Understanding BP 22: The Bouncing Checks Law in the Philippines

I. Introduction

Batas Pambansa Blg. 22 (BP 22), commonly known as the Bouncing Checks Law, is a special penal law that punishes the making and issuing of worthless checks in the Philippines.

It was enacted to protect the integrity of checks as substitutes for cash and to discourage the proliferation of checks that are dishonored upon presentment. Unlike estafa, BP 22 focuses less on deceit and more on the act of issuing a check that later bounces due to insufficiency of funds or a closed account.

II. Legal Basis and Policy Objectives

BP 22 is a short law but has a wide practical impact, especially in commercial and lending transactions. Its core policy objectives are:

  1. Protect public interest – Checks are used daily as substitutes for cash. Widespread issuance of bouncing checks undermines trust in the banking system and commercial transactions.
  2. Penalize the issuance of worthless checks – The law targets the act of issuing a check when the drawer knows that his or her account has insufficient funds or credit.
  3. Deter abuse of checks as credit instruments – Even though checks are legally meant as instruments of payment, in practice they are often used as credit or security. BP 22 deters the irresponsible use of checks in that context.

BP 22 is a special penal law and the offense is generally characterized as malum prohibitum—what matters is the prohibited act itself, not the criminal intent or moral blameworthiness.

III. Covered Instruments and Basic Concepts

1. What is a “check” under BP 22?

BP 22 applies to checks as understood under negotiable instruments law—written orders addressed to a bank to pay a sum of money on demand to a payee or bearer, drawn against a deposit account.

Key characteristics:

  • Drawn upon a bank or depositary institution.
  • Payable on demand.
  • Requires the drawer’s signature.

Other negotiable instruments (like promissory notes or bills of exchange not drawn upon a bank) are not covered by BP 22, though they might give rise to civil liability or other criminal offenses.

2. Checks “for value” or “on account”

BP 22 covers checks issued:

  • To apply on account – e.g., to pay an existing obligation or balance.
  • For value – e.g., to pay for goods, services, loans, etc.

Jurisprudence has consistently read this broadly. Even checks issued as security or guarantee for an obligation have often been held to fall within the coverage, because the law is aimed at the issuance of a worthless check itself, not strictly the underlying contract characterization.

IV. Elements of the Offense

To secure a conviction under BP 22, the prosecution must generally establish the following elements:

  1. The making, drawing, and issuance of a check

    • The accused must have made or drawn and issued a check.
    • The check must have been issued—not merely prepared; delivery to the payee or holder is essential.

  2. The check was issued to apply on account or for value

    • There must be an underlying consideration or obligation (loan, sale, payment of a debt, etc.).
    • Purely fictitious or sham checks with no payee or purpose rarely arise in practice, but what matters is that it was meant to have economic effect.

  3. At the time of issuance, the drawer knew that he or she did not have sufficient funds or credit with the bank

    • This element is crucial, but the law provides presumptions to make proof easier (discussed below).

  4. The check was subsequently dishonored by the bank for insufficiency of funds or credit, or because the account was closed

    • Dishonor may be due to any of the following:

      • “Drawn against insufficient funds (DAIF)”
      • “Account closed”
      • Other equivalent reasons clearly traceable to lack of funds or credit

    • Dishonor due solely to technical defects (e.g., mismatched signature, torn check, stale check, post-dated beyond allowable, etc.) may not qualify under BP 22 if the bank does not actually state insufficiency of funds or similar reason.

V. Presumption of Knowledge and Notice Requirements

One of the most important features of BP 22 is its built-in presumption of knowledge of insufficiency of funds, designed to address the difficulty of proving a person’s state of mind.

1. Presentment within 90 days

For the presumption to arise, the law generally requires that:

  • The check must be presented to the bank for payment within ninety (90) days from its date.

If the check is presented beyond 90 days, BP 22 liability may be affected, because:

  • The statutory presumption of knowledge might not apply.
  • However, in some cases, liability may still be argued if actual knowledge is proven by other evidence.

2. Written notice of dishonor

Upon dishonor by the bank, the holder or payee typically receives advice from the bank (e.g., a “return slip” or “advice of dishonor”). However, for BP 22 purposes, the crucial requirement is:

  • The drawer must receive a written notice of dishonor from the holder or payee (or his/her representative).

Key practical points:

  • The notice should be in writing (letter, demand notice, etc.).

  • It should clearly inform the drawer that the check was dishonored and why (e.g., insufficient funds).

  • Actual receipt by the drawer is important and is often proven by:

    • Signature on a registry return card
    • Acknowledgment receipts
    • Affidavits of the person who served the notice

  • If the notice is sent by registered mail, courts often accept the registry return card and corresponding documents as proof.

If the accused never received written notice of dishonor, this is a common defense, because without such notice, the 5-banking-day grace period (below) never starts to run.

3. Five (5) banking-day grace period

After receiving the written notice of dishonor, the drawer is granted a statutory grace period:

  • The drawer has five (5) banking days from receipt of written notice to:

    • Fully pay the amount of the check to the holder; or
    • Make arrangements for payment acceptable to the payee or holder.

If payment is made or acceptable arrangements are reached within this period, criminal liability under BP 22 is generally avoided, because the presumption of knowledge does not become conclusive.

However, if the drawer fails to pay or make acceptable arrangements within five banking days:

  • The law presumes that he or she knew at the time of issuance that there were insufficient funds or credit.
  • This presumption is prima facie (rebuttable), but in practice it is difficult to overcome without very strong evidence.

VI. Nature of the Offense: Malum Prohibitum

BP 22 is a malum prohibitum statute. This has several practical consequences:

  1. Criminal intent (mens rea) is not essential

    • The prosecution does not need to prove intent to defraud, bad faith, or malice.
    • What matters is that the prohibited act occurred under the circumstances defined by law (issue of check, dishonor, failure to pay within 5 banking days after notice).

  2. Good faith or honest belief is often not a valid defense

    • Even if the drawer sincerely believed funds would be available later (e.g., expecting a deposit, payment, or loan), that usually does not excuse liability.

  3. Underlying civil dispute is separate

    • Arguments that the underlying transaction was void, unfair, or simulated may not automatically extinguish BP 22 liability, although in some cases they might be relevant (e.g., total absence of consideration or fraud against the issuer).

VII. Penalties and Sentencing Trends

1. Statutory penalties

Under BP 22, the basic penalties provided by law are:

  • Imprisonment of not less than thirty (30) days but not more than one (1) year;
  • Or a fine of not less than but not more than double the amount of the check (subject to the monetary ceiling provided by law, as amended);
  • Or both fine and imprisonment, at the discretion of the court.

Each bounced check is generally treated as a separate offense, so multiple checks in a single transaction can lead to multiple counts and multiple penalties.

2. Judicial policy: preference for fines

Over time, the Supreme Court has issued several Administrative Circulars providing guidance to trial courts on how to impose penalties in BP 22 cases. Key themes in these circulars include:

  • Strong preference for the imposition of fines only, rather than imprisonment, particularly when:

    • The case is primarily one of debt collection;
    • There are no aggravating circumstances;
    • The amount involved and circumstances justify leniency.

  • Recognition that the law’s purpose is to protect public interest and deter bad check issuance, but not necessarily to overcrowd jails with debtors.

As a result, in practice, many BP 22 convictions result in fines, often with civil liability and conditions for payment, rather than imprisonment—though jail terms remain legally possible and are sometimes imposed.

VIII. Civil vs Criminal Liability

BP 22 violations almost always involve both criminal and civil aspects.

1. Criminal aspect

  • Concerned with the public wrong of issuing a worthless check.
  • Prosecuted in the name of the People of the Philippines.
  • Outcome: Acquittal or conviction (with penalties).

2. Civil aspect

  • Arises from the underlying obligation or the amount represented by the check.
  • Even if the criminal case is dismissed, the civil liability may persist, unless the dismissal is based on a finding that the debt does not exist or has already been fully paid.

Courts often:

  • Include a civil judgment (ordering payment of the amount of the check plus interest, damages, etc.) in the BP 22 decision; or
  • Reserve the civil action for separate filing.

3. Effect of payment and settlement

  • Before filing of the criminal case – Full payment and settlement may convince the offended party not to file a complaint, effectively stopping criminal exposure in practice.
  • After filing but before conviction – Courts may still proceed with the criminal case as a matter of public policy, but payment is a strong mitigating circumstance and may lead to reduction of penalties or settlement.
  • After conviction – Payment does not erase the conviction, but it may influence execution or the arrangement of civil liabilities.

In reality, many BP 22 cases are settled through compromise agreements, with complainants agreeing to move for withdrawal or dismissal (subject to court approval) in exchange for full or structured payment.

IX. Distinction Between BP 22 and Estafa (Art. 315(2)(d), RPC)

Issuing a bouncing check can give rise to either or both of:

  1. BP 22 – Special law on bouncing checks; and
  2. Estafa under Article 315(2)(d) of the Revised Penal Code – Swindling via postdated or worthless checks.

1. Key differences

a. Nature of the offense

  • BP 22 – Malum prohibitum; focuses on the act of issuing a worthless check.
  • Estafa – Malum in se; requires deceit and damage to another.

b. Elements (simplified)

  • BP 22:

    • Issuance of a check for value or on account;
    • Insufficient funds or closed account at time of issuance;
    • Check dishonored;
    • Failure to pay within 5 banking days after written notice of dishonor.

  • Estafa (Art. 315(2)(d)):

    • The check is used to induce the offended party to part with money or property;
    • At the time of issue, the drawer knows that he or she has no sufficient funds;
    • The offended party suffers damage (loss).

c. Evidence of deceit

  • BP 22 – Deceit or damage is not required.
  • Estafa – Requires proof of fraud or deceit and damage, such as convincing someone to sell goods or extend a loan based on the false assurance of a check.

2. Double jeopardy and cumulative liability

  • A person may, in principle, be charged both for BP 22 and estafa arising from the same check, because they punish different aspects of the act. Courts, however, are careful about double jeopardy issues and evaluate whether the elements and evidence are distinct.

X. Persons Who May Be Liable

1. Individual drawer

The primary liable party is the drawer, i.e., the person whose account is drawn upon and whose signature appears on the check.

2. Corporate officers and responsible signatories

When the drawer is a corporation, partnership, or juridical entity, the check is usually signed by:

  • President, CEO, Treasurer, or
  • Other officers or authorized signatories.

In BP 22 cases:

  • The signatory officer who actually signed and issued the check on behalf of the corporation is typically made criminally liable.
  • Corporate personality does not shield the signatory from criminal liability; the corporation itself is generally subject to civil liability for the amount involved, but criminal responsibility attaches to a natural person.

3. Agents and representatives

If an agent signs a check without authority or exceeds authority, he or she may incur liability. If there was authority and the agent merely implemented instructions, liability questions may arise depending on who had control over the account and issuance.

XI. Venue and Jurisdiction

Because BP 22 is punishable by imprisonment of up to one year, jurisdiction typically lies with:

  • The Municipal Trial Court (MTC), Metropolitan Trial Court (MeTC), or Municipal Circuit Trial Court (MCTC) of the place where the offense was committed.

Over time, the Supreme Court has clarified where the offense is deemed committed, allowing venue in any of the following:

  1. Place where the check was drawn or issued
  2. Place where the check was delivered to the payee or holder
  3. Place where the check was dishonored (where the drawee bank is located)

This flexibility is meant to make it easier for complainants to file cases and avoid technical dismissals based on improper venue.

XII. Common Defenses and Issues in BP 22 Cases

Despite being malum prohibitum, there are still valid defenses or mitigating factors in BP 22 cases. Some of the most common include:

1. Lack of written notice of dishonor

If the accused never received written notice of dishonor:

  • The five-banking-day grace period never legally began;
  • The presumption of knowledge of insufficiency cannot arise;
  • This can be ground for dismissal or acquittal.

Courts scrutinize the proof of mailing and receipt carefully.

2. Payment or arrangement within 5 banking days

If the accused paid the amount in full or made acceptable arrangements within five banking days after receiving notice:

  • Criminal liability is generally avoided under BP 22, because the law itself grants this period as a way to cure the dishonor.

3. The instrument is not a “check” within the meaning of the law

Examples:

  • Document is not drawn on a bank;
  • It is a promissory note or another instrument, not a check;
  • Post-dated instrument not intended for bank presentment.

In such cases, BP 22 may not apply, though other liabilities may.

4. The check was not issued “for value or on account”

If the accused can convincingly prove that the check:

  • Was never intended as payment or security;
  • Was issued under unusual circumstances (e.g., as a sample or demonstration, without any obligation);

then BP 22 coverage may be questioned. In practice, this is rare and fact-sensitive.

5. Forged or unauthorized signatures

If the signature on the check is forged or unauthorized:

  • The alleged drawer cannot be held liable, because there was no issuance by that person;
  • Liability may fall on whoever forged or used the forged check, under other legal provisions.

6. Technical banking issues

If the check was dishonored for reasons unrelated to funds, such as:

  • Mismatched signature due to bank error
  • Material alterations made by someone other than the drawer
  • Stale check (presented beyond the bank’s allowable period)

then BP 22 liability can be affected, depending on whether insufficiency of funds was truly the reason for dishonor.

XIII. Compliance and Risk Management for Businesses and Individuals

Because BP 22 is frequently invoked in commercial disputes, prudent parties should adopt clear practices:

  1. Never issue a check without assured funds or credit

    • Treat checks as cash equivalents, not mere promises.

  2. Maintain accurate and updated records of check issuance and bank balances.

  3. Avoid using checks purely as “security” if you’re not certain funds will be available when due, as courts have repeatedly applied BP 22 in such cases.

  4. Respond immediately to any notice of dishonor

    • Use the 5-banking-day grace period wisely—either pay in full or negotiate a formal written arrangement with the holder.

  5. Ensure proper authority and documentation when signing checks on behalf of companies or organizations.

  6. Use alternative modes of payment (e.g., electronic transfers) when appropriate, especially for large or sensitive transactions, to reduce exposure to BP 22 issues.

XIV. Emerging Issues and Perspectives

Even without going into specific new cases, some larger themes have emerged over time:

  1. Policy debates on criminalization of debt

    • Critics argue that BP 22 effectively criminalizes private debt and can be abused as a collection tool.
    • Supporters maintain that the law is vital to preserving confidence in checks and the banking system.

  2. Shift to electronic payments

    • With the growth of online banking and e-wallets, the practical use of physical checks is decreasing in some sectors. However, in many business and financing transactions, checks (especially postdated checks) remain common.

  3. Judicial emphasis on balancing deterrence and fairness

    • Courts try to balance the need to deter irresponsible issuance of checks against the realities of financial hardship, often favoring fines and structured payments over imprisonment.

XV. Conclusion

BP 22, the Bouncing Checks Law, remains a powerful tool in Philippine commercial practice. It punishes the issuance of worthless checks not because of deceit alone, but because such acts threaten public confidence in the banking system and the use of checks as substitutes for cash.

For individuals and businesses, the key takeaways are:

  • Treat a check as cash, not a casual promise.
  • Always ensure sufficient funds or credit before issuing a check.
  • Take written notices of dishonor very seriously and act within the five-banking-day window.
  • Remember that settlement may address civil obligations, but the criminal dimension of BP 22 follows its own rules.

A solid understanding of BP 22 helps parties transact more safely, avoid criminal exposure, and use checks in a way that supports, rather than undermines, trust in the Philippine financial system.

Disclaimer: This content is not legal advice and may involve AI assistance. Information may be inaccurate.

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