. In due time, the company is
manufacturing a gas-saving device similar to the invention of Narciso Planas. Before
offering it for sale, the company secured a patent. Below are the actions and defenses
available for Narciso Planas. Which of the following statements are correct?
Statement 1: Narciso Planas should first bring an action for the cancellation of the
patent illegally secured by San Miguel Company and on the said proceedings, he must
prove that he invented the device.
Statement 2: Narciso Planas, being the inventor of the gadget, is the owner of an
intellectual creation and is entitled to legal protection of said property right from
the unauthorized use of the same by another person or entity.
Statement 3: While the cancellation proceedings are pending, Narciso Planas may ask
the court for preliminary injunction to prevent San Miguel from manufacturing more
gadgets.
Statement 4: San Miguel Co. has a better right over the invention because they secured
a patent before selling the device.
A. Statement 4 is correct
B. Statements 1, 2 and 3 are correct
C. Statements 1 and 2 are correct.
D. Statements 1 and 3 are correct
D.
5. Read the following statements and determine which of the choices are correct:
Statement 1: Infringement is the use by others without the registrant’s consent of a
reproduction or colorable imitation of his trademark, tradename or service mark with
the purpose of causing to mislead or misleading the public that those goods or
services are those of the registrant.
Statement 2: The definition of infringement implies that only registered trademarks,
trade names and service marks are protected against infringement or unauthorized use
by another or others
A. Only Statement 1 is true
B. Both statements are true
C. Neither statements is true
D. Only Statement 2 is true
6. Which of the following works are protected and can be copyrighted?

A. A biography containing your life, love and success.
B. None of the choices
C. News of the day and other facts having the character of mere press information.
D. Any work of the Government of the Philippines.
7. Application 1: Patent for the treatment of the human body by therapy

Application 2: Trademark for the signature of President Marcos with the consent of
Senator Bong Bong Marcos
Application 3: Copyright for a computer program invented by a professor
Which should be approved?
A. Application 3
B. Application 2
C. Applications 2 & 3
D. Application 1
8. Ely commissioned Marcus, a renowned artist, to paint a mural in the lobby of his
newly renovated building located at Binondo, for the sum of P2.0 million. Later
on, an infringement case was filed by Marcus against Raimund. Raimund contended
that Marcus has no right to file the case. Rule.
A. Marcus has no right because he has no interest to the painting
B. Marcus has no right since Ely owns the painting
C. Marcus has a right provided he obtains the consent of Ely being as the owner of
the painting.
D. Marcus has a right since he owns the copyright to the painting , being its
creator.
9. Rico is a laptop repair technician. A defective laptop was sold to him. He was
able to fix. In its hardrive, he found a program which he used to develop
FACELOOK. Later, Bob filed an action for damages on account of an infringement of
copyright on the program which he owns. Rico raised as a defense that he was
unaware that what he used was a copyright material. Rule.
A. The defense is not valid since there was bad faith when he copied the program
considering that the laptop was only sold to him
B. The defense is valid. Good faith can be used in this case since the laptop is
already beyond repair when it was sold to him.
C. The defense is not valid. It is immaterial whether the infringer was aware or
not that the material he copied has a copyright.
D. The defense is valid since the computer program is an invention hence, not
covered by a copyright
10. Piolo and Sam are famous personalities who kept a secret love affair. They
used a special instant messaging service which allows them to see one another’s
typing on their screen as each letter is pressed. When KC, the controller of
the service facility, found out their identities, she kept a copy of all the
messages, including the song composed by Sam for Piolo, and later published
them. Is KC liable for copyright infringement?
A. No, the letters are not in the form required by law to be protected by
copyright
B. Yes, the law does not distinguish if the letters are handwritten or in
electronic form
C. Yes, provided the electronic data is authenticated
D. No, there is no artistic or literary work in the letters published
11. Mark manufactured rubber shoes under the brand name of Koby. He did not register it
but it became popular. Years later, Nelson manufactured rubber shoes using the same
design and color as Koby but named it as Shak. Mark filed a case against Nelson.
Nelson contended that the name Koby is not protected. Rule.
A. Nelson is liable since the name is already popular
B. Nelson is not liable since the name is not registered
C. Nelson is liable but not for infringement
D. Nelson is not liable because he gave it a different name
12. Che Che invented a device that can transform rain into fuel. He asked Guevarra to
help him register it. Guevarra suggested that they form a company and register the
same. While the application is pending, CheChe died. Castro, the estranged husband of
CheChe now comes contesting the application of the corporation and filed his own
patent application as the sole surviving heir. Rule.
A. Castro has no right since the right to the invention retroacts from its filing hence,
favors the corporation
B. Castro has a right being the heir of Che Che. It also appears that the corporation is
not authorized to file the application
C. Castro has no right since property rights to the invention already passed to the
corporation
D. Castro has a right provided it is proven in the estate proceedings of Che Che
13. Unilevel Corporation asked your legal advice regarding their plan to use a
trademark with the words “SWEET CANDY” However, there is an existing and registered
trademark using the words “TWEET CANDY” Which of the following advices are correct.
A. Unilevel is a well-known company and their products are patronized country-wide, they
can use the trademark SWEET CANDY because TWEET CANDY is owned by a small-time company
whose market is within Luzon only.
B. None of the choices
C. The firm must abandon the plan because another company uses the trademark Tweet Candy
and there is a danger of a suit for infringement. The words Sweet and Tweet is almost
similar in sound and they can confuse or mislead the public.
D. They can use the SWEET CANDY as long as there will be a very different packaging and
flavors so as not to mislead the public.
14. Kris Aquino commissioned Mr. Magaling to write a biography of her late father,
Ninoy Aquino, for a fee. Upon completion of the work, Kris paid Mr. Magaling the
agreed price. The biography was copyrighted. Kris, however, changed her mind again
upon reading the book and decided not to have it published. Can Kris Aquino sell the
property without the consent of Mr. Magaling?
A. Yes, Kris Aquino can sell the copyrighted biography of her father without need of
securing the consent of Mr. Magaling, the writer of said biography.
B. Mr. Magaling entered into a contract with Kris Aquino and having compensated, he had
parted with all his rights to the said book, in effect making Kris his assignee.
C. All choices
D. The assignee’s rights include the right to sell the work without the consent of the
writer, Mr. Magaling.
15. X sold its energy drink under the brand name of Cobra. He registered a trademark
for the drink. Subsequently, Y manufactured boots and sold it under the name of Cobra.
X knows that there is no infringement since they have different products. But he wants
to file a case on the ground of the theory of dilution so that the case will prosper.
He asks you now what are the conditions so he can use this theory.
A. Actual damage is suffered by the X
B. If there is a connection between the energy drink and the boots
D. There is confusion in the market as a result of the same brand name with different
products

Regulatory Framework For Business Transactions Special Laws Q & A Notes

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REGULATORY FRAMEWORK FOR BUSINESS TRANSACTIONS

SPECIAL LAWS Q & A NOTES

INSOLVENCY & CORPORATE REHABILITATION

What questions will be asked from this law?

What is the relevant statute for this topic?

What is the State’s policy on rehabilitation and insolvency?

How shall rehabilitation or liquidation be facilitated?

What do you mean by insolvent?

What is the main difference between voluntary and involuntary proceeding?

What is the approval requirement for voluntary proceeding?

How is involuntary proceeding initiated?

What is suspension of payment?

When is rehabilitation possible?

What is a rehabilitation plan?

 sale of the business (or parts of it) as a going concern

What is a stay order or suspension order?

LAW ON BOUNCING CHECKS

What specific points will be asked from this topic?

What is the relevant law on this topic?

What is a bounced check?

What does the law say on checks without sufficient funds?

What does credit mean?

Who shall be liable?

Who shall be liable in case the check is issued by a corporation?

What is the punishment?

What is the evidence of knowledge of insufficient funds?

Is there an exception to the presumption above?

What is the duty of the drawee of a bounced check?

GENERAL BANKING LAWS

What specific topics will be asked from this law?

What is the relevant statute on this topic?

What is a bank or a banking institution?

What does the term bank or banking institution include?

How shall domestic banks be organized?

What type of stocks may be issued by banks?

What is the directorship requirement for banks?

What is a commercial banking corporation?

What is a savings and mortgage banks?

What are building and loan associations?

What loan is prohibited for a building and loan association?

What is a trust corporation?

Can a trust corporation engage in commercial banking?

Can a commercial bank engage in the business of a trust company?

What specific business cannot be entered into by banking institutions?

What is the general policy for DOSRI?

What is the DOSRI rule?

What is a substantial stockholder?

What is the single borrower’s limit?

Can the single borrower’s limit be increased?

NEW CENTRAL BANK ACT

What specific points will be asked from this topic?

What is the relevant law on this topic?

What is the legal tender power of the Bangko Sentral ng Pilipinas?

What does the “legal tender power” of a currency mean?

Under what authority does the BSP issue currency?

When is a conservator needed?

Who appoints the conservator?

For under what duration shall the conservatorship be?

When is a bank or quasi-bank placed under receivership?

Who shall function as the receiver?

What are the functions of the receiver?

For under what duration shall the receivership be?

What happens during or after the 90 days of receivership?