PHILIPPINE DEPOSIT INSURANCE CORPORATION LAW I. Coverage A. Deposits 1.

One of these is not included in the definition of deposit as the unpaid balance of money or its equivalent received by a bank in the usual course of business and for which it has given or is obliged to give credit: a. Commercial, checking, savings, time or thrift accounts, or issued in accordance with the Bangko Sentral rules and regulations and other applicable laws. b. Other obligations of a bank which, consistent with banking usage and practice, the Board of Directors of Philippine Deposit Insurance Corporation shall determine to be deposit liabilities of the bank. c. Deposits of a branch of a domestic bank abroad insured with the approval of the Board of Directors of Philippine Deposit Insurance Corporation. d. Deposits in a safety deposit box. B. Exclusions 1. One of these is not exempted from coverage: a. Investment products such as bonds, securities, trust accounts, and other similar insurances. b. Deposit accounts which are unfunded, fictitious or fraudulent. c. Deposits from unsafe and unsound banking practice after notice and hearing and publication of cease and desist order issued by Philippine Deposit Insurance Corporation and deposits determined to be proceeds of money laundering. d. Deposits in foreign currency. II. Insurance Coverage A. Maximum Coverage 1. One of these statements is not correct: a. The maximum coverage is P500,000 per depositor. b. In determining such amount, all deposits in the same right and capacity for the benefit of the depositor in his own name or in the name of others shall be added together. c. A joint account shall be insured separately from an individually owned account.

d. Account in the name of the depositor shall be added together with an account in his name in trust for another person. 2. One of these statements is not correct: a. If the account is held jointly by two or more persons, the maximum deposit shall be divided equally among them unless a different sharing is stipulated. b. If the account is held jointly by a juridical entity and one or more natural persons, the maximum deposit is presumed to belong entirely to the juridical entity. c. The aggregate of the interests of each co-owner over several joint accounts, whether owned by the same or different combinations of individual or juridical entities, shall be subject to the maximum insurance coverage. d. The maximum insurance coverage shall not be reduced by the amount of any obligation of the depositor to the banks. III. Determination of Maximum Coverage 1. One of these statements is not correct: a. No owner or holder of a negotiable certificate of deposit shall be entitled to payment unless his name is registered in the books of the banks. b. Any director, employee, or agent of the bank is criminally liable if he creates fictitious deposit accounts or splits deposits with an outstanding balance more than the maximum insurance coverage and transfers it into two or more accounts in the name of persons who have no beneficial ownership 120 days immediately before or during a bank closure for the purpose of availing of the maximum insurance coverage. c. The determination of the Philippine Deposit Insurance Corporation as to the insurance coverage shall be final and executory unless set aside by the court on petition for certiorari filed within 30 days from notice of denial of the claim. d. If a depositor fails to file a claim within three years from the actual takeover of the closed bank by the receiver or does not enforce his claim within three years after the three-year period to file a claim, all his rights against the Philippine Deposit Insurance Corporation will be barred. IV. Payment 1. One of these statements is not correct: a. The payment may be made to a depositor in cash or a transferred deposit in another insured bank. b. Payment must be made within six months from the date of the filing of the claim. c. The six-month deadline will not apply if the Philippine Deposit Insurance Corporation is not satisfied as to the

validity of the claim, and it may require final determination of the claim by a court. d. The Philippine Deposit Insurance Corporation may not withhold a portion of the payment to provide for payment of any liability of the depositor to the bank which is not offset against its claims. V. Effect of Payment and Injunctions 1. One of these statements is not correct: a. The Philippine Deposit Insurance Corporation shall be subrogated to the rights of the insured depositors against the closed bank. b. The payments made to the insured depositor shall be considered as a preferred credit similar to a mortgage credit. c. No court, except the Court of Appeals, can issue a temporary restraining order or preliminary injunction against the Philippine Deposit Insurance Corporation for any action under this law. d. The Supreme Court may issue a temporary restraining order or preliminary injunction when the matter is of extreme urgency involving a constitutional issue such that unless it is issued grave and irreparable injury will follow. CHATTEL MORTGAGE LAW I. Requisites 1. One of these is not a requisite of a chattel mortgage: a. It must be constituted to secure the payment of a principal obligation. b. The mortgagor must be the absolute owner of the property mortgaged. c. The mortgagor must have free disposal of his property and in the absence of it, legal authorization. d. The mortgagor must be the debtor under the principal obligation. 2. One of these is not a requisite of a chattel mortgage: a. b. c. d. The property mortgaged is personal property. The mortgage must be registered. There must be an affidavit of good faith. The property mortgaged must be delivered to the mortgagee.

3. One of these statements is not correct: a. If the proceeds of the loan whose payment is being secured by chattel mortgage were not released, the chattel mortgage is unenforceable.

b. A chattel mortgage over a vessel registered in the name of the mortgagor is valid even if he had not paid the seller and they had an understanding that he would not register the vessel in his name until the price had been fully paid. c. A chattel mortgage executed over a jeepney by the buyer is valid even if the jeepney had not yet been delivered to him. d. An unemancipated minor cannot mortgage property he owns. 4. One of these cannot execute a chattel mortgage: a. b. c. d. A demented person A deaf-mute who can write An entrustee under a trust receipt A convict sentenced to suffer civil interdiction

5. One of these properties cannot be the subject of a chattel mortgage: a. b. c. d. Machinery placed by the lessee of a building Stocks in trade Growing crops Goods covered by a trust receipt.

6. One of these statements is not correct: a. A chattel mortgage over a building is valid as between the parties because of estoppel. b. A chattel mortgage over shares of stock is required to be registered with the register of deeds in the province or city where the corporation who issued the stock certificate has its office if the mortgagor resides in another place. c. A chattel mortgage over a motor vehicle must be registered with the register of deeds and the Land Transportation Office. d. A chattel mortgage over a vessel must be registered with the register of deeds and the Maritime Industry Authority. 7. One of these statements is not correct: a. A chattel mortgage over an aircraft must be registered with the register of deeds and the Civil Aviation Authority of the Philippines. b. A chattel mortgage over a patent must be registered with the register of deeds and the Intellectual Property Office. c. A chattel mortgage over a trademark must be registered with the register of deeds and the Intellectual Property Office. d. A chattel mortgage over a copyright must be registered with the register of deeds but need not be registered with the National Library. 8. One of these statements is not correct:

a. A chattel mortgage is valid between the parties even if there is no affidavit of good faith. b. A chattel mortgage is unenforceable against third parties if there is no affidavit of good faith. c. A chattel mortgage will be valid against third parties even if there is no affidavit of good faith if the third party has actual notice of it and the chattel mortgage was executed in good faith and for a valid obligation. d. A chattel mortgage over a building is binding upon third parties. II. Scope of Effectivity 1. One of these statements is not correct: a. A chattel mortgage does not cover property acquired by the mortgagor afterwards as substituted property for the original property. b. If the properties covered by a chattel mortgage consists of the stocks in trade being sold a by store, the chattel mortgage may stipulate that it will cover properties acquired afterwards in substitution of the original stocks in trade. c. A chattel mortgage cannot secure the payment of future obligations. d. A chattel mortgage can secure a credit line granted by a bank. III. Foreclosure 1. One of these statements is not correct: a. If the debtor defaulted in paying the obligation which was secured by the chattel mortgage, the chattel mortgage may be foreclosed. b. The parties may stipulate that the properties mortgaged will be sold at a private sale instead of by public auction. c. The sale shall be held in the city or municipality where the mortgagor resides or where the properties are located. d. The mortgagor and the mortgagee may not stipulate on the place where the sale will be held. 2. One of these statements is not correct: a. Notice of sale must be posted in two or more public places in the city of municipality where the public auction will be held at least ten days before the date of the sale. b. Notice of the sale must be sent to the mortgagor or person holding under him and subsequent mortgagees by notice in writing directed to them or left at their residence or sent by mail if they are not residents of the city or municipality at least ten days before the sale. c. There is no right of redemption in foreclosure of a chattel mortgage.

d. A junior mortgagee has no equity of redemption in foreclosure of a chattel mortgage. 3. One of these statements is not correct: a. If the proceeds from the sale exceed the expenses and the amount due the mortgagee, the balance shall be paid to junior mortgagees in their order. b. If the proceeds from the sale resulted in a deficiency, the mortgagee shall be entitled to sue the debtor for the deficiency. c. If the property was sold on installment basis and a chattel mortgage over the property was constituted to secure the payment of the price, the mortgagee will be barred from recovering any deficiency in case of foreclosure. d. Even if the property covered by a chattel mortgage is actually real property, the foreclosure sale should be conducted in accordance with the Chattel Mortgage Law rather than Act No. 3135. FORECLOSURE OF REAL ESTATE MORTGAGE I. General Principles 1. One of these statements is not correct: a. In case a real estate mortgage was executed to secure the payment of an obligation for the payment of money, the mortgagee may: (1) foreclose the mortgage judicially; (2) foreclose it extrajudicially, or (3) file an action for payment of a sum of money. b. In order that the mortgagee may be authorized to foreclose a real estate mortgage extrajudicially, the deed of mortgage must grant the mortgagee a special power of attorney for the purpose. c. The petition for extrajudicial foreclose of the real property shall be filed with the Executive Judge through the Clerk of Court. d. A petition for extrajudicial foreclosure of the real estate mortgage need not be filed if the foreclosure sale will be conducted by a notary public. II. Foreclosure 1. One of these statements is not correct: a. If the stipulated rate of interest is unconscionable, the foreclosure is premature and void, because the mortgagor had no obligation to pay the unconscionable interest. b. The sale shall be held in the city or municipality where the property is situated. c. It may be stipulated that the sale will be held in a different city or municipality.

d. In case it is stipulated that the sale will be made in a place outside the city or municipality where the property is located, the sale cannot be made in the place where the property is located. 2. One of these statements is not correct: a. Notice of the sale shall be published once a week for three consecutive in a newspaper of general circulation in the place where the sale will be held. b. The sale is not valid if notice of it was published in a newspaper of general circulation but no notices of the sale were posted in three public places. c. The publication of a notice of sale is not valid if the newspaper is not circulated in place of the sale. d. No personal notice of sale to the mortgagor is required. 3. One of these statements is not correct: a. If it is stipulated that personal notice of sale shall be given to the mortgagor, the sale is void if the mortgagor was not given personal notice. b. If the sale was postponed, notice of sale must be republished in a newspaper of general circulation. c. It is void for the mortgagor to waive the republication of the notice of sale in case the sale was postponed. d. Typographical errors in the name of the mortgagor and the technical description of the property in the notice of sale will nullify the sale. 4. One of these statements is not correct: a. If several parcels of land were mortgaged, they are not required to be sold separately one at a time and they may be sold as a whole. b. A second sale is required if only one bidder appeared at the sale. c. If the proceeds of the sale result in a deficiency, the mortgagee can sue the debtor for the deficiency. d. If the proceeds of the sale exceed the amount due the mortgagor, the excess should be turned over to the mortgagor. III. Redemption A. Right of Redemption and Duration 1. One of these statements is not correct: a. The waiver of the right of redemption is void, because it is against public policy. b. As a rule, the mortgagor has the right to redeem the property mortgaged within a year. c. The redemption period is counted from the date of registration of the certificate of sale.

d. A bank who did not object when the sheriff who conducted the sale stated in the certificate of sale that the redemption period is two years cannot be deemed to have agreed to it. 2. One of these statements is not correct: a. If the mortgagor is a juridical person and the mortgagee is a bank, the redemption period runs until the registration of the certificate of sale or three months after the sale, whichever is earlier. b. The filing of an action for redemption within the redemption period is not sufficient unless the redemption price is tendered as soon as it is determined. c. The mortgagor and the mortgagee can agree to extend the redemption period. d. The acceptance by the buyer of the redemption place tendered beyond the redemption period does not constitute a waiver of the redemption period. 3. One of these statements is not correct: a. If a real estate mortgage secured the payment of two loans which were already due when the bank filed an application for extrajuridical foreclosure of the real estate mortgage on the first loan only, the payment for the second loan should not be included in the redemption price. b. If all the lots mortgaged were sold at a single foreclosure sale and for a single price, the mortgagor cannot redeem some of them only and must redeem all of them. c. If the buyer at the foreclosure sale is not a bank, the redemption price is the purchase price, with interest at rate of one per cent a month up to the time of redemption, together with the amount of any assessment and taxes which the buyer paid after the purchase, with interest at the rate of one per cent a month. d. If the buyer at the foreclose sale is the bank, the redemption price is the purchase price, with interest at the rate specified in the mortgage, and all the costs and expenses incurred by the bank from the sale and custody of the property, less income derived from it. IV. Writ of Possession 1. One of these statements is not correct: a. It is the ministerial duty of the court to issue a writ of possession after the foreclosure sale. b. The right to file a petition for a writ of possession is prescriptible. c. The buyer is entitled to a writ of possession even if the mortgagor filed an action for annulment of the real estate mortgage or of the foreclosure sale. d. The buyer at the sale cannot ask for a writ of possession if the buyer leased the property to the mortgagor and the

mortgagor defaulted in paying rent, because the rights of the parties are governed by the lease. 2. One of these statements is not correct: a. The writ of possession can be enforced against third parties whose rights are dependent upon those of the mortgagor. b. The writ of possession can be enforced against a lessee of the mortgagor. c. The writ of possession cannot be enforced against a lessee of the mortgagor if the lease has not yet expired and it is registered, the buyer knew of its existence and duration, or it is covered by the House Rental Law. d. The writ of possession can be enforced against a third person asserting rights of ownership adverse to the mortgagor. V. Annulment of Foreclosure Sale 1. One of these statements is not correct: a. The mortgagor may file a petition that the sale be set aside and the writ of possession be cancelled on the ground that the real estate mortgage was not violated or the sale was not made in accordance with law. b. The petition shall be filed in the proceedings in which possession was requested not later than 30 days after the buyer was given possession. c. The court shall take cognizance of the petition in accordance with Section 112 of the Property Registration Decree. d. If no writ of possession has yet been issued, the mortgagor cannot file a separate action for annulment of the foreclosure sale. TRUTH IN LENDING ACT 1. One of these statements is not correct: a. It is the policy of this law to protect consumers by assuring full disclosure of the cost of the use of credit. b. The law does not apply only to banks and non-banking financial institutions but also to private individuals engaged in the business of granting loans. c. The requirement to disclose the cost of finance charges cannot be complied with by making the disclosure in the promissory note rather than a separate document. d. A creditor cannot charge handling charges for loans or increase the penalty if no disclosure was made to the debtor. 2. One of these statements is not correct: a. The contract is valid and enforceable even if the creditor did not comply with the law.

b. A creditor who does not comply with the law will be liable to the debtor for an amount equal to double the finance charges but not less than 100 pesos nor more than 2,000 pesos. c. The creditor will be liable for attorneys fees and costs of suit in the action fee recovery of finance charges. d. There is no criminal penalty for violation of the law. ANTI-MONEY LAUNDERING ACT I. Covered Institutions 1. One of these institutions is not covered: a. Banks, non-banks, quasi-banks, trust entities and all other institutions and their subsidiaries and affiliates supervised by the Bangko Sentral ng Pilipinas. b. Insurance companies and all other institutions supervised by the Insurance Commission. c. Securities dealers, brokers, salesman, investment houses, and other similar entities managing securities or rendering services as investment agent, advisor or consultant. d. Real estate dealers.

2. One of these institutions is not covered: a. Mutual funds, close-end investment companies, commontrust funds, pre-need companies and other similar entities. b. Foreign exchange corporations, money changers, money payment, remittance and transfer companies and other similar entities. c. Other entities dealing in currency, commodities or financial derivatives, valuable objects, cash substitutes and other similar monetary instruments or property regulated by the Securities and Exchange Commission. d. Car dealers. II. Obligations of Covered Institutions 1. One of these is not an obligation of covered institutions: a. To establish and record the true identities of their clients based on official document. b. To maintain and store safely all records of all their transactions for five years from the dates of the transactions. c. To report to the Anti-Money Laundering Council all covered transactions and suspicious transactions. d. To automatically furnish the Anti-Money Laundering Council records of suspicious transactions. III. Suspicious Transactions:

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1. One of these transactions is not suspicious: a. There is no underlying legal or trade obligations, purpose or economic justification. b. The client is not properly identified. c. The amount involved is not commensurate with the business or financial capacity of the client. d. The client is rushing the transactions. 2. One of these transactions is not suspicious: a. It may be perceived that the transaction is structured to avoid being the subject of reporting requirements. b. Any circumstance which deviates from the profile of the client or the clients past transactions with the covered institution. c. The transaction is related to an unlawful activity. d. A document is lacking. IV. Definition of Money Laundering 1. Money laundering is a crime whereby the proceeds of an unlawful activity are transacted, thereby making them appear to have originated from legitimate sources. One of these is not guilty of money laundering: a. A person knowing that any monetary instrument or property relates to the proceeds of any unlawful activity transacts it. b. A person knowing that any monetary instrument or property involves the proceeds of any unlawful activity performs or fails to perform any act as a result of which he facilitates its transaction. c. A person knowing that any monetary instrument or property is required to be disclosed and filed with the Anti-Money Laundering Council, fails to do so. d. A person who performs an operation to change the appearance of a person suspected to be engaged in money laundering. V. Predicate Crimes 1. One of these is not a predicate crime: a. Kidnapping for ransom b. Sections 3, 4, 5, 6, 7, 8, 9, 10, 12, 13, 14, 15 or 16 of the Comprehensive Dangerous Drugs Act c. Section 3, paragraphs B, C, D, E, G, H and I of the AntiGraft and Corrupt Practices Act d. Theft of motor vehicles 2. One of these is not a predicate crime: a. Plunder b. Robbery and extortion c. Jueteng and masiao

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d. Sale of counterfeit digital video disks 3. One of these is not a predicate crime: a. Piracy on the high seas b. Qualified theft under Article 310 of the Revised Penal Code c. Swindling under Article 315 of the Revised Penal Code d. Anti-fencing 4. One of these is not a predicate crime: a. b. c. d. Smuggling Violation of the Electronic Commerce Act Hijacking, destructive arson and murder Counterfeiting bank notes

5. One of these is a predicate crime: a. Fraudulent practices under the Securities Regulations Code b. Tax evasion under the National Internal Revenue Code c. Malversation d. Destruction of official documents. VI. Important Functions of Anti-Money Laundering Council 1. One of these statements is not correct: a. To require and receive covered or suspicious transaction reports from covered institutions. b. To issue orders to the Supervising Authority or covered institution to determine the true identity of the owner of any monetary investment or property subject of a covered transaction or suspicious transaction report or request for assistance from a foreign state, or believed on the basis of substantial evidence to be the proceeds of an unlawful activity. c. To institute civil forfeiture proceedings and all other remedial proceedings through the Office of the Solicitor General. d. To order the closure of any establishment engaged in money laundering. 2. One of these is not an important function of the Anti-Money Laundering Council: a. To cause the filing of complaints with the Department of Justice or the Ombudsman for the prosecution of money laundering offense. b. To investigate suspicious transactions and covered transactions deemed suspicious after an investigations by AMLC, money laundering activities, and other violations of the law.

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c. To apply before the Court of Appeals ex parte for the freezing of any monetary instrument or property alleged to be proceeds of any unlawful activity. d. To conduct an administrative investigation of any public officer for violation of the Anti-Money Laundering Act. VII. Freezing of Property and Examination of Bank Deposit 1. One of these statements is not correct: a. The Court of Appeals, upon application ex parte by the Anti-Money Laundering Council, and after determination that probable cause exists that any monetary instrument or property is related to an unlawful acting may issue a freeze order for twenty days unless extended by it. b. The Anti-Money Laundering Council may inquire into any deposit or investment with any bank or financial institution upon order of a court in case of violation of this Act if there is probable cause that it is related to an unlawful activity or a money laundering activity but no court order is required in cases involving unlawful activities in Section 3 (i) (1) (2) and (12), i.e. kidnapping for ransom, violation of the Comprehensive Dangerous Drugs Act, and hijacking, destructive arson and murder. c. The court order cannot be issued ex parte. d. The Bangko Sentral ng Pilipinas may not inquire into any deposit or investment with any bank or financial institution in the course of a periodic or special examination. FOREIGN INVESTMENTS ACT 1. One of these statements is not correct: a. It is the policy of the Foreign Investments Act to attract, promote and welcome productive foreign investors. b. An export enterprise is an enterprise where a manufacturer, processor, or service enterprise, including tourism, exports 60 percent or more of its output, or wherein a trader purchases products domestically and exports 60 percent or more of such purchases. c. Domestic market enterprise is an enterprise which produces goods for sale or renders services to the domestic market entirely or if exporting a portion of its output fails to consistently export at least 60 percent of it. d. The law applies to non-bank financial institutions. 2. One of these statements is not true: a. A citizen of the Philippines or a domestic partnership or association wholly owned by citizens of the Philippines is a Philippine national. b. A corporation organized under the laws of the Philippines of which at least 60 percent of the capital stock

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outstanding and entitled to vote is owned and held by citizens of the Philippines is a Philippine national. c. A trustee of funds or pension or other employee retirement or separation benefits, where the trustee is a Philippine national and at least 60 percent of the funds will accrue to the benefit of Philippine nationals is not a Philippine national. d. Where a corporation and its non-Filipino stockholders own stocks in a domestic corporation, at least 60 percent of the capital stock outstanding and entitled to vote of each of both corporations are owned and held by citizens of the Philippines and at least 60 percent of the members of the board of directors of both corporations are citizens of the Philippines, is a Philippine national. 3. One of these statements is not correct: a. Foreign investment in export enterprise and domestic market enterprise is allowed up to 100 percent if their products and services do not fall within Lists A and B of the Foreign Investment Negative List. b. List A enumerates the areas of activities reserved to Philippine nationals by mandate of the Constitution and specific laws. c. List B contains the areas of activities and enterprises regulated by law which are defense-related activities or which have implications on public health and morals, such as the manufacture and distribution of dangerous drugs, forms of gambling, nightclubs, bars, beer houses, dance halls, sauna and steam bathhouses and massage clinics. d. Small and medium-sized domestic market enterprises with paid-in equity capital less than the equivalent of US$200,000 are reserved to Philippine nationals, but they shall be allowed to foreigners if (1) they involve advanced technology; or (2) they employ at least 50 direct employees with a minimum paid-in capital of US$150,000.00. INTELLECTUAL PROPERTY CODE I. Patents A. Patentability 1. One of these cannot be patented: a. b. c. d. A useful machine A product A process Discoveries, scientific methods.

theories,

and

mathematical

2. One of these cannot be patented: a. An improvement of a machine, product, or process.

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b. Micro-organisms c. Non-biological and microbiological processes d. The theory of relativity 3. One of these can be patented: a. In the case of drugs and medicines, the mere discovery of new form or new property of a known substance which does not result in the enhancement of the known efficacy of that substance, or the new discovery of any new property or new use for a known substance. b. Schemes, rules and methods of performing mental acts, playing games or doing business, and computer programs. c. Methods for treatment of the human body by surgery or therapy and diagnostic methods practiced on the human or animal body. d. The improved process for making pre-cast tiles which resulted in durability of the tiles. 4. One of these cannot be patented: a. Plant varieties or animal breeds or essentially biological process for the production of plants or animals. b. Aesthetic creations. c. Anything which is contrary to public order or morality. d. An improvement in mascots used in restaurants by the use of a device to move the facial parts of the mascot.

B. Conditions of Patentability 1. One of these is not a condition of patentability: a. Novelty, which means it does not form part of a prior art. b. Involvement of inventive step, which means that it is not obvious to a person skilled in the art. c. Industrial applicability, which means that it can be produced and used in an industry. d. Durability C. Ownership 1. One of these statements is not correct: a. The patent belongs to the inventor, his heirs, or assigns. b. When two or more persons jointly make an invention, the patent belongs to them jointly. c. The person who commissioned a work will own the patent. d. Even if the contract provides otherwise, the person who commissioned a work will own the patent. 2. One of these statements is not correct:

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a. An employee who made an invention in the course of his employment owns the patent, if that is not part of his regular duties. b. An employee owns the patent if he made an invention in the course of employment if that is not part of his duties even if he used the time, facilities and materials of the employer. c. An employer owns the patent for an invention if an employee made it as a result of the performance of his regularly assigned duties. d. The employer owns the patent for an invention if an employee made it as a result of the performance of his regularly assigned duties even if there is an agreement to the contrary. 3. One of these statements is not correct: a. If two or more persons made an invention independently of each other, the patent will belong to the one who applied for a patent. b. If two or more applicants applied for a patent for the same invention, the patent belongs to the applicant who has the earliest filing date or the earliest priority date. c. If two or more applications for the same invention have the same filing date or the same priority date, the patent belongs to the applicant who has the earliest filing time on the basis of minutes. d. If a person who was deprived of a patent without his consent or through fraud is declared by a final court decision to be the true and actual inventor, the court shall order his substitution as owner of the patent or cancel the patent, at his option, and award him damages. D. Priority 1. One of these statements regarding the condition for consideration of the date of the previous filing of a foreign application as the date of filing in the Philippines is not correct. a. The local application need not expressly claim priority. b. It is filed within 12 months from the date of filing of the earliest foreign application. c. A certified true copy of the foreign application together with an English translation is filed within six months from the date of filing in the Philippines. d. The foreign country affords the similar privileges to Filipino citizens. E. Grounds for Cancellation of a Patent 1. One of these statements regarding the grounds for cancellation of a patent is not true: a. A patent can be cancelled if the invention is not new or patentable.

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b. A patent can be cancelled if it does not disclose the invention in a manner sufficiently clear and complete for it to be carried out by a person skilled in the art. c. A patent can be cancelled if it is contrary to law and morality. d. A patent cannot be cancelled if it includes matters outside the scope of the disclosure in the application. F. Exclusive Rights of Owner of Patent: 1. One of these is not an exclusive right of the owner of a patent: a. To restrain, prohibit and prevent any unauthorized person or entity from making, using, offering for sale, selling or importing the patented product. b. To restrain, prevent or prohibit any unauthorized person or offering for entity from using the process and from manufacturing, dealing in, using, selling, or offering for sale, or importing any products obtained directly or indirectly from the patented process. c. To assign or transfer by succession the patent and conclude licensing agreements for it. d. To have the invention attributed to him. G. Limitation of Patent Rights 1. One of these statements is not correct: a. The owner of a patent has no right to prevent the use of a patented product which has been sold in the market in the Philippines by the owner of the product. b. The owner of a patent has no right to prevent the use of a patented drug or medicine after it has been introduced in the Philippines or anywhere else in the world by the owner of the patent. c. The owner of a patent has the right to prevent the use of a patented drug or medicine after it has been put on the market in the Philippines by any party authorized to use it. d. Any government agency or any private third party has the right to import drugs and medicines. 2. One of these statements is not correct: a. The owner of a patent can prevent an act done by third parties privately on a non-commercial scale or for a noncommercial purpose even if it does not significantly prejudice the economic rights of the owner of the patent. b. The owner of a patent has no right to prevent the making or using of a patented process exclusively for experimental use of the invention for scientific purposes or educational purposes and such other activities directly related to the scientific or educational experimental use. c. The owner of a patent for drugs and medicines cannot prevent the testing, using, making, or selling of the drug or medicine, including data related to it, solely for the

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purposes of reasonably related to the development and submission of information and issuance of approvals by government regulatory agencies in the Philippines or of another country. d. The owner of a patent cannot prevent the preparation for individual cases, in a pharmacy or by a medical professional, of a medicine in accordance with a medical prescription or acts concerning the medicines so prepared. 3. One of these is not a case which a government agency or a third person authorized by the government may exploit an invention even without the agreement of the owner of the patent: a. Public interest, in particular, national security, health, or the development of other sectors so required. b. A judicial or administrative body has determined that the manner of exploitation by the owner of the patent or license is competitive. c. There is a national emergency of other circumstances of extreme urgency requiring the use of a patented drug or medicine. d. The demand for a patented drug or medicine in the Philippines is not being met to an adequate extent and on reasonable terms. H. Infringement of Patent 1. One of these statements is not correct: a. Infringement of a patent is the making, using, offering for sale, selling, or importing of a patented product or a product obtained directly or indirectly from a patented process or the use of a patented process without the authorization of the owner of the patent. b. There can be infringement of patent even if no patent has been granted. c. In literal infringement, the challenged matter falls within the literal meaning of the patent claims. d. Imitating a patented process for curving walking sticks and umbrella handles by exposing them to the flames coming from a lamp fueled by oil is literal infringement. 2. One of these statements is not correct: a. According to the doctrine of equivalents, an infringement occurs if despite some modifications, a device performs substantially the same function in substantially the same way to achieve substantially the same result. b. The use of a patented process for curving walking sticks and umbrella handles by exposing them to the flames of a lamp fueled by oil by substituting the oil with alcohol is infringement of patent. c. A later model of a sing-along system which like a prior model is equipped with two cassette tape decks so that

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one can be used to play back a song while the other is being used to record the voice of a singer does not infringe the patent of the earlier model. d. A pharmaceutical compound which combats gastrointestinal parasites in animals with the same result as a prior pharmaceutical product does not infringe its patent unless it performs the function in substantially the same way. 3. One of these statements is not correct: a. A civil action for infringement of patent cannot be filed if there is a pending petition for its cancellation. b. A foreign national or entity may bring a civil action for infringement of patent, despite the lack of license to do business in the Philippines, if its country is a party to a convention, treaty or agreement to which the Philippines is also a party or a law of that country grants Filipino citizens similar rights. c. A licensee of the infringer is not liable unless the license is voluntary and he colluded with the infringer. d. Aside from the infringer, anyone who actively induces the infringement of patent or provides him with a component of the product or of a product produced because of the patented product knowing that it is especially adapted exclusively for infringement is liable solidarily as contributing infringer. 4. One of these statements is not correct: a. No damages can be recovered if the infringement was committed more than four years before the filing of the civil action. b. It is a defense that the invention is not new or patentable. c. It is not a defense that the patent does not disclose the invention in a manner sufficiently clear and complete for it to be carried out by a person skilled in the arts. d. It is a defense that the patent is contrary to public order or morality. 5. One of these statements is not correct: a. If the infringer repeats the infringement after finality of the judgment of the court against him, he is criminally liable. b. Anyone who connives with him is also criminally liable. c. The criminal action prescribes in three years from the date of commission of the case. d. The person if convicted is imprisoned for not less than one year and not more than four years or a fine from P100,000 to 300,000 pesos, or both. I. Voluntary License 1. One of these statements is not correct:

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a. It is mandatory that licensing agreements be governed by Philippine laws and in case of litigation the venue will be the place of the principal office of the licensee. b. It is not mandatory that continued access to improvements and techniques and processes related to the technology be made available during the period of the agreement. c. If there is a provision for arbitration, the procedure of Philippine arbitration law, the arbitration rules of UNCITRAL, or the rules of the International Chamber of Commerce will apply and the venue will be the Philippines or a neutral country. d. It is mandatory that Philippines taxes on all payments under the agreement shall be borne by the licensor. 2. One of these is not a prohibited provision in licensing agreements: a. Those which require the licensee to acquire goods from a specific source. b. Those which reserve to the licensee the right to fix the selling prices. c. Those that restrict the volume of products. d. Those that prohibit the use of competitive technology if the licensing agreement is exclusive. 3. One of these is not a prohibited provision in licensing agreements: a. Those that obligate the licensee to transfer to licensor for free inventions or improvements on the licensed technology. b. Those that require payment of royalties for unused patents. c. Those which prohibit the licensee to export the licensed products to countries where the licensor has granted an exclusive license. d. Those that restrict the use of the technology supplied after expiration of the agreement. 4. One of these is not a prohibited provision in licensing agreements: a. Those which prohibit the licensee from contesting the validity of the patent. b. Those which restrict the research and development activities of the licensee. c. Those which do not prevent the licensee from adapting the technology to local conditions. d. Those which exempt the licensee from liability for nonfulfillment of its liabilities or liability to a third party arising from use of the licensed products. J. Compulsory Licensing 1. One of these is not a ground for granting a compulsory license:

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a. A national emergency or other circumstances of extreme urgency exist. b. Public interest, in particular, national secrecy, nutrition, health, or the development of other vital sectors of the national economy requires it. c. A judicial or administrative body has determined that the manner of exploitation of the patent by the owner of his licensee is competitive. d. The owner of the patent has not devoted the invention to public non-commercial use without satisfactory reason. 2. One of these statements is not correct: a. A compulsory license cannot be granted if a voluntary licensee has been granted. b. The existence of one of the grounds for the grant of a compulsory license is sufficient. c. A petition for a compulsory licensee on the ground that the invention is not being worked in the Philippines on a commercial scale without satisfactory reason can be filed only after four years from the date of filing of the application for the patent or three years from the date of the patent, whichever is later. d. A petition for a compulsory licensee on any of the other grounds may be filed at anytime. 3. One of the statements is not correct: a. The petitioner exerted efforts to obtain a license on reasonable terms but has been unsuccessful. b. The requirement of reasonable efforts does not apply if it seeks to remedy a practice determined to be anticompetitive. c. The requirement of reasonable efforts does not apply if there is a national emergency. d. The requirement of reasonable efforts applies if the invention has not been devoted to public non-commercial use. K. Assignment 1. One of these statements is not correct: a. An assignment may be of the entire rights or for an individual share of the entire patent. b. An assignment may be limited to a specified territory. c. A joint owner can assign his rights without the consent of the other owners. d. An assignment of a patent is void as against any subsequent buyer or mortgagor for valuable consideration without notice unless it is recorded in the Intellectual Property Office. II. Trademarks

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A. Definition and Registability 1. One of these statements is not correct: a. A mark is any visible sign capable of distinguishing the goods (trademark) or services (service mark) of an enterprise and shall include a stamped or marked container of goods. b. A collective mark is any visible sign designated as such in the application for registration and capable of distinguishing the origin or any other common characteristic, including the quality of goods or services of different enterprises which use the sign under the control of the registered owner of the collective mark. c. A trade name is the name or description identifying or distinguishing an enterprise. d. Use in trade or commerce is not required to acquire ownership of a trade name. 2. One of these statements is not correct: a. Ownership of trademark is acquired by valid registration. b. Prior use is not required to acquire ownership of a trademark. c. A trademark cannot be registered if it consists of an immoral, deceptive or scandalous matter or a matter which may disparage or falsely suggest a connection with persons living or dead, institutions, beliefs, or national symbols, or bring them into contempt or disparage. d. The name of the deceased wife of a President cannot be registered as a trademark. 3. One of these trademarks cannot be registered: a. It consists of the flag or coat of arms or other insignia of the Philippines or any of its political subdivision, or of any foreign nation, or any simulation of them. b. A trademark cannot be registered if it is identical with a registered trademark belonging to a different person or a prior trademark if (1) they refer to the same goods or services; (2) they refer to closely related goods or services; or (3) it resembles the prior trademark so as to be likely to cause confusion. c. A sign which is likely to mislead the public, particularly as to the nature, quality, characteristics or geographical origin of goods or services cannot be registered. d. A trademark consisting exclusively of a generic sign can be registered. 4. One of these statements is not correct: a. Trademark consists exclusively of signs customary to designate the goods or services in everyday language can be registered.

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b. A trademark consisting exclusively of signs to designate the kind, quality, intended purposes, value, geographical origin, time or production of the goods or rendering services or other characteristics of goods or services cannot be registered. c. A trademark that consists of shapes necessitated by technical factors or by nature of the goods or factors that affect their intrinsic value cannot be registered. d. A color alone cannot be registered as a trademark, unless it is defined by a given form. 5. One of these statements is not correct: a. A trademark which is contrary to public order or morality cannot be registered. b. The suffix tussin when used as part of a cough syrup is merely generic. c. The phrase pale pilsen, which refers to a type of beer, is generic. d. The word Isabela can be registered as a trademark for cigars. B. Confusing Similarity 1. One of these statements is not correct: a. According to the holistic test of confusing similarity, the trademarks in their entirety as they appeared in their respective labels are considered in relation to the goods to which they are attached. b. According to the dominancy test of confusing similarity, if the questioned trademark contains the main features of another trademark by reason of which deception is likely to result, infringement of trademark takes place. c. The Intellectual Property Code has adopted both the holistic test and the dominancy test. d. Confusing similarity does not require exact identity. It is sufficient if one trademark is a colorable imitation of another, which means that such a resemblance to the alleged trademark as to deceive an ordinary buyer giving the attention a buyer usually gives. 2. One of these statements is not correct: a. The likelihood of confusion is great when the goods being purchased are cheap commodities which are consumed every day like candies, soap and coffee. b. The likelihood of confusion is remote when expensive articles are being purchased like television sets, watches, and cars. c. The likelihood of confusion is remote in the case of the purchase of medicines which cannot be bought without a prescription. d. To determine if two trademarks are confusingly similar, the two products should be placed alongside and compared.

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3. One of these set of trademarks are not confusingly similar: a. b. c. d. Planters Cocktail Peanuts and Planters Cereal Peanuts Gold Toe and Gold Top Big Mac and Big Mak Victorias and Valentino

4. One of these statements is not correct: a. There are two types of confusion, confusion of goods and confusion of origin. b. In confusion of goods, the buyer is induced to buy a product in the belief that he is buying the other product he had in mind. c. In confusion of origin, the goods are different but the public might be deceived to believe that the challenged product came from another manufacturer of another product, because the two products are related. d. The protection of a trademark does not extend to the market areas that are the normal potential expansion of the business. 5. One of these sets of products are not closely related: a. b. c. d. Petroleum products and cigarettes Paint and sandals Wines and cigarettes Haberdashery goods and shoes.

C. Well-Known Trademarks 1. One of these statements is not correct: a. A trademark which is identical with or confusingly similar to or is a translation of an internationally well-known trademark cannot be registered for identical or similar goods or services. b. The internationally well-known trademark must be registered in the Philippines to be protected. c. In determining if a trademark is internationally wellknown it is the knowledge of the relevant sector of the public rather than of the public at large that should be considered, including knowledge in the Philippines obtained as a result of promotion of the trademarks. d. A trademark cannot be registered if it is identical with or confusingly similar to or is a translation of an internationally well-known trademark which is registered in the Philippines with respect to goods or services which are similar to those applied for registration but which would indicate a connection to those of the owner of the internationally well-known trademark. D. Rights Conferred by Registration of Trademark and Infringement of Trademark

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1. One of these statements is not correct: a. The owner of a registered trademark has the exclusive right to prevent all third parties who do not have his consent from using in the course of trade identical or similar signs or containers for goods or services which are identical or similar in respect of which the trademark is registered if use will result in a likelihood of confusion. b. The elements of infringement of trademark are (1) validity of the trademark of the plaintiff; (2) ownership of the trademark of the plaintiff; and (3) likelihood of confusion as a result of the use of the trademark or its colorable imitation by the defendant. c. There can be an infringement of trademark even if it is not registered. d. Infringement of trademark takes place even if there is no actual sale of the goods or services using the infringing trademark. 2. One of these is not available as a defense: a. The plaintiff is not entitled to the registration of the trademark. b. No damages may be recovered after four years from the time the cause of action arose. c. The claim is barred by laches, estoppel; and acquiescence. d. There is a pending action for cancellation of the registration of the trademark. 3. One of these statements is not correct: a. The measure of the damages the owner of the registered trademark may recover is the reasonable profits he would have made had the defendant not infringed his rights or the profits the defendants actually earned from the infringement. b. If the damage cannot be readily ascertained, the court may award a reasonable percentage of the gross sales of the defendant or the value of the services in connection with which the trademark was used in infringing the rights of the plaintiff. c. If actual intent to mislead the public or to defraud the plaintiff is shown, the court may treble the damages. d. The plaintiff cannot recover damages unless the acts were committed with knowledge that the imitation is likely to cause confusion, to cause mistake, or to deceive. Such knowledge is presumed if the plaintiff gave notice and his trademark is registered by displaying with the trademark the words Registered Mark or the letter R inside a circle, or actual notice of the defendant of the registration. E. Unfair Competition 1. One of these statements is not correct:

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a. Any person who employs deception or any other means contrary to good faith by which he shall pass off the goods he manufactured or in which he deals, or his business, or services for those of one having a established goodwill or who committed any acts calculated to produce this result is guilty of unfair competition. b. The elements of unfair competition are: (1) confusing similarity in the general appearance of the goods; and (2) intent to deceive the public and defraud a competitor. c. The distinctions between infringement trademark and unfair competition are: (1) in infringement of trademark, its prior registration is required; in unfair competition, it is not required; (2) in infringement of trademark fraudulent intent is not necessary; (3) infringement of trademark is the unauthorized use of a trademark; unfair competition is passing off ones goods for the goods of another. d. An action for unfair competition cannot be filed if the defendant registered the trademark in his name. III. Copyright A. General Principles 1. One of these is not correct: a. Literary and artistic works are protected from the moment of their creation. b. Literary and artistic works are protected, irrespective of their mode or form of expression, content, quality, and purpose. c. The delivery of copies of copyright works to the National Library and the Supreme Court Library is for the protection of the rights of the author. d. For a work to be protected, it must be original. It must be an independent creation of the author and was not copied totally or substantially from another work. B. Copyrightable Works 1. One of these cannot be copyrighted: a. Books, pamphlets, articles and other writings. b. Periodicals and newspapers c. Lectures, seminars, addresses, dissertations prepared for oral delivery. d. A trademark 2. One of these cannot be copyrighted: a. Letters b. Dramatic or dramatico-musical compositions, choreographic works or entertainment in dumb show. c. Musical compositions d. A bushing for motor vehicles

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3. One of these cannot be copyrighted: a. Works of drawing, painting, architecture, sculpture, engraving, or other works of art. b. Original ornamental designs or models for articles of manufacture. c. Illustrations, maps, plans, sketches, charts and three dimensional works relative to geography, topography, architecture or science. d. Sportswear 4. One of these cannot be copyrighted: a. Drawings or plastic works of a scientific or technical character. b. Photographic works, including works produced by a process analogous to photography. c. Audiovisual works and cinematography works and works produced by an analogous process. d. Blank forms for recording information. 5. One of these cannot be copyrighted: a. b. c. d. Pictorial illustrations and advertisements Computer programs Other literary, scholarly, scientific and artistic works. Racing program.

C. Derivative Works 1. One of these is not a derivative work: a. Dramatizations, translations, adaptations, abridgments, arrangements, and other alterations of literary or artistic works. b. Collections of literary, scholarly or artistic works which are original by reason of their selection, coordination or arrangement of their content. c. Compilation of data and other materials which are original by reason of the selection, coordination, or arrangement of their contents. d. Photograph of a statue. D. Non-Copyrightable Works: 1. One of these can be copyrighted: a. An idea, procedure, system, method or operation, concept, principle, discovery or mere data as such. b. News of the day and other miscellaneous facts which constitute press information. c. Official text of a legislative, administrative of legal nature, as well as any official translation of them. d. Collection of speeches delivered by a Senator in the Senate compiled by him.

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E. Rights of Owner of Copyright 1. One of these is not included in the exclusive economic rights of an owner of a copyright: a. Reproduction of the work or substantial party of the works. b. Dramatization, translation, adaptation, abridgment, arrangement, or other transformation of the work. c. The first public distribution of the original and each copy of the work by sale or other forms of transfer of ownership. d. Reproduction of a chapter of a work for purposes of research. 2. One of these is not included in the exclusive economic rights of the owner of a copyright: a. Rental of the original or a copy of an audiovisual or cinematographic work, a work embodied as a sound recording, a computer program, a compilation of data and other materials or a musical work in graphic form. b. Public display of the original or a copy of the work. c. Public performance or other communication to the public of the work. d. Use of a book for judicial proceedings. F. Ownership of Copyright 1. One of these is not correct: a. The copyright to an original literary and artistic work belongs to the author. b. In case of works of joint authority, the co-authors shall be co-owners of the copyright. c. If a joint work consists of parts that can be used separately and the author of each part can be identified, the author of each part shall be the owner of the copyright in the part he created. d. The copyright to the letters shall belong to the addressee. 2. One of these statements is not correct: a. If the creator of work is not part of the regular duties of an employee, the copyright shall belong to him, even if he used the time, facilities and materials of the employer. b. If the work is the result of a performance of the regular duties of an employee, the copyright shall belong to the employer, unless there is an agreement to the contrary. c. In the case of commissioned work, the copyright shall belong to the owner who commissioned it. d. In the case of an audiovisual work, the copyright shall belong to the producer, author of the scenario, composer of the music, film director, and author of the work adapted.

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G. Doctrine of Fair Use 1. One of these statements is not correct: a. The fair use of a copyrighted work for criticism and comment is not infringement of copyright. b. The fair use of a copyrighted work for news reporting is not infringement of a copyright. c. The fair use of a copyrighted work for teaching, scholarship, research, and similar purposes is not infringement of copyright. d. Decompilation, the reproduction of the code and translation of the forms of the computer program to achieve inter-operability of an independently created computer program with other programs is fair use. 2. One of these statements is not correct: a. In determining whether the use of a work is fair use, the following factors should be considered: (1) the purpose and character of the use; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used; and (4) the effect of the use upon the potential market for or value of the copyrighted work. b. A satirical version of a song is not fair use of the original song. c. The photo-copying of a book which is out of stock made by a library is allowable. d. The public performance of a work by a charitable organization where no admission fee is charged is allowable. H. Infringement of Copyright 1. One of these statements is not correct: a. Infringement consists in the doing by any person without the consent of the owner of the copyright of anything the sole right to do which is conferred by statute on the owner of the copyright. b. A distributor of software who was authorized to produce only one copy for each customer who made additional copies to be used for other purposes is liable for infringement. c. The copying of 88 percent of the words in dictionary of a previous author is infringement. d. A photographer who photographed the same scenic spots shown in postcards and used a different arrangement and composition is liable for infringement. 2. One of these is not a valid defense in an action for infringement of copyright: a. The use of the copyrighted work constitutes fair use.

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b. The copyright of the format of a television is not valid, because the format is just a concept. c. The action is barred by prescription because of the lapse of four years from the date of the infringement. d. The defendant had no intention to infringe the copyright. 3. One of these statements is not correct: a. An injunction may be issued restraining the infringement of copyright. b. The defendant may be ordered to pay actual damages to the owner of the copyright. c. The infringing copies of the work, devices and other means for making infringing copies may be ordered to be delivered under oath for destruction without compensation. d. Moral and exemplary damages cannot be awarded. 4. One of these is not a criminal act: a. Selling, letting for hire, or exposing for sale or hire the infringing article. b. Distributing the infringing article for purpose of trade. c. Trade exhibit of the article in public. d. Lending the infringing article for free. GENERAL BANKING LAW I. General Concepts 1. One of these statements is not correct: a. A bank is an entity engaged in the lending of funds obtained in the form of deposits. b. Banks are classified only into universal banks, commercial banks and thrift banks. c. A quasi-bank is an entity engaged in the borrowing funds through the issuance, endorsement or assignment with recourse or acceptance of deposit substitutes for purposes of relending or purchasing of receivables and other obligations. d. A trust entity administers a trust or holds property in trust or on deposit for the use, benefit, or behalf of others. II. Powers and Liabilities 1. Banks cannot perform one of these: a. b. c. d. Grant loans and credit accommodations Own equity investment Accept deposits Act as insurer

2. A bank cannot perform one of these:

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a. Receive in custody funds, documents and valuable objects b. Act as financial agent and buy and sell by order and for the account of customers, shares, evidence of indebtedness, and all types of securities. c. Make collections and payments for the account of others and perform such other services for their customers or are not incompatible with banking business. d. Act as real estate broker. 3. A bank cannot perform one of these: a. Act as managing agent, adviser, consultant or administrator of investment management/advertising/consultancy accounts. b. Rent out safety deposit boxes. c. Engage in trust operations with authorization by the Monetary Board. d. Engage in warehousing. 4. One of these statements is not correct: a. The relationship between a depositor and a bank is that of lender and borrower. b. The relationship between a customer who rented a safety deposit box and a bank is that of depositor and depository. c. Banks must exercise extraordinary diligence in the care and handling of the money of their customers, because their business is imbued with public interest. d. A stipulation in contract for the rent of a safety deposit box that the liability of a bank is limited to exercising due diligence to see to it that no unauthorized person is admitted to the safety deposit box is valid. III. Stipulations on Interest 1. One of these statements is not correct: a. There is no regulatory ceiling imposed by the Monetary Board on interest on loans. b. A monthly interest of three percent or higher on a bank loan is unconscionable. c. A provision giving a bank authority to increase the interest on a loan solely on the basis of its determination is valid. d. A provision giving a bank authority to increase interest rates is valid if there is a stipulated reference rate which will be the basis for the increase.

IV. Loans A. Risk-Based Capital

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1. One of these statements is not correct: a. The Monetary Board shall prescribe the minimum rate which the net worth of a bank must bear to its total risk assets. b. If a bank does not comply with the prescribed minimum rate, the Monetary Board may prohibit the distribution of net profits until the minimum requirement has been met. c. If a bank does not comply with the prescribed minimum rate, the Monetary Board may prohibit the acquisition of major assets and the making of new investments by the bank. d. The purchase of readily marketable evidence of indebtedness of the Republic of the Philippines and of the Bangko Sentral and any other evidence of indebtedness fully guaranteed by the Republic of the Philippines is not exempt from the prohibition. B. Single Borrowers Limit 1. One of these statements is not correct: a. The total amount of loans that may be extended by a bank to a single borrower shall not exceed twenty per cent of the net worth of the bank. b. The total amount of loans to a single borrower may be increased by ten per cent if the additional loans are secured by trust receipts, shipping documents, warehousing receipts or other similar documents covering goods which are readily marketable, nonperishable, and fully insured. c. The Monetary Board may not prescribe a different limitation on the total loans to a single borrower. d. Loans secured by obligations of the Bangko Sentral or of the Philippine Government are excluded in computing the total amount of the loans. 2. One of these statements is not correct: a. Loans fully guaranteed by the Philippine Government are excluded in computing the total amount of the loan. b. Loans covered by assignment of deposits in the lending bank and held in the Philippines are excluded in computing the total amount of the loan. c. Letters of credit are excluded in computing the total amount of loan to the extent they are covered by marginal deposits. d. The Monetary Board may not exclude other loans in the computation of the total amount of loan. C. Loans to Directors, Officers, Stockholders, and Their Related Interests 1. One of these is not a procedural requirement for loans to directors or officers of a bank:

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a. There must be a written approval of majority of all the directors excluding the directors concerned. b. The approval shall be entered upon the records of the bank. c. A copy of the entry shall be transmitted to the Bangko Sentral. d. There must be a certificate signed by the corporate secretary. 2. One of these statements is not correct: a. The terms shall not be less favorable to the bank than those offered to others. b. The loan shall be limited to an amount equal to their unencumbered deposits and paid-in capital stocks. c. Loans considered as non-risk by the Monetary Board shall be excluded from the limit. d. Loans in the form of fringe benefits are covered by the law. 3. One of these statements is not correct: a. The mere act of the president of a bank of obtaining a loan from the bank without the approval of the majority of the directors constitutes a violation of the law. b. The president of a bank who obtained a loan from the bank without complying with the law and who falsely made it appear that somebody else obtained the loan is liable for violation of the law. c. The president who obtained a loan from a bank and falsely made it appear that somebody else applied for the loan is liable for estafa through falsification of a commercial document. d. Since the contract is void, the borrower is not required to pay the loan. - END -

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