Professional Documents
Culture Documents
I. State Policies
SUGGESTED ANSWER:
The Bangko Sentral ng Pilipinas shall provide policy directions in the
areas of money, banking, and credit. It shall have supervision over the
operations of banks and exercise such regulatory powers as provided in this
Act and other pertinent laws over the operations of finance companies and
non-bank financial institutions performing quasi-banking functions, hereafter
referred to as quasi-banks, and institutions performing similar functions.
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Mention the corporate powers of the Central Bank(now Bangko
Sentral ng Pilipinas)
SUGGESTED ANSWER:
The Bangko Sentral is hereby authorized to perform the following:
1. to adopt, alter, and use a corporate seal which shall be judicially
noticed;
2. to enter into contracts;
3. to lease or own real and personal property,
4. to sell or otherwise dispose of real and personal property;
5. to sue and be sued;
6. otherwise to do and perform any and all things that may be necessary
or proper to carry out the purposes of the New Central Bank Act;
7. may acquire and hold such assets and incur such liabilities in
connection with its operations authorized by the provisions of the New
Central Bank Act, or as are essential to the proper conduct of such
operations.
8. may compromise, condone or release, in whole or in part, any claim of
or settled liability to the Bangko Sentral, regardless of the amount
involved, under such terms and conditions as may be prescribed by
the Monetary Board to protect the interests of the Bangko Sentral.
(Section 5, NCBA)
QUESTION
What body exercises the powers and functions of the BSP? What is
its composition?
SUGGESTED ANSWER:
The Monetary Board exercises the powers and functions of the BSP. It is
composed of seven (7) members appointed by the President of the
Philippines for a term of six (6) years:
(1) Governor of the Bangko Sentral - acts as Chairman of the MB; he
shall be head of a department and his appointment is subject to
confirmation by the Commission of Appointments.
(2) Member of the Cabinet; and
(3) Five (5) members coming from the private sector who shall serve
full-time (Sec. 6, NCBA).
QUESTION:
Enumerate the qualifications of the members of the Monetary Board.
SUGGESTED ANSWER:
The members of the Monetary Board must possess the following
qualifications:
1. natural-born citizens of the Philippines;
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2. at least thirty-five (35) years of age, with the exception of the
Governor who should at least be forty (40) years of age;
3. of good moral character;
4. of unquestionable integrity;
5. of known probity and patriotism; and
6. with recognized competence in social and economic disciplines.
Liquidity is the ability to pay off obligations when they fall due. It refers
to that condition wherein high percentage of the assets can be quickly
converted into cash without involving any considerable loss by accepting
sacrifice prices (F.L. Garcia, Glen G. Munn’s Encyclopedia of Banking and
Finance 414).
Termination of conservatorship
1. when the Monetary Board is satisfied that the institution can continue to
operate on its own and the conservatorship is no longer necessary.
2. when the Monetary Board, on the basis of the report of the conservator
or of its own findings, determines that the continuance in business of the
institution would involve probable loss to its depositors or creditors
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QUESTION
Distinguish between conservatorship from receivership
CONSERVATORSHIP RECEIVERSHIP
Ground/s a state of continuing Under the NCBA:
inability or unwillingness 1. is unable to pay its liabilities as
to maintain a condition they become due in the
of liquidity deemed ordinary course of business; or
adequate to protect the
interest of depositors 2. by the Bangko Sentral, to meet
and creditors its liabilities; or
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realizable assets, realizable within a
reasonable time by a reasonable
prudent person of a bank are less
than its liabilities.
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v. The Manila Banking
Corporation, G.R. No. 157911,
September 19, 2006).
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Veterans Bank vs. NLRC, G.R.
No. 13039. October 26, 1999).
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the doctrine of activities in an effort to restore
implied authority — and reinstate the corporation to
the conservator its former position of successful
cannot do either. operation and solvency (Phil.
Ineluctably, his Veterans Bank Union v. Vega,
power is not 360 SCRA 33, 28 June 2001).
unilateral and he
cannot simply
repudiate valid
obligations of the
Bank. (First
Philippine
International Bank v.
CA, 252 SCRA 259)
TRUE OR FALSE. A bank under receivership can still grant new loans
and accept new deposits
SUGGESTED ANSWER:
The receiver of the bank is obliged to collect debts owing to the bank, which
debts form part of the assets of the bank. Thus, borrowers’ obligation to
pay interest subsists even when respondent was placed under
receivership. The bank's receivership is an extraneous circumstance and
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has no effect on borrowers’ obligation (Spouses Aguilar v. The Manila
Banking Corporation, G.R. No. 157911, September 19, 2006).
SUGGESTED ANSWER:
a.
No, the act of the President is not valid. Receivership is equivalent to
an injunction to restrain the bank officers from intermeddling with the
property of the bank in any way. Thus, the appointment of a receiver
operates to suspend the authority of the bank and of its directors and
officers over its property and effects (Villanueva v. CA, 244 SCRA 395).
b.
No, the suit will not prosper. Since the act of the President was invalid,
the exclusive option to purchase the building granted to the investors is
likewise invalid. Also, since the Bank is under receivership, the properties of
the Bank may only be administered for the benefit of its creditors.
Under the law, the sanction of closure could be imposed upon a bank by the
BSP even without notice and hearing. The apparent lack of procedural due
process would not result in the invalidity of action by the MB. This "close
now, hear later" scheme is grounded on practical and legal considerations to
prevent unwarranted dissipation of the bank’s assets and as a valid exercise
of police power to protect the depositors, creditors, stockholders, and the
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general public (BSP MB v. Antonio-Valenzuela, G.R. No. 184778, October 2,
2009).
The respondent banks cannot prevent their closure by the MB. Their remedy
is a subsequent one, which will determine whether the closure of the bank
was attended by grave abuse of discretion. Judicial review enters the picture
only after the MB has taken action; it cannot prevent such action by the MB.
The threat of the imposition of sanctions, even that of closure, does not
violate their right to due process.
The "close now, hear later" doctrine has already been justified as a measure
for the protection of the public interest. Swift action is called for on the part
of the BSP when it finds that a bank is in dire straits. Unless adequate and
determined efforts are taken by the government against distressed and
mismanaged banks, public faith in the banking system is certain to
deteriorate to the prejudice of the national economy itself, not to mention
the losses suffered by the bank depositors, creditors, and stockholders, who
all deserve the protection of the government (Rural Bank of Lucena v. Arca,
G.R. No. L-21146, Sept. 20, 1965).
Ground:
Procedure:
The Monetary Board shall notify in writing the board of directors of its
findings and direct the receiver to proceed with the liquidation of the
institution.
1. The receiver shall file ex parte with the proper regional trial court (RTC), a
petition for assistance in the liquidation of the institution pursuant to a
liquidation plan adopted by the Philippine Deposit Insurance Corporation
for general application to all closed banks. In case of quasi-banks, the
liquidation plan shall be adopted by the Monetary Board.
1. Suspension of operation
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the institution was placed under such receivership or liquidation, be
exempt from any order of garnishment, levy, attachment, or execution.
(Sec. 30, NCBA).
Judicial Review
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Section 52 - All notes and coins issued by the Bangko Sentral
shall be fully guaranteed by the Government of the Republic of
the Philippines and shall be legal tender in the Philippines for
all debts, both public and private: Provided, however, That,
unless otherwise fixed by the Monetary Board, coins shall be
legal tender in amounts not exceeding Fifty pesos (P50.00) for
denominations of Twenty-five centavos and above, and in
amounts not exceeding Twenty pesos (P20.00) for
denominations of Ten centavos or less.
1. One peso coins and coins of higher peso value are legal tender for
obligations not exceeding P 1,000; and
2. Twenty-five cents and coins of lower value are legal tender for
obligations not exceeding P 100.
QUESTION
SUGGESTED ANSWER:
Yes, the debtor can compel his creditor to accept payment of the
foregoing coins. All notes and coins issued by the Bangko Sentral shall be
fully guaranteed by the Government of the Republic of the Philippines and
shall be legal tender in the Philippines for all debts, both public and private;
provided that, unless otherwise fixed by the Monetary Board, coins shall be
legal tender in amounts not exceeding One Thousand Pesos (P1000.00) for
denominations of P1.00 and above, and in amounts not exceeding One
Hundred Pesos (P100.00) for denominations of Twenty-five Centavos or less.
(Sec. 52, NCBA as amended).
SUGGESTED ANSWER:
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YES. Under Section 52 of the New Central Bank Act, as amended,
coins with denominations from P0.25 and below are legal tender in amounts
not exceeding One Hundred Pesos (P100.00).
[A/N: This question was answered using BSP Circular No. 537 series of
2006.]
SUGGESTED ANSWER:
No. The salesgirl’s understanding that coins are not legal tender is not
correct. Coins are legal tender in amounts not exceeding P1000 for
denominations from 1-peso and above, and in amounts not exceeding P100
for denominations 25-centavos and less.
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longer period as the Monetary Board may determine, they may
be exchanged at par and without charge in the Bangko Sentral
and by agents duly authorized by the Bangko Sentral for this
purpose. After the expiration of this latter period, the notes
and coins which have not been exchanged shall cease to be a
liability of the Bangko Sentral and shall be demonetized. The
Bangko Sentral shall also demonetize all notes and coins
which have been called in and replaced.
QUESTION:
Do checks have legal tender power?
SUGGESTED ANSWER:
No, checks representing demand deposits do not have legal tender
power and their acceptance in payment of debts, both public and private, is
at the option of the creditor. However, a check which has been cleared and
credited to the account of the creditor shall be equivalent to a delivery to the
creditor of cash in an amount equal to the amount credited to his account
(Sec. 60, NCBA).
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