In the Philippines, the failure to remit funds collected for a specific purpose—whether in a private commercial setting or involving mandatory government contributions—is not merely a civil breach of contract. It often crosses the threshold into criminal territory. The legal framework penalizes the misappropriation or withholding of such funds under several special laws and the Revised Penal Code (RPC).

1. Estafa under the Revised Penal Code

The primary vehicle for prosecuting the failure to remit funds is Article 315, paragraph 1(b) of the Revised Penal Code, or Estafa with Abuse of Confidence.

The Act: This occurs when a person receives money, goods, or any other personal property in trust, or on commission, or for administration, or under any other obligation involving the duty to make delivery of or to return the same, but misappropriates or converts such money or property.
Key Element: The "failure to account" for the funds upon demand is often considered circumstantial evidence of misappropriation.
Corporate Liability: While a corporation has a separate juridical personality, the responsible officers (e.g., President, Treasurer, or Manager) who authorized or performed the illegal act are held criminally liable.

2. Mandatory Contributions and Special Laws

The most common instances of criminal non-remittance occur in the employer-employee relationship regarding mandatory statutory benefits.

A. Social Security System (SSS)

Under Republic Act No. 11199 (Social Security Act of 2018), employers are mere trustees of the contributions deducted from their employees' salaries.

Liability: Failure or refusal to remit the deducted contributions to the SSS within the prescribed period is penalized as Estafa.
Presumption: The law explicitly states that if the employer fails to remit the funds, it is presumed that they have been misrepresented or converted to their own use.

B. Pag-IBIG Fund (HDMF)

Under Republic Act No. 9679, employers who fail to remit the contributions collected from employees face imprisonment of up to six years and a fine. Similar to the SSS Law, the responsible officers of a corporation are the ones who face the penalty of imprisonment.

C. PhilHealth

Under Republic Act No. 10606 (National Health Insurance Act), the failure of an employer to remit the required contributions is penalized by a fine and imprisonment. The law emphasizes that the employer’s obligation is a mandatory fiduciary duty.

3. Failure to Remit Taxes (Tax Evasion)

The National Internal Revenue Code (NIRC), as amended by the TRAIN Law and subsequent legislation, imposes heavy penalties on "Withholding Agents."

Trust Fund Doctrine: Taxes withheld by an employer (such as Income Tax on compensation or VAT) are considered held in trust for the government.
Criminality: Under Section 255 of the NIRC, any person required to withhold and remit any tax who fails to do so shall, in addition to other penalties, be punished by a fine and imprisonment of not less than one year but not more than ten years.

4. Bouncing Checks (B.P. 22)

In many cases, an attempt to remit funds is made through a check that later bounces.

Batas Pambansa Blg. 22: Even if the underlying reason for the payment was a failure to remit collected funds, the act of issuing a check without sufficient funds constitutes a separate criminal offense. This is often filed concurrently with an Estafa charge to ensure a higher probability of conviction or settlement.

5. Elements for Prosecution

To secure a conviction for criminal non-remittance (specifically Estafa), the prosecution must generally prove:

Receipt of Funds: That the offender received the money in trust or under an obligation to remit it.
Misappropriation: That the offender misappropriated or converted the money for personal use or failed to deliver it.
Demand: That a demand was made by the offended party (though in statutory crimes like SSS non-remittance, the lapse of the deadline often suffices as a violation).
Prejudice: That damage or prejudice was caused to another person (the employee or the government).

6. Defenses and Mitigation

Common legal defenses against these charges include:

Absence of Intent: Proving that the failure was due to a technical error rather than a willful intent to defraud (though this is difficult in "Malum Prohibitum" cases like SSS/PhilHealth).
Novation: Attempting to convert the criminal liability into a purely civil obligation through a new agreement before a criminal case is filed (though this is often rejected by courts once the crime of Estafa is already consummated).
Full Payment: While paying the amount does not extinguish criminal liability, it may be considered a mitigating circumstance or lead to the withdrawal of the complaint by the private offended party through an Affidavit of Desistance.

Summary Table: Criminal Liability

Type of Fund	Governing Law	Primary Penalty	Responsible Party
Private/Commercial	Art. 315, RPC (Estafa)	Imprisonment based on amount	Individual/Corporate Officer
SSS Contributions	R.A. 11199	6-12 years imprisonment	Employer / Managing Head
Pag-IBIG Funds	R.A. 9679	Up to 6 years / Fine	Employer / Managing Head
Withholding Tax	NIRC (Tax Code)	1-10 years imprisonment	Withholding Agent
PhilHealth	R.A. 10606	Fine and Imprisonment	Employer / Managing Head