Philippines

The Philippines distinguishes between causal and incidental fraud. Causal fraud, which induces a party to enter into a contract, may be ground for annulment and damages (Civil Code of the Philippines (NCC), Articles 1338, 1344). Incidental fraud, which occurs in the performance of an obligation, gives rise to an action for damages (NCC, Articles 1170, 1344).

The NCC primarily governs civil actions for fraud. Other statutes govern fraud claims relating to specific subject matters (e.g., securities, banking, and consumer purchases). For criminal actions, this is governed by the Revised Penal Code (RPC), specifically for estafa (swindling) and other deceits. Other kinds of fraud and financial crimes are covered by special penal laws including the Anti-Money Laundering Act (AMLA), and Anti-Graft and Corrupt Practices Act.

Local courts may assume jurisdiction provided the following requisites are met:

• the court is one to which the parties may conveniently resort to;
• the court is in a position to make an intelligent decision as to the law and the facts; and
• the court has or is likely to have power to enforce its decision (Continental Micronesia, Inc. v. Basso, G.R. No. 178382-83, September 23, 2015).

For criminal fraud, the Philippines generally adopts a territorial approach. Local courts will typically not have jurisdiction over crimes committed outside the country.

The connecting factors considered include, among others:

• the nationality of a person, domicile, and residence;
• seat of a juridical person;
• situs of the thing, when real rights are involved;
• place where the contract has been executed; and
• place of performance of contractual duties (Vda De. Alcañeses v. Alcañeses, G.R. No. 187847, June 30, 2021).

Courts adopt a fact-intensive approach in view of the particular circumstances of a case. There is a general trend of assuming jurisdiction when relief may be provided by the local court.

A party may request the following information:

1. for the stockholdings in, and financial position of, a corporation, corporate records may be requested from the Securities and Exchange Commission (SEC);
2. for real properties, information may be obtained from the Registry of Deeds where the properties are located; and
3. for vehicles, information may be obtained from the Land Transportation Office.

For the requests under (2) and (3), these are subject to the applicable provisions of the Data Privacy Act.

Foreign currency deposits (FCD) are regarded as absolutely confidential in nature under the Foreign Currency Deposit Act, subject to limited statutory exceptions (e.g., AMLA and terrorist financing) and exempt from garnishment and attachment. For Philippine peso denominated deposits and investment in government securities, the Bank Secrecy Law (BSL) strictly prohibits inquiry into and disclosure of information by bank employees unless these fall under certain exceptions, which include if the money itself is the subject of litigation, or upon court order in cases of bribery or dereliction of duty. Another exception to the BSL is a bank inquiry conducted by the Anti-Money Laundering Council (AMLC) as discussed further under Question 5.2, below.

Yes, the AMLC conducts bank inquiries and does not distinguish between individual, joint, mixed or commingled. Civil forfeiture is available under the AMLA for mixed funds. However, as bank deposits are subject to strict confidentiality, tracing by private parties, especially prior to litigation, poses challenges.

Yes, the right to recover specific property is recognized through replevin (personal property) or an accion reivindicatoria (real property).

Civil forfeiture under the AMLA is available for substituted assets. When probable cause that any monetary instrument or property is in any way related to an unlawful activity or a money laundering offense is established, the substituted assets may be forfeited in favor of the government (AMLA, section 12(a)). For non-AMLA actions, courts will generally not allow recovery of substituted assets (especially if in the name of another), unless an implied trust is alleged and proven.

In civil cases, a writ of preliminary attachment may be issued where the claim involves fraud or the adverse party disposes property to defraud creditors (Rules of Court (ROC), rule 57). When issued, assets of the adverse party will be levied upon and held as security for the satisfaction of the judgment (Security Bank Corporation v. Great Wall Commercial Press Company, Inc., G.R. No. 219345, January 30, 2017). While the adverse party is not prohibited from transferring ownership of the attached real property during the pendency of the action, any third-party transferee is likewise bound by the writ.

A party may seek injunctive relief against the disposition of specific assets sought to be recovered (ROC, rule 58) or apply for receivership (ROC, rule 60).

For AMLA-related unlawful activities, the AMLC may obtain an ex parte freezing order.

In arbitration, parties may seek interim measures of protection, inclusive of attachment and injunction (Special Rules of Court on Alternative Dispute Resolution, (Special ADR Rules), rules 5.4 and 5.6).

The court may subpoena the judgment debtor to be examined under oath to disclose property and income when a writ of execution is unsatisfied. The debtor of a judgment debtor may also be examined by the court regarding the credits due to the judgment debtor (ROC, rule 39, sections 37 and 38). Analogous remedies are available prior to judgment. In attachments proceedings, any person owing debts to as well as possessing or controlling credits or other personal property belonging to the party subject of the attachment writ may be required to appear and be examined under oath (ROC, rule 57, section 10). Other disclosure tools such as written interrogatories and the production and inspection of documents may also be utilized to identify assets (ROC, rules 25 and 27).

Yes. The AMLC may file an application for a bank inquiry prior to the institution of any action before the Court of Appeals. Upon a finding of probable cause, the AMLC can examine any particular deposit or investment, including related accounts, with any banking institution or non-bank financial institution in the Philippines. (AMLA Implementing Rules and Regulations (AMLA IRR), rule 2, section (1)). For non-AMLA matters, there are no remedies available to compel pre-action disclosure.

For AMLA-related unlawful activities and money laundering offenses, Philippine courts do not directly assist foreign fraud and asset recovery proceedings. Instead, the foreign state must request assistance from the AMLC, which may execute, refuse, or defer the request for valid reasons. If the request is granted, the AMLC will initiate the necessary proceedings before Philippine courts (Republic Act (RA) 9160, section 13).

For non-AMLA matters, the Philippines is party to the Convention on the Service of Judicial and Extrajudicial Documents in Civil or Commercial Matters (HSC), under which Philippine courts may assist in the service of judicial documents. The Philippines is likewise a party to treaties including Mutual Legal Assistance Treaties (MLATs) which require courts to assist in foreign proceedings relating to forfeiture and restitution of victims.

Coordination with foreign courts and regulators is consistent with the AMLA’s policy that the state shall extend cooperation in transnational investigations and prosecutions of persons involved in money laundering activities (AMLA, section 2). For non-AMLA matters, Philippine courts generally implement their obligations under the HSC and other treaties. In both instances, the Philippine National Bureau of Investigation, through its International Criminal Police Organization Division, is in charge of coordinating with its foreign counterparts to investigate transnational crimes.

Yes. The Philippines is part of several international conventions which deal with crime and fraud, such as the United Nations (UN) Convention Against Corruption and the UN Convention Against Transnational Organized Crime and its Protocols. On assistance to foreign proceedings, the Philippines is a party to the HSC and various MLATs.

Yes, foreign judgments, which are final and rendered by a competent court, can be recognized and enforced through a petition before the local courts. The foreign judgment may be repelled by proof of want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact (ROC, rule 39, section 48). Foreign arbitral awards may be recognized and enforced through a summary proceeding (Special ADR Rules, rule 13.1). The Philippines is not a party to the Convention of July 2, 2019 on the Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters.

The foreign state must submit a Mutual Legal Assistance request to the Department of Justice to seek its assistance in freezing, restraining, or seizing assets alleged to be proceeds of any unlawful activity (AMLA IRR, rule 29, sections 2 and 6). For freezing or confiscation orders relating to non-AMLA matters, which have become final, the process and limitations prescribed for enforcement of foreign judgments are applicable (ROC, rule 39, section 48), unless the matter is covered by treaties or MLATs.

There is no specific rule on the treatment of fraud and asset recovery claims in insolvency proceedings, creditors with this nature of claims are required to undergo the procedure under the Financial Rehabilitation and Insolvency Act (FRIA) and its implementing rules and regulations.

Yes. Duly appointed rehabilitation receivers and liquidators are empowered to sue and recover, with the approval of the court, all property or money of the debtor paid, transferred, or disbursed in fraud of the debtor or its creditors, or which constitute undue preference of creditors, as well as to initiate avoidance actions (FRIA, sections 31, 58, 119, 128).

Yes. The FRIA penalizes debtors who have notice of the commencement of insolvency proceedings, or have reason to believe that insolvency proceedings are about to be commenced, and who have committed the following acts:

• disposed of property other than in the ordinary course of business;
• approved any transaction in fraud of or in any manner grossly disadvantageous to creditors; and
• concealed, embezzled, or misappropriated its properties from the creditor.

Liquidators are empowered to commence avoidance actions (FRIA, sections 10, 119, 128).

Yes. A civil action for recovery is deemed instituted with the criminal action unless waived, reserved, or previously filed separately (ROC, rule 111). In fraud cases, an independent civil action for damages may also be filed concurrently and need only be proven by a preponderance of evidence (NCC, Article 33). For cases before the Sandiganbayan, the special court with jurisdiction over cases of graft and corruption involving public officers or employees, the civil action must be jointly instituted and resolved with the criminal case, with any prior civil action consolidated therein (RA 10660, section 2).

Yes, the AMLA permits civil forfeiture under the Rules of Procedure in Cases of Civil Forfeiture (“Rules on Civil Forfeiture”). RA 1379 authorizes the civil forfeiture of assets of public officers and employees, including those held under different names, where the assets are manifestly disproportionate to lawful income and are presumed unlawfully acquired unless proven otherwise.

Yes. Victims may intervene in forfeiture proceedings to assert claims over the property subject of forfeiture (Rules on Civil Forfeiture, section 35; Rule on Asset Preservation, Seizure, And Forfeiture in Criminal Cases Under Republic Act No. 9160 As Amended (“Rules on Criminal Forfeiture”), section 11). In certain cases, such as trafficking in persons (RA 9208, section 14) and child sexual abuse or exploitation (RA 11930, section 13), any deficiency in the damages awarded to victims may be satisfied from the forfeited proceeds, tools, or instruments of the crime. Outside forfeiture proceedings, victims may pursue damages either in the criminal case or through a separate civil action.

If victims are able to establish their claims against the recovered assets, as detailed under Question 9.3, above, and those assets are insufficient to satisfy all claims, the order of preference of credits under the NCC shall govern (NCC, Articles 2241–2251).

For civil actions, the prescriptive period depends on the cause of action. Actions based on written or oral contracts must be filed within 10 or six years, respectively, while actions for injury to rights or quasi-delict prescribe in four years (NCC, Articles 1145–1146). For criminal actions, the period varies by offense. Estafa generally prescribes in five to 20 years, depending on the penalty imposed and the amount involved (RPC, Articles 315 and 90), while offenses under the Anti-Graft and Corrupt Practices Act prescribe in 15 years (RA 3019, section 11).

Fraud may extend limitation periods as generally the right of action for relief on the grounds of fraud accrues from discovery of the fraud (Stilianopoulos, et al., v. Register of Deeds, G.R. No. 224678, July 3, 2019).

Common defenses in fraud cases, whether civil or criminal, include good faith, lack of fraudulent intent, prescription, and the prohibition against double recovery. In asset tracing proceedings, defenses often invoke bank secrecy and data privacy protections, or that the assets were lawfully acquired and are unconnected to the alleged wrongful act.

Once a judgment for asset recovery becomes final and executory, the claimant may seek a writ of execution to enforce it. The sheriff will first demand payment from the judgment obligor; if payment is not made, the obligor’s non-exempt properties may be garnished or levied upon. Levied properties may then be sold to satisfy the judgment and execution costs (ROC, rule 39, section 8). FCDs are exempt from garnishment.

Yes. A constructive trust is created by law to prevent unjust enrichment as the property was acquired through fraud or mistake (NCC, Article 1456).

Once there is a final judgment, it may be executed within five years from the date of its entry (ROC, rule 39). Traceable assets may be levied/garnished to satisfy the money judgment.

Generally, if there are two or more creditors, the judgment will indicate how the assets are to be shared by them. If the judgment debtor’s assets are insufficient, the order of preference of credits under the NCC shall govern in the distribution (NCC, Articles 2241–2251).

Monetary judgments generally earn legal interest at the prevailing prescribed rates of the Bangko Sentral ng Pilipinas (“BSP”), the Philippines central bank, from finality of judgment until full payment (Lara’s Gifts v. Midtown Industrial Sales, G.R. No. 225433, August 28, 2019). Attorney’s fees and litigation expenses are recoverable only in specific circumstances, including where the defendant acted in gross bad faith, or the plaintiff was compelled to litigate to protect its interests (NCC, Article 2208).

The Philippines has a strong framework for fraud and asset recovery. The AMLA supports asset tracing through freezing orders and exceptions to bank secrecy for local currency deposits. Provisional remedies such as attachment and injunction are available during proceedings, and final judgments may be enforced through garnishment and levy (ROC, rule 39).

However, asset disclosure mechanisms generally become available only after proceedings have commenced. Asset recovery by private parties is also constrained by statutory exemptions, including limitations on access to bank deposits outside the AMLA framework and the exemption of FCDs from attachment and garnishment. While victims may seek civil liability in criminal proceedings, civil forfeiture generally benefits the state, subject to limited statutory exceptions discussed under Question 9.3, above.

Provisional remedies may be obtained expeditiously once a civil action has been commenced. A court may issue a 72-hour temporary restraining order (TRO) ex parte in cases of extreme urgency where the applicant faces irreparable injury. Following a summary hearing, the TRO may be extended pending resolution of the application for a preliminary injunction (ROC, rule 58, section 5). Likewise, applications for preliminary attachment may be granted ex parte (ROC, rule 57, section 2).

The principal costs include attorneys’ fees, litigation expenses, and docket fees based on the relief sought and amount claimed, and bonds required for provisional remedies.

Third-party litigation funding remains legally uncertain. Philippine jurisprudence generally treats champertous arrangements as void for being contrary to public policy. Courts have recognized two approaches: a broad approach, under which funding by a disinterested third party for profit is champertous; and a narrow approach, under which champerty arises only where the funder is a lawyer. In Rodco Consultancy and Maritime Services Corp. v. Ross (“Rodco”) (G.R. No. 259832, November 6, 2023), the Supreme Court applied the broad approach, emphasizing that the funding arrangement was grossly disadvantageous to the funded party. This suggests that the validity of third-party funding arrangements will largely depend on whether their terms are unfair or prejudicial to litigants.

Delays in investigations and court proceedings may negatively impact time-sensitive asset tracing and freezing.

Forfeiture proceedings initiated by the AMLC focus on state recovery, requiring victims to take additional steps to recover forfeited assets.

Confidentiality laws also pose challenges. Although local currency deposits are subject to certain AMLA exceptions, FCDs are protected by stricter secrecy rules and require the depositor’s consent. FCDs are likewise exempt from certain legal processes like attachment and garnishment (RA 6426, section 8). The Data Privacy Act also poses practical challenges to asset tracing.

The Philippines passed the Anti-Financial Account Scamming Act (AFASA) to penalize financial cybercrimes and impose duties on financial institutions to prevent fraud, such as the temporary holding of disputed funds (RA 12010, sections 6–10). In Eastwest Rural Bank v. PNP-ACG (G.R. No. 273720, July 29, 2025), the Supreme Court affirmed that prohibitions against inquiry/disclosure into bank deposits shall not apply to financial accounts that are under investigation by the BSP.

Another notable reform is the SEC’s Beneficial Ownership Disclosure Rules of 2026 (Memorandum Circular No. 15, Series of 2025) which strengthens access to accurate beneficial ownership information, and the BSP regulations for non-bank financial institutions, particularly around virtual asset service providers, to deter fraud in digital currencies.

On third-party funding, the case of Rodco should be studied to ensure arrangements are not subsequently nullified for being void against public policy.

Yes, the Supreme Court recently held that civil forfeiture proceedings against public officers under RA 1379 extends to properties originally registered under the name of third persons so long as ownership is traceable to the erring public officers or employees (Heirs of Ligot v. Republic, G.R. No. 257827, March 5, 2025).

In Eastwest Rural Bank v. PNP-ACG, the Supreme Court held that a literal interpretation of the BSL would potentially hinder the prosecution of cyber­related crimes, and that an inflexible approach could inadvertently impede the effective prosecution and adjudication of crimes contemplated under the Cybercrime Prevention Act and the AFASA.

The Philippines has been engaging in initiatives that facilitate fraud litigation and asset recovery, including the Crypto-Asset Reporting Framework and entering into to the ASEAN MLAT, which provides for cooperation in forfeiture proceedings.