BOUNCING CHECKS LAW

Case Overview and Summary

Summary of Batas Pambansa Blg. 22

Penalties for Issuing Checks Without Sufficient Funds or Credit
- Any person who issues a check without sufficient funds or credit shall be punished by:
• Imprisonment of not less than 30 days but not more than 1 year, or
• Fine of not less than the amount of the check but not more than double the amount, not exceeding ₱200,000, or
• Both imprisonment and fine (Section 1)

- The same penalty applies if the drawer had sufficient funds initially but failed to maintain funds to cover the check within 90 days from the date on the check (Section 1)

Evidence of Knowledge of Insufficient Funds
• Dishonor of a check within 90 days from its date is prima facie evidence of knowledge of insufficient funds, unless the drawer pays or makes arrangements for payment within 5 banking days after receiving notice of dishonor (Section 2)

Duties of the Drawee Bank
• The drawee bank must explicitly state "insufficient funds" as the reason for dishonor (Section 3)
• A dishonored check with the reason stamped by the drawee bank is prima facie evidence of issuance, presentment, dishonor, and proper dishonor reason (Section 3)
• Even with a stop payment order, the drawee must state "insufficient funds" if applicable (Section 3)

Definition of "Credit"
• "Credit" means an arrangement or understanding with the bank for payment of the check (Section 4)

Relation to Revised Penal Code
• Prosecution under this Act is without prejudice to liability under the Revised Penal Code (Section 5)

Separability Clause and Effectivity
• If any provision is declared unconstitutional, the remaining provisions shall remain in force (Section 6)
• The Act took effect 15 days after publication in the Official Gazette (Section 7)