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 Banking
 Special Commercial Laws
 Financial Rehabilitation and Insolvency Act
 Negotiable Instruments Law

What is a letter of credit?

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Kinds of letter of credit

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What laws or rules govern

letter of credit?

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Parties to a letter of
credit/rights
Kinds of correspondent bank

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Does a correspondent bank

automatically assume the
obligation of a confirming
bank?

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Doctrine of Independence

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Where is the doctrine of

independence derived?

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Fraud Exception Principle

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Doctrine of Strict
Compliance

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TRUST RECEIPTS LAW

What is a Trust Receipt?

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Distinguish letter of credit

from trust receipt

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Are all obligations of the

entrustee criminal in
nature?

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Transaction considered a
loan even though
denominated as a trust
receipt

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Remedies available to the

entruster in case of violation
of the trust receipt
agreement

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What are the remedies

available to the
warehouseman to enforce his
lien?

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Banking Laws
Monetary Board

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How the BSP handles

banks in distress?

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Distinguish conservator
from receiver

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Law on Secrecy of Philippine

Currency Bank Deposits
(Ra 1405)
Laws on secrecy of bank funds

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In what cases may information on

Philippine currency bank deposits, as
well as investment in government
securities, be disclosed, examined or
looked into without violating the law?

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May the bank disclose information

about Philippine currency bank
deposits pursuant to a writ of
garnishment?

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General Banking Act

What is a Bank?

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Bank Liabilities

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What are the limitations on

the authority of the bank to
grant loan and security for
such loan?

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What do you mean by the

single borrower’s limit?

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What are the rules governing

transactions where DOSRI
may incur contractual
obligation with their banks?

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ANTI-MONEY
LAUNDERING LAW
(RA 9160, as amended by RA 10365)

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Obligations of covered
institutions/persons

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When is Money
Laundering committed?

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What is the meaning of

safe harbor provision
under AMLA?

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Bank inquiry
and freeze orders

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PHILIPPINE DEPOSIT
INSURANCE
CORPORATION

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Deposit accounts not entitled

to payment

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Prohibition against splitting

of deposits

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Prohibition against
issuance of TRO

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INANCIAL
REHABILITATION AND
INSOLVENCY ACT OF
2010 (R.A. No.10142)

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I. Rehabilitation
a. Court supervised rehabilitation
i. Voluntary
ii. Involuntary
b. Pre-negotiated rehabilitation
c. Out of court or informal restructuring agreement or
Rehabilitation Plan

II. Petition for liquidation

i. Voluntary
ii. Involuntary

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The procedure is as follows:

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3. The rehabilitation proceedings shall commence upon issuance of the

commencement order. The commencement order, among others, appoint the
rehabilitation receiver and set the case for initial hearing. It shall also include
a stay order which shall suspend all actions or proceedings for the
enforcement of claims against the debtor, as well as actions to enforce any
judgment or attachment or provisional remedy against the debtor; prohibits
disposition or encumbrance of property except in the ordinary course of
business and prohibit debtor from making any payment except when
authorized by the rules. The stay order does not include, among others, cases
on appeal with the sc, cases falling with a specialized court or quasi-judicial
agency, enforcement of claims against surety and other persons solidarily
liable with the debtor and third party or accommodation mortgagors as well
as issuers of letter of credit, unless the property subject of third party
mortgage is necessary for the rehabilitation of the debtor as determined by
the court; criminal action against the debtor.

4. At the hearing, court will direct creditors to give their comments to

the petition and rehab plan and the rehab receiver to submit report to
the court on whether debtor can be rehabilitated.
5. Receiver submits report to the court on whether debtor can be
rehabilitated.
6. Within ten days from submission of the report, the court may give
due course to the petition or convert the proceedings into one for
liquidation ( if debtor is insolvent and no substantial likelihood for
rehabilitation.
7. If the petition is given due course, the court shall direct receiver to
review, revise and/or recommend action on the rehab plan.

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8. Receiver consults with debtor and creditors.

9. Receiver submits rehab plan to the court.
10. Court directs creditors to give comments to the rehab plan.
11. Court approves rehab plan upon recommendation of receiver and
even over the objection of creditors if objection is manifestly
unreasonable.
12. The court has one year from filing of petition to approve rehab
plan.
13. Proceedings terminated by order of the court declaring successful
implementation of the rehab plan or a failure of rehab.

 There is failure of rehabilitation in the following cases:

A. Dismissal of the petition by the court;
B. The debtor fails to submit a rehabilitation plan;
C. Under the rehabilitation plan submitted by the debtor, there is no substantial
likelihood that the debtor can be rehabilitated within a reasonable period;
D. In the implementation of the rehabilitation plan, the debtor fails to perform its
obligations thereunder or there is failure to realize the objectives, targets or
goals set forth therein, including the timeliness and conditions for the
settlement of the obligations due to the creditors and other claimants;
E. The Commission of fraud in securing the rehabilitation plan or its
amendment; and
F. Other analogous circumstances as may be defined by the rules of procedure.

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Upon failure of the rehabilitation, the

Court may issue an order converting the
proceedings to a liquidation.

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 The CA's reliance on the expertise of the court-appointed Rehabilitation

Receiver, who opined that respondents' rehabilitation is viable, in order to
justify its finding that the financial statements submitted were reliable,
overlooks the fact that the determination of the validity and the approval of the
rehabilitation plan is not the responsibility of the rehabilitation receiver, but
remains the function of the court. The rehabilitation receiver's duty prior to
the court's approval of the plan is to study the best way to rehabilitate the
debtor, and to ensure that the value of the debtor's properties is reasonably
maintained; and after approval, to implement the rehabilitation plan.
Notwithstanding the credentials of the court-appointed rehabilitation receiver,
the duty to determine the feasibility of the rehabilitation of the debtor rests
with the court. While the court may consider the receiver's report favorably
recommending the debtor's rehabilitation, it is not bound thereby if, in its
judgment, the debtor's rehabilitation is not feasible. Philippine Asset Growth
Two, Inc. and Planters Development Bank vs. Fastech Synergy Philippines
Inc., et al. G.R. No. 206528, 28 June 2016, J. Perlas-Bernabe

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BAR EXAM QUESTIONS

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Congratulations in advance!
©2020 Dean Nilo T. Divina, All Rights Reserved

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