G.R. No. 222312 - Concurring and Dissenting Opinion

G.R. No. 222312, May 20, 2025,
♦ Decision, Dimaampao, [J]
♦ Concurring Opinion, Leonen, [J]
♦ Concurring and Dissenting Opinion, Caguioa, [J]
♦ Concurring Opinion, Zalameda, [J]
♦ Separate Concurring Opinion, J.Lopez, [J]

MELISSA GAY CASTAÑEDA LIMLINGAN MANGANIP, BEATRICE EMILIA L. MANGANIP, PATRICIA GRACE LIMLINGAN PADUA, JOSE JERICHO PADUA III, GERARDO MARTIN C. LIMLINGAN,* CELESTE MAYA RECTO LIMLINGAN, AND MANUELITA LIMLINGAN, PETITIONERS,
vs.
REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE ANTI-MONEY LAUNDERING COUNCIL, RESPONDENT.

POWERLINK.COM CORP., PETITIONER,
vs.
REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE ANTI-MONEY LAUNDERING COUNCIL, RESPONDENT.

CODEWORKS.PH, INC., PETITIONER,
vs.
REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE ANTI-MONEY LAUNDERING COUNCIL, RESPONDENT.

OMNI SECURITY INVESTIGATION, INC., VIVE HOTEL INC., CORPORATE SOLUTIONS MANPOWER & GENERAL SERVICES, INC., AND UNANIMOUS HOLDINGS, INC. PETITIONERS,
vs.
REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE ANTI-MONEY LAUNDERING COUNCIL, RESPONDENT.

The ponencia denies the instant petitions which challenge Sections 10 and 11 of the Anti-Money Laundering Act (AMLA), as amended, as well as Rules 10.a.3, 10.c.3 to 10.d of the 2012 Revised Implementing Rules and Regulations of the AMLA, as amended1 (2012 AMLA Rules).

To briefly recap the facts, on May 7, 2015, the Anti-Money Laundering Council (AMLC) filed an Ex Parte Petition for the issuance of a freeze order against the "bank accounts, insurance policies, and securities, including all related accounts" of Jejomar C. Binay, Jejomar Erwin S. Binay, Gerardo S. Limlingan, Jr., Eduviges D. Baloloy, Ernesto S. Mercado, Greenergy Holdings, Inc., Sunchamp Real Estate Development Corp., Earthright Holdings, Inc., Antonio L. Tiu, Millennium Food Chains Corp., BDO Unibank, Inc., BDO Private Bank, Inc., Land Bank of the Philippines, Metropolitan Bank and Trust Co., Ltd., Philippine National Bank, Secuirty Bank Corp., Rizal Commercial Banking Corp., Philippine Bank of Communications, Inc., RCBC Savings Bank, Inc., Philippines Business Bank, Inc., Agricultural Bank of the Philippines, Inc., Sterling Bank of Asia, Inc., Union Bank of the Philippines, Inc., Bank of the Philippine Islands, Asia United Bank Corp., Bankard, Inc., CLSA Philippines, Inc., SB Equities, Inc., Grepalife Financial, Inc., BDO Securities, Inc., First Metro Investment Corp., Philequity Management, Inc., RCBC Securities, Inc., Philippine AXA Life Insurance Corp., Elenita S. Binay, Lily Hernandez Crystal, Carmelita Palo Galvan, Francisco Balaguer Baloloy, Bernadette Cezar Portollano, Mitzi Ouano Sedillo, Marguerite Lichnock, Melissa Gay Castañeda Limlingan,2 Victor S. Limlingan, Patricia Grace Limlingan Padua, Gerardo Martin Castañeda Limlingan, James Lee Tiu, Pei Feng Lee, Ann Loraine Buencamino Tiu; Frederick Duenas Baloloy, Jennifer V. Baloloy, Mario Alejo Oreta, Jose Orillaza, Daniel C. Subido, Man Bun Chong, Erlinda S. Chong, April Joy Pascual Mercado, and Omni Security Investigation and General Services, Inc.,3 in connection with the supposed irregularities surrounding the construction of the New Makati City Parking II Building.4 Save for some of the petitioners in G.R. No. 2223125 and G.R. No. 222315,6 petitioners herein were not named in the AMLC's Ex Parte Petition.

On May 11, 2015, the Court of Appeals (CA) granted the petition and issued a Freeze Order, effective immediately for a period of six months.7 The Freeze Order directed the therein respondent banks, insurance companies, and securities companies to: (i) FREEZE the specific accounts described in the freeze order, "including all related accounts wherever they may be found";8 and (ii) SUBMIT to the CA and the AMLC within 24 hours from notice "a detailed return specifying pertinent and relevant information on all frozen bank accounts, insurance policies, securities and investments, including all related accounts wherever they may be found,"9 pursuant to Rules 10.c.3 to 10.d of the 2012 AMLA Rules.

Thereafter, it appears that the AMLC and therein respondent banks conducted an analysis of the accounts described in the Freeze Order and determined that herein petitioners' accounts, though not described in the Freeze Order, were "materially linked" to the accounts described in the Freeze Order and are therefore "related accounts" under the Freeze Order and the 2012 AMLA Rules.10 On this basis, the banks froze petitioners' accounts.

Petitioners filed motions challenging the Freeze Order, arguing that there was no probable cause against them and that Sections 10 and 11 of the AMLA, as well as Rules 10.a.3, 10.c.3 to 10.d of the 2012 AMLA Rules are unconstitutional. The CA denied the motions, holding, among other things, that the six-month duration of the Freeze Order had already lapsed on November 11, 2015.11

Petitioners are now before the Court on the main argument that Sections 10 and 11 of the AMLA, as amended, as well as Rules 10.a.3, 10.c.3 to 10.d of the 2012 AMLA Rules violate Article III, Sections 1, 2, and 3 of the Constitution and should be struck down as unconstitutional.12

The ponencia ultimately upholds the validity of the questioned provisions of the 2012 AMLA Rules, holding that they do not conflict with the Constitution or with the AMLA.

Verily, it is my view that Rules 10.c.1 and 10.d of the 2012 AMLA Rules should be interpreted in a manner consistent with the Constitution and the AMLA.

Rule 10.c.1 and Rule 10.d of the 2012 AMLA Rules provide that, upon receipt of the freeze order, the covered institution (e.g., the bank) is required to "immediately" freeze the monetary instrument or property subject of the freeze order and determine and freeze "related accounts subject thereof". Thus:

Under the 2012 AMLA Rules, accounts are deemed to be "related accounts" when their funds originated from and/or are "materially linked" to the monetary instruments or properties identified in a freeze order (hereafter, "principal accounts"), to wit:

The AMLC and the respondent banks in the Ex Parte Petition opine that the challenged provisions allow the immediate freezing of "related accounts," without the need for a separate freeze order. Thus, in this case, they conducted an analysis of the principal accounts and determined that herein petitioners' accounts, although not described in the Freeze Order, were "materially linked" to the principal accounts, and are therefore "related accounts" under the Freeze Order and the 2012 AMLA Rules.13 Accordingly, the banks froze petitioners' accounts. Apparently, the AMLC and the banks believed that the CA's May 11, 2015 Freeze Order for the principal accounts "including all related accounts wherever they may be found" was sufficient to freeze the accounts of petitioners.

SECTION 2. 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.

Section 2 guarantees the people's right against unreasonable searches and seizures of whatever nature and for any purpose. As a general rule, a government seizure is reasonable when it complies with the following requirements:

The freezing of monetary instruments or property under Section 10 of the AMLA is undeniably a seizure that must comply with the requirements imposed by Article III, Section 2 of the Constitution.

In Ret. Lt. Gen. Ligot v. Republic,15 the Court explained the nature and purpose of a freeze order as follows:

A freeze order is an extraordinary and interim relief issued by the CA to prevent the dissipation, removal, or disposal of properties that are suspected to be the proceeds of, or related to, unlawful activities as defined in Section 3(i) of [Republic Act] No. 9160, as amended. The primary objective of a freeze order is to temporarily preserve monetary instruments or property that are in any way related to an unlawful activity or money laundering, by preventing the owner from utilizing them during the duration of the freeze order. The relief is pre-emptive in character, meant to prevent the owner from disposing his property and thwarting the State's effort in building its case and eventually filing civil forfeiture proceedings and/or prosecuting the owner.16 (Emphasis in the original; citations omitted)

In contrast to the bank inquiry order under Section 11 of the AMLA, a freeze order under Section 10 involves a seizure of property because the owner is "inhibited from utilizing the same." Thus, the Court in Republic v. Hon. Judge Eugenio, Jr.17 explained:

Consistent with the requirements of a search warrant under Section 2 of the Bill of Rights, Section 10 of the AMLA authorizes the freezing of monetary instruments or property only after the CA has determined that probable cause exists that the same are "in any way related to an unlawful activity as defined in Section 3(i)" of the AMLA.

As seen from Section 10, the AMLC must make a prior determination that certain monetary instruments or properties are related to any unlawful activity, and only then include these items in the application for the freeze order. Thereafter, these monetary instruments or properties may be frozen only after the CA has determined that probable cause exists that they are related to an unlawful activity as defined in the AMLA. Once the covered institutions receive the freeze order, the only monetary instruments or properties that they can freeze are those indicated in the freeze order. This is because only those monetary instruments or properties identified in the freeze order have been the subject of the CA's determination of probable cause. If a monetary instrument or property is not identified in the freeze order, that means that such an account was not included in the CA's determination of probable cause. Nothing in Section 10 grants the covered institutions the power to determine and immediately freeze additional accounts which they alone perceive to be "related" or "materially linked" to the principal accounts identified in the freeze order.

It must be stressed that when the CA determines probable cause and issues the Freeze Order against the principal accounts, the CA is not yet informed at that point of what the "related accounts" are. Thus, it is impossible for the CA to determine probable cause against those yet-to-be identified accounts.

In the present case, the Court should not allow the covered institutions (i.e., the banks) to determine and freeze bank accounts which they believe are related to the principal accounts identified in the Freeze Order. Otherwise, the covered institutions (i.e., the banks) would effectively be allowed to arrogate unto themselves the CA's duty to determine the existence of probable cause against those "related accounts." This would thus contravene both Section 2 of the Bill of Rights and Section 10 of the AMLA.

I thus agree with the ponencia's ruling22 that an ex parte petition before the CA for the issuance of a freeze order must already state and particularly describe any related and materially-linked accounts that may be involved, and that such accounts will also be the subject of the CA's determination of probable cause.

In this connection, the ponencia rules that the 2012 AMLA Rules, as amended, do not transgress the right against unreasonable searches and seizures enshrined in Article III, Section 2 of the Constitution. According to the ponencia, assuming that the freezing of related accounts in the Freeze Order amounts to a warrantless seizure, the same "cannot be said to be unreasonable when juxtaposed with the reality that a money launderer may open or create [an] intricate and diverse web of related and interlocking accounts in the different covered institutions to conceal his or her crime/s."23 The ponencia states that since funds can now be transferred swiftly, time is of the essence and the government must act urgently to prevent the dissipation of properties that are suspected to be proceeds of, or related to, unlawful activities defined in the AMLA.24 To rule otherwise, continues the ponencia, would thwart the objective of a freeze order which is the preservation of the money instruments or property that are related to money laundering.25

In other words, the ponencia anchors the constitutionality of the pertinent provisions of the 2012 AMLA Rules on the urgency or immediacy involved in preserving the funds suspected to be related to money laundering.

I respectfully disagree. I submit that this is an improper formulation of the lens through which the constitutionality issue should be resolved. To be sure, the urgency in preventing the dissipation of potentially laundered funds should not operate-to dispense with the constitutional requirements of probable cause and particularity of the thing to be seized—requirements that qualify a seizure as reasonable under the Constitution. The said urgency may justify the ex parte application for a freeze order, as held in Republic v. Hon. Judge Eugenio, Jr.,26 but it would be dangerous for the Court to rule that "urgency" makes a seizure automatically reasonable despite noncompliance with Article III, Section 2 of the Constitution. Such a pronouncement would virtually sacrifice constitutional safeguards for the sake of exigency. If the same urgency in preserving the funds of related accounts is present in preserving the funds of principal accounts, could it then be said that the amounts could be automatically frozen? In other words, is the probable cause requirement contained in Section 10 optional? May Congress remove the said requirement from Section 10 of the AMLA in future amendments? In my view, the urgent nature of freezing funds suspected to be related to money laundering does not justify non-observance of the requirements under Article III, Section 2 of the Constitution.

To make things worse, by directing the covered institutions to freeze the principal accounts "including all related accounts wherever they may be found," the CA not only unduly delegated its power to determine probable cause, but it also issued a general warrant that is prohibited by the Constitution.

A general warrant is a "warrant that is not particular as to the person to be arrested or the property to be seized."27 It is one which "gives the officer executing the warrant the discretion over which items to take."28 "Such discretion is abhorrent, as it makes the person, against whom the warrant is issued, vulnerable to abuses."29

Here, the banks were precisely given that prohibited discretion by the CA. Again, the petitioners' bank accounts were not particularly identified in the freeze order. They were only frozen because the banks determined that they were "related accounts" as defined in the 2012 AMLA Rules, but they were not particularly identified for purposes of satisfying the particularity requirement of Section 2 of the Bill of Rights.

Nonetheless, these erroneous actions do not necessarily render Rule 10.c.1 and Rule 10.d of the 2012 AMLA Rules unconstitutional.

In Estrada v. Sandiganbayan,30 the Court ruled that courts should act with caution and forbearance in determining the validity of the acts of the legislature. Thus, "[e]very intendment of the law must be adjudged by the courts in favor of its constitutionality, invalidity being a measure of last resort. In construing therefore the provisions of a statute, courts must first ascertain whether an interpretation is fairly possible to sidestep the question of constitutionality."31 Consistent with this principle, the Court should pursue an interpretation of the assailed Rules which is consistent with the Constitution, rather than declare them as invalid.

The present case reveals an apparent confusion in the implementation of a freeze order. To recall, after receiving the Freeze Order, the covered institutions conducted an analysis of the principal accounts and determined that herein petitioners' accounts, though not described in the Freeze Order, were "materially linked" to the principal accounts and are therefore "related accounts" under the Freeze Order and the 2012 AMLA Rules. The records do not show that the analysis was conducted pursuant to a bank inquiry order issued by any court. Thus, it may be reasonably inferred that the same was done merely on the strength of the Freeze Order.

A freeze order does not authorize the examination of monetary accounts. The "primary objective of a freeze order is to temporarily preserve monetary instruments or property that are in any way related to an unlawful activity or money laundering, by preventing the owner from utilizing them during the duration of the freeze order."32 It is not meant as a tool to discover the accounts suspected of being related to money laundering. That is the function of the bank inquiry order. Although the petition for a freeze order is ex parte, the freeze order, upon its issuance, shall be served on the respondent-owner and the covered institution.33

A bank inquiry order under Section 11 of the AMLA is "a means for the government to ascertain whether there is sufficient evidence to sustain an intended prosecution of the account holder for violation of the [AMLA]."34 It is "a preparatory tool for the discovery and procurement, and preservation — through the subsequent issuance of a freeze order — of relevant evidence of a money laundering transaction or activity."35 The entire proceeding for a bank inquiry order — from the filing of the application until the conduct of the inquiry — is confidential and ex parte.36

Notably, Section 11 authorizes a bank inquiry into "related accounts" but only after the CA determines probable cause that they are related accounts.38 A bank inquiry order for "related accounts" must be preceded by a bank inquiry order for the principal account.39 In other words, the probable cause determination/or "related accounts" is separate and distinct from the probable cause determination for the principal account.40 For the principal account, there must be probable cause that the said account is related to an unlawful activity defined in the AMLA.41 On the other hand, for "related accounts," there must be probable cause that they are materially linked to the principal account.42 The discussion of the Court in Subido Pagente Certeza Mendoza and Binay Law Offices v. CA43 is instructive:

From the foregoing, it is clear that a bank inquiry order is entirely different from a freeze order. The former is a discovery tool availed of preparatory to the preservation of an account that is related to an unlawful activity as defined under the AMLA. It covers both: (1) the principal accounts indicated in the application for a bank inquiry order; and (2) other accounts that constitute "related accounts" as defined under Section 11.

In contrast, a freeze order is the preservative remedy that prohibits the owner of the funds from transacting the same during the duration of the freeze order. It covers only the principal accounts indicated in the petition filed with the CA.

In this case, the banks essentially merged the function of a bank inquiry order to that of a freeze order when they used the freeze order as apparent basis to discover "related accounts" and freeze them. Both this act of discovery and freezing are done without prior determination of probable cause by the CA, contrary to Article III, Section 2 of the Constitution and Sections 10 and 11 of the AMLA. The CA's prior determination of probable cause is crucial because it assures the bank account owner that a neutral and detached judge45 has been persuaded that there is sufficient evidence for a reasonably discreet and prudent person to believe that his or her bank account "sought to be frozen [is] in any way related to any of the illegal activities enumerated under [Republic Act] No. 9160, as amended."46 That guarantee is lost when the banks are empowered to determine what accounts should be frozen and why.

In this connection, the ponencia rules that the probable cause requirement is complied with as to the related accounts even if not specifically identified in the application, because the subject of the probable cause determination and of the freeze order is the amount of the funds or monetary instrument contained in an account, and not the account itself.47 In support, the ponencia highlights that portion of Section 10 of the AMLA, which states:

Once probable cause has been determined to exist that certain funds, monetary instrument, or property sought to be frozen, inquired into, or preserved is in any way related to any unlawful activity and/or money laundering offense, such finding necessarily extends to all related accounts. This is the only logical conclusion given that these related accounts are believed to have directly originated from and/or are materially linked to the monetary instruments or properties subject of the freeze order."49 (Emphasis supplied)

Accordingly, when the covered institution implements the freeze order as to related accounts that are not identified in the freeze order, the ponencia rules that such institution does not determine probable cause which had already been done by the CA, but rather merely verifies if there are accounts related to the instrument subject of the freeze order and disallows any transactions from the account containing such funds, keeping in mind the definition of a "related account" in the AMLA Rules.50

Probable cause is determined against both the amount of the funds and the bank account itself, when the funds are contained in a bank account. This is supported by the text of Section 10 of the AMLA, as amended, which is replicated in full for easy reference:

As seen above, Section 10 of the AMLA expressly refers to the freezing of an "account." Further, the provision states that probable cause is determined against a "monetary instrument or property." The definition of a "monetary instrument" under the 2018 AMLA Rules51 includes "bank deposits."52 That the term "monetary instrument" contemplates bank accounts or bank deposits is even confirmed by the Senate's deliberations on the amendments to Section 10, as cited in the ponencia, to wit:

From the foregoing, it is clear that probable cause for the issuance of a freeze order is determined not only against the amount of the funds contained in a monetary instrument, but even against the monetary instrument itself, that is, the bank account containing the funds supposedly related to money laundering. The second paragraph of Section 10(a) is in the law to maintain the freezing of accounts within reasonable limits. The accounts are frozen—partially, instead of entirely—to the extent of the amount estimated by the court to be within the bounds of its probable cause determination. The second paragraph does not mean, and should not be taken to mean as the ponencia does, that only amounts are frozen but not accounts.

I therefore disagree with the ponencia's ruling that the freezing extends only to the amounts but not the accounts, especially in this case where there is not even an amount indicated in the freeze order in question. I wish to highlight that the freeze order in the present case did not state the amount of funds to be frozen from the principal and related accounts.54 It merely described the accounts to be frozen (i.e., name of the covered institution as well as the account name and the account number of the account to be frozen) without indicating the amounts to be frozen.

It is thus my view that the probable cause determination against the principal account does not, and should not, extend to the related accounts. By the language of the law and jurisprudence, there must be a separate determination of probable cause in order to freeze the funds contained in related accounts that are not identified in the freeze order. This interpretation applies the same framework adopted by the Court En Banc in Subido quoted above.

Although the ruling in Subido relates to the issuance of bank inquiry orders under Section 11 of the AMLA, the same rationale should also apply to freeze orders as the latter class involves a higher level of intrusion into the right to privacy. As previously discussed, a bank inquiry order merely authorizes the examination of accounts, whereas a freeze order prevents the owner from utilizing the funds in the frozen account. If the probable cause requirement under Article III, Section 2 of the Constitution is applied to bank inquiry orders for related accounts, as done in Subido, then it should apply with more reason to freeze orders for related accounts.

That said, it is possible that a joint hearing be held for the issuance of both a bank inquiry order and a freeze order. The Court's discussion in Republic v. Ongpin55 is instructive:

Guided by the foregoing discussion, I propose the following guidelines in the proper interpretation and implementation of the bank inquiry order and freeze order under the AMLA and its implementing rules:

It must be emphasized that requiring a separate freeze order for the additional accounts discovered by the AMLC or the covered institution will not necessarily thwart the pre-emptive objective of a freeze order.

Again, the discovery of additional related accounts is not a function granted to covered institutions. Nothing prevents the AMLC from first conducting an extensive inquiry into and examination of accounts it suspects to be involved in money laundering by obtaining bank inquiry orders under Section 11. The entirety of the proceedings for a bank inquiry order—from the filing of the application until the conduct of the examination—are confidential and ex parte.65 This is the appropriate stage when the AMLC should conduct its financial analysis to discover the related web of accounts that may be involved in money laundering.

Since the issuance of a freeze order would alert a supposed money launderer that he or she is being investigated,66 the logical strategy that the AMLC should adopt would be to first utilize the bank inquiry order to identify all the accounts related to the suspected AMLA violation before seeking a freeze order for any of those identified accounts. Otherwise, any subsequent freeze order for additional accounts would likely be in vain as the supposed money launderer would have already transferred the funds to other accounts—as what happened in the case of Ongpin, thus:

Here, petitioner chose to first file the Petition for Freeze Order on December 3, 2012. The Freeze Order was then issued on December 6, 2012, after which it filed the Application for Bank Inquiry on December 11, 2012.

What happened here was an error in strategy. Because the application for bank inquiry was filed after the Freeze Order had been issued, notably with notice to the parties, the ex parte nature of the bank inquiry proceedings was rendered useless. Through the Freeze Order, respondents were notified of the ongoing money laundering investigation involving their accounts. As expected, and as will be discussed more fully later, the bank inquiry done after the Freeze Order had been issued revealed that most of the frozen accounts were already closed.67

Turning back to the present case, nothing in the 2012 AMLA Rules expressly directs the covered institution to freeze the additional "related accounts" even without a separate freeze order issued by the CA. Therefore, there is nothing inherently unconstitutional in the text of the 2012 AMLA Rules. Rather, it is its interpretation and implementation by the CA, the AMLC, and the covered institutions that is invalid. When Rule 10.c.1 and 10.d provide that the covered institution shall immediately freeze the related accounts of those subject of the freeze order, the same should be construed to refer to a situation where a separate freeze order is issued for the said related accounts. This preserves the safeguards put in place by Article III, Section 2 of the Constitution. Again, this approach is consistent with the principle of judicial restraint. Nonetheless, the Court should advise the AMLC to make the necessary changes in its current AMLA Rules, conformable to the foregoing guidelines, in order to avoid any confusion.

Unfortunately, the same ambiguity in the 2012 AMLA Rules is also present in A.M. No. 05-11-04-SC.68 As pointed out by the ponencia, Section 55 of A.M. No. 05-11-04-SC requires the covered institution to immediately freeze the principal account's "related web of accounts." Similarly, Section 52 provides that the freeze order shall contain a directive for the covered institution to freeze the principal account's "web of related accounts." Thus:

Given the previous discussion on why a separate probable cause determination must be made for the freezing of related accounts, these provisions in A.M. No. 05-11-04-SC must be revisited and amended. Accordingly, I propose the following changes:

All told, I vote that the Court DENY the petitions. I further urge that the AMLC be ADVISED to make the necessary changes in the current AMLA Rules to conform to the guidelines in this opinion.