Republic Act No.

6426

Foreign Currency
Deposit Act of the
Philippines
 FOREIGN CURRENCY
DEPOSITS
 fundsin foreign currencies which are
accepted and held by authorized banks
in the regular course of business with
the obligation to return an equivalent
amount to the owner thereof, with or
without interest
 Authority to Deposit Foreign Currencies
(Sec.2)
 WHO MAY DEPOSIT? Any person, natural or juridical may deposit with
Philippine banks in good standing, as may, upon application, be
designated by the Central Bank for the purpose.

 WHAT TO DEPOSIT? Foreign currencies which are acceptable as part

of the international reserve, except those which are required by the
Central Bank to be surrendered in accordance with the provisions of
Republic Act No. 265.
 Authority of Banks To Accept Foreign
Currency Deposit
(Sec. 3)
 1) To accept deposits and to accept foreign currencies in
trust: Provided, That numbered accounts for recording
and servicing of said deposits shall be allowed;
 2) To issue certificates to evidence such deposits;
 3) To discount said certificates;
 4) To accept said deposits as collateral for loans subject to
such rules and regulations as may be promulgated by the
Central Bank from time to time; and
 5) To pay interest in foreign currency on such deposits.
Absolute Confidentiality of Foreign
Currency Deposits

 The secrecy of deposits under this Act shall be governed in

accordance with the provisions of Republic Act No. 1405.
 All foreign currency deposits are absolutely confidential
and cannot be examined, inquired, or looked into by any
person, government official, bureau or office, whether
judicial or administrative or legislative, or any other
private or public entity.
 Foreign currency deposits are also exempt from
attachment, garnishment, or any other order or process of
any court, legislative body, government agency or any
administrative body whatsoever.
Secrecy Of Foreign Currency Deposits

Allforeign currency deposits under

this Act are considered of an
absolutely confidential nature,
EXCEPT upon the written
permission of the depositor
 Exceptions under Other Laws

 a. Directors, officers, stockholders and related interests

who contract a loan or any form of financial
accommodation with their bank or related bank are
required to execute a written waiver of secrecy of
deposits pursuant to The New Central Bank Act. (Sec. 26,
Rep. Act No. 7653)
 Exceptions under Other Laws
 b.
The Commissioner of Internal Revenue is
authorized to inquire into bank deposit
accounts in relation to:
 anapplication for compromise of tax liability or a
determination of a decedent’s gross estate under The
National Internal Revenue Code (Rep. Act No. 8424, as
amended by Rep. Act No. 10021); and
a request for tax information of made by a foreign tax
authority pursuant to a tax treaty under The Exchange of
Information on Tax Matters Act of 2009 (Rep. Act No.
8424, as amended by Rep. Act No. 10021).
 Exceptions under Other Laws
 c. The Anti-Money Laundering Council may be
authorized to examine and inquire into bank
deposits or investments with banking or non-bank
financial institutions:
i. with court order, when there is probable cause that
the deposits or investments are related to an unlawful
activity or a money laundering offense (Secs. 3(i) and
4 of Rep. Act No. 9160); and
ii. without need of court order, when probable cause
exists that a particular deposit or investment with any
banking institution is related to certain predicate
crimes, such as kidnapping for ransom, violation of the
Comprehensive Dangerous Drugs Act, hijacking and
other violations under Republic Act No. arson and
murder (Sec. 11 of Republic Act No. 9160)
 Exceptions under Other Laws
 d. The Bangko Sentral is authorized to:
i. inquire into or examine bank deposits and
investments in the course of a periodic or
special examination to ensure compliance
with The Anti- Money Laundering Act, in
accordance with the rules of examination
of the Bangko Sentral (Sec. 11, Rep. Act
No. 9160, as amended); and

ii. conduct annual testing which is limited to

the determination of the existence
 Exceptions under Jurisprudence on
Grounds of Equity

 Account of a Non-resident Alien

The garnishment of a foreign currency

deposit account of a non-resident alien
found guilty of raping a minor was
allowed on the basis of equity.
(Salvacion v. Central Bank of the
Philippines, 278 S.C.R.A. 27 [1997])
 Exceptions under Jurisprudence on
Grounds of Equity

 b. Account of a Co-payee of a Check

A co-payee of a check who filed a suit for

recovery of sum of money was considered, in a
pro hac vice ruling by the Supreme Court, as a
depositor in view of the distinctive
circumstances of the case. (China Banking
Corporation v. Court of Appeals, 511 S.C.R.A.
110 [2006])
 Penalties

 Violation of Republic Act No. 6426 shall subject the

offender, upon conviction, to the following penalties:
imprisonment of not less than one (1) year but not
more than five (5) years; or
fine of not less than Five Thousand Pesos
(P5,000.00) but not more than Twenty Five
Thousand Pesos (P25,000.00); or
both imprisonment and fine.
 Penalties

 The following sanctions may also be imposed

against a bank or any bank director and officer
for:
revocation of the authority of the bank to accept
new foreign currency deposits; and
administrative sanctions provided under Section 37
of the New Central Bank Act (Rep. Act No. 7653), as
may be applicable.