In the Philippine legal system, the garnishment of bank accounts is a powerful remedial measure used to satisfy a final judgment or to secure a claim during pending litigation. It is a species of attachment that focuses specifically on personal property—in this case, credits or money—belonging to a debtor but held by a third party, typically a banking institution.

1. Legal Basis and Nature

Garnishment is primarily governed by the Rules of Court, specifically Rule 39 (Execution, Satisfaction, and Effect of Judgments) for post-judgment scenarios, and Rule 57 (Provisional Remedies: Attachment) for cases where the litigation is still ongoing.

Unlike a levy on real property, garnishment does not require the physical seizure of assets. Instead, it operates as an involuntary forced assignment of the debtor's credit. Once a bank is served with a notice of garnishment, it becomes a "forced intervenor" or a "custodian" of the funds for the court.

2. The Procedure: How It Happens

The process generally follows a strict sequence to ensure due process:

Issuance of Writ: A court issues a Writ of Execution (post-judgment) or a Writ of Attachment (pre-judgment).
Notice of Garnishment: The Sheriff serves the writ along with a formal Notice of Garnishment to the bank’s cashier, manager, or authorized officer.
Bank’s Acknowledgment: The bank must immediately "freeze" the amount specified in the notice. They are required to submit a Reply or Affidavit of Garnishment to the court within a specific period (usually five days), stating whether the debtor has sufficient funds to cover the debt.
Delivery of Funds: If funds are available, the bank does not hand the money directly to the creditor. Instead, the bank issues a check in the name of the judgment obligee (the creditor) or the court, which the Sheriff then delivers.

3. Legal Limits and Exemptions

Under Philippine law, not all funds in a bank account can be touched. There are significant statutory protections designed to prevent the debtor from falling into total destitution or to protect public interests.

Property Exempt from Execution

Under Section 13, Rule 39 of the Rules of Court, the following (which may be deposited in banks) are exempt:

The Family Home: Generally exempt, though there are exceptions (e.g., non-payment of taxes).
Salaries and Wages: Earnings for personal services rendered within the month preceding the levy, necessary for the support of the family.
Pensions and Government Benefits: Money received as gratuity, pension, or aid from the government (e.g., SSS, GSIS, or Veterans’ benefits) is strictly exempt from garnishment.
Trust Funds: Funds held by the debtor in a fiduciary capacity for another person.

The Bank Secrecy Act (R.A. 1405)

A common misconception is that the Law on Secrecy of Bank Deposits prevents garnishment. The Supreme Court has ruled that garnishment does not violate bank secrecy laws. Because the Sheriff is not inquiring into the detailed history of transactions but is merely seizing the "existence" of a credit to satisfy a court order, it is considered a valid legal exception.

4. Specific Protections for Special Accounts

Foreign Currency Deposits (R.A. 6426)

Foreign currency accounts (e.g., US Dollar accounts) enjoy a higher level of protection than Peso accounts. Under the Foreign Currency Deposit Act, these deposits are "exempt from attachment, garnishment, or any other order or process of any court, legislative body, government agency or any administrative body whatsoever."

Note: The only major exception created by jurisprudence (e.g., Salvacion vs. Central Bank) is when the depositor is a transient foreigner (like a rapist or criminal) and the funds are needed to satisfy a claim for damages by a Filipino victim, based on equity and public policy.

Joint Accounts

In the case of "And/Or" accounts, the bank may freeze the entire amount initially. However, the non-debtor co-owner can file a Third-Party Claim to prove that a portion of the funds belongs exclusively to them and should therefore be released.

5. Duties of the Bank

The bank occupies a delicate position. It owes a fiduciary duty to its depositor but must comply with a lawful court order.

Duty to Inform: The bank must notify its client that their account has been garnished.
Duty to Hold: Once served, the bank cannot allow the debtor to withdraw the garnished amount. If the bank allows the debtor to spirit away the funds after receiving notice, the bank can be held liable for "indirect contempt" and may be forced to pay the creditor out of its own pocket.

6. Remedies for the Account Holder

If a person finds their account garnished, they have several legal avenues:

Motion to Quash: If the Writ was issued irregularly or the judgment is not yet final and executory.
Affidavit of Third-Party Claim: If the funds in the account belong to someone other than the defendant.
Claim for Exemption: If the funds are exempt by law (e.g., government pension).
Counter-bond: In cases of preliminary attachment, the debtor can post a counter-bond to lift the garnishment while the case is ongoing.