BP 22, commonly referred to as the “Bouncing Checks Law,” holds considerable importance in the Philippines as it governs the use of checks for payment purposes. The primary goal of this legislation is to uphold the integrity of financial transactions and preserve the trust between the parties involved. In this blog, we will explore the key aspects of BP 22, its consequences, and the penalties that transgressors may face.
What is BP 22?
BP 22 or Batas Pambansa Bilang 22 was enacted in 1979 to address the issue of bounced or dishonored checks. It prohibits the issuance of checks without sufficient funds or credit to cover the amount stated, constituting a criminal offense.
Who are persons liable under BP 22?
- Any person who makes or draws and issues any check to apply on account or for value, knowing at the time of issue that he does not have sufficient funds in or credit with the drawee bank for the payment of such check in full upon its presentment, which check is subsequently dishonored by the drawee bank for insufficiency of funds or credit or would have been dishonored for the same reason had not the drawer, without any valid reason, ordered the bank to stop payment;
- Any person who, having sufficient funds in or credit with the drawee bank when he makes or draws and issues a check, shall fail to keep sufficient funds or to maintain a credit to cover the full amount of the check if presented within a period of ninety (90) days from the date appearing thereon, for which reason it is dishonored by the drawee bank.[1]
Note: Where the check is drawn by a corporation, company or entity, the person or persons who actually signed the check in behalf of such drawer shall be liable under this Act.[2]
What are the elements to be liable under BP 22?
(1) the making, drawing, and issuance of any check for value; (2) the knowledge of the maker, drawer, or issuer that at the time of issuance he does not have sufficient funds in or credit with the drawee bank; and (3) the subsequent dishonor of the check by the drawee bank for insufficiency of funds or credit.[3]
Is good faith a valid defense for violation of BP 22?
Good faith and honest intention are not defenses in a prosecution for violation of B.P. 22 since it follows the general principles of malum prohibitum; it does not punish a person for non-payment of contractual debt but for issuing a bum check; it was enacted to protect the interest of people in checks as a substitute for money; a worthless check is detrimental if placed in circulation
What is the presumption of knowledge of insufficiency of funds under BP 22?
The law presumes that the issuer knew of the insufficiency of his funds if the check is dishonored within 90 days from the date of the check. This presumption is overcome only if the issuer pays or makes arrangements for payment of the full amount of the check within five banking days after receiving a notice of its dishonor. Further, there must be proof that that the issuer was notified of the fact of dishonor, and proof that the issuer had received such notice of dishonor.[4]
What is a Notice of Dishonor?
A written notice of dishonor is required to avail of the presumption of knowledge of insufficient funds at the time of the issuance of the check, which is an element of violation of B.P. Blg. 22. Such notice of dishonor of a check to the maker must be in writing. A mere oral notice to the drawer or maker of the dishonor of his check will not suffice[5].
Is receipt of Notice of Dishonor necessary for the successful conviction of the accused?
Yes, it must be established that the accused received the notice of dishonor for him to be convicted of a violation of B.P. Blg. 22.[6]
If the check is corporate, personal knowledge of the notice of dishonor is necessary. In such case, the notice of dishonor must be sent to the one who signed the check and not to the corporation.[7]
When can a Notice of Dishonor be dispensed with?
A notice of dishonor can be dispensed with where the drawer has no right to expect or require that the drawee bank will honor the check. [8]
The Supreme Court held that the accused whose bank account was already closed even before the subject check was issued had no right to expect or require the drawee bank to honor his check. Hence, he is not entitled to be given a notice of dishonor.[9]
What happens when the check becomes stale?
When the check was not presented for payment within a reasonable time, the maker or drawer will not be liable for a violation of BP 22. However, the unpaid amount may still be recovered through a civil action, or the obligor or debtor may replace the stale check subject to the consent of the obligee or lender.
What is “reasonable time”?
A reasonable time according to current banking practice for presentment of check to hold the maker, drawer, issuer liable is 180-days from the date indicated therein.[10]
Can a person liable under BP 22 be made liable also for Estafa under the Revised Penal Code?
Yes. Estafa can be committed when the offender uses deceit through issuance of check, one of the means of committing estafa. [11]
What is the penalty for violation of BP 22?
If the accused is found guilty, the penalty for its violation is imprisonment for at least 30 days but not more than one year, or a fine of at least
[1] Section 1, BP 22.
[2] Ibid.
[3] San Mateo v. People, March 6, 2013, G.R. No. 200090
[4] Sec. 2, BP 22.
[5] Sia v. People, G.R. No. 149695, 28 April 2004
[6] Chua v. People, G.R. No. 196853, 13 July 2015
[7] Lao v. Court of Appeals, G.R. No. 119178, 20 June 1997
[8] Section 114, Negotiable Instruments Law
[9] Lopez v. People (G.R. No. 166810, 26 June 2008)
[10] Wong v. CA, G.R. No. 117857, February 2, 2001.
[11] Article 315, Revised Penal Code.
