G.R. No. 222312 - Concurring 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.

I concur in the result. I also join the declaration that, based on the arguments of the present Petitions, Section 10 of Republic Act No. 9160, as amended, otherwise known as the Anti-Money Laundering Act, is not unconstitutional.

I further refine the findings and provide a discussion to definitively resolve the proper implementation of a freeze order concerning related and materially-linked accounts.

The case originated from the complaint filed against former Vice President Jejomar C. Binay (Binay) and certain members of the Sangguniang Panlungsod of Makati City for alleged violations of the Anti-Graft and Corrupt Practices Act in relation to the Anti-Plunder Act, specifically concerning the overpricing of the New Makati City Parking II Building.1 The Court of Appeals granted the ex parte petition filed by the Anti-Money Laundering Council and, on May 11, 2015, issued a freeze order on Binay's bank accounts, including all related accounts.2

The case presents a novel issue: whether the freeze order of the Court of Appeals may extend to related accounts and, if so, whether the procedure for its implementation under Section 10 of the Anti-Money Laundering Act inherently violates the constitutional right to due process.

The constitutional rights to privacy, as defined in Article III, Section 3 of the Constitution,3 and the right to be secure in one's person and property in accordance with due process, under Sections 1 and 2 of Article III,4 serve as fundamental safeguards against unwarranted government intrusion.

The penumbra of rights protected by the due process clause and the prohibition against unreasonable searches and seizures extends to intangible property essential to human life such as bank accounts and deposits.5 Therefore, any inquiry into these accounts, including orders to freeze them, must adhere to constitutional limitations and must not result in the deprivation of property without due process of law. Freeze orders and bank inquiries under Sections 10 and 11 of the Anti-Money Laundering Act, as amended, must be carefully balanced with an individual's constitutional right to privacy and against unreasonable searches and seizure.

In Subido v. Court of Appeals,6 this Court upheld the constitutionality of Section 11, ruling that it does not violate due process or the right to privacy. There is no unreasonable seizure, as the law does not contemplate physical seizure but merely authorizes an inquiry in furtherance of the Anti-Money Laundering Council's investigative functions.7

As regards the right to privacy, this Court in Subido, citing Republic v. Eugenio,8 reaffirmed that the right to privacy concerning bank deposits finds basis in statute, that is Republic Act No. 1405 or the Bank Secrecy Law,9 and not in the Constitution. Consequently, the law can carve out exceptions, one of which is Section 11 of the Anti-Money Laundering Act.10

A similar issue arises: Does the current procedure of the implementation of a freeze order under Section 10 extend to "related accounts," and if so, is it constitutional?

When the Anti-Money Laundering Act was originally enacted, it authorized the Anti-Money Laundering Council to issue freeze orders upon a determination of probable cause. The original text of Section 10 reads:

SECTION 10. Authority to Freeze. — Upon determination that probable cause exists that any deposit or similar account is in any way related to an unlawful activity, the [Anti-Money Laundering Council] may issue a freeze order, which shall be effective immediately, on the account for a period not exceeding fifteen (15) days. Notice to the depositor that his account has been frozen shall be issued simultaneously with the issuance of the freeze order. The depositor shall have seventy-two (72) hours upon receipt of the notice to explain why the freeze order should be lifted. The [Anti-Money Laundering Council] has seventy-two (72) hams to dispose of the depositor's explanation. If it fails to act within seventy-two (72) hours from receipt of the depositor's explanation, the freeze order shall automatically be dissolved. The fifteen (15)-day freeze order of the [Anti-Money Laundering Council] may be extended upon order of the court, provided that the fifteen (15)-day period shall be tolled pending the court's decision to extend the period.

No court shall issue a temporary restraining order or writ of injunction against any freeze order issued by the [Anti-Money Laundering Council] except the Court of Appeals or the Supreme Court.

Subsequent amendments to Section 10 were introduced through Republic Act No. 9194 in 2003, Republic Act No. 10167 in 2012, Republic Act No. 10927 in 2017, and Republic Act No. 11521 in 2021. These amendments shifted the Anti-Money Laundering Council's role in freeze order proceedings from being the issuing authority to acting as a petitioner before the Court of Appeals.11 Section 10 currently reads:

Republic v. Ongpin12 shepherded the amendments to this provision until Republic Act No. 10927, the relevant portion of which was retained by Republic Act No. 11521, as follows:

Notably, the requirement for a determination of probable cause remained; only the authority to make this determination shifted to the courts, specifically the Court of Appeals.

Based on the foregoing, the procedure for issuing a freeze order now requires two things: first, the Anti-Money Laundering Council must file an ex parte petition before the Court of Appeals; and second, the Court of Appeals must determine whether probable cause exists to believe that any monetary instrument or property is related to an unlawful activity as defined in Section 3(i) of the Anti-Money Laundering Act. If such probable cause is established, the Court of Appeals may issue a freeze order, which takes immediate effect and remains valid for a period of 20 days.

In Ongpin, citing Ligot v. Republic,14 this Court also affirmed that this process complies with the constitutional safeguards against unreasonable searches and seizures, thus:

Before a freeze order is issued, the Anti-Money Laundering Council must put forward evidence of probable cause, or "such facts and circumstances which would lead a reasonably discreet, prudent or cautious [person] to believe that an unlawful activity and/or a money laundering offense is about to be, is being or has been committed and that the account or any monetary instrument or property subject thereof sought to be frozen is in any way related to said unlawful activity and/or money laundering offense." This requirement is consistent with the prohibition on unreasonable searches and seizure, our bank accounts and information about them being properties and effects within the meaning of the Constitution.15 (Emphasis supplied, citations omitted)

This process pertains to the freezing of an account, which Section 10 refers to as "any monetary instrument [that] is in any way related to an unlawful activity."16 However, the provision does not explicitly mention related or materially-linked accounts. These terms, however, are defined in the 2018 Implementing Rules and Regulations of the Anti-Money Laundering Act (2018 Rules).17 Rule 2, Section 1(fff) defines it as follows:

Additionally, the 2018 Rules further elaborate on the definitions of "related account" and "materially-linked account." These definitions were also incorporated into Section 904(i) of the 2021 Manual of Regulations for Banks (2021 MORB), which serves as the primary regulatory framework governing entities supervised by the Bangko Sentral ng Pilipinas.18 The 2018 Rules define these terms as follows:

While the 2018 Rules and similar issuances, such as the 2021 MORB, clearly define what constitutes a related or a materially-linked account is, the application of Section 10 concerning the freezing of such accounts remains a point of contention.

The overarching policy of the Anti-Money Laundering Act is "to protect and preserve the integrity and confidentiality of bank accounts."19 It seeks to disrupt networks of accounts used to facilitate unlawful activities, "[ensuring] that the Philippines shall not be used as a money laundering site."20 To achieve this, the law aims to dismantle the web of accounts involved in illicit financial transactions.21

Modern financial transactions occur rapidly, particularly through wire transfers. In my concurring opinion in Subido,22 it was mentioned how we live in a day and age of instantaneous financial transactions, emphasizing the need to balance the right to privacy with the State's compelling interest in preventing money laundering:

Even the deliberations on Senate Bill No. 300924 as thoughtfully and meticulously included by the ponente,25 the legislators clarified that the interpretation of a materially-linked account should be understood as "materially-linked to the monetary instrument or properties subject of the petition for the freeze order."26 It need not be directly linked to the commission of the offense per se.27

Moreover, various definitions within the Anti-Money Laundering Act support an interpretation broad enough to encompass related or materially linked accounts. The definition of "monetary instrument" includes instruments where ownership transfers by endorsement, assignment, or delivery.28 Money laundering is defined as a crime where proceeds of unlawful activity are "transacted."29 A "transaction" encompasses "any movement of funds by any means within a covered institution."30 When read together, these provisions suggest a broad network where transactions are inherently interconnected. One can infer from the broad definition of a "transaction" that every movement of funds is linked to another, forming a continuous chain of financial activity—or, in the worst case, money laundering. This means that one transaction naturally gives rise to another. As such, within this statutory framework, every transaction could be considered a "related transaction" to another, reinforcing the idea that related or materially-linked accounts would fall within the scope of Section 10.

Despite this, the freezing of related accounts must still adhere to the constitutional guarantees of privacy and due process. Guided by these premises, there is a pressing need to refine the procedure governing the inclusion of related or materially-linked accounts in freeze orders, ensuring that its implementation remains consistent with constitutional due process requirements.

The procedure for implementing freeze orders with respect to related accounts is outlined in the challenged provisions of the 2018 Rules. They read:

Under these provisions, the process for freezing related accounts after a finding of probable cause by the Court of Appeals is as follows: first, the Court of Appeals directs the covered person to freeze any related accounts, if any exist; second, the covered person verifies whether there are accounts related to the monetary instrument subject of the freeze order; third, the covered person files a return after freezing the related accounts; fourth, in case of voluminous or complex transactions, the covered person implements the freezing of the related accounts within a reasonable period and file as supplemental return; and finally, the covered person furnishes a copy of the freeze order to the account holders.

As it stands, the freezing of related accounts occurs only after the issuance of the freeze order. It is incorporated into the freeze order issued by the Court of Appeals. In this case, the Freeze Order directed the covered persons "to submit . . . 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[.]"32

In BCD Foreign Exchange v. Republic and Metrobank,33 the petitioner's account was frozen after Metrobank deemed it as a related account. Petitioner argued that Metrobank had no legal authority to freeze the account or determine whether it constituted a materially-linked account or was part of a broader web of related accounts.34

In dismissing BCD's argument, this Court held that Metrobank did not determine probable cause.(awÞhi( It "merely complied with the instruction of the Court of Appeals to submit a detailed Return specifying all pertinent information on the accounts listed in the Freeze Order, with other related accounts and the corresponding grounds for the identification of each."35

This situation, however, underscores the ambiguity surrounding the role of covered persons in implementing the freeze orders and, consequently, identifying related and materially-linked accounts.

A freeze order may extend to related accounts if these accounts are included in the ex parte petition.36 Under the rules, the Anti-Money Laundering Council, as petitioner, may include in its petition the freezing of related and materially-linked accounts.37

In A.M. No. 05-11-04-SC, issued by this Court in 2005,38 the rules governing the procedure in cases of civil forfeiture, asset preservation, and freezing of monetary instrument, property, or proceeds representing, involving, or relating to an unlawful activity or money laundering offense, we enumerated the contents of the ex parte petition as follows:

To reiterate, the definition of a monetary instrument inherently includes all forms of ownership transfer.39 When applied in the context of an unlawful activity, it encompasses related account and materially-linked accounts.40 Given the vast number of financial transactions involved, it is essential that the "specific description with particularity" also specify the amounts in question. Currently, the reckoning of the amounts within the accounts occurs only after the issuance of the freeze order. However, by including these amounts in the ex parte petition, the Anti-Money Laundering Council would not only provide clarity in the complex web of transactions but also strengthen the evidentiary basis for establishing a material link between the related accounts and the main account. More importantly, this level of specificity ensures compliance with due process protections, preventing arbitrary or overly broad applications of freeze orders.

I concur with the ponencia that the determination of probable cause in the context of money laundering is consistent with the prohibition on unreasonable searches and seizures. It does not transgress the individual person's right to privacy as protected under Section 2, Article III of the Constitution.41 Accordingly, related accounts should also be included in the determination of probable cause. In Republic v. Eugenio, Jr.,42 this Court emphasized that the determination of probable cause remains part and parcel the function of the courts, thus:

Section 11 itself requires that it be established that "there is probable cause that the deposits or investments are related to unlawful activities," and it obviously is the court which stands as arbiter whether there is indeed such probable cause. The process of inquiring into the existence of probable cause would involve the function of determination reposed on the trial court. Determination clearly implies a function of adjudication on the part of the trial court, and not a mechanical application of a standard predetermination by some other body. The word "determination" implies deliberation and is, in normal legal contemplation, equivalent to "the decision of a court of justice."

The court receiving the application for inquiry order cannot simply take the AMLC's word that probable cause exists that the deposits or investments are related to an unlawful activity. It will have to exercise its own determinative function in order to be convinced of such fact.43 (Citations omitted)

Considering the foregoing rules, the application and subsequent implementation of a freeze order should follow this procedure:

First, the Anti-Money Laundering Council shall file an ex parte petition before the Court of Appeals to freeze any monetary instrument or property that is in any way related to an unlawful activity. The ex parte petition shall include related and materially-linked accounts as defined under the 2018 Implementing Rules and Regulations of the Anti-Money Laundering Act and the 2021 Manual of Regulations for Banks. For both the main account and the related account, the Anti-Money Laundering Council must provide a specific description with particularity, including the amounts contained therein.

Second, the Court of Appeals shall independently determine whether probable cause exists to establish that the monetary instrument or property, including the related and materially-linked accounts, are related to an unlawful activity as defined under the Anti-Money Laundering Act.

Third, if probable cause is found, the Court of Appeals shall issue a freeze order, effective immediately for a period of 20 days. During this period, the Court of Appeals must conduct a summary hearing, with notice to the parties, to determine whether to modify or lift the freeze order or extend its effectivity, which should not exceed six months.

Fourth, any person whose account has been frozen may file a motion to lift the freeze order and the Court of Appeals must resolve this motion before the expiration of the freeze order.

Fifth, if there is no case filed against a person whose account has been frozen within the period determined by the Court of Appeals, which in no case shall not exceed six months, the freeze order shall be deemed ipso facto lifted.