Matrix - The New Central Bank Act

MATRIX OF SENATE BILL NO.
1027, 16, 859—THE NEW CENTRAL BANK ACT

Senate Bill No. 1027 Senate Bill No. 16 Senate Bill No. 859
(by Sen. Escudero) (by Sen. Franklin M. Drilon) (by Sen. Ralph G. Recto)
Title. AN ACT AMENDING REPUBLIC Title. AN ACT AMENDING REPUBLIC Title. AN ACT PROVIDING FOR A
ACT NUMBER 7653, ACT NUMBER 7653, COMPREHENSIVE REVISION OF
OTHERWISE KNOWN AS “THE NEW OTHERWISE KNOWN AS “THE NEW THE CHARTER OF THE BANGKO
CENTRAL BANK ACT”, CENTRAL BANK ACT”,
SENTRAL NG PILIPINAS (BSP) BY
AND FOR OTHER PURPOSES
AMENDING REPUBLIC ACT NO.
7653, OTHERWISE KNOWN AS
“THE NEW CENTRAL BANK ACT”
SECTION 1. Section 2 of Republic Act SECTION 1. Section 2 of SECTION 1. Section 2 of Republic

No. 7653, otherwise known as “The Republic Act No. 7653, otherwise
Act No. 7653 is hereby amended to
New Central Bank Act” is hereby known as “The New Central Bank Act”
amended to read as follows: is hereby amended to read as follows: read as follows:
“SEC. 2. Creation of the Bangko SEC. 2. Creation of the Bangko “SEC. 2. Creation of the Bangko
Sentral. - There is hereby established Sentral. - There is hereby established
Sentral. — There is hereby
an independent central monetary an independent central monetary
authority, which shall be a body authority, which shall be a body established an independent central
corporate known as the Bangko Sentral corporate known as the Bangko Sentral
monetary authority, which shall be a
ng Pilipinas, hereafter referred to as the ng Pilipinas, hereafter referred to as the
Bangko Sentral. Bangko Sentral. body corporate known as the Bangko
Sentral ng Pilipinas, hereafter
“The capital of the Bangko Sentral shall The capital of the Bangko Sentral shall
be TWO HUNDRED [Fifty] billion pesos referred to as the Bangko Sentral.
be TWO HUNDRED [Fifty] billion
(P[50,]200,000,000,000), to be fully
The capital of the Bangko Sentral
subscribed by the Government of the pesos (P[50,] 200,000,000,000), to be
Republic, hereafter referred to as the shall be Fifty Billion Pesos
fully subscribed by the Government of
Government. [Ten billion pesos
(P50,000,000,000), to be fully
1
MATRIX OF SENATE BILL NO. 1027, 16, 859—THE NEW CENTRAL BANK ACT
(P10,000,000,000) of which] THE the Republic, hereafter referred to as subscribed by the Government of the
UNPAID SUBSCRIPTION shall be fully
the Government. [Ten billion pesos Republic, hereafter referred to as the
paid for by the Government IN CASH
AND/OR GOVERNMENT SECURITIES (P10,000,000,000) of which] THE Government, Ten Billion Pesos
UPON EFFECTIVITY OF THIS ACT.
UNPAID SUBSCRIPTION shall be fully (P10,000,000,000) of which shall be
THEREAFTER THE ADEQUACY OF
THE CAPITALIZATION SHALL BE paid for by the Government IN THREE fully paid for by the Government
SUBJECT TO REVIEW EVERY FIVE (5)
(3) CONSECUTIVE ANNUAL upon the effectivity of this Act [and
YEARS AND ADJUSTED UPON JOINT
RECOMMENDATION BY THE INSTALLMENTS UNTIL 2017. [upon the balance to be paid for within two
SECRETARY OF FINANCE, THE
the effectivity of this Act and the (2) years from the effectivity of this
SECRETARY OF BUDGET AND
MANAGEMENT AND THE MONETARY balance to be paid for within a period Act in such manner and form as the
BOARD. THE PAYMENT OF ANY
of two (2) years from the effectivity of Government, through the Secretary
UNPAID SUBSCRIPTION AND/OR
INCREASE IN CAPITALIZATION this Act in such manner and form as of Finance and the Secretary of
SHALL BE AUTOMATICALLY
the Government, through the Secretary Budget and Management, may
APPROPRIATED IN THE ANNUAL
GENERAL APPROPRIATIONS ACT. of Finance and the Secretary of Budget thereafter determine]. THE
[upon the effectivity of this Act and the
and Management, may thereafter BALANCE SHALL BE PAID FOR IN
balance to be paid for within a period of
two (2) years from the effectivity of this determine.] CASH AVAILABLE TO THE
Act in such manner and form as the
GOVERNMENT OR THROUGH THE
Government, through the Secretary of
Finance and the Secretary of Budget ISSUANCE OF READILY
and Management, may thereafter
MARKETABLE GOVERNMENT
determine.]”
SECURITIES OF EQUIVALENT
MARKET VALUE TO THE BALANCE
2
OF THE UNPAID SUBSCRIPTION
OF THE GOVERNMENT TO THE
BANGKO SENTRAL: PROVIDED,
THAT THE CASH OR
GOVERNMENT SECURITIES
ISSUED PURSUANT HERETO ARE
HEREBY AUTHORIZED AND SHALL
BE DEEMED AUTOMATICALLY
APPROPRIATED FOR THE
PURPOSE OF ENABLING THE
GOVERNMENT TO COMPLY WITH
ITS OBLIGATION TO PAY FOR ITS
UNPAID SUBSCRIPTION TO THE
BANGKO SENTRAL.”
SEC. 2. Section 3 of the same Act is SEC. 2. Section 3 of the same Act is SEC. 2. Section 3 of Republic Act No.
hereby amended to read as follows:
hereby amended to read as follows: 7653 is hereby amended to read as
follows:
“SEC. 3. Responsibility and Primary SEC. 3. Responsibility and Primary “SEC. 3. Responsibility and Primary
Objective. - The Bangko Sentral shall Objective. — The Bangko Sentral shall
3
provide policy directions in the areas of provide policy directions in the areas of Objective. — The Bangko Sentral
money, banking, and credit. It shall money, banking, and credit. It shall
shall provide policy directions in the
have supervision over the operations of have supervision over the operations of
banks and exercise such regulatory banks and exercise such regulatory areas of money, banking, and credit.
AND EXAMINATION powers as powers as provided in this Act and
It shall have supervision over the
provided in this Act and other pertinent other pertinent laws over the
laws over the QUASI-BANKING operations of finance companies and operations of banks and exercise
operations of [finance companies and] non-bank financial institutions
such regulatory powers as provided
non-bank financial institutions. performing quasi-banking functions,
[performing quasi-banking functions, [hereafter referred to as quasi-banks,] in this Act and other pertinent laws
hereafter referred to as quasi-banks, CREDIT CARD COMPANIES, MONEY
over the operations of finance
and institutions performing similar CHANGERS, E-MONEY ISSUERS,
functions] AS MAY BE DETERMINED REMITTANCE AGENTS, PAYMENT companies and non-bank financial
BY THE MONETARY BOARD, IT AND SETTLEMENT SYSTEM
institutions performing quasi-banking
SHALL LIKEWISE EXERCISE OPERATORS and OTHER institutions
REGULATORY AND EXAMINATION performing similar functions AS MAY functions, hereafter referred to as
POWERS OVER MONEY SERVICE BE DETERMINED BY THE MONETARY
quasi-banks, INCLUDING CREDIT
BUSINESSES, CREDIT GRANTING BOARD.
BUSINESSES, AND PAYMENT CARD COMPANIES, E-MONEY
SYSTEM OPERATORS.
ISSUERS, REMITTANCE AGENTS
and institutions performing similar
functions REGULATED BY THE
BANGKO SENTRAL UNDER THIS
ACT OR UNDER SPECIAL LAWS.
“The primary objective of the Bangko The primary objective of the Bangko [The primary objective of the Bangko
Sentral is to maintain price stability
Sentral is to maintain price stability Sentral is to maintain price stability
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conducive to a balanced and conducive to a balanced and conducive to a balanced and
sustainable growth of the economy. It
sustainable growth of the economy. It sustainable growth of the economy.]
shall also promote and maintain
monetary stability and the convertibility shall also promote and maintain IN THE FORMULATION OF
of the peso.
monetary AND FINANCIAL stability MONETARY POLICY, THE BANGKO
and the convertibility of the peso. SENTRAL SHALL PROMOTE AND
ADVANCE THE PRIMARY GOALS
OF FULL EMPLOYMENT AND
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.”
“THE BANGKO SENTRAL SHALL

PROMOTE FINANCIAL STABILITY
AND CLOSELY WORK WITH OTHER
RELEVANT BODIES INCLUDING, BUT
NOT LIMITED TO, THE SECURITIES
AND EXCHANGE COMMISSION, THE
INSURANCE COMMISSION, THE
PHILIPPINE DEPOSIT INSURANCE
5
CORPORATION AND THE NATIONAL
GOVERNMENT.
“THE BANGKO SENTRAL SHALL THE BANGKO SENTRAL SHALL

OVERSEE THE PAYMENT AND
OVERSEE THE PAYMENTS AND
SETTLEMENT SYSTEMS IN THE
PHILIPPINES, INCLUDING CRITICAL SETTLEMENTS SYSTEMS IN THE
FINANCIAL MARKET
PHILIPPINES IN ACCORDANCE
INFRASTRUCTURES, IN ORDER TO
PROMOTE SOUND AND PRUDENT WITH SOUND AND PRUDENT
PRACTICES CONSISTENT WITH THE
PRACTICES.
MAINTENANCE OF FINANCIAL
STABILITY.”
SEC. 3. Section 11 of the same Act is SEC. 3. Section 11 of the same Act is SEC. 5. Section 11 of Republic Act
hereby amended to read as follows: No. 7653 is hereby amended to read
as follows:
“SEC. 11. Meetings. — The Monetary SEC. 11. Meetings. — The “SEC. 11. Meetings. – The Monetary
Board shall meet at least once a week.
Monetary Board shall meet at least Board shall meet at least once a
The Board may be called to a meeting
by the Governor of the Bangko Sentral once a week. The Board may be called week. The Board may be called to a
or by two (2) other members of the
to a meeting by the Governor of the meeting by the Governor of the
Board.
Bangko Sentral or by two (2) other Bangko Sentral or by two (2) other
members of the Board. members of the Board.
“The presence of four (4) members The presence of four (4) members shall The presence of four (4) members
shall constitute a quorum: Provided,
constitute a quorum: Provided, That in shall constitute a quorum: Provided,
6
That in all cases the Governor or his all cases the Governor or his duly That in all cases the Governor or his
duly designated alternate shall be
designated alternate shall be among duly designated alternate shall be
among the four (4).
the four (4). among the four (4).
“Unless otherwise provided in this Act, Unless otherwise provided in this Act, Unless otherwise provided in this Act,
all decisions of the Monetary Board
all decisions of the Monetary Board all decisions of the Monetary Board
shall require the concurrence of at least
four (4) members. shall require the concurrence of at least shall require the concurrence of at
four (4) members. least four (4) members.
“The Bangko Sentral shall maintain and The Bangko Sentral shall maintain and
preserve a complete record of the
preserve a complete record of the
proceedings and deliberations of the
Monetary Board, including the tapes proceedings and deliberations of the
and transcripts of the stenographic
Monetary Board, including the tapes
notes, either in their original form or in
microfilm. and transcripts of the stenographic
notes, either in their original form or in
microfilm.
“THE MEETINGS OF THE MONETARY THE MEETINGS OF THE MONETARY THE MEETING OF THE MONETARY
BOARD MAY BE CONDUCTED
BOARD MAY BE CONDUCTED BOARD, AS REQUIRED BY
THROUGH MODERN TECHNOLOGIES
SUCH AS, BUT NOT LIMITED TO, THROUGH MODERN TECHNOLOGIES CIRCUMSTANCES, MAY BE
TELECONFERENCING AND
SUCH AS, BUT NOT LIMITED TO, CONDUCTED THROUGH MODERN
VIDEOCONFERENCING.”
TELECONFERENCING AND TECHNOLOGIES SUCH AS, BUT
7
VIDEOCONFERENCING. NOT LIMITED TO,
TELECONFERENCING AND VIDEO
CONFERENCING, SUBJECT TO
PRIOR NOTICE TO ALL THE
MEMBERS OF THE BOARD OF THE
CALL FOR SUCH METHOD OF
CONFERENCING AND SUBJECT
FURTHER TO THE REQUIREMENT
THAT THE CHAIRMAN OF THE
BOARD OR THE ALTERNATE
PRESIDING OFFICER IS
PHYSICALLY PRESENT, TOGETHER
WITH THREE (3) OTHER
MEMBERS OF THE BOARD, AT THE
DESIGNATED VENUE OF THE
MEETING.
THE GOVERNOR SHALL VOTE AT

MEETINGS OF THE MONETARY
BOARD SUBJECT TO THE
LIMITATIONS OF SECTION 14
8
(WITHDRAWAL DUE TO
PERSONAL OR PECUNIARY
INTEREST) HEREIN. EACH AND
EVERY VOTE OF THE GOVERNOR
AND THE MONETARY BOARD
MEMBERS, BE IT IN THE
AFFIRMATIVE, NEGATIVE OR
ABSTENTION, SHOULD BE
REFLECTED IN THE MINUTES OF
THE MEETING.
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 OR IN

OTHER RECORDING MEDIA.”
SEC. 3. Section 6 of Republic Act No.
9
7653 is hereby amended to read as
follows:
“SEC. 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
10
attend a meeting of the Board, he shall
designate a Deputy Governor to act as
his alternate AND THE ATTENDANCE
OF THE LATTER AS AN ALTERNATE
TO THE GOVERNOR SHALL BE
CONSIDERED IN DETERMINING THE
QUORUM BUT SAID ALTERNATE,
WHILE ENTITLED TO BE HEARD,
SHALL HAVE NO RIGHT TO VOTE:
Provided, HOWEVER, That in [such
event,] THE ABSENCE OF THE
GOVERNOR AT THE MEETING OF
THE BOARD, 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
11
designate an Undersecretary in his
Department to attend as his alternate
WHOSE ATTENDANCE AT THE
MEETING OF THE BOARD SHALL BE
CONSIDERED IN DETERMINING A
QUORUM BUT SAID ALTERNATE,
WHILE ENTITLED TO BE HEARD,
SHALL HAVE NO RIGHT TO VOTE;
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
12
more than once.”
SEC. 4. Section 16 of the same Act is SEC. 4. Section 16 of the same SEC. 8. Section 16 of Republic Act
Act is hereby amended to read as No. 7653 is hereby amended to read
follows: as follows:
“SEC. 16. Responsibility. - THE SEC. 16. Responsibility. — Members of “SEC. 16. Responsibility. – Members
GENERAL RULE AND THE
the Monetary Board, officials, of the Monetary Board, officials,
EXCEPTION THEREFROM ON THE
LIABILITY OF PUBLIC OFFICERS AS examiners, and employees of the examiners, and employees of the
PROVIDED IN SECTIONS 38 AND 39
Bangko Sentral who willfully violate this Bangko Sentral who willfully violate
OF CHAPTER 9, BOOK 1 OF THE
REVISED ADMINISTRATIVE CODE OF act or who are guilty of negligence, this Act or who are guilty of
1987 SHALL APPLY TO THE members
abuses or acts of malfeasance or negligence, abuses or acts of
of the Monetary Board [, officials,
examiners, and employees] AND misfeasance [or fail to exercise malfeasance or misfeasance or fail to
OTHER PERSONNEL of the Bangko
extraordinary diligence] in the exercise extraordinary diligence in
Sentral [who willfully violate this Act or
who are guilty of negligence, abuses or performance of [his] THEIR duties shall the performance of [his] THEIR
acts of malfeasance or misfeasance or
be held liable for any loss or injury duties shall be held liable for any loss
fail to exercise extraordinary diligence
in the performance of his duties shall be suffered by the Bangko Sentral or other or injury suffered by the Bangko
held liable for any loss or injury
banking institutions as a result of such Sentral or other banking institutions
suffered by the Bangko Sentral or other
banking institutions as a result of such violation, negligence, abuse, as a result of such violation,
violation, negligence, abuse,
malfeasance[,] OR misfeasance [or negligence, abuse, malfeasance,
malfeasance, misfeasance or failure to
13
exercise extraordinary diligence]. failure to exercise extraordinary misfeasance or failure to exercise
diligence]. extraordinary diligence.
“Similar responsibility shall apply to Similar responsibility shall apply to Similar responsibility shall apply to
members OF THE MONETARY
members, officers, and employees of members, officers, and employees of
BOARD, officers, and employees AND
OTHER PERSONNEL of the Bangko the Bangko Sentral for: (1) the the Bangko Sentral for: (1) the
Sentral for: (1) the disclosure of any
disclosure of any information of a disclosure of any information of a
information of a confidential nature, or
any information on the discussions or confidential nature, or any information confidential nature, [or any
resolutions of the Monetary Board, or
on the discussions or resolutions of the information on the discussions or
about the confidential operations of the
Bangko Sentral, unless the disclosure is Monetary Board, or about the
resolutions of the Monetary Board, ]
in connection with the performance of
confidential operations of the Bangko
official functions with the Bangko or about the confidential operations
Sentral, or is with prior authorization of Sentral, unless the disclosure is in
of the Bangko Sentral, unless the
the Monetary Board or the Governor; or
connection with the performance of
(2) the use of such information for disclosure is in connection with the
personal gain or to the detriment of the official functions with the Bangko
performance of official functions with
Government, the Bangko Sentral or
Sentral, or is with prior authorization of
third parties: Provided, however, That the Bangko Sentral, or is with prior
any data or information required to be the Monetary Board or the Governor; or
authorization of the Monetary Board
submitted to the President and/or the
(2) the use of such information for
Congress, or to be published under the or the Governor; or (2) the use of
provisions of this Act shall not be personal gain or to the detriment of the
such information for personal gain or
considered confidential.
government, the Bangko Sentral or
to the detriment of the Government,
third parties: Provided, however, that
the Bangko Sentral or third parties:
any data or information required to be
14
submitted to the President and/or the Provided, however, That any data or
Congress, or to be published under the information required to be submitted
provisions of this act shall not be to the President and/or the Congress,
considered confidential. or to be published under the
provisions of this Act shall not be
considered confidential.”
“THE ABOVE NOTWITHSTANDING, THE ABOVE NOTWITHSTANDING,

MEMBERS OF THE MONETARY
UNLESS THE ACTIONS OF THE
BOARD AND OTHER PERSONNEL OF
THE BANGKO SENTRAL SHALL NOT BANGKO SENTRAL OR ANY OF ITS
BE SUBJECT TO ANY ACTION, CLAIM
OFFICERS AND EMPLOYEES ARE
OR DEMAND IN CONNECTION WITH
ANY ACT DONE OR OMITTED BY FOUND TO BE IN WILLFUL
THEM IN THE PERFORMANCE OF
VIOLATION OF THIS ACT,
THEIR DUTIES AND EXERCISE OF
THEIR POWERS EXCEPT FOR THOSE PERFORMED IN BAD FAITH, WITH
ACTIONS AND OMISSIONS DONE IN
MALICE AND/OR GROSS
EVIDENT BAD FAITH OR GROSS
NEGLIGENCE. UNLESS THE ACTIONS NEGLIGENCE, THE BANGKO
OF THE BANGKO SENTRAL,
SENTRAL, MEMBERS OF THE
BOARD AND ITS OTHER PERSONNEL MONETARY BOARD, ITS OFFICERS
ARE FOUND TO BE IN WILLFUL
AND EMPLOYEES, ARE HELD FREE
VIOLATION OF THIS ACT,
PERFORMED WITH EVIDENT BAD AND HARMLESS TO THE FULLEST
15
FAITH OR GROSS NEGLIGENCE, EXTENT PERMITTED BY LAW FROM
THEY ARE HELD FREE AND
ANY LIABILITY, AND THEY SHALL BE
HARMLESS TO THE FULLEST
EXTENT PERMITTED BY LAW FROM INDEMNIFIED FOR ANY AND ALL
ANY LIABILITY, AND THEY SHALL BE
LIABILITIES, LOSSES, CLAIMS,
INDEMNIFIED FOR ANY AND ALL
LIABILITIES, LOSSES, CLAIMS, DEMANDS, DAMAGES,
DEMANDS, DAMAGES,
DEFICIENCIES, COSTS AND
DEFICIENCIES, COSTS AND
EXPENSES OF WHATSOEVER KIND EXPENSES OF WHATSOEVER KIND
AND NATURE THAT MAY ARISE IN
AND NATURE THAT MAY ARISE IN
CONNECTION WITH THE EXERCISE
OF THEIR POWERS AND CONNECTION WITH THE
PERFORMANCE OF THEIR DUTIES
PERFORMANCE OF THEIR DUTIES
AND FUNCTIONS.”
DONE IN GOOD FAITH AND
CONSISTENT WITH THE POWERS
AND FUNCTIONS AUTHORIZED BY
LAW.
SEC. 4. Section 9 of Republic Act No.

7653 is hereby amended to read as
follows:
16
“SEC. 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
17
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]. NO MEMBER OF THE

MONETARY BOARD, INCLUDING
THE GOVERNOR AND ANY
DEPUTY GOVERNOR OF THE
18
BANGKO SENTRAL SHALL BE
ELECTED AS DIRECTOR, OR
EMPLOYED AS OFFICER OR
EMPLOYEE, OR HIRED AS
CONSULTANT, ADVISER, LAWYER
OR IN OTHER CONTRACTUAL
CAPACITY OF ANY BANK, QUASI-
BANK, FINANCE COMPANY, NON-
BANK FINANCIAL INTERMEDIARY,
OR IN SIMILAR CAPACITIES IN
OTHER INSTITUTIONS THAT ARE
SUPERVISED/REGULATED BY THE
BANGKO SENTRAL WITHIN THREE
(3) YEARS AFTER THE
EXPIRATION OF THEIR
RESPECTIVE TERMS OF OFFICE
OR AFTER ANY OF SUCH
OFFICIALS RETIRES OR RESIGNS
FROM THEIR RESPECTIVE
POSITIONS IN THE BANGKO
19
SENTRAL EXCEPT WHEN ANY OF
SUCH OFFICIALS IS APPOINTED
OR DESIGNATED AS AN OFFICIAL
REPRESENTATIVE OF THE
PHILIPPINE GOVERNMENT IN A
MULTILATERAL OR
INTERNATIONAL FINANCIAL
INSTITUTION.”
as follows:
“SEC. 21. Deputy Governors. — The SEC. 21. Deputy Governors. — The “SEC. 21. Deputy Governors. — The
Governor of the Bangko Sentral, with
Governor of the Bangko Sentral, with Governor of the Bangko Sentral, with
the approval of the Monetary Board,
shall appoint not more than [three (3)] the approval of the Monetary Board, the approval of the Monetary Board,
FIVE (5) Deputy Governors who shall
shall appoint not more than [three (3)] shall appoint not more than [three
perform duties as may be assigned to
them by the Governor and the Board. FIVE (5) Deputy Governors who shall
(3)] FIVE (5) Deputy Governors who
perform duties as may be assigned to
shall perform duties AND
them by the Governor and the Board.
RESPONSIBILITIES CONSISTENT
WITH THEIR RESPECTIVE
20
SECTORS ASSIGNED TO THEM BY
THE MONETARY BOARD, TO WIT:
[as may be assigned to them by the

Governor and the Board.]
“In the absence of the Governor, a In the absence of the Governor, a

Deputy Governor designated by the
Governor shall act as chief executive of
the Bangko Sentral and shall exercise Governor shall act as chief executive of
the powers and perform the duties of
the Bangko Sentral and shall exercise
the Governor. Whenever the
[Government] GOVERNOR is unable to the powers and perform the duties of
attend meetings of government boards
the Governor. Whenever the
or councils in which he is an ex officio
member pursuant to provisions of Government is unable to attend
special laws, a Deputy Governor as may
meetings of government boards or
be designated by the Governor shall be
vested with authority to participate and councils in which he is an ex officio
exercise the right to vote in such
member pursuant to provisions of
meetings.”
special laws, 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.
21
(A) DEPUTY GOVERNOR FOR THE
MONETARY AND CURRENCY
MANAGEMENT SECTOR;
(B) DEPUTY GOVERNOR FOR

SUPERVISION AND EXAMINATION
OF COMMERCIAL AND UNIVERSAL
BANKS (INCLUDING THEIR
SUBSIDIARIES AND AFFILIATES
ENGAGED IN FINANCIAL ALLIED
UNDERTAKINGS) AS WELL AS
GOVERNMENT-OWNED AND
CONTROLLED BANKS;
(C) DEPUTY GOVERNOR FOR

OF STAND-ALONE RURAL BANKS
AND THRIFT BANKS (WHICH ARE
NOT AFFILIATED TO UNIVERSAL
22
OR COMMERCIAL BANKS);
COOPERATIVE BANKS; AND
MICROFINANCE BANKS;
(D) DEPUTY GOVERNOR FOR

OF NON-BANK FINANCIAL
INTERMEDIARIES WHICH BY
SPECIAL LAWS HAVE BEEN
PLACED UNDER THE
SUPERVISION OF THE BANGKO
SENTRAL WHICH INCLUDE
INVESTMENT HOUSES; SAVINGS
AND LOAN ASSOCIATIONS;
PAWNSHOPS; CREDIT CARD
COMPANIES; REMITTANCE
AGENTS; AND E-MONEY
ISSSUERS;
(E) DEPUTY GOVERNOR FOR

HUMAN RESOURCES
23
MANAGEMENT WHO SHALL BE IN
CHARGE OF THE ADMINISTRATIVE
REQUIREMENTS OF
RECRUITMENT, APPOINTMENT,
PERFORMANCE EVALUATION, AND
THE IMPLEMENTATION OF
COMPENSATION AND BENEFITS,
PAYROLL SERVICING, LEAVES
AND RETIREMENTS AND
EMPLOYEE RELATIONS,
INCLUDING THE ASSESSMENT OF
THE TRAINING NEEDS OF ALL
PERSONNEL OF THE BANGKO
SENTRAL, AND THE DESIGN AND
ADMINISTRATION OF TRAINING
PROGRAMS FOR THE RANK AND
FILE EMPLOYEES, THE EXECUTIVE
DEVELOPMENT AND VALUES
ENHANCEMENT COURSES; THE
ADMINISTRATION OF THE
24
MEDICAL AND DENTAL CLINIC,
AND WHO SHALL SUPERVISE THE
CONSTRUCTION, REPAIR AND
RENOVATION OF ALL BUILDINGS,
OFFICES AND FACILITIES OF THE
BANGKO SENTRAL, THE GENERAL
UP-KEEP AND MAINTENANCE OF
THE MECHANICAL, ELECTRICAL,
ELECTRONIC AND
AUXILIARY/ACCESSORY
EQUIPMENT SYSTEMS OF THE
BANGKO SENTRAL AND THE
PROTECTION AND SAFEGUARDS
OF THE MAIN OFFICE AND OTHER
BRANCHES OF THE BANGKO
SENTRAL.
THE SCOPE OF THE DUTIES AND

RESPONSIBILITIES OF EACH AND
EVERY DEPUTY GOVERNOR AND
THE OFFICES UNDER EACH OF
25
THEM AND THE DELINEATION OF
OTHER FUNCTIONS AND
ASSIGNMENTS SHALL BE
DEFINED OR REFINED AND
PRESCRIBED BY THE MONETARY
BOARD UPON RECOMMENDATION
OF THE GOVERNOR.
THE MANAGEMENT OF THE

PROVIDENT FUND, THE
PROCUREMENT SERVICES,
INCLUDING THE SERVICING OF
THE BIDS AND AWARDS
COMMITTEE AND THE SECURITY
PLANT COMPLEX SHALL BE
DEFINED AND PRESCRIBED BY
THE MONETARY BOARD. THE
MONITORING, REPORTING, AND
THE INFORMATION TECHNOLOGY
APPLICATIONS REQUIRED FOR
EACH OF THE OFFICES AND
26
SERVICES REFERRED TO IN THIS
PARAGRAPH SHALL ALSO BE SET
FORTH BY THE MONETARY
BOARD, UPON
RECOMMENDATION OF THE
GOVERNOR.
[In the absence of the Governor, a

Governor shall act as chief executive
of the Bangko Sentral and shall
exercise the powers and perform the
duties of the Governor. 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, a Deputy Governor as
may be designated by the Governor
shall be vested with authority to
27
participate and exercise the right to
vote in such meetings.]”
as follows:
“SEC. 23. Authority to Obtain Data and SEC. 23. Authority to Obtain Data and “SEC. 23. Authority to Obtain Data
Information. — The Bangko Sentral shall
Information. — The Bangko Sentral and Information. — The Bangko
have the authority to REQUIRE
[request] from ANY PERSON OR shall have the authority to REQUIRE Sentral shall have the authority to
ENTITY, INCLUDING government
[request] from government offices and [request] REQUIRE from ANY
offices and instrumentalities, or
government-owned or -controlled instrumentalities, or government- PERSON OR ENTITY, INCLUDING
corporations, any data [which it may],
owned or -controlled corporations, any government offices and
FOR STATISTICAL AND POLICY
DEVELOPMENT PURPOSES [require data which it may require for the instrumentalities, or government-
for] IN RELATION TO the proper
proper discharge of its functions and owned or controlled corporations,
discharge of its functions and
responsibilities, PROVIDED, THAT responsibilities.The Bangko Sentral any data which it may require for the
DISAGGREGATED DATA GATHERED
through the Governor or in his absence, proper discharge of its functions and
ARE SUBJECT TO PREVAILING
CONFIDENTIALITY LAWS. The a duly authorized representative shall responsibilities. The Bangko Sentral
Bangko Sentral through the Governor or
have the power to issue a subpoena for through the Governor or in his
in his absence, a duly authorized
representative shall have the power to the production of the books and records
absence, a [duly authorized
issue a subpoena for the production of
for the aforesaid purpose. Those who
28
the books and records for the aforesaid refuse the subpoena without justifiable representative] DEPUTY
purpose. Those who refuse the
cause, or who refuse to supply the GOVERNOR DULY AUTHORIZED IN
subpoena without justifiable cause, or
who refuse to supply the [bank] [bank] BANGKO SENTRAL with data WRITING shall have the power to
BANGKO SENTRAL with data
[requested or] required, shall
be issue a subpoena [for the production
[requested or] required, shall be subject
to punishment for contempt in subject to punishment for contempt in of the books and records for the
accordance with the provisions of the
Rules of Court. aforesaid purpose] SPECIFYING
Rules of Court.
THE DATA REQUIRED AND THE
SPECIFIC PURPOSE FOR WHICH
SUCH DATA SHALL BE ISSUED.
Those who refuse the subpoena
without justifiable cause, or who
refuse to supply the [bank] BANGKO
SENTRAL with data [requested or]

required, shall be subject to
punishment for contempt in
Rules of Court.
Data on individualS AND firms, other Data on individual firms, other than Data on individualS AND firms, other
29
than banks, gathered by the banks, gathered by the [Department of than banks, gathered by the
[Department of Economic Research and
Economic Research and other Department of Economic Research
other departments or units of the]
Bangko Sentral shall not be made departments or units of the] Bangko and other departments or units of the
available to any person or entity
Sentral shall not be made available to Bangko Sentral shall not be made
outside of the Bangko Sentral whether
public or private except under order of any person or entity outside of the available to any person or entity
the court or under such conditions as
Bangko Sentral whether public or outside of the Bangko Sentral
may be prescribed by the Monetary
Board: Provided, however, That the private except under order of the court whether public or private except
collective data on firms may be
or under such conditions as may be under order of the court or under
released to interested persons or
entities: Provided, finally, That in the prescribed by the Monetary Board: such conditions as may be prescribed
case of data on banks, the provisions of
Provided, however, That the collective by the Monetary Board: Provided,
Section 27 of this Act shall apply.”
data on firms may be released to however, That the collective data on
interested persons or entities: Provided, firms may be released to interested
finally, That in the case of data on persons or entities: Provided, Finally,
banks, the provisions of Section 27 of That in the case of data on banks,
this Act shall apply. the provisions of Section 27 of this
Act shall apply.”
SEC. 6. Section 12 of Republic Act

No. 7653 is hereby amended to read
30
as follows:
“SEC. 12. Attendance of the Deputy

Governors. — The Deputy Governors
[may] SHALL, UPON THE ORDER

OF THE GOVERNOR OR THE
MONETARY BOARD, attend the
meetings of the Monetary Board with
the right to be heard. OTHER
OFFICIALS OF THE BANGKO
SENTRAL MAY BE DIRECTED TO
ATTEND THE MONETARY BOARD
MEETINGS UPON INVITATION OF
THE MONETARY BOARD ON A PER
MEETING BASIS IF THEIR
EXPERTISE IS NEEDED IN A
PARTICULAR AGENDA OR
MATTER.”
31
“SEC. 25. Supervision and SEC. 25. Supervision and Examination. “SEC. 25. Supervision and
Examination. — The Bangko Sentral
— The Bangko Sentral shall have Examination. – SUBJECT TO THE
shall have supervision over, and
conduct [periodic] REGULAR or special supervision over, and conduct PROVISIONS OF SECTION 28 OF
examinations of, banking institutions
[periodic] REGULAR or special THIS ACT, the Bangko Sentral
and quasi-banks, including their
subsidiaries and affiliates engaged in examinations of, banking institutions THROUGH THE SUPERVISING AND
allied activities.
and quasi-banks, including their EXAMINING DEPARTMENT
subsidiaries and affiliates engaged in DESIGNATED UNDER THIS ACT
allied activities. shall have supervision over, and
conduct [periodic] REGULAR or
special examinations of [banking

institutions] BANKS and quasi-
banks, including their subsidiaries
and affiliates engaged in allied
activities AND OTHER FINANCIAL
INSTITUTIONS WHICH UNDER
SPECIAL LAWS ARE SUBJECT TO
32
BANGKO SENTRAL SUPERVISION.
“THE BANGKO SENTRAL SHALL THE BANGKO SENTRAL SHALL HAVE THE BANGKO SENTRAL SHALL
HAVE REGULATORY AUTHORITY
REGULATORY AUTHORITY OVER, ALSO HAVE THE POWER TO
OVER, AND CONDUCT REGULAR OR
SPECIAL EXAMINATIONS OF, AND CONDUCT REGULAR OR REGULATE AND EXAMINE
ENTITIES WHICH UNDER THIS ACT
SPECIAL EXAMINATIONS OF, TRANSACTIONS BETWEEN A
OR BY SPECIAL LAWS ARE SUBJECT
TO ITS JURISDICTION. ENTITIES WHICH UNDER THIS ACT SUPERVISED INSTITUTION AND
OR BY SPECIAL LAWS ARE SUBJECT ITS PARENT COMPANY.
TO ITS JURISDICTION.
“THE BANGKO SENTRAL SHALL THE BANGKO SENTRAL SHALL ALSO

ALSO HAVE THE POWER TO OBTAIN
HAVE THE POWER TO OBTAIN
INFORMATION FROM THE PARENT
OR OTHER AFFILIATE COMPANIES INFORMATION FOR SUPERVISORY
OF SUPERVISED INSTITUTIONS AND
PURPOSES ON TRANSACTIONS
EXAMINE TRANSACTIONS BETWEEN
A SUPERVISED INSTITUTION AND BETWEEN A SUPERVISED
SAID ENTITIES, FOR SUPERVISORY
INSTITUTION AND ITS PARENT OR
PURPOSES.
OTHER AFFILIATE COMPANIES, AND
EXAMINE THESE TRANSACTIONS.
THIS POWER INCLUDES THE
AUTHORITY OF THE BANGKO
SENTRAL TO LOOK INTO THE MAIN
33
ACTIVITIES OF COMPANIES
AFFILIATED WITH THE PARENT
COMPANIES THAT HAVE A
MATERIAL IMPACT ON THE SAFETY
AND SOUNDNESS OF THE BANK
AND THE BANKING GROUP.
“A PARENT COMPANY MEANS A A PARENT COMPANY MEANS A

CORPORATION WHICH OWNS OR
CORPORATION WHICH OWNS
HOLDS WITH POWER TO VOTE
DIRECTLY OR INDIRECTLY THE DIRECTLY OR INDIRECTLY VOTING
VOTING STOCK OF A SUPERVISED
STOCK OF A SUPERVISED
INSTITUTION OF THE BANGKO
SENTRAL SUFFICIENT TO CONTROL INSTITUTION OF THE BANGKO
ITS MANAGEMENT AND
SENTRAL SUFFICIENT TO CONTROL
OPERATIONS, SUBJECT TO THE
GUIDELINES ISSUED BY THE ITS MANAGEMENT AND
MONETARY BOARD.
OPERATIONS, SUBJECT TO THE
GUIDELINES ISSUED BY THE
MONETARY BOARD.
“AS USED IN THIS SECTION AND AS USED IN THIS SECTION AND

SECTION 25-A, AND SUBJECT TO
SECTION 25-A, AND SUBJECT TO
THE GUIDELINES ISSUED BY THE
MONETARY BOARD, CONTROL THE GUIDELINES ISSUED BY THE
EXISTS WHEN THE PARENT
34
COMPANY OWNS DIRECTLY OR MONETARY BOARD, CONTROL
INDIRECTLY MORE THAN ONE HALF
EXISTS WHEN THE PARENT OWNS
OF THE VOTING STOCK OF A
SUPERVISED INSTITUTION. DIRECTLY OR INDIRECTLY MORE
CONTROL ALSO EXISTS EVEN WHEN
THAN ONE HALF OF THE STOCK OF
THE PARENT COMPANY OWNS ONE
HALF OR LESS OF THE VOTING A SUPERVISED INSTITUTION.
STOCK OF THE SUPERVISED
CONTROL ALSO EXISTS EVEN
INSTITUTION WHEN: (1) THERE IS
POWER OVER MORE THAN ONE WHEN THE PARENT OWNS ONE
HALF OF THE VOTING RIGHTS BY
HALF OR LESS OF THE VOTING
PROXY OR BY VIRTUE OF AN
AGREEMENT WITH OTHER STOCK OF THE SUPERVISED
INVESTORS WHICH THEREBY
INSTITUTION WHEN THERE IS
ENABLES THE PARENT COMPANY TO
CAST THE MAJORITY OF VOTES AT POWER OVER MORE THAN ONE
MEETINGS OF THE STOCKHOLDERS
OF THE SUPERVISED INSTITUTION
OR TO ELECT THE MAJORITY OF PROXY OR BY VIRTUE OF AN
MEMBERS OF THE BOARD OF
AGREEMENT WITH OTHER
DIRECTORS OF THE SUPERVISED
INSTITUTION, OR (2) THERE IS INVESTORS, OR OTHER SIMILAR
POWER TO DETERMINE THE
ARRANGEMENTS, WHICH THEREBY
FINANCIAL AND OPERATING
POLICIES OF THE SUPERVISED ENABLES THE PARENT COMPANY
INSTITUTION, OR OTHER SIMILAR
TO CAST THE MAJORITY OF VOTES
ARRANGEMENTS.
AT MEETINGS OF THE
STOCKHOLDERS OF THE
35
SUPERVISED INSTITUTION, OR TO
ELECT THE MAJORITY OF MEMBERS
OF THE BOARD OF DIRECTORS OF
THE SUPERVISED INSTITUTION OR
TO APPOINT KEY EXECUTIVE
OFFICERS WHO SHALL DIRECTLY
OR INDIRECTLY CONTROL THE
MANAGEMENT AND OPERATIONS
OF THE SUPERVISED INSTITUTION.
“For purposes of this section, a For purposes of this section, a For purposes of THE FIRST
subsidiary means a corporation more
subsidiary means a corporation more PARAGRAPH OF this Section, a
than fifty percent (50%) of the voting
stock of which is DIRECTLY OR than fifty percent (50%) of the voting subsidiary means a corporation more
INDIRECTLY owned, CONTROLLED
stock of which is owned by a bank or than fifty percent (50%) of the voting
OR HELD WITH POWER TO VOTE by
a bank or quasi-bank and an affiliate quasi-bank and an affiliate means a stock of which is owned DIRECTLY
means a corporation the voting stock of
corporation the voting stock of which, OR INIDIRECTLY by a bank or quasi-
which, to the extent of fifty percent
(50%) or less, is owned by a bank or to the extent of fifty percent (50%) or bank and an affiliate means a
quasi-bank or which is related or linked
less, is owned by a bank or quasi-bank corporation the voting stock of which,
DIRECTLY OR INDIRECTLY to such
institution or intermediary through or which is related or linked to such to the extent of fifty percent (50%) or
common stockholders or such other
institution or intermediary through less, is owned by a bank or quasi-
factors as may be determined by the
Monetary Board. common stockholders or such other bank or which is related or linked to
36
factors as may be determined by the such institution or intermediary
Monetary Board. through common stockholders or
such other factors as may be
determined by the Monetary Board.
IN CONNECTION WITH THE

SECOND PARAGRAPH OF THIS
SECTION, A PARENT COMPANY
MEANS A CORPORATION WHICH
OWNS DIRECTLY OR INDIRECTLY
THE VOTING STOCK OF A
SUPERVISED INSTITUTION OF
THE BANGKO SENTRAL
SUFFICIENT TO CONTROL ITS
MANAGEMENT AND OPERATIONS.
AS USED IN THIS SECTION,

CONTROL EXISTS WHEN THE
PARENT OWNS DIRECTLY OR
INDIRECTLY MORE THAN ONE-
HALF OF THE STOCK OF A
37
SUPERVISED INSTITUTION.
CONTROL ALSO EXISTS EVEN
WHEN THE PARENT OWNS ONE-
HALF OR LESS OF THE VOTING
STOCK OF THE SUPERVISED
INSTITUTION WHEN THERE IS
POWER OVER MORE THAN ONE-
PROXY OR BY VIRTUE OF AN
AGREEMENT WITH OTHER
INVESTORS WHICH THEREBY
ENABLES THE PARENT COMPANY
TO CAST THE MAJORITY OF
VOTES AT MEETINGS OF THE
STOCKHOLDERS OF THE
SUPERVISED INSTITUTION, OR TO
ELECT THE MAJORITY OF
MEMBERS OF THE BOARD OF
DIRECTORS OF THE SUPERVISED
INSTITUTION OR TO APPOINT KEY
38
EXECUTIVE OFFICERS WHO
SHALL DIRECTLY OR INDIRECTLY
CONTROL THE MANAGEMENT
AND OPERATIONS OF THE
SUPERVISED INSTITUTION.
“The department heads and the The department heads and the The department heads and the
examiners of the supervising and/or
examiners of the supervising and/or examiners of the supervising and/or
examining departments are hereby
authorized to administer oaths to any examining departments are hereby examining departments are hereby
director, officer, or employee of any
authorized to administer oaths to any authorized to administer oaths to any
institution under their respective
supervision or subject to their director, officer, or employee of any director, officer, or employee of any
examination, [and] to compel the
institution under their respective institution under their respective
presentation of all books, documents,
papers or records necessary in their supervision or subject to their supervision or subject to their
judgment to ascertain the facts relative
examination, and to compel the examination and to compel the
to the true condition of any institution
as well as the books and records of presentation of all books, documents, presentation of all books, documents,
persons and entities relative to or in
papers or records necessary in their papers or records necessary in their
connection with the operations,
activities or transactions of the judgment to ascertain the facts relative judgment to ascertain the facts
institution under examination, AND TO
to the true condition of any institution relative to the true condition of any
INQUIRE INTO BANK DEPOSITS AND
INVESTMENT ACCOUNTS IN THE as well as the books and records of institution as well as the books and
COURSE OF AN EXAMINATION IN
persons and entities relative to or in records of persons and entities
ORDER TO ASCERTAIN COMPLIANCE
WITH THE LAWS AND BANKING connection with the operations, relative to or in connection with the
39
REGULATIONS, OR IN CASES WHERE activities or transactions of the operations, activities or transactions
THERE IS REASONABLE GROUND TO
institution under examination subject to of the institution under examination,
BELIEVE THAT A FRAUD,
IRREGULARITY OR UNLAWFUL the provision of existing laws protecting subject to the provision of existing
ACTIVITY HAS BEEN OR IS BEING
or safeguarding the secrecy or laws protecting or safeguarding the
COMMITTED AND THAT IT IS
NECESSARY TO LOOK INTO THE confidentiality of bank deposits as well secrecy or confidentiality of bank
DEPOSIT OR INVESTMENT TO
as investments of private persons, deposits as well as investments of
ESTABLISH SUCH FRAUD,
IRREGULARITY OR UNLAWFUL natural or juridical, in debt instruments private persons, natural or juridical,
ACTIVITY. [,subject to the provision of
issued by the Government. in debt instruments issued by the
existing laws protecting or safeguarding
the secrecy or confidentiality of bank Government.
deposits as well as investments of
private persons, natural or juridical, in
debt instruments issued by the
Government.]
“No restraining order or injunction shall No restraining order or injunction shall [No restraining order or injunction
be issued by the court enjoining the
be issued by the court enjoining the shall be issued by the court enjoining
Bangko Sentral from examining any
institution subject to supervision or Bangko Sentral from examining any the Bangko Sentral from examining
examination by the Bangko Sentral,
institution subject to supervision or any institution subject to supervision
unless there is convincing proof that the
action of the Bangko Sentral is plainly examination by the Bangko Sentral, or examination by the Bangko
arbitrary and made in bad faith and the
unless there is convincing proof that Sentral, unless there is convincing
petitioner or plaintiff files with the clerk
or judge of the court in which the action the action of the Bangko Sentral is proof that the action of the Bangko
is pending a bond executed in favor of
plainly arbitrary and made in bad faith Sentral is plainly arbitrary and made
40
the Bangko Sentral, in an amount to be and the petitioner or plaintiff files with in bad faith and the petitioner or
fixed by the court. The provisions of
the clerk or judge of the court in which plaintiff files with the clerk or judge
Rule 58 of the New Rules of Court
insofar as they are applicable and not the action is pending a bond executed of the court in which the action is
inconsistent with the provisions of this
in favor of the Bangko Sentral, in an pending a bond executed in favor of
section shall govern the issuance and
dissolution of the restraining order or amount to be fixed by the court. The the Bangko Sentral, in an amount to
injunction contemplated in this
provisions of Rule 58 of the New Rules be fixed by the court. The provisions
section.”
of Court insofar as they are applicable of Rule 58 of the New Rules of Court
and not inconsistent with the provisions insofar as they are applicable and not
of this section shall govern the inconsistent with the provisions of
issuance and dissolution of the this Section shall govern the issuance
restraining order or injunction and dissolution of the restraining
contemplated in this section. order or injunction contemplated in
this Section.]”

as follows:
“SEC. 15. Exercise of Authority. — In

the exercise of its authority, the
Monetary Board shall:
41
(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;
ANY ISSUANCE THAT AFFECTS

THIRD PARTIES OR IMPOSES A
PENALTY OR SANCTION AGAINST
THE INSTITUTIONS
SUPERVISED/REGULATED BY THE
BANGKO SENTRAL OR THEIR
DIRECTORS OR OFFICERS SHALL,
BEFORE ITS ISSUANCE, BE
SUBJECT TO PUBLIC HEARINGS OF
THE PARTIES AND INSTITUTIONS
42
TO BE AFFECTED.
NO RULES AND REGULATIONS

SHALL BECOME EFFECTIVE
UNLESS PUBLISHED IN TWO (2)
NEWSPAPERS OF NATIONAL
CIRCULATION;
(b) direct the management,

operations, and administration of the
Bangko Sentral, reorganize its
personnel AND IN CONNECTION
THEREWITH PROVIDE
SEPARATION BENEFITS AS
DEEMED APPROPRIATE, 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;]
43
THE MONETARY BOARD SHALL
ESTABLISH A LEGAL UNIT UNDER
ITS EXCLUSIVE SUPERVISION AND
CONTROL THAT SHALL ASSIST
THE MONETARY BOARD IN ITS
POLICY FORMULATION, IN THE
PROMULGATION OF
IMPLEMENTING RULES AND
REGULATIONS AND IN REVIEWING
THE LEGAL ASPECT OF
MEASURES INCLUDED IN THE
AGENDA OF THE MEETINGS 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
44
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
45
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.
46
(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, CREDIT AND MONETARY
POLICY OPERATIONS 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
47
reason of the performance of his
functions or duties, unless he is
finally adjudged in such action or
proceeding to be liable for BAD
FAITH, MALICE, 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] HAD NOT ACTED

WITH BAD FAITH, MALICE,
negligence or misconduct.
The costs and expenses incurred in

defending the aforementioned action,
suit or proceeding may be paid by
48
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
REFERRED TO IN SUBSECTION (E)
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 ON
ACCOUNT OF BAD FAITH, MALICE,
NEGLIGENCE OR MISCONDUCT.”
SEC. 8. A new section entitled Section SEC. 8. A new section entitled Section
25-A is hereby included in the same Act
25-A is hereby inserted in the same Act
to read as follows:
to read as follows:
“SEC. 25-A. AUTHORITY TO SEC. 25-A. AUTHORITY TO

APPROVE TRANSFER OF SHARES -
APPROVE TRANSFER OF SHARES -
TRANSFERS OR ACQUISITIONS, OR
A SERIES THEREOF, OF AT LEAST TRANSFERS OR ACQUISITIONS, OR
TEN PERCENT (10%) OF THE
49
VOTING SHARES IN BANKS OR A SERIES THEREOF, OF TEN
QUASI-BANKS SHALL REQUIRE THE
PERCENT (10%) OF VOTING RIGHTS
PRIOR APPROVAL OF THE BANGKO
SENTRAL. THE SELLING OR IN BANKS OR QUASI-BANKS SHALL
CONVEYING STOCKHOLDER SHALL
REQUIRE THE PRIOR APPROVAL OF
SUBMIT SUCH TRANSFER OR
ACQUISITON FOR APPROVAL BY THE BANGKO SENTRAL. THE
THE BANGKO SENTRAL WITHIN
SELLING OR CONVEYING
SUCH PERIOD AS MAY BE
PRESCRIBED BY THE MONETARY STOCKHOLDER SHALL SUBMIT
BOARD. IN APPROVING SUCH
SUCH TRANSFER OR ACQUISITON
TRANSFERS OR ACQUISITIONS,
REGARD SHALL BE GIVEN BY THE FOR APPROVAL BY THE BANGKO
BANGKO SENTRAL TO THE FITNESS
SENTRAL WITHIN SUCH PERIOD AS
OF THE INCOMING STOCKHOLDERS
AS MAY BE INDICATED IN THEIR MAY BE PRESCRIBED BY THE
INTEGRITY, REPUTATION AND
MONETARY BOARD. IN APPROVING
FINANCIAL CAPACITY. WITHOUT
BANGKO SENTRAL APPROVAL, NO SUCH TRANSFERS OR
SUCH TRANSFER OR ACQUISITION
ACQUISITIONS, REGARD SHALL BE
SHALL HAVE LEGAL EFFECT NOR
SHALL THE SAME BE RECOGNIZED GIVEN BY THE BANGKO SENTRAL
IN THE BOOKS OF THE INSTITUTION
TO THE FITNESS OF THE INCOMING
OR BY ANY GOVERNMENT AGENCY,
AND THE TRANSFEROR- STOCKHOLDERS AS MAY BE
STOCKHOLDERS SHALL REMAIN
INDICATED IN THEIR INTEGRITY,
ACCOUNTABLE AND RESPONSIBLE
THEREFOR. TRANSFER OF ACTUAL REPUTATION AND FINANCIAL
CONTROL OR MANAGEMENT OF THE
CAPACITY. WITHOUT BANGKO
50
INSTITUTION TO THE NEW SENTRAL APPROVAL, NO SUCH
STOCKHOLDERS OR THEIR
TRANSFER OR ACQUISITION SHALL
REPRESENTATIVES PRIOR TO
BANGKO SENTRAL APPROVAL HAVE LEGAL EFFECT NOR SHALL
SHALL MAKE THE TRANSFEROR,
THE SAME BE RECOGNIZED IN THE
THE TRANSFEREE AND ANY PERSON
RESPONSIBLE THEREFOR LIABLE BOOKS OF THE INSTITUTION OR BY
UNDER SECTIONS 36 AND 37 OF
ANY GOVERNMENT AGENCY, AND
THIS ACT. NOTWITHSTANDING ANY
PROVISION OF LAW TO THE THE TRANSFEROR-STOCKHOLDERS
CONTRARY, THE BANGKO SENTRAL
SHALL REMAIN ACCOUNTABLE AND
MAY SHARE WITH THE PHILIPPINE
DEPOSIT INSURANCE CORPORATION RESPONSIBLE THEREFOR.
ANY INFORMATION THAT THE
TRANSFER OF ACTUAL CONTROL
BANGKO SENTRAL MAY OBTAIN
PERTAINING TO TRANSFER OR OR MANAGEMENT OF THE
ACQUISITION OF SHARES OR
INSTITUTION TO THE NEW
SERIES OF TRANSFERS OR
ACQUISITION OF SHARES IN BANKS STOCKHOLDERS OR THEIR
AND QUASI-BANKS.”
REPRESENTATIVES PRIOR TO
BANGKO SENTRAL APPROVAL
SHALL MAKE THE TRANSFEROR,
THE TRANSFEREE AND ANY
PERSON RESPONSIBLE THEREFOR
LIABLE UNDER SECTIONS 36 AND
37 OF THIS ACT.
51
NOTWITHSTANDING ANY
PROVISION OF LAW TO THE
CONTRARY, THE BANGKO SENTRAL
MAY SHARE WITH THE PHILIPPINE
DEPOSIT INSURANCE
CORPORATION ANY INFORMATION
THAT THE BANGKO SENTRAL MAY
OBTAIN PERTAINING TO TRANSFER
OR ACQUISITION OF SHARES OR
SERIES OF TRANSFERS OR
ACQUISITION OF SHARES IN BANKS
AND QUASI-BANKS.

as follows:
“SEC. 26. Bank Deposits [and

Investments]. — Any director, officer
or stockholder who, together with his
related interest, contracts a loan or
52
any form of financial accommodation
from: (1) his bank; 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, in excess of five
percent (5%) of the capital and
surplus of the bank, or in the
maximum amount permitted by law,
whichever is lower, shall be required
by the lending bank to waive the
secrecy of his deposits of whatever
nature in all banks in the Philippines.
Any information obtained from an
examination of his deposits shall be
held strictly confidential and may be
53
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.
RELATED INTEREST, AS USED IN

THIS SECTION, SHALL REFER TO
STOCKHOLDINGS OF FAMILY
GROUPS OR CORPORATE
HOLDINGS OF THE SAME FAMILY
GROUPS OR SAME GROUPS OF
PERSONS AS DEFINED IN
SECTION 12 AND SECTION 13 OF
REPUBLIC ACT NO. 8791
OTHERWISE KNOWN AS THE
GENERAL BANKING LAW OF 2000
WHO CONTROL OR OWN AT
LEAST FORTY PERCENT (40%) OF
THE VOTING STOCK OF A BANK,
54
QUASI BANK, AND OTHER
FINANCIAL INSTITUTION WHICH
IS SUBJECT TO SUPERVISION BY
THE BANGKO SENTRAL; RELATED
INTEREST MAY ALSO REFER TO A
HOLDING COMPANY THAT
CONTROLS OR OWNS AT LEAST
FORTY PERCENT (40%) OF THE
VOTING STOCK AS A GROUP, OF
BANKS, QUASI BANKS AND
OTHER FINANCIAL INSTITUTIONS
WHICH ARE SUBJECT TO
SUPERVISION BY THE BANGKO
SENTRAL.”
SEC. 9. Section 27 (d) of the same Act SEC. 16. Section 27 of Republic Act
is hereby amended to read as follows:
as follows:
“SEC. 27. Prohibitions. – In addition to “SEC. 27. Prohibitions. — In addition

the prohibitions found in Republic Act
to the prohibitions found in Republic
Nos. 3019 and 6713, personnel of the
55
Bangko Sentral are hereby prohibited Act Nos. 3019 and 6713, personnel of
from:
the Bangko Sentral are hereby
xxx prohibited from:
(a) being an officer, director, lawyer

or agent, employee, consultant or
stockholder, directly or indirectly, of
any institution subject to supervision
or examination by the Bangko
Sentral, except non-stock savings
and loan associations and provident
funds organized exclusively for
employees of the Bangko Sentral,
and except as otherwise provided in
this Act;
(b) directly or indirectly requesting or

receiving any VALUABLE gift,
[present] IN KIND or pecuniary or

material benefit for
56
himself/HERSELF or [another] FOR
A RELATIVE WITHIN THE FIRST
DEGREE OF CONSANGUINITY OR
AFFINITY from any institution
subject to supervision or examination
by the Bangko Sentral;
(c) revealing in any manner, except

under orders of the court, the
[Congress] HOUSE OF
REPRESENTATIVES OR THE
SENATE OR ANY OF THE
APPROPRIATE COMMITTEES
THEREIN or any government office
or agency authorized by law, or
under such conditions as may be
prescribed by the Monetary Board,
information relating to the condition
or business of any institution UNDER
ITS SUPERVISION. This prohibition
57
shall not be held to apply to the
giving of information to the Monetary
Board or the Governor of the Bangko
Sentral, or to any person authorized
by either of them, in writing, to
receive such information; and
“(d) borrowing from any institution (d) borrowing from any institution
by the Bangko Sentral shall be
prohibited unless said borrowing[s are] by the Bangko Sentral shall be
IS TRANSACTED ON AN ARM’S
prohibited unless said borrowings are
LENGTH BASIS [adequately secured],
fully disclosed to the Monetary Board, adequately secured, fully disclosed to
and shall be subject to such rules and
the Monetary Board, and shall be
regulations as the Monetary Board may
prescribe[: Provided, however, That subject to such further rules and
personnel of the supervising and
regulations as the Monetary Board
examining departments are prohibited
from borrowing from a bank under their may prescribe: Provided, however,
supervision and examination]. xxx”
That personnel of the supervising
and examining departments are
prohibited from borrowing from a
bank under their supervision or
58
examination.”

as follows:
“SEC. 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, AT HIS INITIATIVE, OR

UPON THE RECOMMENDATION OF
A MEMBER OF THE MONETARY
BOARD, 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] DEEMED to be necessary

to carry out the purposes and
provisions of this Act. THE
59
SUPPORTING MEMORANDUM FOR
ANY ITEM INCLUDED IN THE
AGENDA FOR THE MEETINGS OF
THE MONETARY BOARD SHALL BE
DISTRIBUTED TO THE MEMBERS
AT LEAST THREE (3) WORKING
DAYS BEFORE THE SCHEDULED
MEETING IN ORDER TO ENABLE
THE MEMBERS OF THE BOARD TO
STUDY, REVIEW, AND EVALUATE
EACH AND EVERY ITEM INCLUDED
IN THE AGENDA; PROVIDED,
HOWEVER, THAT IN EMERGENCY
CASES, PRIOR ONE (1) WORKING
DAY BEFORE A MEETING SHALL
APPLY;
(b) execute and administer the

policies and measures approved by
the Monetary Board UPON THEIR
60
EFFECTIVITY;
(c) direct and supervise the

operations and internal
administration of the Bangko Sentral.
The Governor may delegate IN
WRITING certain of his
administrative responsibilities OR
SPECIFIC TASKS 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
SUBJECT TO SUCH GUIDELINES
AND REPORTORIAL
REQUIREMENTS AS HE SHALL
REQUIRE or subject to such rules
and regulations as the Monetary
Board may prescribe FOR THE
DELEGATED AUTHORITY;
61
PROVIDED, HOWEVER, THAT A
POWER OR AUTHORITY DIRECTLY
VESTED BY LAW TO BE
EXERCISED BY THE MONETARY
BOARD UNDER THIS ACT AND/OR
UNDER ANY OTHER SPECIAL LAW
SHALL NOT BE DELEGATED TO BE
EXERCISED BY THE GOVERNOR
OR ANY OTHER EXECUTIVE
OFFICER OF THE BANGKO
SENTRAL, BUT THE POWER OR
AUTHORITY EXERCISED BY THE
MONETARY BOARD PURSUANT TO
LAW THROUGH THE RULES AND
REGULATIONS PROMULGATED BY
IT, OR THE DECISIONS, RULINGS
OR ORDERS ISSUED BY THE
MONETARY BOARD SHALL BE
IMPLEMENTED OR EXECUTED BY
THE GOVERNOR AND/OR OTHER
62
PERTINENT EXECUTIVE OFFICERS
OF THE BANGKO SENTRAL;
(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; AND
[(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
63
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)] (E) exercise such other powers

as may be vested in him by the
Monetary Board.”
“SEC. 28. Examination and Fees. — The SEC. 28. Examination and Fees. — The “SEC. 28. Examination and Fees. — The
supervising and examining department
supervising and examining department supervising and examining department head,
head, personally or by deputy, shall
examine the [books] OPERATIONS of head, personally or by deputy, shall personally or by deputy, shall examine the
every bank[ing] AND QUASI-BANK,
examine the [books] OPERATIONS of books AND OPERATIONS of every
INCLUDING THEIR SUBSIDIARIES
AND AFFILIATES ENGAGED IN every bank[ing] AND QUASI-BANK, bank[ing], OR QUASI-BANKING OR NON-
ALLIED ACTIVITIES, AND OTHER
INCLUDING THEIR SUBSIDIARIES BANK FINANCIAL institution once in every
ENTITIES WHICH UNDER THIS ACT
64
OR SPECIAL LAWS ARE SUBJECT TO AND AFFILIATES ENGAGED IN twelve (12) months, and at such other times as
BANGKO SENTRAL SUPERVISION, IN
ALLIED ACTIVITIES, AND OTHER the Monetary Board by an affirmative vote of
ACCORDANCE WITH THE
GUIDELINES SET BY THE MONETARY ENTITIES WHICH UNDER THIS ACT AT LEAST five (5) members, may [deem
BOARD TAKING INTO
OR SPECIAL LAWS ARE SUBJECT TO expedient] AUTHORIZE A SPECIAL
CONSIDERATION SOUND AND
PRUDENT PRACTICES. [once in every BANGKO SENTRAL SUPERVISION, EXAMINATION IF THE
twelve (12) months, and at such other CIRCUMSTANCES WARRANT and to
IN ACCORDANCE WITH THE
times as the Monetary Board by an
affirmative vote of five (5) members, GUIDELINES SET BY THE [make a report on the same] SUBMIT AN
may deem expedient and to make a
MONETARY BOARD TAKING INTO EXECUTIVE SUMMARY OF THE
report on the same to the Monetary
Board:] Provided, That there shall be CONSIDERATION SOUND AND FINDINGS OF EXAMINATION WITH
an interval of at least twelve (12)
PRUDENT PRACTICES. [once in THE REPORT OF EXAMINATION
months between [annual] REGULAR
examinations; PROVIDED, FURTHER, every twelve (12) months, and at such ATTACHED THERETO FOR READY
THAT THE MONETARY BOARD, BY
other times as the Monetary Board by REFERENCE to the Monetary Board:
AN AFFIRMATIVE VOTE OF AT LEAST
FIVE (5) MEMBERS, MAY an affirmative vote of five (5) Provided, That there shall be an interval of at
AUTHORIZE A SPECIAL
members, may deem expedient and to least twelve (12) months between annual
EXAMINATION IF THE
CIRCUMSTANCES WARRANT. make a report on the same to the examinations.
Monetary Board:] Provided, That there
shall be an interval of at least twelve
(12) months between [annual]
REGULAR examinations; PROVIDED,
FURTHER, THAT THE MONETARY
65
BOARD, BY AN AFFIRMATIVE VOTE
OF AT LEAST FIVE (5) MEMBERS,
MAY AUTHORIZE A SPECIAL
EXAMINATION IF THE
CIRCUMSTANCES WARRANT.
“The INSTITUTION [bank] concerned The INSTITUTION [bank] concerned THE SUPERVISED INSTITUTIONS
shall afford to the head of the
shall afford to the head of the UNDER THIS SECTION SHALL BE
appropriate supervising and examining
departments and to his authorized appropriate supervising and examining GIVEN THE OPPORTUNITY TO
deputies full opportunity to examine its
departments and to his authorized CONTEST IN WRITING ANY OR
books AND RECORDS, cash and
[available] assets and general condition deputies full opportunity to examine its ALL OF THE FINDINGS OF THE
AND REVIEW ITS SYSTEMS AND
books AND RECORDS, cash and EXAMINERS OF THE SUPERVSING
PROCEDURES at any time during
BUSINESS [banking] hours when [available] assets and general AND EXAMINATION DEPARTMENT
requested to do so by the Bangko
condition AND REVIEW ITS SYSTEMS OF THE BANGKO SENTRAL IN AN
Sentral: Provided, however, That none
of the reports and other papers relative AND PROCEDURES at any time during EXIT CONFERENCE BEFORE THE
to such examinations shall be open to
BUSINESS [banking] hours when REPORT OF EXAMINATION IS
inspection by the public except insofar
as such publicity is incidental to the requested to do so by the Bangko FINALIZED. THE WRITTEN
proceedings hereinafter authorized or is
Sentral: Provided, however, That none EXPLANATIONS, IF ANY, OF THE
necessary for the prosecution of
violations in connection with the of the reports and other papers relative SUPERVISED INSTITUTION UNDER
business of such institutions.
to such examinations shall be open to EXAMINATION SHALL BE PART OF
inspection by the public except insofar THE REPORT OF EXAMINATION
66
as such publicity is incidental to the WITH COMMENTS IF DEEMED
proceedings hereinafter authorized or is WARRANTED BY THE EXAMINERS
necessary for the prosecution of INVOLVED.
violations in connection with the
“[Banking and quasi-banking [Banking and quasi-banking institutions The bank, OR QUASI-BANK OR
institutions which are subject to
which are subject to examination by NON-BANK FINANCIAL
examination by the Bangko Sentral]
SUPERVISED INSTITUTIONS shall pay the Bangko Sentral] SUPERVISED INSTITUTION concerned shall
to the Bangko Sentral, NO LATER
INSTITUTIONS shall pay to the afford to the head of the appropriate
THAN MAY 31 OF EACH YEAR [within
the first thirty (30) days of each year], Bangko Sentral, NO LATER THAN MAY supervising and examining
an annual SUPERVISION fee [in an
31 OF EACH YEAR [within the first departments and to his authorized
amount equal to a percentage,] as may
be prescribed by the Monetary Board. [, thirty (30) days of each year], an deputies full opportunity to examine
of its average total assets during the
annual SUPERVISION fee [in an its books, cash and available assets
preceding year as shown on its end-of-
month balance sheets, after deducting amount equal to a percentage,] as may and general condition at any time
cash on hand and amounts due from
be prescribed by the Monetary Board. during banking hours when
banks, including the Bangko Sentral
and banks abroad.] IN DETERMINING [,of its average total assets during the requested to do so by the Bangko
THE AMOUNT OF THE ANNUAL
preceding year as shown on its end-of- Sentral: Provided, however, That
SUPERVISION FEE, THE MONETARY
BOARD SHALL CONSIDER THE month balance sheets, after deducting none of the reports and other papers
67
COSTS OF SUPERVISION.” cash on hand and amounts due from relative to such examinations shall be
banks, including the Bangko Sentral open to inspection by the public
and banks abroad.] IN DETERMINING except insofar as such publicity is
THE ANNUAL SUPERVISION FEE, incidental to the proceedings
THE MONETARY BOARD SHALL hereinafter authorized or is
CONSIDER THE COST OF necessary for the prosecution of
SUPERVISION. violations in connection with the
BankS[ing, and] quasi-banking,

AND NON-BANK FINANCIAL
institutions which are subject to
examination by the Bangko Sentral
shall pay to the Bangko Sentral,
within the first thirty (30) days of
each year, 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
68
on its end-of-QUARTER [month
balance sheets] STATEMENT OF

CONDITION, after deducting cash on
hand and amounts due from banks,
QUASI-BANKS, AND OTHER
FINANCIAL INSTITUTIONS,
including the Bangko Sentral and
banks abroad.”

as follows:
“SEC. 19. Authority of the Governor

in Emergencies. — In case of
emergencies where time is
insufficient to call a FORMAL
meeting of the Monetary Board, the
Governor of the Bangko Sentral, with
the concurrence of [two (2)] THREE

(3) other members of the Monetary
69
Board, may decide [any] AN
URGENT matter or take [any] action
[within the authority of the Board]

RELEVANT TO THE EMERGENCY
INVOLVED, WITHOUT FORMALLY
CONVENING A MEETING OF THE
MONETARY BOARD.
The Governor shall submit a report to

the President and Congress within
seventy-two (72) hours after the
action has been taken.
At the soonest possible time, the

Governor shall call a meeting of the
Monetary Board to submit his action
for ratification.”
SEC. 11. A new section entitled Section SEC. 10. A new section entitled
Section 28-A is hereby inserted in the
to read as follows:
same Act to read as follows:
“SEC. 28-A. BANGKO SENTRAL SEC. 28-A. BANGKO SENTRAL
70
COORDINATION. – THE SUSPENSION COORDINATION. – THE SUSPENSION
OR REVOCATION OF ANY
OR REVOCATION OF ANY
GOVERNMENT LICENSE NECESSARY
FOR THE OPERATION OF A BANGKO GOVERNMENT LICENSE NECESSARY
SENTRAL-SUPERVISED ENTITY
FOR THE OPERATION OF A BANGKO
MUST BE DONE ONLY WITH PRIOR
CONSULTATION WITH THE BANGKO SENTRAL-SUPERVISED ENTITY
SENTRAL.”
MUST BE DONE ONLY WITH PRIOR
CONSULTATION WITH THE BANGKO
SENTRAL.

as follows:
“SEC. 29. Appointment of

Conservator. — Whenever, on the
basis of a report OF EXAMINATION
submitted by the appropriate
supervising or examining department
OF THE BANGKO SENTRAL, the
Monetary Board, IN CONSULTATION
WITH THE PHILIPPINE DEPOSIT
71
INSURANCE CORPORATION
(PDIC), CONFIRMS [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,
OR CONTINUES TO SUFFER
CHRONIC RESERVE OR CAPITAL
DEFICIENCIES WHICH, IF NOT
CORRECTED, WILL EVENTUALLY
RESULT IN INSOLVENCY, the
Monetary Board, IN ORDER TO
AVERT THE THREATENED
INSOLVENCY OF THE BANK, [may]

SHALL appoint a conservator WHO
SHALL INTRODUCE AND ADOPT
MANAGEMENT REFORMS AND
CORRECTIVE MEASURES THAT
72
WILL ENABLE THE BANK TO
RESTORE AND MAINTAIN ITS
VIABILITY. THE CONSERVATOR
[with] SHALL HAVE such powers as

the Monetary Board shall deem
necessary to ENABLE HIM TO take
charge of the assets, liabilities, and
the management thereof, reorganize
the management, collect all monies
and debts due said institution,
PLACE OR INVEST ITS FUNDS IN
READILY MARKETABLE
SECURITIES AND INVESTMENTS,
SELL, IF NECESSARY, REAL
PROPERTIES AND OTHER FIXED
ASSETS TO MEET ITS
OBLIGATIONS, and exercise all
powers [necessary] to restore AND

MAINTAIN its viability. The
73
conservator shall report and be
responsible to the Monetary Board,
WITH A COPY OF SUCH REPORT
FURNISHED THE PDIC, 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, EXCEPT
THAT SUCH POWER CANNOT
EXTEND TO THE POST FACTO
REPUDIATION OF PERFECTED
CONTRACTS THAT INFRINGE
AGAINST THE NON-IMPAIRMENT
CLAUSE OF THE CONSTITUTION.
The conservator should be

competent and knowledgeable in
bank operations and management.
The conservatorship shall not exceed
one (1) year, WHICH MAY BE
EXTENDED FOR A PERIOD OF NOT
74
MORE THAN SIX (6) MONTHS, AS
MAY BE APPROVED BY THE
MONETARY BOARD. The
conservator shall receive
remuneration to be fixed by the
Monetary Board, PAYABLE IN
MONTHLY PAYMENTS: [in an

amount not to exceed two-thirds
(2/3) of the salary of the president of
the institution in one (1) year,
payable in twelve (12) equal monthly
payments:] Provided, That, if at any

time within the one-year period, the
conservatorship is terminated on the
ground that the institution can
operate on its own, the conservator
shall receive the balance of the
remuneration which he would have
received up to the end of the year;
75
but if the conservatorship is
terminated on other grounds, the
conservator shall not be entitled to
such remaining balance. The
Monetary Board [may appoint a

conservator connected with the
Bangko Sentral,] SHALL

AUTHORIZE THE CONSERVATOR
TO APPOINT A CORE GROUP OF
PROFESSIONALS TO ASSIST HIM
IN THE PERFORMANCE OF HIS
POWERS AND DUTIES AS
CONSERVATOR, in which case, [he]
THEY shall [not] be entitled to

receive [any] remuneration or
emoluments THAT THE MONETARY
BOARD SHALL DETERMINE [from
the Bangko Sentral] during the

PERIOD OF conservatorship. The
76
expenses attendant to the
conservatorship shall be borne by the
bank or quasi-bank concerned.
UPON THE REQUEST OF THE

CONSERVATOR, THE MONETARY
BOARD MAY AUTHORIZE THE
GRANT OF EMERGENCY LOANS
OR ADVANCES TO THE
INSTITUTION TO MEET IN A
TIMELY MANNER ITS MATURING
OBLIGATIONS OR UNUSUAL
DEPOSIT WITHDRAWALS WHILE
THE CONSERVATOR IS IN THE
PROCESS OF COLLECTING
MONIES AND DEBTS DUE THE
INSTITUTION UNDER
CONSERVATORSHIP, OR
LIQUEFYING ITS ASSETS TO
RECOVER FROM ITS ILLIQUID
CONDITION AND THEREBY
77
RESTORE THE BANK TO
NORMALCY. THE BANGKO
SENTRAL SHALL REQUIRE
COLLATERALS FOR SUCH
EMERGENCY LOANS OR
ADVANCES, PROVIDED, THAT, IF
THE COLLATERALS ARE
AUTHORIZED TO BE SOLD OR
DISPOSED OF, THE PROCEEDS
SHALL BE APPLIED TO PAY OR
PREPAY THE LOANS OR
ADVANCES, OR PORTIONS
THEREOF, AS THE BANGKO
SENTRAL MAY STIPULATE.
DURING THE PERIOD OF

CONSERVATORSHIP, THE PDIC
SHALL HAVE THE AUTHORITY TO
EXAMINE THE BANK UNDER
CONSERVATORSHIP, INQUIRE
INTO OR EXAMINE THE DEPOSIT
78
ACCOUNTS THEREIN, AND/OR
CONDUCT A DUE DILIGENCE
AUDIT OF THE BANK IN
PREPARATION FOR THE POSSIBLE
ESTABLISHMENT, ORGANIZATION
AND OPERATION OF A BRIDGE
BANK.
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. The conservatorship shall
likewise be terminated should the
Monetary Board, on the basis of the
report of the conservator or of its
own findings, determine that the
continuance in business of the
institution, DESPITE THE
REMEDIAL MEASURES THAT HAVE
79
BEEN ADOPTED, CONTINUE TO
EXPERIENCE ILLIQUIDITY AND
OTHER RELATED FINANCIAL
STRESSES, SUCH THAT THERE
EXIST GROUNDS FOR THE
INSTITUTION TO ENTER
RECEIVERSHIP AND LIQUIDATION,
[would involve probable loss to its

depositors or creditors,] in which
case the provisions of Section 30
shall apply.”
hereby amended to read as follows: hereby amended to read as follows: No. 7653 is hereby amended to read
as follows:
“SEC. 30. Proceedings in Receivership SEC. 30. Proceedings in Receivership “SEC. 30. Proceedings in
and Liquidation. - Whenever, upon
and Liquidation. - Whenever, upon Receivership and Liquidation. –
report of the head of the supervising or
examining department, the Monetary report of the head of the supervising or Whenever, [upon] ON THE BASIS
Board finds that a bank or quasi-bank:
examining department, the Monetary
OF A report of [the head of the
Board finds that a bank or quasi-bank:
supervising or examining
80
department] EXAMINATION, the
Monetary Board finds OR CONFIRMS
that a bank or quasi-bank:
“(a) HAS NOTIFIED THE BANGKO (a) is unable to pay its liabilities as (a) HAS NOTIFIED THE BANGKO
SENTRAL OR PUBLICLY ANNOUNCED
they become due in the ordinary course SENTRAL OR PUBLICLY
A UNILATERAL CLOSURE, OR HAS
BEEN DORMANT FOR AT LEAST of business: Provided, That this shall ANNOUNCED A UNILATERAL
SIXTY (60) DAYS OR IN ANY
not include inability to pay caused by CLOSURE, OR HAS BEEN
MANNER HAS SUSPENDED THE
PAYMENT OF ITS DEPOSIT/DEPOSIT extraordinary demands induced by DORMANT FOR AT LEAST SIXTY
SUBSTITUTE LIABILITIES, OR is
financial panic in the banking (60) DAYS OR IN ANY MANNER
unable to pay its liabilities as they
become due in the ordinary course of community; HAS SUSPENDED THE PAYMENT
business: Provided, That this shall not
OF ITS DEPOSIT/DEPOSIT
include inability to pay caused by
extraordinary demands induced by LIABILITIES, OR is unable to pay its
financial panic in the banking
liabilities as they become due in the
community;
ordinary course of business:
Provided, That this shall not include
inability to pay caused by
extraordinary demands induced by
financial panic in the banking OR
FINANCIAL community; OR
81
“(b) has insufficient realizable assets, (b) has insufficient realizable assets, (b) has insufficient realizable assets
as determined by the Bangko Sentral,
as determined by the Bangko Sentral, TO MEET ITS LIABILITIES, as
to meet its liabilities; or
to meet its liabilities; or determined by the Bangko Sentral[,
to meet its liabilities] IN

ACCORDANCE WITH BANKING
REGULATIONS; or
“(c) cannot continue in business (c) cannot continue in business (c) cannot continue in business
without involving probable losses to its
without involving probable losses to its without involving SUBSTANTIAL
depositors or creditors; or
depositors or creditors; or probable losses to its depositors or
creditors RELATIVE TO THE SIZE
OF THE INSTITUTION
CONCERNED; or
“(d) has willfully violated a cease and (d) has willfully violated a cease and (d) has willfully violated a cease and
desist order under Section 37 that has
desist order under Section 37 that has desist order under Section 37 that
become final, involving acts or
transactions which amount to fraud or a become final, involving acts or has become final, involving acts or
dissipation of the assets of the
transactions which amount to fraud or transactions which amount to fraud
institution;
a dissipation of the assets of the or a dissipation of the assets of the
institution; in which cases, the institution; in which cases, the
82
Monetary Board may summarily and Monetary Board may summarily and
without need for prior hearing forbid without need for prior hearing forbid
the institution from doing business in the institution from doing business in
the Philippines and designate the the Philippines, and IN CASE IT IS A
Philippine Deposit Insurance BANK designate the Philippine
Corporation as receiver of the banking Deposit Insurance Corporation as
institution. receiver of the banking institution.
NOTIFY IN WRITING THE BOARD
OF DIRECTORS OF ITS FINDINGS
AND DIRECT THE PDIC TO
PROCEED WITH THE LIQUIDATION
OF THE CLOSED BANKING
INSTITUTION PURSUANT TO
PARAGRAPH 6 OF THIS SECTION.
in which cases, the Monetary Board

may summarily and without need for
prior hearing forbid the institution from
doing business in the Philippines and IN
THE CASE OF BANKS, designate the
83
Philippine Deposit Insurance
Corporation (PDIC) as receiver [of the
banking institution] AND DIRECT THE
PDIC TO PROCEED WITH THE
LIQUIDATION OF THE CLOSED BANK
PURSUANT TO THIS SECTION AND
THE RELEVANT PROVISIONS OF
REPUBLIC ACT NO. 3591, AS
AMENDED. THE MONETARY BOARD
SHALL NOTIFY IN WRITING THE
BOARD OF DIRECTORS OF THE
CLOSED BANK OF ITS DECISION.
“[For a quasi-bank, any person of [For a quasi-bank, any person of For a quasi-bank, any person of
recognized competence in banking or
recognized competence in banking or recognized competence in banking or
finance may be designated as receiver.]
finance may be designated as finance SHALL [may] be designated
receiver.] as receiver.
THE AUTHORITY OF THE

MONETARY BOARD TO PLACE A
BANK OR QUASI-BANK UNDER
RECEIVERSHIP AS PROVIDED
ABOVE SHALL ALSO BE
EXERCISED OVER OTHER NON-
84
BANK FINANCIAL INSTITUTIONS
WHICH UNDER THIS ACT OR
SPECIAL LAWS ARE SUBJECT TO
BANGKO SENTRAL SUPERVISION,
BASED ON THE SAME
APPLICABLE GROUNDS. FOR THIS
PURPOSE, ANY PERSON OF
RECOGNIZED COMPETENCE IN
BANKING, CREDIT AND FINANCE
MAY BE DESIGNATED AS A
RECEIVER.
“[The receiver shall immediately gather The receiver shall immediately gather The receiver shall immediately
and take charge of all the assets and
and take charge of all the assets and gather, take charge of, MANAGE
liabilities of the institution, administer
the same for the benefit of its creditors, liabilities of the institution, administer AND CONTROL all the assets,
and exercise the general powers of a
the same for the benefit of its creditors, WHICH, IN CASE OF A BANK,
receiver under the Revised Rules of
Court but shall not, with the exception and exercise the general powers of a SHALL INCLUDE ITS LICENSE, and
of administrative expenditures, pay or
receiver under the Revised Rules of liabilities of the institution,
commit any act that will involve the
transfer or disposition of any asset of Court but shall not, with the exception administer the same for the benefit
the institution: Provided, That the
of administrative expenditures, pay or of its creditors, and, exercise the
receiver may deposit or place the funds
of the institution in nonspeculative commit any act that will involve the general powers of a receiver under
85
investments. The receiver shall transfer or disposition of any asset of EXISTING LAWS AND the Revised
determine as soon as possible, but not
the institution: Provided, That the Rules of Court. HOWEVER, THE
later than ninety (90) days from
takeover, whether the institution may receiver may deposit or place the funds DISPOSITION OF THE LICENSE BY
be rehabilitated or otherwise placed in
of the institution in nonspeculative THE RECEIVER SHALL BE SUBJECT
such a condition so that it may be
permitted to resume business with investments. The receiver shall TO THE APPROVAL OF THE
safety to its depositors and creditors
determine as soon as possible, but not MONETARY BOARD. THE
and the general public: Provided, That
any determination for the resumption of later than ninety (90) days from RECEIVER SHALL ADDITIONALLY
business of the institution shall be
takeover, whether the institution may HAVE THE AUTHORITY TO: (1) [but
subject to prior approval of the
Monetary Board.] be rehabilitated or otherwise placed in
shall not, with the exception of] PAY
administrative expenditures, [pay
permitted to resume business with
or commit any act that will involve
safety to its depositors and creditors
the transfer or disposition of any
and the general public: Provided, That
asset of the institution: Provided,
any determination for the resumption
That the receiver may] (2) deposit
of business of the institution shall be
or place the funds of the institution
subject to prior approval of the
in non-speculative investments, OR
Monetary Board.
(3) ADOPT, IF DEEMED
APPROPRIATE BY THE RECEIVER,
BRIDGE BANKING AS A
86
RESOLUTION METHOD, AS
GOVERNED BY SECTION 30-B OF
THIS ACT. The receiver OF QUASI-
BANKS AND NON-BANK
FINANCIAL INSTITUTIONS shall
determine as soon as possible, but
not later than ninety (90) days
from take-over, whether [the]

SUCH institution may be
rehabilitated or otherwise placed in
permitted to resume business with
safety to its [depositors and]

creditors and the general public:
Provided, That any determination for
the resumption of business of the
institution shall be subject to prior
approval of the Monetary Board.
IN ORDER TO REHABILITATE THE IN ORDER TO REHABILITATE THE
87
CLOSED INSTITUTION OR TO CLOSED INSTITUTION OR TO
RESTORE ITS OPERATIONS WITH RESTORE ITS OPERATIONS WITH
SAFETY TO ITS DEPOSITORS, SAFETY TO ITS DEPOSITORS,
CREDITORS AND THE GENERAL CREDITORS AND THE GENERAL
PUBLIC, OR TO MERGE OR PUBLIC OR TO MERGE OR
CONSOLIDATE THE CLOSED CONSOLIDATE THE CLOSED
INSTITUTION WITH ANOTHER INSTITUTION WITH ANOTHER
QUALIFIED INSTITUTION, THE QUALIFIED INSTITUTION, THE
RECEIVER MAY IMMEDIATELY RECEIVER OF QUASI-BANKS AND
TRANSFER OR DISPOSE OF ANY OR OTHER NON-BANK FINANCIAL
ALL OF THE ASSETS OF THE INSTITUTIONS MAY IMMEDIATELY
CLOSED INSTITUTION, CAUSE TRANSFER OR DISPOSE OF ANY
QUASI-REORGANIZATION OF THE OR ALL OF THE ASSETS OF THE
INSTITUTION, AND SUCH OTHER CLOSED INSTITUTION AND
ACTS AS MAY BE AUTHORIZED BY PERFORM SUCH OTHER ACTS AS
LAW. MAY BE AUTHORIZED BY LAW.
“[If the receiver determines that the If the receiver determines that the If the receiver OF QUASI-BANK
institution cannot be rehabilitated or
institution cannot be rehabilitated or AND OTHER NON-BANK
permitted to resume business in
accordance with the next preceding permitted to resume business in FINANCIAL INSTITUTIONS
88
paragraph, the Monetary Board shall accordance with the next preceding determines that the institution
notify in writing the board of directors
paragraph, the Monetary Board shall cannot be rehabilitated or permitted
of its findings and direct the receiver to
proceed with the liquidation of the notify in writing the board of directors to resume business in accordance
institution. The receiver shall:]
of THE RECEIVER’S [its] findings and with the next preceding paragraph
direct the receiver to proceed with the OF THIS SECTION, the Monetary
liquidation of the institution. The Board shall notify in writing the board
receiver shall: of directors of [its] THE RECEIVER’S
findings and direct the receiver to
proceed with the liquidation of the
institutions. The receiver shall:
“[1. file ex parte with the proper (1) file ex parte with the proper 1. File ex parte with the proper
regional trial court, and without
regional trial court, and without regional trial court, and without
requirement of prior notice or any other
action, a petition for assistance in the requirement of prior notice or any other requirement of prior notice or any
liquidation of the institution pursuant to
action, a petition for assistance in the other action, a petition for assistance
a liquidation plan adopted by the
Philippine Deposit Insurance liquidation of the institution pursuant to in the liquidation of the institution
Corporation for general application to
a liquidation plan adopted by the pursuant to a liquidation plan
all closed banks. In case of quasi-banks,
the liquidation plan shall be adopted by Philippine Deposit Insurance adopted by the Philippine Deposit
the Monetary Board. Upon acquiring
Corporation for general application to Insurance Corporation for general
jurisdiction, the court shall, upon
motion by the receiver after due notice, all closed banks. In case of quasi- application to all closed banks. In
89
adjudicate disputed claims against the banks, the liquidation plan shall be case of quasi-banks, the liquidation
institution, assist the enforcement of
adopted by the Monetary Board. Upon plan shall be adopted by the
individual liabilities of the stockholders,
directors and officers, and decide on acquiring jurisdiction, the court shall, Monetary Board. Upon acquiring
other issues as may be material to
upon motion by the receiver after due jurisdiction, the court shall, upon
implement the liquidation plan adopted.
The receiver shall pay the cost of the notice, adjudicate disputed claims motion by the receiver after due
proceedings from the assets of the
against the institution, assist the notice, adjudicate disputed claims
institution.]
enforcement of individual liabilities of against the institution, assist the
the stockholders, directors and officers, enforcement of individual liabilities of
and decide on other issues as may be the stockholders, directors and
material to implement the liquidation officers, and decide on other issues
plan adopted. The receiver shall pay as may be material to implement the
the cost of the proceedings from the liquidation plan adopted. The
assets of the institution. receiver shall pay the cost of the
proceedings from the assets of the
institution.
“[2. convert the assets of the (2) convert the assets of the 2. Convert the assets of the
institutions to money, dispose of the
institutions to money, dispose of the institution to money, dispose of the
same to creditors and other parties, for
the purpose of paying the debts of such same to creditors and other parties, for same to creditors and other parties,
institution in accordance with the rules
the purpose of paying the debts of such for the purpose of paying the debts
on concurrence and preference of credit
under the Civil Code of the Philippines institution in accordance with the rules of such institution in accordance with
90
and he may, in the name of the on concurrence and preference of the rules on concurrence and
institution, and with the assistance of
credit under the Civil Code of the preference of credit under the Civil
counsel as he may retain, institute such
actions as may be necessary to collect Philippines and he may, in the name of Code of the Philippines and he may,
and recover accounts and assets of, or
the institution, and with the assistance in the name of the institution, and
defend any action against, the
institution. The assets of an institution of counsel as he may retain, institute with the assistance of counsel as he
under receivership or liquidation shall
such actions as may be necessary to may retain, institute such actions as
be deemed in custodia legis in the
hands of the receiver and shall, from collect and recover accounts and assets may be necessary to collect and
the moment the institution was placed
of, or defend any action against, the recover accounts and assets of, or
under such receivership or liquidation,
be exempt from any order of institution. The assets of an institution defend any action against, the
garnishment, levy, attachment, or
under receivership or liquidation shall institution. The assets of an
execution.]
be deemed in custodia legis in the institution under receivership or
hands of the receiver and shall, from liquidation shall be deemed in
the moment the institution was placed custodia legis in the hands of the
under such receivership or liquidation, receiver and shall, from the moment
be exempt from any order of the institution was placed under such
garnishment, levy, attachment, or receivership or liquidation, be
execution. exempt from any order of
garnishment, levy, attachment, or
execution.
91
“The actions of the Monetary Board The actions of the Monetary The actions of the Monetary Board
taken under this section or under
Board taken under this section or under taken under this section or under
Section 29 of this Act shall be final and
executory, and may not be restrained Section 29 of this Act shall be final and Section 29 of this Act shall be final
or set aside by the court except on
executory, and may not be restrained and executory, and may not be
petition for certiorari on the ground that
the action taken was in excess of or set aside by the court except on restrained or set aside by the court
jurisdiction or with such grave abuse of
petition for certiorari on the ground except on petition for certiorari on
discretion as to amount to lack or
excess of jurisdiction. The petition for that the action taken was in excess of the ground that the action taken was
certiorari may only be filed by the
jurisdiction or with such grave abuse of in excess of jurisdiction or with such
stockholders of record representing the
majority of the capital stock within ten discretion as to amount to lack or grave abuse of discretion as to
(10) days from receipt by the board of
excess of jurisdiction. The petition for amount to lack or excess of
directors of the institution of the order
directing receivership, liquidation or certiorari may only be filed by the jurisdiction. The petition for certiorari
conservatorship. The designation of a
stockholders of record representing the may only be filed by the stockholders
conservator under Section 29 of this Act
or the appointment of a receiver under majority of the capital stock within ten of record representing the majority of
this section shall be vested exclusively
(10) days from receipt by the board of the capital stock within ten (10) days
with the Monetary Board. Furthermore,
the designation of a conservator is not directors of the institution of the order from receipt by the board of directors
a precondition to the designation of a
directing receivership, liquidation or of the institution of the order
receiver.
conservatorship. The designation of a directing receivership, liquidation or
conservator under Section 29 of this conservatorship.
Act or the appointment of a receiver
92
under this section shall be vested
exclusively with the Monetary Board.
Furthermore, the designation of a
conservator is not a precondition to the
designation of a receiver.
“THE AUTHORITY OF THE THE AUTHORITY OF THE MONETARY

MONETARY BOARD TO SUMMARILY
BOARD TO PLACE A BANK OR
AND WITHOUT NEED FOR PRIOR
HEARING FORBID THE BANK OR QUASI-BANK UNDER RECEIVERSHIP
QUASI-BANK FROM DOING
AS PROVIDED ABOVE MAY ALSO BE
BUSINESS IN THE PHILIPPINES AS
PROVIDED ABOVE MAY ALSO BE EXERCISED OVER NON-STOCK
EXERCISED OVER NON-STOCK
SAVINGS AND LOAN
SAVINGS AND LOAN ASSOCIATIONS,
BASED ON THE SAME APPLICABLE ASSOCIATIONS, BASED ON THE
GROUNDS. FOR QUASI-BANKS AND
SAME APPLICABLE GROUNDS. FOR
NON-STOCK SAVINGS AND LOAN
ASSOCIATIONS, ANY PERSON OF QUASI-BANKS AND NON-STOCK
SAVINGS AND LOAN
BANKING, CREDIT OR FINANCE MAY
BE DESIGNATED BY THE BANGKO ASSOCIATIONS, ANY PERSON OF
SENTRAL AS A RECEIVER.”
BANKING, CREDIT OR FINANCE MAY
BE DESIGNATED AS A RECEIVER.
93
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.
[Furthermore, the designation of a

conservator is not a precondition to
the designation of a receiver.]”
SEC. 20. A new section entitled

section 30-A of the same Act shall be
inserted between Section 30 and
Section 30-B which shall read as
follows:
“SEC. 30-A. PROMPT

CORRECTIVE ACTION (PCA). -
WHENEVER ON THE BASIS OF
THE REPORT OF EXAMINATION
(ROE), THE MONETARY BOARD
FINDS THAT A BANK OR NON-
94
BANK FINANCIAL INSTITUTION
PERFORMING QUASI-BANK
FUNCTIONS IS CAPITAL
DEFICIENT AND FAILS TO COMPLY
WITH MINIMUM CAPITAL
REQUIREMENTS PRESCRIBED
UNDER EXISTING LAWS AND
IMPLEMENTING REGULATIONS,
TAKE PROMPT CORRECTIVE
ACTION DIRECTING THE ENTITIES
AFOREMENTIONED TO INFUSE
ADDITIONAL CAPITAL UP TO AN
AMOUNT NECESSARY TO
RESTORE THEIR CAPITAL TO THE
MINIMUM REQUIRED AMOUNT.
THE AFFECTED ENTITIES SHALL
BE GIVEN A PERIOD OF NOT LESS
THAN (10) MONTHS FROM THE
DATE OF RECEIPT OF THE
95
DIRECTIVE OF THE MONETARY
BOARD TO COMPLY WITH THE
CAPITAL RESTORATION
PROGRAM. IF IT IS SHOWN THAT
THE AFFECTED ENTITY HAS
TAKEN EARNEST EFFORTS TO
COMPLY WITH THE MANDATE OF
THE MONETARY BOARD, THE
AFFECTED ENTITY SHALL BE
GIVEN BY THE MONETARY BOARD
AN EXTENSION OF ANOTHER
FOUR (4) MONTHS TO COMPLY
WITH THE MONETARY BOARD
DIRECTIVE.
IN CASE THE REPORT OF

EXAMINATION (ROE) OF THE
AFFECTED ENTITY ALSO SHOWS
THAT IT ALSO FAILED TO
ADDRESS CORPORATE
MANAGEMENT INADEQUACIES
96
AND/OR NEEDS TO INSTITUTE
ADMINISTRATIVE REFORMS THAT
ARE AUTHORIZED UNDER THIS
ACT OR SPECIAL LAWS, THE
MONETARY BOARD, IN ADDITION
TO INSTITUTING PROMPT
CORRECTIVE ACTION THAT DEALS
SPECIFICALLY WITH THE CAPITAL
DEFICIENCY PROBLEM, MAY
IMPOSE OTHER SUPERVISORY
INTERVENTIONS THAT ARE
AUTHROIZED UNDER THIS ACT
OR SPECIAL LAWS.
IN THE EVENT THAT THE

AFFECTED BANK IS A RURAL
BANK WHICH IS UNABLE TO
COMPLY WITH THE CAPITAL
RESTORATION PROGRAM
INSTITUTED BY THE MONETARY
BOARD WITHIN THE PRESCRIBED
97
PERIOD AND IN ORDER TO
PREVENT THE RURAL BANK
AFFECTED FROM BEING CLOSED,
ANOTHER RURAL BANK SHALL BE
GIVEN THE RIGHT OF FIRST
REFUSAL TO INVEST,
CONSOLIDATE OR MERGE WITH
THE SAID BANK OR TO ACQUIRE
THE ASSETS AND ASSUME THE
LIABILITIES OF SAID RURAL BANK
IN ORDER TO RESTORE THE
NORMAL OPERATIONS OF SAID
RURAL BANK, TO THE EXCLUSION
OF OTHER CATEGORIES OF
BANKS UNLESS NO OTHER RURAL
BANK OF GOOD STANDING
EXPRESSES TO EXERCISE THE
RIGHT OF FIRST REFUSAL
PROVIDED UNDER THIS SECTION.
THE RURAL BANKERS
98
ASSOCIATION OF THE
PHILIPPINES SHALL BE
OFFICIALLY NOTIFIED BY THE
MONETARY BOARD IN WRITING
OF THE RIGHT OF FIRST REFUSAL
MADE AVAILABLE UNDER THIS
SECTION IN ORDER THAT ALL
RURAL BANKS OF GOOD
STANDING SHALL BE NOTIFIED
ACCORDINGLY.
IN CASE THE AFFECTED BANK IS

A GOVERNMENT BANK OR A
GOVERNMENT QUASI-BANK WITH
ORIGINAL STATUTORY CHARTERS,
INFUSION OF ADDITIONAL
CAPITAL BEYOND WHAT IS
PRESCRIBED IN THEIR CHARTERS
SHALL BE UNDERTAKEN
THROUGH AMENDATORY
LEGISLATION. HOWEVER, ISSUES
99
OF CAPITAL NOTES
SUBORDINATED TO OTHER
CREDITS BUT SUPERIOR TO THE
EQUITY OF STOCKHOLDERS IN
THE ORDER OF PREFERENCE OF
CLAIMS AGAINST THE AFFECTED
GOVERNMENT FINANCIAL
INSTITUTION IS HEREBY
AUTHORIZED TO BE ISSUED,
WITH NATIONAL GOVERNMENT
GUARANTEE AND SHALL BE
QUALIFIED AS EQUIVALENT TO
THE REQUIRED CAPITAL
INFUSION.”

section 30-B of the same Act shall be
inserted between Sections 30-A and
31 which shall read as follows:
“SEC. 30-B. BRIDGE BANKING. -
100
(A) THE PHILIPPINE DEPOSIT
INSURANCE CORPORATION (PDIC)
MAY FORM, ESTABLISH,
ORGANIZE, AND OPERATE
AND/OR CONTRACT TO OPERATE
SUBSIDIARIES OR
CORPORATIONS WHOSE PRIMARY
PURPOSE IS TO OPERATE AS A
BRIDGE BANK AND/OR MANAGE
ACQUIRED ASSETS OF THE PDIC.
(B) A BRIDGE BANK REFERS TO A

TEMPORARY BANK LICENSED BY
THE BANGKO SENTRAL,
ESTABLISHED AND OPERATED TO
ACQUIRE ASSETS AND ASSUME
LIABILITIES OF A FAILED BANK.
THE BRIDGE BANK SHALL HAVE
AUTHORITY TO PURCHASE
ASSETS, ASSUME DEPOSITS AND
OTHER LIABILITIES WHICH THE
101
PDIC MAY DETERMINE TO BE
APPROPRIATE; AND PERFORM
SUCH OTHER BANKING
FUNCTIONS AS THE MONETARY
BOARD MAY AUTHORIZE,
CONSISTENT WITH THE
OBJECTIVES OF THIS SECTION.
(C) A BRIDGE BANK RESOLUTION

MEASURE MAY BE ADOPTED ONLY
IF THE BOARD OF DIRECTORS
DETERMINES THAT IT IS A COST-
EFFECTIVE AND VIABLE
RESOLUTION MEASURE AND THE
AMOUNT NECESSARY TO
IMPLEMENT SUCH MEASURE IS
LESS THAN THE ESTIMATED
INSURED DEPOSITS OF THE
FAILED BANK; AND THE
PRESERVATION OF CRITICAL
BANKING FUNCTIONS IS IN THE
102
BEST INTEREST OF THE
DEPOSITORS AND THE PUBLIC.
(D) FOR THE EFFECTIVE

IMPLEMENTATION OF A BRIDGE
BANK RESOLUTION MEASURE,
THE PDIC MAY:
1. SELL, ASSIGN, TRANSFER, OR

CONVEY ITS SHAREHOLDINGS IN
ITS SUBSIDIARY TO THE FAILED
BANK;
2. TRANSFER SUCH ASSETS AND

DEPOSIT LIABILITIES OF A FAILED
BANK TO THE BRIDGE BANK, AS
THE PDIC MAY DEEM
APPROPRIATE. ALL TRANSFERS
UNDER THIS SUBSECTION SHALL:
I. NOT BE SUBJECT TO ANY

TAXES, SUCH AS CAPITAL GAINS
TAX, AS WELL AS INCOME TAX,
103
VALUE ADDED TAX AND
DOCUMENTARY STAMP TAX, AND
OTHER TAXES, AS MAY BE
APPLICABLE;
II. BE CONSIDERED IN CUSTODIA

LEGIS IN THE HANDS OF THE
BRIDGE BANK. FROM THE TIME
THE ASSETS ARE TRANSFERRED
TO A BRIDGE BANK, ITS ASSETS
SHALL NOT BE SUBJECT TO
ATTACHMENT, EXECUTION,
GARNISHMENT, LEVY,
FORECLOSURE OR ANY OTHER
COURT PROCESSES. THEREFORE,
A JUDGE, OFFICER OF THE COURT
OR ANY PERSON WHO SHALL
ISSUE, ORDER, PROCESS OR
CAUSE THE ISSUANCE OR
104
IMPLEMENTATION OF THE WRIT
OF GARNISHMENT, LEVY,
ATTACHMENT OR EXECUTION
SHALL BE LIABLE UNDER
SECTION 22 HEREOF.
III. BE EFFECTIVE WITHOUT ANY

CONSENT FROM THE
STOCKHOLDERS, CREDITORS,
STAKEHOLDERS OF THE FAILED
BANK, NOTWITHSTANDING ANY
PROVISION OF LAW TO THE
CONTRARY.
3. MAKE ADVANCES TO THE

BRIDGE BANK OR CLOSED BANK,
UPON SUCH TERMS AND
CONDITIONS AND IN SUCH FORM
AND AMOUNTS AS THE PDIC MAY
PRESCRIBE, SUFFICIENT FUNDS
105
FOR THE BRIDGE BANK TO
OPERATE. THESE ADVANCES
SHALL PARTAKE OF THE NATURE
OF PUBLIC FUNDS, AND AS
SUCH, MUST BE CONSIDERED A
PREFERRED CREDIT SIMILAR TO
TAXES DUE TO THE NATIONAL
GOVERNMENT IN THE ORDER OF
PREFERENCE UNDER ARTICLE
2224 OF THE NEW CIVIL CODE;
4. CONDUCT DUE DILIGENCE ON

AN INSURED BANK, AND
EXAMINE AND AUDIT THE
DEPOSIT ACCOUNTS AND/OR
RECORDS, OF AN INSURED
BANK, SO AS TO ESTABLISH A
DEPOSIT PROFILE OF THE BANK
AS TO THE NUMBER OF DEPOSIT
ACCOUNTS AND TOTAL INSURED
DEPOSITS: PROVIDED, THAT THE
106
INFORMATION ON INDIVIDUAL
ACCOUNTS OBTAINED THROUGH
SUCH EXAMINATION OR AUDIT
SHALL NOT BE DISCLOSED OR
RELEASED TO ANY OTHER PARTY
EXCEPT TO THE BOARD OF
DIRECTORS OF THE PDIC OR
UPON ORDER OF THE COURT;
AND
5. APPOINT, INSTALL,
DESIGNATE, AND/OR REMOVE
THE DIRECTORS AND OFFICERS
OF A BRIDGE BANK AND FIX
THEIR COMPENSATION.
(E) THE 90-DAY PERIOD

PROVIDED UNDER SECTION 30 OF
REPUBLIC ACT 7653, AS
AMENDED, WITHIN WHICH THE
RECEIVER SHALL DETERMINE
107
WHETHER THE INSTITUTION MAY
BE REHABILITATED SHALL NOT BE
APPLICABLE.
(F) THE BRIDGE BANK SHALL

TERMINATE AT THE END OF TWO
(2) YEARS FOLLOWING THE DATE
IT WAS GRANTED A BANKING
LICENSE, SUBJECT TO THE
PROVISIONS IN THE
PARAGRAPHS (G) AND (H);
PROVIDED, FURTHER, THAT THE
PDIC MAY EXTEND THE STATUS
OF THE BRIDGE BANK IF DEEMED
NECESSARY TO CONCLUDE
PENDING NEGOTIATIONS FOR
THE SALE, MERGER OR
ACQUISITION OF THE BRIDGE
BANK BY A BUYER OR ACQUIRER:
PROVIDED, FINALLY, THAT THE
MAXIMUM EXTENSION SHALL BE
108
ONE (1) YEAR.
(G) TERMINATION OF BRIDGE

BANK. - THE STATUS OF ANY
BRIDGE BANK AS SUCH SHALL
TERMINATE UPON THE EARLIEST
OF—
1. THE MERGER OR
CONSOLIDATION OF THE BRIDGE
BANK WITH ANOTHER BANK
THAT IS NOT A BRIDGE BANK; OR
2. THE SALE OF THE BRIDGE

BANK TO A QUALIFIED BUYER,
AS MAY BE DETERMINED BY THE
PDIC; OR
3. THE ASSUMPTION OF ALL OR

SUBSTANTIALLY ALL OF THE (i)
DEPOSITS AND OTHER
LIABILITIES AND/OR (ii) ASSETS
OF THE BRIDGE BANK BY AN
109
INSURED BANK THAT IS NOT A
BRIDGE BANK, OR OTHER ENTITY
AS PERMITTED UNDER
APPLICABLE LAW. FOLLOWING
THE ASSUMPTION OF ALL OR
SUBSTANTIALLY ALL OF THE
LIABILITIES OF THE BRIDGE BANK
AND THE SALE OF ALL OR
SUBSTANTIALLY ALL OF THE
ASSETS OF THE BRIDGE BANK,
THE BRIDGE BANK SHALL BE
LIQUIDATED IN ACCORDANCE
WITH THE PROVISIONS OF LAW
RELATING TO THE LIQUIDATION
OF CLOSED BANKS; AND
4. THE EXPIRATION OF THE

PERIOD PROVIDED IN
PARAGRAPH (F), OR THE
EARLIER DISSOLUTION OF THE
BRIDGE BANK AS PROVIDED IN
110
PARAGRAPH (H).
(H) DISSOLUTION OF BRIDGE

BANK.- NOTWITHSTANDING ANY
OTHER PROVISION OF LAW TO
THE CONTRARY, IF THE BRIDGE
BANK’S STATUS AS SUCH HAS
NOT PREVIOUSLY BEEN
TERMINATED BY THE
OCCURRENCE OF AN EVENT
SPECIFIED IN SUBPARAGRAPH
(1), (2) OR (3), OF PARAGRAPH
(G), THE BOARD OF DIRECTORS
OF PDIC, MAY DISSOLVE A
BRIDGE BANK AT ANY TIME IT
DEEMS NECESSARY. THE PDIC,
AS SUCH RECEIVER, SHALL WIND
UP THE AFFAIRS OF THE BRIDGE
BANK IN CONFORMITY WITH THE
PROVISIONS OF LAW RELATING
TO THE LIQUIDATION OF CLOSED
111
BANKS. WITH RESPECT TO ANY
SUCH BRIDGE BANK, THE PDIC,
AS SUCH RECEIVER, SHALL HAVE
ALL THE RIGHTS, POWERS, AND
PRIVILEGES, AND SHALL
PERFORM THE DUTIES RELATED
TO THE EXERCISE OF SUCH
RIGHTS, POWERS, OR
PRIVILEGES GRANTED BY LAW
TO A RECEIVER OF ANY INSURED
BANK.
(I) MATTERS RELATING TO THE

EXERCISE BY THE PDIC OF THE
FUNCTIONS UNDER THIS SECTION
SHALL BE SUBJECT TO
VISITORIAL AUDIT ONLY.
(J) THE ACTIONS OF THE PDIC

UNDER THIS SECTION SHALL BE
112
FINAL AND EXECUTORY, AND MAY
NOT BE RESTRAINED OR SET
ASIDE BY THE COURT, EXCEPT ON
PETITION FOR CERTIORARI WITH
THE COURT OF APPEALS ON THE
GROUND THAT THE ACTION WAS
TAKEN IN EXCESS OF
JURISDICTION OR WITH SUCH
GRAVE ABUSE OF DISCRETION AS
TO AMOUNT TO A LACK OR
EXCESS OF JURISDICTION. THE
PETITION FOR CERTIORARI MAY
ONLY BE FILED WITHIN TEN (10)
DAYS FROM PUBLICATION OF THE
NOTICE ON THE ESTABLISHMENT
OF A BRIDGE BANK.
(K) THE PDIC SHALL

PROMULGATE THE
IMPLEMENTING RULES AND
REGULATIONS TO IMPLEMENT
113
THE PROVISIONS OF THIS
SECTION.”

as follows:
“Sec. 24. Training of Technical

Personnel. — The Bangko Sentral
shall promote and sponsor the
training of technical personnel in the
fields of [money and banking]

BANKING, QUASI-BANKING, NON-
BANK FINANCIAL
INTERMEDIARIES,
MICROFINANCE, DERIVATIVES,
ARBITRAGE, FOREIGN EXCHANGE,
SAVINGS FORMATION, PAYMENT
AND SETTLEMENT SYSTEMS,
INFORMATION TECHNOLOGY,
MONEY AND CAPITAL MARKETS
114
DEVELOPMENT TRENDS,
INNOVATIONS AND PRACTICES
AND SUCH OTHER TRAINING
PROGRAMS AS THE MONETARY
BOARD SHALL APPROVE. Toward
this end, the Bangko Sentral is
hereby authorized to defray the costs
of study, at home or abroad, of
qualified employees of the Bangko
Sentral, of promising university
graduates or of any other qualified
persons who shall be determined by
proper competitive examinations.
The Monetary Board shall prescribe
rules and regulations to govern the
training program of the Bangko
Sentral.”
SEC. 13. Section 31 of the same Act is SEC. 12. Section 31 of the same
hereby deleted.
Act is hereby amended to read as
115
follows:
“[SEC. 31. Distribution of Assets. — In SEC. 31. Distribution of Assets. — In

case of liquidation of a bank or quasi-
case of liquidation of a bank, quasi-
bank, after payment of the cost of
proceedings, including reasonable bank OR NON-STOCK SAVINGS AND
expenses and fees of the receiver to be
LOAN ASSOCIATION, after payment of
allowed by the court, the receiver shall
pay the debts of such institution, under the cost of proceedings, including
order of the court, in accordance with
reasonable expenses and fees of the
the rules on concurrence and
preference of credit as provided in the receiver to be allowed by the court, the
Civil Code.]”
receiver shall pay the debts of such
institution, under order of the court, in
accordance with the rules on
concurrence and preference of credit as
provided in the Civil Code.
SEC. 14. Section 32 of the same Act is SEC. 13. Section 32 of the same Act is
hereby deleted.
“[SEC. 32. Disposition of Revenues and SEC. 32. Disposition of Revenues and
Earnings. — All revenues and earnings
Earnings. — All revenues and earnings
realized by the receiver in winding up
the affairs and administering the assets realized by the receiver in winding up
of any bank or quasi-bank within the
the affairs and administering the assets
purview of this Act shall be used to pay
116
the costs, fees and expenses mentioned of any bank, quasi-bank OR NON-
in the preceding section, salaries of
STOCK SAVINGS AND LOAN
such personnel whose employment is
rendered necessary in the discharge of ASSOCIATION within the purview of
the liquidation together with other
this Act shall be used to pay the costs,
additional expenses caused thereby.
The balance of revenues and earnings, fees and expenses mentioned in the
after the payment of all said expenses,
preceding section, salaries of such
shall form part of the assets available
for payment to creditors.]” personnel whose employment is
rendered necessary in the discharge of
the liquidation together with other
additional expenses caused thereby.
The balance of revenues and earnings,
after the payment of all said expenses,
shall form part of the assets available
for payment to creditors.

as follows:
“SEC. 33. Disposition of Banking

Franchise. — The Bangko Sentral
117
may, if public interest so requires,
award to an institution, upon such
terms and conditions as the
Monetary Board may approve, the
banking franchise of a CLOSED bank
[under liquidation] to operate in the

area where said bank or its branches
were previously operating: Provided,
That whatever proceeds may be
realized from such award shall be
[subject to the appropriate exclusive

disposition of the Monetary Board ]
FOR THE BENEFIT OF THE
CREDITORS OF THE CLOSED
BANK.”
“SEC. 34. Refusal to Make Reports or SEC. 34. Refusal to Make Reports
Permit Examination. — Any officer,
or Permit Examination. — Any officer,
owner, agent, manager, director or
118
officer-in-charge of any institution owner, agent, manager, director or
[subject to the supervision or
officer-in-charge of any institution
within the purview of this act] who, subject to the supervision or
being required in writing by the
Monetary Board or by the head of the
supervising and examining department within the purview of this act who,
WITHIN THE PURVIEW OF THIS ACT
being required in writing by the
AND RELEVANT LAWS willfully refuses
to file the required report or permit any Monetary Board or by the head of the
lawful examination into the affairs of
supervising and examining department
such institution shall be punished by a
fine of not less than fifty thousand willfully refuses to file the required
pesos (P50,000) nor more than [one
report or permit any lawful examination
hundred thousand pesos (P100,000)]
TWO MILLION PESOS (P2,000,000) into the affairs of such institution shall
or by imprisonment of not less than one
be punished by a fine of not less than
(1) year nor more than five (5) years, or
both, [in] AT the discretion of the court. fifty thousand pesos (P50,000) nor
more than [one hundred thousand
pesos (P100,000)] TWO MILLION
PESOS (P2,000,000) or by
imprisonment of not less than one (1)
year nor more than five (5) years, or
both, [in] AT the discretion of the court.
“THIS SHALL ALSO APPLY TO THE THIS SHALL ALSO APPLY TO THE
119
OFFICER, OWNER, AGENT, OFFICER, OWNER, AGENT,
MANAGER, DIRECTOR OR OFFICER-
MANAGER, DIRECTOR OR OFFICER-
IN-CHARGE OF THE AFFILIATE
COMPANY/IES AND PARENT IN-CHARGE OF THE AFFILIATE
COMPANY OF A BANK OR QUASI-
COMPANY/IES AND PARENT
BANK, AS WELL AS THE AFFILIATES
OF SUCH PARENT COMPANY, COMPANY OF A BANK OR QUASI-
WHOSE TRANSACTIONS ARE
BANK, AS WELL AS THE AFFILIATES
SUBJECT TO EXAMINATION UNDER
THIS LAW.” OF SUCH PARENT COMPANY,
WHOSE TRANSACTIONS ARE
SUBJECT TO EXAMINATION UNDER
THIS LAW.
hereby amended to read as follows”
“SEC. 35. False Statement. — The SEC. 35. False Statement. — The willful
willful making of a false or misleading
making of a false or misleading
statement on a material fact to the
Monetary Board or to the examiners of statement on a material fact to the
the Bangko Sentral shall be punished
Monetary Board or to the examiners of
by a fine of not less than One hundred
thousand pesos (P100,000) nor more the Bangko Sentral shall be punished
than [Two hundred thousand pesos
by a fine of not less than One hundred
(P200,000)] TWO MILLION PESOS
(P2,000,000), or by imprisonment of thousand pesos (P100,000) nor more
not more than (5) years, or both, at the
120
discretion of the court.” than [Two hundred thousand pesos
(P2,000,000), or by imprisonment of
not more than (5) years, or both, at the
discretion of the court.
“SEC. 36. Proceedings Upon Violation of SEC. 36. Proceedings Upon Violation of “SEC. 36. Proceedings Upon Violation
This Act and Other Banking Laws,
This Act and Other Banking Laws, of this Act and Other Banking Laws,
Rules, Regulations, Orders or
Instructions. — Whenever a bank, [or] Rules, Regulations, Orders or Rules, Regulations, Orders or
quasi-bank, INCLUDING THEIR
Instructions. — Whenever a bank, [or] Instructions. - Whenever a bank, [or]
ENGAGED IN ALLIED ACTIVITIES OR quasi-bank, OR OTHER ENTITY quasi-bank, OR OTHER FINANCIAL
OTHER ENTITY WHICH UNDER THIS
WHICH UNDER THIS ACT OR INSTITUTION WHICH UNDER THIS
ACT OR SPECIAL LAWS IS SUBJECT
TO BANGKO SENTRAL SUPERVISION SPECIAL LAWS IS SUBJECT TO ACT OR SPECIAL LAWS IS
or whenever any person or entity
BANGKO SENTRAL SUPERVISION or SUBJECT TO BANGKO SENTRAL
willfully violates this Act or other
pertinent banking laws being enforced whenever any person or entity willfully SUPERVISION or whenever any
or implemented by the Bangko Sentral
violates this Act or other pertinent person or entity willfully violates this
or any order, instruction, rule or
regulation issued by the Monetary banking laws being enforced or Act or other pertinent banking laws
Board, the person or persons
121
responsible for such violation shall implemented by the Bangko Sentral or being enforced or implemented by
unless otherwise provided in this Act be
any order, instruction, rule or regulation the Bangko Sentral or any order,
punished by a fine of not less than Fifty
thousand pesos (P50,000) nor more issued by the Monetary Board, the instruction, rule or regulation issued
than [Two hundred thousand pesos
person or persons responsible for such by the Monetary Board, the person or
(P2,000,000.00) or by imprisonment violation shall unless otherwise persons responsible for such violation
of not less than two (2) years nor more
provided in this Act be punished by a shall unless otherwise provided in
than ten (10) years, or both, at the
discretion of the court. fine of not less than Fifty thousand this Act be punished by a fine of not
pesos (P50,000) nor more than [Two less than Fifty Thousand Pesos
hundred thousand pesos (P200,000)] (P50,000) nor more than [Two
TWO MILLION PESOS Hundred Thousand Pesos
(P2,000,000.00) or by imprisonment
of not less than two (2) years nor more
(P2,000,000.00) or by
than ten (10) years, or both, at the
imprisonment of not less than two (2)
years nor more than [ten (10)] SIX
(6) years, or both, at the SOUND
“Whenever AN ENTITY UNDER Whenever AN ENTITY UNDER Whenever [a bank or quasi-bank] AN

BANGKO SENTRAL SUPERVISION [a
BANGKO SENTRAL SUPERVISION [a ENTITY UNDER BANGKO SENTRAL
bank or quasi-bank] persists in carrying
on its business in an unlawful or unsafe bank or quasi-bank] persists in carrying SUPERVISION persists in carrying
122
manner, the Board may, without on its business in an unlawful or unsafe on its business in an [unlawful or]
prejudice to the penalties provided in
manner, the Board may, without unsafe or UNSOUND manner AS
the preceding paragraph of this Section
and the administrative sanctions prejudice to the penalties provided in DETERMINED UNDER THE
provided in Section 37 of this Act, take
the preceding paragraph of this Section PROVISIONS OF SECTION 56 OF
action under Section 30 of this Act.
and the administrative sanctions REPUBLIC NO. 8791 AND IT
provided in Section 37 of this Act, take REFUSES OR FAILS TO CEASE
action under Section 30 of this Act. AND DESIST FROM SUCH
MISCONDUCT AND TO INSTITUTE
CORRECTIVE MEASURES AFTER
NOTICE HAS BEEN GIVEN BY THE
BANGKO SENTRAL, the MONETARY
Board may, without prejudice to the
penalties provided in the preceding
paragraph of this Section and the
administrative sanctions provided in
Section 37 of this Act, take action
under Section 30 of this Act.”
“THE BANGKO SENTRAL MAY

GRANT INFORMER’S REWARD TO
123
ANY PERSON, EXCEPT AN OFFICER
OR EMPLOYEE OF THE BANGKO
SENTRAL OR OF ANY INTELLIGENCE
OR LAW ENFORCEMENT AGENCY,
INCLUDING THE RELATIVES OF
SUCH OFFICER OR EMPLOYEE
WITHIN THE THIRD DEGREE OF
CONSANGUINITY OR AFFINITY, WHO
VOLUNTARILY GIVE DEFINITE
INFORMATION NOT YET IN THE
POSSESSION OF THE BANGKO
SENTRAL LEADING TO THE: (A)
ARREST OF BANK DIRECTORS OR
OFFICERS AND/OR BSP PERSONNEL
FOR VIOLATION OF THIS ACT OR
ANY BANKING AND OTHER LAWS
IMPLEMENTED OR ENFORCED BY
THE BANGKO SENTRAL, OR FOR
VIOLATION OF OTHER PENAL LAWS
COMMITTED IN CONNECTION WITH
THEIR EMPLOYMENT OR
FUNCTIONS; OR (B) FILING OF
CRIMINAL CHARGES AGAINST ANY
PERSON FOR VIOLATION OF
SECTION 50 OF THIS ACT.
“THE MONETARY BOARD IS HEREBY

AUTHORIZED TO PROMULGATE THE
IMPLEMENTING GUIDELINES FOR
124
THE GRANT OF INFORMER’S
REWARD, WHICH IN NO CASE
SHALL EXCEED ONE MILLION PESOS
(P1,000,000.00). SAID GUIDELINES
MAY PROVIDE FOR ADDITIONAL
QUALIFICATIONS AND
DISQUALIFICATIONS OF
INFORMANTS AS WELL AS THE
FORM AND MINIMUM CONTENT OF
THE INFORMATION GIVEN.
“THE CASH REWARD OF

INFORMERS SHALL BE SUBJECT TO
APPLICABLE WITHHOLDING
TAXES.”
“SEC. 37. Administrative Sanctions on SEC. 37. Administrative Sanctions on “SEC. 37. Administrative Sanctions
[Banks and Quasi-Banks] SUPERVISED
Banks and Quasi-Banks. — Without [On Banks And Quasi-Banks]. —
ENTITIES. — Without prejudice to the
criminal sanctions against the culpable prejudice to the criminal sanctions Without prejudice to the criminal
persons provided in Sections 34, 35,
against the culpable persons provided sanctions against the culpable
and 36 of this Act, the Monetary Board
may, at its discretion, impose upon any in Sections 34, 35, and 36 of this Act, persons provided in Sections 34, 35,
bank, [or] quasi-bank, INCLUDING
the Monetary Board may, at its and 36 of this Act, the Monetary
THEIR SUBSIDIARIES AND
125
AFFILIATES ENGAGED IN ALLIED discretion, impose upon any bank or Board may, at its discretion, impose
ACTIVITIES, OR OTHER ENTITY
quasi-bank, INCLUDING THEIR ADMINISTRATIVE SANCTIONS
WHICH UNDER THIS ACT OR
SPECIAL LAWS ARE SUBJECT TO SUBSIDIARIES AND
AFFILIATES upon any bank [or quasi-bank, their
THE BANGKO SENTRAL
ENGAGED IN ALLIED ACTIVITIES, directors, and/or officers, for any
SUPERVISION, AND/OR their
directors, officers and/or EMPLOYEES, OR OTHER ENTITIES WHICH UNDER willful violation of its charter or by-
for any willful violation of its charter or
THIS ACT OR SPECIAL LAWS ARE laws, willful delay in the submission
by-laws, willful delay in the submission
of reports or publications thereof as SUBJECT TO THE BANGKO SENTRAL of reports or publications thereof as
required by law, rules and regulations;
SUPERVISION, AND/OR their required by law, rules and
any refusal to permit examination into
the affairs of the institution; any willful directors, officers and/or EMPLOYEES, regulations; any refusal to permit
making of a false or misleading
for any willful violation of its charter or examination into the affairs of the
statement to the Board or the
appropriate supervising and examining by-laws, willful delay in the submission institution; any willful making of a
department or its examiners; any willful
of reports or publications thereof as false or misleading statement to the
failure or refusal to comply with, or
violation of, any banking law or any required by law, rules and regulations; Board or the appropriate supervising
order, instruction or regulation issued
any refusal to permit examination into and examining department or its
by the Monetary Board, or any order,
instruction or ruling by the Governor; or the affairs of the institution; any willful examiners; any willful failure or
any commission of irregularities, and/or
making of a false or misleading refusal to comply with, or violation of,
conducting business in an unsafe or
unsound manner as may be determined statement to the Board or the any banking law or any order,
by the Monetary Board, the following
appropriate supervising and examining instruction or regulation issued by
administrative sanctions, whenever
applicable: department or its examiners; any willful the Monetary Board, or any order,
failure or refusal to comply with, or instruction or ruling by the
126
violation of, any banking law or any Governor;] FINANCE COMPANY
order, instruction or regulation issued AND NON-BANK FINANCIAL
by the Monetary Board, or any order, INSTITUTION PERFORMING
instruction or ruling by the Governor; or QUASI-BANKING FUNCTIONS,
any commission of irregularities, and/or HEREINAFTER REFERRED TO AS
conducting business in an unsafe or QUASI-BANKING INSTITUTIONS
unsound manner as may be PERFORMING SIMILAR
determined by the Monetary Board, the FUNCTIONS REGULATED BY THE
following administrative sanctions, BANGKO SENTRAL UNDER THIS
whenever applicable: ACT OR UNDER SPECIAL LAWS
THAT ARE UNDER THE
SUPERVISION OF THE BANGKO
SENTRAL FOR WILLFUL
VIOLATION OR FAILURE TO
COMPLY WITH THE PROVISIONS
OF THIS ACT, OF REPUBLIC ACT
NO. 8791 AND OTHER SPECIAL
LAWS; or any commission of
irregularities, and/or conducting
business in an unsafe or unsound
127
manner as may be determined by the
Monetary Board the following
administrative sanctions, [whenever]

WHEREVER OR WHICHEVER
applicable.
THE FOLLOWING
ADMINISTRATIVE SANCTIONS
SHALL BE IMPOSED TAKING INTO
CONSIDERATION THE ATTENDANT
CIRCUMSTANCES SUCH AS THE
NATURE AND GRAVITY OF THE
VIOLATION OR IRREGULARITY
AND THE SIZE OF THE BANK,
QUASI-BANK OR NON-BANK
FINANCIAL INSTITUTION
INVOLVED.
“(a) fines in amounts as may be (a) fines in amounts as may be (a) [fines] ADMINISTRATIVE
determined by the Monetary Board to
determined by the Monetary Board to PENALTIES in amounts as may be
be appropriate, but in no case to
128
exceed [Thirty thousand pesos be appropriate, but in no case to PRESCRIBED AND determined by the
(P30,000)] ONE MILLION PESOS
exceed [Thirty thousand pesos Monetary Board to be appropriate,
(P1,000,000.00) FOR EACH
TRANSACTIONAL VIOLATION OR (P30,000)] ONE MILLION PESOS but in no case to exceed [Thirty
ONE HUNDRED THOUSAND PESOS
(P1,000,000.00) FOR EACH Thousand Pesos (P30,000) a day for
(P100,000.00) PER CALENDAR
[a]day for [each] violationS OF A TRANSACTIONAL VIOLATION OR each violation, taking into
CONTINUING NATURE, taking into
ONE HUNDRED THOUSAND PESOS consideration the attendant
consideration the attendant
circumstances, such as the nature and (P100,000.00) PER BANKING [a]day circumstances, such as the nature
gravity of the violation or irregularity
for each CONTINUING violation, and gravity of the violation or
and the size of the INSTITUTION,
[bank or quasi-bank] PROVIDED: THAT taking into consideration the attendant irregularity and the size of the bank
IN CASE PROFIT IS GAINED OR LOSS
circumstances, such as the nature and
IS AVOIDED AS A RESULT OF THE or quasi-bank;] THE MAXIMUM
VIOLATION, A FINE NO MORE THAN gravity of the violation or irregularity
PENALTIES PRESCRIBED HEREIN
THREE (3) TIMES THE PROFIT
and the size of the INSTITUTION,
GAINED OR LOSS AVOIDED MAY FOR EACH VIOLATION, AS
ALSO BE IMPOSED; [bank or quasi-bank] PROVIDED:
FOLLOWS:
THAT IN CASE PROFIT IS GAINED
OR LOSS IS AVOIDED AS A RESULT
OF THE VIOLATION, A FINE OF NO
MORE THAN THREE (3) TIMES THE
PROFIT GAINED OR LOSS AVOIDED
MAY BE IMPOSED;
129
1. FOR UNIVERSAL AND
COMMERCIAL BANKS – NOT
EXCEEDING P10,000 PER
BANKING DAY;
2. FOR THRIFT BANKS – NOT

EXCEEDING P5,000 PER BANKING
DAY;
3. FOR RURAL
BANKS/COOPERATIVE BANKS –
NOT EXCEEDING P2,000 PER
BANKING DAY;
4. FOR FINANCE COMPANIES AND

NON-BANK FINANCIAL
INSTITUTIONS PERFORMING
QUASI-BANKING FUNCTIONS –
NOT EXCEEDING P5,000 PER
BANKING DAY;
5. FOR FINANCE COMPANIES AND

FINANCIAL INSTITUTIONS WHICH
130
ARE NOT PERFORMING QUASI-
BANKING FUNCTIONS – NOT
DAY;
6. FOR OTHER INSTITUTIONS

THAT ARE SUPERVISED BY THE
BANGKO SENTRAL – NOT
DAY.
WITHIN THE MAXIMUM PENALTY

PRESCRIBED HEREIN, FOR
VIOLATIONS OR
IRREGULARILITIES COMMITTED
BY EVERY CATEGORY OF BANKS,
QUASI-BANKS, AND NON-BANKS
FINANCIAL INSTITUTIONS AS
HEREIN PROVIDED, THE
MONETARY BOARD SHALL
ACCORDING TO THE DEGREE OF
131
SEVERITY OF VIOLATIONS OR
IRREGULARITIES SUBJECT TO
PENALTIES, CLASSIFY
VIOLATIONS OR IRREGULARITIES
COMMITTED INTO GRAVE, LESS
GRAVE AND LIGHT OFFENSES
SUCH THAT THE PENALTIES TO BE
IMPOSED SHALL
CORRESPONDINGLY BE
GRADUATED WITHIN THE
PRESCRIBED MAXIMUM
PENALTIES.
IN COMPUTING THE
AFOREMENTIONED PENALTIES,
THE FOLLOWING ATTENDING
CIRCUMSTANCES SHALL BE
TAKEN INTO CONSIDERATION:
THE CAPITAL OF THE
INSTITUTION, THE NATURE OF
THE VIOLATION; A ONE-TIME
132
VIOLATION VIS-Á-VIS A
CONTINUING VIOLATION OR
OFFENSE; FREQUENCY OF THE
VIOLATION OR OFFENSE; AND
THE GRAVITY OF THE OFFENSE
(GRAVE, LESS GRAVE AND LIGHT
VIOLATIONS). GRAVE OFFENSES
ARE THOSE THAT HAVE
SIGNIFICANT/MATERIAL IMPACT
ON THE SOLVENCY, LIQUIDITY
AND/OR NET PROFITABILITY OF A
BANK, QUASI-BANK OR OTHER
NON-BANK FINANCIAL
INSTITUTION.
THE SUPERVISION AND

EXAMINATION SECTOR
CONCERNED SHALL SUBMIT TO
THE MONETARY BOARD A
MONTHLY REPORT OF
ADMINISTRATIVE PENALTIES
133
IMPOSED ON INSTITUTIONS, IF
ANY, INDICATING IN THE REPORT
THE PENALTIES IMPOSED ON
CERTAIN INSTITUTIONS;
PENALTIES THAT HAVE BEEN
COLLECTED; AND PENALTIES
UNDER CONSIDERATION;
“(b) suspension of rediscounting (b) suspension of rediscounting (b) suspension of rediscounting

privileges or access to Bangko Sentral
privileges or access to Bangko Sentral privileges or access to Bangko
credit facilities;
credit facilities; Sentral credit facilities;
“(c) suspension of lending or foreign (c) suspension of lending or foreign (c) suspension of lending or foreign
exchange operations or authority to
exchange operations or authority to exchange operations or authority to
accept new deposits or make new
investments; accept new deposits or make new accept new deposits or make new
investments; investments; AND/OR
“(d) suspension of interbank clearing (d) suspension of interbank clearing (d) suspension of interbank clearing
privileges; and/or
privileges; and/or privileges; [and/or]
“(e) SUSPENSION OR revocation of (e) SUSPENSION OR revocation of [(e) revocation of quasi-banking

quasi-banking OR OTHER SPECIAL
quasi-banking OR OTHER SPECIAL license.]
licenseS.
134
licenseS.
“Resignation or termination from office Resignation or termination from Resignation or termination from office
shall not exempt such director, officer
office shall not exempt such director, shall not exempt such director or
OR EMPLOYEE from administrative or
criminal sanctions. officer OR EMPLOYEE from officer from administrative or criminal
administrative or criminal sanctions. sanctions.
“The Monetary Board may, whenever The Monetary Board may, whenever The Monetary Board may, whenever
warranted by circumstances,
warranted by circumstances, warranted by circumstances,
preventively suspend any director or
officer of [a bank or quasi-bank] THE preventively suspend any director or preventively suspend any director or
INSTITUTION pending an
officer of [a bank or quasi-bank] THE officer of [a bank or quasi-bank] THE
investigation: Provided, That should the
case be not finally decided by the INSTITUTION pending an INSTITUTION pending an
Bangko Sentral within a period of one
investigation: Provided, That should the investigation: Provided, That should
hundred twenty (120) days after the
date of suspension, said director or case be not finally decided by the the case be not finally decided by the
officer shall be reinstated in his
Bangko Sentral within a period of one Bangko Sentral within a period of one
position: Provided, further, That when
the delay in the disposition of the case hundred twenty (120) days after the hundred twenty (120) days after the
is due to the fault, negligence or
date of suspension, said director or date of suspension, said director or
petition of the director or officer, the
period of delay shall not be counted in officer shall be reinstated in his officer shall be reinstated in his
computing the period of suspension
position: Provided, further, That when position: Provided, further, That when
herein provided.
the delay in the disposition of the case the delay in the disposition of the
is due to the fault, negligence or case is due to the fault, negligence or
135
petition of the director or officer, the petition of the director or officer, the
period of delay shall not be counted in period of delay shall not be counted
computing the period of suspension in computing the period of
herein provided. suspension herein provided.
“The above administrative sanctions The above administrative sanctions The above administrative sanctions
need not be applied in the order of their
need not be applied in the order of need not be applied in the order of
severity.
their severity. their severity.
“Whether or not there is an Whether or not there is an Whether or not there is an

administrative proceeding, if the
administrative proceeding, if the administrative proceeding, if the
institution and/or the directors, officers
and/or EMPLOYEES concerned institution and/or the directors, officers institution and/or the directors and/or
continue with or otherwise persist in the
and/or EMPLOYEES concerned officers, concerned continue with or
commission of the indicated practice or
violation, the Monetary Board may continue with or otherwise persist in otherwise persist in the commission
issue an order requiring the institution
the commission of the indicated of the indicated practice or violation,
and/or the directors, officers and/or
EMPLOYEES concerned to cease and practice or violation, the Monetary the Monetary Board may issue an
desist from the indicated practice or
Board may issue an order requiring the order requiring the institution and/or
violation, and may further order that
immediate action be taken to correct institution and/or the directors, officers the directors, and/or officers
the conditions resulting from such
and/or EMPLOYEES concerned to concerned to cease and desist from
practice or violation. The cease and
desist order shall be immediately cease and desist from the indicated the indicated practice or violation,
effective upon service on the
136
respondents. practice or violation, and may further and may further order that
order that immediate action be taken immediate action be taken to correct
to correct the conditions resulting from the conditions resulting from such
such practice or violation. The cease practice or violation. The cease and
and desist order shall be immediately desist order shall be immediately
effective upon service on the effective upon service on the
respondents. respondents.
“The respondents shall be afforded an The respondents shall be afforded an The respondents shall be afforded an
opportunity to defend their action in a
opportunity to defend their action in a opportunity to defend their action in
hearing before the Monetary Board or
any committee chaired by any hearing before the Monetary Board or a hearing before the Monetary Board
Monetary Board member created for
any committee chaired by any or any committee chaired by any
the purpose, upon request made by the
respondents within five (5) days from Monetary Board member created for Monetary Board member created for
their receipt of the order. If no such
the purpose, upon request made by the the purpose, upon request made by
hearing is requested within said period,
the order shall be final. If a hearing is respondents within five (5) days from the respondents within five (5) days
conducted, all issues shall be
their receipt of the order. If no such from their receipt of the order. If no
determined on the basis of records,
after which the Monetary Board may hearing is requested within said period, such hearing is requested within said
either reconsider or make final its order.
the order shall be final. If a hearing is period, the order shall be final. If a
conducted, all issues shall be hearing is conducted, all issues shall
determined on the basis of records, be determined on the basis of
after which the Monetary Board may records, after which the Monetary
137
either reconsider or make final its Board may either reconsider or make
order. final its order.
“The Governor is hereby authorized, at The Governor is hereby authorized, at [The Governor is hereby authorized,
his discretion, to impose upon [banking
his discretion, to impose upon [banking at his discretion, to impose upon
institutions], BANKS AND QUASI-
BANKS, INCLUDING THEIR institutions], BANKS AND QUASI- banking institutions for any failure to
BANKS, INCLUDING THEIR comply with the requirements of law,
ENGAGED IN ALLIED ACTIVITIES,
AND OTHER ENTITIES WHICH SUBSIDIARIES AND AFFILIATES Monetary Board regulations and
UNDER THIS ACT OR SPECIAL LAWS
ENGAGED IN ALLIED ACTIVITIES, policies, and/or instructions issued by
ARE SUBJECT TO BANGKO SENTRAL
SUPERVISION for any failure to comply AND OTHER ENTITIES WHICH the Monetary Board or by the
with the requirements of law, Monetary
UNDER SPECIAL LAWS ARE Governor, fines not in excess of Ten
Board regulations and policies, and/or
instructions issued by the Monetary SUBJECT TO BANGKO SENTRAL thousand pesos (P10,000) a day for
Board or by the Governor, fines not in
SUPERVISION for any failure to each violation, the imposition of
excess of [Ten thousand pesos
(P10,000)] ONE HUNDRED comply with the requirements of law, which shall be final and executory
THOUSAND PESOS (P100,000.00)
Monetary Board regulations and until reversed, modified or lifted by
FOR EACH TRANSACTIONAL
VIOLATION OR THIRTY THOUSAND policies, and/or instructions issued by the Monetary Board on appeal.]”
PESOS (P30,000.00) PER
the Monetary Board or by the Governor,
CALENDAR [a] day for [each]
violationS OF A CONTINUING fines not in excess of [Ten thousand
NATURE, the imposition of which shall
pesos (P10,000)] ONE HUNDRED
be final and executory until reversed,
modified or lifted by the Monetary THOUSAND PESOS (P100,000.00)
Board on appeal.”
FOR EACH TRANSACTIONAL
138
VIOLATION OR THIRTY THOUSAND
PESOS (P30,000.00) PER BANKING
[a] day for each CONTINUING
violation, the imposition of which shall
be final and executory until reversed,
modified or lifted by the Monetary
Board on appeal.
to read as follows:
“SEC. 38-A. ISSUANCE OF SEC. 38-A. ISSUANCE OF

INJUNCTIVE RELIEF AGAINST
PROVISIONAL REMEDIES AGAINST
BANGKO SENTRAL ACTIONS. – NO
COURT, OTHER THAN THE COURT BANGKO SENTRAL ACTIONS. – NO
OF APPEALS AND THE SUPREME
COURT, OTHER THAN THE COURT
COURT, SHALL ISSUE ANY
TEMPORARY RESTRAINING ORDER, OF APPEALS AND THE SUPREME
PRELIMINARY INJUNCTION OR
COURT, SHALL ISSUE ANY
PRELIMINARY MANDATORY
INJUNCTION AGAINST THE BANGKO TEMPORARY RESTRAINING ORDER,
SENTRAL FOR ANY ACTION UNDER
PRELIMINARY INJUNCTION OR
THIS ACT.
PRELIMINARY MANDATORY
139
INJUNCTION AGAINST THE BANGKO
SENTRAL FOR ANY ACTION UNDER
THIS ACT.
“ANY RESTRAINING ORDER OR ANY RESTRAINING ORDER OR

INJUNCTION ISSUED IN VIOLATION
INJUNCTION ISSUED IN VIOLATION
OF THIS SECTION IS VOID AND OF
NO FORCE AND EFFECT. OF THIS SECTION IS VOID AND OF
NO FORCE AND EFFECT.
“THE PROVISIONS OF RULES OF THE PROVISIONS OF RULE 58 OF

COURT ON INJUNCTIONS IN SO FAR
THE 1997 RULES ON CIVIL
AS THEY ARE APPLICABLE AND NOT
INCONSISTENT WITH THE PROCEDURE IN SO FAR AS THEY
PROVISIONS OF THIS ACT SHALL
ARE APPLICABLE AND NOT
GOVERN THE ISSUANCE AND
DISSOLUTION OF RESTRAINING INCONSISTENT WITH THE
ORDERS OR INJUNCTIONS AGAINST
PROVISIONS OF THIS ACT SHALL
THE BANGKO SENTRAL.”
GOVERN THE ISSUANCE AND
DISSOLUTION OF THE RESTRAINING
ORDER OR INJUNCTION AGAINST
THE BANGKO SENTRAL.

140
as follows:
“SEC. 54. [Reports.] APPEARANCE

BEFORE CONGRESS. – [Before the
end of March of each year, 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.
The annual report shall also include a

statement of the financial condition
of the Bangko Sentral and a
statistical appendix which shall
present, as a minimum, the following
141
data:] THE BSP GOVERNOR SHALL
APPEAR BEFORE THE
COMMITTEES ON
APPROPRIATIONS, WAYS AND
MEANS, ECONOMIC AFFAIRS, AND
BANKS AND FINANCIAL
INTERMEDIARIES OF THE HOUSE
OF REPRESENTATIVES ON OR
BEFORE THE 2ND TUESDAY OF
MARCH AND SEPTEMBER, AND;
BEFORE THE COMMITTEES ON
FINANCE, WAYS AND MEANS,
ECONOMIC AFFAIRS, AND BANKS,
FINANCIAL INSTITUTIONS AND
CURRENCIES OF THE SENATE ON
OR BEFORE THE 4TH TUESDAY OF
MARCH AND SEPTEMBER TO
REPORT ON THE STATUS AND
DIRECTIONS OF THE FISCAL AND
MONETARY POLICIES OF THE
142
GOVERNMENT, ECONOMIC
DEVELOPMENTS AND PROSPECTS
FOR THE FUTURE, TAKING INTO
ACCOUNT PAST AND
PROSPECTIVE DEVELOPMENTS IN
EMPLOYMENT, UNEMPLOYMENT,
PRODUCTION, INVESTMENT, REAL
INCOME, PRODUCTIVITY,
EXCHANGE RATES,
INTERNATIONAL TRADE AND
PAYMENTS, AND PRICES.
THE GOVERNOR OF THE BSP

SHALL ALSO SUBMIT A WRITTEN
REPORT TO THE PRESIDENT AND
TO THE COMMITTEES SPECIFIED
IN THE ABOVE PARAGRAPH
WHICH SHALL INCLUDE, BUT
SHALL NOT BE LIMITED TO, THE
FOLLOWING:
143
(a) the monthly movement of
monetary aggregates and their
components;
(b) the monthly movement of
purchases and sales of foreign
exchange and of the international
reserves of the Bangko Sentral;
(c) balance of payments of the
Philippines;
(d) monthly indices of consumer
prices and of import and export
prices;
(e) the monthly movement, in

summary form, of exports and
imports, by volume and value;
(f) the monthly movement of the
accounts of the Bangko Sentral and
of other banks;
(g) the principal data on
government receipts and
expenditures and on the status of the
144
public debt, both domestic and
foreign; [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, and; AND
(I) OTHER INFORMATION THAT
MAY BE REQUESTED BY THE SAID
COMMITTEES OF CONGRESS.
[The Bangko Sentral shall publish

another version of the annual report]
THE BSP SHALL MAKE AVAILABLE
COPIES OF THE REPORTS
SUBMITTED TO CONGRESS IN
THEIR OFFICIAL WEBSITES FOR A
REASONABLE PERIOD
IMMEDIATELY FOLLOWING THE
145
SUBMISSION OF THE REPORTS in
terms understandable to the layman.
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.”
hereby amended as follows:
Act is hereby amended as follows:
“SEC. 43. Computation of Profits and SEC. 43. Computation of Profits and
Losses. — Within the first thirty (30)
Losses. — Within the first thirty (30)
days following the end of each year, the
Bangko Sentral shall determine its net days following the end of each year, the
profits or losses. [In the calculation of
Bangko Sentral shall determine its net
net profits, the Bangko Sentral shall
make adequate allowance or establish profits or losses. [In the calculation of
adequate reserves for bad and doubtful
net profits, the Bangko Sentral shall
accounts] NOTWITHSTANDING ANY
PROVISION OF LAW TO THE make adequate allowance or establish
CONTRARY, THE NET PROFIT OF
146
THE BANGKO SENTRAL SHALL BE adequate reserves for bad and doubtful
DETERMINED AFTER ALLOWING
accounts]. NOTWITHSTANDING ANY
FOR EXPENSES OF OPERATION,
ADEQUATE ALLOWANCES AND PROVISION OF LAW TO THE
PROVISIONS FOR BAD AND
CONTRARY, THE NET PROFIT OF
DOUBTFUL DEBTS, DEPRECIATION
IN ASSETS, AND SUCH OTHER THE BANGKO SENTRAL SHALL BE
ALLOWANCES AND CONTINGENCIES
DETERMINED AFTER ALLOWING
OR PURPOSES AS THE MONETARY
BOARD MAY DETERMINE IN FOR EXPENSES OF OPERATION
ACCORDANCE WITH PRUDENT
ADEQUATE ALLOWANCES AND
FINANCIAL MANAGEMENT AND
EFFECTIVE CENTRAL BANKING PROVISIONS FOR BAD AND
OPERATIONS.”
DOUBTFUL DEBTS, DEPRECIATION
IN ASSETS, AND SUCH OTHER
ALLOWANCES AND CONTINGENCIES
OR PURPOSES AS THE MONETARY
BOARD MAY DETERMINE IN
ACCORDANCE WITH PRUDENT
FINANCIAL MANAGEMENT.
to read as follows:
147
“SEC. 43-A. BANGKO SENTRAL SEC. 43-A. BANGKO SENTRAL
RESERVE FUND. - THE BANGKO
RESERVE FUND. - THE BANGKO
SENTRAL SHALL ESTABLISH A
RESERVE FUND TO MITIGATE SENTRAL SHALL ESTABLISH A
FUTURE RISKS AND
RESERVE FUND TO MITIGATE
CONTINGENCIES INHERENT IN
CARRYING OUT THE BANGKO FUTURE RISKS AND
SENTRAL-MANDATED FUNCTIONS
CONTINGENCIES INHERENT IN
AS CENTRAL MONETARY
AUTHORITY. THE RESERVE FUND CARRYING OUT THE BANGKO
SHALL CONSIST OF FLUCTUATION
SENTRAL-MANDATED FUNCTIONS
RESERVE, CONTINGENCY RESERVE
AND SUCH OTHER RESERVES AS AS CENTRAL MONETARY
THE MONETARY BOARD DEEMS
AUTHORITY. THE RESERVE FUND
PRUDENT OR NECESSARY.
SHALL CONSIST OF FLUCTUATION
RESERVE, CONTINGENCY RESERVE
AND SUCH OTHER RESERVES AS
THE MONETARY BOARD DEEMS
PRUDENT OR NECESSARY.
“THE FLUCTUATION RESERVE THE FLUCTUATION RESERVE SHALL

SHALL COVER LOSSES FROM
COVER LOSSES FROM EXCHANGE
EXCHANGE RATE AND PRICE
VOLATILITY AND SHALL BE DERIVED RATE AND PRICE VOLATILITY AND
FROM THE NET PROFITS BEFORE
SHALL BE DERIVED FROM THE NET
DISTRIBUTION, AS PROVIDED
UNDER SECTION 44 OF THIS ACT.” PROFITS BEFORE DISTRIBUTION,
148
AS PROVIDED UNDER SECTION 44
OF THIS ACT. ALL OTHER RESERVE
FUNDS SHALL BE SOURCED FROM
SURPLUS.
follows:
“SEC. 45. Revaluation Profits and SEC. 45. Revaluation Profits and Losses.
Losses. — UNREALIZED profits or
— UNREALIZED profits or losses
losses arising from any revaluation of
the Bangko Sentral's [net] assets [or], arising from any revaluation of the
liabilities OR DERIVATIVE
Bangko Sentral's [net] assets [or],
INSTRUMENTS DENOMINATED in
[gold or] foreign currencies with respect liabilities OR DERIVATIVE
to the MOVEMENTS OF PRICES AND
INSTRUMENTS DENOMINATED in
EXCHANGE RATES FROM THIRD
CURRENCIES TO Philippine peso shall [gold or] foreign currencies with
not be included in the computation of
respect to the MOVEMENTS OF
the annual profits and losses of the
Bangko Sentral. Any profits or losses PRICES AND EXCHANGE RATES
arising in this manner shall be offset by
FROM THIRD CURRENCIES TO
any amounts which, as a consequence
of such revaluations, are owed by the Philippine peso shall not be included in
Philippines to any international or
the computation of the annual profits
regional intergovernmental financial
149
institution of which the Philippines is a and losses of the Bangko Sentral. Any
member or are owed by these
profits or losses arising in this manner
institutions to the Philippines. Any
remaining UNREALIZED profit or loss shall be offset by any amounts which,
shall be carried in a special frozen
as a consequence of such revaluations,
account which shall be named
"Revaluation of International Reserve are owed by the Philippines to any
(RIR)", and the net balance of which
international or regional
shall appear either among the liabilities
or among the assets of the Bangko intergovernmental financial institution
Sentral, depending on whether the
of which the Philippines is a member or
revaluations have produced net profits
or net losses. are owed by these institutions to the
Philippines. Any remaining
UNREALIZED profit or loss shall be
carried in a special frozen account
which shall be named "Revaluation of
International Reserve (RIR)", and the
net balance of which shall appear either
among the liabilities or among the
assets of the Bangko Sentral,
depending on whether the revaluations
have produced net profits or net losses.
“The [Revaluation of International The [Revaluation of International
150
Reserve] RIR account shall be [neither] Reserve] RIR account shall be [neither]
credited [nor] OR debited FOR THE
credited [nor] OR debited ONLY FOR
PERIODIC REVALUATION AS
AUTHORIZED IN THIS SECTION AND THE PERIODIC REVALUATION AS
TO REFLECT THE CORRESPONDING
AUTHORIZED IN THIS SECTION AND
ADJUSTMENT RESULTING TO
REDUCTION IN THE BANGKO TO REFLECT THE CORRESPONDING
SENTRAL’S NET FOREIGN ASSETS,
ADJUSTMENT RESULTING TO
LIABILITIES AND FOREIGN
CURRENCY-DENOMINATED REDUCTION IN THE BANGKO
DERIVATIVE INSTRUMENTS. THE RIR
SENTRAL’S NET FOREIGN ASSETS,
SHALL BE ADJUSTED AND
RECOGNIZED IN THE INCOME LIABILITIES AND FOREIGN
STATEMENT UPON SALE OF GOLD
CURRENCY-DENOMINATED
AND FOREIGN SECURITIES, OR
WHEN THE FOREIGN CURRENCY IS DERIVATIVE INSTRUMENTS. THE
REPATRIATED TO LOCAL CURRENCY
RIR SHALL BE ADJUSTED AND
OR IS USED TO PAY FOREIGN
OBLIGATIONS, OR UPON MATURITY RECOGNIZED IN THE INCOME
OF A FOREIGN CURRENCY-
STATEMENT UPON SALE OF GOLD
DENOMINATED FORWARD OR
OPTION CONTRACT INVOLVING THE AND FOREIGN SECURITIES, OR
PHILIPPINE PESO. [for any purposes
WHEN THE FOREIGN CURRENCY IS
other than those specifically authorized
in this section.]” REPATRIATED TO LOCAL CURRENCY
OR IS USED TO PAY FOREIGN
OBLIGATIONS OR UPON MATURITY
OF A FOREIGN CURRENCY-
151
DENOMINATED FORWARD OR
OPTION CONTRACT INVOLVING THE
PHILIPPINE PESO. [for any purposes
other than those specifically authorized
in this section.]

as follows:
“SEC. 54. Printing of Notes and

Minting of Coins. — The Monetary
Board shall prescribe the amounts of
notes and coins to be printed and
minted, respectively, and the
conditions to which the printing of
notes and the minting of coins shall
be subject. The Monetary Board shall
have the authority to contract
institutions, mints or firms for such
operations.
152
THE HEAD OF THE SECURITY
PRINTING OF NOTES AND
MINTING OF COINS SHALL
SUBMIT TO THE MONETARY
BOARD REGULAR REPORTS OF
EACH AND EVERY PRINTING JOB
OF NOTES AND MINTING OF
COINS WHETHER THE PRINTING
OF NOTES AND MINTING OF
COINS IS DONE IN-HOUSE OR
OUTSOURCED. A REPORT SHALL
BE SUBMITTED WITHIN THIRTY
(30) DAYS FROM COMPLETION OF
PRINTING OF NOTES AND
MINTING OF COINS IF IN-HOUSE
AND WITHIN THIRTY (30) DAYS
FROM THE DATE OF DELIVERY TO
THE BANGKO SENTRAL OF
OUTSOURCED PRINTING/MINTING
153
JOB.
THE REGULAR REPORTS ON THE

PRINTING OF NOTES/MINTING OF
COINS TO BE SUBMITTED TO THE
CONTAIN THE FOLLOWING
MINIMUM INFORMATION PER
PRODUCTION JOB:
(A) THE VOLUME OF

NOTES/COINS AS ACTUALLY
PRINTED/MINTED:
(B) THE NOTES AND COINS

PRINTED/MINTED INDICATING
THE SERIAL NUMBERS AND YEAR
MARK OF THE NOTES PRINTED AS
WELL AS THE YEAR MARK OF THE
COINS;
(C) THE NAMES AND ADDRESSES

OF THE ENTITIES THAT PRINTED
154
THE NOTES OR MINTED THE
COINS, IF OUTSOURCED;
OTHERWISE INDICATE IF THE
NOTES AND COINS WERE
PRINTED/MINTED IN-HOUSE;
(D) PAPERS, INK AND OTHER

RAW MATERIALS ORDERED VS.
PRODUCTION OUTPUT;
(E) PRODUCTION CAPACITY PER

DENOMINATION VS. VOLUME OF
PRODUCTION OUTPUT;
(F) DATES OF DELIVERY OF RAW

MATERIALS FOR PARTICULAR
DENOMINATION AND DATES OF
DELIVERY OF PRINTED NOTES OR
MINTED COINS TO THE CASH
DEPARTMENT;
(G) ALLOWANCE FOR WASTAGE

VS. ACTUAL WASTAGE PER
155
PRODUCTION ORDER. THE
RECORD OF WASTAGE SHALL
INCLUDE INFORMATION ON THE
SHREDDING OF WASTAGE; AND
(H) RUNNING BALANCE OF THE

PARTICULAR DENOMINATION
PRINTED/MINTED.
All expenses incurred in the printing

of notes and the minting of coins
shall be for the account of the
Bangko Sentral.”
“SEC. 61. Guiding Principle. — THE SEC. 61. Guiding Principle. — THE “SEC. 61. Guiding Principle. — THE
MONETARY BOARD SHALL MONETARY BOARD SHALL
REGULARLY ASSESS PRICE
DEVELOPMENTS AND OUTLOOK REGULARLY ASSESS PRICE REGULARLY ASSESS PRICE
AND, BASED ON ITS ANALYSIS AND
DEVELOPMENTS AND OUTLOOK DEVELOPMENTS AND OUTLOOK
EVALUATION OF INFLATIONARY
PRESSURES, USE ITS POLICY AND, BASED ON ITS ANALYSIS AND AND BASED ON ITS ANALYSIS
156
INSTRUMENTS TO ATTAIN AND EVALUATION OF INFLATIONARY AND EVALUATION OF
MAINTAIN PRICE STABILITY. [The
PRESSURES, USE ITS POLICY INFLATIONARY PRESSURES USE
Monetary Board shall endeavor to
control any expansion or contraction in INSTRUMENTS TO ATTAIN AND ITS POLICY INSTRUMENTS TO
monetary aggregates which is
MAINTAIN PRICE STABILITY. [The ATTAIN AND MAINTAIN PRICE
prejudicial to the attainment or
maintenance of price stability.]” Monetary Board shall endeavor to STABILITY.
control any expansion or contraction in
The Monetary Board shall endeavor
monetary aggregates which is
to control any SIGNIFICANT
prejudicial to the attainment or
expansion or contraction in monetary
maintenance of price stability.]
aggregates which is prejudicial to the
attainment or maintenance of price
stability.”
follows:
“SEC. 63. Action when Abnormal SEC. 63. Action when Abnormal
Movements Occur in the [Monetary
Movements Occur in the [Monetary
Aggregates, Credit, Or] Price Level. —
Whenever abnormal movements in the Aggregates, Credit, Or] Price Level. —
[monetary aggregates, in credit, or in]
Whenever abnormal movements in the
prices endanger the stability of the
Philippine economy or important [monetary aggregates, in credit, or in]
157
sectors thereof, the Monetary Board prices endanger the stability of the
shall:
Philippine economy or important
sectors thereof, the Monetary Board
shall:
“(a) take such remedial measures as (a) take such remedial measures as
are appropriate and within the powers
are appropriate and within the powers
granted to the Monetary Board and the
Bangko Sentral under the provisions of granted to the Monetary Board and the
this Act; and
Bangko Sentral under the provisions of
this Act; and
“(b) submit to the President of the (b) submit to the President of the
Philippines and the Congress, and make
Philippines and the Congress, and make
public, a detailed report which shall
include, as a minimum, a description public, a detailed report which shall
and analysis of:
include, as a minimum, a description
and analysis of:
“(1) the causes of the rise or fall of [the (1) the causes of the rise or fall of
monetary aggregates, of credit or of]
[the monetary aggregates, of credit or
prices;
of] prices;
“(2) the extent to which the changes in (2) the extent to which the changes
[the monetary aggregates, in credit, or
in [the monetary aggregates, in credit,
in] prices have been reflected in
158
changes in the level of domestic output, or in] prices have been reflected in
employment, wages and economic
changes in the level of domestic
activity in general, and the nature and
significance of any such changes; and output, employment, wages and
economic activity in general, and the
nature and significance of any [such]
changes; and
“(3) the measures which the Monetary (3) the measures which the Monetary
Board has taken and the other
Board has taken and the other
monetary, fiscal or administrative
measures which it recommends to be monetary, fiscal or administrative
adopted.
measures which it recommends to be
adopted.
“Whenever the [monetary aggregates, Whenever the [monetary aggregates,

or the level of credit, increases or
or the level of credit, increases or
decreases by more than fifteen percent
(15%), or the] cost of living index decreases by more than fifteen percent
increases by more than ten percent
(15%), or the] cost of living index
(10%), in relation to the level existing at
the end of the corresponding month of increases by more than ten percent
the preceding year, or even though
(10%), in relation to the level existing
[any of these] THIS quantitative
guideline[s have] HAS not been at the end of the corresponding month
reached when in its judgment the
of the preceding year, or even though
circumstances so warrant, the Monetary
159
Board shall submit the reports [any of these] THIS quantitative
mentioned in this Section, and shall
guideline[s have] HAS not been
state therein whether, in the opinion of
the Board, said changes in the reached when in its judgment the
[monetary aggregates, credit or] cost of
circumstances so warrant, the
living represent a threat to the stability
of the Philippine economy or of Monetary Board shall submit the
important sectors thereof.
reports mentioned in this Section, and
shall state therein whether, in the
opinion of the Board, said changes in
the [monetary aggregates, credit or]
cost of living represent a threat to the
stability of the Philippine economy or of
important sectors thereof.
“The Monetary Board shall continue to The Monetary Board shall continue to
submit periodic reports to the President
submit periodic reports to the President
of the Philippines and to Congress until
it considers that the [monetary, credit of the Philippines and to Congress until
or] price disturbances have disappeared
it considers that the [monetary, credit
or have been adequately controlled.”
or] price disturbances have
disappeared or have been adequately
controlled.
160
“SEC. 81. Guiding Principles. — The SEC. 81. Guiding Principles. — The “SEC. 81. Guiding Principles. — The
rediscounts, discounts, loans and rediscounts, discounts, loans and
rediscounts, discounts, loans and
advances which the Bangko Sentral is advances which the Bangko Sentral is
authorized to extend to banking advances which the Bangko Sentral is authorized to extend to banking
institutions, under the provisions of the institutions AND OTHER
authorized to extend to banking
present article of this Act shall be used SUPERVISED FINANCIAL
to influence the volume of credit institutions, under the provisions of the INSTITUTIONS under the provisions
consistent with the objective of price of the present article of this Act shall
present article of this Act shall be used
stability AND MAINTENANCE OF be used to influence the volume of
FINANCIAL STABILITY.” to influence the volume of credit credit consistent with the objective of
price stability AND MAINTENANCE
consistent with the objective of price
OF FINANCIAL STABILITY.”
stability AND MAINTENANCE OF
FINANCIAL STABILITY.

as follows:
“SEC. 83. Loans for Liquidity

Purposes. — The Bangko Sentral, BY
A VOTE OF AT LEAST FIVE (5)
161
BOARD, may extend loans and
advances to [banking] BANKS,

QUASI-BANKS AND OTHER
SYSTEMICALLY CRITICAL BANGKO
SENTRAL-SUPERVISED institutions
for a period of not more than [seven
(7)] FORTY-FIVE (45) BANKING

days without any collateral for the
purpose of providing liquidity to the
banking system in times of need,
SUBJECT TO SUCH TERMS AND
CONDITIONS AS THE MONETARY
BOARD MAY PRESCRIBE TO
MINIMIZE POSSIBLE LOSSES TO
as follows:
162
“SEC. 84. Emergency Loans and SEC. 84. Emergency Loans and “SEC. 84. Emergency Loans and
Advances. - In periods of national
Advances. - In periods of national Advances. — In periods of national
and/or local emergency or of imminent
financial panic which directly threaten and/or local emergency or of imminent and/or local emergency or of
monetary and FINANCIAL [banking]
financial panic which directly threaten imminent financial panic which
stability, the Monetary Board may, by a
vote of at least five (5) of its members, monetary and FINANCIAL [banking] directly threaten monetary and
authorize the Bangko Sentral to grant
stability, the Monetary Board may, by a [banking] FINANCIAL stability, the
extraordinary loans or advances to
banking institutions, secured by assets vote of at least five (5) of its members, Monetary Board may, by a vote of at
as defined hereunder: Provided, That
authorize the Bangko Sentral to grant least five (5) of its members,
while such loans or advances are
outstanding, the debtor institution shall extraordinary loans or advances to authorize the Bangko Sentral to grant
not, except upon prior authorization by
banking institutions, secured by assets extraordinary loans or advances to
the Monetary Board, expand the total
volume of its loans or investments. as defined hereunder: Provided, That banking, QUASI-BANKING AND
while such loans or advances are OTHER SYSTEMICALLY CRITICAL
outstanding, the debtor institution shall BANGKO SENTRAL-SUPERVISED
not, except upon prior authorization by institutions TO BE secured by assets
the Monetary Board, expand the total as defined hereunder: Provided, That
volume of its loans or investments. while such loans or advances are
outstanding, the debtor institution
shall not, except upon prior
authorization by the Monetary Board,
expand the total volume of its loans
163
or investments.
“The Monetary Board may, at its The Monetary Board may, at its The Monetary Board may, at its
discretion, likewise authorize the
discretion, likewise authorize the discretion, likewise authorize the
Bangko Sentral to grant emergency
loans or advances to banking Bangko Sentral to grant emergency Bangko Sentral to grant emergency
institutions, even during normal
loans or advances to banking loans or advances to [banking]
periods, for the purpose of assisting a
bank in a precarious financial condition institutions, even during normal BANKS, QUASI-BANKS AND
or under serious financial pressures
periods, for the purpose of assisting a OTHER SYSTEMICALLY CRITICAL
brought by unforeseen events, or
events which, though foreseeable, bank in a precarious financial condition BANGKO SENTRAL-SUPERVISED
could not be prevented by the bank
or under serious financial pressures institutions, even during normal
concerned: Provided, however, That
the Monetary Board has ascertained brought by unforeseen events, or periods, for the purpose of assisting a
that the bank is not insolvent and has
events which, though
foreseeable, bank in a precarious financial
the assets defined hereunder to secure
the advances: Provided, further, That a could not be prevented by the bank condition or under serious financial
concurrent vote of at least five (5)
concerned: Provided, however, That pressures brought by unforeseen
members of the Monetary Board is
obtained. the Monetary Board has ascertained events, or events which, though
that the bank is not insolvent and has foreseeable, could not be prevented
the assets defined hereunder to secure by the bank concerned: Provided,
the advances: Provided, further, That a however, That the Monetary Board
concurrent vote of at least five (5) has ascertained that the bank is not
members of the Monetary Board is insolvent and has the assets defined
obtained.
164
hereunder to secure the advances:
Provided, further, That a concurrent
vote of at least five (5) members of
the Monetary Board is obtained.
“The amount of any emergency loan or The amount of any emergency loan or The amount of any emergency loan
advance shall not exceed the sum of
advance shall not exceed the sum of or advance shall not exceed the sum
fifty percent (50%) of total deposits and
deposit substitutes of the banking fifty percent (50%) of total deposits and of fifty percent (50%) of total
institution, and shall be disbursed in
deposit substitutes of thebanking [deposits and deposit substitutes]
two (2) or more tranches. The amount
of the first tranche shall be limited to institution, and shall be disbursed in
BORROWINGS of the [banking]
twenty-five percent (25%) of the total
two (2) or more tranches. The amount
deposit and deposit substitutes of the institution and shall be disbursed in
institution and shall be secured by (A) of the first tranche shall be limited to
two (2) or more tranches. The
government securities, (B)
twenty-five percent (25%) of the total
ACCEPTABLE GUARANTEES BACKED amount of the first tranche shall be
UP BY THE NATIONAL GOVERNMENT deposit and deposit substitutes of the
limited to twenty-five percent (25%)
OR ITS SECURITIES; (C) [to the
institution and shall be secured by (A)
extent of their applicable loan values of the BORROWINGS [total deposit
and] other unencumbered first class government securities, (B)
collaterals and (D) OTHER KINDS OF and deposit substitutes] of the
ACCEPTABLE GUARANTEES BACKED
COLLATERALS AS MAY BE
institution and shall be secured by
AUTHORIZED BY THE MONETARY UP BY THE NATIONAL
BOARD IN ACCORDANCE WITH
GOVERNMENT OR ITS SECURITIES; (A) government securities [to the
SOUND RISK MANAGEMENT
PRINCIPLES [which the Monetary (C) [to the extent of their applicable extent of their applicable loan values
Board may approve]: Provided, That if
loan values and] other unencumbered and]; (B) ACCEPTABLE
165
as determined by the Monetary Board, first class collaterals and (D) OTHER GUARANTEES BACKED UP BY THE
the circumstances surrounding the
KINDS OF COLLATERALS AS MAY BE NATIONAL GOVERNMENT OR ITS
emergency warrant a loan or advance
greater than the amount provided AUTHORIZED BY THE MONETARY SECURITIES; (C) other
hereinabove, the amount of the first
BOARD IN ACCORDANCE WITH unencumbered first class collaterals
tranche may exceed twenty-five
percent (25%) of the bank’s total SOUND RISK MANAGEMENT AND (D) PRIVATE COMMERCIAL
deposit and deposit substitutes if the
PRINCIPLES [which the Monetary PAPER TO THE EXTENT OF THEIR
same is adequately secured by
[applicable loan values of government Board may approve]: Provided, That if APPLICABLE LOAN VALUES which
securities and unencumbered first class
as determined by the Monetary Board, the Monetary Board may approve:
collaterals] ANY OF THE
COLLATERALS SET FORTH ABOVE the circumstances surrounding the Provided, That if as determined by
AS approved by the Monetary Board,
emergency warrant a loan or advance the Monetary Board, the
and the principal stockholders of the
institution furnish an acceptable greater than the amount provided circumstances surrounding the
undertaking to indemnify and hold
hereinabove, the amount of the first emergency warrant a loan or
harmless from suit a conservator whose
appointment the Monetary Board may tranche may exceed twenty-five advance greater than the amount
find necessary at any time.
percent (25%) of the bank’s total provided hereinabove, the amount of
deposit and deposit substitutes if the the first tranche may exceed twenty-
same is adequately secured
by five percent (25%) of the [bank’s]
applicable loan values of government
INSTITUTION’S total [deposit and
securities and unencumbered first class
deposit substitutes] BORROWINGS
collaterals approved by the Monetary
if the same is adequately secured by
Board, and the principal stockholders of
166
the institution furnish an acceptable applicable loan values of government
undertaking to indemnify and hold securities and unencumbered first
harmless from suit a conservator whose class collaterals OR ACCEPTABLE
appointment the Monetary Board may GUARANTEES BACKED UP BY THE
find necessary at any time. NATIONAL GOVERNMENT OR ITS
SECURITIES approved by the
Monetary Board, 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.
“Prior to the release of the first tranche, Prior to the release of the first tranche, Prior to the release of the first
the banking institution shall submit to
the banking institution shall submit to tranche, the [banking] institution
the Bangko Sentral a resolution of its
board of directors authorizing the the Bangko Sentral a resolution of its shall submit to the Bangko Sentral a
Bangko Sentral to evaluate other assets
board of directors authorizingthe resolution of its board of directors
of the banking institution certified by its
external auditor to be good and Bangko Sentral to evaluate other authorizing the Bangko Sentral to
available for collateral purposes should
assets of the banking institution evaluate other assets of the
the release of the subsequent tranche
be thereafter applied for. certified by its external auditor to be
167
good and available for collateral [banking] institution certified by its
purposes should the release of the external auditor to be good and
subsequent tranche be thereafter available for collateral purposes
applied for. should the release of the subsequent
tranche be thereafter applied for.
“The Monetary Board may, by a vote of The Monetary Board may, by a vote of The Monetary Board may, by a vote
at least five (5) of its members,
at least five (5) of its members, of at least five (5) of its members,
authorize the release of a subsequent
tranche on condition that the principal authorize the release of a subsequent authorize the release of a subsequent
stockholders of the institution:
tranche on condition that the principal tranche on condition that the
stockholders of the institution: principal stockholders of the
institution:
“(a) furnish an acceptable undertaking (a) furnish an acceptable (a) furnish an acceptable undertaking
to indemnify and hold harmless from
undertaking to indemnify and hold to indemnify and hold harmless from
suit a conservator whose appointment
the Monetary Board may find necessary harmless from suit a conservator whose suit a conservator whose
at any time; and
appointment the Monetary Board may appointment the Monetary Board
find necessary at any time; and may find necessary at any time; and
“(b) provide acceptable security which, (b) provide acceptable security (b) provide acceptable security
in the judgment of the Monetary Board,
which, in the judgment of the Monetary which, in the judgment of the
would be adequate to supplement,
where necessary, the assets tendered Board, would be adequate to Monetary Board, would be adequate
168
by the banking institution to supplement, where necessary, the to supplement, where necessary, the
collateralize the subsequent tranche.
assets tendered by the banking assets tendered by the [banking]
institution to collateralize the institution to collateralize the
subsequent tranche. subsequent tranche.
“In connection with the exercise In connection with the exercise of these In connection with the exercise of
of these powers, the prohibitions in
powers, the prohibitions in Section 128 these powers, the prohibitions in
Section 128 of this Act shall not apply
insofar as it refers to acceptance as of this Act shall not apply insofar as it Section 128 of this Act shall not apply
collateral of shares and their acquisition
refers to acceptance as collateral of insofar as it refers to acceptance as
as a result of foreclosure proceedings,
including the exercise of voting rights shares and their acquisition as a result collateral of shares and their
pertaining to said shares: Provided,
of foreclosure proceedings, including acquisition as a result of foreclosure
however, That should the Bangko
Sentral acquire any of the shares it has the exercise of voting rights pertaining proceedings, including the exercise of
accepted as collateral as a result of
to said shares: Provided, however, voting rights pertaining to said
foreclosure proceedings, the Bangko
Sentral shall dispose of said shares by That should the Bangko Sentral acquire shares: Provided, however, That
public bidding within one (1) year from
any of the shares it has accepted as should the Bangko Sentral acquire
the date of consolidation of title by the
Bangko Sentral. collateral as a result of foreclosure any of the shares it has accepted as
proceedings, the Bangko Sentral shall collateral as a result of foreclosure
dispose of said shares by public bidding proceedings, the Bangko Sentral shall
within one (1) year from the date of dispose of said shares by public
consolidation of title by the Bangko bidding within one (1) year from the
169
Sentral. date of consolidation of title by the
Bangko Sentral.
“Whenever a financial institution incurs Whenever a financial institution incurs Whenever a financial institution
an overdraft in its account with the
an overdraft in its account with the incurs an overdraft in its account with
Bangko Sentral, the same shall be
eliminated within the period prescribed Bangko Sentral, the same shall be the Bangko Sentral, the same shall
in Section 102 of this Act.”
eliminated within the period prescribed be eliminated within the period
in Section 102 of this Act. prescribed in Section 102 of this Act.”
SEC. 27. A new section entitled Section SEC. 26. A new section entitled SEC. 31. A new section entitled
Section 88-A is hereby inserted in the Section 88-A of the same Act shall be
to read as follows:
same Act to read as follows: inserted between Section 88 and
Section 88-B which shall read as
follows:
“SEC. 88-A. EXEMPTION OF SEC. 88-A. EXEMPTION FROM “SEC. 88-A. EXEMPTION FROM
COLLATERALS FROM
ATTACHMENT. - COLLATERALS ON ATTACHMENT. - THE PROVISIONS
ATTACHMENTS, EXECUTIONS AND
OTHER RESTRICTIONS. – LOANS AND ADVANCES GRANTED OF ANY LAW TO THE CONTRARY
COLLATERALS ON LOANS AND
BY THE BANGKO SENTRAL, NOTWITHSTANDING AND
ADVANCES GRANTED BY THE
BANGKO SENTRAL, WHETHER OR WHETHER OR NOT THE INTEREST SECTION 31 OF THIS ACT,
NOT THE INTEREST OF THE
OF THE BANGKO SENTRAL IS COLLATERALS ON LOANS AND
BANGKO SENTRAL IS REGISTERED,
SHALL NOT BE SUBJECT TO REGISTERED, SHALL NOT BE ADVANCES GRANTED BY THE
ATTACHMENT, EXECUTION OR ANY
170
OTHER COURT PROCESS OR SUBJECT TO ATTACHMENT, BANGKO SENTRAL SHALL NOT BE
ADMINISTRATIVE RESTRICTIONS ON
EXECUTION OR ANY OTHER COURT SUBJECT TO ATTACHMENT,
LAND USE, NOR SHALL THEY BE
INCLUDED IN THE PROPERTY OF PROCESS OR ADMINISTRATIVE EXECUTION OR ANY OTHER
INSOLVENT PERSONS OR
RESTRICTIONS ON LAND USE, NOR COURT PROCESS, NOR SHALL
INSTITUTIONS.”
SHALL THEY BE INCLUDED IN THE THEY BE INCLUDED IN THE
PROPERTY OF INSOLVENT PERSONS PROPERTY OF INSOLVENT
OR INSTITUTIONS. PERSONS OR INSTITUTIONS,
UNLESS THE SECURED LOANS
AND ADVANCES GRANTED BY THE
BANGKO SENTRAL TO INSOLVENT
PERSONS OR INSTITUTIONS OR A
CLOSED INSTITUTION HAVE
ALREADY BEEN FULLY PAID IN
WHICH CASE THE EXEMPTIONS
UNDER THIS SECTION SHALL NO
LONGER APPLY.”
88-B is hereby included in the same Act
Section 88-B is hereby inserted in the Section 88-B of the same Act shall be
to read as follows:
same Act to read as follows: inserted between Section 88-A and
Section 88-C which shall read as
171
follows:
“SEC. 88-B. DEPUTIZATION OF SEC. 88-B. DEPUTIZATION OF “SEC. 88-B. DEPUTIZATION OF

LEGAL STAFF IN CASE OF
LEGAL STAFF. – IN CASE OF AN LEGAL STAFF. – IN CASE OF AN
FORECLOSURES. – IN CASE OF AN
EXTRAJUDICIAL FORECLOSURE OF EXTRAJUDICIAL FORECLOSURE OF EXTRAJUDICIAL FORECLOSURE OF
MORTGAGE IN CONNECTION WITH
MORTGAGE, THE BANGKO SENTRAL MORTGAGE, THE BANGKO
LOANS AND ADVANCES UNDER THIS
ARTICLE, THE BANGKO SENTRAL MAY DEPUTIZE ANY OF ITS SENTRAL MAY, DEPUTIZE ANY OF
MAY DEPUTIZE ANY OF ITS
LAWYERS TO CONDUCT THE PUBLIC ITS LAWYERS TO CONDUCT THE
LAWYERS TO CONDUCT THE PUBLIC
AUCTION PURSUANT TO ACT NO. AUCTION PURSUANT TO ACT NO. PUBLIC AUCTION PURSUANT TO
3135, AS AMENDED.
3135, AS AMENDED. IN CASE OF A ACT NO. 3135, AS AMENDED. IN
JUDICIAL FORECLOSURE, THE CASE OF A JUDICIAL
BANGKO SENTRAL MAY, WITH THE FORECLOSURE, THE BANGKO
APPROVAL OF THE COURT, SENTRAL MAY WITH THE
LIKEWISE DEPUTIZE ANY OF ITS APPROVAL OF THE COURT,
LAWYERS TO ACT AS SPECIAL LIKEWISE DEPUTIZE ANY OF ITS
SHERIFF IN THE SALE OF A LAWYERS TO ACT AS SPECIAL
DEBTOR’S PROPERTIES AND IN THE SHERIFF IN THE SALE OF THE
ENFORCEMENT OF COURT WRITS DEBTOR’S PROPERTIES AND IN
AND PROCESSES RELATED THE ENFORCEMENT OF COURT
THERETO. THE SPECIAL SHERIFF OF WRITS AND PROCESSSES
THE BANGKO SENTRAL SHALL RELATED THERETO. THE SPECIAL
172
MAKE A REPORT TO THE PROPER SHERIFF OF THE BANGKO
COURT AFTER ANY ACTION HAS SENTRAL SHALL MAKE A REPORT
BEEN TAKEN BY HIM, WHICH COURT TO THE PROPER COURT AFTER
SHALL TREAT SUCH ACTION AS IF ANY ACTION HAS BEEN TAKEN BY
IT WERE AN ACT OF ITS OWN HIM, WHICH COURT SHALL TREAT
SHERIFF IN ALL RESPECTS. SUCH ACTION AS IF IT WERE AN
ACT OF ITS OWN SHERIFF IN ALL
RESPECTS.
“LIKEWISE, IN CASE OF A JUDICIAL

FORECLOSURE IN CONNECTION
WITH LOANS AND ADVANCES
UNDER THIS ARTICLE, THE BANGKO
SENTRAL MAY, WITH THE APPROVAL
OF THE COURT, DEPUTIZE ANY OF
ITS LAWYERS TO ACT AS SPECIAL
SHERIFF IN THE SALE OF A
DEBTOR’S PROPERTIES AND IN THE
ENFORCEMENT OF COURT WRITS
AND PROCESSES RELATED
THERETO. THE SPECIAL SHERIFF OF
THE BANGKO SENTRAL SHALL
MAKE A REPORT TO THE PROPER
COURT AFTER ANY ACTION HAS
BEEN TAKEN BY HIM, WHICH COURT
SHALL TREAT SUCH ACTION AS IF IT
173
WERE AN ACT OF ITS OWN SHERIFF
IN ALL RESPECTS.
“NO RESTRAINING ORDER OR NO RESTRAINING ORDER OR “NO RESTRAINING ORDER OR

INJUNCTION SHALL BE ISSUED BY
INJUNCTION SHALL BE ISSUED BY INJUNCTION SHALL BE ISSUED BY
THE COURT ENJOINING THE
BANGKO SENTRAL FROM THE COURT ENJOINING THE THE COURT ENJOINING THE
PROCEEDING WITH THE
BANGKO SENTRAL FROM BANGKO SENTRAL FROM
FORECLOSURE OF THE MORTGAGE
UNLESS A BOND IS POSTED IN PROCEEDING WITH THE PROCEEDING WITH THE
FAVOR OF THE BANGKO SENTRAL IN
FORECLOSURE OF THE MORTGAGE FORECLOSURE OF THE
AN AMOUNT EQUIVALENT TO THE
TOTAL CLAIM OF THE BANGKO UNLESS A BOND IS POSTED IN MORTGAGE UNLESS A BOND IS
SENTRAL. THE RESTRAINING
FAVOR OF THE BANGKO SENTRAL POSTED IN FAVOR OF THE
ORDER OR INJUNCTION SHALL BE
REFUSED OR, IF GRANTED, SHALL IN AN AMOUNT EQUIVALENT TO BANGKO SENTRAL IN AN AMOUNT
BE DISSOLVED UPON FILING BY THE
THE TOTAL CLAIM OF THE BANGKO EQUIVALENT TO THE TOTAL
BANGKO SENTRAL OF A BOND,
WHICH SHALL BE IN THE FORM OF SENTRAL. THE RESTRAINING CLAIM OF THE BANGKO SENTRAL.
A BANGKO SENTRAL CHECK, IN AN
ORDER OR INJUNCTION SHALL BE THE RESTRAINING ORDER OR
AMOUNT TWICE THE AMOUNT OF
THE ORIGINAL BOND POSTED REFUSED OR, IF GRANTED, SHALL INJUNCTION SHALL BE REFUSED
CONDITIONED THAT THE BANGKO
BE DISSOLVED UPON FILING BY THE OR, IF GRANTED, SHALL BE
SENTRAL WILL PAY THE DAMAGES
WHICH THE PARTY MAY SUFFER BY BANGKO SENTRAL OF A BOND, DISSOLVED UPON FILING BY THE
THE REFUSAL OR DISSOLUTION OF
WHICH SHALL BE IN THE FORM OF BANGKO SENTRAL OF A BOND,
THE INJUNCTION. THE PROVISIONS
OF THE RULES OF COURT ON A BANGKO SENTRAL CHECK, IN AN WHICH SHALL BE IN THE FORM
INJUNCTIONS INSOFAR AS THEY
AMOUNT TWICE THE AMOUNT OF OF A BANGKO SENTRAL CHECK,
174
ARE APPLICABLE AND NOT THE ORIGINAL BOND POSTED IN AN AMOUNT TWICE THE
INCONSISTENT WITH THE
CONDITIONED THAT THE BANGKO AMOUNT OF THE ORIGINAL BOND
PROVISIONS OF THIS SECTION
SHALL GOVERN THE ISSUANCE AND SENTRAL WILL PAY THE DAMAGES POSTED CONDITIONED THAT THE
DISSOLUTION OF THE RESTRAINING
WHICH THE PARTY MAY SUFFER BY BANGKO SENTRAL WILL PAY THE
ORDER OR INJUNCTION
CONTEMPLATED IN THIS SECTION.” THE REFUSAL OR DISSOLUTION OF DAMAGES WHICH THE PARTY MAY
THE INJUNCTION. THE PROVISIONS SUFFER BY THE REFUSAL OR
OF RULE 58 OF THE NEW RULES OF DISSOLUTION OF THE
COURT INSOFAR AS THEY ARE INJUNCTION. THE PROVISIONS
APPLICABLE AND NOT OF RULE 58 OF THE NEW RULES
INCONSISTENT WITH THE OF COURT INSOFAR AS THEY ARE
PROVISIONS OF THIS SECTION APPLICABLE AND NOT
SHALL GOVERN THE ISSUANCE AND INCONSISTENT WITH THE
DISSOLUTION OF THE RESTRAINING PROVISIONS OF THIS SECTION
ORDER OR INJUNCTION SHALL GOVERN THE ISSUANCE
CONTEMPLATED IN THIS SECTION. AND DISSOLUTION OF THE
RESTRAINING ORDER OR
INJUNCTION CONTEMPLATED IN
THIS SECTION.”
88-C is hereby included in the same Act
Section 88-C is hereby inserted in the Section 88-C of the same Act shall be
175
to read as follows: same Act to read as follows: inserted between Section 88-B and
Section 89 which shall read as
follows:
“SEC. 88-C. RIGHT OF SEC. 88-C. RIGHT OF REDEMPTION “SEC. 88-C. RIGHT OF
REDEMPTION OF FORECLOSED
OF FORECLOSED REAL PROPERTY; REDEMPTION OF FORECLOSED
REAL PROPERTY; RIGHT OF
POSSESSION DURING REDEMPTION RIGHT OF POSSESSION DURING REAL PROPERTY; RIGHT OF
PERIOD. – IN THE EVENT OF
REDEMPTION PERIOD. – THE POSSESSION DURING
FORECLOSURE, WHETHER
JUDICIALLY OR EXTRAJUDICIALLY, MORTGAGOR SHALL HAVE THE REDEMPTION PERIOD. – THE
THE MORTGAGOR, WHO IS A
RIGHT TO REDEEM THE PROPERTY MORTGAGOR SHALL HAVE THE
NATURAL PERSON, SHALL HAVE
THE RIGHT TO REDEEM THE WITHIN ONE (1) YEAR FROM THE RIGHT TO REDEEM THE
PROPERTY WITHIN ONE (1) YEAR
DATE OF FORECLOSURE SALE OF PROPERTY WITHIN ONE YEAR
FROM THE DATE OF FORECLOSURE
SALE. IN CASE THE MORTGAGOR IS THE REAL ESTATE, IN CASE THE FROM THE DATE OF
A JURIDICAL PERSON, THE
MORTGAGOR IS A NATURAL FORECLOSURE SALE OF THE REAL
MORTGAGOR SHALL HAVE THE
RIGHT TO REDEEM THE PROPERTY PERSON, AND WITHIN NINETY (90) ESTATE, IN CASE THE
SOLD IN AN EXTRAJUDICIAL
DAYS BUT NOT LATER THAN THE MORTGAGOR IS A NATURAL
FORECLOSURE SALE UNDER ACT
NO. 3135 WITHIN ONE (1) YEAR DATE OF REGISTRATION OF THE PERSON, AND WITHIN NINETY
FROM THE DATE OF FORECLOSURE
CERTIFICATE OF FORECLOSURE DAYS BUT NOT LATER THAN THE
SALE; PROVIDED, THAT IN CASE OF
JUDICIAL FORECLOSURE, THE SALE, IN CASE THE MORTGAGOR IS DATE OF REGISTRATION OF THE
MORTGAGOR SHALL HAVE THE
A JURIDICAL PERSON; PROVIDED CERTIFICATE OF FORECLOSURE
RIGHT TO REDEEM THE PROPERTY
SOLD WITHIN NINETY (90) DAYS HOWEVER, THAT FORECLOSED SALE, IN CASE THE MORTGAGOR
176
FROM THE FORECLOSURE SALE BUT REAL PROPERTIES IN THE NAME OF IS A JURIDICAL PERSON.
NOT LATER THAN THE
A BORROWER BANK, OR OTHER REDEMPTION SHALL BE
REGISTRATION OF THE CERTIFICATE
OF FORECLOSURE SALE. CORPORATE THIRD PARTY EFFECTED BY PAYING THE
REDEMPTION SHALL BE EFFECTED
MORTGAGOR WHOSE PROPERTIES PRINCIPAL, INTERESTS,
BY PAYING THE PRINCIPAL,
INTERESTS, CHARGES, ARE DIRECTLY MORTGAGED TO THE CHARGES, COMMISSIONS AND
COMMISSIONS AND ALL CLAIMS OF
BANGKO SENTRAL, PURSUANT TO ALL CLAIMS OF WHATEVER
WHATEVER NATURE OF THE
BANGKO SENTRAL OUTSTANDING ACT NO. 3135, THE APPLICABLE NATURE OF THE BANGKO
AND DUE AS OF THE DATE OF
REDEMPTION PERIOD IS ONE (1) SENTRAL OUTSTANDING AND
FORECLOSURE SALE, INCLUDING
ALL COSTS AND OTHER EXPENSES YEAR. REDEMPTION SHALL BE DUE AS OF THE DATE OF
INCURRED BY REASON OF THE
EFFECTED BY PAYING THE FORECLOSURE SALE, INCLUDING
FORECLOSURE SALE AND CUSTODY
OF THE PROPERTY. PRINCIPAL, INTERESTS, CHARGES, ALL COSTS AND OTHER
COMMISSIONS AND ALL CLAIMS OF EXPENSES INCURRED BY REASON
WHATEVER NATURE OF THE OF THE FORECLOSURE SALE AND
BANGKO SENTRAL OUTSTANDING CUSTODY OF THE PROPERTY.
AND DUE AS OF THE DATE OF
FORECLOSURE SALE, INCLUDING
ALL COSTS AND OTHER EXPENSES
INCURRED BY REASON OF THE
FORECLOSURE SALE AND CUSTODY
177
OF THE PROPERTY.
“THE BANGKO SENTRAL, AS THE BANGKO SENTRAL, AS THE BANGKO SENTRAL, AS

PURCHASER IN THE FORECLOSURE
PURCHASER IN THE FORECLOSURE PURCHASER IN THE
SALE AND WITHOUT NEED OF
POSTING A BOND, MAY TAKE SALE AND WITHOUT NEED OF FORECLOSURE SALE AND
POSSESSION OF THE FORECLOSED
POSTING A BOND, MAY TAKE WITHOUT NEED OF POSTING A
PROPERTY DURING THE
REDEMPTION PERIOD. THE BANGKO POSSESSION OF THE FORECLOSED BOND, MAY TAKE POSSESSION OF
SENTRAL SHALL BE ENTITLED TO
PROPERTY DURING THE THE FORECLOSED PROPERTY
THE FRUITS OF THE PROPERTY, THE
SAME TO BE APPLIED AGAINST THE REDEMPTION PERIOD. THE DURING THE REDEMPTION
REDEMPTION PRICE.”
BANGKO SENTRAL SHALL BE PERIOD. THE BANGKO SENTRAL
ENTITLED TO THE FRUITS OF THE SHALL BE ENTITLED TO THE
PROPERTY, THE SAME TO BE FRUITS OF THE PROPERTY, THE
APPLIED AGAINST THE SAME TO BE APPLIED AGAINST
REDEMPTION PRICE. THE REDEMPTION PRICE.”
88-D is hereby included in the same Act
Section 88-D is hereby inserted in the
to read as follows:
“SEC. 88-D. UNSECURED BANGKO SEC. 88-D. UNSECURED BANGKO

SENTRAL CLAIMS. – ALL
SENTRAL CLAIMS. – ALL
UNSECURED CLAIMS OF THE
BANGKO SENTRAL SHALL BE UNSECURED CLAIMS OF THE
CONSIDERED PREFERRED CREDITS
178
SIMILAR TO TAXES DUE TO THE BANGKO SENTRAL SHALL BE
NATIONAL GOVERNMENT IN THE
CONSIDERED PREFERRED CREDITS
ORDER OF PREFERENCE UNDER
ARTICLE 2244 OF THE NEW CIVIL SIMILAR TO TAXES DUE TO THE
CODE.”
NATIONAL GOVERNMENT IN THE
ORDER OF PREFERENCE UNDER
ARTICLE 2244 OF THE NEW CIVIL
CODE.
Section 89-A is hereby inserted in the Section 89-A of the same Act shall be
to read as follows:
same Act to read as follows: inserted between Section 89 and
Section 90 which shall read as
follows:
“SEC. 89-A. FINANCIAL FACILITIES SEC. 89-A. FINANCIAL FACILITIES “SEC. 89-A. CREDIT FACILITIES
FOR ISLAMIC BANKS. - THE
FOR ISLAMIC BANKS. - THE FOR ISLAMIC BANKS. –THE
BANGKO SENTRAL MAY, TAKING
INTO CONSIDERATION THE BANGKO SENTRAL MAY, TAKING BANGKO SENTRAL MAY, TAKING
PECULIAR CHARACTERISTICS OF
INTO CONSIDERATION THE INTO CONSIDERATION THE
ISLAMIC BANKING, FORMULATE
RULES AND REGULATIONS FOR THE PECULIAR CHARACTERISTICS OF PECULIAR CHARACTERISTICS OF
EXTENSION OF FINANCIAL
ISLAMIC BANKING, FORMULATE ISLAMIC BANKING, FORMULATE
FACILITIES TO ISLAMIC BANKS
PROVIDED SUCH EXPOSURES RULES AND REGULATIONS FOR THE RULES AND REGULATIONS FOR
SHALL BE PROPERLY SECURED.”
179
EXTENSION OF FINANCIAL THE EXTENSION OF
FACILITIES TO ISLAMIC BANKS REDISCOUNTING OR OTHER
PROVIDED SUCH EXPOSURES SIMILAR FACILITIES TO ISLAMIC
SHALL BE PROPERLY SECURED. BANKS.”
89-B is hereby included in the same Act
Section 89-B is hereby inserted in the
to read as follows:
“SEC. 89-B. LOANS TO THE SEC. 89-B. LOANS TO THE

CORPORATION. – THE BANGKO
SENTRAL, PURSUANT TO ITS CORPORATION. – THE BANGKO
MANDATE OF MAINTAINING
SENTRAL, PURSUANT TO ITS
FINANCIAL STABILITY, MAY LEND
FUNDS TO THE PHILIPPINE DEPOSIT MANDATE OF MAINTAINING
INSURANCE CORPORATION FOR
FINANCIAL STABILITY, MAY LEND
INSURANCE PURPOSES AND IN
CASES OF FINANCIAL ASSISTANCE TO THE PHILIPPINE DEPOSIT
THAT THE LATTER IS AUTHORIZED
INSURANCE CORPORATION FUNDS
TO EXTEND UNDER SECTION 22(E)
OF REPUBLIC ACT NO. 3591, AS FOR INSURANCE PURPOSE AND
AMENDED. NOTWITHSTANDING
FOR FINANCIAL ASSISTANCE THAT
SECTION 23 OF REPUBLIC ACT NO.
3591, AS AMENDED, THE THE LATTER IS AUTHORIZED TO
EXTEND UNDER SECTION 17(D) OF
PRESCRIBE INTEREST RATES AND
180
SUCH OTHER TERMS AND REPUBLIC ACT NO. 3591, AS
CONDITIONS OF THE LOAN.”
AMENDED, TO AN INSURED BANK
IN DANGER OF CLOSING IN ORDER
TO MINIMIZE LOSSES TO ITS
DEPOSITORS AND CREDITORS.
NOTWITHSTANDING SECTION 18 OF
REPUBLIC ACT NO. 3591, AS
AMENDED, THE MONETARY BOARD
SHALL PRESCRIBE INTEREST RATES
AND SUCH OTHER TERMS AND
CONDITIONS OF THE LOAN.
“SEC. 92. Issue and Negotiation of SEC. 92. Issue and Negotiation of “SEC. 92. Issue and Negotiation of
Bangko Sentral Obligations. — In order
Bangko Sentral Obligations. — In order Bangko Sentral Obligations. — In
to provide the Bangko Sentral with
effective instruments for open market to provide the Bangko Sentral with order to provide the Bangko Sentral
operations, the Bangko Sentral may,
effective instruments for open market with effective instruments for open
subject to such rules and regulations as
the Monetary Board may prescribe and operations, the Bangko Sentral may, market operations, the Bangko
in accordance with the principles stated
181
in Section 90 of this Act, issue, place, subject to such rules and regulations Sentral may, subject to such rules
buy and sell freely negotiable evidences
as the Monetary Board may prescribe and regulations as the Monetary
of indebtedness of the Bangko Sentral.
[:Provided, That issuance of such and in accordance with the principles Board may prescribe and in
certificates of indebtedness shall be
stated in Section 90 of this Act, issue, accordance with the principles stated
made only in cases of extraordinary
movement in price levels.] Said place, buy and sell freely negotiable in Section 90 of this Act, issue, place,
evidences of indebtedness may be
evidences of indebtedness of the buy and sell freely negotiable
issued directly against the international
reserve of the Bangko Sentral or Bangko Sentral. [:Provided, That evidences of indebtedness of the
against the securities which it has
issuance of such certificates
of Bangko Sentral. [: Provided, That
acquired under the provisions of
Section 91 of this Act, or may be issued indebtedness shall be made only in ssuance of such certificates of
without relation to specific types of
cases of extraordinary movement in indebtedness shall be made only in
assets of the Bangko Sentral.
price levels.] Said evidencesof cases of extraordinary movement in
indebtedness may be issued directly
price levels.] Said evidences of
against the international reserve of the
indebtedness may be issued directly
Bangko Sentral or against the
against the international reserve of
securities which it has acquired under
the Bangko Sentral or against the
the provisions of Section 91 of this Act,
securities which it has acquired
or may be issued without relation to
under the provisions of Section 91 of
specific types of assets of the Bangko
this Act, or may be issued without
Sentral.
relation to specific types of assets of
182
the Bangko Sentral.
“The Monetary Board shall determine The Monetary Board shall determine The Monetary Board shall determine
the interest rates, maturities and other
the interest rates, maturities and other the interest rates, maturities and
characteristics of said obligations of the
Bangko Sentral, and may, if it deems it characteristics of said obligations of the other characteristics of said
advisable, denominate the obligations
Bangko Sentral, and may, if it deems it obligations of the Bangko Sentral,
in gold or foreign currencies.
advisable, denominate the obligations and may, if it deems it advisable,
in gold or foreign currencies. denominate the obligations in gold or
foreign currencies.
“Subject to the principles stated in Subject to the principles stated in Subject to the principles stated in
Section 90 of this Act, the evidences of
Section 90 of this Act, the evidences of Section 90 of this Act, the evidences
indebtedness of the Bangko Sentral to
which this section refers may be indebtedness of the Bangko Sentral to of indebtedness of the Bangko
acquired by the Bangko Sentral before
which this section refers may be Sentral to which this Section refers
their maturity, either through purchases
in the open market or through acquired by the Bangko Sentral before may be acquired by the Bangko
redemptions at par and by lot if the
their maturity, either through Sentral before their maturity, either
Bangko Sentral has reserved the right
to make such redemptions. The purchases in the open market or through purchases in the open
evidences of indebtedness acquired or
through redemptions at par and by lot if market or through redemptions at
redeemed by the Bangko Sentral shall
not be included among its assets, and the Bangko Sentral has reserved the par and by lot if the Bangko Sentral
shall be immediately retired and
right to make such redemptions. The has reserved the right to make such
cancelled.”
evidences of indebtedness acquired or redemptions. The evidences of
183
redeemed by the Bangko Sentral shall indebtedness acquired or redeemed
not be included among its assets, and by the Bangko Sentral shall not be
shall be immediately retired and included among its assets, and shall
cancelled. be immediately retired and
cancelled.
THE BANGKO SENTRAL IN

PURSUIT OF ITS OPEN MARKET
OPERATIONS, MAY ALSO ENGAGE
IN THE PURCHASE AND RESALE
OF READILY MARKETABLE
COMMERCIAL PAPERS ISSUED BY
FINANCIAL INSTITUTIONS DULY
ACCREDITED UNDER SUCH RULES
AND REGULATIONS AS THE
MONETARY BOARD MAY
PRESCRIBE TO PROVIDE
LIQUIDITY TO THE FINANCIAL
MARKETS FROM TIME TO TIME.
SUCH PURCHASE AND RESALE
MAY BE SUBJECT TO
184
REPURCHASE OR REVERSE
REPURCHASE AGREEMENTS AS
STIPULATE AND SUCH
INSTRUMENTS ARE PART OF THE
OPEN MARKET OPERATIONS OF
“SEC. 95. Definition of Deposit SEC. 95. Definition of Deposit “SEC. 95. Definition of Deposit
Substitutes. — The term "deposit
Substitutes. — The term "deposit Substitutes. — The term “deposit
substitutes" is defined as an alternative
form of obtaining funds from the public, substitutes" is defined as an alternative substitutes” is defined as an
other than deposits, through the
form of obtaining funds from the public, alternative form of obtaining funds
issuance, endorsement, or acceptance
of debt instruments for the borrower's other than deposits, through the from the public, other than deposits,
own account, for the purpose of
issuance, endorsement, or acceptance through the issuance, endorsement,
relending or purchasing of receivables
and other obligations. These of debt instruments for the borrower's or acceptance of debt instruments for
instruments may include, but need not
own account, for the purpose of the borrower’s own account, for the
be limited to, bankers acceptances,
promissory notes, participations, relending or purchasing of receivables purpose of relending or purchasing of
certificates of assignment and similar
185
instruments with recourse, and and other obligations. These receivables and other obligations.
repurchase agreements. THE PHRASE
instruments may include, but need not These instruments may include, but
‘OBTAINING FUNDS FROM THE
PUBLIC’ SHALL MEAN BORROWING be limited to, bankers acceptances, need not be limited to, bankers
FROM TWENTY (20) OR MORE
promissory notes, participations, acceptances, promissory notes,
LENDERS AT ANY ONE TIME, AND,
FOR THIS PURPOSE, “LENDERS” certificates of assignment and similar participations, certificates of
SHALL REFER TO INDIVIDUALS AND
instruments with recourse, and assignment and similar instruments
CORPORATE ENTITIES THAT ARE
NOT ACTING AS FINANCIAL repurchase agreements. THE TERM with recourse[, and repurchase
INTERMEDIARIES, SUBJECT TO THE
‘PUBLIC’ MEANS BORROWING
SAFEGUARDS AND REGULATIONS agreements.]: PROVIDED,
ISSUED BY THE MONETARY BOARD. FROM TWENTY (20) OR MORE
HOWEVER, THAT REPURCHASE
The Monetary Board shall determine
LENDERS AT ANY ONE TIME. FOR
what specific instruments shall be AGREEMENTS, INCLUDING
considered as deposit substitutes for THIS PURPOSE, “LENDERS” SHALL
REVERSE PURCHASE
the purposes of Section 94 of this Act:
REFER TO INDIVIDUALS AND
Provided, however, That deposit AGREEMENTS ENTERED INTO BY
substitutes of commercial, industrial CORPORATE ENTITIES THAT ARE
and other non-financial companies for
NOT ACTING AS FINANCIAL
the limited purpose of financing their NOT BE CONSIDERED DEPOSIT
own needs or the needs of their agents INTERMEDIARIES, SUBJECT TO THE
SUBSTITUTES.
or dealers shall not be covered by the
SAFEGUAR DS AND REGULATIONS
provisions of Section 94 of this Act.”
ISSUED BY THE MONETARY BOARD. The Monetary Board shall determine
The Monetary Board shall determine what specific instruments shall be
what specific instruments shall be considered as deposit substitutes for
considered as deposit substitutes for the purposes of Section 94 of this
186
the purposes of SECTION 94 of this Act[:]. THE MONETARY BOARD
Act[:]. Provided, however, That deposit MAY ALSO EXCLUDE FUNDS
substitutes of commercial, industrial OBTAINED OR BORROWED FROM
and other non-financial companies for CERTAIN INSTITUTIONAL
the limited purpose of financing their LENDERS FROM THIS SECTION:
own needs or the needs of their agents Provided, however, That deposit
or dealers shall not be covered by the substitutes of commercial, industrial
provisions of Section 94 of this Act. 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 THE COMPUTATION OF THE

RESERVES AGAINST DEPOSIT
SUBSTITUTES UNDER SECTION 94
OF THIS ACT, THE MONETARY
BOARD SHALL DETERMINE WHAT
SHALL BE CONSIDERED AS
187
DEPOSIT SUBSTITUTES SUBJECT
TO RESERVE REQUIREMENTS.
FINANCIAL INSTRUMENTS ISSUED

BY THE NATIONAL GOVERNMENT
AND THE BANGKO SENTRAL AND
INTERBANK BORROWINGS SHALL
NOT BE CONSTRUED AS DEPOSIT
SUBSTITUTES.

as follows:
“SEC. 99. Adjustment [Increase] in

Reserve Requirements. — Whenever
in the opinion of the Monetary Board
it becomes necessary to ADJUST
[increase] reserve requirements

against existing liabilities, the
[increase] CHANGE shall be made in

a [gradual] manner [and shall not
188
exceed four percentage points in any
thirty-day period] CONSISTENT

WITH THE MONETARY POLICY
DETERMINED BY THE MONETARY
BOARD. Banks and other affected
financial institutions shall be notified
reasonably in advance of the date on
which such [increase] CHANGE is to

become effective.”
SEC. 35. Section 101 of the same Act SEC. 34. Section 101 of the
same Act is hereby amended to read as
follows:
“SEC. 101. Reserve Deficiencies. - SEC. 101. Reserve Deficiencies. -

Whenever the reserve position of any
Whenever the reserve position of any
bank or quasi-bank, computed in the
manner specified in the preceding bank or quasi-bank, computed in the
section of this Act, is below the required
manner specified in the preceding
minimum, the bank or quasi-bank shall
pay the Bangko Sentral [one-tenth of section of this Act, is below the
one percent (1/10 of 1%) per day on the
required minimum, the bank or quasi-
amount of the deficiency or the
prevailing ninety-one-day treasury bill bank shall pay the Bangko Sentral one-
189
rate plus three percentage points, tenth of one percent (1/10 of 1%) per
whichever is higher] MONETARY
day on the amount of the deficiency or
PENALTY AS MAY BE PRESCRIBED
BY THE MONETARY BOARD: the prevailing ninety-one-day treasury
Provided, however, That banks and
bill rate plus three percentage points,
quasi-banks shall ordinarily be
permitted to offset any reserve whichever is higher: Provided, however,
deficiency occurring on one or more
That banks and quasi-banks shall
days of the week with any excess
reserves which they may hold on other ordinarily be permitted to offset any
days of the same week and shall be
reserve deficiency occurring on one or
required to pay the penalty [only on the
average daily deficiency during the more days of the week with any excess
week] IN ACCORDANCE WITH THE
reserves which they may hold on other
MECHANISM APPROVED BY THE
MONETARY BOARD. In cases of abuse, days of the same week and shall be
the Monetary Board may deny any bank
required to pay the penalty only on the
or quasi-bank the privilege of offsetting
reserve deficiencies in the aforesaid average daily deficiency during the
manner.
week. In cases of abuse, the Monetary
Board may deny any bank or quasi-
bank the privilege of offsetting reserve
deficiencies in the aforesaid manner.
“If a bank or quasi-bank chronically has If a bank or quasi-bank chronically has

a reserve deficiency, the Monetary
a reserve deficiency, the Monetary
Board may limit or prohibit the making
of new loans or investments by the Board may limit or prohibit the making
190
institution and may require that part or of new loans or investments by the
all of the net profits of the institution be
institution and may require that part or
assigned to surplus.
all of the net profits of the institution be
assigned to surplus.
“The Monetary Board may modify or set The Monetary Board may modify or set
aside the reserve deficiency penalties
aside the reserve deficiency penalties
provided in this section, for part or the
entire period of a strike or lockout provided in this section, for part or the
affecting a bank or a quasi-bank as
entire period of a strike or lockout
defined in the Labor Code, or of a
national emergency affecting affecting a bank or a quasi-bank as
operations of banks or quasi-banks, OR
defined in the Labor Code, or of a
IN SUCH OTHER INSTANCES WHERE
THE GRANT OF WAIVER OF national emergency affecting
PENALTIES IS DETERMINED BY THE
operations of banks or quasi-banks OR
MONETARY BOARD TO BE
JUSTIFIABLE. The Monetary Board may IN SUCH OTHER INSTANCES WHERE
also modify or set aside reserve
THE GRANT OF WAIVER IS
deficiency penalties for rehabilitation
program of a bank.” DETERMINED BY THE MONETARY
BOARD TO BE JUSTIFIABLE. The
Monetary Board may also modify or set
aside reserve deficiency penalties for
rehabilitation program of a bank.
191
follows:
“SEC. 104. Guiding Principle. — The SEC. 104. Guiding Principle. — The
Monetary Board shall use the powers
Monetary Board shall use the powers
granted to it under this Act to ensure
that the supply, availability and cost of granted to it under this Act to ensure
money are in accord with the needs of
that the supply, availability and cost of
the Philippine economy and that bank
credit is not granted for speculative money are in accord with the needs of
purposes prejudicial to the national
the Philippine economy and that bank
interests. Regulations on bank
operations shall be applied to all banks credit is not granted for speculative
of the same category, AS MAY BE
purposes prejudicial to the national
DEFINED BY THE MONETARY
BOARD, uniformly and without interests. Regulations on bank
discrimination.”
operations shall be applied to all banks
of the same category AS MAY BE
DEFINED BY THE MONETARY BOARD
uniformly and without discrimination.
follows:
192
“SEC. 108. Minimum Capital Ratios. — SEC. 108. Minimum Capital Ratios. —
The Monetary Board may prescribe
The Monetary Board may prescribe
minimum RISK-BASED CAPITAL
ADEQUACY ratios BASED ON minimum RISK-BASED CAPITAL
INTERNATIONALLY ACCEPTED
ADEQUACY ratios BASED ON
STANDARDS [which the capital and
surplus of the banks must bear to the INTERNATIONALLY ACCEPTED
volume of their assets, or to specific
STANDARDS [which the capital and
categories thereof,] and may alter said
ratios whenever it deems necessary. IN surplus of the banks must bear to the
THE EXERCISE OF ITS AUTHORITY
volume of their assets, or to specific
UNDER THIS SECTION, THE
MONETARY BOARD MAY REQUIRE categories thereof,] and may alter said
BANKS TO HOLD CAPITAL BEYOND
ratios whenever it deems necessary.
THE MINIMUM REQUIREMENTS
COMMENSURATE TO THEIR RISK IN THE EXERCISE OF ITS
PROFILE.”
AUTHORITY UNDER THIS SECTION,
THE MONETARY BOARD MAY
PRESCRIBE A HIGHER MINIMUM
CAPITAL ADEQUACY RATIO FOR
DIFFERENT BANK CATEGORIES AS
MAY BE WARRANTED BY THEIR
RISK PROFILE.
SEC. 38. Section 113 of the same Act SEC. 37. Section 113 of the SEC. 38. Section 113 of Republic Act
same Act is hereby amended to read as No. 7653 is hereby amended to read
193
“SEC. 113. Official Deposits. — The SEC. 113. Official Deposits. — The “SEC. 113. Official Deposits. — The
Bangko Sentral shall be the official
Bangko Sentral shall be the official Bangko Sentral shall be the official
depository of the Government, its
political subdivisions and depository of the Government, its depository of the Government, its
instrumentalities as well as of
political subdivisions and political subdivisions and
government-owned or -controlled
corporations. and, a As a general instrumentalities as well as of instrumentalities as well as of
policy, their cash balances should be
government-owned or -controlled government-owned or controlled
deposited with the Bangko Sentral, with
only minimum working balances to be corporations and, as a general policy, corporations. [and, as a general
held by government-owned banks and
their cash balances should be policy, their cash balances should be
such other banks LICENSED TO
OPERATE [incorporated] in the deposited with the Bangko Sentral, with deposited with the Bangko Sentral,
Philippines as the Monetary Board may
only minimum working balances to be with only minimum working balances
AUTHORIZE. [designate, subject to
such rules and regulations as the Board held by government-owned banks and to be held by government-owned
may prescribe: Provided, That such
such other banks incorporated in the banks and such other banks
banks may hold deposits of the political
subdivisions and instrumentalities of Philippines as the Monetary Board may incorporated in the Philippines as the
the Government beyond their minimum
designate, subject to such rules and Monetary Board may designate,
working balances whenever such
subdivisions and instrumentalities have regulations as the Board may prescribe: subject to such rules and regulations
outstanding loans with said banks.]
Provided, That such banks may hold as the Board may prescribe:
deposits of the political subdivisions Provided, That such banks may hold
and instrumentalities of the deposits of the political subdivisions
Government beyond their minimum
194
working balances whenever such and instrumentalities of the
subdivisions and instrumentalities have Government beyond their minimum
outstanding loans with said banks. working balances whenever such
subdivisions or instrumentalities
have outstanding loans with said
banks.]
“The Bangko Sentral may ACCEPT The Bangko Sentral may ACCEPT EXCEPT FOR DEMAND DEPOSITS,
DEPOSITS AND pay interest on SUCH
DEPOSITS AND pay interest on SUCH the Bangko Sentral [may] SHALL
deposits AND OTHER SIMILAR
PLACEMENTS of the Government or of deposits AND OTHER SIMILAR pay interest on deposits of the
its political subdivisions and
PLACEMENTS of the Government or of Government or of its political
instrumentalities, banks AND OTHER
BANGKO SENTRAL-SUPERVISED its political subdivisions and subdivisions and instrumentalities, as
INSTITUTIONS.”
instrumentalities, banks AND OTHER well as on deposits of banks with the
BANGKO SENTRAL-SUPERVISED Bangko Sentral.”
INSTITUTIONS.

as follows:
195
“SEC. 117. Issue of Government
Obligations. — The issue of securities
representing obligations of the
Government, its political subdivisions
or instrumentalities, may be made
through the Bangko Sentral, which
may act as agent of, and for the
account of, the Government or its
respective subdivisions or
instrumentality, as the case may be:
Provided, however, That the Bangko
Sentral shall not guarantee the
placement of said securities, and
shall not subscribe to their issue
except to replace its maturing
holdings of securities with the same
type as the maturing securities.
THE PRIMARY SALE OF

GOVERNMENT SECURITIES MAY
ALSO BE PUBLICLY
196
UNDERWRITTEN BY, OR
PRIVATELY PLACED IN, FINANCIAL
INSTITUTIONS ACCREDITED BY
THE DEPARTMENT OF FINANCE
OF THE NATIONAL GOVERNMENT.
THE DIRECT PURCHASE AND SALE

OF GOVERNMENT SECURITIES BY
AND BETWEEN AND AMONG
ACCREDITED FINANCIAL
INSTITUTIONS SHALL BE DEEMED
EXEMPT TRANSACTIONS UNDER
REPUBLIC ACT NO. 8799,
OTHWERISE KNOWN AS THE
SECURITIES REGULATION CODE.
THE SECRETARY OF FINANCE, IN
CONSULTATION WITH THE
BANGKO SENTRAL, SHALL
PROMULGATE SUCH RULES AND
REGULATIONS, ORDERS OR
INSTRUCTIONS WHICH SHALL
197
PROTECT FROM FRAUD THE
REPUBLIC OF THE PHILIPPINES,
AS ISSUER AND THE ACCREDITED
FINANCIAL INSTITUTIONS AS
INVESTORS OR TRADERS OF SAID
GOVERNMENT SECURITIES.
IN ORDER TO INSURE THAT SAID

INSTITUTIONS SHALL OPERATE
UNDER FAIR AND UNIFORM
TRADING RULES, THEY SHALL, AS
PART OF THE GUIDELINES OF
ACCREDITATION, BE REQUIRED
TO JOIN AN ASSOCIATION OF
INSTITUTIONS TO BE GOVERNED
BY INTERNAL RULES OF
CONDUCT APPROVED BY THE
SECRETARY OF FINANCE, THE
LATTER BEING THE OFFICIAL
198
REPRESENTATIVE OF THE
REPUBLIC OF THE PHILIPPINES,
THE PRIMARY OBLIGOR IN THE
ISSUANCE OF SAID GOVERNMENT
SECURITIES; PROVIDED,
HOWEVER, THAT THE DIRECT
PARTICIPATION OF ACCREDITED
FINANCIAL INSTITUTIONS IN THE
OPEN MARKET OPERATIONS OF
THE BANGKO SENTRAL AS
PROVIDED IN SECTIONS 90 AND
91 HEREIN SHALL BE SUBJECT TO
SUCH RULES AND REGULATIONS
AS MAY BE PRESCRIBED BY THE
MONETARY BOARD, IN
CONSULTATION WITH THE
SECRETARY OF FINANCE.”

199
as follows:
“SEC. 118. Methods of Placing

Government Securities. — The
Bangko Sentral may place the
securities to which the FIRST
PARAGRAPH OF THE preceding
Section refers through direct sale to
financial institutions [and the public].
The Bangko Sentral shall not be a

member of any stock exchange or
syndicate, but may intervene therein,
IN COORDINATION WITH THE
DEPARTMENT OF FINANCE, for the
sole purpose of regulating their
operations in the placing of
government securities.
The Government, or its political

subdivisions or instrumentalities,
shall reimburse the Bangko Sentral
200
for the expenses incurred in the
placing of the aforesaid securities.”

as follows:
“SEC. 119. Servicing and Redemption

of the Public Debt. — The servicing
and redemption of the public debt
shall also BE DONE UNDER THE
AUTHORITY OF THE DEPARTMENT
OF FINANCE. IT MAY also be
effected through the Bangko Sentral.
SEC. 39. Section 123 of the same Act

“SEC. 123. Financial Advice on Official

Credit Operations. — Before
undertaking any credit operation
abroad, the Government, through the
Secretary of Finance, shall request the
opinion, in writing, of the Monetary
Board on the monetary implications of
the contemplated action. Such opinions
201
must similarly be requested by all
political subdivisions and
instrumentalities of the Government
before any credit operation abroad is
undertaken by them.
“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.
“Whenever the Government, or any of

its political subdivisions or
instrumentalities, contemplates
borrowing within the Philippines, 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
price level, and the balance of
payments.
“A CREDIT OPERATION OR
BORROWING AS PROVIDED HEREIN
MAY TAKE THE FORM OF DIFFERENT
CREDIT FACILITIES SUCH AS BUT
202
NOT LIMITED TO A SINGLE LOAN,
SERIES OF LOANS UNDER A
BORROWING PROGRAM, OR CREDIT
LINES. NO PRIOR MONETARY
BOARD OPINION SHALL BE
REQUIRED FOR INDIVIDUAL
DRAWDOWNS OR BORROWINGS
WITHIN APPROVED CREDIT LINES
OR BORROWING PROGRAMS.”
SEC. 40. Section 125 of the same Act SEC. 38. Section 125 of the SEC. 42. Section 125 of Republic Act
same Act is hereby amended to read as No. 7653 is hereby amended to read
“SEC. 125. Tax Exemptions. — The SEC. 125. Tax Exemptions. — The “SEC. 125. Tax Exemptions. — THE
Bangko Sentral shall be exempt for a
Bangko Sentral shall be exempt [for a PROVISIONS OF ANY GENERAL OR
period of five (5) years from the
approval of this Act from all national, period of five (5) years from the SPECIAL LAW TO THE CONTRARY
provincial, municipal and city taxes,
approval of this Act] from all national, NOTWITHSTANDING, FINANCIAL
fees, charges and assessments.
provincial, municipal and city taxes, TRANSACTIONS OF the Bangko
fees, charges and assessments. Sentral ARISING FROM ITS OPEN
MARKET OPERATIONS shall be
exempt [for a period of five (5) years
203
from the approval of this Act ] from all
national, AND LOCAL [provincial,
municipal and city] taxes, fees,

charges and assessments.
“The exemption authorized in the The exemption authorized in the [The exemption authorized in the
preceding paragraph of this section
preceding paragraph of this section preceding paragraph of this Section
shall apply to all property of the Bangko
Sentral, to the resources, receipts, shall apply to all property of the shall apply to all property of the
expenditures, profits and income of the
Bangko Sentral, to the resources, Bangko Sentral, to the resources,
Bangko Sentral, as well as to all
contracts, deeds, documents and receipts, expenditures, profits and receipts, expenditures, profits and
transactions related to the conduct of
income of the Bangko Sentral, as well income of the Bangko Sentral, as well
the business of the Bangko Sentral:
Provided, however, That said as to all contracts, deeds, documents as to all contracts, deeds, documents
exemptions shall apply only to such
and transactions related to the conduct and transactions related to the
taxes, fees, charges and assessments
for which the Bangko Sentral itself of the business of the Bangko Sentral: conduct of the business of the
would otherwise be liable, and shall not
Provided, however, That said Bangko Sentral: Provided, however,
apply to taxes, fees, charges, or
assessments payable by persons or exemptions shall apply only to such That said exemptions shall apply only
other entities doing business with the
taxes, fees, charges and assessments to such taxes, fees, charges and
Bangko Sentral: Provided, further, That
foreign loans and other obligations of for which the Bangko Sentral itself assessments for which the Bangko
the Bangko Sentral shall be exempt,
would otherwise be liable, and shall not Sentral itself would otherwise be
both as to principal and interest, from
any and all taxes if the payment of such apply to taxes, fees, charges, or liable, and shall not apply to taxes,
204
taxes has been assumed by the Bangko assessments payable by persons or fees, charges, or assessments
Sentral.”
other entities doing business with the payable by persons or other entities
Bangko Sentral: Provided, further, That doing business with the Bangko
foreign loans and other obligations of Sentral: Provided, further, That
the Bangko Sentral shall be exempt, foreign loans and other obligations of
both as to principal and interest, from the Bangko Sentral shall be exempt,
any and all taxes if the payment of both as to principal and interest, from
such taxes has been assumed by the any and all taxes if the payment of
Bangko Sentral. such taxes has been assumed by the
Bangko Sentral.]”

as follows:
“SEC. 126. Exemption from Customs

Duties. — The provision of any
general or special law to the contrary
notwithstanding, the importation and
exportation by the Bangko Sentral of
notes and coins, and of gold and
205
other metals to be used for purposes
authorized under this Act, and the
importation of all [equipment]

SUPPLIES needed [for] BY THE
BANGKO SENTRAL FOR bank
note production, minting of coins,
metal refining and other security
printing operations AND
TRANSPORT OF CURRENCY shall
be fully exempt from all customs
duties and consular fees and from all
other taxes, assessments and
charges related to such importation
or exportation.
THE IMPORTATION OF
MACHINERY OR EQUIPMENT
REQUIRED BY THE BANGKO
SENTRAL FOR THE PRINTING OF
NOTES AND THE MINTING OF
206
COINS SHALL BE SUBJECT TO
CUSTOMS DUTIES AND OTHER
RELATED ASSESSMENTS AND
CHARGES RELATED TO THE
IMPORTATION OF ANY SUCH
MACHINERY OR EQUIPMENT.”

Section 126-A of Republic Act No.
7653 shall be inserted between
Section 126 and Section 127 which
shall read as follows:
“SEC. 126-A. ACQUISITIONS

SUBJECT TO PROCUREMENT LAW.
– ANY AND ALL ACQUISITION OF
GOODS AND SERVICES BY THE
BANGKO SENTRAL SHALL BE
SUBJECT TO THE PROCUREMENTS
LAWS.”
SEC. 41. Section 128 of the same Act SEC. 39. Section 128 of the same Act
207
“SEC. 128. Prohibitions. — The Bangko SEC. 128. Prohibitions. — The Bangko
Sentral shall not acquire shares of any
Sentral shall not acquire shares of any
kind or accept them as collateral, and
shall not participate in the ownership or kind or accept them as collateral, and
management of any enterprise, either
shall not participate in the ownership or
directly or indirectly: [.] PROVIDED,
THAT THIS PROHIBITION SHALL management of any enterprise, either
NOT APPLY WHENEVER THE
directly or indirectly; [.] PROVIDED,
MONETARY BOARD, BY A VOTE OF
AT LEAST FIVE (5) OF ITS THAT THIS PROHIBITION SHALL
MEMBERS, (1) DEEMS AN
NOT APPLY WHENEVER THE
ACQUISITION OR INVESTMENT TO
BE NECESSARY TO QUALIFY OR A MONETARY BOARD, BY A VOTE OF
REQUIRED FOR MEMBERSHIP IN
AT LEAST FIVE (5) OF ITS
INTERNATIONAL AND REGIONAL
ORGANIZATIONS OR (2) MEMBERS, DEEMS AN ACQUISITION
DETERMINES THAT INVESTING IN
OR INVESTMENT TO BE NECESSARY
AND/OR OPERATING AN
ENTERPRISE WILL BE CONSISTENT TO QUALIFY OR AS REQUIRED FOR
WITH THE EFFECTIVE FULFILLMENT
MEMBERSHIP IN INTERNATIONAL
OF ITS MANDATE AND WILL NOT
CONSTITUTE ANY CONFLICT OF AND REGIONAL ORGANIZATIONS.
INTEREST.
“The Bangko Sentral shall not engage in The Bangko Sentral shall not engage in
development banking or financing:
development banking or financing:
Provided, however, That outstanding
loans obtained or extended for Provided, however, That outstanding
208
development financing shall not be loans obtained or extended for
affected by the prohibition of this
development financing shall not be
section.”
affected by the prohibition of this
section.
SEC. 42. Repealing Clause. All SEC. 40. Repealing Clause. All SEC. 46. Repealing Clause. - All
provisions of existing laws, orders, rules
provisions of existing laws, orders, rules laws, decrees, executive orders, rules
and regulations, or parts thereof which
are in conflict or inconsistent with the and regulations, or parts thereof which and regulations, or parts thereof
provisions of this Act are hereby
are in conflict or inconsistent with the which are inconsistent with this Act
repealed, amended or modified
accordingly. provisions of this Act are hereby are hereby repealed, amended or
repealed, amended or modified modified accordingly.
accordingly.
SEC. 43. Separability Clause. If any SEC. 41. Separability Clause. SEC. 45. Separability Clause. - If any
provision or section of this Act is held to
If any provision or section of this Act is part or provision of this Act shall be
be unconstitutional or invalid, the other
provisions or sections hereof, which are held to be unconstitutional or invalid, held to be unconstitutional or invalid,
not affected thereby shall continue to
the other provisions or sections hereof, other parts or provisions hereof
be in full force and effect.
which are not affected thereby shall which are not affected thereby shall
continue to be in full force and effect. continue to be in full force and effect.
SEC. 44. Effectivity. This Act shall SEC. 42. Effectivity. This Act SEC. 47. Effectivity. - This Act shall
take effect fifteen (15) days following
shall take effect fifteen (15) days take effect fifteen days (15) days
its publication in the Official Gazette or
209
in a newspaper of general circulation in following its publication in the Official following its publication in at least
the Philippines.
Gazette or in a newspaper of general two (2) newspapers of general
circulation in the Philippines. circulation or the Official Gazette.
Approved,
-aj-
210

Matrix - The New Central Bank Act

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Matrix - The New Central Bank Act

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MATRIX OF SENATE BILL NO.

1027, 16, 859—THE NEW CENTRAL BANK ACT

SECTION 1. Section 2 of Republic Act SECTION 1. Section 2 of SECTION 1. Section 2 of Republic

“THE BANGKO SENTRAL SHALL

“THE BANGKO SENTRAL SHALL THE BANGKO SENTRAL SHALL

THE GOVERNOR SHALL VOTE AT

The Bangko Sentral shall maintain

stenographic notes[, either] in their

original form, [or] in microfilm OR IN

SEC. 3. Section 6 of Republic Act No.

“SEC. 6. Composition of the Monetary

The seven (7) members are:

(a) the Governor of the Bangko Sentral

(b) a member of the Cabinet to be

(c) five (5) members who shall come

“THE ABOVE NOTWITHSTANDING, THE ABOVE NOTWITHSTANDING,

SEC. 4. Section 9 of Republic Act No.

The members of the Monetary Board

No person shall be a member of the

[multilateral] banking or financial

to his appointment [; likewise, no

institution]. NO MEMBER OF THE

[as may be assigned to them by the

“In the absence of the Governor, a In the absence of the Governor, a

(B) DEPUTY GOVERNOR FOR

(C) DEPUTY GOVERNOR FOR

(D) DEPUTY GOVERNOR FOR

(E) DEPUTY GOVERNOR FOR

THE SCOPE OF THE DUTIES AND

THE MANAGEMENT OF THE

[In the absence of the Governor, a

vote in such meetings.]”

refuse to supply the [bank] BANGKO

SENTRAL with data [requested or]

SEC. 6. Section 12 of Republic Act

“SEC. 12. Attendance of the Deputy

[may] SHALL, UPON THE ORDER

conduct [periodic] REGULAR or

special examinations of [banking

“THE BANGKO SENTRAL SHALL THE BANGKO SENTRAL SHALL ALSO

“A PARENT COMPANY MEANS A A PARENT COMPANY MEANS A

“AS USED IN THIS SECTION AND AS USED IN THIS SECTION AND

IN CONNECTION WITH THE

AS USED IN THIS SECTION,

SEC. 7. Section 15 of Republic Act

“SEC. 15. Exercise of Authority. — In

ANY ISSUANCE THAT AFFECTS

NO RULES AND REGULATIONS

(b) direct the management,

this purpose. [The legal units of the

the Monetary Board;]

(c) establish a human resource

A compensation structure, based on

for under Republic Act No. 6758 [:

On the recommendation of the

(e) indemnify its members and other

including personnel [of the

In the event of a settlement or

person to be indemnified [did not

commit any] HAD NOT ACTED

The costs and expenses incurred in

“SEC. 25-A. AUTHORITY TO SEC. 25-A. AUTHORITY TO

SEC. 15. Section 26 of Republic Act