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Meetings, quorum, decisions and proceedings MB

1. MB shall meet at least once a week. MB may be called to meeting by governor or 2 other
members of board

2. Presence of 4 members constitute quorum provided that governor or his alternate is among
the 4

3. BSP shall maintain and preserve complete records of proceedings in their original form or in

4. General Rule: All decisions of MB shall require concurrence of at least 4 members

Exception to general rule where at least 5 votes is required:

1. Sec 61 GBL – publication of financial statements is required once at least every quarter. In
national or local emergency or of imminent panic, MB by vote of 5, upon application of bank,
may allow such bank to defer publication of financial statement

2. Sec 28 NCBA – supervision and examining department head shall examine books of every
banking institution once every 12 months and at such other time at the vote of 5 members of

3. Sec 72 NCBA – During exchange crisis or national emergency, with concurrence of 5 members
of MB and approval of president, MB may temporarily suspend sales of exchange by BSP and
may subject all transactions in gold and foreign exchange to license by BSP

4. Sec 84 NCBA – in nation or local emergency or imminent financial panic, MB may, with 5
vote of members, authorize BSP to grant extraordinary loans or advances to banks secured by

Deputy Governors may attend meetings of MB

• They may attend meetings and have the right to be heard

Salaries of governor and members of MB

• Salary shall be fixed by President at a sum commensurate to the importance and responsibility
attached to their position

Personal or Pecuniary interests

• Members of MB with personal or pecuniary interest in any matter in the agenda of MB shall
disclose his interest and shall retire from the meeting when matter is taken

• The decision made on matter shall be made public and the minutes shall reflect disclosure
made and retirement of member
IX. Profits, losses and special accounts

Fiscal Year

• Starts on January first and ends on December 31st of each year

Computation of Profits and Losses

• Within 30 days following end of each year, BSP shall determine net profits and losses
Distribution of net profits
• Within 60 days following end of each fiscal year, MB shall determine distribution of net profits
according to the following:

1. 50% of net profits carried to surplus

2. Remaining 50% shall revert back to National Treasury

Revaluation profits and losses

1. Profits or losses from revaluation of gold or foreign currency shall not be included in
computation of annual profits or losses
2. Any profit or losses from revaluation shall be offset by amounts owed by Philippines to
international financial institutions
3. Any remaining profit or loss shall be placed in the Revaluation of International Reserve and
net balance shall appear as either liability or asset depending whether profit or loss

The Auditor

• Chairman of COA act as ex official auditor of BSP and authorized to appoint representative
auditor to BSP. Can only be removed by COA
• Representative shall be (1) CPA, (2) 10 years experience, (3) not relative to member of MB or
COA to 6th civil degree

X. Penalty for Violation

• Sec 66 of GBL provides that if offender is director or officer, shall be suspended or removed
from office. If offender is corporation, shall be dissolved by quo warranto instituted by SG

Penalty for refusal to make reports or permit examination

• Person was required in writing by MB or supervising department but refused to file or permit
examination. Penalty 50k-100k

Penalty for wilful making of a false or misleading statement of material fact

• Penalty 100k-200k

Proceedings upon and penalty for violations of NCBA and banking laws

1. Bank, quasi bank or any person violates NCBA, penalty is 50-200k

2. Bank or quasi bank persists in carrying business in unlawful or unsafe manner same penalty
Administrative violations on banks

• MB shall impose administrative penalty to bank, quasi-bank, director or officer for:

1. Willful violation of charter

2. Willful delay in submitting report
3. Refusal to permit examination
4. Willful making of false or misleading
5. Willful failure to comply with bank laws
6. Any commission of irregularity
7. Conduct business in unsafe manner

• Following are the sanctions:

1. Fines not exceed 30k per day per violation
2. Suspension of rediscounting privileges
3. Suspension of lending or FOREX operations
4. Suspension of interbank clearing privileges
5. Revocation of quasi-banking license

• Resignation shall not exempt criminal or administrative sanctions

• MB may preventively suspend office under investigation not exceed 120 days except when delay
is caused by him

• Administrative sanctions need not be applied in order of severity

Administrative Proceedings on banks

1. WON there is administrative proceedings, if officer continue to persist in practice or violation,

MB shall release cease and desist order effective upon service to respondents

2. Respondents have opportunity to defend their action in a hearing upon a request made
within 5 days from receipt of order. If no hearing is requested, order is final

3. Governor is authorized to impose to banks fines not exceeding 10k per day per violation
which can be appealed to MB