A Comprehensive Discussion of the Bouncing Checks Law (Batas Pambansa Blg. 22) in the Philippines

Disclaimer: This article is for informational purposes only and should not be construed as legal advice. For specific concerns or questions, please consult a qualified legal professional.

1. Introduction

The “Bouncing Checks Law” in the Philippines refers to Batas Pambansa Blg. 22 (BP 22), which was enacted to discourage and penalize the issuance of checks that are dishonored upon presentment. Commonly called the “Anti-Bouncing Checks Law,” BP 22 aims to promote stability in commercial transactions and protect the public from the pernicious effects of dishonored checks, which can disrupt financial dealings and lead to economic harm.

2. Historical Background and Legislative Intent

Enactment and Purpose
BP 22 was passed in 1979 (during the Interim Batasang Pambansa) and took effect to address the growing number of cases where individuals issued checks with insufficient funds or closed bank accounts, thus failing to meet their financial obligations.
Policy and Rationale
The law’s main objective is to deter the issuance of worthless checks and preserve the integrity of negotiable instruments. Before BP 22, victims of bounced checks had to rely on the Revised Penal Code provisions on estafa (deceit) or file civil actions for collection. BP 22 streamlined the process by criminalizing the act of issuing worthless checks itself, making it easier for payees to hold drawers liable.

3. Scope and Coverage of BP 22

BP 22 applies to any person (natural or juridical) who makes or draws and issues a check that is dishonored upon presentment due to:

Insufficient funds in the account;
Account closure by the drawer;
Stopped payment orders or other reasons that cause the bank to dishonor the check, if intended to avoid payment and if no valid justification exists.

The law covers checks issued in payment of an obligation, including debt and other financial transactions, regardless of the nature or classification of the obligation (civil, commercial, etc.). It also covers postdated checks, provided the checks are eventually presented and dishonored.

4. Essential Elements of the Offense

Under Philippine jurisprudence, to secure a conviction under BP 22, the prosecution generally must establish the following:

The Making, Drawing, and Issuance of the Check
The accused must have voluntarily made or drawn the check and delivered it to the payee or holder for value.
Knowledge of Insufficiency of Funds
There is a prima facie presumption of knowledge of insufficiency of funds when the check is dishonored within 90 days from the date of issuance. However, the accused may rebut this presumption by showing, for example, that they had a valid agreement with the payee to hold the check or that they made arrangements to cover the amount but the bank erred.
Dishonor of the Check
The check is dishonored by the drawee bank for insufficient funds, account closure, or other reasons indicating lack of credit or funds.
Notice of Dishonor and Failure to Pay
The payee (or holder) must give written notice of dishonor to the drawer or maker. The maker must then fail to pay the amount of the check within five (5) banking days after receiving the notice of dishonor.

If these elements are met, the individual who issued the check can be held criminally liable under BP 22.

5. Penalties and Sanctions

BP 22 provides for the following penalties upon conviction:

Imprisonment of up to one (1) year, or
Fine of not less than the amount of the check but not more than double that amount (with a ceiling of Php 200,000),
Or both imprisonment and fine, at the discretion of the court.

In practice, courts often opt for the imposition of a fine (instead of or in addition to imprisonment), particularly if the amount involved is relatively small or if the accused shows willingness to make restitution. Philippine jurisprudence also directs courts to consider the socio-economic context and the totality of circumstances when determining penalties.

6. Key Jurisprudential Doctrines and Updates

Nature of the Offense
The Supreme Court has ruled that BP 22 is malum prohibitum—the act of issuing a bouncing check is criminalized by law regardless of the absence of criminal intent (i.e., even if the maker did not intend to defraud). It is enough that the accused knowingly issued a check without sufficient funds or credit and failed to make good the amount within the prescribed period.
Notice of Dishonor
One recurring defense by the accused is lack of proper notice of dishonor. Philippine courts have emphasized that notice must be in writing and served on the drawer. Without proper notice, the presumption of knowledge of insufficient funds may not arise, and conviction may be difficult.
Civil Aspect
Even though BP 22 imposes criminal liability, it does not negate the right of the payee or holder to pursue a civil action to recover the amount of the check. In many instances, the criminal case and the civil case are consolidated or pursued simultaneously.
Supreme Court Circulars on Imprisonment
In several administrative circulars, the Supreme Court has encouraged lower courts to favor the imposition of fines rather than imprisonment, especially for first-time offenders who do not display malicious intent. However, this is a matter of judicial discretion, and imprisonment remains a valid penalty.
No Automatic Clearance by Mere Payment
Payment of the amount of the bounced check after a case has been filed does not automatically extinguish criminal liability. It can serve as a mitigating factor and may affect the penalty imposed, but it does not guarantee the dismissal of criminal charges unless there is a mutual agreement or arrangement that leads to a withdrawal of the complaint.
Prescription Period
The prescriptive period for violations of BP 22 is four (4) years from the date of the commission of the offense—typically from the date the check is dishonored.

7. Defenses Available Under BP 22

While BP 22 is strict, some defenses are recognized:

Full Payment or Settlement Before Filing of the Case
If the amount due is settled or the check is replaced with a valid payment before the filing of a complaint, the payee may decide not to press charges, or the court may dismiss the complaint for lack of interest.
Proving Lack of Knowledge of Insufficiency
The accused can present evidence that they had sufficient funds at the time the check was issued or that they reasonably believed they had sufficient funds. Alternatively, they can prove that the bank or a third party committed an error causing the dishonor.
Invalid or No Notice of Dishonor
If the accused never received valid written notice that the check bounced, or if the notice fails to meet legal requirements, it can be a strong ground for dismissal or acquittal.
Check Issued for a Non-Existing or Illegal Obligation
If the issuer can prove that the transaction underlying the issuance of the check was void from the beginning (e.g., an illegal cause), the payee may be barred from recovery. However, caution must be exercised because the check issuance itself can still be seen as a separate act.

8. Procedural Aspects

Filing a Complaint
- The payee (or holder) may file a complaint before the Office of the Prosecutor.
- The complainant must show the existence of the check, proof of dishonor, and the requisite notice of dishonor given to the drawer.
Preliminary Investigation
- The Prosecutor’s Office conducts a preliminary investigation to determine probable cause.
- If probable cause is found, an information (charge sheet) is filed in court.
Trial and Judgment
- The accused has the right to present defenses.
- The court evaluates the evidence and renders a decision, imposing either fine, imprisonment, or both if it finds guilt beyond reasonable doubt.

9. Civil Liabilities and Compromise Agreements

Civil Liability
Upon conviction, the accused usually faces civil liability equivalent to the amount of the dishonored checks plus possible damages and costs.
Compromise Agreements
Philippine law allows for the possibility of amicable settlements. If the accused settles with the complainant and the latter executes an affidavit of desistance, the criminal proceedings may be dismissed—although courts are not automatically bound by such desistance if it believes prosecution must continue.
Extent of Civil Liability
The principal amount is typically the face value of the check, but courts may also award interest and costs of litigation, depending on the circumstances.

10. Practical Considerations and Advice

Draw Checks Only if You Are Certain You Have Funds
To avoid liability, ensure your bank account has sufficient balance at the time of issuance and will maintain sufficient funds on the due date or date of presentment.
Keep Written Documentation
Maintain records of transactions, including receipts, bank statements, and any correspondence about the check. This documentation can help in establishing valid defenses or showing good faith.
Respond Promptly to Notice of Dishonor
If you receive a notice of dishonor, act immediately by paying the amount due or negotiating an extension with the payee. The law gives five banking days after receipt of notice to make the check good.
Seek Legal Counsel Early
If you are unsure of your obligations or you have been served with a notice, consulting a lawyer promptly can help you avoid criminal prosecution or mitigate consequences.

11. Emerging Developments and Future Considerations

Decriminalization Proposals
Over the years, there have been discussions and proposed legislation to decriminalize the issuance of bouncing checks, making it purely a civil matter. Proponents argue that jailing individuals for issuing worthless checks hampers economic recovery and disproportionately affects small businesspersons. As of this writing, however, BP 22 remains enforceable.
Electronic Checks and Digital Payments
With the rise of electronic payment methods and digital wallets, physical checks are less frequently used. While BP 22 exclusively covers checks, the broader principle of penalizing fraudulent financial instruments may evolve, possibly prompting updates to the law in the future.

12. Conclusion

Batas Pambansa Blg. 22, the Bouncing Checks Law, remains a vital legal tool to protect financial stability and commercial transactions in the Philippines. Its strict penalties and simplified requirements underscore the government’s intent to discourage the issuance of checks without adequate funds. While it has invited discussions on decriminalization and calls for more lenient penalties, BP 22 continues to serve as a cautionary reminder for individuals and businesses alike to handle checks responsibly.

Whether you are a creditor seeking redress or an issuer defending against a charge, understanding the elements, penalties, defenses, and procedural rules of BP 22 is critical. Ultimately, consultation with a legal professional provides the most reliable guidance for navigating specific cases under the Bouncing Checks Law.

This article has presented an extensive overview of Batas Pambansa Blg. 22 in the Philippines. For any specific legal questions or advice, it is strongly recommended to seek assistance from a qualified Philippine attorney.