2.

0 Bouncing Checks
BATAS PAMBANSA BLG. 22 (The Anti-Bouncing Checks Law)
Effective June 29, 1979

“An act penalizing the making or drawing and issuance of a check without sufficient funds or
credit and for other purposes.”

The gravamen of the offense punished by B.P. 22 is the act of making and issuing
a worthless check or a check that is dishonored upon its presentation for payment.
It is not the non-payment of all obligation which the law punishes. The law is not
intended or designed to coerce a debtor to pay his debt. The thrust of the law is to
prohibit, under pain of penal sanctions, the making of worthless checks and putting
them in circulation. Because of its deleterious effects on public interest, the
practice is proscribed by the law. The law punishes the act not as an offense
against property, but as an offense against public order. (Caram Resource
Corporation vs. Conterars, Adm. Matter No. MTJ-93-849 October 26, 1994)

What the law punishes is the issuance of a bouncing check, not the purpose for
which it was issued, nor the terms and conditions relating to its issuance. The mere
act of issuing a worthless check is malum prohibitum.

2.1. Requisites to be liable under B.P. 22

2.1.1. Checks without sufficient funds

1. A person makes or draws and issues any check

2. The check is made or drawn and issued to apply on
Sec. 1, par. 1 account or for value
Act penalized under 3. The person who makes or draws and issues the check
the law: knows at the time of issue that he does not have sufficient
funds in or credit with the drawee bank for the payment of
Drawing a check such check in full upon its presentment
without sufficient 4. The check is subsequently dishonored by the drawee
funds 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
Sec. 1, par. 2
1. A person has sufficient funds in or credit with the drawee
Act penalized under
bank when he makes or draws and issues a check
the law:
2. He fails to keep sufficient funds or maintain a credit to
cover the full amount of the check if presented within 90
Failing to Keep
days from the date appearing
Sufficient to Cover a
The check is dishonored by the drawee bank
Check Issued
To be liable for violation of B.P. 22, the following essential
elements must be present:
Essential elements
to be liable for 1. The making, drawing, and issuance of any check to apply
violation of B.P. 22 for account or for value;
2. 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
3. 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.

The language of B.P. 22 is broad enough to cover all kinds of

checks, whether present dated or postdated, or whether
issued in payment of pre-existing obligations or given in
mutual or simultaneous exchange for something of value.
(Lozano vs. Martinez, GRN L-63419, December 18, 1986)

EXAMPLES:
1. Accommodation check
Check covered by 2. Guarantee check
B.P. 22 3. Memorandum check
4. Foreign check, provided they are drawn and
issued in the Philippines, though payable
outside thereof (De Villa vs. CA, 195 SCRA
722)

Where a check was drawn before B.P. 22 took effect on

January 29, 1979, although it bounced after said date, the
drawer is not liable. (People vs. Verdiano, 132 SCRA 523)

• Personal checks – the signatory or the signatories

Persons liable • Corporate checks – the person or persons who actually
signed the bounced check

2.1.2. 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
Prima facie of knowledge of such insufficiency of funds or credit
evidence of
knowledge 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. (Sec. 2)

(a) The check is presented within ninety (90) days from the
date of the check;
For the presumption (b) The drawer or maker of the check receives notice that
to arise, the such check has not been paid by the drawee; and
prosecution must (c) The drawer or maker of the check fails to pay the older of
prove: the check the amount due thereon, or make
arrangements for payment in full within five (5) banking
days after receiving notice that such check has not been
 paid by the drawee. (Amanda Resterio vs. People of the
Philippines, G.R. No. 177438, September 24, 2012)

While, indeed, Section 2 of B.P. 22 does not state that the

notice of dishonor be in writing, taken in conjunction,
however, with Section 3 of the law, i.e., “that 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,” a mere oral notice or demand to pay would appear
to be insufficient for conviction under the law. The court is
Notice of dishonor convinced that both the spirit and letter of the Bouncing
Checks Law would require for the act to be punished
thereunder not only that the accused issued a check that is
dishonored, but that likewise the accused has actually been
notified in writing of the fact of dishonor. The consistent rule
is that penal statuses have to be construed strictly against the
State and liberally in favor of the accused. (Domagsang vs.
Court of Appeals, G.R. No. 139292, December 5, 2000)

The absence of proof that petitioner received any notice

informing her of the fact that her checks were dishonored and
giving her five (5) banking days within which to make
arrangements for payment of the said checks prevents the
application of the disputable presumption that she had
Proof of receipt of knowledge of the insufficiency of her funds at the time she
notice of dishonor issued the checks. Absent such presumption, the burden
shifts to the prosecution to prove that petitioner had
knowledge of the insufficiency of her funds when she issued
the said checks, otherwise, she cannot be held liable under
the law. (Caras vs. Court of Appeals, G.R. No. 129900,
October 2, 2001)

• It shall be the duty of the drawee of any check, when

refusing to pay the same to the holder thereof upon
presentment, to cause to be written, printed, or stamped
in plain language thereon, or attached thereto, the reason
for drawee’s dishonor or refusal to pay the same:
Provided, that 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. In all
prosecutions under this Act, the introduction in evidence
of any unpaid and dishonored check, having the drawee’s
Duty of drawee; refusal to pay stamped or written thereon or attached
rules of evidence thereto, with the reason therefor as aforesaid, shall be
prima facie evidence of the making or issuance of said
check, and the due presentment to the drawee for
payment and the dishonor thereof, and that the same was
properly dishonored for the reason written, stamped or
attached by the drawee on such dishonored check.

• Notwithstanding receipt of an order to stop payment, the

drawee shall state in the notice that there were no
sufficient funds in or credit with such bank for the payment
in full of such check, if such be the fact. (Sec 3)
 2.1.3. Duty of drawer

• A depositor is under a duty to set up an accounting

system and a business procedure as are reasonably
calculated to prevent or render difficult the forgery of
indorsements, particularly by the depositor's own
employees. If the drawer (depositor) learns that a check
drawn by him has been paid under a forged indorsement,
Duty of drawer;
the drawer is under duty promptly to report such fact to
effect of
the drawee bank. For his negligence or failure either to
negligence
discover or to report promptly the fact of such forgery to
the drawee, the drawer loses his right against the drawee
who has debited his account under the forged
indorsement. In other words, he is precluded from using
forgery as a basis for his claim for recrediting of his
account.

2.1.4. Credit construed

• The word "credit" as used herein shall be construed to

Credit construed
mean an arrangement or understanding with the bank for
(Sec. 4)
the payment of such check.

2.2. Comparison with Estafa (Art. 315 [2] (d)

B.P. 22 ESTAFA

• Crime against public interest • Crime against property

• Mere issuance of a bounced check • Deceit is essential, also damage
• Failure of the drawer to settle the • Failure of the drawer to settle the
amount within 5 banking days from account within 3 days from notice of
notice of dishonor is conclusive dishonor is conclusive evidence of
evidence of knowledge of deceit
insufficient funds
• Rules on summary procedure • Rules on criminal procedure
• Malum prohibitum – an act • Mala in se – an act that is inherently
prohibited by law but is not wrong
necessarily wrong in itself
• It covers post-dated, present dated • It only covers post-dated checks and
checks, check issued to apply: checks issued for value or given in
1. on account (to pay a pre- mutual or simultaneous exchange
existing obligation); or for something of value.
2. for value (no pre-existing
obligation).
3.0 Consumer Protection
R.A. 7394 (The Consumer Act of the Philippines)
Effective July 15, 1992

The State shall protect consumers from trade malpractices and from substandard or hazardous
products. (Article XVI, Section 9 of the Constitution)

Basic Policy
It is the policy of the State to protect the interests of the consumer, promote his general
welfare and to establish standards of conduct for business and industry.

Objectives:
a) protection against hazards to health and safety;
b) protection against deceptive, unfair and unconscionable sales acts and practices;
c) provision of information and education to facilitate sound choice and the proper
exercise of rights by the consumer;
d) provision of adequate rights and means of redress; and
e) involvement of consumer representatives in the formulation of social and economic
policies.

Consumer Rights:
• Right to basic needs – a right that guaranties survival, adequate food, clothing, shelter,
healthcare, education and sanitation.
• Right to safety – right to be protected against the marketing of goods or provision of
services that are hazardous to health and life.
• Right to information – right to be protected against fraudulent, dishonest, or misleading
advertising, labeling, promotion and the right to be given the facts and information
needed to make an informed choice.
• Right to choice – right to choose products of competitive prices with an assurance and
satisfactory quality.
• Right to representation – right to express consumer interests in the making and
execution of government policies.
• Right to redress – right to be compensated for misrepresentation shoddy goods and
unsatisfactory services.
• Right to consumer education – right to acquire the knowledge and skills necessary to
be an informed consumer.
• Right to a healthy environment – right to live and work for an environment which is
neither threatening or dangerous and which permits a life of dignity and well-being.

3.1 Consumer Product Quality and Safety

• to develop and provide safety and quality standards for consumer

products, including performance or use-oriented standards, codes
of practice and methods of tests;
The duty of the
• to assist the consumer in evaluating the quality, including safety,
State
performance and comparative utility of consumer products;
• to protect the public against unreasonable risks of injury
associated with consumer products;
 • to undertake research on quality improvement of products and
investigation into causes and prevention of product related
deaths, illness and injuries;
• to assure the public of the consistency of standardized
products

Concerned • DOH (Department of Health) – Food, drugs, cosmetics, devices,

and substances.
agencies or
• DA (Department of Agriculture) – Products related to agriculture.
implementing • DTI (Department of Trade and Industries) – Other consumer
agencies products not specified above.

a) requirements to performance, composition, contents, design,

construction, finish, packaging of a consumer product;
b) requirements as to kind, class, grade, dimensions, weights,
material;
Scope of the c) requirements as to the methods of sampling, tests and codes used
implementing to check the quality of the products;
d) requirements as to precautions in storage, transporting and
agencies packaging;
e) requirements that a consumer product be marked with or
accompanied by clear and adequate safety warnings or
instructions, or requirements respecting the form of warnings or
instructions.

• Sale of consumer products that are considered prohibited or

banned under R.A. 7394, such as, injurious, dangerous, unsafe
and hazardous products including the importation of products that
have been banned or withdrawn from their country of
manufacture.
• Deceptive, unfair and unconscionable sales acts or practices the
Violations and/or aim of which is to induce consumers to enter into a sales or lease
prohibited Acts transaction of any consumer product or service through:
under R.A. 7394 1. False representation, fraudulent manipulation or any
other similar means,
2. Taking advantage of consumers’ inability to give valid
consent.
• Mislabeling of consumer products or services
• Selling of defective products when such is not intent of the buyer
• False, deceptive and misleading advertisement
• In case the department, upon petition by an interested party or its
own initiative and after due notice and hearing, determines a
consumer product to be substandard or materially defective, it
shall so notify the manufacturer, distributor or seller thereof of
Amendment and such finding and order such manufacturer, distributor or seller to
Revocation of a. give notice to the public of the defect or failure to comply
Declaration of the with the product safety standards; and
b. give notice to each distributor or retailer of such product
Injurious, Unsafe
or Dangerous • The department shall also direct the manufacturer, distributor or
Character of a seller of such product to extend any or all of the following remedies
Consumer Product to the injured person:
a. to bring such product into conformity with the
requirements of the applicable consumer product
standards or to repair the defect in order to conform with
the same;
 b. to replace the product with a like or equivalent product
which complies with the applicable consumer product
standards which does not contain the defect;
c. to refund the purchase price of the product less a
reasonable allowance for use; and
d. to pay the consumer reasonable damages as may be
determined by the department

Any consumer product offered for importation into the customs of the
Philippine territory shall be refused admission if such product:
a. fails to comply with an applicable consumer product
Imported products quality and safety standard or rule;
b. is or has been determined to be injurious, unsafe and
dangerous;
c. is substandard; or
d. has material defect

3.2 Deceptive Sales Acts and Practices

Implementing
• Department of Trade and Industry (DTI)
agency

• An act or practice shall be deemed deceptive whenever the

producer, manufacturer, supplier or seller, through concealment,
false representation of fraudulent manipulation, induces a
consumer to enter into a sales or lease transaction of any
consumer product or service.
• The act or practice of a seller or supplier is deceptive when it
represents that:

a. a consumer product or service has the sponsorship,

approval, performance, characteristics, ingredients,
accessories, uses, or benefits it does not have;
b. a consumer product or service is of a particular standard,
quality, grade, style, or model when in fact it is not;
c. a consumer product is new, original or unused, when in
fact, it is in a deteriorated, altered, reconditioned,
When is an act or reclaimed or second-hand state;
practice d. a consumer product or service is available to the
deceptive? consumer for a reason that is different from the fact;
e. a consumer product or service has been supplied in
accordance with the previous representation when in fact
it is not;
f. a consumer product or service can be supplied in a
quantity greater than the supplier intends;
g. a service, or repair of a consumer product is needed
when in fact it is not;
h. a specific price advantage of a consumer product exists
when in fact it does not;
i. the sales act or practice involves or does not involve a
warranty, a disclaimer of warranties, particular warranty
terms or other rights, remedies or obligations if the
indication is false; and
j. the seller or supplier has a sponsorship, approval, or
affiliation he does not have
 • An act or practice shall be deemed unfair or unconscionable
whenever the producer, manufacturer, distributor, supplier or
seller, by taking advantage of the consumer's physical or mental
infirmity, ignorance, illiteracy, lack of time or the general conditions
of the environment or surroundings, induces the consumer to
enter into a sales or lease transaction grossly inimical to the
interests of the consumer or grossly one-sided in favor of the
producer, manufacturer, distributor, supplier or seller.
• In determining whether an act or practice is unfair and
unconscionable, the following circumstances shall be considered:
a. that the producer, manufacturer, distributor, supplier or
seller took advantage of the inability of the consumer to
reasonably protect his interest because of his inability to
When is an act or understand the language of an agreement, or similar
practice unfair or factors;
unconscionable? b. that when the consumer transaction was entered into,
the price grossly exceeded the price at which similar
products or services were readily obtainable in similar
transaction by like consumers;
c. that when the consumer transaction was entered into,
the consumer was unable to receive a substantial benefit
from the subject of the transaction;
d. that when the consumer was entered into, the seller or
supplier was aware that there was no reasonable
probability or payment of the obligation in full by the
consumer; and
e. that the transaction that the seller or supplier induced the
consumer to enter into was excessively one-sided in
favor of the seller or supplier.
Penalty on doing
deceptive, unfair • 500.00 – 10,000.00 or imprisonment of not less than 5 months but
and not more than 1 year, or both, upon discretion of the court.
unconscionable • Damages and such other orders as it thinks fit to redress injury to
sales acts or the person caused by such conduct.
practices

3.3. Product Service and Warranty

Implementing
• Department of Trade and Industry (DTI)
agency

Terms of express warranty. – Any seller or manufacturer who gives

an express warranty shall:

a. set forth the terms of warranty in clear and readily

understandable language and clearly identify himself as the
warrantor;
b. identify the party to whom the warranty is extended;
Terms and c. state the products or parts covered;
express warranty d. state what the warrantor will do in the event of a defect,
malfunction of failure to conform to the written warranty and at
whose expense;
e. state what the consumer must do to avail of the rights which
accrue to the warranty; and
f. stipulate the period within which, after notice of defect,
malfunction or failure to conform to the warranty, the warrantor
will perform any obligation under the warranty
 A written warranty shall clearly and conspicuously designate such
warranty as:
a. "Full warranty" if the written warranty meets the minimum
requirements
• remedy such consumer product within a
reasonable time and without charge in case of a
defect, malfunction or failure to conform to such
Designation of written warranty;
• permit the consumer to elect whether to ask for a
Warranties
refund or replacement without charge of such
product or part, as the case may be, where after
reasonable number of attempts to remedy the
defect or malfunction, the product continues to
have the defect or to malfunction.
; or
b. "Limited warranty" if the written warranty does not meet
such minimum requirements

a) refusal without any valid legal cause by the total manufacturer or

any person obligated under the warranty or guarantee to honor a
warranty or guarantee issued;
Prohibited Acts in b) unreasonable delay by the local manufacturer or any person
consumer product obligated under the warranty or guarantee in honoring the
service and warranty;
warranties c) removal by any person of a product's warranty card for the
purpose of evading said warranty obligation;
d) any false representation in an advertisement as to the existence
of a warranty or guarantee.
• 500.00 – 5,000.00 pesos or an imprisonment of not less than 3
Penalties months but not more than 2 years, or both, upon discretion of the
court.

3.4. Labeling and Packaging

• Department of Trade and Industry (DTI). Provided with respect to

Implementing food, drugs, cosmetics, devices and hazardous substances, it
agency shall be enforced by the concerned department.

• It shall be unlawful for any person, either as principal or agent,

engaged in the labeling or packaging of any consumer product, to
display or distribute or to cause to be displayed or distributed in
commerce any consumer product whose package or label does
not conform to the provisions of this Chapter.
Prohibited Act on • The prohibition in this Chapter shall not apply to persons engaged
Labeling and in the business of wholesale or retail distributors of consumer
products except to the extent that such persons:
Packaging
a. are engaged in the packaging or labeling of such products;
b. prescribe or specify by any means the manner in which
such products are packaged or labeled; or
c. having knowledge, refuse to disclose the source of the
mislabeled or mispackaged products
a) its correct and registered trade name or brand name;
Minimum Labeling b) its duly registered trademark;
Requirements for c) its duly registered business name;
Consumer d) the address of the manufacturer, importer, repacker of the
Products consumer product in the Philippines;
e) its general make or active ingredients;
 f) the net quality of contents, in terms of weight, measure or
numerical count rounded of to at least the nearest tenths in the
metric system;
g) country of manufacture, if imported; and
h) if a consumer product is manufactured, refilled or repacked under
license from a principal, the label shall so state the fact.

The following may be required by the concerned department

in accordance with the rules and regulations they will
promulgate under authority of this Act:

a. whether it is flammable or inflammable;

b. directions for use, if necessary;
c. warning of toxicity;
d. wattage, voltage or amperes; or
e. process of manufacture used if necessary.

• 500.00 – 20,000.00 pesos or imprisonment of not less than 3

months but not more than 2 years or both, at the discretion of the
court.
Penalties • If the consumer product is not a food, cosmetic, drug, device, or
hazardous substance, the penalty is 200.00 – 5,000.00 or
imprisonment of 1 month but not more than 1 year or both, at the
discretion of the court.

3.5. Consumer Rights

3.5.1. Price Tag Act (Article 81 of R.A 7394)

It shall be unlawful to offer any consumer product for retail sale to the
public without an appropriate price tag, label or marking publicly
displayed to indicate the price of each article and said products shall
not be sold at a price higher than that stated therein and without
Price Tag discrimination to all buyers: Provided, That lumber sold, displayed or
offered for sale to the public shall be tagged or labeled by indicating
Requirement
thereon the price and the corresponding official name of the wood:
Provided, further, That if consumer products for sale are too small or
the nature of which makes it impractical to place a price tag thereon
price list placed at the nearest point where the products are displayed
indicating the retail price of the same may suffice.

Manner of Placing Price tags, labels or markings must be written clearly, indicating the
Price Tags price of the consumer product per unit in pesos and centavos.

Regulations for The concerned department shall prescribe rules and regulations for
Price Tag the visible placement of price tags for specific consumer products and
services. There shall be no erasures or alterations of any sort of price
Placement tags, labels or markings.

3.5.2. Lemon Law (R.A 10642)

Coverage of the • Brand new motor vehicles purchased in the Philippines reported
Law by a consumer to be in nonconformity with the vehicle’s
manufacturer or distributor’s standards or specifications within
 twelve (12) months from the date of original delivery to the
consumer, or up to twenty thousand (20,000) kilometers of
operation after such delivery, whichever comes first.
• Motor vehicle refers to any self-propelled, four (4) wheeled road
vehicle designed to carry passengers including, but not limited to
sedans, coupes, station wagons, convertibles, pick-ups, vans,
sports utility vehicles (SUVs) and Asian Utility Vehicles (AUV).

a.) motorcycles
b.) delivery trucks
c.) dump trucks
d.) buses
Excluded vehicles e.) road rollers
f.) trolley cars
g.) street sweepers
h.) sprinklers
i.) lawn mowers

Within what period

may a consumer The consumer may invoke his rights under the Lemon Law within the
avail of his rights Coverage Period which is 12 months from the date of the delivery of
the motor vehicle, or for as long as the motor vehicle has not run more
under the Lemon than 20,000 km after such delivery, whichever comes first.
Law?