Question & AnswerQ&A (Republic Act No. 6426)
The title of Republic Act No. 6426 is the 'Foreign Currency Deposit Act of the Philippines.'
Any person, natural or juridical, may deposit foreign currencies with designated Philippine banks in good standing, subject to the provisions of this Act.
Only foreign currencies acceptable as part of the international reserve, except those required by the Central Bank to be surrendered under Republic Act No. 265, may be deposited.
They have the authority to accept deposits and foreign currencies in trust, issue certificates evidencing deposits, discount such certificates, accept deposits as collateral for loans, and pay interest in foreign currency on deposits.
Banks must maintain a 100% foreign currency cover for their deposit liabilities, with at least 15% in foreign currency deposits with the Central Bank, and the remainder in foreign currency deposits, short-term loans, or securities that are readily marketable.
No, there are no restrictions on withdrawal or transfer abroad except those arising from the contract between the depositor and the bank.
Interests on deposits belonging to non-residents not engaged in trade or business in the Philippines are exempt from income tax.
The Monetary Board of the Central Bank promulgates necessary rules and regulations for implementing the Act.
In such cases, the rules and regulations in effect at the time the deposit was made shall govern.
Secrecy of deposits is governed in accordance with the provisions of Republic Act No. 1405.
Yes, deposits under this Act are insured under Republic Act No. 3591, and payment shall be made in the same currency as the deposits.
Violators upon conviction face imprisonment of one to five years, a fine of five thousand to twenty-five thousand pesos, or both at the court's discretion.