The Bank Secrecy Law and its exceptions

By Atty. Eduardo T. Reyes III

Approved to become a law on September 09, 1955, the Bank Secrecy Law as embodied in Republic Act No. 1405 remains as one of the most controversial laws in terms of legal interpretation.

Section 2 of the law is the core protection that it affords to a depositor:

Section 2. All deposits of whatever nature with banks or banking institutions in the Philippines including investments in bonds issued by the Government of the Philippines, its political subdivisions and its instrumentalities, are hereby considered as of an absolutely confidential nature and may not be examined, inquired or looked into by any person, government official, bureau or office x x x”.

                The avowed purpose of RA 1405 was explained in a recent case entitled Republic of the Philippines v. Lt. Col. George Abonito Rabusa, SG-25, Ma. Debbie Arevalo Rabusa, and Felix Arevalo, G.R. No. 208183 which came down on August 31, 2022.  Therein it was pronounced that:

“R.A. No. 1405 statutorily grants persons with a legitimate expectation of privacy on their respective bank accounts. Its rationale is to ‘discourage private hoarding, as well as to give encouragement to people to deposit their money in banking institutions, so that the same may be properly utilized by banks in authorized loans and thereby assist in the country’s economic development’. X x x”.

RA 1405 admits of exceptions. The following are instances when bank deposits may be inquired into:

(1) upon written permission of the depositor;

(2) in cases of impeachment;

(3) upon order of a competent court in the case of bribery or dereliction of duty of public officials; or

(4) when the money deposited or invested is the subject matter of the litigation.

Yet despite the statutorily-recognized exceptions, Republic of the Philippines v. Lt. Col. George Abonito Rabusa has underlined the importance of the general rule which is to keep depositor’s bank accounts as confidential as possible as this law aims to protect bank accounts as being within one’s “zone of privacy”, thus:

“While subsequent statutory enactments have expanded the scope of exceptions to this policy, the secrecy of bank deposits still lies as the general rule, falling as it does within the legally-recognized zones of privacy”.

Resultantly, it was held that doubts should be resolved in favor of confidentiality. (Republic of the Philippines v. Lt. Col. George Abonito Rabusa, SG-25, Ma. Debbie Arevalo Rabusa, and Felix Arevalo, G.R. No. 208183. August 31, 2022).  

An instance when the doubt was resolved in favor of confidentiality is the case of BSB Group, Inc. v. Go which is cited in Republic of the Philippines v. Lt. Col. George Abonito Rabusa.  Therein, an employee was charged with qualified theft for misappropriating the checks paid by customers of the complainant which the employee deposited to respondent’s own account. Subpoena were issued to get details of the bank account but when the same were challenged before the Supreme Court, the information were deemed inadmissible in evidence for irrelevance as the case for qualified theft is not dependent on the details of the bank account.

Indeed, this is one example of our laws being protective of our rights to privacy. Most of the time, we are unmindful or incognizant of the right to privacy of our own friends or family.

Perhaps this could be a reminder even as we must take our cue from the law that oftentimes, the right to privacy cannot be interfered with.

            (The author is the senior partner of ET Reyes III & Associates– a law firm based in Iloilo City. He is a litigation attorney, a law professor, MCLE lecturer, bar reviewer and a book author. His website is