NINETEENTH CONGRESS OF THE) 
REPUBLIC OF THE PHILIPPINES ) 
Third Regular Session 
)
25 rrn -4 0 6 ’39
SENATE 
S. No. 2981
(In Substitution of S.B. Nos. 123, 2760, and 2839)
Prepared by the Committee on Banks, Financial Institutions & Currencies, with 
Senators Villar C., Escudero, Villar M., as authors thereof
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AN ACT
PROVIDING FOR A NEW CHARTER OF THE LAND BANK OF THE 
PHILIPPINES, REPEALING FOR THE PURPOSE SECTIONS 74 TO 100 OF
REPUBLIC ACT NO. 3844 OR THE 
AS AMENDED
'AGRICULTURAL LAND REFORM CODE'
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled:
SECTION 1. Short Title.
the Philippines Act'.
This Act shall be known as the "New Land Bank of
SEC. 2. Declaration of Policy. - It is the policy of the State to support 
agriculture by providing adequate financial, production, marketing, and other support 
services, to promote countryside and countrywide development, and to strengthen 
the powers and functions of its premier government financial institution (GFI) that 
deliver essential funding and financial services for sustained economic growth.
The State recognizes the role of GFIs in advancing meaningful and 
comprehensive agrarian reform and stimulating economic development by servicing 
small farmers and fisherfolk, local government units (LGUs), micro, small, and medium 
enterprises (MSMEs), and other sectors that generate employment and drive economic 
progress.
SEC. 3. Name and Corporate Existence. - The Land Bank of the Philippines, 
hereinafter referred to as the "Bank", created under Republic Act No. 3844 or the 
"Agricultural Land Reform Code," as amended, shall operate under the provisions of 
this Act. The Bank shall continue to exist as a body corporate and shall have perpetual 
existence. The Governance Commission for Government-Owned or -Controlled


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Corporations (GCG) shall not be precluded from evaluating the performance and
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determining the relevance of the Bank as a government-owned or -controlled
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corporation (GOCC) consistent with the principles and policies of Republic Act No.
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10149 or the "GOCC Governance Act of 2011".
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SEC. 4. Primary Objective of the Bank. - As a GFI, the Bank shall pursue
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its social mission of spurring countryside and countrywide development and shall be
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responsible for broad-based agricultural, rural, and industrial development while
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promoting financial inclusion by providing banking services to rural financial
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institutions, small farmers and fisherfolk, agrarian reform beneficiaries, agricultural
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and industrial enterprises, and MSMEs, and by granting loans to finance agrarian
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reform and agriculture-related undertakings, infrastructure and sustainable national
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government development projects: Provided, That these objectives shall be pursued
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with the utmost consideration for its financial viability, operational agility, and market
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competitiveness to effectively participate in national development and the attainment
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of meaningful and inclusive economic growth. The Bank shall also adopt policies on
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digitalization to improve operational efficiency and governance while promoting
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financial inclusion.
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SEC. 5. Principai Office, Branches, and Other Offices. - The Bank shall
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have its principal office and place of business in Metro Manila. The Bank may open
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and maintain branches and agencies in accordance with applicable regulations of the
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Bangko Sentrai ng Pilipinas (BSP).
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SEC. 6. Corporate Powers. - In addition to the general powers of a
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corporation under Republic Act No. 11232, or the "Revised Corporation Code of the
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Philippines", the Bank shall have the power to:
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(a) Adopt, amend, or change its by-laws; to adopt, alter, and use a seal; to
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lease or own real and personal property and to sell or otherwise dispose of the same;
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to enter into contracts; to sue and be sued; and exercise the general powers of a
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corporation mentioned in Republic Act No. 11232, including the power to acquire or
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establish subsidiaries registered with the Securities and Exchange Commission with
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the right to receive dividends from such subsidiaries in accordance with Section 28
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hereof;
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(b) Hold, purchase, acquire and own real and personal property; introduce
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necessary improvements thereon to enhance and develop their social and economic
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value; and sell, mortgage, or otherwise dispose of the same;
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(c) Make contracts, negotiate and secure loans from both local and foreign
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sources: Provided, That before undertaking such credit operations, the Bank, through
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the Secretary of Finance, shall request the opinion of the Monetary Board of the BSP
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on the monetary implications of the contemplated action. All loans from foreign
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sources shall be subject to approval by the President of the Philippines and shall be
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fully guaranteed by the Philippine Government;


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(d) Grant short-, medium-, and long-term loans and advances against the 
security of real estate or other acceptable assets for the establishment, development 
or expansion of agricultural, agrarian reform, industrial, home building or home 
financing projects, and other productive enterprises;
(e) Grant loans to farmers' cooperatives and associations to facilitate farm 
production, marketing of crops, and acquisition of essential commodities;
(f) Establish a Directors' and Officers' Liability Fund, or obtain Directors' and 
Officers' Liability Insurance from the Government Service Insurance System or other 
reputable insurance companies duly accredited by the appropriate regulatory body, 
without prejudice to the right of the Bank to put up its own legal insurance fund, as 
may be determined by its Board of Directors;
(g) Borrow from, or rediscount notes, bills of exchange and other credit 
instruments with the BSP subject to the provisions of Republic Act No. 7653 or 'The 
New Central Bank Act", as amended, and relevant BSP rules and regulations;
(h) Accept and manage trust funds and properties and carry on the business of 
a trust corporation;
(i) Provide continuing assistance through credit and capacity building to farmers 
and fishers cooperatives, associations, and organizations nationwide;
G) Act as official government depository bank with authority to maintain 
deposits and deposit substitutes of the National Government, its agencies, bureaus, 
instrumentalities, GOCCs, LGUs, and autonomous regions, as well as other territorial 
and political subdivisions, subject to such rules and regulations as the Monetary Board 
of the BSP may prescribe;
(k) Engage in financial leasing of movable and immovable properties in 
connection with government projects;
(l) Dispose of its acquired assets;
(m) Offer and issue common and preferred shares of stocks in such manner 
and in such quantities as approved by the Secretary of Finance, upon the 
recommendation of the Board and in accordance with applicable laws, rules, and 
regulations. The preferred shares shall be non-voting. Other features of preferred 
shares shall be determined by the Board in accordance with applicable laws and 
regulations;
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(n) Engage internationally recognized auditing firms as the Bank's external
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auditor to audit its financial statements, in case the Bank issues shares to the public;
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and


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(o) Exercise all such powers and services as may be necessary to carry out the
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business of a bank under Republic Act No. 8791 or "The General Banking Law of
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2000," subject to the existing rules and regulations of the Monetary Board of the BSP,
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in order to perform its mandate under this Act.
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Unless otherwise provided for in this Act, the exercise of the above-mentioned
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powers shall be subject to applicable laws, rules and regulations and regulations
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promulgated by the BSP.
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SEC. 7. Authorized Capital Stock - Par Value. - The capital stock of the
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Bank shall be One trillion pesos (Phpl,000,000,000,000.00) with a par value of One
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hundred pesos (PhplOO.OO) per share. The Board shall determine the classification of
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shares, their corresponding rights, privileges, or restrictions, if any: Provided, That the
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National Government shall own, at all times, at least seventy percent (70%) of the
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total outstanding capital stock of the Bank.
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Two hundred billion pesos (Php200,000,000,000.00) or twenty percent (20%)
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of the authorized shares of the Bank shall be subscribed and One hundred sixty-three
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billion seven hundred eighty-seven million seven hundred eleven thousand three
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hundred eight pesos (Phpl63,787,711,308.00) or at least eighty-one and 89/100
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percent (81.89%) of the total subscription shall be paid up by the National
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Government; Provided, further. That the Bank may allocate part or all of its
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unrestricted retained earnings toward paying for the capitalization of the Bank.
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When dividends are declared for stockholders, the dividend due to the National
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Government shall at all times be in proportion to its ownership of the Bank.
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SEC. 8. Investment by Government-Owned or Controlled
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Corporations. - Unless otherwise provided in their respective charters, GOCCs,
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including GFIs, are authorized to invest in shares of stock of the Bank. These
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investments shall form part of the National Government's ownership in the Bank.
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SEC. 9. Voting of Shares. - The voting power of all the common shares of
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stock of the Bank owned and controlled by the government shall be vested in the
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President of the Philippines or in any ex-officio member of the Board.
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Sec. 10. Issuance by the Bank of Bonds, Eligible Capital Instruments,
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and Other Securities. - The Bank may issue all kinds of bonds, notes, debentures,
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other evidence of indebtedness, derivatives, commodities, negotiable instruments,
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eligible capital instruments, and other securities, and the renewal or refunding thereof
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within and/or outside the Philippines, at such terms, rates, and conditions as the Board
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of Directors may determine. Such issuance shall be subject to compliance with the
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provisions of applicable laws, and rules and regulations promulgated by the Monetary
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Board of the BSP.


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The Bank shall acquire, assign, or otherwise dispose of marketable securities
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and other debt instruments that are essentiai to the effective conduct of its generai
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banking activities.
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The Bank shali provide for appropriate reserves, as necessary, for the
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redemption or retirement of the foregoing. These bonds and other obiigations shail be
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redeemable at the option of the Bank at or before maturity and in such manner as
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may be stipuiated therein, and shali bear such rate of interest as may be fixed by the
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Bank.
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Such obiigations shali be secured by the assets of the Bank, inciuding stocks,
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bonds, debentures, and other securities purchased or heid by it under the provisions
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of this Act, as necessary to ensure the successful issuance of such obiigations. These
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bonds and other obligations may be long-, medium-, or short-term, with a fixed or
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floating interest rate.
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Sec. 11. Applicability of the New Government Procurement Reform
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Act - Ail procurement activities of the Bank shali adhere to the provisions of Repubiic
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Act No. 9184 or the "Government Procurement Reform Act", as amended by Republic
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Act No. 12009, their impiementing ruies and reguiations, and any amendments
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thereto, whichever may be appiicable, except for the engagement of professionai or
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technicai services necessary for issuance of securities, inciuding debt instruments, and
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selecting investments. These services inciude issue and deai management, fund
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management, investment anaiysis, advisory, arrangement, underwriting, securities
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brokerage and dealership, and capitai market and equity research anaiysis: Provided,
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That the seiection process for engaging these professionai and technicai services shail
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be open, competitive, and approved by the Board.
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SEC. 12. Board of Directors^ Composition, Tenure, and Per Diems. -
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powers and functions of the Bank shaii be vested in and exercised by a Board of
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Directors which shail be composed of nine (9) members as foliows:
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(a) The Secretary of Finance as the ex-officio Chairperson of the Board;
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(b) The President of the Bank as Vice Chairperson;
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(c) The Secretary of Agricuiture as an ex-officio member;
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(d) The Secretary of Agrarian Reform as an ex-officio member;
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(e) The Secretary of Labor and Empioyment as ex-officio member;
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(f) The Secretary of the Nationai Economic and Development Authority as an
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ex-officio member; and
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(g) Three (3) independent directors to be appointed by the President of the
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Philippines in accordance with the appointment process and the Fit and Proper Rule


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under Republic Act No. 10149, wherein one (1) shall represent the agricultural sector
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and two (2) shall represent the private sector, preferably with expertise in finance,
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economics, and banking.
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In the event that private persons acquire shares of stock of the Bank, there
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shall be two (2) additional members of the Board of Directors who shali be eiected in
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accordance with Republic Act No. 11232.
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The ex-officio members of the Board may each designate an alternate, who
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shall be an official with a rank not lower than Assistant Secretary.
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The Chairperson shall preside over the meetings of the Board. In case the
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Chairperson is absent or incapacitated, the Vice Chairperson shail preside over
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meetings of the Board. In case of incapacity or absence of both the Chairperson and
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the Vice Chairperson, the Board shali designate a temporary chairperson from among
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its members.
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No person shali be elected or appointed as director of the Bank unless such
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person is a Filipino citizen, of good moral character, and has attained proficiency,
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expertise and recognized competence in one (1) or more of the foilowing: banking,
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finance, economics, law, agriculture, agrarian reform, business management,
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governance, sustainability, digital transformation, rural economy, cooperation, small-
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scale industry, information technology, and information security.
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Except for the President, no incumbent officer or employee of the Bank may be
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appointed as a member of the Board; nor shail any incumbent officer of any other
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bank be eligible as a member of the Board.
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The term of office for the independent directors shali be for a period of one (1)
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year or until such time that their successors are appointed and have qualified.
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Appointment to any vacancy shall be only for the unexpired term of the predecessor,
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pursuant to Republic Act No. 10149.
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The compensation, per diems, allowances, incentives, and other benefits, for
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the members of the Board shali be consistent with the principles and policies of
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Republic Act No. 10149.
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SEC. 13. Powers and Duties of the Board of Directors. - The Board shall
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have the following duties, powers, and authority:
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(a) Formulate policies necessary to carry out the provisions of this Act and to
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prescribe, amend, and repeal by-laws, rules, and regulations for the effective
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operation of the Bank, the conduct of its general business and the exercise of powers
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granted to it by law;
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(b) Decide on matters concerning loans, other credit accommodations,
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guarantees issued or obtained by the Bank, prescribe the terms and conditions to


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govern the grant of the foregoing, and engage in such other financial activities under
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such terms and conditions consistent with the provisions of this Act, banking laws, and
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regulations promulgated by the Monetary Board of the BSP, as it may deem necessary:
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Provided, That the Board may delegate the authority to approve loans, other credit
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accommodations, and guarantees to such officers as it may deem necessary;
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(c) Upon the recommendation of the President, adopt an annual budget for the
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effective operation and administration of the Bank;
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(d) Compromise or release, in whole or in part, any claim or settled liability to
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the Bank regardless of the amount involved, under such terms and conditions as it
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may impose to protect the interests of the Bank. The authority to compromise shall
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extend to claims against the Bank: Provided, That the Board may delegate the
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authority to compromise or release any claim or settled liability to the President or
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such other officers of the Bank as it may deem necessary;
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(e) Establish such branches, agencies and other offices deemed necessary and
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convenient in accordance with applicable rules and regulations of the BSP;
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(f) Notwithstanding any law to the contrary, adopt an organizational structure,
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staffing pattern and personnel qualification standards for the Bank and reorganize,
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rationalize and restructure the same, or realign the various functions in the Bank to
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ensure effective accomplishment of its mandates and strategic goals, align its
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organizational structure and staffing pattern with industry standards, and guarantee
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its responsiveness to regulatory requirements, consistent with the principles and
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policies of Republic Act No. 10149, to meet the demands, maintain service quality,
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and support the expansion of the developmental mandate of the Bank;
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(g) Design, adopt, and revise, as it may deem necessary, an early separation
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plan for employees of the Bank to ensure the availability of a qualified human resource
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pool capable of implementing the Bank's authorities under this Charter in a manner
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responsive and attuned to market developments, and provide incentives for those who
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shall be separated from the service, consistent with the principles and policies of
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Republic Act No. 10149;
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(h) Maintain, manage, and operate the existing "Provident Fund" of the Bank,
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which shall consist of contributions made both by the Bank and its officers or
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employees as a common fund for the payment of benefits to such officers and
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employees, or their heirs, under such terms and conditions consistent with the
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principles and policies of Republic Act No. 10149; and
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(i) Perform other functions, duties and responsibilities necessary, related, and
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incidental to the above-mentioned powers and functions.


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The Board shall exercise its powers in a manner consistent with the principles
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of transparency, fairness, and accountability: Provided, That the Board may delegate
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its powers to the President as it may deem necessary.
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SEC. 14. President and Chief Executive Officer. - The President of the
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Bank shall be the Chief Executive Officer (CEO) who shall be elected annually by the
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members of the Board from among its ranks. The President and CEO shall be subject
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to the disciplinary powers of the Board. No person shall be appointed President of the
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Bank unless the person is of good moral character and reputation, with at least ten
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(10) years of previous experience in banking, and has a reputed proficiency, expertise,
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and recognized competence in banking or financial management.
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The President shall carry out and administer the policies, measures, orders, and
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resolutions approved by the Board; direct and supervise the operation and
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administration of the Bank; and exercise such other powers and perform such other
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functions or duties as may be directed or assigned by law, regulations, and executive
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issuances.
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The President shall be assisted by Vice Presidents and other officials. The salary
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of the President, Vice President, and other officials shall be consistent with the policies
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and principles of Republic Act No. 10149. During the absence or temporary incapacity
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of the President, or in case of vacancy or permanent incapacity and pending
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appointment of a new President of the Bank, the Board shall designate the Officer-in-
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Charge of the Bank.
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The President shall have the following powers and duties:
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(a) Sign and execute ail contracts concluded by the Bank; enter into all
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necessary obligations required or permitted by this Act; and sign all notes, securities
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certificates, and other major documents of the Bank;
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(b) Exercise, as CEO of the Bank, the powers of control and supervision over
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the decisions and actions of subordinate officers, and all other powers that may be
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granted by the Board;
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(c) Report to the Board the main facts concerning the operations of the Bank
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and to recommend changes in policies that are deemed advisable;
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(d) Appoint, promote, or remove employees and officers of the Bank: Provided,
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That promotions, transfers, assignments, or reassignments of officers and personnel
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of the Bank are personnel actions deemed made in the interest of the service, any
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provision of civil service laws to the contrary notwithstanding;
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(e) Determine the rates of allowances, honoraria, and such other additional
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compensation of the Bank's technical staff and consultants, consistent with the
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principles and policies of Republic Act No. 10149 and other relevant laws;


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(f) Submit an annual report to the President of the Philippines and Congress on
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the result of the operations of the Bank; and
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(g) As required by circumstances, delegate any of the powers, duties or
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functions to any officer or director of the Bank.
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SEC. 15. Qualifications of Executive Officers. - No person shall be
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appointed to any executive position in the Bank mentioned in the preceding section
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unless qualified by the Fit and Proper Rule, in accordance with Republic Act No. 10149,
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civil service laws, rules, and regulations: Provided, That in determining whether a
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person is fit and proper for a particular position, the following shall be considered:
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integrity or probity, physical and mental fitness, relevant education, training, and
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competencies for the job, such as knowledge and expertise, skills, and diligence to
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fully carry out responsibilities.
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SEC. 16. Legal Department. - Any provision of law to the contrary
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notwithstanding, the Bank shail have its own Legai Department which shali have the
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power to represent the Bank in cases fiied before courts, tribunals, and quasi-judicial
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bodies; render opinions; and prepare and review contracts and agreements. The Head
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of the Legal Department shall be appointed by the President.
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In appropriate cases, the Bank may also avail of the legal services of external
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counsel, subject to the approval of the Board and the Office of the Government
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Corporate Counsel (OGCC). The present Legal Services Group of the Bank shall serve
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as its in-house legal counsel and principal law office under the control and supervision
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of the OGCC.
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SEC. 17. Foreclosure of Collaterals and Disposal of Bank Acquired
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Properties. - The foreclosure of collaterals and disposal of bank acquired properties
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shall be governed by the following:
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(a) Foreclosure of Mortgage Collaterals - The foreclosure of mortgage
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collaterals for loans may be made either judicially or extrajudicially;
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(b) Deputization of Legal Staff - In case of an extrajudicial foreclosure of
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mortgage in connection with loans and advances, the Bank may, 
upon the
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recommendation of its Legal Department, designate any member of its legal staff to
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conduct the public auction pursuant to Act No. 3135 or "An Act to Regulate the Sale
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of Property under Special Powers Inserting In or Annexed to Real Estate Mortgage,"
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as amended.
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In case of a judicial foreclosure in connection with loans and advances under
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this Section, the Bank may, with the approval of the court, deputize any of its legal
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staff to act as special sheriff in the sale of the debtor's properties and in the
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enforcement of court writs and related processes.


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After an action is taken, the special sheriff of the Bank shall make a report to
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the proper court, which shall treat such action as if it were an act of its own sheriffs
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in ail respects.
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The sale of mortgaged properties under existing laws or this Act shall be
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conducted under the direction of the sheriff of the province or any special sheriff of
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the Bank, or of a municipal judge or notary public of the city or municipality where
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the sale is to be made, who shall be entitled to collect fees provided for in the Rules
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of Court with respect to the sale of properties under execution;
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(c) Disposal of Rea! Estate and Other Properties in the Collection of Debt- Real
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estate and other properties acquired by the Bank in the collection of debts or
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investment by way of foreclosure or other means shall be sold or disposed of in
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accordance with law within five (5) years after their respective dates of acquisition.
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For this purpose, the Board of Directors shall be the appropriate regulatory authority
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to promulgate the necessary implementing rules and regulations;
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(d) Exemption from Attachment - The provisions of any law to the contrary
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notwithstanding, collaterals, securities on loans, or other credit accommodations and
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guarantees granted by the Bank or its predecessors-in-interest shall not be subject to
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attachment, execution, stay order, or any other court process, nor shall they be
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included in the property of insolvent persons or institutions unless all debts and
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obligations of the debtors to the Bank and its predecessors-in-interest have been paid,
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including accrued interest, penalties, collection expenses, and other charges; and
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(e) Right of Redemption of Foreclosed Property, Right of Possession During
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Redemption Period - Any individual or juridical mortgagor of the Bank whose real
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property has been judicially sold at public auction, or any individual mortgagor of the
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Bank whose real property has been extrajudicially sold at public auction shall, within
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one (1) year counted from the date of registration of the Certificate of Foreclosure
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Sale with the applicable Register of Deeds, have the right to redeem the real property
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by paying to the Bank all of the latter's claims as determined by the Bank.
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Notwithstanding the provisions of Act No. 3135, as amended, juridical
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mortgagors whose real property have been extrajudicially sold at public auction shall
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have the right to redeem the property until, but not after, the registration of the
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Certificate of Foreclosure Sale with the applicable Register of Deeds, which registration
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shall in no case be more than three (3) months from the date of foreclosure, whichever
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is earlier.
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The Bank may take possession of the foreclosed property during the
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redemption period and during such period, it shall be entitled to the fruits of the
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property with no obligation to account for them, the same being considered
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compensation for the interest that would otherwise accrue on the account. Neither
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shall the Bank be obliged to post a bond for the purpose of such possession.
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SEC. 18. Human Resource. - The Board, upon the recommendation of the 
President and CEO, shall provide for an organizational structure and staffing pattern 
of officers and employees of the Bank.
All positions in the Bank shall be consistent with the principles and policies of 
Republic Act No. 10149: Provided, That the Board shall determine the positions that 
are considered highly-technical, including their compensation and other emoluments: 
Provided, further. That such compensation and emoluments shall be comparable with 
the prevailing rates in the private sector.
The Bank officers and employees, including all members of the Board, shall not 
engage directly or indirectly in partisan political activities or take part in any election 
activity except to vote.
law.
No officer or employee of the Bank shall be dismissed except as provided by
SEC. 19. Environmental, Social, and Governance Principles. - As an
integral part of the National Government, the Bank is inherently mandated to be 
socially responsible and to act and operate as a good corporate citizen. The Governing 
Board of the Bank shall recognize and perform the obligations that the Bank has 
towards the National Government—its majority stockholder, as well as the minority 
stockholders when existing, together with the employees, suppliers, customers, and 
other stakeholders, and the communities in which it operates.
SEC. 20. Disclosure and Inhibition from Board Meeting of Member 
with Personal or Pecuniary Interest - Whenever any member attending a Board 
meeting or any of such member's relative within the second civil degree of 
consanguinity or affinity, has a personal or pecuniary interest, directly or indirectly, in 
any matter in the agenda or in its discussion or resolution, the said member shall 
disclose said interest to the Board and shall inhibit oneself in the discussion or 
resolution of the matter and must retire from the meeting during the deliberation 
thereon. The Board members present in the meeting shall still constitute a quorum 
despite the inhibition of the subject member in any matter, discussion or resolution in 
the same meeting
The minutes of the meeting, which shall note the subject matter, the fact that 
a member had a personal interest in it, and the withdrawal of the member concerned, 
may be made available to the public.
For this purpose, the members of the Board shall, at the beginning of their 
respective terms, disclose to the Board any and all interests they may have in any 
corporation, partnership, or association and shall disclose to the Board, any change 
thereto.
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SEC. 21. Prohibition on Persons with Personai or Pecuniary Interest
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- No member of the Board, officer, attorney, agent, or employee of the Bank shall in
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any manner, directly or indirectly participate in the deliberation upon determination of
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any question affecting their direct personal interest or that of relatives within the
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second civil degree of consanguinity or affinity, or of any corporation, partnership, or
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association in which the member, officer, attorney, agent, or employee has a direct
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interest. Any person violating the provision of this section shall be removed from office
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and shall upon conviction be penalized with a fine of not less than Fifty thousand pesos
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(Php50,000.00) but not more than Two million pesos (Php2,000,000.00), or
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imprisonment of not less than two (2) years but not more than ten (10) years, or both,
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at the discretion of the court.
12 
SEC. 22. Prohibition on Owning Stock in or Incurring Indebtedness to
13 
the Bank. - The Governor of the BSP, all other members of the Monetary Board, and
14 
the head of the auditing department of the Bank are prohibited from owning stock in
15 
the Bank, or from becoming indebted to the Bank, directly or indirectly.
16 
SEC. 23. Borrowing by Directors, Officers and Empioyees; Restrictions
17 
and Limitations. - No (1) director, officer, or employee of the Bank; or (2) any
18 
corporation, partnership, or company wherein any member of the Bank's Board, officer
19 
or employee, or their relatives within the first civil degree of consanguinity or affinity
20 
is a director, officer or controlling shareholder either directly or indirectly, for one's
21 
self or a representative or agent of others, shall borrow any of the deposits of funds
22 
from the Bank, become a guarantor, or in any manner be an obligor for money
23 
borrowed from the Bank or loaned by it: Provided, That this prohibition on loans to
24 
directors, officers and employees shall not include loans allowed in the form of fringe
25 
benefits granted in accordance with rules and regulations as may be prescribed by the
26 
Monetary Board: Provided, further. That this prohibition shall not apply to loans to
27 
corporations wherein the director, officer or employee of the Bank sits on the board
28 
of the borrower corporation to represent the interest of the Bank.
29 
SEC. 24. Rules and Regulations on Conflict of Interest. - The Board is
30 
hereby authorized to issue rules and regulations to determine and resolve conflict of
31 
interest questions, which shall, in particular, include the requirement for all officers
32 
and employees of the Bank to disclose any shareholdings they, or their relatives within
33 
the second civil degree of consanguinity or affinity, may have in any corporation,
34 
partnership, or company in excess of two percent (2%) of the equity of said
35 
corporation, partnership, or company or in any related party transactions defined by
36 
the Monetary Board of the BSP and the Board of the Bank.
37 
SEC. 25. Prohibition on Officers and Employees of the Bank to Disclose
38 
Client Account Records - Except as required by law, or upon order of a court of
39 
competent jurisdiction, or the express order of the President of the Philippines, or
40 
written permission of the client, no officer or employee of the Bank shall reveal or
41 
allow to be examined, inquired about, or looked into by any third person, government
12


1 
official, bureau, or office any information relative to details of individual accounts or
2 
specific banking transactions, condition, or businesses of any of its clients, or funds or
3 
properties in the custody of the Bank belonging to private individuals: Provided, That
4 
with respect to deposits or whatever nature, the provisions of existing law shall apply.
5 
This prohibition shall not apply to the exchange of confidential credit
6 
information among GFIs or banks, in accordance with established banking practices
7 
or as may be allowed by law.
8 
SEC. 26. Exaction of Fee, Commission, Gift or Charge. - No unauthorized
9 
fee, commission, gift, or charge of any kind shall be exacted, demanded, or paid, for
10 
obtaining loans from the Bank. An officer, employee, or agent of the Bank found guilty
11 
shall be penalized by a fine of not less than Fifty thousand pesos (Php50,000.00) but
12 
not more than Two million pesos (Php2,000,000.00), imprisonment of not less than
13 
six (6) years and one (1) month but not more than fifteen (15) years, perpetual
14 
disqualification from public office, and confiscation or forfeiture in favor of the
15 
government of any prohibited interest and unexplained wealth.
16 
SEC. 27. Examination of the Bank by the Bangko Sentrai ng Pilipinas
17 
(BSP). - The Bank shall be subject to supervision and examination by the appropriate
18 
department of the BSP: Provided, That in conducting the said examination, the BSP
19 
shall duly consider the Bank's risk-taking activities in furtherance of its mandate.
20 
SEC. 28. Control Over Subsidiaries and Dividends from Subsidiaries. -
21 
The Bank, through its President and CEO, may temporarily appoint directors in cases
22 
where urgent action is needed from the subsidiaries but the present number of
23 
directors does not constitute a quorum.
24 
Without impairing its viability and the purposes for which it has been
25 
established, every subsidiary shall declare and remit at least fifty percent (50%) of its
26 
annual net earnings as cash, stock, or property dividends to the Bank as the parent
27 
corporation: Provided, That the percentage of annual net earnings that shall be
28 
declared by such subsidiary may be adjusted by the President and CEO.
29 
SEC. 29. General Pena! Provisions. - Any director, officer or employee of
30 
the Bank who violates, or permits any of its officers, employees or agents or any other
31 
person to violate, any of the provision of this Act not specifically punished in the
32 
preceding sections and any person violating or aiding and abetting the violation of this
33 
Act shall be penalized with a fine not less than Fifty thousand pesos (Php50,000.00)
34 
but not more than Two million pesos (Php2,000,000.00), or imprisonment for a period
35 
of not less than two (2) years but not more than ten (10) years, or both, at the
36 
discretion of the court.
37 
SEC. 30. Other Liability of Guilty Board Member, Officer, or Employee.
38 
- A member of the Board, officer or employee of the Bank who willfully violates any of
39 
the provisions of this Act shall, in addition to the criminal and administrative liability
13


1 
resulting from such act, be held liable for any loss or injury suffered by the Bank as a
2 
result of such violation.
3 
SEC. 31. Liability of Directors, Officers, or Partners of the Offending
4 
Corporation or Partnetship. - If the violation of the provisions of this Act is
5 
committed by a corporation or partnership, its directors, officers, or partners who
6 
participated in the violation shall be criminally liable.
7 
SEC. 32. Applicability of Banking Laws. - The provisions of Republic Act
8 
No. 7653, as amended. Republic Act No. 8791, and other applicable banking laws,
9 
insofar as they are not in conflict with any provision of this Act, shall apply to the
10 
Bank.
11 
The penal provisions of Section 66 of Republic Act No. 8791, in relation to
12 
Sections 34, 35, 36 and 37 of Republic Act No. 7653, as amended, shall be applicable
13 
to directors, officers, employees and borrowers of the Bank.
14 
SEC. 33. Interpretation. - Nothing in this Act shall operate to abolish the
15 
Bank and affect the validity or legality of any right, duty, or obligation created by or
16 
in respect of the Bank prior to the effectivity this Act.
17 
SEC. 34. Transitory Provision. - Within one hundred eighty (180) days after
18 
the effectivity of this Act, the Bank is authorized to reorganize and/or rationalize the
19 
Bank's organizational structure to attract fresh and critical talents to join the Bank's
20 
workforce in response to dynamic industry trends, incentivize early separation of
21 
tenured employees and those with medical conditions who will be considered for
22 
retirement before the optional retirement age of sixty (60) years old, and improve
23 
headcount management and succession planning, consistent with the principles and
24 
policies of Republic Act No. 10149.
25 
Employees who shall retire from the service or are separated therefrom on
26 
account of the reorganization of the Bank under the provisions of this Charter shall be
27 
entitled to all gratuities and benefits provided for under existing laws and/or
28 
supplementary retirement plans adopted by and effective in the Bank, consistent with
29 
the principles and policies of Republic Act No. 10149.
30 
SEC. 35. Separability Clause. - If any provision of this Act is declared
31 
unconstitutional, the remainder thereof not otherwise affected shall remain in full force
32 
and effect.
33 
SEC. 36. Repealing Clause. - Sections 74 to 100 of Republic Act No. 3844 or
34 
the "Agricultural Land Reform Code", as amended, are hereby repealed. All other laws,
35 
presidential decrees, executive orders, letters of construction, proclamations or
36 
administrative regulations that are inconsistent with any provision hereof are hereby
37 
repealed, amended or modified accordingly.
14


1 
SEC. 37. Effectivity. - This Act shall take effect after fifteen days (15)
2 
foliowing its publication in the Official Gazette or in a newspaper of general circulation.
Approved,
15