Philippine Bank Secrecy and the Fruit of the Poisonous Tree

JURIST Columnist Edsel Tupaz of Tupaz & Associates, and Guest Columnist Ira Paulo Pozon of the Office of the Vice President of the Philippines, examine the application of the US doctrine of the "fruit of the poisonous tree" in the Philippines and its bearing in the violation of Philippines banking laws...


The ongoing impeachment trial of Chief Justice Renato Corona brought back into the limelight issues of bank secrecy and confidentiality, which had not been so publicly heard of since the impeachment trial of President Joseph Ejercito Estrada in 2000. Accessory to the issue of bank secrecy is the doctrine of the fruit of the poisonous tree, which has likewise gained a foothold in the Philippine media and popular pulse of late.

The rule of thumb has always been that when evidence has been acquired unlawfully, contrary to a number of constitutional protections under the Bill of Rights, such evidence is deemed inadmissible in court or any proceeding. This rule has traditionally been known as the doctrine of the "fruit of the poisonous tree." The doctrine states that if the tree (the source of the evidence) is tainted, then the fruit (any evidence gained from the tree) is tainted as well and thus inadmissible in any court or other proceeding.

Patterned after the US Constitution, the 1987 Philippine Constitution provides a fundamental right of the people against unlawful searches and seizures in Article III, Section 2 of the Bill of Rights, as follows:

The right of the people to be secure in their persons, houses, papers, and effects against unreasonable searches and seizures of whatever nature and for any purpose shall be inviolable, and no search warrant or warrant of arrest shall issue except upon probable cause to be determined personally by the judge after examination under oath or affirmation of the complainant and the witnesses he may produce, and particularly describing the place to be searched and the persons or things to be seized.
Throughout the years, the Philippine Supreme Court has had the occasion to rule on issues relating to the doctrine of the fruit of the poisonous tree. From as early as US v. Hachaw in 1912 and US v. Santos — holdings of the courts at a time when the Philippines was still a non-state US territory pursuant to the Treaty of Paris of 1898 — to People v. Aminnudin in 1988 among many other cases, the Supreme Court has remained steadfast on the ruling that
If a person is searched without a warrant, or under circumstances other than those justifying an arrest without warrant in accordance with law, merely on suspicion that he is engaged in some felonious enterprise, and in order to discover if he has indeed committed a crime, it is not only the arrest which is illegal but also, the search on the occasion thereof as being "the fruit of the poisonous tree."
To reinforce inadmissibility, the Court ruled in 1987 in Nolasco v. Paño and People v. Burgos in 1986, again turning to US precedent, that any evidence taken, even if it confirms the suspicion of commission of a crime, is inadmissible "for any purpose in any proceeding."

Now on the topic of secrecy of bank accounts, the Philippine bank secrecy law has been considered as among the strictest in the world on the issue of confidentiality and non-disclosure. The primary law is the 1955 Republic Act No. 1405, also known as the Bank Secrecy Law, which provided as a general rule, strict confidentiality on deposits with banks or banking institutions, as follows
Section 2. All deposits of whatever nature with banks or banking institutions in the Philippines including investments in bonds issued by the Government of the Philippines, its political subdivisions and its instrumentalities, are hereby considered as of an absolutely confidential nature and may not be examined, inquired or looked into by any person, government official, bureau or office, except upon written permission of the depositor, or in cases of impeachment, or upon order of a competent court in cases of bribery or dereliction of duty of public officials, or in cases where the money deposited or invested is the subject matter of the litigation.
While Section 2 provided for the confidentiality of bank accounts, it also provided for exceptions, thereby allowing lawful access to bank information. These exceptions can be summed up into four instances: first, upon written permission of the depositor; second, in cases of impeachment; third, upon order of a competent court in bribery or dereliction of duty cases of public officials; and fourth, in cases where the money is the subject matter of litigation. Arguably, the second, third and fourth exceptions may be applicable to Corona's impeachment trial, thus, banks which are subject to a subpoena by the Senate sitting as the Impeachment Court, would have to disclose Corona's accounts. It has to be noted too that subsequent laws provided for other exceptions to the guarantee of privacy under Republic Act No. 1405.

Curiously, the Bank Secrecy Law did not provide for a clause aimed to render inadmissible unlawfully accessed bank information. The only plausibly relevant provisions, read together, which may lend support to an application of the fruit of the poisonous tree doctrine state that the unlawful act of any official or employee of a banking institution to disclose any information on bank deposits (Section 3) is deemed a violation of the law subjecting the offender to imprisonment and fine (Section 5).

In the landmark 2006 case of Ejercito v. Sandiganbayan, the Philippine Supreme Court ruled on the issue of unlawful access of bank accounts of former President Joseph Estrada on the charge of plunder. In justifying the access of bank information for plunder, the Court likened cases of plunder and unexplained wealth to bribery or dereliction of duty, in order to fit the case squarely into the exceptions under Section 2 of the Bank Secrecy Law, as follows
Cases of unexplained wealth are similar to cases of bribery or dereliction of duty and no reason is seen why these two classes of cases cannot be excepted from the rule making bank deposits confidential. The policy as to one cannot be different from the policy as to the other ... Thus, cases for plunder involve unexplained wealth.
On the issue of the doctrine of the fruit of the poisonous tree, the Supreme Court also held in Estrada
However, R.A. 1405, it bears noting, nowhere provides that an unlawful examination of bank accounts shall render the evidence obtained therefrom inadmissible in evidence. Section 5 of R.A. 1405 only states that "any violation of this law will subject the offender upon conviction, to an imprisonment of not more than five years or a fine of not more than twenty thousand pesos or both, in the discretion of the court.
The fruit of the poisonous tree doctrine presupposes a violation of law. If there was no violation of RA 1405 in the instant case, then there would be no "poisonous tree" to begin with, and, thus, no reason to apply the doctrine.

As such, it has become clear that, as it currently stands, the Bank Secrecy Law provides for confidentiality of bank accounts and information, the exceptions thereto, and the penalties for violations of its provisions. However, the Estrada ruling brings to light a ratio that may provide for instances where bank information may be accessed unlawfully yet may be admissible against the account holder in any court or proceeding. This, in our opinion, can be a silent constitutional space which the prosecution and defense alike may capitalize upon.

Edsel Tupaz is currently a private prosecutor of the House prosecution panel in the impeachment trial of Philippine Chief Justice Renato Corona. He is a graduate of Harvard Law School and Ateneo Law School. Tupaz is a public interest lawyer and law professor whose expertise lies in comparative constitutional law and policy, teaching at law schools in the US and the Philippines.

Ira Paulo Pozon is Head of the Vice Presidential Special Concerns Unit of the Vice President of the Philippines. He also serves as Legal Counsel and International Relations Officer to the Vice President. He is a graduate of De La Salle University and Far Eastern University. His interests lie in foreign policy, international relations, and comparative public law. He currently teaches at the College of Law of the University of the City of Manila.

Suggested citation: Edsel Tupaz & Ira Paulo Pozon, Philippine Bank Secrecy and the Fruit of the Poisonous Tree, JURIST - Sidebar, Mar. 2, 2012, http://jurist.org/sidebar/2012/03/tupaz-pozon-fruit.php.



This article was prepared for publication by JURIST's professional commentary editorial staff. Please direct any questions or comments to them at professionalcommentary@jurist.org

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