Election‐Period Ban on Large Cash Withdrawals in the Philippines
A comprehensive legal primer (updated 13 June 2025)
1. Concept and Policy Rationale
“Cash-withdrawal ban” (sometimes called the large-cash withdrawal prohibition) is the shorthand for a set of rules the Commission on Elections (COMELEC) attempted to enforce during the 2010s that would have limited or suspended the release of large amounts of cash by banks during the official election period. The immediate goal was to curb vote-buying and the physical movement of cash that traditionally spikes a few days before Election Day. By making it harder to pull out large sums, COMELEC hoped to:
- Break the logistical chain of retail vote-buying;
- Leave an electronic trail (if withdrawals had to be done by cheque or online transfer); and
- Deter would-be spenders because quick encashment would be impossible.
The proposal was novel; no permanent statute in Philippine election law expressly authorises a cash-withdrawal ban. Instead, COMELEC anchored its order on its constitutional power to “enforce and administer all laws and regulations relative to the conduct of elections” (Art. IX-C, § 2(1), 1987 Constitution).
2. Statutory Background
| Source | Core provision relevant to cash withdrawals | Interaction with COMELEC rule-making |
|---|---|---|
| Omnibus Election Code (B.P. Blg. 881) § 261(a) | Vote-buying is an election offense. | The cash-withdrawal ban was conceived as a preventive, not punitive, measure. |
| R.A. 7166 (1991) | Caps on campaign spending and mandate for official statements of contributions & expenditures (SOCE). | Large cash withdrawals defeat the paper-trail purpose of SOCE. |
| Anti-Money Laundering Act (R.A. 9160, as amended) | Banks must report “covered transactions” ≥ ₱500,000 in a single day. | COMELEC’s proposed ₱100,000 weekly cap mirrored AMLA thresholds but was stricter and would have applied even to legitimate withdrawals. |
| Bank Secrecy Act (R.A. 1405) & FCDU Law (R.A. 6426) | Generally prohibit disclosure of deposits. | COMELEC’s order did not require disclosure, only restriction, thus it did not on its face violate bank secrecy—but bankers argued it was an unconstitutional impairment of contract. |
| Bangko Sentral ng Pilipinas (BSP) Charter (R.A. 7653) | BSP has sole supervision over banking operations. | The banking sector contended that COMELEC’s direct regulation of withdrawals usurped BSP’s prudential authority. |
3. COMELEC Resolution No. 9688 (22 March 2013)
Although COMELEC earlier floated similar ideas in 2010 and 2011, Resolution 9688 is the cornerstone document. Key elements:
Period covered: 29 March – 13 May 2013 (election period for the 13 May 2013 mid-term polls).
Section 1 – Prohibition:
- *“No banking institution shall allow any cash withdrawal, encashment of cheque, or conversion of any monetary instrument into cash in an amount exceeding *One Hundred Thousand Pesos (₱100,000) per account per week.”
Section 2 – Reports: Banks must electronically report to COMELEC’s Campaign Finance Office any request that would breach the cap.
Penalties: Treated as an election offense under § 262 of the Omnibus Election Code, punishable by imprisonment and perpetual disqualification from public office (if offender is a public officer) or revocation of banking licence (if a bank).
Exemptions: Government payrolls, remittances of overseas Filipino workers, and withdrawals for bona fide business operations upon prior COMELEC clearance.
4. Immediate Challenge: Bankers Association of the Philippines v. COMELEC
G.R. No. 206844, TRO issued 2 April 2013; decision promulgated 25 June 2013 (unanimous en banc).
Petitioners: Bankers Association of the Philippines (BAP), Chamber of Thrift Banks, Rural Bankers Association, Philippine Bankers Association.
Grounds raised:
- Ultra vires – COMELEC has no power to regulate private contracts of deposit and withdrawal; that power is vested in the BSP and Congress.
- Due process & equal protection – Blanket restriction penalises innocent bank clients and disrupts commerce.
- Right to property – Depositors are unduly deprived of the use of their funds without substantive basis.
Supreme Court action:
2 April 2013: Status quo ante TRO suspending enforcement of Resolution 9688.
25 June 2013 decision: Declared Resolution 9688 null and void for being “a patent exercise of power beyond what the Constitution and statutes allow.” The Court stressed:
- COMELEC may regulate campaign finance reporting after the fact, but it may not impose prior restraints on lawful banking transactions.
- The measure was over-inclusive (it hit legitimate business withdrawals) and under-inclusive (one could still transfer funds via multiple sub-₱100,000 transactions).
Aftermath: The TRO became permanent; no similar resolution has been re-issued since. The ruling stands unaltered as of June 2025.
5. Interaction with Other Election-Finance Rules
| Issue | Usual legal treatment | Effect (or non-effect) of the invalidated ban |
|---|---|---|
| Cash spending on campaign | Legal if within spending limits and properly receipted in SOCE. | Banks remain free to release cash; COMELEC enforces via auditing of SOCEs and AMLA “covered transaction” reports. |
| Vote-buying crackdown | Prosecuted under § 261(a) on the basis of witness testimony, surveillance, and seized money. | Without the ban, COMELEC relies on field operations and coordination with AMLC for suspicious‐transaction reports (STRs) nearing Election Day. |
| Use of electronic money | Not specifically covered by OEC; BSP circulars apply. | Shift to e-wallet vote-buying has been observed; regulators now track aggregate e-wallet top-ups > ₱100k close to elections under AMLA. |
6. Constitutional Points to Remember
- Police power vs. property rights – SC acknowledges that preventing corruption in elections is a legitimate governmental objective, but restrictions on property (cash) must pass substantive due process and equal protection.
- COMELEC’s powers are broad but not limitless – Art. IX-C, § 2 is still subject to statutes defining campaign finance. Where Congress has not acted, COMELEC may fill gaps only if the measure is reasonable and not inconsistent with existing laws (see Penera v. COMELEC, G.R. No. 181613, 25 Nov 2009, among others).
- Delegation doctrine – Regulation of monetary and banking policy lies primarily with Congress and, by enabling statute, the BSP; COMELEC cannot assume that role.
7. Compliance Guidance for Banks and Candidates (Post-2013)
| Stakeholder | Practical pointers under current regime |
|---|---|
| Banks & BSP-supervised institutions | Continue AMLA compliance. “Covered transactions” ≥ ₱500k/day and “suspicious transactions” (regardless of amount) must be reported to AMLC, which shares red-flag intelligence with COMELEC’s Campaign Finance Office. No special caps apply during elections unless resurrected by statute. |
| Candidates & Party Treasurers | Remember the cash expenditure ceiling: ₱3/registered voter for president/vice-president and ₱5/registered voter for others (R.A. 7166). Large cash moves are not by themselves illegal, but unexplained withdrawals close to election day may draw AMLC or COMELEC scrutiny. |
| Campaign Donors | Donations above ₱50,000 must be reported in the donor’s income tax return under the NIRC. Prefer cheque or electronic transfer for traceability. |
| Audit & Accounting Firms | Strongly advise clients to maintain separate campaign bank accounts and preserve ATM receipts/online confirmation for inclusion in SOCE attachments. |
8. Critiques & Reform Proposals
- Overbreadth vs. Under-Inclusiveness – Scholars note that a blanket ₱100,000 cap was too blunt. A risk-based AML approach (triggering enhanced due diligence only for politically exposed persons, PEPs) would withstand judicial review better.
- Legislation Needed – Several bills (e.g., Senate Bills 2159, 2268 in the 18th Congress; House Bill 6095 in the 19th) seek to give COMELEC express authority to impose transaction ceilings during elections, subject to BSP concurrence. None has reached bicameral approval as of 13 June 2025.
- Leverage Fintech Data – With the pivot to e-wallets, the Bangko Sentral’s “Regtech for AML/CFT” framework could feed real-time analytics to COMELEC without a hard-and-fast cash ban.
- Public Education – NGOs argue the demand side of vote-buying will not abate unless voters’ attitudes change; hence civil society pushes for voter‐education campaigns rather than purely supply-side (cash flow) controls.
9. Key Takeaways
- There is no operative election-period cash-withdrawal ban today. COMELEC’s 2013 attempt (Res. 9688) was permanently struck down in BAP v. COMELEC.
- COMELEC can police campaign finance after the fact, but may not impose prior restraints on routine banking activity without clear statutory authority.
- Banks remain gate-keepers under AMLA; their CTRs and STRs, plus COMELEC field intelligence, are now the primary tools against vote-buying.
- Future change requires Congress. Pending bills envision a calibrated cap crafted jointly by COMELEC and BSP, paired with electronic audit trails.
10. Suggested Citation
Author, “Election-Period Ban on Large Cash Withdrawals in the Philippines,” [Journal/Institution] (13 June 2025).
(All statutes and case law cited are Philippine sources; jurisprudential citations follow Supreme Court SCRA and Phil. Reports conventions.)