(This is a four-part discussion on Bouncing Checks. See the pages at bottom of post.)
Checks will always be an integral part of business, which is why we have a number of discussions regarding checks (see Bouncing Checks [BP 22]). This time let’s have a more extensive discussion on bouncing checks.
What is the law that punishes bounced checks?
The Bouncing Checks Law, or Batas Pambansa (BP) Blg. 22, is a law that governs the criminal liability arising from the issuance of bounced checks. The full title of BP 22: “An Act Penalizing the Making or Drawing and Issuance of a Check Without Sufficient Funds or Credit and for Other Purposes“. In certain instances, the same acts may also give rise to another criminal liability for estafa under the Revised Penal Code (see discussion in part 4 below).
What’s the reason or rationale for BP 22?
BP 22 is intended to prohibit the making of worthless checks and putting them in circulation. Even years ago, the approximate value of bouncing checks was about 200 million pesos per day. The issuance of bouncing checks is a crime not only against property. The magnitude of the crime has an adverse effect on the greater public interest. The stability and commercial value of checks as currency substitutes will be seriously affected. This, of course, has serious repercussions in trade and in banking communities.
Does BP 22 violate the Constitutional mandate that no person shall be imprisoned for debt?
It has been argued that BP 22 in reality punishes the non-payment of debt. However, while it is true that no person can be imprisoned for debt, what BP 22 punishes is the act of issuing bad checks, and not the failure to pay a debt. It’s not a “bad debt law”; it’s rather a “bad check law.” It’s not designed to coerce a debtor to pay his debt.
Does BP 22 impairs the freedom of people to enter into contracts?
The Constitution also guarantees the right to enter into contract. Each one should be responsible for the contracts entered into. If you get into a bad bargain, if you get a bad check, then it’s your fault for not making sure that the other person is trustworthy. Checks, however, are not simple contracts between two persons. “It is a commercial instrument which, in this modem day and age, has become a convenient substitute for money.” It is an integral part of the banking system. Besides, what the law protects are “lawful” contracts.