BANKING LAWS

REPUBLIC ACT No. 7653 THE NEW CENTRAL BANK ACT CHAPTER I — ESTABLISHMENT AND ORGANIZATION OF THE BANGKO SENTRAL NG PILIPINAS ARTICLE I CREATION, RESPONSIBILITIES AND CORPORATE POWERS OF THE BANGKO SENTRAL Section 1. Declaration of Policy. - The State shall maintain a central monetary authority that shall function and operate as an independent and accountable body corporate in the discharge of its mandated responsibilities concerning money, banking and credit. In line with this policy, and considering its unique functions and responsibilities, the central monetary authority established under this Act, while being a government-owned corporation, shall enjoy fiscal and administrative autonomy. Section 2. Creation of the Bangko Sentral. - There is hereby established an independent central monetary authority, which shall be a body corporate known as the Bangko Sentral ng Pilipinas, hereafter referred to as the Bangko Sentral. The capital of the Bangko Sentral shall be Fifty billion pesos (P50,000,000,000), to be fully subscribed by the Government of the Republic, hereafter referred to as the Government, Ten billion pesos (P10,000,000,000) of which shall be fully paid for by the Government upon the effectivity of this Act and the balance to be paid for within a period of two (2) years from the effectivity of this Act in such manner and form as the Government, through the Secretary of Finance and the Secretary of Budget and Management, may thereafter determine. Section 3. Responsibility and Primary Objective. - The Bangko Sentral shall provide policy directions in the areas of money, banking, and credit. It shall have supervision over the operations of banks and exercise such regulatory powers as provided in this Act and other pertinent laws over the operations of finance companies and non-bank financial institutions performing quasi-banking functions, hereafter referred to as quasi-banks, and institutions performing similar functions. The primary objective of the Bangko Sentral is to maintain price stability conducive to a balanced and sustainable growth of the economy. It shall also promote and maintain monetary stability and the convertibility of the peso. Section 4. Place of Business. - The Bangko Sentral shall have its principal place of business in Metro Manila, but may maintain branches, agencies and correspondents in such other places as the proper conduct of its business may require. Section 5. Corporate Powers. - The Bangko Sentral is hereby authorized to adopt, alter, and use a corporate seal which shall be judicially noticed; to enter into contracts; to lease or own real and personal property, and to sell or otherwise dispose of the same; to sue and be sued; and otherwise to do and perform any and all things that may be necessary or proper to carry out the purposes of this Act. The Bangko Sentral may acquire and hold such assets and incur such liabilities in connection with its operations authorized by the provisions of this Act, or as are essential to the proper conduct of such operations. The Bangko Sentral may compromise, condone or release, in whole or in part, any claim of or settled liability to the Bangko Sentral, regardless of the amount involved, under such terms and conditions as may be prescribed by the Monetary Board to protect the interests of the Bangko Sentral. ARTICLE II THE MONETARY BOARD Section 6. Composition of the Monetary Board. - The powers and functions of the Bangko Sentral shall be exercised by the Bangko Sentral Monetary Board, hereafter referred to as the Monetary Board, composed of seven (7) members appointed by the President of the Philippines for a term of six (6) years. The seven (7) members are: (a) the Governor of the Bangko Sentral, who shall be the Chairman of the Monetary Board. The Governor of the Bangko Sentral shall be head of a department and his appointment shall be subject to confirmation by the Commission on Appointments. Whenever the Governor is unable to attend a meeting of the Board, he shall designate a Deputy Governor to act as his alternate: Provided, That in such event, the Monetary Board shall designate one of its members as acting Chairman; (b) a member of the Cabinet to be designated by the President of the Philippines. Whenever the designated Cabinet Member is unable to attend a meeting of the Board, he shall designate an Undersecretary in his Department to attend as his alternate; and (c) five (5) members who shall come from the private sector, all of whom shall serve full-time: Provided, however, That of the members first appointed under the provisions of this subsection, three (3) shall have a term of six (6) years, and the other two (2), three (3) years. No member of the Monetary Board may be reappointed more than once. Section 7. Vacancies. - Any vacancy in the Monetary Board created by the death, resignation, or removal of any member shall be filled by the appointment of a new member to complete the unexpired period of the term of the member concerned.

Section 8. Qualifications. - The members of the Monetary Board must be natural-born citizens of the Philippines, at least thirty-five (35) years of age, with the exception of the Governor who should at least be forty (40) years of age, of good moral character, of unquestionable integrity, of known probity and patriotism, and with recognized competence in social and economic disciplines. Section 9. Disqualifications. - In addition to the disqualifications imposed by Republic Act No. 6713, a member of the Monetary Board is disqualified from being a director, officer, employee, consultant, lawyer, agent or stockholder of any bank, quasi-bank or any other institution which is subject to supervision or examination by the Bangko Sentral, in which case such member shall resign from, and divest himself of any and all interests in such institution before assumption of office as member of the Monetary Board. The members of the Monetary Board coming from the private sector shall not hold any other public office or public employment during their tenure. No person shall be a member of the Monetary Board if he has been connected directly with any multilateral banking or financial institution or has a substantial interest in any private bank in the Philippines, within one (1) year prior to his appointment; likewise, no member of the Monetary Board shall be employed in any such institution within two (2) years after the expiration of his term except when he serves as an official representative of the Philippine Government to such institution. Section 10. Removal. - The President may remove any member of the Monetary Board for any of the following reasons: (a) If the member is subsequently disqualified under the provisions of Section 8 of this Act; or (b) If he is physically or mentally incapacitated that he cannot properly discharge his duties and responsibilities and such incapacity has lasted for more than six (6) months; or (c) If the member is guilty of acts or operations which are of fraudulent or illegal character or which are manifestly opposed to the aims and interests of the Bangko Sentral; or (d) If the member no longer possesses the qualifications specified in Section 8 of this Act. Section 11. Meetings. - The Monetary Board shall meet at least once a week. The Board may be called to a meeting by the Governor of the Bangko Sentral or by two (2) other members of the Board. The presence of four (4) members shall constitute a quorum: Provided, That in all cases the Governor or his duly designated alternate shall be among the four (4). Unless otherwise provided in this Act, all decisions of the Monetary Board shall require the concurrence of at least four (4) members. The Bangko Sentral shall maintain and preserve a complete record of the proceedings and deliberations of the Monetary Board, including the tapes and transcripts of the stenographic notes, either in their original form or in microfilm. Section 12. Attendance of the Deputy Governors. - The Deputy Governors may attend the meetings of the Monetary Board with the right to be heard. Section 13. Salary. - The salary of the Governor and the members of the Monetary Board from the private sector shall be fixed by the President of the Philippines at a sum commensurate to the importance and responsibility attached to the position. Section 14. Withdrawal of Persons Having a Personal Interest. - In addition to the requirements of Republic Act No. 6713, any member of the Monetary Board with personal or pecuniary interest in any matter in the agenda of the Monetary Board shall disclose his interest to the Board and shall retire from the meeting when the matter is taken up. The decision taken on the matter shall be made public. The minutes shall reflect the disclosure made and the retirement of the member concerned from the meeting. Section 15. Exercise of Authority. - In the exercise of its authority, the Monetary Board shall: (a) issue rules and regulations it considers necessary for the effective discharge of the responsibilities and exercise of the powers vested upon the Monetary Board and the Bangko Sentral. The rules and regulations issued shall be reported to the President and the Congress within fifteen (15) days from the date of their issuance; (b) direct the management, operations, and administration of the Bangko Sentral, reorganize its personnel, and issue such rules and regulations as it may deem necessary or convenient for this purpose. The legal units of the Bangko Sentral shall be under the exclusive supervision and control of the Monetary Board; (c) establish a human resource management system which shall govern the selection, hiring, appointment, transfer, promotion, or dismissal of all personnel. Such system shall aim to establish professionalism and excellence at all levels of the Bangko Sentral in accordance with sound principles of management. A compensation structure, based on job evaluation studies and wage surveys and subject to the Board's approval, shall be instituted as an integral component of the Bangko Sentral's human resource development program: Provided, That the Monetary Board shall make its own system conform as closely as possible with the principles provided for under Republic Act No. 6758: Provided, however, That compensation and wage structure of employees whose positions fall under salary grade 19 and below shall be in accordance with the rates prescribed under Republic Act No. 6758. On the recommendation of the Governor, appoint, fix the remunerations and other emoluments, and remove personnel of the Bangko Sentral, subject to pertinent civil service laws: Provided, That the Monetary Board shall have exclusive and final authority to promote, transfer, assign, or reassign personnel of the Bangko Sentral and these personnel actions are deemed made in the interest of the service and not disciplinary: Provided, further, That the Monetary Board may delegate such authority to the Governor under such guidelines as it may determine.

(d) adopt an annual budget for and authorize such expenditures by the Bangko Sentral as are in the interest of the effective administration and operations of the Bangko Sentral in accordance with applicable laws and regulations; and (e) indemnify its members and other officials of the Bangko Sentral, including personnel of the departments performing supervision and examination functions against all costs and expenses reasonably incurred by such persons in connection with any civil or criminal action, suit or proceedings to which he may be, or is, made a party by reason of the performance of his functions or duties, unless he is finally adjudged in such action or proceeding to be liable for negligence or misconduct. In the event of a settlement or compromise, indemnification shall be provided only in connection with such matters covered by the settlement as to which the Bangko Sentral is advised by external counsel that the person to be indemnified did not commit any negligence or misconduct. The costs and expenses incurred in defending the aforementioned action, suit or proceeding may be paid by the Bangko Sentral in advance of the final disposition of such action, suit or proceeding upon receipt of an undertaking by or on behalf of the member, officer, or employee to repay the amount advanced should it ultimately be determined by the Monetary Board that he is not entitled to be indemnified as provided in this subsection. Section 16. Responsibility. - Members of the Monetary Board, officials, examiners, and employees of the Bangko Sentral who willfully violate this Act or who are guilty of negligence, abuses or acts of malfeasance or misfeasance or fail to exercise extraordinary diligence in the performance of his duties shall be held liable for any loss or injury suffered by the Bangko Sentral or other banking institutions as a result of such violation, negligence, abuse, malfeasance, misfeasance or failure to exercise extraordinary diligence. Similar responsibility shall apply to members, officers, and employees of the Bangko Sentral for: (1) the disclosure of any information of a confidential nature, or any information on the discussions or resolutions of the Monetary Board, or about the confidential operations of the Bangko Sentral, unless the disclosure is in connection with the performance of official functions with the Bangko Sentral, or is with prior authorization of the Monetary Board or the Governor; or (2) the use of such information for personal gain or to the detriment of the Government, the Bangko Sentral or third parties: Provided, however, That any data or information required to be submitted to the President and/or the Congress, or to be published under the provisions of this Act shall not be considered confidential. ARTICLE III THE GOVERNOR AND DEPUTY GOVERNORS OF THE BANGKO SENTRAL Section 17. Powers and Duties of the Governor. - The Governor shall be the chief executive officer of the Bangko Sentral. His powers and duties shall be to: (a) prepare the agenda for the meetings of the Monetary Board and to submit for the consideration of the Board the policies and measures which he believes to be necessary to carry out the purposes and provisions of this Act; (b) execute and administer the policies and measures approved by the Monetary Board; (c) direct and supervise the operations and internal administration of the Bangko Sentral. The Governor may delegate certain of his administrative responsibilities to other officers or may assign specific tasks or responsibilities to any full-time member of the Monetary Board without additional remuneration or allowance whenever he may deem fit or subject to such rules and regulations as the Monetary Board may prescribe; (d) appoint and fix the remunerations and other emoluments of personnel below the rank of a department head in accordance with the position and compensation plans approved by the Monetary Board, as well as to impose disciplinary measures upon personnel of the Bangko Sentral, subject to the provisions of Section 15(c) of this Act: Provided, That removal of personnel shall be with the approval of the Monetary Board; (e) render opinions, decisions, or rulings, which shall be final and executory until reversed or modified by the Monetary Board, on matters regarding application or enforcement of laws pertaining to institutions supervised by the Bangko Sentral and laws pertaining to quasi-banks, as well as regulations, policies or instructions issued by the Monetary Board, and the implementation thereof; and (f) exercise such other powers as may be vested in him by the Monetary Board. Section 18. Representation of the Monetary Board and the Bangko Sentral. - The Governor of the Bangko Sentral shall be the principal representative of the Monetary Board and of the Bangko Sentral and, in such capacity and in accordance with the instructions of the Monetary Board, he shall be empowered to: (a) represent the Monetary Board and the Bangko Sentral in all dealings with other offices, agencies and instrumentalities of the Government and all other persons or entities, public or private, whether domestic, foreign or international; (b) sign contracts entered into by the Bangko Sentral, notes and securities issued by the Bangko Sentral, all reports, balance sheets, profit and loss statements, correspondence and other documents of the Bangko Sentral. The signature of the Governor may be in facsimile whenever appropriate; (c) represent the Bangko Sentral, either personally or through counsel, including private counsel, as may be authorized by the Monetary Board, in any legal proceedings, action or specialized legal studies; and (d) delegate his power to represent the Bangko Sentral, as provided in subsections (a), (b) and (c) of this section, to other officers upon his own responsibility: Provided, however, That in order to preserve the integrity and the prestige of his office, the Governor of the Bangko Sentral may choose not to participate in preliminary discussions with any multilateral banking or financial institution on any negotiations for the Government within or outside the Philippines. During the negotiations, he may instead be represented by a permanent negotiator.

. is owned by a bank or quasi-bank or which is related or linked to such institution or intermediary through common stockholders or such other factors as may be determined by the Monetary Board. among others. or in the maximum amount permitted by law. Accordingly. civic. . contracts a loan or any form of financial accommodation from: (1) his bank. or who refuse to supply the bank with data requested or required. however. or government-owned or controlled corporations. by designation of the President. Whenever the Government is unable to attend meetings of government boards or councils in which he is an ex officio member pursuant to provisions of special laws. finally. of qualified employees of the Bangko Sentral.In case of emergencies where time is sufficient to call a meeting of the Monetary Board. The Monetary Board shall prescribe rules and regulations to govern the training program of the Bangko Sentral. The Bangko Sentral through the Governor or in his absence. . shall appoint not more than three (3) Deputy Governors who shall perform duties as may be assigned to them by the Governor and the Board. For purposes of this section. Research and Statistics. a Deputy Governor designated by the Governor shall act as chief executive of the Bangko Sentral and shall exercise the powers and perform the duties of the Governor. including their subsidiaries and affiliates engaged in allied activities. Data on individual firms.Section 19. The department heads and the examiners of the supervising and/or examining departments are hereby authorized to administer oaths to any director.The Bangko Sentral shall have the authority to request from government offices and instrumentalities. . subject to the provision of existing laws protecting or safeguarding the secrecy or confidentiality of bank deposits as well as investments of private persons. No restraining order or injunction shall be issued by the court enjoining the Bangko Sentral from examining any institution subject to supervision or examination by the Bangko Sentral. Outside Interests of the Governor and the Full-time Members of the Board. Section 21.The Governor of the Bangko Sentral.The Governor of the Bangko Sentral and the full-time members of the Board shall limit their professional activities to those pertaining directly to their positions with the Bangko Sentral. gathered by the Department of Economic Research and other departments or units of the Bangko Sentral shall not be made available to any person or entity outside of the Bangko Sentral whether public or private except under order of the court or under such conditions as may be prescribed by the Monetary Board: Provided. whether public or private. .Any director. . or employee of any institution under their respective supervision or subject to their examination and to compel the presentation of all books. whichever is lower. Toward this end. Section 24. In the absence of the Governor. natural or juridical. credit and exchange policies. may decide any matter or take any action within the authority of the Board. Such data shall include. a Deputy Governor as may be designated by the Governor shall be vested with authority to participate and exercise the right to vote in such meetings. documents. At the soonest possible time. with the exception of positions in eleemosynary. and conduct periodic or special examinations of. a subsidiary means a corporation more than fifty percent (50%) of the voting stock of which is owned by a bank or quasi-bank and an affiliate means a corporation the voting stock of which. activities or transactions of the institution under examination. shall be required by the lending bank to waive the secrecy of his deposits of whatever nature in all banks in the Philippines. Authority to Obtain Data and Information. Bank Deposits and Investments. Authority of the Governor in Emergencies. with the concurrence of two (2) other members of the Monetary Board. Section 26. the Governor shall call a meeting of the Monetary Board to submit his action for ratification. in debt instruments issued by the Government. banking. the provisions of Section 27 of this Act shall apply. a duly authorized representative shall have the power to issue a subpoena for the production of the books and records for the aforesaid purpose. The Governor shall submit a report to the President and Congress within seventy-two (72) hours after the action has been taken. officer. they may not accept any other employment. the Governor or the fulltime member is tasked to represent the interest of the Government or other government agencies in matters connected with or affecting the economy or the financial system of the country. papers or records necessary in their judgment to ascertain the facts relative to the true condition of any institution as well as the books and records of persons and entities relative to or in connection with the operations. The provisions of Rule 58 of the New Rules of Court insofar as they are applicable and not inconsistent with the provisions of this section shall govern the issuance and dissolution of the restraining order or injunction contemplated in this section. shall be subject to punishment for contempt in accordance with the provisions of the Rules of Court. Any information obtained from an examination of his deposits shall be held strictly . Supervision and Examination. Training of Technical Personnel. other than banks. cultural or religious organizations or whenever. Those who refuse the subpoena without justifiable cause.The Bangko Sentral shall promote and sponsor the training of technical personnel in the field of money and banking. to the extent of fifty percent (50%) or less. or (2) from a bank (a) which is a subsidiary of a bank holding company of which both his bank and the lending bank are subsidiaries or (b) in which a controlling proportion of the shares is owned by the same interest that owns a controlling proportion of the shares of his bank. together with his related interest. in an amount to be fixed by the court. the Governor of the Bangko Sentral. . That the collective data on firms may be released to interested persons or entities: Provided. . any data which it may require for the proper discharge of its functions and responsibilities. Section 20. forecasts of the balance of payments of the Philippines. Section 25. statistics on the monthly movement of the monetary aggregates and of prices and other statistical series and economic studies useful for the formulation and analysis of monetary. That in the case of data on banks. banking institutions and quasi-banks. officer or stockholder who. Section 23. in excess of five percent (5%) of the capital and surplus of the bank. unless there is convincing proof that the action of the Bangko Sentral is plainly arbitrary and made in bad faith and the petitioner or plaintiff files with the clerk or judge of the court in which the action is pending a bond executed in favor of the Bangko Sentral. with the approval of the Monetary Board. of promising university graduates or of any other qualified persons who shall be determined by proper competitive examinations. Deputy Governors.The Bangko Sentral shall prepare data and conduct economic research for the guidance of the Monetary Board in the formulation and implementation of its policies.The Bangko Sentral shall have supervision over. ARTICLE IV OPERATIONS OF THE BANGKO SENTRAL Section 22. the Bangko Sentral is hereby authorized to defray the costs of study. at home or abroad. remunerated or ad honorem.

directly or indirectly. The conservator shall receive remuneration to be fixed by the Monetary Board in an amount not to exceed two-thirds (2/3) of the salary of the president of the institution in one (1) year. however. or to any person authorized by either of them. on the basis of the report of the conservator or of its own findings. (c) revealing in any manner. (b) directly or indirectly requesting or receiving any gift. the Monetary Board finds that a bank or quasi-bank: (a) is unable to pay its liabilities as they become due in the ordinary course of business: Provided. except under orders of the court. consultant or stockholder. in which case the provisions of Section 30 shall apply. in which case he shall not be entitled to receive any remuneration or emolument from the Bangko Sentral during the conservatorship. and the management thereof. The bank concerned shall afford to the head of the appropriate supervising and examining departments and to his authorized deputies full opportunity to examine its books. The Monetary Board may appoint a conservator connected with the Bangko Sentral. That there shall be an interval of at least twelve (12) months between annual examinations. including the Bangko Sentral and banks abroad. employee. shall examine the books of every banking institution once in every twelve (12) months. and (d) borrowing from any institution subject to supervision or examination by the Bangko Sentral shall be prohibited unless said borrowings are adequately secured. the conservator shall receive the balance of the remuneration which he would have received up to the end of the year. to receive such information. Section 28. and exercise all powers necessary to restore its viability. personnel of the Bangko Sentral are hereby prohibited from: (a) being an officer. (b) has insufficient realizable assets. Section 29. determine that the continuance in business of the institution would involve probable loss to its depositors or creditors. as determined by the Bangko Sentral. or (c) cannot continue in business without involving probable losses to its depositors or creditors. Banking and quasi-banking institutions which are subject to examination by the Bangko Sentral shall pay to the Bangko Sentral. of any institution subject to supervision or examination by the Bangko Sentral. The Monetary Board shall terminate the conservatorship when it is satisfied that the institution can continue to operate on its own and the conservatorship is no longer necessary. Prohibitions. the conservator shall not be entitled to such remaining balance. but if the conservatorship is terminated on other grounds. however. in writing. an annual fee in an amount equal to a percentage as may be prescribed by the Monetary Board of its average total assets during the preceding year as shown on its end-of-month balance sheets. information relating to the condition or business of any institution. The expenses attendant to the conservatorship shall be borne by the bank or quasi-bank concerned. on the basis of a report submitted by the appropriate supervising or examining department. collect all monies and debts due said institution. That. Appointment of Conservator. within the first thirty (30) days of each year. Section 27. if at any time within one-year period. . . director. 3019 and 6713. may deem expedient and to make a report on the same to the Monetary Board: Provided. fully disclosed to the Monetary Board. The conservatorship shall not exceed one (1) year. cash and available assets and general condition at any time during banking hours when requested to do so by the Bangko Sentral: Provided. That this shall not include inability to pay caused by extraordinary demands induced by financial panic in the banking community. Section 30. or under such conditions as may be prescribed by the Monetary Board. Proceedings in Receivership and Liquidation. Examination and Fees. personally or by deputy. and except as otherwise provided in this Act. except non-stock savings and loan associations and provident funds organized exclusively for employees of the Bangko Sentral. That none of the reports and other papers relative to such examinations shall be open to inspection by the public except insofar as such publicity is incidental to the proceedings hereinafter authorized or is necessary for the prosecution of violations in connection with the business of such institutions. from any institution subject to supervision or examination by the Bangko Sentral. liabilities. after deducting cash on hand and amounts due from banks. payable in twelve (12) equal monthly payments: Provided.confidential and may be used by the examiners only in connection with their supervisory and examination responsibility or by the Bangko Sentral in an appropriate legal action it has initiated involving the deposit account. in which cases. involving acts or transactions which amount to fraud or a dissipation of the assets of the institution. the conservatorship is terminated on the ground that the institution can operate on its own. The conservator shall report and be responsible to the Monetary Board and shall have the power to overrule or revoke the actions of the previous management and board of directors of the bank or quasi-bank. the Congress or any government office or agency authorized by law. The conservatorship shall likewise be terminated should the Monetary Board. or (d) has willfully violated a cease and desist order under Section 37 that has become final. . the Monetary Board finds that a bank or a quasi-bank is in a state of continuing inability or unwillingness to maintain a condition of liquidity deemed adequate to protect the interest of depositors and creditors. and shall be subject to such further rules and regulations as the Monetary Board may prescribe: Provided. . the Monetary Board may appoint a conservator with such powers as the Monetary Board shall deem necessary to take charge of the assets. lawyer or agent.Whenever. and at such other times as the Monetary Board by an affirmative vote of five (5) members. . That personnel of the supervising and examining departments are prohibited from borrowing from a bank under their supervision or examination. upon report of the head of the supervising or examining department. The conservator should be competent and knowledgeable in bank operations and management. the Monetary Board may summarily and without need for prior hearing forbid the institution from doing business in the Philippines and designate the Philippine Deposit Insurance Corporation as receiver of the banking institution. This prohibition shall not be held to apply to the giving of information to the Monetary Board or the Governor of the Bangko Sentral. reorganize the management.In addition to the prohibitions found in Republic Act Nos.Whenever. to meet its liabilities.The supervising and examining department head. present or pecuniary or material benefit for himself or another.

Regulations. shall form part of the assets available for payment to creditors. after the payment of all said expenses. institute such actions as may be necessary to collect and recover accounts and assets of. the institution. Section 35. The receiver shall pay the cost of the proceedings from the assets of the institution. . award to an institution. or defend any action against. attachment. Proceedings Upon Violation of This Act and Other Banking Laws. and with the assistance of counsel as he may retain. liquidation or conservatorship. Section 34. or both. Disposition of Revenues and Earnings. the designation of a conservator is not a precondition to the designation of a receiver. . The balance of revenues and earnings. after payment of the cost of proceedings. instruction. the banking franchise of a bank under liquidation to operate in the area where said bank or its branches were previously operating: Provided. The designation of a conservator under Section 29 of this Act or the appointment of a receiver under this section shall be vested exclusively with the Monetary Board. Orders or Instructions. Distribution of Assets. . or both. and may not be restrained or set aside by the court except on petition for certiorari on the ground that the action taken was in excess of jurisdiction or with such grave abuse of discretion as to amount to lack or excess of jurisdiction.All revenues and earnings realized by the receiver in winding up the affairs and administering the assets of any bank or quasi-bank within the purview of this Act shall be used to pay the costs. the Monetary Board may. directors and officers.000) or by imprisonment of not less than two (2) years nor more than ten (10) years. at the discretion of the court.000) or by imprisonment of not less than one (1) year nor more than five (5) years. and without requirement of prior notice or any other action. for any willful violation of its charter or by-laws. fees and expenses mentioned in the preceding section. . salaries of such personnel whose employment is rendered necessary in the discharge of the liquidation together with other additional expenses caused thereby. Section 33. Refusal to Make Reports or Permit Examination. and 36 of this Act. upon motion by the receiver after due notice. Upon acquiring jurisdiction. That any determination for the resumption of business of the institution shall be subject to prior approval of the Monetary Board. impose upon any bank or quasi-bank. Rules. director or officer-in-charge of any institution subject to the supervision or examination by the Bangko Sentral within the purview of this Act who. at the discretion of the court.000) nor more than One hundred thousand pesos (P100.000) nor more than Two hundred thousand pesos (P200. or whenever any person or entity willfully violates this Act or other pertinent banking laws being enforced or implemented by the Bangko Sentral or any order.In case of liquidation of a bank or quasi-bank. . Section 32. Section 37. in the name of the institution. and decide on other issues as may be material to implement the liquidation plan adopted. take action under Section 30 of this Act. The receiver shall immediately gather and take charge of all the assets and liabilities of the institution.The Bangko Sentral may. but not later than ninety (90) days from take over.000) nor more than Two hundred thousand pesos (P200. manager. The receiver shall determine as soon as possible. adjudicate disputed claims against the institution. Section 31. in the discretion of the court. (2) convert the assets of the institutions to money. without prejudice to the penalties provided in the preceding paragraph of this section and the administrative sanctions provided in Section 37 of this Act.000). rule or regulation issued by the Monetary Board. Furthermore. The assets of an institution under receivership or liquidation shall be deemed in custodia legis in the hands of the receiver and shall. agent. or both. In case of quasi-banks. under order of the court. the Board may. their directors and/or officers. The actions of the Monetary Board taken under this section or under Section 29 of this Act shall be final and executory. being required in writing by the Monetary Board or by the head of the supervising and examining department willfully refuses to file the required report or permit any lawful examination into the affairs of such institution shall be punished by a fine of not less than Fifty thousand pesos (P50. the receiver shall pay the debts of such institution. Disposition of Banking Franchise. be exempt from any order of garnishment. dispose of the same to creditors and other parties. upon such terms and conditions as the Monetary Board may approve. assist the enforcement of individual liabilities of the stockholders. That whatever proceeds may be realized from such award shall be subject to the appropriate exclusive disposition of the Monetary Board.The willful making of a false or misleading statement on a material fact to the Monetary Board or to the examiners of the Bangko Sentral shall be punished by a fine of not less than One hundred thousand pesos (P100.Without prejudice to the criminal sanctions against the culpable persons provided in Sections 34. . pay or commit any act that will involve the transfer or disposition of any asset of the institution: Provided. 35. If the receiver determines that the institution cannot be rehabilitated or permitted to resume business in accordance with the next preceding paragraph.Any officer. from the moment the institution was placed under such receivership or liquidation. willful delay in the submission of reports or publications . a petition for assistance in the liquidation of the institution pursuant to a liquidation plan adopted by the Philippine Deposit Insurance Corporation for general application to all closed banks. any person of recognized competence in banking or finance may be designed as receiver. the person or persons responsible for such violation shall unless otherwise provided in this Act be punished by a fine of not less than Fifty thousand pesos (P50. the liquidation plan shall be adopted by the Monetary Board. False Statement. and exercise the general powers of a receiver under the Revised Rules of Court but shall not. for the purpose of paying the debts of such institution in accordance with the rules on concurrence and preference of credit under the Civil Code of the Philippines and he may. or by imprisonment of not more than (5) years. levy. administer the same for the benefit of its creditors. the court shall. if public interest so requires. whether the institution may be rehabilitated or otherwise placed in such a condition so that it may be permitted to resume business with safety to its depositors and creditors and the general public: Provided. That the receiver may deposit or place the funds of the institution in non-speculative investments. at its discretion. in accordance with the rules on concurrence and preference of credit as provided in the Civil Code. including reasonable expenses and fees of the receiver to be allowed by the court. The petition for certiorari may only be filed by the stockholders of record representing the majority of the capital stock within ten (10) days from receipt by the board of directors of the institution of the order directing receivership. Section 36. The receiver shall: (1) file ex parte with the proper regional trial court. Whenever a bank or quasi-bank. owner.For a quasi-bank. the Monetary Board shall notify in writing the board of directors of its findings and direct the receiver to proceed with the liquidation of the institution. Whenever a bank or quasi-bank persists in carrying on its business in an unlawful or unsafe manner. or execution. with the exception of administrative expenditures. Administrative Sanctions on Banks and Quasi-banks.

as a minimum. which shall be submitted within ninety (90) days after the end hereof. the order shall be final. Annual Report. The cease and desist order shall be immediately effective upon service on the respondents. Operating Departments of the Bangko Sentral.Before the end of March of each year. The Monetary Board may. modified or lifted by the Monetary Board on appeal. Section 40. any banking law or any order. Reports and Publications. the period of delay shall not be counted in computing the period of suspension herein provided. of the Bangko Sentral as it deems convenient for the proper and efficient conduct of the operations and the accomplishment of the objectives of the Bangko Sentral. . said director or officer shall be reinstated in his position: Provided. The Monetary Board shall publish and submit the following reports to the President and to the Congress: (a) not later than ninety (90) days after the end of each quarter. and may further order that immediate action be taken to correct the conditions resulting from such practice or violation. and (d) as soon as practicable. not later than seventytwo (72) hours after they are taken. and/or instructions issued by the Monetary Board or by the Governor.The Bangko Sentral shall publish a general balance sheet showing the volume and composition of its assets and liabilities as of the last working day of the month within sixty (60) days after the end of each month except for the month of December. the Bangko Sentral shall publish and submit to the President and the Congress an annual report on the condition of the Bangko Sentral including a review of the policies and measures adopted by the Monetary Board during the past year and an analysis of the economic and financial circumstances which gave rise to said policies and measures. including a public information office. If no such hearing is requested within said period. (b) suspension of rediscounting privileges or access to Bangko Sentral credit facilities. for any failure to comply with the requirements of law. determine and provide for such operating departments and other offices. upon request made by the respondents within five (5) days from their receipt of the order.The Monetary Board shall. to impose upon banking institutions. or any commission of irregularities. an analysis of economic and financial developments. further. at his discretion. remedial measures in response to such abnormal movements. If a hearing is conducted. That should the case be not finally decided by the Bangko Sentral within a period of one hundred twenty (120) days after the date of suspension. any refusal to permit examination into the affairs of the institution. Monetary Board regulations and policies. The above administrative sanctions need not be applied in the order of their severity. (b) within ninety (90) days after the end of the year. and. That when the delay in the disposition of the case is due to the fault. in accordance with its authority under this Act.thereof as required by law. the following data: . (d) suspension of interbank clearing privileges. Resignation or termination from office shall not exempt such director or officer from administrative or criminal sanctions. a review of the state of the financial system. abnormal movements in monetary aggregates and the general price level. any willful failure or refusal to comply with. such as the nature and gravity of the violation or irregularity and the size of the bank or quasi-bank. but in no case to exceed Thirty thousand pesos (P30. The functions and duties of such operating departments and other offices shall be determined by the Monetary Board. any willful making of a false or misleading statement to the Board or the appropriate supervising and examining department or its examiners. or any order.000) a day for each violation. the following administrative sanctions. instruction or ruling by the Governor. including the condition of net international reserves and monetary aggregates. Section 38. all issues shall be determined on the basis of records. .000) a day for each violation. taking into consideration the attendant circumstances. The annual report shall also include a statement of the financial condition of the Bangko Sentral and a statistical appendix which shall present. if the institution and/or the directors and/or officers concerned continue with or otherwise persist in the commission of the indicated practice or violation. whenever applicable: (a) fines in amounts as may be determined by the Monetary Board to be appropriate. negligence or petition of the director or officer. the Monetary Board may issue an order requiring the institution and/or the directors and/or officers concerned to cease and desist from the indicated practice or violation. The respondents shall be afforded an opportunity to defend their action in a hearing before the Monetary Board or any committee chaired by any Monetary Board member created for the purpose. and/or conducting business in an unsafe or unsound manner as may be determined by the Monetary Board. (c) one hundred twenty (120) days after the end of each semester. whenever warranted by circumstances. The Governor is hereby authorized. . or violation of. instruction or regulation issued by the Monetary Board. fines not in excess of Ten thousand pesos (P10. the preceding year's budget and profit and loss statement of the Bangko Sentral showing in reasonable detail the result of its operations. the imposition of which shall be final and executory until reversed. (c) suspension of lending or foreign exchange operations or authority to accept new deposits or make new investments. ARTICLE V REPORTS AND PUBLICATIONS Section 39. Whether or not there is an administrative proceeding. and/or (e) revocation of quasi-banking license. after which the Monetary Board may either reconsider or make final its order. rules and regulations. preventively suspend any director or officer of a bank or quasibank pending an investigation: Provided.

Within the first sixty (60) days following the end of each fiscal year. No relative of any member of the Monetary Board or the Chairman of the Commission within the sixth degree of consanguinity or affinity shall be appointed such representative. Section 43. respectively. he is empowered and authorized to appoint a representative who shall be the auditor of the Bangko Sentral and. in accordance with law. The Bangko Sentral shall publish another version of the annual report in terms understandable to the layman. by the Governor. AND SPECIAL ACCOUNTS Section 42. . both domestic and foreign. as amended.(a) the monthly movement of monetary aggregates and their components. The auditor of the Bangko Sentral and personnel under him may be removed only by the Chairman of the Commission. In the calculation of net profits. and by the auditor of the Bangko Sentral. Revaluation Profits and Losses. as such. fix his salary. Suspense Accounts. in summary form. by volume and value. The Revaluation of International Reserve account shall be neither credited nor debited for any purposes other than those specifically authorized in this section. Section 44. The representative of the Chairman of the Commission must be a certified public accountant with at least ten (10) years experience as such. . (f) the monthly movement of the accounts of the Bangko Sentral and of other banks.Within the first thirty (30) days following the end of each year. Amounts outstanding as of the effective date of this Act based on these accounts shall continue to be for the account of the Central Bank and shall be governed by the transitory provisions of this Act. Any remaining profit or loss shall be carried in a special frozen account which shall be named "Revaluation of International Reserve" and the net balance of which shall appear either among the liabilities or among the assets of the Bangko Sentral. (c) the balance of payments of the Philippines.The balance sheets and other financial statements of the Bangko Sentral shall be signed by the officers responsible for their preparation. creating the Monetary Adjustment Account (MAA) and the Exchange Stabilization Adjustment Account (ESAA). Computation of Profits and Losses. the Bangko Sentral shall make adequate allowance or establish adequate reserves for bad and doubtful accounts. Distribution of Net Profits. 265. are owed by the Philippines to any international or regional intergovernmental financial institution of which the Philippines is a member or are owed by these institutions to the Philippines.The Chairman of the Commission on Audit shall act as the ex officio auditor of the Bangko Sentral and. Signatures on Statements. and to appoint and fix salaries and number of personnel to assist said representative in his work. (g) the principal data on government receipts and expenditures and on the status of the public debt. (e) the monthly movement. the Monetary Board shall determine and carry out the distribution of the net profits. (d) monthly indices of consumer prices and of import and export prices. . as a consequence of such revaluations. Section 45. Appointment and Personnel. The Revaluation of International Reserve (RIR) account as of the effective date of this Act of the Central Bank shall continue to be for the account of the same entity and shall be governed by the provisions of Section 44 of Republic Act No. ARTICLE VI PROFITS. . Section 46. the Bangko Sentral shall determine its net profits or losses. . . LOSSES. . of exports and imports. Failure to comply with the reportorial requirements pursuant to this article without justifiable reason as may be determined by the Monetary Board shall cause the withholding of the salary of the personnel concerned until the requirements are complied with. as amended.Profits or losses arising from any revaluation of the Bangko Sentral's net assets or liabilities in gold or foreign currencies with respect to the Philippine peso shall not be included in the computation of the annual profits and losses of the Bangko Sentral. until otherwise provided for in accordance with the transitory provisions of this Act. The salaries and other emoluments shall be paid by the Commission. ARTICLE VII THE AUDITOR Section 47. Any profits or losses arising in this manner shall be offset by any amounts which. are hereby repealed. and (h) the texts of the major legal and administrative measures adopted by the Government and the Monetary Board during the year which relate to the functions or operations of the Bangko Sentral or of the financial system. . in accordance with the following rule: Fifty percent (50%) of the net profits shall be carried to surplus and the remaining fifty percent (50%) shall revert back to the National Treasury. (b) the monthly movement of purchases and sales of foreign exchange and of the international reserves of the Bangko Sentral.The fiscal year of the Bangko Sentral shall begin on January first and end on December thirty-first of each year. except as otherwise provided in the transitory provisions of this Act. Fiscal Year. Section 41. 265.Sections 43 and 43-A of Republic Act No. depending on whether the revaluations have produced net profits or net losses.

Definition of Currency. on demand and without charge. . and in amounts not exceeding Twenty pesos (P20. unless otherwise fixed by the Monetary Board. for the purpose of maintaining the integrity of the currency. The Monetary Board shall have the authority to contract institutions. fineness. in the opinion of the Monetary Board. In the minting of coins. however. and notes which have lost more than two-fifths (2/5) of their surface or all of the signatures inscribed thereon. . CURRENCY Section 49." ARTICLE II ISSUE OF MEANS OF PAYMENT A.The Bangko Sentral may call in for replacement notes of any series or denomination which are more than five (5) years old and coins which are more than (10) years old. they shall cease to be legal tender but during the following year. Retirement of Old Notes and Coins. Philippine currency of any denomination for Philippine notes and coins of any other denomination requested. may put into circulation notes. the Monetary Board. with the approval of the President of the Philippines. might circulate as currency. . . the Monetary Board shall give full consideration to the availability of suitable metals and to their relative prices and cost of minting. If for any reason the Bangko Sentral is temporarily unable to provide notes or coins of the denominations requested. in facsimile.The Bangko Sentral shall withdraw from circulation and shall demonetize all notes and coins which for any reason whatsoever are unfit for circulation and shall replace them by adequate notes and coins: Provided. Liability for Notes and Coins.The Monetary Board. That said notes shall state that they are liabilities of the Bangko Sentral and are fully guaranteed by the Government of the Republic of the Philippines. After this period. inscriptions and other characteristics of notes issued by the Bangko Sentral: Provided.00) for denominations of Ten centavos or less.00) for denominations of Twenty-five centavos and above. Exclusive Issue Power. The Bangko Sentral shall have the authority to investigate. . make arrests. Replacement of Currency Unfit for Circulation. then that penalty shall be imposed. however. or for such longer period as the . That the Bangko Sentral shall not replace notes and coins the identification of which is impossible. In case the Revised Penal Code provides for a greater penalty.CHAPTER II — THE BANGKO SENTRAL AND THE MEANS OF PAYMENT ARTICLE I THE UNIT OF MONETARY VALUE Section 48. and in amounts not exceeding. of the President of the Philippines and of the Governor of the Bangko Sentral. Section 56. Violation of this provision or any regulation issued by the Bangko Sentral pursuant thereto shall constitute an offense punishable by imprisonment of not less than five (5) years but not more than ten (10) years. the assets of the Bangko Sentral. The Monetary Board may issue such regulations as it may deem advisable in order to prevent the circulation of foreign currency or of currency substitutes as well as to prevent the reproduction of facsimiles of Bangko Sentral notes. The Peso. clipping or perforation. coins or any other object or document which. nor reproduce or imitate the facsimiles of Bangko Sentral notes without prior authority from the Bangko Sentral. both public and private: Provided. shall prescribe the denominations. denominations and other characteristics of the coins issued by the Bangko Sentral.The word "currency" is hereby defined. That. . Notes and coins in such mutilated conditions shall be withdrawn from circulation and demonetized without compensation to the bearer. .Notes and coins issued by the Bangko Sentral shall be liabilities of the Bangko Sentral and may be issued only against. No other person or entity. Interconvertibility of Currency. Section 52." which is represented by the sign "P. designs. Section 54. Section 50.The Monetary Board shall prescribe the amounts of notes and coins to be printed and minted.The Bangko Sentral shall have the sole power and authority to issue currency. for purposes of this Act. and the conditions to which the printing of notes and the minting of coins shall be subject. however. All expenses incurred in the printing of notes and the minting of coins shall be for the account of the Bangko Sentral.All notes and coins issued by the Bangko Sentral shall be fully guaranteed by the Government of the Republic of the Philippines and shall be legal tender in the Philippines for all debts. Section 57. Similarly. shall not form part of the assets or liabilities of the Bangko Sentral. respectively. The Bangko Sentral's holdings of its own notes and coins shall not be considered as part of its currency issue and. Section 53. coins shall be legal tender in amounts not exceeding Fifty pesos (P50. conduct searches and seizures in accordance with law. shall prescribe the weight. designs. Characteristics of the Currency. Section 51. . ." The peso is divided into one hundred (100) equal parts called "centavos. within the territory of the Philippines. mints or firms for such operations. coins which show signs of filing." which are represented by the sign "c. Said notes and coins shall be a first and paramount lien on all assets of the Bangko Sentral. Legal Tender Power. as meaning all Philippine notes and coins issued or circulating in accordance with the provisions of this Act. Notes and coins called in for replacement in accordance with this provision shall remain legal tender for a period of one (1) year from the date of call. Said notes shall bear the signatures. dimensions.The Bangko Sentral shall exchange. public or private. with the approval of the President of the Philippines. it shall meet its obligations by delivering notes and coins of the denominations which most nearly approximate those requested. Section 55. Printing of Notes and Mining of Coins.The unit of monetary value in the Philippines is the "peso. . accordingly.

. Action When Abnormal Movements Occur in the Monetary Aggregates. a detailed report which shall include. . . Power to Define Terms. Guiding Principle. (2) the extent to which the changes in the monetary aggregates. and (b) submit to the President of the Philippines and the Congress. Section 63.The Monetary Board shall endeavor to control any expansion or contraction in monetary aggregates which is prejudicial to the attainment or maintenance of price stability. Section 65. . Credit. although not necessarily limited to. increases or decreases by more than fifteen percent (15%). the volume and maturity of the foreign exchange assets and liabilities of all other persons and entities in the Philippines. CHAPTER III — GUIDING PRINCIPLES OF MONETARY ADMINISTRATION BY THE BANGKO SENTRAL ARTICLE I DOMESTIC MONETARY STABILIZATION Section 61. said changes in the monetary aggregates.For purposes of this Act. The Bangko Sentral shall also demonetize all notes and coins which have been called in and replaced. or in prices endanger the stability of the Philippine economy or important sectors thereof.Whenever abnormal movements in the monetary aggregates. current payments for foreign trade and invisibles.Monetary Board may determine. or Price Level. International Monetary Stabilization. Section 60. wages and economic activity in general.Checks representing demand deposits do not have legal tender power and their acceptance in the payment of debts. credit or price disturbances have disappeared or have been adequately controlled. Section 59. the Monetary Board shall submit the reports mentioned in this section. the Monetary Board shall: (a) take such remedial measures as are appropriate and within the powers granted to the Monetary Board and the Bangko Sentral under the provisions of this Act. of credit or of prices. . and the nature and significance of any such changes. the notes and coins which have not been exchanged shall cease to be a liability of the Bangko Sentral and shall be demonetized. credit and prices and shall make public such definitions and any changes thereof. . . the Monetary Board shall be guided by the prospective receipts and payments of foreign exchange by the Philippines. or the cost of living index increases by more than ten percent (10%). is at the option of the creditor: Provided. both public and private. International Reserves. The Monetary Board shall continue to submit periodic reports to the President of the Philippines and to Congress until it considers that the monetary. credit or cost of living represent a threat to the stability of the Philippine economy or of important sectors thereof. as a minimum. and make public. in credit.For purposes of this article and of this Act. the Monetary Board shall formulate definitions of monetary aggregates. After the expiration of this latter period. in relation to the level existing at the end of the corresponding month of the preceding year. they may be exchanged at par and without charge in the Bangko Sentral and by agents duly authorized by the Bangko Sentral for this purpose. In judging the adequacy of the international reserves. Whenever the monetary aggregates. in the opinion of the Board.Only banks duly authorized to do so may accept funds or create liabilities payable in pesos upon demand by the presentation of checks. employment. and (3) the measures which the Monetary Board has taken and the other monetary. Legal Character. a description and analysis of: (1) the causes of the rise or fall of the monetary aggregates. ARTICLE II INTERNATIONAL MONETARY STABILIZATION Section 64. The Board shall give special attention to the volume and maturity of the Bangko Sentral's own liabilities in foreign currencies.In order to maintain the international stability and convertibility of the Philippine peso. and shall state therein whether. the Bangko Sentral shall maintain international reserves adequate to meet any foreseeable net demands on the Bangko Sentral for foreign currencies. or in prices have been reflected in changes in the level of domestic output. . . Issue of Demand Deposits.The Bangko Sentral shall exercise its powers under this Act to preserve the international value of the peso and to maintain its convertibility into other freely convertible currencies primarily for. however. or even though any of these quantitative guidelines have not been reached when in its judgment the circumstances so warrant. to the volume and maturity of the foreign exchange assets and liabilities of other banks operating in the Philippines and. the term "demand deposits" means all those liabilities of the Bangko Sentral and of other banks which are denominated in Philippine currency and are subject to payment in legal tender upon demand by the presentation of checks. B. and such operations shall be subject to the control of the Monetary Board in accordance with the powers granted it with respect thereto under this Act. Definition. or the level of credit. in credit. DEMAND DEPOSITS Section 58. insofar as they are known or can be estimated. fiscal or administrative measures which it recommends to be adopted. Section 62. That a check which has been cleared and credited to the account of the creditor shall be equivalent to a delivery to the creditor of cash in an amount equal to the amount credited to his account.

such additional action as it deems necessary to restore equilibrium in the international balance of payments of the Philippines. Action When the International Stability of the Peso Is Threatened. moreover. (3) the monetary. or whenever the international reserve appears to be in imminent danger of falling to such a level. or if the deterioration cannot be checked except by chronic restrictions on exchange and trade transactions or by sacrifice of the domestic objectives of a balanced and sustainable growth of the economy. demand and time deposits in central banks. Means of Action. The Monetary Board shall issue regulations determining the other qualifications which foreign exchange assets must meet in order to be included in the international reserves of the Bangko Sentral. treasuries and commercial banks abroad. . CHAPTER IV — INSTRUMENTS OF BANGKO SENTRAL ACTION ARTICLE I GENERAL CRITERION Section 68. . (c) foreign or international financial institutions. (2) the remedial measures already taken or to be taken by the Monetary Board. as well as to the anticipated demands for such currencies. and (4) the character and extent of the cooperation required from other government agencies for the successful execution of the policies of the Monetary Board. (b) the Government.The Bangko Sentral may buy and sell gold in any form.Whenever the international reserve of the Bangko Sentral falls to a level which the Monetary Board considers inadequate to meet prospective net demands on the Bangko Sentral for foreign currencies. its political subdivisions and instrumentalities. . The purchases and sales of gold authorized by this section shall be made in the national currency at the prevailing international market price as determined by the Monetary Board. a description and analysis of: (1) the nature and causes of the existing or imminent decline. and foreign notes and coins. The Monetary Board shall endeavor to hold the foreign exchange resources of the Bangko Sentral in freely convertible currencies. The Monetary Board shall submit periodic reports to the President and to Congress until the threat to the international monetary stability of the Philippines has disappeared. as a minimum. or whenever the international reserve is falling as a result of payments or remittances abroad which. If the resultant actions fail to check the deterioration of the reserve position of the Bangko Sentral. The Bangko Sentral may engage in future exchange operations. and (b) submit to the President of the Philippines and to Congress a detailed report which shall include. the Monetary Board shall: (a) take such remedial measures as are appropriate and within the powers granted to the Monetary Board and the Bangko Sentral under the provisions of this Act. the Board shall give particular consideration to the prospects of continued strength and convertibility of the currencies in which the reserve is maintained. Composition of the International Reserves.The international reserves of the Bangko Sentral may include but shall not be limited to the following assets: (a) gold. the Monetary Board shall rely on its moral influence and the powers granted to it under this Act for the management of monetary aggregates.In order to achieve the primary objective of price stability. . ARTICLE II OPERATIONS IN GOLD AND FOREIGN EXCHANGE Section 69. are contrary to the national welfare. with appropriate notice of the Congress. and (b) assets in foreign currencies in the form of: documents and instruments customarily employed for the international transfer of funds. Purchases and Sales of Foreign Exchange. .The Bangko Sentral may buy and sell foreign notes and coins. Section 70. The Bangko Sentral may engage in foreign exchange transactions with the following entities or persons only: (a) banking institutions operating in the Philippines. subject to such regulations as the Monetary Board may issue. and documents and instruments of types customarily employed for the international transfer of funds. foreign government securities. Section 67. The Bangko Sentral shall be free to convert any of the assets in its international reserves into other assets as described in subsections (a) and (b) of this section. in the opinion of the Monetary Board. fiscal or administrative measures further proposed. the Monetary Board shall propose to the President. .Section 66. Purchases and Sales of Gold.

The banks shall be granted a reasonable period of time in which to adjust their currency positions to any such requirement. The Bangko Sentral may also act as agent or correspondent for such entities. outstanding liabilities. determine the net assets and net liabilities of banks and shall. and may engage in such other operations with these entities as are in the national interest and are appropriate to its character as a central bank. Section 71. and shall be applied to all banks alike and without discrimination. within sixty (60) days from the date the limit is exceeded. at the request of any banking institution operating in the Philippines. at the effective exchange rate or rates: Provided. the Monetary Board may require the banks to sell to the Bangko Sentral or to other banks all or part of their surplus holdings of foreign exchange. . and may acquire such currencies in an amount exceeding the minimum balance necessary to cover current demands for said currencies only when. Foreign Asset Position of the Bangko Sentral. The powers granted under this section shall be exercised only when special circumstances make such action necessary. Requirement of Balanced Currency Position. take into account the bank's networth. in making such a determination.The Bangko Sentral shall avoid the acquisition and holding of currencies which are not freely convertible. Section 75. the Bangko Sentral shall. The Monetary Board shall similarly determine the rates for other types of foreign exchange transactions by the Bangko Sentral. but the margins between the effective exchange rates and the rates thus established may not exceed the corresponding margins for spot exchange transactions by more than the additional costs or expenses involved in each type of transactions. subject to such rules and regulations as the Monetary Board shall prescribe.The Monetary Board shall determine the exchange rate policy of the country. The Bangko Sentral shall effect its exchange transactions between foreign currencies and the Philippine peso at the rates determined in accordance with the provisions of Section 74 of this Act. and the manner in which they will be paid. In the event that the equivalent amount in pesos of the foreign exchange liabilities of the Bangko Sentral exceed twice the equivalent amount in pesos of the foreign exchange assets of the bank. the Bangko Sentral may. including purchases and sales of foreign notes and coins. Operations with Foreign Entities. in the opinion of the Monetary Board. . . other than actual telegraphic or cable costs incurred by it. . provided that the foreign currencies so offered or demanded are freely convertible into gold or United States dollars. and sell any quantity of foreign exchange demanded. Upon authority of the Monetary Board. The Monetary Board shall determine the procedures which shall apply to the acquisition and disposition by the Bangko Sentral of foreign exchange which is not freely utilizable in the international market. 6426 shall be exempt from these requirements.In order that the Bangko Sentral may at all times have foreign exchange resources sufficient to enable it to maintain the international stability and convertibility of the peso. Acquisition of Inconvertible Currencies.In order to achieve the primary objective of the Bangko Sentral as set forth in Section 3 of this Act.(d) foreign governments and their instrumentalities. and (e) other entities or persons which the Monetary Board is hereby empowered to authorize as foreign exchange dealers. This requirement shall not apply to demands for foreign notes and coins.The Monetary Board may require the banks to maintain a balanced position between their assets and liabilities in Philippine pesos or in any other currency or currencies in which they operate. . buy any quantity of foreign exchange offered. such acquisition is considered by the Monetary Board to be in the national interest. with the concurrence of at least five (5) of its members and with the approval of the President of the Philippines. Any such determination of net assets and net liabilities shall be applied in all banks uniformly and without discrimination.The Bangko Sentral shall endeavor to maintain at all times a net positive foreign asset position so that its gross foreign exchange assets will always exceed its gross foreign liabilities. or in time of national emergency and to give the Monetary Board and the Government time in which to take constructive measures to forestall. Section 74. and may subject all transactions in gold and foreign exchange to license by the Bangko Sentral. Section 77. Section 72. Exchange Rates. Such transfers may be required for all foreign currencies or for only certain of such currencies. The Bangko Sentral shall not collect any additional commissions or charges of any sort. or protect the international reserves of the Bangko Sentral in the imminence of. both public and private. submit a report to the Congress stating the origin of these liabilities. . the Bangko Sentral may pledge any gold or other assets which it possesses as security against loans which it receives from foreign or international entities. Section 73. The transfers shall be made at the rates established under the provisions of Section 74 of this Act. and shall establish deviation limits from the effective exchange rate or rates as it may deem proper. or overcome such a crisis or emergency. That foreign currency deposits made under Republic Act No. The Monetary Board may. . may temporarily suspend or restrict sales of exchange by the Bangko Sentral. or during an exchange crisis. combat. according to the decision of the Monetary Board. Emergency Restrictions on Exchange Operations. by such institution. the Monetary Board. . or such other financial or performance ratios as may be appropriate under the circumstances. actual and contingent. The Monetary Board shall determine the rates at which the Bangko Sentral shall buy and sell spot exchange. whenever warranted. however. and may require that any foreign exchange thereafter obtained by any person residing or entity operating in the Philippines be delivered to the Bangko Sentral or to any bank or agent designated by the Bangko Sentral for the purpose.The Monetary Board may authorize the Bangko Sentral to grant loans to and receive loans from foreign banks and other foreign or international entities. and to the extent that. or in order to promote the domestic investment of bank resources. In order to maintain the convertibility of the peso. ARTICLE III REGULATION OF FOREIGN EXCHANGE OPERATIONS OF THE BANKS Section 76. Foreign Exchange Holdings of the Banks.

exportation. mineral. animal. Section 79. or to submit such data as may be required on operations or activities giving rise to or in connection with or relating to a gold or foreign exchange transaction.The banks shall report to the Bangko Sentral the volume and composition of their purchases and sales of gold and foreign exchange each day. loans and advances which the Bangko Sentral is authorized to extend to banking institutions under the provisions of the present article of this Act shall be used to influence the volume of credit consistent with the objective of price stability. buy and sell bills. (6) negotiable treasury bills. That the Monetary Board shall prescribe additional safeguards for disbursing these funds. Other Exchange Profits and Losses. or industrial products. including exchange risks not assumed by the Bangko Sentral under the provisions of the preceding section. (3) the credit instruments to which reference is made in subsection (a) of this section. (4) the credit instruments to which reference is made in subsection (b) of this section. . and shall also bear any other typically commercial or banking risks.The Bangko Sentral may rediscount. (5) utilized portions of advances in current amount covered by regular overdraft agreements related to operations included under subsections (a) and (b) of this section. notes and other negotiable obligations of the Government maturing within three (3) years from the date of the advance. the Bangko Sentral may normally and regularly carry on the following credit operations with banking institutions operating in the Philippines: (a) Commercial credits. the Bangko Sentral shall provide funds from non-inflationary sources: Provided. buy and sell bills.Subject to the principle stated in the preceding section of this Act. . Guiding Principles. shall not exceed one hundred eighty (180) days: (1) gold coins or bullion. or their transportation within the Philippines. . . Section 80. B. Regulation of Non-spot Exchange Transactions.The banks shall bear the risks of non-compliance with the terms of the foreign exchange documents and instruments which they buy and sell. acceptances. . CREDIT POLICY Section 81. certificates of indebtedness. ARTICLE IV LOANS TO BANKING AND OTHER FINANCIAL INSTITUTIONS A. Whenever necessary. . (2) securities representing obligations of the Bangko Sentral or of other domestic institutions of recognized solvency.The Bangko Sentral may grant advances against the following kinds of collaterals for fixed periods which. . promissory notes and other credit instruments with maturities of not more than one hundred eighty (180) days from the date of their rediscount. Documents or instruments acquired in accordance with this subsection shall be secured by a pledge of the respective crops or products: Provided. and . acceptances. discount. and must furnish such additional information as the Bangko Sentral may request with reference to the movements in their accounts in foreign currencies. The Monetary Board shall prescribe the forms on which such declarations must be made.Section 78. the Monetary Board may issue such regulations governing bank purchases and sales of non-spot exchange as it may consider necessary for said purpose. discounts. or (2) the storing of non-perishable goods and products which are duly insured and deposited. and in foreign exchange whether entered into or undertaken by them directly or through agents. with the exception of advances against collateral named in clause (4) of the present subsection. . discount or acquisition by the Bangko Sentral and resulting from transactions related to the production or processing of agricultural. however. under conditions assuring their preservation. however.Special credit instruments not otherwise rediscountable under the immediately preceding subsections (a) and (b) may be eligible for rediscounting in accordance with rules and regulations which the Bangko Sentral shall prescribe. NORMAL CREDIT OPERATIONS Section 82. (d) Advances. and certified as to amount and liquidity by the institution soliciting the advance. purchase or sale of readily saleable goods and products.The rediscounts. for periods which shall not exceed three hundred sixty (360) days.In order to restrain the banks from taking speculative positions with respect to future fluctuations in foreign exchange rates. .The Bangko Sentral may rediscount. discount. (c) Other credits. discount or acquisition by the Bangko Sentral and resulting from transactions related to: (1) the importation. Authorized Types of Operations. The Monetary Board may also require other persons and entities to report to it currently all transactions or operations in gold. (b) Production credits. Information on Exchange Operations. in authorized bonded warehouses or in other places approved by the Monetary Board. That the crops or products need not be pledged to secure the documents if the original loan granted by the Bangko Sentral is secured by a lien or mortgage on real estate property seventy percent (70%) of the appraised value of which equals or exceeds the amount of the loan granted. promissory notes and other credit instruments having maturities of not more than three hundred sixty (360) days from the date of their rediscount. The accuracy of the declarations may be verified by the Bangko Sentral by whatever inspection it may deem necessary. in any shape or form.

though foreseeable. the banking institution shall submit to the Bangko Sentral a resolution of its board of directors authorizing the Bangko Sentral to evaluate other assets of the banking institution certified by its external auditor to be good and available for collateral purposes should the release of the subsequent tranche be thereafter applied for. Section 86.In periods of national and/or local emergency or of imminent financial panic which directly threaten monetary and banking stability. . likewise authorize the Bangko Sentral to grant emergency loans or advances to banking institutions. discounts. further. for the purpose of assisting a bank in a precarious financial condition or under serious financial pressures brought by unforeseen events. discounted. where necessary. That if as determined by the Monetary Board. That while such loans or advances are outstanding. SPECIAL CREDIT OPERATION Section 83. loans and advances made in accordance with the provisions of this section may not be renewed or extended unless extraordinary circumstances fully justify such renewal or extension. E. Loans for Liquidity Purposes. would be adequate to supplement. Section 87. city or municipal governments. by a vote of at least five (5) of its members. the prohibitions in Section 128 of this Act shall not apply insofar as it refers to acceptance as collateral of shares and their acquisition as a result of foreclosure proceedings. Whenever a financial institution incurs an overdraft in its account with the Bangko Sentral. That should the Bangko Sentral acquire any of the shares it has accepted as collateral as a result of foreclosure proceedings. or events which. . except upon prior authorization by the Monetary Board. The amount of any emergency loan or advance shall not exceed the sum of fifty percent (50%) of total deposits and deposit substitutes of the banking institution and shall be disbursed in two (2) or more tranches. . including the exercise of voting rights pertaining to said shares: Provided. or by any Philippine Government instrumentality.Documents rediscounted. the debtor institution shall not. authorize the release of a subsequent tranche on condition that the principal stockholders of the institution: (a) furnish an acceptable undertaking to indemnify and hold harmless from suit a conservator whose appointment the Monetary Board may find necessary at any time. the Bangko Sentral shall dispose of said shares by public bidding within one (1) year from the date of consolidation of title by the Bangko Sentral. That the Monetary Board has ascertained that the bank is not insolvent and has the assets defined hereunder to secure the advances: Provided. authorize the Bangko Sentral to grant extraordinary loans or advances to banking institutions secured by assets as defined hereunder: Provided. CREDIT TERMS Section 85. Emergency Loans and Advances. In connection with the exercise of these powers. in the judgment of the Monetary Board. Interest and rediscount rates shall be applied to all banks of the same category uniformly and without discrimination. by a vote of at least five (5) of its members. EMERGENCY CREDIT OPERATION Section 84.(7) negotiable bonds issued by the Government of the Philippines. expand the total volume of its loans or investments. The Monetary Board may. even during normal periods. Advances made against the collateral named in clauses (6) and (7) of subsection (d) of this section may not exceed eighty percent (80%) of the current market value of the collateral.The Bangko Sentral may extend loans and advances to banking institutions for a period of not more than seven (7) days without any collateral for the purpose of providing liquidity to the banking system in times of need. The Monetary Board may. the circumstances surrounding the emergency warrant a loan or advance greater than the amount provided hereinabove. however. D. and (b) provide acceptable security which. but after due consideration has been given to the credit needs of the market. or upon liquidation of the obligations which they represent or to which they relate whenever said obligations have been liquidated prior to their dates of maturity. the amount of the first tranche may exceed twenty-five percent (25%) of the bank's total deposit and deposit substitutes if the same is adequately secured by applicable loan values of government securities and unencumbered first class collaterals approved by the Monetary Board. The amount of the first tranche shall be limited to twenty-five percent (25%) of the total deposit and deposit substitutes of the institution and shall be secured by government securities to the extent of their applicable loan values and other unencumbered first class collaterals which the Monetary Board may approve: Provided. receivership or liquidations of the debtor-institution notwithstanding. . Prior to the release of the first tranche. The rediscounts. by Philippine provincial. and the general requirements of the national monetary policy. and the principal stockholders of the institution furnish an acceptable undertaking to indemnify and hold harmless from suit a conservator whose appointment the Monetary Board may find necessary at any time. the same shall be eliminated within the period prescribed in Section 102 of this Act. the Monetary Board may. the assets tendered by the banking institution to collateralize the subsequent tranche. . Endorsement. This provision shall apply prospectively.The documents rediscounted. bought or accepted as collateral by the Bangko Sentral in the course of the credit operations authorized in this article shall bear the endorsement of the institution from which they are received. Interest and Rediscount. discounted or accepted as collateral by the Bangko Sentral must be withdrawn by the borrowing institution on the dates of their maturities.The Bangko Sentral shall collect interest and other appropriate charges on all loans and advances it extends. the composition of the Bangko Sentral's portfolio. the closure. could not be prevented by the bank concerned: Provided. however. . C. at its discretion. That a concurrent vote of at least five (5) members of the Monetary Board is obtained. and having maturities of not more than ten (10) years from the date of advance. The Monetary Board shall fix the interest and rediscount rates to be charged by the Bangko Sentral on its credit operations in accordance with the character and term of the operation. Repayment of Credits.

. the Bangko Sentral may. ARTICLE VII BANK RESERVES Section 94. denominate the obligations in gold or foreign currencies. Section 88. ARTICLE VI COMPOSITION OF BANGKO SENTRAL'S PORTFOLIO Section 93. all banks operating in the Philippines shall be required to maintain reserves against their deposit liabilities: Provided. Review of the Bangko Sentral's Portfolio. in their aggregate. exceed twenty percent (20%) of the average annual income of the borrower for the last three (3) preceding fiscal years. additional conditions which borrowing institutions must satisfy in order to have access to the credit of the Bangko Sentral.At least once every month the Monetary Board shall review the portfolio of the Bangko Sentral in relation to its future credit policy. Section 89. with respect to the imposition. shall be determined in the same manner as provided for reserve requirements against regular bank deposits. The Monetary Board may exempt from reserve requirements deposits and deposit substitutes with remaining maturities of two (2) years or more.Banks shall have the right at any time to withdraw any documents which they have presented to the Bangko Sentral as collateral. place. Other requirements. The required reserves of each bank shall be proportional to the volume of its deposit liabilities and shall ordinarily take the form of a deposit in the Bangko Sentral. the Monetary Board shall especially consider whether a sufficiently large part of the portfolio consists of assets with early maturities. in accordance with the principle stated in Section 90 of this Act and with such rules and regulations as may be prescribed by the Monetary Board. also require all banks and/or quasi-banks to maintain reserves against funds held in trust and liabilities for deposit substitutes as defined in this Act. Section 91. upon payment in full of the corresponding debt to the Bangko Sentral. maturities and other characteristics of said obligations of the Bangko Sentral. issue. . Provisional Advances to the National Government. Purchases and Sales of Government Securities. Reserve Requirements. increase. if imposed. The evidences of indebtedness acquired under the provisions of this section must be freely negotiable and regularly serviced and must be available to the general public through banking institutions and local government treasuries in denominations of a thousand pesos or more. as well as interbank borrowings. . the evidences of indebtedness of the Bangko Sentral to which this section refers may be acquired by the Bangko Sentral before their maturity. The evidences of indebtedness acquired or redeemed by the Bangko Sentral shall not be included among its assets. Subject to the principles stated in Section 90 of this Act. That issuance of such certificates of indebtedness shall be made only in cases of extraordinary movement in price levels.In order to achieve the objectives of the national monetary policy. Reserves against deposit substitutes. either through purchases in the open market or through redemptions at par and by lot if the Bangko Sentral has reserved the right to make such redemptions. within the general powers granted to it under this Act. Reserve requirements shall be applied to all banks of the same category uniformly and without discrimination. Said evidences of indebtedness may be issued directly against the international reserve of the Bangko Sentral or against the securities which it has acquired under the provisions of Section 91 of this Act.The open market purchases and sales of securities by the Bangko Sentral shall be made exclusively in accordance with its primary objective of achieving price stability. The Monetary Board shall determine the interest rates. Section 92. buy and sell in the open market for its own account: (a) evidences of indebtedness issued directly by the Government of the Philippines or by its political subdivisions. and to any other clearly definable aspect of the credit policy of the bank. in order that a contraction in Bangko Sentral credit may be effected promptly whenever the national monetary policy so requires. subject to such rules and regulations as the Monetary Board may prescribe and in accordance with the principles stated in Section 90 of this Act. and shall be immediately retired and cancelled. . and may. That said advances shall be repaid before the end of three (3) months extendible by another three (3) months as the Monetary Board may allow following the date the National Government received such provisional advances and shall not. the Bangko Sentral shall not pay interest on the reserves maintained with it unless the Monetary Board decides otherwise as warranted by circumstances. at its discretion. . Since the requirement to maintain bank reserves is imposed primarily to control the volume of money. and (b) evidences of indebtedness issued by government instrumentalities and fully guaranteed by the Government. the Bangko Sentral may. . to the purposes for which their loans in general are destined.The Monetary Board may prescribe. That the Monetary Board may. ARTICLE V OPEN MARKET OPERATIONS FOR THE ACCOUNT OF THE BANGKO SENTRAL Section 90. Principles of Open Market Operations. . buy and sell freely negotiable evidences of indebtedness of the Bangko Sentral: Provided. and computation of reserves. if it deems it advisable. These conditions may refer to the rates of interest charged by the banks. including interest charges. In reviewing the Bangko Sentral's portfolio.The Bangko Sentral may make direct provisional advances with or without interest to the National Government to finance expenditures authorized in its annual appropriation: Provided. Issue and Negotiation of Bangko Sentral Obligations. or may be issued without relation to specific types of assets of the Bangko Sentral. .In order to provide the Bangko Sentral with effective instruments for open market operations.In order to control the volume of money created by the credit operations of the banking system.

Whenever in the opinion of the Monetary Board it becomes necessary to increase reserve requirements against existing liabilities. Banks and other affected financial institutions shall be notified reasonably in advance of the date on which such increase is to become effective. and that. Section 97. . the reserve position as calculated at the close of the business day immediately preceding such holidays and non-banking days shall apply on such days. availability and cost of money are in accord with the needs of the Philippine economy and that bank credit is not granted for speculative purposes prejudicial to the national interests. For the purpose of computing the reserve position of each bank or quasi-bank. That banks and quasi-banks shall ordinarily be permitted to offset any reserve deficiency occurring on one or more days of the week with any excess reserves which they may hold on other days of the same week and shall be required to pay the penalty only on the average daily deficiency during the week. . . or acceptance of debt instruments for the borrower's own account. computed in the manner specified in the preceding section of this Act. These instruments may include. for part or the entire period of a strike or lockout affecting a bank or a quasi-bank as defined in the Labor Code.Whenever the reserve position of any bank or quasi-bank. . whichever is higher. Section 100. which each bank and/or quasi-bank may maintain.The Bangko Sentral shall establish facilities for interbank clearing under such rules and regulations as the Monetary Board may prescribe: Provided. further. garnishments. Increase in Reserve Requirements. through the issuance. Banks with existing overdrafts with the Bangko Sentral as of the effectivity of this Act shall. In cases of abuse. for the purpose of relending or purchasing of receivables and other obligations. participations. Section 96. Exemption from Attachment and Other Purposes. . That any bank which incurs on overdrawing in its deposit account with the Bangko Sentral shall fully cover said overdraft.Deposits maintained by banks with the Bangko Sentral as part of their reserve requirements shall be exempt from attachment. Regulations on bank operations shall be applied to all banks of the same category uniformly and without discrimination.The reserve position of each bank or quasi-bank shall be calculated daily on the basis of the amount.The Monetary Board shall use the powers granted to it under this Act to ensure that the supply. Reserves Against Unused Balances of Overdraft Lines. other than deposits. or of a national emergency affecting operations of banks or quasi-banks. alter the minimum reserve ratios to peso deposits. finally. or settle such overdrafts. industrial and other non-financial companies for the limited purpose of financing their own needs or the needs of their agents or dealers shall not be covered by the provisions of Section 94 of this Act.In order to facilitate Bangko Sentral control over the volume of bank credit. The deposit reserves maintained by the banks in the Bangko Sentral in accordance with the provisions of Section 94 of this Act shall serve as basis for the clearing of checks and the settlement of interbank balances.The Monetary Board may fix and. If a bank or quasi-bank chronically has a reserve deficiency. within such period as may be prescribed by the Monetary Board. Section 98. . including interest thereon at a rate equivalent to one-tenth of one percent (1/10 of 1%) per day or the prevailing ninety-one-day treasury bill rate plus three percentage points. or its political subdivisions or instrumentalities. bankers acceptances. however. . the Monetary Board may deny any bank or quasi-bank the privilege of offsetting reserve deficiencies in the aforesaid manner. The Monetary Board may also modify or set aside reserved deficiency penalties for rehabilitation program of a bank. Required Reserves Against Foreign Currency Deposits. That the Bangko Sentral may charge administrative and other fees for the maintenance of such facilities. the bank or quasi-bank shall pay the Bangko Sentral one-tenth of one percent (1/10 of 1%) per day on the amount of the deficiency or the prevailing ninety-one-day treasury bill rate plus three percentage points. Required Reserves Against Peso Deposits. subject to such rules and regulations as the Monetary Board may issue with respect to such operations: Provided. or any other order or process of any court. . Interbank Settlement. That with reference to holidays or non-banking days. endorsement. promissory notes. is below the required minimum. at the close of business for the day. its principal office in the Philippines and all its branches and agencies located therein shall be considered as a single unit. Section 102. The powers of the Monetary Board to prescribe and modify reserve requirements against unused balances of overdraft lines shall be the same as its powers with respect to reserve requirements against demand deposits. and repurchase agreements. government agency or any other administrative body issued to satisfy the claim of a party other than the Government. Reserve Deficiencies. not later than the next clearing day: Provided. . the Monetary Board may limit or prohibit the making of new loans or investments by the institution and may require that part or all of the net profits of the institution be assigned to surplus. certificates of assignment and similar instruments with recourse. ARTICLE VIII SELECTIVE REGULATION OF BANK OPERATIONS Section 104. Section 103. whichever is higher: Provided. . Guiding Principle. Section 101. The Monetary Board may modify or set aside the reserve deficiency penalties provided in this section. when it deems necessary.Section 95. That the appropriate clearing office shall be officially notified of banks with overdrawn balances. Computation on Reserves. . the Bangko Sentral shall take such action against the bank as may be warranted under this Act. That settlement of clearing balances shall not be effected for any account which continues to be overdrawn for five (5) consecutive banking days until such time as the overdrawing is fully covered or otherwise converted into an emergency loan or advance pursuant to the provisions of Section 84 of this Act: Provided. as well as to deposit substitutes. The Monetary Board shall determine what specific instruments shall be considered as deposit substitutes for the purposes of Section 94 of this Act: Provided.The Monetary Board is similarly authorized to prescribe and modify the minimum reserve ratios applicable to deposits denominated in foreign currencies.The term "deposit substitutes" is defined as an alternative form of obtaining funds from the public. Section 99. however. the increase shall be made in a gradual manner and shall not exceed four percentage points in any thirty-day period. upon failure to so comply herewith. That deposit substitutes of commercial. Definition of Deposit Substitutes. but need not be limited to. of the institution's reserves and the amount of its liability accounts against which reserves are required to be maintained: Provided. the Monetary Board may establish minimum reserve requirements for unused balances of overdraft lines. and such ratio shall be applied uniformly to all banks of the same category as well as to quasi-banks. either convert the overdraft into an emergency loan or advance with a plan of payment.

Section 114. the Board may place an upper limit on the amount of loans and investments which the banks may hold.The Bangko Sentral may be authorized by the Government to represent it in dealings. whenever it deems it expedient. In no case shall the Monetary Board establish limits which are below the value of the loans or investments of the banks on the date on which they are notified of such restrictions. . as a general policy. designate any of his other financial advisors to jointly represent the Government in such dealings.The Bangko Sentral shall open a general cash account for the Treasurer of the Philippines. Representation with the International Monetary Fund. and may relate the size of the required margin to the nature of the transaction to be financed. Issue of Government Obligations.The Bangko Sentral shall represent the Government in all dealings. Toward this end. Section 107. Required Security Against Bank Loans. . or operations with.The Monetary Board may prescribe minimum ratios which the capital and surplus of the banks must bear to the volume of their assets. or to specific categories thereof. ARTICLE II THE MARKETING AND STABILIZATION OF SECURITIES FOR THE ACCOUNT OF THE GOVERNMENT A. Official Deposits. which may act as agent of. however. . Section 108. commissions or fees for services which it renders to the Government. Section 113.In the performance of its functions as fiscal agent. Designation of Bangko Sentral as Banker of the Government. Section 111. Minimum Capital Ratios. as well as on deposits of banks with the Bangko Sentral. That for fiscal operations in foreign countries. negotiations or transactions. The Bangko Sentral may pay interest on deposits of the Government or of its political subdivisions and instrumentalities. . Margin Requirements Against Letters of Credit. and for the account of. The President may. . in which the liquid funds of the Government shall be deposited. Section 106. the Bangko Sentral may engage the services of foreign banking and financial institutions.The Bangko Sentral shall be the official depository of the Government. its political subdivisions and instrumentalities as well as of government-owned or controlled corporations and. Fiscal Operations. Transfers of funds from this account to other accounts shall be made only upon order of the Treasurer of the Philippines. its political subdivisions and instrumentalities. the Bangko Sentral may engage the services of other government-owned and controlled banks and of other domestic banks for operations in localities at home or abroad in which the Bangko Sentral does not have offices or agencies adequately equipped to perform said operations: Provided. may be made through the Bangko Sentral. and the kind and amount of security to be required against the various types of credit operations of the banks. . Portfolio Ceilings. negotiations and transactions with the International Monetary Fund and shall carry such accounts as may result from Philippine membership in. That such banks may hold deposits of the political subdivisions and instrumentalities of the Government beyond their minimum working balances whenever such subdivisions or instrumentalities have outstanding loans with said banks. subject to such rules and regulations as the Board may prescribe: Provided. ARTICLE IX COORDINATION OF CREDIT POLICIES BY GOVERNMENT INSTITUTIONS Section 109.The Monetary Board may at any time prescribe minimum cash margins for the opening of letters of credit. however.In order to promote liquidity and solvency of the banking system. . Remuneration for Services. its political subdivisions and instrumentalities.Whenever the Monetary Board considers it advisable to prevent or check an expansion of bank credit. . the Monetary Board may. and may alter said ratios whenever it deems necessary. Section 115.Section 105. CHAPTER V — FUNCTIONS AS BANKER AND FINANCIAL ADVISOR OF THE GOVERNMENT ARTICLE I FUNCTIONS AS BANKER OF THE GOVERNMENT Section 110.Government-owned corporations which perform banking or credit functions shall coordinate their general credit policies with those of the Monetary Board. Representation with Other Financial Institutions. their cash balances should be deposited with the Bangko Sentral. . The Monetary Board may apply such limits to the loans and investments of each bank or to specific categories thereof.The Bangko Sentral may charge equitable rates. make suggestions or recommendations to such corporations for the more effective coordination of their policies with those of the Bangko Sentral. . the Monetary Board may issue such regulations as it may deem necessary with respect to the maximum permissible maturities of the loans and investments which the banks may make. The restrictions shall be applied to all banks uniformly and without discrimination. said Fund. Section 112. negotiations or transactions with the International Bank for Reconstruction and Development and with other foreign or international financial institutions or agencies. Other Banks as Agents of the Bangko Sentral. . Section 116. Coordination of Credit Policies. THE ISSUE AND PLACING OF GOVERNMENT SECURITIES Section 117. .The Bangko Sentral shall act as a banker of the Government. its political subdivisions or instrumentalities. with only minimum working balances to be held by government-owned banks and such other banks incorporated in the Philippines as the Monetary Board may designate. the .The issue of securities representing obligations of the Government. . or may place a limit on the rate of increase of such assets within specified periods of time.

.The Bangko Sentral shall be exempt for a period of five (5) years from the approval of this Act from all national. the Government.Before undertaking any credit operation abroad. Section 126. Financial Advice on Official Credit Operations. The operations of the Securities Stabilization Fund shall consist of purchases and sales. BANGKO SENTRAL SUPPORT OF THE GOVERNMENT SECURITIES MARKET Section 120. credit and exchange policies of the Bangko Sentral. or assessments payable by persons or other entities doing business with the Bangko Sentral: Provided.In order to assure effective coordination between the economic. charges and assessments for which the Bangko Sentral itself would otherwise be liable. Section 118. or any of its political subdivisions or instrumentalities. charges. The Bangko Sentral shall not be a member of any stock exchange or syndicate. but may intervene therein for the sole purpose of regulating their operations in the placing of government securities. and shall not apply to taxes. municipal and city taxes. the Deputy Governor designated by the Governor of the Bangko Sentral shall be an ex officio member of the National Economic and Development Authority Board. and the balance of payments. Section 124. of bonds and other evidences of indebtedness issued or fully guaranteed by the Government. shall request the opinion. The Securities Stabilization Fund. as the case may be: Provided. The Monetary Board shall issue such regulations as may be necessary to implement the provisions of this section. shall reimburse the Bangko Sentral for the expenses incurred in the placing of the aforesaid securities. Servicing and Redemption of the Public Debt. to the resources. further. The purpose of these operations shall be to increase the liquidity and stabilize the value of said securities in order thereby to promote investment in government obligations. the prior opinion of the Monetary Board shall likewise be requested in order that the Board may render an opinion on the probable effects of the proposed operation on monetary aggregates. The Government. That foreign loans and other obligations of the Bangko Sentral shall be exempt.There shall be established a "Securities Stabilization Fund" which shall be administered by the Bangko Sentral for the account of the Government. and shall not subscribe to their issue except to replace its maturing holdings of securities with the same type as the maturing securities.The servicing and redemption of the public debt shall also be effected through the Bangko Sentral.Subject to Section 132 of this Act. the importation and exportation by the Bangko Sentral of notes and coins. Section 119.The Bangko Sentral may place the securities to which the preceding section refers through direct sale to financial institutions and the public. the price level. in the open market. or its political subdivisions or instrumentalities. Representation on the National Economic and Development Authority.The provision of any general or special law to the contrary notwithstanding. The opinion of the Monetary Board shall be based on the gold and foreign exchange resources and obligations of the nation and on the effects of the proposed operation on the balance of payments and on monetary aggregates. B. regardless of whether said profits arise from capital gains or from interest earnings. expenditures. . Profits and Losses of the Fund. the resources of the Securities Stabilization Fund shall come from the balance of the fund as held by the Central Bank under Republic Act No. fees. Exemption from Customs Duties. however. fees. through the Secretary of Finance. That the Bangko Sentral shall not guarantee the placement of said securities. and of gold and other metals to be used for purposes authorized . contemplates borrowing within the Philippines. Section 121. . financial and fiscal policies of the Government and the monetary. profits and income of the Bangko Sentral. from any and all taxes if the payment of such taxes has been assumed by the Bangko Sentral. . That said exemptions shall apply only to such taxes. CHAPTER VI — PRIVILEGES AND PROHIBITIONS ARTICLE I PRIVILEGES Section 125. The exemption authorized in the preceding paragraph of this section shall apply to all property of the Bangko Sentral. . of the Monetary Board on the monetary implications of the contemplated action.The Securities Stabilization Fund shall retain net profits which it may make on its operations. 265 as of the effective date of this Act.Government or its respective subdivisions or instrumentality. but shall not endeavor to alter movements of the market resulting from basic changes in the pattern or level of interest rates. both as to principal and interest. Resources of the Securities Stabilization Fund. Such opinions must similarly be requested by all political subdivisions and instrumentalities of the Government before any credit operation abroad is undertaken by them. Tax Exemptions. deeds. The Fund shall correspondingly bear any net losses which it may incur. however. . documents and transactions related to the conduct of the business of the Bangko Sentral: Provided. Methods of Placing Government Securities. . Whenever the Government. ARTICLE III FUNCTIONS AS FINANCIAL ADVISOR OF THE GOVERNMENT Section 123. provincial. receipts. . or moderate. as well as to all contracts. fees. . in writing. The Monetary Board shall use the resources of the Fund to prevent. sharp fluctuations in the quotations of said government obligations. Section 122. charges and assessments.

000). and (e) any asset or liability of the Central Bank not transferred to the Bangko Sentral shall be retained and administered. may without need of obtaining prior approval from any other government agency. ARTICLE II PROHIBITIONS Section 128.000. . That. . All incumbent personnel in the Central Bank as of the date of the approval of this Act shall continue to exercise their duties and functions as personnel of the Bangko Sentral subject to the provisions of Section 133: Provided. . That such personnel in the Central Bank as may be necessary for the purpose of implementing Section 132 may be assigned by the Bangko Sentral Monetary Board to the Central Bank. .The Bangko Sentral shall be made operational by the performance of the following acts: (a) the President shall constitute the Monetary Board by appointing the members thereof within sixty (60) days from the effectivity of this Act. (c) the assets and liabilities to be transferred shall be limited to an amount that will enable the Bangko Sentral to perform its responsibilities adequately and operate on a viable basis: Provided. but not limited to.Unless circumstances warrant otherwise and approved by the Congress Oversight Committee. within a period of five (5) years from the effectivity of this Act. reappraisal. appoint personnel in the Bangko Sentral whose services are deemed necessary in order not to unduly disrupt the operations of the Bangko Sentral. CHAPTER VII — TRANSITORY PROVISIONS Section 129. . That no qualification requirements for positions in the Bangko Sentral shall be imposed other than those set by the Monetary Board: Provided. 119. phase out all fiscal agency functions provided for in Sections 117.under this Act. three (3) members of the Monetary Board.Upon the effectivity of this Act. Transfer of Assets and Liabilities. in accordance with Sections 15(c) and 17(d) of this Act. revaluation and bond issuance by the National Government. by an initial amount of Ten billion pesos (P10. Phase-out of Regulatory Powers Over the Operations of Finance Corporations and Other Institutions Performing Similar Functions. and (b) the transfer of such assets and liabilities from the Central Bank to the Bangko Sentral as provided in Section 132 shall be completed within ninety (90) days from the constitution of the Monetary Board. except as to those which are policydetermining. minting of coins. shall not engage directly or indirectly in partisan activities or take part in any election except to vote. Section 130. Prohibitions. Section 127. the same to be assumed by the Securities and Exchange Commission. Applicability of the Civil Service Law. further. Section 132. assessments and charges related to such importation or exportation. That the Bangko Sentral may financially assist the Central Bank of Liquidators in the liquidation of CB liabilities: Provided. and 120 as well as in other pertinent provisions of this Act and transfer the same to the Department of Finance. and the importation of all equipment needed for bank note production. the Secretary of Finance and the Secretary of Budget and Management in representation of the National Government. either directly or indirectly.000. and shall not participate in the ownership or management of any enterprise. or to the National Government as dividends.The Bangko Sentral shall not acquire shares of any kind or accept them as collateral. The Committee shall complete its work within ninety (90) days from the constitution of the Monetary Board submitting a comprehensive report with all its findings and justification. and the Chairmen of the Committees on Banks of the Senate and the House of Representatives shall determine the assets and liabilities of the Central Bank which may be transferred to or assumed by the Bangko Sentral. . which may include the Governor. . That the assets shall exceed the liabilities as certified by the Commission on Audit (COA). (b) the Bangko Sentral shall remit seventy-five percent (75%) of its net profits to a special deposit account (sinking fund) until such time as the net liabilities of the Central Bank shall have been liquidated through generally accepted finance mechanisms such as. phase out its regulatory powers over finance companies without quasi-banking functions and other institutions performing similar functions as provided in existing laws. disposed of and liquidated by the Central Bank itself which shall continue to exist as the CB Board of Liquidators only for the purposes provided in this paragraph but not later than twenty-five (25) years or until such time that liabilities have been liquidated: Provided. shall be made only according to the Civil Service Law and regulations: Provided. primarily confidential or highly technical in nature. (d) liabilities to be assumed by the Bangko Sentral shall include liability for notes and coins in circulation as of the effective date of this Act. The Bangko Sentral shall not engage in development banking or financing: Provided. the Bangko Sentral shall. set-offs. 118. metal refining and other security printing operations shall be fully exempt from all customs duties and consular fees and from all other taxes. collections. Section 131. the Monetary Board or Governor. Phase-out of Fiscal Agency Functions. finally.Appointments in the Bangko Sentral. That outstanding loans obtained or extended for development financing shall not be affected by the prohibition of this section. Implementing Details. The following guidelines shall be strictly observed in the determination of which assets and liabilities shall be transferred to the Bangko Sentral: (a) the Monetary Board and the Secretary of Finance shall have primary responsibility for working out creative monetary and financial solutions to retire the Central Bank liabilities and losses at the least cost to the Government. in representation of the Bangko Sentral.The Bangko Sentral shall. Officers and employees of the Bangko Sentral. within a period of three (3) years but in no case longer than five (5) years from the approval of this Act. including all members of the Monetary Board. however. write-offs. condonation. respectively.

and shall be fully implemented within a period of six (6) months thereafter. Approved: June 14. . Section 136. which may be inconsistent with the provisions of this Act are hereby repealed. Personnel who may not be retained are deemed separated from the service. rule or regulation issued pursuant to said Republic Act No. Section 135. special charters. Separability Clause. Separation Benefits. nor shall any personnel be considered as having prior or vested rights with respect to retention in the Bangko Sentral or in any position which may be created in the new staffing pattern.Pursuant to Section 15 of this Act. an entirely new staffing pattern on organizational structure to suit the operations of the Bangko Sentral under this Act. 7430. the other provisions or sections of this Act. as amended. and the application of such provision or section to other persons or circumstances. . the provisions of any other law. All actions taken by the Bangko Sentral Monetary Board under this section shall be reported to Congress and the President within thirty (30) days. . even if he should be the incumbent of a similar position prior to organization.This Act shall take effect fifteen (15) days following its publication in the Official Gazette or in two (2) national newspapers of general circulation. which shall be in addition to all gratuities and benefits to which they may be entitled under existing laws. and all those who shall retire or be separated from the service on account of reorganization under the preceding section shall be entitled to such incentives.Except as may be provided for in Section 46 and 132 of this Act. Section 137. Section 133. Section 134.If any provision or section of this Act or the application thereof to any person or circumstance is held invalid. . The formulation of the program of organization shall be completed within six (6) months after the effectivity of this Act. Mandate to Organize.That upon disposition of said retained assets and liquidation of said retained liabilities. duties and functions vested by law in the Central Bank of the Philippines not inconsistent with the provisions of this Act shall be deemed transferred to the Bangko Sentral ng Pilipinas. the Monetary Board is authorized to provide separation incentives. 1792 is likewise repealed. 265. Presidential Decree No. All references to the Central Bank of the Philippines in any law or special charters shall be deemed to refer to the Bangko Sentral. Effectivity Clause. Transfer of Powers. Section 138. Republic Act No. Repealing Clause. 265.The Bangko Sentral shall be organized by the Monetary Board without being subject to the provisions of Republic Act No. as amended. or parts thereof. the Central Bank shall be deemed abolished. by adopting if it so desires. No preferential or priority right shall be given to or enjoyed by any personnel for appointment to any position in the new staffing pattern. shall not be affected thereby. 1993 . . .All powers.

PD 1792 was expressly repealed by Sec 135 of R. or in cases where the money deposited or invested is the subject matter of the litigation. in the discretion of the court. 1981. bureau or office. Executive Orders.A. its political subdivisions and its instrumentalities. Approved: September 9. government official. or in cases where the money deposited or invested is the subject matter of the litigation. 3. It is hereby declared to be the policy of the Government to give encouragement to the people to deposit their money in banking institutions and to discourage private hoarding so that the same may be properly utilized by banks in authorized loans to assist in the economic development of the country. except upon written per-mission of the depositor. inquired or looked into by any person. 1955 1 Footnote 1 This Section and Section 3 were both amended by PD No. 1405 AN ACT PROHIBITING DISCLOSURE OF OR INQUIRY INTO.A. approved June 14. Section 1. are hereby considered as of an absolutely confidential nature and may not be examined." "Sec. its political subdivisions and its instrumentalities. or upon order of a competent court in cases of bribery or dereliction of duty of public officials. The original sections 2 and 3 of R. Section 2. as follows. are hereby considered as of an absolutely confidential nature and may not be examined. All Acts or parts of Acts. bureau or office. or upon order of a competent court in cases of bribery or dereliction of duty of public officials. This Act shall take effect upon its approval. 7653. It shall be unlawful for any official or employee of a banking institution to disclose to any person other than those mentioned in Section two hereof any information concerning said deposits.REPUBLIC ACT No." . 1993. 1792 issued January 16. or in cases of impeachment. No. Special Charters. Section 5. It shall be unlawful for any official or employee of a banking institution to disclose to any person other than those mentioned in Section two hereof any information concerning said deposits.1405 are hereby reproduced for reference. DEPOSITS WITH ANY BANKING INSTITUTION AND PROVIDING PENALTY THEREFOR. Section 6. to an imprisonment of not more than five years or a fine of not more than twenty thousand pesos or both. No. "Sec 2 All deposits of whatever nature with banks or banking institutions in the Philippines including investments in bonds issued by the Government of the Philippines. or in cases of impeachment. except upon written permission of the depositor. All deposits of whatever nature with banks or banking institutions in the Philippines including investments in bonds issued by the Government of the Philippines. inquired or looked into by any person. Section 3. Any violation of this law will subject offender upon conviction. government official. Section 4. Rules and Regulations which are inconsistent with the provisions of this Act are hereby repealed.

the depository banks shall maintain at all times a one hundred percent foreign currency cover for their liabilities. Repealing clause. AND FOR OTHER PURPOSES.REPUBLIC ACT No. – Except as the Monetary Board may otherwise prescribe or allow. Authority of banks to accept foreign currency deposits.) Depository banks which. said depository banks may extend foreign currency loans to any domestic enterprise. subject to the limitations to be prescribed by the Monetary Board on such loans. 3591. in the case of nonresidents. 21. 1453. Section 6. past performance. (As amended by PD No. Section 4. prom. without prejudice. Penal provisions. as well as its implementing rules and regulations: Provided. in no instance shall foreign currency deposits be examined. except those which are required by the Central Bank to be surrendered in accordance with the provisions of Republic Act Numbered two hundred sixty-five (Now Rep. (2) To issue certificates to evidence such deposits. be designated by the Central Bank for the purpose. are hereby exempted from any and all taxes whatsoever irrespective of whether or not these deposits are made by residents or nonresidents so long as the deposits are eligible or allowed under aforementioned laws and. 1035. however. rules and regulations. – All foreign currency deposits authorized under this Act. 1978. on account of networth. rules and regulations at the time the deposit was made shall govern. – There shall be no restriction on the withdrawal by the depositor of his deposit or on the transferability of the same abroad except those arising from the contract between the depositor and the bank. may. Tax exemption. and further amended by PD No. the foreign currency cover shall be in the same currency as that of the corresponding foreign currency deposit liability. as well as foreign currency deposits authorized under PD No. (4) To accept said deposits as collateral for loans subject to such rules and regulations as may be promulgated by the Central Bank from time to time. as amended by PD No. In case the Central Bank promulgates new rules and regulations decreasing the rights of depositors. 1035. without the limitations prescribed in the preceding paragraph regarding maturity and marketability. government official.) Section 5. and if requested shall exchange the foreign currency notes and coins into foreign currency instruments drawn on its depository banks. and such loans shall be eligible for purposes of the 100% foreign currency cover prescribed in the preceding paragraph. – All foreign currency deposits made under this Act. Section 3. – Any willful violation of this Act or any regulation duly promulgated by the Monetary Board pursuant hereto shall subject the offender upon conviction to an imprisonment of not less than one year nor more than five years or a fine of not less than five thousand pesos nor more than twenty-five thousand pesos. or any other order or process of any court. in accordance with the provisions of this Act. the validity of other provisions shall not be affected thereby. Nov. Foreign currency cover requirements. 6426 AN ACT INSTITUTING A FOREIGN CURRENCY DEPOSIT SYSTEM IN THE PHILIPPINES. deposit with such Philippine banks in good standing. – The banks designated by the Central Bank under Section two hereof shall have the authority: (1) To accept deposits and to accept foreign currencies in trust Provided. have been qualified by the Monetary Board to function under an expanded foreign currency deposit system. Authority to deposit foreign currencies. as may. Section 11. (As added by PD No. Separability clause. Provided. resources. or any other entity whether public or private. .) Section 9. as amended by PD No. (3) To discount said certificates. Such foreign currency loans may include loans to domestic enterprises which are export-oriented or registered with the Board of Investments. (As amended by PD No. 1977. bureau or office whether judicial or administrative or legislative. including interest and all other income or earnings of such deposits. except upon the written permission of the depositor. 7653). foreign currencies which are acceptable as part of the international reserve. Subject to prior Central Bank approval when required by Central Bank regulations. upon application. Section 12. 1034. June 11. Section 8. executive orders. shall be exempt from the requirements in the preceding paragraph of maintaining fifteen percent (15%) of the cover in the form of foreign currency deposit with the Central Bank. or other pertinent criteria. – The Monetary Board of the Central Bank shall promulgate such rules and regulations as may be necessary to carry out the provisions of this Act which shall take effect after the publications in the Official Gazette and in a newspaper of national circulation for at least once a week for three consecutive weeks. Nov. That said foreign currency deposits shall be exempt from attachment. garnishment. as amended (Philippine Deposit Insurance Corporation). however.– This act shall be known as the "Foreign Currency Deposit Act of the Philippines. 21. of which cover at least fifteen percent shall be in the form of foreign currency deposit with the Central Bank. (As amended by PD No. Except as the Monetary Board may otherwise prescribe or allow. 1977." Section 2. Deposit insurance coverage. The Central Bank may pay interest on the foreign currency deposit. to deposits made thereunder.) Section 7. inquired or looked into by any person. legislative body. – Any person. or both such fine and imprisonment at the discretion of the court. and the balance in the form of foreign currency loans or securities. Secrecy of foreign currency deposits. Section 1. Title. government agency or any administrative body whatsoever. That insurance payment shall be in the same currency in which the insured deposits are denominated. – All acts. prom. irrespective of whether or not they are engaged in trade or business in the Philippines. are hereby declared as and considered of an absolutely confidential nature and. Act No. amended or modified accordingly. natural or juridical. which loans or securities shall be of short term maturities and readily marketable. That numbered accounts for recording and servicing of said deposits shall be allowed. 1246. Rules and regulations. Section 10. – The deposits under this Act shall be insured under the provisions of Republic Act No. – The provisions of this Act are hereby declared to be separable and in the event one or more of such provisions are held unconstitutional. as well as foreign currency deposits authorized under PD No. 1246. 1035. 1034. and (5) To pay interest in foreign currency on such deposits. which are inconsistent with any provisions of this Act are hereby repealed. Withdrawability and transferability of deposits. or parts thereof. 1035.

discounts. any purchase.000 on any credit transaction. Section 1. or discount. Nov. the creditor shall be liable for reasonable attorney's fees and court costs as determined by the court. any contract to sell. and includes the Philippine Government or any agency thereof." Section 2. It is hereby declared to be the policy of the State to protect its citizens from a lack of awareness of the true cost of credit to the user by assuring a full disclosure of such cost with a view of preventing the uninformed use of credit to the detriment of the national economy. Any creditor shall furnish to each person to whom credit is extended. such new enactment or regulation shall not apply to foreign currency deposits already made or existing at the time of issuance of such new enactment or regulation. mortgage. . The Board shall prescribe such rules and regulations as may be necessary or proper in carrying out the provisions of this Act. or other acquisition of. the following information: (1) the cash price or delivered price of the property or service to be acquired. or any credit upon the security of. (As added by PD No. credit. individually itemized. any contract or arrangement for the hire. 1974 REPUBLIC ACT No. (5) the total amount to be financed. property or money. or for the delivery of. or any other government. any option. Section 5. or installment basis. (6) the finance charge expressed in terms of pesos and centavos. or other claim against. to be credited as down payment and/or trade-in. the term (1) "Board" means the Monetary Board of the Central Bank of the Philippines. (4) "Creditor" means any person engaged in the business of extending credit (including any person who as a regular business practice make loans or sells or rents property or services on a time. In any action under this subsection in which any person is entitled to a recovery. in any court of competent jurisdiction. This Act shall be known as the "Truth in Lending Act. – In the event a new enactment or regulation is issued decreasing the rights hereunder granted. Section 4. prior to the consummation of the transaction. any obligation of claim arising out of any of the foregoing. pledge. deed of trust. or any rule or regulation issued thereunder. (a) Any creditor who in connection with any credit transaction fails to disclose to any person any information in violation of this Act or any regulation issued thereunder shall be liable to such person in the amount of P100 or in an amount equal to twice the finance charged required by such creditor in connection with such transaction. either as principal or as agent) who requires as an incident to the extension of credit. demand. any rental-purchase contract. or to facilitate the enforcement of this Act. Declaration of Policy. partnership. and any transaction or series of transactions having a similar purpose or effect. or the legal successor or representative of the foregoing. or leasing of property. but such new enactment or regulation shall apply only to foreign currency deposits made after its issuance. except that such liability shall not exceed P2. 1246. lien. (2) the amounts. 21. 1977. a clear statement in writing setting forth. the payment of a finance charge. – This Act shall take effect upon its approval. or any agency of the foregoing. or other organized group of persons. Section 3. As used in this Act. Section 6. association. Approved. prom. which are paid or to be paid by such person in connection with the transaction but which are not incident to the extension of credit. either for present or future delivery. any conditional sales contract. bailment. or of any of its political subdivisions. advance. Any rule or regulation prescribed hereunder may contain such classifications and differentiations as in the judgment of the Board are necessary or proper to effectuate the purposes of this Act or to prevent circumvention or evasion. service charges. (5) "Person" means any individual. to the extent applicable and in accordance with rules and regulations prescribed by the Board. and such other charges incident to the extension of credit as the Board may be regulation prescribe. Effectivity. Action to recover such penalty may be brought by such person within one year from the date of the occurrence of the violation. or sale or contract of sale of property or services.) Section 13. (2) "Credit" means any loan. corporation. whichever is the greater. (3) "Finance charge" includes interest. under which part or all of the price is payable subsequent to the making of such sale or contract. April 4. 3765 AN ACT TO REQUIRE THE DISCLOSURE OF FINANCE CHARGES IN CONNECTION WITH EXTENSIONS OF CREDIT. Amendatory enactments and regulations. (4) the charges. (3) the difference between the amounts set forth under clauses (1) and (2). if any. fees.Section 12-A. and (7) the percentage that the finance bears to the total amount to be financed expressed as a simple annual rate on the outstanding unpaid balance of the obligation.

Section 7.000 or imprisonment for not less than 6 months. 1963 . (d) No punishment or penalty provided by this Act shall apply to the Philippine Government or any agency or any political subdivision thereof. nothing contained in this Act or any regulation contained in this Act or any regulation thereunder shall affect the validity or enforceability of any contract or transactions. (c) Any person who willfully violates any provision of this Act or any regulation issued thereunder shall be fined by not less than P1. (e) A final judgment hereafter rendered in any criminal proceeding under this Act to the effect that a defendant has willfully violated this Act shall be prima facie evidence against such defendant in an action or proceeding brought by any other party against such defendant under this Act as to all matters respecting which said judgment would be an estoppel as between the parties thereto. Approved: June 22.(b) Except as specified in subsection (a) of this section. This Act shall become effective upon approval. nor more than one year or both.00 or more than P5.

(e) "Person" refers to any natural or juridical person. 4." Section 2.000. and (iv) other entities administering or otherwise dealing in currency. Short Title. bonds. quasi-banks. (iii) foreign exchange corporations. 6425. the State shall extend cooperation in transnational investigations and prosecutions of persons involved in money laundering activities whenever committed. . and (3) (i) securities dealers. (ii) mutual funds. the following terms are hereby defined as follows: (a) "Covered Institution" refers to: (1) banks. valuable objects.Congress of the Philippines Twelfth Congress REPUBLIC ACT NO. otherwise known as the Revised Penal Code. (d) "Offender" refers to any person who commits a money laundering offense. 5. It likewise refers to a single. otherwise known as the Dangerous Drugs Act of 1972. (2) Sections 3. as amended. non-banks. as amended. 3815. origin or economic justification. and all other institutions and their subsidiaries and affiliates supervised or regulated by the Bangko Sentral ng Pilipinas (BSP). (g) "Supervising Authority" refers to the appropriate supervisory or regulatory agency. remittance. Section 3.000. 7. or consultant. commodities or financial derivatives based thereon. 2001 AN ACT DEFINING THE CRIME OF MONEY LAUNDERING. trust certificates. and transfer companies and other similar entities.00) especially cash deposits and investments having no credible purpose or origin. custodial receipts or deposit substitute instruments. or combination of transactions involving a total amount in excess of Four million Philippine pesos (Php4. at the time of the transaction was a properly identified client and the amount is commensurate with the business or financial capacity of the client. 8 and 9 of Article Two of Republic Act No. brokers. (c) "Monetary Instrument" refers to: (1) coins or currency of legal tender of the Philippines. money changers. purpose. Consistent with its foreign policy. (h) "Transaction" refers to any act establishing any right or obligation or giving rise to any contractual or legal relationship between the parties thereto. series. commercial papers. money payment. advisor. close and investment companies. PROVIDING PENALTIES THEREFOR AND FOR OTHER PURPOSES Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled: Section 1. checks and notes. trust entities. It also includes any movement of funds by any means with a covered institution. (3) securities or negotiable instruments. (f) "Proceeds" refers to an amount derived or realized from an unlawful activity. (2) Insurance companies and all other institutions supervised or regulated by the Insurance Commission. – It is hereby declared the policy of the State to protect and preserve the integrity and confidentiality of bank accounts and to ensure that the Philippines shall not be used as a money laundering site for the proceeds of any unlawful activity. salesmen. department or office supervising or regulating the covered institutions enumerated in Section 3(a). (l) "Unlawful activity" refers to any act or omission or series or combination thereof involving or having relation to the following: (1) Kidnapping for ransom under Article 267 of Act No. investment houses and other similar entities managing securities or rendering services as investment agent. trading orders. or those with an underlying legal or trade obligation. (b) "Covered transaction" is a single. (2) drafts. cash substitutes and other similar monetary instruments or property supervised or regulated by Securities and Exchange Commission.00) or an equivalent amount in foreign currency based on the prevailing exchange rate within five (5) consecutive banking days except those between a covered institution and a person who. assignment or delivery. For purposes of this Act. pre-need companies and other similar entities. – This Act shall be known as the "Anti-Money Laundering Act of 2001. and (4) other similar instruments where title thereto passes to another by endorsement. transaction tickets and confirmations of sale or investments and money marked instruments.000. deposit certificates. common trust funds.000. Definitions. series or combination or pattern of unusually large and complex transactions in excess of Four million Philippine pesos (Php4. underlying trade obligation or contract. Declaration of Policy. 9160 September 29. or of any other country.

H and I of Republic Act No. Section 6. as amended. as amended. Creation of Anti-Money Laundering Council (AMLC). 6235. – Money laundering is a crime whereby the proceeds of an unlawful activity are transacted. . the Commissioner of the Insurance Commission and the Chairman of the Securities and Exchange Commission as members. in any manner or by any means. It is committed by the following: (a) Any person knowing that any monetary instrument or property represents. (8) Qualified theft under. transacts or attempts to transact said monetary instrument or property. involving. Article 310 of the Revised Penal Code. 299. thereby making them appear to have originated from legitimate sources. as amended. as defined under the Revised Penal Code. 296. 7080. The AMLC shall act unanimously in the discharge of its functions as defined hereunder: (1) to require and receive covered transaction reports from covered institutions. as amended. whenever located. fails to do so. or relates to the proceeds of any unlawful activity. 301 and 302 of the Revised Penal Code. (4) to cause the filing of complaints with the Department of Justice or the Ombudsman for the prosecution of money laundering offenses. C. destructive arson and murder. or believed by the Council. (5) Robbery and extortion under Articles 294. (4) Plunder under Republic Act No. directly or indirectly. Money Laundering Offense. (6) to freeze any monetary instrument or property alleged to be proceed of any unlawful activity. (3) to institute civil forfeiture proceedings and all other remedial proceedings through the Office of the Solicitor General. representing. (12) Hijacking and other violations under Republic Act No. the proceeds of an unlawful activity. involves. or related to. as amended. – The regional trial courts shall have jurisdiction to try all cases on money laundering. 532. 1602. 3019. as amended and Presidential Decree No. (9) Swindling under Article 315 of the Revised Penal Code. (7) to implement such measures as may be necessary and justified under this Act to counteract money laundering. 455 and 1937. E. as amended. (5) to initiate investigations of covered transactions. Jurisdiction of Money Laundering Cases. (7) Piracy on the high seas under the Revised Penal Code. (6) Jueteng and Masiao punished as illegal gambling under Presidential Decree No. including those perpetrated by terrorists against non-combatant persons and similar targets. (14) Felonies or offenses of a similar nature that are punishable under the penal laws of other countries. (10) Smuggling under Republic Act Nos. money laundering activities and other violations of this Act. 300. Section 5. 295. on the basis of substantial evidence to be in whole or in part. 8799. otherwise known as the Securities Regulation Code of 2000. otherwise known as the Electronic Commerce Act of 2000. (c) Any person knowing that any monetary instrument or property is required under this Act to be disclosed and filed with the AntiMoney Laundering Council (AMLC). (b) Any proceeding relating to the unlawful activity shall be given precedence over the prosecution of any offense or violation under this Act without prejudice to the freezing and other remedies provided. – The Anti-Money Laundering Council is hereby created and shall be composed of the Governor of the Bangko Sentral ng Pilipinas as chairman. (2) to issue orders addressed to the appropriate Supervising Authority or the covered institution to determine the true identity of the owner of any monetary instrument or property subject of a covered transaction report or request for assistance from a foreign State. Prosecution of Money Laundering. Section 4. – (a) Any person may be charged with and convicted of both the offense of money laundering and the unlawful activity as herein defined. Those committed by public officers and private persons who are in conspiracy with such public officers shall be under the jurisdiction of the Sandiganbayan. otherwise known as the Anti-Graft and Corrupt Practices Act. G. (b) Any person knowing that any monetary instrument or property involves the proceeds of any unlawful activity. (13) Fraudulent practices and other violations under Republic Act No. 8792.(3) Section 3 paragraphs B. (11) Violations under Republic Act No. Section 7. performs or fails to perform any act as a result of which he facilitates the offense of money laundering referred to in paragraph (a) above.

Republic Act No. or any other information in relation thereto. 6426. in undertaking any and all anti-money laundering operations. Republic Act No. as well as the authority and identification of all persons purporting to act on their behalf. in any manner or by any means. – When there is a covered transaction report made. or other similar devices. and all other similar accounts shall be absolutely prohibited. and the court has. the methods and techniques used in money laundering. In case of violation thereof. They shall maintain a system of verifying the true identity of their clients and. office. The AMLC has seventy-two (72) hours to dispose of the depositor's explanation. Authority to inquire into Bank Deposits. shall be preserved and safety stored for at least five (5) years from the dates when they were closed. bureau. Section 10. for a declaration that the same legitimately belongs to him and for . unless the Supervising Authority concerned prescribes a longer period not exceeding ten (10) working days. the concerned officer. entity. anonymous accounts. the concerned officer. Neither may such reporting be published or aired in any manner or form by the mass media. the AMLC may inquire into or examine any particular deposit or investment with any banking institution or non-bank financial institution upon order of any competent court in cases of violation of this Act when it has been established that there is probable cause that the deposits or investments involved are in any way related to a money laundering offense: Provided. agents. employees. the contents thereof. any request from foreign states for assistance in their own anti-money laundering operations provided in this Act. agent. the viable means of preventing money laundering and the effective ways of prosecuting and punishing offenders. consultants or associates shall not be deemed to have violated Republic Act No. Prevention of Money Laundering. provided that the fifteen (15)-day period shall be tolled pending the court's decision to extend the period. The provisions of existing laws to the contrary notwithstanding. whether or not such reporting results in any criminal prosecution under this Act or any other Philippine law. (b) Claim on Forfeited Assets. electronic mail. the Revised Rules of Court on civil forfeiture shall apply. consultant or associate of the covered institution. and (10) to enlist the assistance of any branch. However. – Where the court has issued an order of forfeiture of the monetary instrument or property in a criminal prosecution for any money laundering offense defined under Section 4 of this Act. Creation of a Secretariat. – (a) Customer Identification. as amended. in a petition filed for the purpose ordered seizure of any monetary instrument or property. Authority to Freeze. In case of violation thereof. or media shall be held criminally liable. at least thirty-five (35) years of age and of good moral character. directly or indirectly. advisors. to any person the fact that a covered transaction report was made. directly or indirectly. on the account for a period not exceeding fifteen (15) days. by verified petition. With respect to closed accounts. Notice to the depositor that his account has been frozen shall be issued simultaneously with the issuance of the freeze order. the records on customer identification. All members of the Secretariat must have served for at least five (5) years either in the Insurance Commission. advisors. unquestionable integrity and known probity. Republic Act No. the freeze order shall automatically be dissolved. in any manner or by any means. agents. (c) Reporting of Covered Transactions. shall lie against any person for having made a covered transaction report in the regular performance of his duties and in good faith. employee. representative. (b) Record Keeping – All records of all transactions of covered institutions shall be maintained and safely stored for five (5) years from the date of transactions. When reporting covered transactions to the AMLC. representative. employees. The fifteen (15)-day freeze order of the AMLC may be extended upon order of the court. If it falls to act within seventy-two (72) hours from receipt of the depositor's explanation. consultants or associates are prohibited from communicating. accounts under fictitious names. as amended. Section 9. agency or instrumentality of the government. When reporting covered transactions to the AMLC. account files and business correspondence. as amended. detection and investigation of money laundering offenses and prosecution of offenders. That this provision shall not apply to deposits and investments made prior to the effectivity of this Act. the AMLC may issue a freeze order. shall be criminally liable. the media. The BSP may conduct annual testing solely limited to the determination of the existence and true identity of the owners of such accounts. Forfeiture Provisions. Customer Identification Requirements and Record Keeping. 8791. 1405. representatives. covered institutions and their officers. which shall be effective immediately. – Covered institutions shall report to the AMLC all covered transactions within five (5) working days from occurrence thereof. the offender or any other person claiming an interest therein may apply. the Securities and Exchange Commission or the Bangko Sentral ng Pilipinas (BSP) and shall hold full-time permanent positions within the BSP. (9) to develop educational programs on the pernicious effects of money laundering. Section 12. – (a) Civil Forfeiture. The depositor shall have seventy-two (72) hours upon receipt of the notice to explain why the freeze order should be lifted. – Upon determination that probable cause exists that any deposit or similar account is in any way related to an unlawful activity. related to said report. require a system of verifying their legal existence and organizational structure. Peso and foreign currency non-checking numbered accounts shall be allowed. advisor.Covered institutions shall establish and record the true identity of its clients based on official documents. or any other information in relation thereto. – Notwithstanding the provisions of Republic Act No. in case of corporate clients.(8) to receive and take action in respect of. the fact that a covered transaction report was made. agent. . 6426. 8791 and other similar laws. as amended. no administrative. including government-owned and –controlled corporations. Republic Act No. the contents thereof. Section 11. in whole or in part. directly or indirectly. 1405. and other laws. consultant or associate of the covered institution. advisor. which may include the use of its personnel. facilities and resources for the more resolute prevention. – The AMLC is hereby authorized to establish a secretariat to be headed by an Executive Director who shall be appointed by the Council for a term of five (5) years. representatives. employee. covered institutions and their officers. criminal or civil proceedings. to any person. Section 8. but are prohibited from communicating. He must be a member of the Philippine Bar. No court shall issue a temporary restraining order or writ of injunction against any freeze order issued by the AMLC except the Court of Appeals or the Supreme Court. department.

or officer in or of. – The AMLC may refuse to comply with any request for assistance where the action sought by the request contravenes any provision of the Constitution or the execution of a request is likely to prejudice the national interest of the Philippines unless there is a treaty between the Philippines and the requesting State relating to the provision of assistance in relation to money laundering offenses. and a certification of an affidavit of a competent officer of the requesting State stating that the conviction and the order of forfeiture are final and then no further appeal lies in respect or either. document. attributable to the offender. the AMLC may execute the request or refuse to execute the same and inform the foreign State of any valid reason for not executing the request or for delaying the execution thereof. restraining and seizing assets alleged to be proceeds of any unlawful activity. converted or otherwise transferred to prevent the same from being found or to avoid forfeiture thereof. That the court shall not issue such an order unless the application is accompanied by an authenticated copy of the order of a court in the requesting State ordering the forfeiture of said monetary instrument or properly of a person who has been convicted of a money laundering offense in the requesting State. instead of enforcing the order of forfeiture of the monetary instrument or property or part thereof or interest therein. document. The penalty of imprisonment from four (4) to seven (7) years and a fine of not less than One million five hundred thousand Philippine pesos (Php 1.00) but not more than twice the value of the monetary instrument or property involved in the offense. This provision shall apply in both civil and criminal forfeiture. the requesting State. and (8) contain such other information as may assist in the execution of the request. for this purpose.500. restraining and seizing assets alleged to be proceeds of any unlawful activity under the procedures laid down in this Act. diminished in value or otherwise rendered worthless by any act or omission. consul general. (2) giving information needed by the foreign State within the procedures laid down in this Act. the government of the requesting State. (5) ask from the covered institution concerned any information. Mutual Assistance among States. in default of which the said order shall become final and executory. – The AMLC may make a request to any foreign State for assistance in (1) tracking down. . or it is located outside the Philippines or has been placed or brought outside the jurisdiction of the court. consular agent or any officer in the foreign service of the Philippines stationed in the foreign State in which the record is kept. or of the person administering the government or a department of the requesting territory. be at all times recognized. the court may. and said order cannot be enforced because any particular monetary instrument or property cannot. destroyed. (6) specify the manner in which and to whom said information. shall be imposed upon a person convicted under Section 4(a) of this Act. (7) give all the particulars necessary for the issuance by the court in the requested State of the writs. or it has been commingled with other monetary instruments or property belonging to either the offender himself or a third person or entity. shall be imposed upon a person convicted under Section 4(b) of this Act. or it has been substantially altered. The penalty of imprisonment ranging from seven (7) to fourteen (14) years and a fine of not less than Three million Philippine pesos (Php 3. This provision shall apply in both civil and criminal forfeiture. a document is authenticated if the same is signed or certified by a judge. That the documents accompanying the request in support of the application have been duly authenticated in accordance with the applicable law or regulation of the foreign State. material or object which may be of assistance to the investigation or prosecution. (3) to the extent allowed by the law of the Foreign State. and authenticated by the oath or affirmation of a witness or sealed with an official or public seal of a minister. (2) obtaining information that it needs relating to any covered transaction. thereby rendering the same difficult to identify or be segregated for purposes of forfeiture. The certificate of authentication may also be made by a secretary of the embassy or legation. Section 14. secretary of State. and authenticated by the seal of his office. (g) Extradition. (c) Obtaining Assistance from Foreign States. and (4) applying for an order of forfeiture of any monetary instrument or property in the proper court in the foreign State: Provided. – Where the court has issued an order of forfeiture of the monetary instrument or property subject of a money laundering offense defined under Section 4. accordingly order the convicted offender to pay an amount equal to the value of said monetary instrument or property. freezing. freezing.000. (2) state the grounds on which any person is being investigated or prosecuted for money laundering or the details of his conviction. is to be produced. – Where a foreign State makes a request for assistance in the investigation or prosecution of a money laundering offense. any or all of the persons named in said request. protectorate or colony. magistrate or equivalent officer in or of. removed. The principles of mutuality and reciprocity shall.000. Penal Provisions. related thereto. directly or indirectly. (f) Authentication of Documents. – (a) Request for Assistance from a Foreign State. – For purposes of this Section. (4) give particulars sufficient to identity any covered institution believed to have any information. (c) Payment in Lieu of Forfeiture.segregation or exclusion of the monetary instrument or property corresponding thereto. That the request is accompanied by an authenticated copy of the order of the regional trial court ordering the forfeiture of said monetary instrument or property of a convicted offender and an affidavit of the clerk of court stating that the conviction and the order of forfeiture are final and that no further appeal lies in respect of either. (b) Power of the AMLC to Act on a Request for Assistance from a Foreign State. – (a) Penalties for the Crime of Money Laundering. and/or search any or all such persons named therein and/or remove any document.000. material or object which may be of assistance to the investigation or prosecution. (d) Limitations on Request for Mutual Assistance.000. material or object named in said request: Provided. within fifteen (15) days from the date of the order or forfeiture. Section 13.00). with due diligence. consul. – The Philippines shall negotiate for the inclusion of money laundering offenses as herein defined among extraditable offenses in all future treaties. and (3) applying for an order of forfeiture of any monetary instrument or property in the court: Provided. vice consul. document. orders or processes needed by the requesting State. money laundering offense or any other matter directly or indirectly. – The AMLC may execute a request for assistance from a foreign State by: (1) tracking down. or it has been concealed. applying with the proper court therein for an order to enter any premises belonging to or in the possession or control of. material or object detained pursuant to said request. The verified petition shall be filed with the court which rendered the judgment of conviction and order of forfeiture.00) but not more than Three million Philippine pesos (Php 3. (e) Requirements for Requests for Mutual Assistance from Foreign State.000. be located. – A request for mutual assistance from a foreign State must (1) confirm that an investigation or prosecution is being conducted in respect of a money launderer named therein or that he has been convicted of any money laundering offense. (3) gives sufficient particulars as to the identity of said person.

in addition to the penalties herein prescribed. as are inconsistent with this Act. in addition to the penalties prescribed herein. (b) Penalties for Failure to Keep Records. as amended. but not limited to. he shall. as the case may be. the court may suspend or revoke its license. If the offender is an alien.00) but not more than Five hundred thousand Philippine pesos (Php 500. – This Act shall take effect fifteen (15) days after its complete publication in the Official Gazette or in at least two (2) national newspapers of general circulation. Prohibitions Against Political Harassment.000. rules and regulations or parts thereof. the other provisions or sections of this Act. decrees. – All laws. Section 22. as amended and other similar laws. System of Incentives and Rewards. Appropriations for the succeeding years shall be included in the General Appropriations Act. shall be imposed on a person convicted under Section 9(b) of this Act. and to review or revise the implementing rules issued by the Anti-Money Laundering Council within thirty (30) days from the promulgation of the said rules. The Oversight Committee shall have the power to promulgate its own rules. – There is hereby created a Congressional Oversight Committee composed of seven (7) members from the Senate and seven (7) members from the House of Representatives. association. If the offender is a corporation. attached or forfeited to the prejudice of a candidate for an electoral office during an election period.000. shall be imposed on a person convicted for a violation under Section 9(c). Effectivity. shall not be affected thereby. Covered institutions shall formulate their respective money laundering prevention programs in accordance with this Act including.00) but not more than One million Philippine pesos (Php 1.00). No case for money laundering may be filed against and no assets shall be frozen. 8791. The provisions of this Act shall not apply to deposits and investments made prior to its effectivity.000.00) to be drawn from the national government. suffer perpetual or temporary absolute disqualification from office. If the offender is a juridical person.000. or both. Any public official or employee who is called upon to testify and refuses to do the same or purposely fails to testify shall suffer the same penalties prescribed herein.000. at the discretion of the court: Provided. Restitution. the Insurance Commission and the Securities and Exchange Commission shall promulgate the rules and regulations to implement effectivity the provisions of this Act. – If any provision or section of this Act or the application thereof to any person or circumstance is held to be invalid. Republic Act No. The penalty of imprisonment from six (6) months to one (1) year or a fine of not less than One hundred thousand Philippine pesos (Php 100. Repealing Clause. amended or modified accordingly.000.00) but not more than Five hundred thousand Philippine pesos (Php 500.00). report or files a completely unwarranted or false information relative to money laundering transaction against any person shall be subject to a penalty of six (6) months to four (4) years imprisonment and a fine of not less than One hundred thousand Philippine pesos (Php 100. Appropriations Clause. executive orders. and the training of responsible officers and personnel of covered institutions. If the offender is a public official or employee. . who participated in the commission of the crime or who shall have knowingly permitted or failed to prevent its commission. (c) Malicious Reporting. or in bad faith. or both. Section 23. information dissemination on money laundering activities and its prevention. the Bangko Sentral ng Pilipinas. 6426.000. are hereby repealed. prosecution and conviction of persons involved in the offense penalized in Section 4 of this Act. Implementing Rules and Regulations. Separability Clause.000. Section 15. with malice. – The AMLC shall be provided with an initial appropriation of Twenty-five million Philippine pesos (Php 25. – A system of special incentives and rewards is hereby established to be given to the appropriate government agency and its personnel that led and initiated an investigation. Section 21. Section 19. be deported without further proceedings after serving the penalties herein prescribed. Section 20. The punishment of imprisonment ranging from three (3) to eight (8) years and a fine of not less than Five hundred thousand Philippine pesos (Php 500.000. Section 17. Congressional Oversight Committee.000. the penalty shall be imposed upon the responsible officers. – Restitution for any aggrieved party shall be governed by the provisions of the New Civil Code.00) but not more than Five hundred thousand Philippine pesos (Php 500. to oversee the implementation of this Act. Section 16. as the case may be. Any person who. – Within thirty (30) days from the effectivity of this Act. Section 18.00). including the relevant provisions of Republic Act No. The members from the Senate shall be appointed by the Senate President based on the proportional representation of the parties or coalitions therein with at least two (2) Senators representing the minority. shall be imposed on a person convicted under Section 4(c) of this Act. as amended.The penalty of imprisonment from six (6) months to four (4) years or a fine of not less than One hundred thousand Philippine pesos (Php 100. Republic Act No. 1405.00). The members from the House of Representatives shall be appointed by the Speaker also based on proportional representation of the parties or coalitions therein with at least two (2) members representing the minority. That the offender is not entitled to avail the benefits of the Probation Law. he shall. detection and reporting. partnership or any juridical person. and the application of such provision or section to other persons or circumstances. – This Act shall not be used for political prosecution or harassment or as an instrument to hamper competition in trade and commerce. (d) Breach of Confidentiality. Said rules and regulations shall be submitted to the Congressional Oversight Committee for approval.000.

trust entity or any other institution supervised or regulated by the BSP. for any insurance company authorized to do business in the Philippines.These Rules shall be known and cited as the "Rules and Regulations Implementing Republic Act No. holding company systems and all other persons and entities supervised and/or regulated by the Insurance Commission (IC). A contract of reinsurance is one by which an insurer procures a third person to insure him against loss or liability by reason of such original insurance. not being a duly authorized agent. Sec. (b) The Philippines shall not be used as a money laundering site for the proceeds of any unlawful activity. as amended. professional reinsurers. An insurance company includes those entities authorized to transact insurance business in the Philippines. Sec. 612. damage or liability arising from an unknown or contingent event. D. acts or aids in any manner in negotiating contracts of reinsurance or placing risks of effecting reinsurance. on behalf of an insured other than himself. A contract of insurance is an agreement whereby one undertakes for a consideration to indemnify another against loss. including a reinsurance business and doing or proposing to do any business in substance equivalent to any of the foregoing in a manner designed to evade the provisions of P.These Rules are promulgated to prescribe the procedures and guidelines for the implementation of the AMLA. trust entities. pawnshops. negotiating or procuring the making of any insurance contract or in placing risk or taking out insurance. doing any kind of business specifically recognized as constituting the doing of an insurance business within the meaning of Presidential Decree (P. . No. insurance brokers. insurance agents. 612. Definition of Terms. 9160) RULE 1 POLICY AND APPLICATION Section 1. association or corporation that transacts solely and exclusively reinsurance business in the Philippines. partnership. employee or officer of an insurer in which any reinsurance is effected. Title. and (c) Consistent with its foreign policy. A holding company system includes a holding company together with its controlled insurers and controlled persons. whether life or non-life and whether domestic. Sec. quasi-bank. 2. 4. Transacting insurance business includes making or proposing to make. An insurance agent includes any person who solicits or obtains insurance on behalf of any insurance company or transmits for a person other than himself an application for a policy or contract of insurance to or from such company or offers or assumes to act in the negotiation of such insurance. – It is the policy of the State that: (a) The integrity and confidentiality of bank accounts shall be protected and preserved. whether domestic. domestically incorporated or a branch of a foreign entity. . (a) "Covered institutions" refer to the following: (1) Banks. An insurance broker includes any person who acts or aids in any manner in soliciting. as insurer. non-stock savings and loan associations. Declaration of Policy. trust entity. 3. any contract of suretyship as a vocation and not as merely incidental to any other legitimate business or activity of the surety.RULES AND REGULATIONS IMPLEMENTING THE ANTI-MONEY LAUNDERING ACT OF 2001 (Republic Act No. as amended. (2) Insurance companies. the Philippines shall extend cooperation in transnational investigations and prosecutions of persons involved in money laundering activities wherever committed. domestically incorporated or branch of a foreign entity. 9160" (the Anti-Money Laundering Act of 2001 [AMLA]). An affiliate means an entity at least twenty percent (20%) but not exceeding fifty percent (50%) of the voting stock of which is owned by a bank. A holding company includes any person who directly or indirectly controls any authorized insurer. holding companies. Purpose. any insurance contract. A professional reinsurer includes any person. A reinsurance broker includes any person who. or any other institution supervised and/or regulated by the BSP. reinsurance brokers.) No. A subsidiary means an entity more than fifty percent (50%) of the outstanding voting stock of which is owned by a bank. D. or as surety. offshore banking units. quasi-banks. and all other institutions including their subsidiaries and affiliates supervised and/or regulated by the Bangko Sentral ng Pilipinas (BSP). quasi-bank. .

deposit certificates. A securities salesman includes a natural person. any redeemable security of which it is the issuer. life or non-life. columnists. salesmen. pre-need companies or issuers and other similar entities. A foreign exchange corporation includes any enterprise which engages or purports to engage. whether regularly or on an isolated basis. including their employees. brokers. benefit or advantage of the trustor or of others known as beneficiaries. in the underwriting of securities of another person or enterprise. an investment fund. including securities of the Government and its instrumentalities. A securities broker includes a person engaged in the business of buying and selling securities for the account of others. or of any other country. associated persons of brokers or dealers. (3) Securities or negotiable instruments. journalists. teachers. remit or transfer or transmit money on behalf of any person to another person. a pension fund or a company or person whose assets are managed by an asset manager. remittance and transfer company includes any person offering to pay. whether actual or prospective. cash substitutes and other similar monetary instruments or property supervised and/or regulated by the Securities and Exchange Commission (SEC). reporters. or an agent or a person whose functions are solely clerical or ministerial. investment agents and consultants. checks and notes. custodial receipts or deposit substitute instruments. they shall not be deemed to be investment agents or consultants or trade advisors within the contemplation of the AMLA and these Rules. and publishers of newspapers and business or financial publications of general and regular circulation. A securities dealer includes any person who buys and sells securities for his/her account in the ordinary course of business. exclusively for the collective investment and reinvestment of certain money representing participation in the plan received by it in its capacity as trustee. but does not include a salesman. A money changer includes any person in the business of buying or selling foreign currency notes.(3) (i) Securities dealers. and (5) Contracts or policies of insurance. trust certificates. (2) Drafts. However. in the sale and purchase of foreign currency notes and such other foreign-currency denominated non-bank deposit transactions as may be authorized under its articles of incorporation. as well as the beneficiary of said transactions. An investment agent or consultant or trading advisor includes any person who is engaged in the business of advising others as to the value of any security and the advisability of trading in any security or in the business of issuing reports or making analysis of capital markets. A money payment. valuable objects. A common trust fund includes a fund maintained by an entity authorized to perform trust functions under a written and formally established plan. and (iv) other entities administering or otherwise dealing in currency. whether regularly or on an isolated basis. (b) "Customer" refers to any person or entity that keeps an account. (iii) foreign exchange corporations. holding or management of such funds and/or properties for the use. or otherwise transacts business. A closed-end investment company includes an investment company other than open-end investment company. (4) Other similar instruments where title thereto passes to another by endorsement. A mutual fund or an open-end investment company includes an investment company which is offering for sale or has outstanding. bonds. money payment. with a covered institution and any person or entity on whose behalf an account is maintained or a transaction is conducted. A customer also includes the beneficiary of a trust. trading orders. transaction tickets and confirmations of sale or investments and money market instruments. close-end investment companies. investment houses. (ii) mutual funds or open-end investment companies. commercial papers. and contracts of suretyship. common trust funds. trust companies. or a grantor of a trust. money changers. lawyers. and other entities managing securities or rendering similar services. and transfer companies and other similar entities. assignment or delivery. commodities or financial derivatives based thereon. An associated person of a broker or dealer includes an employee thereof who directly exercises control of supervisory authority. A pre-need company or issuer includes any corporation supervised and/or regulated by the SEC and is authorized or licensed to sell or offer for sale pre-need plans. . editors. (c) "Monetary Instrument" refers to: (1) Coins or currency of legal tender of the Philippines. for the purpose of administration. issuer or broker to buy and sell securities. in case the issuance of reports or the rendering of the analysis of capital markets is solely incidental to the conduct of the business or profession of banks. remittance. accountants. An investment house includes an enterprise which engages or purports to engage. employed as such or as an agent. trading advisors. It includes any insurance policy holder. by a dealer.

It also includes any movement of funds by any means with a covered institution. Composition. real or personal. and (3) All moneys. However. or any other action authorized under the AMLA. Sec. department. the SEC or the IC. or any interest therein or any benefit. that have been completed prior to October 17. operations. Delegation of Authority. costs. the AMLA and these Rules shall apply to all movements of funds respecting such deposits. – The AMLC is authorized under Section 7 (10) of the AMLA to enlist the assistance of the BSP. Unanimous Decision. and shall be entitled to such benefits and subject to such rules and regulations as are applicable to officers of similar rank. However. accounts. 2. agency or instrumentality of the government. He shall be considered a regular employee of the BSP with the rank of Assistant Governor. tangible or intangible. Secretariat. (b) Other than the Executive Director whose qualifications are provided for in the preceding paragraph. outlays. office. Sec. as the case may be. It includes: (1) All material results. bureau. documents. investments and accounts as well as transactions or circumstances in relation thereto. (e) "Person" refers to any natural or juridical person. the AMLC may only choose from among those who have served. continuously or cumulatively. 2001. (f) "Proceeds" refers to an amount derived or realized from an unlawful activity. RULE 2 COMPOSITION AND PROCEEDINGS OF THE ANTI-MONEY LAUNDERING COUNCIL Section 1. absence or disability of any member to discharge his functions. 4. Where the SEC supervision applies only to the incorporation of the registered institution. – The members of the Anti-Money Laundering Council (AMLC) created under the AMLA shall be the Governor of the BSP. (h) "Supervising Authority" refers to the BSP. Detail and Secondment of Personnel. in undertaking any and all anti-money laundering operations. – The AMLC shall act unanimously in discharging its functions as defined in the AMLA and in these Rules. in the case of the incapacity. at least thirty-five (35) years of age and of good moral character. may be undertaken with respect to such deposits. All members of the Secretariat shall be considered regular employees of the BSP and shall be entitled to such benefits and subject to such rules and regulations as are applicable to BSP employees of similar rank. claim or right with respect thereto. (g) "Property" includes any thing or item of value. Collegiality. no covered transaction reports. the officer duly designated or authorized to discharge the functions of the Governor of the BSP. and all other accounts of customers with covered institutions that were opened or created prior to the effectivity of the AMLA on October 17. including government-owned and –controlled corporations. shall act in his stead in the AMLC. papers or things used in or having any relation to any unlawful activity. financial or economic means. 5. the Chairman of the SEC or the Insurance Commissioner. investments. profits. the SEC or the IC or any other branch. expenditures. investigation and prosecution of money laundering cases. effects and any amount realized from any unlawful activity. The Governor of the BSP shall be the Chairman. (b) The AMLA and these Rules shall not be used for political persecution or harassment or as an instrument to hamper competition in trade and commerce. 2001. privilege. . Sec. the Insurance Commissioner and the Chairman of the SEC. within the limits of the AMLA. 3. Sec. 6. – Action on routinary administrative matters may be delegated to any member of the AMLC or to any ranking official of the Secretariat under such guidelines as the AMLC may determine. devices. 5.(d) "Offender" refers to any person who commits a money laundering offense. Sec. but who need not be incumbents therein at the time of their appointment in the Secretariat. that are initiated or commenced on or after October 17. charges. Sec. payments. disbursements. – (a) The Secretariat shall be headed by an Executive Director who shall be appointed by the AMLC for a term of five (5) years. Hence. (a) The provisions of the AMLA and these Rules shall not apply to deposits. (2) All monetary. investments and accounts as well as transactions or circumstances in relation thereto. – The AMLC is a collegial body where the Chairman and the members of the AMLC are entitled to one (1) vote each. Limitations of the Rules. subject to existing laws and Civil Service Rules and Regulations. unquestionable integrity and known probity. for at least five (5) years in the BSP. and maintenance of any unlawful activity. 2001. He must be a member of the Philippine Bar. (i) "Transaction" refers to any act establishing any right or obligation or giving rise to any contractual or legal relationship between the parties thereto. refunds and other similar items for the financing. the SEC and the IC. in organizing the Secretariat. This includes the use of any member of their personnel who may be detailed or seconded to the AMLC. the SEC shall have the authority to require and ask assistance from the government agency having regulatory power and/or licensing authority over said covered institution for the implementation and enforcement of the AMLA and these Rules.

the Executive Director. Nos. including government-owned and –controlled corporations. Sec. Sec. the Congress or any government office or agency authorized by law. any information known to them by reason of their office. Sec. Budget. departments. including indemnification for legal costs and expenses reasonably incurred for the services of external counsel or in connection with any civil. All covered institutions supervised or regulated by the BSP.00) or an equivalent amount in foreign currency based on the prevailing exchange rate where the client is not properly identified and/or the amount is not commensurate with his business or financial capacity. Subject to the rule on confidentiality in the immediately preceding section. (6) A series. reports or files a completely unwarranted or false information relative to any money laundering transaction against any person shall be subject to the penalties provided for under Section 14 (c) of the AMLA.Sec. any person who. 8. Meetings. Authority to Initiate Investigations on the Basis of Voluntary Citizens’ Complaints and Government Agency Referrals.00) or an equivalent in foreign currency based on the prevailing exchange rate exchange rate where most. a total amount in excess of Four million Philippine pesos (Php4. (5) A single unusually large and complex transaction in excess of Four million Philippine pesos (Php4. indicating his current position and rank therein. Authority to Initiate Investigations on the Basis of Covered Transaction Reports. or in bad faith. underlying trade obligation or contract. including covered institutions not subject to any account secrecy laws and branches. 6713 and 7653. agencies and instrumentalities of the government. The VCC and GR forms shall indicate that the members of the AMLC.00). (3) A series or combination of transactions conducted within five (5) consecutive banking days aggregating to a total amount in excess of Four million Philippine pesos (Php4. purpose. or under such conditions as may be prescribed by the AMLC. 3019. criminal or administrative action. regardless of whether or not the client is properly identified and/or the amount is commensurate with his business or financial capacity. 7. (b) Obligation to Report Covered Transactions. (4) A series or combination of transactions conducted within five (5) consecutive banking days aggregating to a total amount in excess of Four million Philippine pesos (Php4. origin. Confidentiality of Proceedings. 2. origin. (2) A single transaction involving an amount in excess of Four million Philippine pesos (Php4. offices. may report to the AMLC any activity that engenders reasonable belief that any money laundering offense under Section 4 of the AMLA and defined under Rule 4 of these Rules is about to be. or economic justification. the Executive Director and all the members of the Secretariat are bound by the confidentiality rule provided in Section 7. (b) The person so reporting shall file a Voluntary Citizens’ Complaint (VCC) or Government Referral (GR) in the form prescribed by the AMLC.000.00) or an equivalent amount in foreign currency based on the prevailing exchange rate which has no underlying legal or trade obligation. teleconferencing and video-conferencing. the AMLC may initiate investigation thereof. do not have any underlying legal or trade obligation. The mandatory duty and obligation of covered institutions to make reports to the AMLC covers the following transactions: (1) A single transaction involving an amount in excess of Four million Philippine pesos (Php4. A. whether permanent. – The AMLC shall meet every first Monday of the month or as often as may be necessary at the call of the Chairman. (c) Any person who files a VCC or GR shall not incur any liability for all their acts in relation thereto that were done in good faith. The GR shall be signed by the authorized representative of the government agency concerned.000. or economic justification.000. is being or has been committed. (d) On the basis of the VCC or GR.000. 9. the person shall be punished in accordance with the pertinent provisions of R.000. the meetings of the AMLC may be conducted through modern technologies such as.000. (a) Any person. – The budget appropriated by the Congress shall be used to defray operational expenses of the AMLC. suit or proceedings to which members of the AMLC and the Executive Director and other members of the Secretariat may be made a party by reason of the performance of their functions or duties. Rule 2 of these Rules. The VCC shall be signed by the complainant.000. bureaus. with malice.00). purpose. RULE 3 POWERS OF THE AMLC Section 1.000.000.000. and based on the evidence gathered. on detail or on secondment. the AMLC may cause the filing of criminal complaints with the Department of Justice or the Ombudsman for the prosecution of money laundering offenses. the SEC and the IC shall report all covered transactions to the AMLC within five (5) working days from the date of the transaction or from the date when the covered institution concerned gained/acquired information/knowledge that the transaction is a covered transaction. but not limited to. – The members of the AMLC. (a) Covered Transactions. shall not reveal in any manner except under orders of the court. regardless of whether or not the client is properly identified and/or the amount is commensurate with his business or financial capacity.000. especially a cash deposit or investment having no credible purpose or origin. if not all the transactions. In case of violation of this provision. . without reference to any period. underlying trade obligation or contract. especially cash deposits and/or investments having no credible purpose or origin. and all the members of the Secretariat. However. combination or pattern of unusually large and complex transactions aggregating to.000.00) or an equivalent in foreign currency based on the prevailing exchange rate where the client is not properly identified and/or the amount is not commensurate with his business or financial capacity.

No. the AMLC may cause the filing of criminal complaints with the Department of Justice or the Ombudsman for the prosecution of money laundering offenses. who participated or failed to prevent its commission.000.00). Upon receipt of the notice of the freeze order. association. suffer perpetual or temporary absolute disqualification from office. banks and their officers. at the discretion of the court: Provided. the contents thereof. the court may suspend or revoke its license. is being or has been committed and that the account or any monetary instrument or property subject thereof sought to be frozen is in any way related to said unlawful activity and/or money laundering offense. Authority to Freeze Accounts.000. . consultants or associates are prohibited from communicating. representatives. partnership or any juridical person. 3. in addition to the penalties herein prescribed. agents.00) but not more than Five hundred thousand Philippine pesos (Php500. with malice. Any person who. 8791 and other similar laws. Neither may such reporting be published or aired in any manner or form by the mass media. 6426. whether or not such reporting results in any criminal prosecution under the AMLA or any other Philippine law. Failure of the owner or holder of the account to file such verified explanation shall be deemed waiver of his right to question the freeze order. (i) File of Covered Transactions. the compliance officer or his equivalent.000. That the offender is not entitled to avail of the benefits under the Probation Law. The Covered Transaction Report (CTR) shall be in the form prescribed by the appropriate Supervising Authority and approved by the AMLC. prudent or cautious man to believe that an unlawful activity and/or a money laundering offense is about to be. 1405. The AMLC may freeze any account or any monetary instrument or property subject thereof prior to the institution or in the course of. or other similar devices. Violation of this provision shall constitute the offense of breach of confidentiality punished under Section 14 (d) of the AMLA with imprisonment from three (3) to eight (8) years and a fine of not less than Five hundred thousand Philippine pesos (Php500. If the offender is a corporation. A. directly or indirectly. employees. be deported without further proceedings after serving the penalties herein prescribed. the covered institution concerned shall immediately stop. in addition to the penalties prescribed herein. and a senior official of the bank with a rank not lower than senior vice-president. the criminal proceedings involving the unlawful activity and/or money laundering offense to which said account. or the media. On the basis of the CTR. That if money laundering cases based thereon have been filed in court. No. When reporting covered transactions to the AMLC. (d) Exemption from Bank Secrecy Laws. the penalty shall be imposed upon the responsible officers. or any other information in relation thereto. or in bad faith. If the offender is a public official or employee. It shall be signed by the employee(s) who dealt directly with the customer in the transaction and/or who made the initial internal report within the covered institution. investment or similar account. as the case may be. advisors. he shall. Sec. simultaneously with the issuance thereof. When reporting covered transactions to the AMLC. If the offender is an alien.000. the covered institution shall not lift the freeze order without securing official confirmation from the AMLC. consultants or associates shall not be deemed to have violated R. The file of covered transactions shall be kept for at least five (5) years: Provided. The CTR shall be filed with the AMLC in a central location. freeze. probable cause includes such facts and circumstances which would lead a reasonably discreet. If the AMLC fails to act within said period. – (a) The AMLC is authorized under Sections 6 (6) and 10 of the AMLA to freeze any account or any monetary instrument or property subject thereof upon determination that probable cause exists that the same is in any way related to any unlawful activity and/or money laundering offense. agents. For purposes of Section 10 of the AMLA and Section 3. (g) Malicious Reporting. employees.(c) Covered Transaction Report Form. R. A. No administrative. and based on the evidence gathered.00). If the offender is a juridical person. – Covered institutions shall maintain a complete file on all covered transactions that have been reported to the AMLC.000. in any manner or by any means. (e) The AMLC shall have seventy-two (72) hours from receipt of the written explanation of the owner or holder of the frozen account to resolve the same. block. reports or files a completely unwarranted or false information relative to any money laundering transaction against any person. he shall. suspend or otherwise place under its absolute control the account and the monetary instrument or property subject thereof.00) but not more than One million Philippine pesos (Php1. as amended. (b) The freeze order on such account shall be effective immediately for a period not exceeding fifteen (15) days. (e) Safe Harbor Provision. said period shall be suspended and the freeze order shall remain effective. monetary instrument or property is any way related. R. as indicated in the instructions on the CTR form. the AMLC may initiate investigation thereof. shall be subject to a penalty of imprisonment from six (6) months to four (4) years and a fine of not less than One hundred thousand Philippine pesos (Php100. the AMLC may apply in court for an extension of said period. entity. the freeze order shall automatically be dissolved. to any person. the fact that a covered transaction report was made. (h) Breach of Confidentiality. Upon the timely filing of such application and pending the decision of the court to extend the period. (f) Before the fifteen (15)-day period expires. (f) Filing of Criminal Complaints. the file must be retained beyond the five(5)-year period until it is confirmed that the case has been finally resolved or terminated by the court. covered institutions and their officers. representatives. as amended. to be determined by the AMLC. A. as the case may be. No. (d) The owner or holder of the account so notified shall have a non-extendible period of seventy-two (72) hours upon receipt of the notice to file a verified explanation with the AMLC why the freeze order should be lifted. criminal or civil proceedings shall lie against any person for having made a covered transaction report in the regular performance of his duties and in good faith. Covered institutions shall undertake the necessary adequate security measures to ensure the confidentiality of such file. Rule 3 of these Rules. advisors. However. (c) The AMLC must serve notice of the freeze order upon the covered institution concerned and the owner or holder of the deposit. electronic mail.

The AMLC may make appropriate issuances for this purpose. Authority to Establish System of Incentives and Rewards. 18 and 19 of the AMLA to promulgate as well as clarify and/or amend. is being or has been committed and that the bank deposit or investment sought to be inquired into or examined is in any way related to said unlawful activity and/or money laundering offense. the Department of Justice. Authority to Assist the United Nations and other International Organizations and Foreign States. under Section 7 (9) of the AMLA to enter into memoranda of agreement with the intelligence units of the Armed Forces of the Philippines. (h) No court shall issue a temporary restraining order or writ of injunction against any freeze order issued by the AMLC or any court order extending period of effectivity of the freeze order except the Court of Appeals or the Supreme Court. A. Sec. For purposes of the AMLA and these Rules. No. – The AMLC is authorized under Sections 7 (7). prosecution. is being or has been committed. – The AMLC is authorized under Section 7 (9) of the AMLA to develop educational programs on the pernicious effects of money laundering. facilitate the resolute prevention. For purposes of Section 11 of the AMLA and Section 4. However. or related to. the Philippine National Police. prior to the institution or in the course of. Authority to Establish Information Sharing System. For this purpose. as may be necessary. RULE 4 MONEY LAUNDERING OFFENSES Section 1. and powers granted. Authority to Inquire into Accounts. and conviction of persons involved in money laundering offenses under Section 4 of the AMLA. in any manner or by any means. as well as their attached agencies. prudent or cautious man to believe that an unlawful activity and/or a money laundering offense is about to be. the AMLC may inquire into or examine any particular deposit or investment with any banking institution or non-bank financial institution upon order of any competent court when the AMLC has established that there is probable cause that the deposits or investments involved are in any way related to any unlawful activity and/or money laundering offense. Implied or Incidental Powers. the Department of Finance. 11. the UN Security Council. 5. – The AMLC is authorized under Section 15 of the AMLA to establish a system of special incentives and rewards to be given to the appropriate government agency and its personnel that led and initiated the investigation. 7. placement or the physical disposal of the criminal proceeds. in any way. 10. 8. and other domestic or transnational governmental or nongovernmental organizations or groups for sharing of all information that may.(g) In case the court denies the application for extension. Any monetary reward shall be made payable out of the funds appropriated by Congress. the proceeds of an unlawful activity. the AMLC may refuse to comply with any such request. to be. resolutions and other directives of the United Nations (UN). thereby making them appear to have originated from legitimate sources. Sec. on the basis of substantial evidence. convention. the methods and techniques used in money laundering. and other international organizations of which the Philippines is a member. 9. involving. implied or incidental to the functions assigned. Sec. probable cause includes such facts and circumstances which would lead a reasonably discreet. Necessary. Sec. and integration or . Authority to Institute Civil Forfeiture Proceedings. resolution or directive where the action sought therein contravenes the provision of the Constitution or the execution thereof is likely to prejudice the national interest of the Philippines. 9160. wherever located. Rule 3 of these Rules. The AMLC shall conduct nationwide information campaigns to heighten awareness of the public of their civic duty as citizens to report any and all activities which engender reasonable belief that a money laundering offense under Section 4 of the AMLA is about to be. substantial evidence includes such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. – Subject to such limitations as provided for by law. Other Inherent. 4. directly or indirectly. the criminal proceedings involving the unlawful activity and/or money laundering offense to which said bank deposit or investment is any way related. The AMLC may file the application for authority to inquire into or examine any particular bank deposit or investment in court. the viable means of preventing money laundering and the effective ways of prosecuting and punishing offenders. (b) In case of any violation of the AMLA involving bank deposits and investments. in whole or in part. these Rules. Sec. representing. (i) No assets shall be frozen to the prejudice of a candidate for an electoral office during an election period. Sec. the freeze order shall remain effective only for the balance of the fifteen (15)-day period. or believed by the AMLC. – (a) The AMLC is authorized under Section 7 (2) of the AMLA to issue orders addressed to the appropriate Supervising Authority or any covered institution to determine and reveal the true identity of the owner of any monetary instrument or property subject of a covered transaction report. The AMLC is also authorized. investigation and prosecution of money laundering offenses and other violations of the AMLA. Sec. or a request for assistance from a foreign State. It is also authorized under Section 7 (7) of the AMLA to cooperate with the National Government and/or take appropriate action in respect of conventions. 6. Clarify and Amend the Rules and Regulations Implementing R. track and analyze money laundering transactions for the resolute prevention. detection and investigation of money laundering offenses. the AMLC shall install a computerized system that will be used in the creation and maintenance of an information database. – The AMLC shall perform such other functions and exercise such other powers as may be inherent. namely. the AMLC is authorized under Section 7 (7) of the AMLA to establish an information sharing system that will enable the AMLC to store. It is a process comprising of three (3) stages. – The AMLC is authorized under Section 7 (3) of the AMLA to institute civil forfeiture proceedings and all other remedial proceedings through the Office of the Solicitor General. Sec. – Money laundering is a crime whereby the proceeds of an unlawful activity are transacted. layering or the separation of the criminal proceeds from their source by creating layers of financial transactions to disguise the audit trail. Authority to Issue. Money Laundering Offenses and their Corresponding Penalties. to it under the AMLA for the purpose of carrying out the declared policy of the AMLA. Authority to Develop and Implement Educational Programs. necessary. – The AMLC is authorized under Sections 7 (8) and 13 (b) and (d) of the AMLA to receive and take action in respect of any request of foreign states for assistance in their own anti-money laundering operations.

concealed. However. this prohibition shall not constitute a bar to the prosecution of any money laundering case filed in court before the election period.000. Sec. the penalty is imprisonment from six (6) months to four (4) years or a fine of not less than One hundred thousand Philippine pesos (Php100. including the identity of the perpetrators and the details of the actual commission of the unlawful activity need be established by proof beyond reasonable doubt. layering or integration stage shall constitute the crime of money laundering. A. involves or relates to the proceeds of any unlawful activity.) No. (i) Section 3. 6235. paragraphs B. 3815. the proceeds of any unlawful activity. performs or fails to perform any act.00) but not more than Five hundred thousand Philippine pesos (Php500. E. (f) The AMLC may apply. 8 and 9 of Article Two of R. as amended.000. may be established by direct evidence or inferred from the attendant circumstances. and (n) Felonies or offenses of a similar nature that are punishable under the penal laws of other countries. in the course of the criminal proceedings.the provision of apparent legitimacy to the criminal proceeds. G. 299. No. No. or relates to. (c) When it is committed by a person who. 1602. . No. 455 and 1937.500. A.) No. 301 and 302 of the same Code. A. involves. (k) Plunder under R. (c) Qualified theft under Article 310 of the same Code.000. However. (d) All the elements of every money laundering offense under Section 4 of the AMLA must be proved by evidence beyond reasonable doubt. 8799. converted. 7080. 3019. (c) Knowledge of the offender that any monetary instrument or property represents. fails to do so. or both.These refer to any act or omission or series or combination thereof involving or having relation to the following: (a) Kidnapping for ransom under Article of Act No. no assets shall be attached to the prejudice of a candidate for an electoral office during an election period. (e) No case for money laundering may be filed to the prejudice of a candidate for an electoral office during an election period. no assets shall be forfeited to the prejudice of a candidate for an electoral office during an election period. as a result of which he facilitates the offense of money laundering referred to in paragraph (a) above. for provisional remedies to prevent the monetary instrument or property subject thereof from being removed. 296.000. 2.00) but not more than twice the value of the monetary instrument or property involved in the offense. However.000.D. No.000. (l) Violations under R. the Revised Penal Code. A. Prosecution of Money Laundering. . the Dangerous Drugs Act of 1972 as amended.00). 532. 6425. (h) Smuggling under R. (e) Piracy on the high seas under the same Code and Presidential Decree (P.000. 4. (m) Fraudulent practices and other violations under R. Sec. the penalty is imprisonment from seven (7) to fourteen (14) years and a fine of not less than Three million Philippine pesos (Php3. Any transaction involving such criminal proceeds or attempt to transact the same during the placement. No. A. (d) Swindling under Article 315 of the same Code. Unlawful Activities. Those committed by public officers and private persons who are in conspiracy with such public officers shall be under the jurisdiction of the Sandiganbayan. Jurisdiction of Money Laundering Cases. however. knowing that any monetary instrument or property is required under this Act to be disclosed and filed with the AMLC. (b) Any proceeding relating to the unlawful activity shall be given precedence over the prosecution of any offense or violation under the AMLA without prejudice to the issuance by the AMLC of a freeze order with respect to the deposit. transacts or attempts to transact said monetary instrument or property. as amended. No element of the unlawful activity. knowing that any monetary instrument or property represents. investment or similar account involved therein and resort to other remedies provided under the AMLA. – (a) Any person may be charged with and convicted of both the offense of money laundering and the unlawful activity as defined under Section 3 (i) of the AMLA.D. (b) When it is committed by a person who. (h) Restitution for any aggrieved party shall be governed by the provisions of the New Civil Code. H and I of R. the penalty is imprisonment from four (4) to seven (7) years and a fine of not less than One million five hundred thousand Philippine pesos (Php1.00). The elements of the offense of money laundering are separate and distinct from the elements of the felony or offense constituting the unlawful activity. A. (g) Where there is conviction for money laundering under Section 4 of the AMLA. including those perpetrated by terrorists against non-combatant persons and similar targets. the court shall issue a judgment of forfeiture in favor of the Government of the Philippines with respect to the monetary instrument or property found to be proceeds of one or more unlawful activities. 300. (g) Jueteng and Masiao punished as illegal gambling under P. A. – The Regional Trial Courts shall have the jurisdiction to try all cases on money laundering. involves. (j) Sections 3. Sec. (a) When it is committed by a person who. 295.00) but not more than Three million Philippine pesos (Php3. 7. 5. 3. C. the Securities Regulation Code of 2000. as amended. the Electronic Commerce ct of 2000. Nos. No. (b) Robbery and extortion under Articles 294. the Anti-Graft and Corrupt Practices Act. commingled with other property or otherwise to prevent its being found or taken by the applicant or otherwise placed or taken beyond the jurisdiction of the court. 8792. (f) Destructive arson and murder as defined under the same Code and hijacking and other violations under Republic Act (R. 4. including the element of knowledge that the monetary instrument or property represents. knowing that any monetary instrument or property involves the proceeds of any unlawful activity. or relates to the proceeds of an unlawful activity or that any monetary instrument or property is required under the AMLA to be disclosed and filed with the AMLC.

(3) Permanent address. preferably bearing a photograph of the customer. (4) Date and place of birth. within ten (10) days from the creation of the new accounts. (5) Nationality. monitored and controlled. For this purpose. Social Security System number or Government Service and Insurance System number. dissolved. if any. (2) Present address. the SEC and the IC. Examples of such documents are identity cards and passports. When dealing with customers who are acting as trustee. (7) Beneficial owners. In case a covered institution has doubts as to whether such persons are being used as dummies in circumvention of existing laws. but not limited to. pursuant to Rule 5 of these Rules and/or their respective charters. covered institutions may create new accounts without face-to-face contact. file copies of documents of identity are to be kept. either in whole or as a product portfolio. – To the extent and through such means allowed under existing laws and applicable rules and regulations of the BSP. wound up or voided. opening of deposit accounts. it is not necessary for the identity of all existing customers to be reestablished: Provided. The following minimum information/documents shall be obtained from individual customers: (1) Name. and (8) Verification of the authority and identification of the person purporting to act on behalf of the client. entering into trust and other fiduciary transactions. (c) Minimum Information/Documents Required for Corporate and Juridical Entities. they shall develop clear customer acceptance policies and procedures when conducting business relations or specific transactions. (8) Tax identification number. covered institutions shall verify and record the true and full identity of the person(s) on whose behalf a transaction is being conducted. including shell companies and corporations: (1) Articles of Incorporation/Partnership. (10) Source of fund(s). no transaction shall be honored by any covered institution respecting an account created without face-to-face contact. (f) Risk-monitoring and Review. or terminated. (6) Contact numbers.RULE 5 PREVENTION OF MONEY LAUNDERING Section 1. covered institutions shall endeavor to ensure that the customer that is a corporate or juridical entity has not been or is not in the process of being. accepting deposit substitutes. should be undertaken with extreme caution. (2) By-laws. Covered institutions shall adopt programs for on-going monitoring of high-risk accounts and risk management. Covered institutions shall also establish and record the true and full identity of such trustees. nominees. Regular reviews of customer base should be undertaken to ensure that the nature of accounts and potential risks are properly identified. it shall immediately make the necessary inquiries to verify the status of the business relationship between the parties. renting of safety deposit boxes. Unless such requirements have been fully complied with. and (11) Names of beneficiaries in case of insurance contracts and whenever applicable. being legal entities which have no business substance in their own right but through which financial transactions may be conducted. Before establishing business relationships. Covered institutions shall establish appropriate systems and methods based on internationally compliant standards and adequate internal controls for verifying and recording the true and full identity of their customers. (d) Verification without Face-to-Face Contact. However. as the case may be. (7) Contact numbers. Dealings with shell companies and corporations. phased out. shut down. . performing remittances and other large cash transactions. or that its business or operations has not been or is not in the process of being. Alternatively. (3) Official address or principal business address. closed. (9) Specimen signature. Where practicable. Customer Identification Requirements. the SEC and the IC. such new accounts shall not be valid and effective unless the customer complies with the requirements under the two (2) immediately preceding subsections and such other requirements that have been or will be imposed by the BSP. the identity card or passport number and/or other relevant details are to be recorded. subject to such rules and regulations as may be prescribed by the appropriate Supervising Authority. (5) List of principal stockholders owning at least two percent (2%) of the capital stock. (e) Acquisition of Another Covered Institution. Covered institutions shall require customers to produce original documents of identity issued by an official authority. That all customer account records are acquired with the business and due diligence inquiries do not raise any doubt as to whether or not the acquired business has fully complied with all the requirements under the AMLA and these Rules. agent or in any capacity for and on behalf of another. – (a) True Identity of Individuals as Clients. nominee. such as. agents and other persons and the nature of their capacity and duties. The following minimum information/documents shall be obtained from customers that are corporate or juridical entities. (4) List of directors/partners. (b) Minimum Information/Documents required for Individual Customers. – When a covered institution acquires the business of another covered institution. (6) Nature of work and name of employer or nature of self-employment/business.

(a) Existing and New Accounts and New Transactions. 4. 2. Sec. Covered institutions shall maintain accounts only in the true name of the account owner or holder. a system of flagging and monitoring transactions that qualify as covered transactions except that they involve amounts below the threshold to facilitate the process of aggregating them for purposes of future reporting of such transactions to the AMLC when their aggregated amounts breach the threshold. and said order cannot be enforced because any particular monetary instrument or property cannot. 2. Peso and foreign currency non-checking numbered accounts shall be allowed: Provided. – Covered institutions shall provide all their responsible officers and personnel with efficient and effective training and continuing education programs to enable them to fully comply with all their obligations under the AMLA and these Rules.00). within fifteen (15) days from the date of the order of forfeiture. Sec. The penalty of imprisonment from six (6) months to one (1) year or a fine of not less than One hundred thousand Philippine pesos (Php100. Covered institutions shall adopt. anonymous accounts. Claim on Forfeited Assets. for a declaration that the same legitimately belongs to him and for segregation or exclusion of the monetary instrument or property corresponding thereto. or has been committed. Payment in lieu of Forfeiture. in a petition filed for the purpose ordered seizure of any monetary instrument or property. (e) Penalties for Failure to Keep Records. Recordkeeping Requirements. (h) Numbered Accounts. or both.Where the court has issued an order of forfeiture of the monetary instrument or property in a criminal prosecution for any money laundering offense under Section 4 of the AMLA. procedures and controls. institution-wide "knowyour-client" policy. relationships and transactions such that any account. as part of their money laundering programs. directly or indirectly. This provision shall apply in both civil and criminal forfeiture. and/or the courts to establish an audit trail for money laundering. The verified petition shall be filed with the court which rendered the judgment of conviction and order of forfeiture. or it has been concealed. the offender or any other person claiming an interest therein may apply. . removed. All records of existing and new accounts and of new transactions shall be maintained and safely stored for five (5) years from October 17. and the court has. said file must be retained beyond the period stipulated in the two (2) immediately preceding subsections. as the case may be. Money Laundering Prevention Programs. related to said report.000. in default of which the said order shall become final and executory. is being. converted or otherwise transferred to prevent the same from being found or to avoid forfeiture . However. the law enforcement and prosecutorial authorities. . (d) Form of Records. attributable to the offender.000. Every covered institution shall submit its own money laundering program to the Supervising Authority concerned within a non-extendible period of sixty (60) days from the date of effectivity of these Rules. The BSP may conduct annual testing for the purpose of determining the existence and true identity of the owners of such accounts. The provisions of existing laws to the contrary notwithstanding. be located.When there is a covered transaction report made. or it has been substantially altered. with due diligence. Sec. institute adequate screening and recruitment procedures. With respect to closed accounts. – Covered institutions shall formulate their respective money laundering prevention programs in accordance with Section 9 and other pertinent provisions of the AMLA and Sections 1 and 2 of Rules 3 and 4 and other pertinent provisions of these Rules. destroyed. in whole or in part. Sec. (b) Closed Accounts. adopt internal policies.(g) Prohibition against Certain Accounts. shall be imposed on a person convicted for a violation of Section 9 (b) of the AMLA. RULE 6 FORFEITURE Section 1. whichever is later. Covered institutions not subject to account secrecy laws shall incorporate in their money laundering programs the provisions of Section 1. subject to such guidelines as may be prescribed by the Supervising Authority and approved by the AMLC. – If a money laundering case based on any record kept by the covered institution concerned has been filed in court. by verified petition. detection and reporting. Every money laundering program shall establish detailed procedures implementing a comprehensive. diminished in value or otherwise rendered worthless by any act or omission. and set-up an audit function to test the system. – Records shall be retained as originals or certified true copies on paper. no assets shall be forfeited to the prejudice of a candidate for an electoral office during an election period. accounts under fictitious names. the records on customer identification. Civil Forfeiture. 3. until it is confirmed that the case has been finally resolved or terminated by the court. . 2001 or from the dates of the accounts or transactions. microfilm or electronic form: Provided. account files and business correspondence shall be preserved and safely stored for at least five (5) years from the dates when they were closed. set-up an effective dissemination of information on money laundering activities and their prevention.00) but not more than Five hundred thousand Philippine pesos (Php500. Rule 3 of these Rules and such other guidelines for the voluntary reporting to the AMLC of all transactions that engender the reasonable belief that a money laundering offense is about to be. designate compliance officers at management level. the Revised Rules of Court on civil forfeiture shall apply. and that the information and documents required under Section 1 (b) and (c) of Rule 5 of these Rules are obtained and recorded by the covered institution. incorrect name accounts and all other similar accounts shall be absolutely prohibited. Training of Personnel. relationship or transaction can be so reconstructed as to enable the AMLC. That such forms are admissible in court pursuant to existing laws and the applicable rules promulgated by the Supreme Court. That the true identity of the customer is satisfactorily established based on official and other reliable documents and records. 3. Sec.Where the court has issued an order of forfeiture of the monetary instrument or property subject of a money laundering offense under Section 4 of the AMLA. – Covered transactions shall prepare and maintain documentation on their customer accounts. (c) Retention of Records in Case a Money Laundering Case Has Been Filed in Court. directly or indirectly.

(b) giving information needed by the foreign state within the procedures laid down in the AMLA and in these Rules. the AMLC may execute the request or refuse to execute the same and inform the foreign state of any valid reason for not executing the request or for delaying the execution thereof. 7. material or object named in said request: Provided. Sec. or it has been commingled with other monetary instruments or property belonging to either the offender himself or a third person or entity. . RULE 8 AMENDMENTS AND EFFECTIVITY Section 1. the requesting state.thereof. That the request is accompanied by an authenticated copy of the order of the Regional Trial Court ordering the forfeiture of said monetary instrument or property of a convicted offender and an affidavit of the clerk of court stating that the conviction and the order of forfeiture are final and that no further appeal lies in respect of either. and (8) contain such other information as may assist in the execution of the request. vice consul. document. Request for Assistance from a Foreign State. 3. Sec. Obtaining Assistance From Foreign States. or it is located outside the Philippines or has been placed or brought outside the jurisdiction of the court. orders or processes needed by the requesting state. (d) give particulars sufficient to identify any covered institution believed to have any information. Limitations on Requests for Mutual Assistance. . any or all of the persons named in said request. freezing. and/or search any or all such persons named therein and/or remove any document. . a document is authenticated if the same is signed or certified by a judge. – These Rules or any portion thereof may be amended by unanimous vote of the members of the AMLC and approved by the Congressional Oversight Committee as provided for under Section 19 of the AMLA. Sec.The AMLC may execute a request for assistance from a foreign state by: (a) tracking down. . Effectivity. material or object which may be of assistance to the investigation or prosecution.The AMLC may make a request to any foreign state for assistance in (a) tracking down. document. . applying with the proper court therein for an order to enter any premises belonging to or in the possession or control of. (b) state the grounds on which any person is being investigated or prosecuted for money laundering or the details of his conviction. This provision shall apply in both civil and criminal forfeiture. and authenticated by the oath or affirmation of a witness or sealed with an official or public seal of a minister. magistrate or equivalent officer in or of. be at all times recognized. Sec. money laundering offense or any other matter directly or indirectly related thereto. the court may. 2. secretary of state. 6. freezing. Powers of the AMLC to Act on a Request for Assistance from a Foreign State. Amendments. The principles of mutuality and reciprocity shall. Sec. (f) specify the manner in which and to whom said information.The AMLC may refuse to comply with any request for assistance where the action sought by the request contravenes any provision of the Constitution or the execution of a request is likely to prejudice the national interest of the Philippines. is to be produced. restraining and seizing assets alleged to be proceeds of any unlawful activity under the procedures laid down in the AMLA and in these Rules. and a certification or an affidavit of a competent officer of the requesting state stating that the conviction and the order of forfeiture are final and that no further appeal lies in respect of either. Requirements for Requests for Mutual Assistance from Foreign States. the government of the requesting state. instead of enforcing the order of forfeiture of the monetary instrument or property or part thereof or interest therein. – These Rules shall take effect after its approval by the Congressional Oversight Committee and fifteen (15) days after the completion of its publication in the Official Gazette or in a newspaper of general circulation. consul. Sec. Authentication of Documents.Where a foreign state makes a request for assistance in the investigation or prosecution of a money laundering offense. or of the person administering the government or a department of the requesting territory. That the documents accompanying the request in support of the application have been duly authenticated in accordance with the applicable law or regulation of the foreign state.A request for mutual assistance from a foreign state must (a) confirm that an investigation or prosecution is being conducted in respect of a money launderer named therein or that he has been convicted of any money laundering offense. and (d) applying for an order of forfeiture of any monetary instrument or property in the proper court in the foreign state: Provided. thereby rendering the same difficult to identify or be segregated for purposes of forfeiture. for this purpose. (e) ask from the covered institution concerned any information. That the court shall not issue such an order unless the application is accompanied by an authenticated copy of the order of a court in the requesting state ordering the forfeiture of said monetary instrument or property of a person who has been convicted of a money laundering offense in the requesting state. and (c) applying for an order of forfeiture of any monetary instrument or property in the court: Provided. . 5. (c) to the extent allowed by the law of the foreign state. consular agent or any officer in the foreign service of the Philippines stationed in the foreign state in which the record is kept. accordingly order the convicted offender to pay an amount equal to the value of said monetary instrument or property. – The Philippines shall negotiate for the inclusion of money laundering offenses as defined under Section 4 of the AMLA among the extraditable offenses in all future treaties. 4. Extradition. Sec. or officer in or of. material or object which may be of assistance to the investigation or prosecution. and authenticated by the seal of his office. document. (g) give all the particulars necessary for the issuance by the court in the requested state of the writs. unless there is a treaty between the Philippines and the requesting state relating to the provision of assistance in relation to money laundering offenses. protectorate or colony. (b) obtaining information that it needs relating to any covered transaction. RULE 7 MUTUAL ASSISTANCE AMONG STATES Section 1. 2. consul general.For purposes of Section 13 of the AMLA and Rule 7 of these Rules. The certificate of authentication may also be made by a secretary of the embassy or legation. . (c) give sufficient particulars as to the identity of said person. restraining and seizing assets alleged to be proceeds of any unlawful activity. material or object obtained pursuant to said request.

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