Bouncing Checks and Legal Consequences in the Philippines

Legal Topic: Bouncing Checks Law in the Philippines (BP 22)

Simplified Query:

Is issuing a bouncing check in the Philippines illegal, and what are the consequences?

Legal Article:

Introduction

The Bouncing Checks Law, also known as Batas Pambansa Blg. 22 (BP 22), addresses issues related to the issuance of checks without sufficient funds or credit. This law penalizes individuals who issue checks knowing that they do not have sufficient funds to cover the amount, and the check subsequently bounces.

Elements of the Offense

Under BP 22, the following elements must be present for an individual to be liable:

1. Making, Drawing, and Issuing a Check
   The check must be issued to apply on account or for value.

2. Knowledge of Insufficient Funds
   The issuer must know at the time of issue that there are insufficient funds or credit with the drawee bank to cover the check in full.

3. Subsequent Dishonor of the Check
   The check must be dishonored by the drawee bank due to insufficiency of funds or credit. The check may also be dishonored if the issuer, without a valid reason, ordered the bank to stop payment【5†source】【7†source】【9†source】.

Presumption of Knowledge

To presume knowledge of insufficient funds, the prosecution must prove:

1. The check was presented within ninety (90) days from the date on the check.
2. The issuer received a written notice that the check was not paid by the drawee.
3. The issuer failed to pay or make arrangements for payment within five (5) banking days of receiving the notice【8†source】.

Notice of Dishonor

A notice of dishonor, which must be written, informs the issuer that the check was not paid. This notice is essential for a conviction. If the notice is not sent or proof of receipt is lacking, the presumption of knowledge does not arise【7†source】【8†source】.

Criminal Liability

Violation of BP 22 may result in imprisonment or fines. However, the issuer may avoid prosecution if they pay the amount due or arrange for payment within five (5) days of receiving notice of the dishonor【5†source】.

Estafa vs. BP 22

A bouncing check might also constitute estafa under Article 315 of the Revised Penal Code if there was fraudulent intent when issuing the check. Estafa involves deceit and damage, while BP 22 focuses on the issuance of a dishonored check without requiring deceit or damage【10†source】.

Avoiding Bouncing Checks

To avoid bouncing checks, individuals should maintain sufficient bank balances, use alternative payment methods, and communicate with their bank about potential issues. If you receive a bounced check, notify the issuer, document the incident, and send a demand letter before pursuing legal action【7†source】.

Conclusion

The Bouncing Checks Law provides a clear framework for penalizing individuals who issue bad checks in the Philippines. Awareness of the legal consequences and proper actions to take can help protect your financial interests when dealing with bounced checks.

For more information:

• Lawphil - Details of Batas Pambansa Blg. 22
• Philippine e-Legal Forum - Bouncing Checks: What You Need to Know
• Ricasio Law - Dealing with Bounced Checks in the Philippines
• Legal Resource PH - Bouncing Checks Law: Explainer
• PALM Law - B.P. 22: A Look into the Bouncing Checks Law
• NDV Law - Can You File Estafa and BP 22 at the Same Time?