Below is a comprehensive discussion of the topic of bouncing checks liability in the Philippines, specifically focusing on a scenario where the drawer (the person issuing the check) notifies the payee (the person to whom the check is issued) that there are insufficient funds. This discussion is based on Philippine laws, primarily Batas Pambansa Blg. 22 (the Bouncing Checks Law) and relevant jurisprudence. It is for general informational purposes only and does not substitute for tailored legal advice from a qualified attorney.

1. Overview of the Relevant Law: Batas Pambansa Blg. 22 (the “Bouncing Checks Law”)

Batas Pambansa Blg. 22 (BP 22), commonly referred to as the Bouncing Checks Law, was enacted to curb the practice of issuing checks without sufficient funds or credit. It is a special penal law that imposes criminal liability on any person who issues a worthless check, under certain conditions.

1.1 Key Elements Under BP 22

To secure a conviction under BP 22, the prosecution typically needs to establish the following elements:

That the offender makes, draws, or issues any check.
That the check is made, drawn, or issued to apply to an account or for value.
That at the time the check is issued, the issuer knows that he or she does not have sufficient funds in, or credit with, the bank.
That the check is subsequently dishonored by the bank for insufficiency of funds or credit, or because the account has been closed.
That the drawer fails to pay or make arrangements for payment within five (5) banking days from receiving notice of dishonor.

Note that under BP 22, there is a statutory presumption of knowledge of insufficient funds once the issuer fails to pay or arrange payment within five days from receipt of notice of dishonor. This is crucial because even if the drawer declares beforehand that there may be insufficient funds, the law places emphasis on the check actually being dishonored and on the post-dishonor remedy or payment.

2. Liability Even After Prior Notice of Insufficient Funds

2.1 “Prior Notice” Does Not Necessarily Negate Criminal Liability

A common misconception is that if the drawer informs the payee in advance that there are insufficient funds or instructs the payee not to deposit the check yet, it automatically negates liability under BP 22. Philippine jurisprudence, however, has repeatedly clarified that prior knowledge on the part of the payee (i.e., being told there is no money in the account at the time of issuance) does not excuse the drawer from liability under the Bouncing Checks Law.

Under BP 22, the core wrongful act is the issuance of a check at a time when the drawer knows it is not sufficiently funded, coupled with a subsequent dishonor of that check. Even if the payee is notified before deposit that there are insufficient funds, the drawer can still be liable if:

The check, upon presentment, is dishonored for insufficiency of funds or a closed account.
The drawer fails to pay the amount of the check or make arrangements with the bank to cover the check within five (5) banking days after receiving written notice of dishonor.

Thus, the mere act of warning the payee does not obliterate the presumption that the drawer knew of the insufficient funds at issuance.

2.2 The “Five-Day” Notice Requirement

Upon dishonor of the check, the payee or bank typically issues a notice of dishonor to the drawer (often through registered mail or a personal service). The drawer then has five (5) banking days from receipt of that notice to settle or make arrangements for payment of the amount. Failure to comply triggers the presumption that the drawer had knowledge of insufficient funds or credit at the time of issuance. This presumption is key to securing a conviction under BP 22.

Even if the drawer had previously told the payee that there might not be sufficient funds, it is the formal dishonor and the subsequent failure to fix the matter within the statutory five days that cements the criminal aspect under the law.

3. Additional Legal Considerations

3.1 Relationship with Estafa (Revised Penal Code)

Issuing a bouncing check can also lead to charges of estafa under Article 315(2)(d) of the Revised Penal Code if there is intent to defraud. While BP 22 covers the act of issuing a check that bounces regardless of intent, estafa requires an element of deceit or fraud at the time of issuance.

It is possible, in some cases, for a payee to file charges both under BP 22 and for estafa. Ultimately, courts will examine whether there was deceit, and whether criminal liability under both laws applies or if the facts only support one charge. In practice, many choose to pursue the simpler and more straightforward BP 22 charge, but the availability of estafa remains a possibility if fraud is present.

3.2 Civil Liability vs. Criminal Liability

Criminal liability: arises from violating BP 22 itself and is punishable by a fine and/or imprisonment.
Civil liability: arises from the obligation to pay the amount of the check (including any damages that may have been suffered by the payee).

The issuance of a bouncing check typically creates both civil liability (the obligation to pay the amount of the check) and criminal liability under BP 22. Courts may, under certain circumstances, award civil damages and impose criminal penalties simultaneously.

3.3 Penalties

Under BP 22, the penalty can be imprisonment of up to one (1) year, or a fine ranging from the amount of the check up to double its amount (but not exceeding Php 200,000), or both at the discretion of the court. Philippine jurisprudence and court issuances (such as Supreme Court administrative circulars) have tended in recent years to favor imposing fines rather than imprisonment, unless there are aggravating circumstances.

3.4 Defenses

Common defenses raised in BP 22 cases include:

Lack of notice of dishonor: If the drawer never received the formal notice of dishonor and thus was not given a chance to pay within five days, the prosecution might fail to prove knowledge of insufficient funds.
Payment or arrangement within five days: If the drawer fully pays or makes payment arrangements accepted by the bank or payee within five days from notice, there is no BP 22 violation.
Check not issued for account or for value: If the check was issued as a mere guarantee and did not represent an actual transaction, some courts have looked into whether BP 22 applies, although generally a check used as a guarantee can still fall under BP 22 if other elements are present.
Forgery or unauthorized issuance: If the drawer proves that the signature was forged or that the check was issued without his/her knowledge or consent, the criminal aspect under BP 22 does not apply.

4. Procedural Aspects and Typical Case Flow

Issuance of the Check: The drawer issues the check to the payee.
Payee’s Deposit/Presentment: The payee deposits or presents the check for payment.
Bank Dishonor: If the bank dishonors the check (due to insufficient funds, closed account, or other valid reason), it notifies the payee (and possibly returns the check).
Notice of Dishonor to Drawer: A formal written notice is sent to the drawer, often via registered mail.
Five-Day Period: From the date the drawer receives the notice, the law affords five banking days to settle the amount or make payment arrangements.
Filing of Criminal Complaint: If the drawer fails to comply within five days, the payee can file a complaint for violation of BP 22.
Preliminary Investigation: The prosecutor conducts a preliminary investigation to see if probable cause exists.
Filing in Court: If probable cause is found, an Information (the formal charge) is filed before the Municipal or Regional Trial Court (depending on the amount).
Trial and Judgment: The court hears the case and decides whether the accused is guilty or not guilty under BP 22. If guilty, a criminal penalty (fine or imprisonment or both) may be imposed, along with possible civil liability.

5. Practical Guidelines and Takeaways

Check Issuance is Serious: When issuing a check, ensure that your account has sufficient funds or that you have a credit arrangement with the bank to avoid the risk of criminal liability.
Prior Notification Won’t Save You: Informing the payee beforehand that funds are insufficient does not shield you from the law. BP 22 remains applicable if the check is dishonored and no remedy is made within five days after formal notice.
Remedy Period: Promptly act upon receiving a notice of dishonor. The five-day window is your last chance to avoid criminal exposure under BP 22.
Documentation: If you arrange to cover the check or settle the debt, keep records of your transactions, confirmations from the bank, and any formal agreements with the payee.
Legal Counsel: Consult an attorney if you are facing a BP 22 charge or if you intend to pursue legal action against someone who issued you a bouncing check. Legal nuances can vary case by case.

6. Conclusion

In Philippine law, liability for bouncing checks under Batas Pambansa Blg. 22 remains firmly grounded on the principle that issuing a check without sufficient funds is a criminal act once the check is dishonored and the issuer fails to remedy the insufficiency within five banking days of notice. Crucially, informing the payee beforehand of insufficient funds does not extinguish or negate the possibility of criminal liability—the law’s focus is on the drawer’s act of issuing the check knowing it could be dishonored, plus the failure to cover it after formal dishonor.

Hence, anyone who issues checks in the Philippines must be aware of BP 22’s requirements and the five-day notice rule. Bouncing checks can lead to serious legal consequences, including fines and possibly imprisonment, in addition to civil liability. If there is any doubt or financial difficulty, consulting with a legal professional early on can help in avoiding or mitigating the repercussions of a BP 22 violation.

Disclaimer: This write-up is provided for general informational purposes and does not constitute legal advice. Laws, regulations, and jurisprudential interpretations can change over time, and individual circumstances vary widely. For specific questions or legal concerns, always consult a qualified Philippine attorney.