AND/OR ACCOUNTS

Once upon a time, a couple sold their condo through a bank-financed deal.

The sellers were a Filipina and her foreign husband. When the transaction finally closed, the mortgagee bank released the proceeds: a Manager’s Check payable to “Spouses A & B.”

That’s when trouble began.

The wife went to deposit the check into their joint “and/or” savings account—only to be told:

“Ma’am, we need both your signatures at the back before we can accept this.”

Her husband had just flown abroad for work. They needed the funds that week.

“But it’s an and/or account!” she protested.

For years, and/or meant either account holder could transact.

But in 2022, the Bangko Sentral ng Pilipinas issued Circular No. 1163, clarifying that under both “and” and “or” joint accounts, deposits may be placed even without the authority of the other depositors.

Technically, that made the wife’s argument sound right.

But in practice, the circular pushed banks to quietly revise their internal policies to remove the long-confusing “and/or” label.

Here’s what happened across the industry:

1️⃣ Some banks converted and/or accounts into Joint (AND) — requiring both signatures for withdrawals or check deposits.

2️⃣ Others standardized to Joint (OR) — allowing either party to transact.

In short, their account probably evolved into an “Sps. A or B” setup without them realizing it.

And when it comes to checks, the stricter rule still applies.

Under the Negotiable Instruments Law (Act 2031, Sec. 41), if a check is payable to “A and B,” both must endorse it before it can be negotiated or deposited.

Here’s where confusion sets in.

BSP Circular 1163 lets either spouse add cash to their joint account—say, Spouse A deposits P1 Mn, no issue there.

But if the fund source is a check payable to both, that check represents ownership shared by both, so both must endorse it before the bank can accept it.

If you’re still unsure, the cover image explains what type of endorsement each situation requires.

Lesson:

Before closing a sale, check the type of bank account where the proceeds will go—and who’s around to sign when it matters most.