BANK INQUIRIES

545 SCRA 385

REPUBLIC OF THE PHILIPPINES vs. HON. ANTONIO EUGENIO, JR.
Justice Dante Tiñga

Summarized by Horace Cimafranca

A petition for certiorari and prohibition was filed by the Republic and AMLC over
the decisions of the RTC of Manila and the Court of Appeals, enjoining the AMLC from
making inquiries into the bank accounts of respondents. Petition was dismissed.

IMPORTANT PEOPLE
Anti-Money Laundering Council (AMLC) – petitioner, together with the Republic
Hon. Antonio Eugenio, Jr. – respondent, presiding judge (RTC, Manila)
Pantaleon Alvarez– respondent, Chairman of the PBAC Technical Committee for
the NAIA 3 Project
Lilia Cheng – respondent, wife of Cheng Yong, whose joint account with Lilia was
subject to investigation by the AMLC

FACTS
1. Following the Court’s decision voiding PIATCO’s contract with the
government for the NAIA 3 project, the AMLC pursued investigations over
persons involved in said contract.
2. Armed with separate resolutions issued by the same body, the AMLC filed ex
parte1 applications, based on Section 11 of the Anti-Money Laundering Act
(RA 9160), to inquire into or examine the deposits of respondent Alvarez,
Wilfredo Trinidad, Alfredo Liongson and Cheng Yong (husband of respondent
Lilia Cheng) before the RTCs of Manila and Makati. Both courts heard the
testimony of and received documentary evidence from the AMLC.
3. The Makati RTC rendered an order granting the AMLC the authority to inquire
and examine the subject bank accounts, saying that the court is satisfied that
there existed probable cause to believe that the accounts are related to the
offense of violating the Anti-Graft and Corrupt Practices Act.

1
An ex parte judicial proceeding is conducted for the benefit of only one party and is usually reserved for
urgent matters where requiring notice would subject one party to irreparable harm.
(thefreedictionary.com) LOL

1
 4. The Manila RTC on January 12, 2006 issued an order granting the application
expressing that the allegations in AMLC’s application are impressed with
merit.
5. Respondent Alvarez entered his appearance before the Manila RTC and filed
an Urgent Motion to Stay Enforcement of Order arguing that nothing in RA
9160 authorizes the AMLC to seek the authority to inquire into bank accounts
ex parte.

6. The Manila RTC issued an Order staying the enforcement of its bank inquiry
order and giving the Republic five days to respond to Alvarez’s motion.

7. The Republic filed an Omnibus Motion for Reconsideration, to which Alvarez

responded with a Reply and Motion to Dismiss.
8. The Manila RTC then issued an Omnibus Order granting the Republic’s
Motion for Reconsideration and reinstating “in full force and effect” the Order
dated January 12, 2006.
9. Alvarez filed an Urgent Motion expressing apprehension that the AMLC would
immediately act upon the Order, thus rendering his intention to file a motion
for reconsideration moot. This goes back and forth until the Manila RTC
issued an Order clarifying that the ex parte Order issued by it dated January
12, 2006 cannot be implemented against the deposits of any of the persons
enumerated in the AMLC application until the resolution of the Alvarez’s
appeal.
10. Meanwhile Lilia Cheng filed with the Court of Appeals a Petition for Certiorari,
Prohibition and Mandamus with Application for TRO and/or Writ of
Preliminary Injunction directed against the Republic and AMLC, the Manila
RTC and Makati RTC. The CA issued a TRO.

ISSUE with HOLDING

1. W/N a bank inquiry issued in accordance with Section 11 of the AMLA may
be stayed by injunction.
a. Yes. Nothing in Section 11 of the AMLA explicitly points out to an ex
parte judicial procedure in the application for a bank inquiry order.
Thus, an Order issued by the Court authorizing the AMLC to inquire
into bank accounts is not immediately enforceable, and may be
challenged by the party whose bank accounts are being subjected to
inquiry.
b. The petitioner’s averment that since ex parte applications are allowed
under Section 10, on freeze orders, the same should be allowed under
Section 11 does not stand since Section 10 contemplates a situation
2
 where an ex parte application is expedient to prevent a party from
dissipating funds from a monetary instrument or property subject to the
freeze order. On the other hand, a party cannot conceal or hide
records of his bank account, which is the subject of Section 11, since
these records are lodged with the bank, not the offender.
c. Furthermore, no mention of an ex parte application is mentioned under
Section 11. This is confirmed by the implementing rules and
regulations of AMLA under RA 9194, which also makes no mention of
it.
d. It is correct to construe the provision this way since it involves right to
privacy considerations, a right protected by the Constitution. In the
case of bank accounts, this right to privacy is operationalized by RA
1405 or the Bank Secrecy Act. While the same law makes exemptions,
any additional exemption must be passed in law by Congress. The
general principle of the State, in view of the right to privacy and the
passage of the Bank Secrecy Act, is that all deposits of whatever
nature in banks are hereby considered as of an absolutely confidential
nature.

DISPOSITIVE PORTION
WHEREFORE, the petition is DISMISSED. No pronouncements as to costs.

DOCTRINE
Section 11 of the AMLA does not empower the AMLA to immediately enforce an
Order by the Court authorizing it to conduct inquiries into bank accounts. Hence,
an application by the AMLC for the authority to inquire into bank accounts is not
ex parte, and requires that the account holder be notified and, if the application is
approved, be allowed to challenge it.

RELEVANCE TO THE LESSON

This case lays out the procedural limits of any inquiry into bank accounts by the
AMLC under Section 11 of AMLA.

OTHER NOTES
1. Also contended by the petitioner was the standing of Lilia Cheng. The Court
ruled that Cheng had standing because she had proven her joint ownership of
at least three of the accounts being subjected to inquiry.
3
2. Cheng averred that her accounts couldn’t be subject to an inquiry under the
AMLA because these were opened prior to the passage of the law. Inclusion
of her accounts, she claimed, would be tantamount to an ex post facto action.
The Court dismissed her averment, explaining that it would be difficult to
contemplate a situation where the law is self-defeating.