BSP v. Werquick, Inc.
REITERATIONFacts
1. The Antecedents: In 2017, the Bangko Sentral ng Pilipinas (BSP) issued Circular No. 942, series of 2017, which amended the Manual of Regulations for Non-Bank Financial Institutions. This circular aimed to regulate Money Service Businesses (MSBs), including remittance, money changing, and foreign exchange dealing, following the 2016 Bangladesh Bank Heist where USD 81 million was laundered through a local remittance company. Werquick, Inc. (Werquick), an entity engaged in money remittance, challenged the circular, arguing that the BSP and the Monetary Board (MB) lacked the statutory authority to regulate MSBs under Republic Act No. 7653 (The New Central Bank Act) and Republic Act No. 9160 (Anti-Money Laundering Act of 2001 (AMLA)). 2. Procedural History: Werquick filed a petition for declaratory relief before the Regional Trial Court (RTC) of Makati City, Branch 57. The RTC rendered a decision declaring Circular No. 942 null and void. The RTC reasoned that MSBs did not fall under the three classifications of entities (banks, finance companies, and quasi-banks) over which the BSP had regulatory authority under Section 3 of Republic Act No. 7653. It further held that the inclusion of 'remittance and transfer companies' in the Anti-Money Laundering Act of 2001 (AMLA) did not vest the BSP with new regulatory powers but merely presumed an authority that did not exist. 3. The Petition: The Bangko Sentral ng Pilipinas (BSP) and the Monetary Board (MB) filed a Petition for Review on Certiorari under Rule 45 before the Supreme Court. They argued that the BSP's authority is derived from the broad policy of maintaining monetary stability under Section 1 of Republic Act No. 7653 and that the Anti-Money Laundering Act of 2001 (AMLA) amendments recognized their supervisory role. Crucially, they pointed out that during the pendency of the case, Republic Act No. 11211 was enacted on February 14, 2019, which explicitly amended Section 3 of Republic Act No. 7653 to include 'money service businesses' under the BSP's regulatory and examination powers.
Issue(s)
Whether the challenge to the validity of Bangko Sentral ng Pilipinas (BSP) Circular No. 942, series of 2017, has been rendered moot and academic by the enactment of Republic Act No. 11211.
Ruling
The Petition for Review on Certiorari is DENIED as the declaratory relief against the validity of Bangko Sentral ng Pilipinas Circular No. 942, series of 2017, has been rendered moot and academic.
Ratio Decidendi
On Issue 1: The Supreme Court ruled that the petition must be dismissed because the supervening enactment of Republic Act No. 11211 on February 14, 2019, rendered the controversy moot. Applying the doctrine in Oclarino v. Navarro, the Court explained that a case is moot when it ceases to present a justiciable controversy, making any judicial declaration of no practical value. The primary contention of Werquick, Inc. was that the Bangko Sentral ng Pilipinas (BSP) lacked express statutory authority to regulate Money Service Businesses (MSBs) at the time Circular No. 942 was issued. However, Section 2 of Republic Act No. 11211 explicitly amended the New Central Bank Act to state that the BSP 'shall likewise exercise regulatory and examination powers over money service businesses.' This legislative action filled the 'crack' in the regulatory framework that previously existed, as acknowledged during Senate deliberations. Furthermore, the BSP has since issued updated manuals and circulars (such as the 2021 Manual of Regulations) that incorporate the provisions of Circular No. 942 under the authority of the new law. Since the BSP now undeniably possesses the power it was previously accused of usurping, the Court found that none of the exceptions to the mootness doctrine applied, and the case no longer required judicial resolution.
Main Doctrine
The Mootness Doctrine dictates that courts will not decide cases where the issues have become academic due to supervening events, such as the enactment of new legislation that addresses the core of the legal dispute. In this case, the enactment of Republic Act No. 11211 explicitly granted the Bangko Sentral ng Pilipinas (BSP) the regulatory power over Money Service Businesses (MSBs) that was previously contested. Consequently, a judicial determination on the validity of an earlier administrative circular (Circular No. 942) issued under the old law would serve no practical purpose. The Court will only depart from this rule if there is a grave constitutional violation, paramount public interest, a need to formulate controlling principles, or if the case is capable of repetition yet evading review.