Bouncing Checks Law
the drawer, without any valid cause, ordered
(B.P. 22)
 “An Act Penalizing the Making or Drawing and
Issuance of a Check without Sufficient Funds
or Credit and For Other Purposes”
What acts are penalized under the law?
A. Drawing a Check Without Sufficient Funds
(Sec. 1)
B. Failing to Keep Sufficient Funds to Cover a
Check Issued (Sec. 1, par. 2)
A. Drawing a Check Without Sufficient Funds (Sec.
1)
 A person makes or draws and issues any check
The check is made or drawn and issued to
apply on account or for value
 whose signature appears on the check is liable.
 The person who makes or draws and issues
the check knows at the time of issue that he
does not have sufficient funds in or credit with
the drawee bank for the payment of such
check in full upon its presentment
 The check is subsequently dishonored by the
drawee bank for insufficiency of funds or
credit, or would have been dishonored for the
same reason had not the drawer, without valid
reason, ordered the bank to stop payment
B. Failing to Keep Sufficient Funds to Cover a Check
Issued (Sec. 1, par. 2)
 A person has sufficient funds in or credit with
the drawee bank when he makes or draws and
issues a check
 He fails to keep sufficient funds or maintain a
credit to cover the full amount of the check if
presented within 90 days from the date
appearing
 The check is dishonored by the drawee bank
What are the essential elements to be liable for
violation of B.P. 22?
 The making, drawing, and issuance of any
check to apply for account or for value;
 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; and
 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 bank to stop payment.
Who is liable for violating the bouncing checks
law?
 Any person who makes, draws or issues a
worthless check is liable. This includes an
“accommodation party,” or one who signed the
check without receiving value in exchange or
who issues said check for the purpose of
lending his name to some other person. The
accommodation party is liable even though the
holder of the check knew him to be a mere
accommodation party who did not receive any
value therefor.
 When the check is issued in behalf of the
corporation or other legal entity, the person
When is the drawer of the check presumed to
know there is insufficient funds in or credit with
the drawee bank?
 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 unless such
maker or drawer pays the holder thereof the
amount due thereon, or makes arrangements
for payment in full by the drawee of such check
within five (5) banking days after receiving
notice that such check has not been paid by the
drawee.
When should a complaint for violation of B.P. 22 be
filed?
 The criminal complaint for violation of B.P. 22
must be filed within four (4) years from the
time the checks have been dishonored.
What is the penalty for violation of B.P. 22?
 The penalty for violation of B.P. 22 is
imprisonment of at least 30 days but not more
than one (1) year, or a fine of at least double
the amount of the check but not to exceed PHP
200,000.00. However, under Supreme Court
Administrative Circular No. 12-2000, the
Supreme Court recommended that fines be
imposed instead of a prison sentence for
verdicts involving B.P. 22. This was later
clarified in Supreme Court Administrative
 Circular No. 13-2001 that imprisonment is still
possible under B.P. 22 verdicts and that if the
accused is unable to pay the fine imposed,
subsidiary imprisonment may still attach.
Philippine Cooperative Code of 2008
(RA 6938)
Cooperative
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.
Purpose
The declared purpose of the law, among
others, is to foster the creation and growth of
cooperatives as a practical vehicle for promoting self-
reliance and harnessing people power towards the
attainment of economic development and social
justice.
Principles of Cooperativism
1. Voluntary and open membership.
Membership in a cooperative is voluntary and
available to all individuals regardless of their
social, political, racial or religious background or
beliefs.
2. Democratic member control.
Cooperatives are democratic organizations
that are controlled by their members who actively
participate in setting their policies and making
decisions. In primary cooperatives, members have
equal voting rights of one-member, one-vote.
Cooperatives at other levels are organized in the
same democratic manner.
3. Member economic participation.
Members contribute equitably to, and
democratically control, the capital of their
cooperatives. At least part of that capital is the
common property of the cooperative. They
shall receive limited compensation or limited
interest, if any, on capital subscribed and paid
as a condition of membership.
4. Autonomy and independence.
Cooperatives are autonomous, self-help
organizations controlled by their members.
5. Cooperation among cooperatives.
Cooperatives serve their members most
effectively and strengthen the cooperative
movement by working together through local,
national, regional and international structures.
6. Cooperative education.
All cooperatives shall make provision for the
education of their members, officers and
employees and of the general public based on the
principles of cooperation.
Types of Cooperatives
1. Credit Cooperative.
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.
2. Consumers Cooperative.
The primary purpose is to procure and
distribute commodities to members and non-
members
3. Producers Cooperative.
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.
4. Marketing Cooperative.
Engages in the supply of production inputs to
members and markets their products.
5. Service Cooperative.
Engages in medical and dental care,
hospitalization, transportation, insurance,
housing, labor, electric light and power,
communication, professional and other services.
6. Multipurpose Cooperative.
Combines two or more of the business
activities of these different types of cooperatives.
7. 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.
8. Agrarian Reform Cooperative.
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.
9. Cooperative Bank.
Organized for the primary purpose of
providing a wide range of financial services to
cooperatives and their members.
10. Dairy Cooperative.
One whose members are engaged in the
production of fresh milk which may be processed
and/or marketed as dairy products.
11. Education Cooperative.
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.
12. Electric Cooperative.
Organized for the primary purposed of
undertaking power generations, utilizing
renewable energy sources, including hybrid
systems, acquisition and operation of sub
transmission or distribution to its household
members.
13. Financial Service Cooperative.
One organized for the primary purpose of
engaging in savings and credit services and other
financial services.
14. Fishermen Cooperative.
Organized by marginalized fishermen in
localities whose products are marketed either as
fresh or processed products.
15. Health Services Cooperative.
Organized for the primary purpose of
providing medical, dental and other health
services.
16. Housing Cooperative.
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.
17. Insurance Cooperative.
Engaged in the business of insuring life and
property of cooperatives and their members.
18. Transport Cooperative.
Includes land and sea transportation, limited
to small vessels, as defined or classified under the
Philippine maritime laws, organized under the
provisions of this Code;
19. Water Service Cooperative.
Organized to own, operate and manage waters
systems for the provision and distribution of
potable water for its members and their
households.
20. Workers Cooperative.
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.
Categories of Cooperative
On the other hand, cooperatives are categorized
according to membership and territorial
considerations:
A. In terms of membership –
1. Primary – Members are natural persons
2. Secondary – Members are primaries
3. Tertiary – Members are secondary
cooperatives
B. In terms of territory, cooperatives shall be
categorized according to areas of operations
which may or may not coincide with the
political subdivisions of the country.
 Capital
The minimum paid-up share capital is now
PhP15,000 (the minimum under the old law is
only PhP2,000), subject to increase by the CDA
upon consultation with the cooperative sector
and the NEDA.
The par value of shares of a primary
cooperative shall not exceed PhP1, 000.
No member of primary cooperative other than
cooperative itself shall own or hold more than
10% of the share capital of the cooperative.
 Membership
New members may only be admitted to the
cooperative after undergoing Pre-
Membership Education Seminar. There are
two kinds of members:
1. Regular members. Entitled to all the
rights and privileges of membership,
 including the right to vote and be voted
upon.
2. Associate members. 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 member shall
be considered a regular member if: (a)
he has been a member for 2
continuous years; (b) he patronizes
the cooperative as its member; and (c)
he signifies his intention of becoming a
regular member.
A member shall be liable for the debts of the
cooperative to the extent of his contribution to
the share capital of the cooperative.
 Cooperative Development Authority (CDA)
- the government lead agency tasked with
the promotion and development of
cooperatives.
 Tax Treatment of Cooperative.
 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. Cooperatives
transacting business with both members
and non-members shall be subject to
another set of rules, but transactions with
members shall remain to be non-taxable.
 Penal Provisions.
 Anyone who uses the word “Cooperative”
without being registered with the
Cooperative Development Authority is
punishable by imprisonment (5 years) and
a fine (PhP20,000). Electric cooperatives
registered with the National Electrification
Administration (NEA) are exempt and may
not register with the CDA.
 Any person who wilfully attempt in any
manner to evade or defeat tax in violation
of the tax treatment/privileges provided
under the Code is punishable by
imprisonment (2 years but not more than
4 years) and a fine (not less than
PhP30,000 but not exceeding
PhP100,000), without prejudice to a
separate action to collect the taxes.
REPUBLIC ACT NO. 8799
The Securities Regulation Code
Purposes:
1. To establish a socially conscious, free market that
regulates itself
2. To encourage the widest participation of ownership
in enterprises
3. To enhance the democratization of wealth
4. To promote the development of the capital market
5. To protect investors
6. To ensure full and fair disclosure about securities
7. To minimize if not totally eliminate insider trading
and other fraudulent or manipulative devices and
practices which create distortions in the free market
 Securities
- are shares, participation or interests in a
corporation or in a commercial enterprise
or profit-making venture and evidenced
by a certificate, contract, instruments,
whether written or electronic in character.
The term ‘securities’ includes:
(a) Shares of stocks, bonds, debentures, notes
evidences of indebtedness, asset-backed securities;
(b) Investment contracts, certificates of interest or
participation in a profit sharing agreement, certifies of
deposit for a future subscription;
(c) Fractional undivided interests in oil, gas or other
mineral rights;
(d) Derivatives like option and warrants;
(e) Certificates of assignments, certificates of
participation, trust certificates, voting trust
certificates or similar instruments;
(f) Proprietary or nonproprietary membership
certificates in corporations; and
(g) Other instruments as may in the future be
determined by the Commission.
Issuer - is the originator, maker, obligor, or creator of
the security.
Broker- is a person engaged in the business of buying
and selling securities for the account of others.
Dealer - means the person who buys /sells securities
for his/her own account in the ordinary course of
business.

Associated person of a broker or dealer - is an
employee therefor whom, directly exercises control of
supervisory authority, but does not include a
salesman, or an agent or a person whose functions are
solely clerical or ministerial.
Clearing Agency - is any person who acts as
intermediary in making deliveries upon payment
effect settlement in securities transactions.
Exchange - is an organized market place or facility
that brings together buyers and sellers and executes
trade of securities and/or commodities.
Insider - means
(a) the issuer;
(b) a director or officer (or any person performing
similar functions) of,
(c) person controlling the issuer; gives or gave him
access to material information about the issuer or the
security that is not generally available to the public;
(d) A government employee, director, or officer of an
exchange, clearing agency and/or self-regulatory
organization who has access to material information
about an issuer or a security that is not generally
available to the public;
(e) a person who learns such information by a
communication from any forgoing insiders.
Pre-need plans - are contracts which provide for the
performance of future services of or the payment of
future monetary considerations at the time of actual
need, for which plan holders pay in cash or installment
at stated prices, with or without interest or insurance
coverage and includes life, pension, education,
interment, and other plans which the Commission
may from time to time approve.
Promoter - is a person who, acting alone or with
others, takes initiative in founding and organizing the
business or enterprise of the issuer and receives
consideration therefor.
Prospectus - is the document made by or on behalf of
an issuer, underwriter or dealer to sell or offer \
securities for sale to the public through registration
statement filed with the Commission.
Registration statement - is the application for the
registration of securities required to be filed with the
Commission.
Salesman - is a natural person, employed as such as
an agent, by a dealer, issuer or broker to buy and sell
securities.
Uncertificated security - is a security evidenced by
electronic or similar records.
Underwriter - is a person who guarantees on a firm
commitment and/or declared best effort basis the
distribution and sale of securities of any kind by
another company.
Commodity Futures Contract - an agreement to buy
or sell a particular commodity at a future date the
price and the commodity are fixed at the time of the
agreement.
Security and Exchange Commission (SEC)
- the government agency tasked to
administer the Code
- composed of the Chairman and Four (4)
Commissioners (so five tanan)
- term of office = 7 years
Qualifications
1. natural-born citizens of the Philippines
2. at least forty (40) years of age for the Chairperson
and at least thirty-five (35) years of age for the
Commissioners,
3. Must be of good moral character, or
unquestionablenintegrity, of known probity and
patriotism, and withmrecognized competence in
social and economic disciplines:
4. majority of Commissioners, including the
Chairperson, shall be members of the Philippine Bar.
Requirement of Registration of Securities
Securities shall not be sold or offered for sale
or distribution within the Philippines, without a
registration statement duly filed with and approved
by the Commission. Prior to such sale, information on
the securities, in such form and with such substance as
the Commission may prescribe, shall be made
available to each prospective purchaser.
Exempt Securities
(a) Any security issued or guaranteed by the
Government of the Philippines, or by any political
subdivision or agency thereof, or by any person
controlled or supervised by, and acting as an
instrumentality of said Government.
(b) Any security issued or guaranteed by the
government of any country with which the Philippines
maintains diplomatic relations, or by any state,
province or political subdivision thereof on the basis
of reciprocity: Provided, That the Commission may
require compliance with the form and content for
disclosures the Commission may prescribe.
(c) Certificates issued by a receiver or by a trustee in
bankruptcy duly approved by the proper adjudicatory
body.
(d) Any security or its derivatives the sale or transfer
of which, by law, is under the supervision and
regulation of the:
Office of the Insurance
Commission, Housing and Land Use
Regulatory Board, or the Bureau of Internal
Revenue.
(e) Any security issued by a bank except its own shares
of stock.
Exempt Transactions
(a) At any judicial sale, or sale by an executor,
administrator, guardian or receiver or trustee in
insolvency or bankruptcy.
(b) By or for the account of a pledge holder, or
mortgagee or any of a pledge lien holder selling or
offering for sale or delivery in the ordinary course of
business and not for the purpose of avoiding the
provision of this Code, to liquidate a bonafide debt, a
security pledged in good faith as security for such
debt.
(c) An isolated transaction in which any security is
sold, offered for sale, subscription or delivery by the
owner therefore, or by his representative for the
owner’s account, such sale or offer for sale or offer for
sale, subscription or delivery not being made in the
course of repeated and successive transaction of a like
character by such owner, or on his account by such
representative and such owner or representative not
being the underwriter of such security.
(d) The distribution by a corporation actively engaged
in the business authorized by its articles of
incorporation, of securities to its stockholders or other
security holders as a stock dividend or other
distribution out of surplus.
(e) The sale of capital stock of a corporation to its own
stockholders exclusively, where no commission or
other remuneration is paid or given directly or
indirectly in connection with the sale of such capital
stock.
(f) The issuance of bonds or notes secured by
mortgage upon real estate or tangible personal
property, when the entire mortgage together with all
the bonds or notes secured thereby are sold to a single
purchaser at a single sale.
(g) The issue and delivery of any security in exchange
for any other security of the same issuer pursuant to a
right of conversion entitling the holder of the security
surrendered in exchange to make such conversion:
Provided, That the security so surrendered has been
registered under this Code or was, when sold, exempt
from the provision of this Code, and that the security
issued and delivered innexchange, if sold at the
conversion price, would at the time of such conversion
fall within the class of securities entitled to
registration under this Code. Upon such conversion
the par value of the security surrendered in such
exchange shall be deemed the price at which the
securities issued and delivered in such exchange are
sold.
(h) Broker’s transaction, executed upon customer’s
orders, on any registered Exchange or other trading
market.
(i) Subscriptions for shares of the capitals stocks of a
corporation prior to the incorporation thereof or in
pursuance of an increase in its authorized capital
stocks under the Corporation Code, when no expense
is incurred, or no commission, compensation or
remuneration is paid or given in connection with the
sale or disposition of such securities, and only when
the purpose for soliciting, giving or taking of such
subscription is to comply with the requirements of
such law as to the percentage of the capital stock of a
corporation which should be subscribed before it can
be registered and duly incorporated, or its authorized,
capital increase.
(j) The exchange of securities by the issuer with the
existing security holders exclusively, where no
commission or other remuneration is paid or given
directly or indirectly for soliciting such exchange.
(k) The sale of securities by an issuer to fewer than b. would be considered by a reasonable person
twenty (20) persons in the Philippines during any important under the circumstances in
twelve-month period. determining his course of action whether to
(l) The sale of securities to any number of the buy, sell or hold a security
following qualified buyers:
(i) Bank;
(ii) Registered investment house;
(iii) Insurance company;
(iv) Pension fund or retirement plan
maintained by the Government of the
Philippines or any political subdivision there
of or manage by a bank or other persons
authorized by the Bangko Sentral to engage in
trust functions;
(v) Investment company or;
(vi) Such other person as the Commission may
rule by determine as qualified buyers, on the
basis of such factors as financial
sophistication, net worth, knowledge, and
experience in financial and business matters,
or amount of assets under management.

Fraudulent Transactions – It shall be unlawful for

any person, directly or indirectly, in connection with
the purchase or sale of any securities to:
1. Employ any device, scheme, or artifice to
defraud;
2. Obtain money or property by means of any
untrue statement of a material fact or any
omission to state a material fact necessary in
order to make the statements made, in the
light of the circumstances under which they
were made, not misleading;
3. Engage in any act, transaction, practice or
course of business which operates or would
operate as a fraud or deceit upon any person.

Insider Trading - is the trading of a public company’s

stock (such as bonds and options) based on material
non-public information about the company.

Material Non-Public Information - Information that

a. not been generally disclosed to the public
and would likely affect the market price of the
security after being disseminated to the public
and the lapse of a reasonable time for the
market to absorb the information