SEVENTEENTH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES 
)
First Regular Session 
)
SENATE
s.B.N o. I P : ) ?
uf lilr
’17 
JAN 17 
P 6 : ll
waiv£DBr.
Prepared by the Committees on Bank, Financial Institutions and Currencies- 
and Ways and Means with Senators Drilon, Recto. Escudero. Ejercito and ’
Angara as authors thereof
AN ACT AMENDING REPUBLIC ACT NUMBER 7653 
OTHERWISE KNOWN AS “ THE NEW CENTRAL BANK ACT”
AND FOR OTHER PURPOSES
Phiiin Be lt- e^ acted by the Senate and the House of Representatives of the 
Philippines in Congress assembled:
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SECTION 1. Section 2 of Republic Act No. 7653, otherwise known as “The 
New Central Bank Act" is hereby amended to read as follows:
“SEC. 2. Creation of the Bangko Central. - 
There is hereby 
established an independent central monetary authority, which shall be 
a body corporate known as the Bangko Central ng Pilipinas, hereafter 
referred to as the Bangko Central.
“The capital of the Bangko Central shall be TWO HUNDRED 
[Fifty] billion pesos (P[50,]200,000.000,000), to be fully subscribed by 
the Government of the Republic, 
hereafter referred to as the 
Government. [Ten billion pesos (P10.000,000.000) of which] THE 
UNPAID SUBSCRIPTION shall be fully paid for by the Government IN 
CASH AND/OR GOVERNMENT SECURITIES UPON EFFECTIVITY 
OF 
THIS 
ACT. 
THEREAFTER 
THE 
ADEQUACY 
OF 
THE


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CAPITALIZATION SHALL BE SUBJECT TO REVIEW EVERY FIVE 
(5) YEARS AND ADJUSTED UPON JOINT RECOMMENDATION BY 
THE SECRETARY OF FINANCE, THE SECRETARY OF BUDGET 
AND 
MANAGEMENT 
AND 
THE 
MONETARY 
BOARD. 
THE 
PAYMENT OF ANY UNPAID SUBSCRIPTION AND/OR INCREASE 
IN 
CAPITALIZATION 
SHALL 
BE 
AUTOMATICALLY 
APPROPRIATED IN THE ANNUAL GENERAL APPROPRIATIONS 
ACT. [upon the effectivily of this Act and the balance to be paid for 
within a period of two (2) years from the effectivity of this Act in such 
manner and form as the Government, through the Secretary of 
Finance and the Secretary of Budget and Management, may thereafter 
determine.]"
SEC. 2. Section 3 of the same Act is hereby amended to read as follows: 
“SEC. 3. Responsibility and Primary Objective. - The Bangko 
Sentral shall provide policy directions in the areas of money, banking, 
and credit. It shall have supervision over the operations of banks and 
exercise such regulatory AND EXAMINATION powers as provided in 
this Act and other pertinent laws over the QUASI-BANKING 
operations of [finance companies and] non-bank financial institutions, 
[performing quasi-banking functions, hereafter referred to as quasi­
banks, and institutions performing similar functions] AS MAY BE 
DETERMINED BY THE MONETARY BOARD. IT SHALL LIKEWISE 
EXERCISE REGULATORY AND EXAMINATION POWERS OVER 
MONEY 
SERVICE 
BUSINESSES, 
CREDIT 
GRANTING 
BUSINESSES, 
AND 
PAYMENT 
SYSTEM 
OPERATORS. 
THE


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MONETARY BOARD IS HEREBY EMPOWERED TO AUTHORIZE 
ENTITIES OR PERSONS TO ENGAGE IN MONEY SERVICE 
BUSINESSES.
“The primary objective of the Bangko Sentral is to maintain price 
stability conducive to a balanced and sustainable growth of the 
economy. It shall also promote and maintain monetary stability and 
the convertibility of the peso.
"THE BANGKO SENTRAL SHALL PROMOTE FINANCIAL 
STABILITY 
AND 
CLOSELY 
WORK 
WITH 
THE 
NATIONAL 
GOVERNMENT, 
INCLUDING, 
BUT 
NOT 
LIMITED 
TO, 
THE 
DEPARTMENT OF FINANCE, SECURITIES AND EXCHANGE 
COMMISSION, 
THE 
INSURANCE 
COMMISSION, 
AND 
THE 
PHILIPPINE DEPOSIT INSURANCE CORPORATION.
"THE BANGKO SENTRAL SHALL OVERSEE THE PAYMENT 
AND SETTLEMENT SYSTEMS IN THE PHILIPPINES, INCLUDING 
CRITICAL FINANCIAL MARKET INFRASTRUCTURES, IN ORDER 
TO PROMOTE SOUND AND PRUDENT PRACTICES CONSISTENT 
WITH THE MAINTENANCE OF FINANCIAL STABILITY.
"IN THE ATTAINMENT OF ITS OBJECTIVES, THE BANGKO 
SENTRAL SHALL PROMOTE BROAD AND CONVENIENT ACCESS 
TO HIGH QUALITY FINANCIAL SERVICES AND CONSIDER THE 
INTEREST OF THE GENERAL PUBLIC.”
SEC. 3. Section 11 of the same Act is hereby amended to read as follows:


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“ SEC. 11. Meetings. —  The Monetary Board shall meet at least 
once a week. The Board may be called to a meeting by the Governor 
of the Bangko Sentral or by two (2) other members of the Board.
“The presence of four (4) members shall constitute a quorum; 
Provided, That in all cases the Governor or his duly designated 
alternate shall be among the four (4).
“Unless otherwise provided in this Act, all decisions of the 
Monetary Board shall require the concurrence of at least four (4) 
members.
The Bangko Sentral shall maintain and preserve a complete 
record of the proceedings and deliberations of the Monetary Board, 
including the tapes and transcripts of the stenographic notes, either in 
their original form or in microfilm.
“ THE MEETINGS OF THE MONETARY BOARD MAY BE 
CONDUCTED THROUGH MODERN TECHNOLOGIES SUCH AS,
BUT 
NOT 
LIMITED 
TO, 
TELECONFERENCING 
AND 
VIDEOCONFERENCING."
SEC. 4. Section 15(e) of the same Act is hereby amended to read as follows: 
SEC. 15. Exercise of Authority. - In the exercise of its authority, the Monetary
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Board shall:
XXX
“(e) indemnify its members and other officials of the Bangko 
Sentral, including personnel of the departments performing supervision 
and examination functions against all costs and expenses reasonably 
incurred by such persons in connection with any civil or criminal action.


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suit or proceedings to which he may be, or is, made a party by reason of 
the performance of his functions or duties, unless he is finally adjudged in 
such action or proceeding to be liable for [negligence or misconduct]
WILLFUL VIOLATION OF THIS ACT, PERFORMED IN EVIDENT BAD 
FAITH OR WITH GROSS NEGLIGENCE.
“In the event of a settlement or compromise, indemnification shall 
be provided only in connection with such matters covered by the 
settlement as to which the Bangko Sentral is advised by external counsel 
that the person to be indemnified did not commit [any negligence or 
misconduct] WILLFUL VIOLATION OF THIS ACT, PERFORMED IN 
EVIDENT BAD FAITH OR WITH GROSS NEGLIGENCE.
“The costs and expenses incurred in defending the aforementioned 
action, suit or proceeding may be paid by the Bangko Sentral in advance 
of the final disposition of such action, suit or proceeding upon receipt of an 
undertaking by or on behalf of the member, officer, or employee to repay 
the amount advanced should it ultimately be determined by the Monetary
Board that he is not entitled to be indemnified as provided in this 
subsection."
SEC. 5. Section 16 of the same Act is hereby amended to read as follows:
"SEC. 16. Responsibility. - THE GENERAL RULE AND THE 
EXCEPTION THEREFROM ON THE LIABILITY OF PUBLIC OFFICERS 
AS PROVIDED IN SECTIONS 38 AND 39 OF CHAPTER 9, BOOK 1 OF 
THE REVISED ADMINISTRATIVE CODE OF 1907 SHALL APPLY TO 
THE members of the Monetary Board [, officials, examiners, and 
employees] AND OTHER ORGANIC PERSONNEL of the Bangko Sentral


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[Who Willfully Violate this Act or who are guilty of negligence, abuses or 
acts of malfeasance or misfeasance or fail to exercise extraordinary 
diligence in the performance of his duties shall be held liable for any loss 
or injury suffered by the Bangko Sentral or other banking institutions as a 
result of such violation, negligence, abuse, malfeasance, misfeasance or 
failure to exercise extraordinary diligence],
“Similar responsibility shall apply to members OF THE MONETARY 
BOARD, 
[officers, 
and 
employees] 
AND 
OTHER 
ORGANIC 
PERSONNEL of the Bangko Sentral for: (1) the disclosure of any 
information of a confidential nature, or any information on the discussions 
or resolutions of the Monetary Board, or about the confidential operations 
of the Bangko Sentral. unless the disclosure is in connection with the 
performance of official functions with the Bangko Sentral, or is with prior 
authorization of the Monetary Board or the Governor; or (2) the use of 
such information for personal gain or to the detriment of the Government, 
the Bangko Sentral or third parties: Provided, however. That any data or 
information required to be submitted to the President and/or the Congress.
or to be published under the provisions of this Act shall not be considered 
confidential.
“ THE ABOVE NOTWITHSTANDING, MEMBERS OF THE 
MONETARY BOARD AND OTHER ORGANIC PERSONNEL OF THE 
BANGKO SENTRAL SHALL NOT BE SUBJECT TO ANY ACTION, 
CLAIM OR DEMAND IN CONNECTION WITH ANY ACT DONE OR 
OMITTED BY THEM IN THE PERFORMANCE OF THEIR DUTIES 
AND EXERCISE OF THEIR POWERS 
EXCEPT FOR THOSE


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ACTIONS AND OMISSIONS DONE IN EVIDENT BAD FAITH OR 
WITH 
GROSS 
NEGLIGENCE. 
UNLESS 
THE 
ACTIONS 
OR 
OMISSIONS OF THE BANGKO SENTRAL, MEMBERS OF THE 
MONETARY BOARD AND ITS OTHER ORGANIC PERSONNEL 
ARE FINALLY ADJUDGED TO BE IN WILLFUL VIOLATION OF 
THIS ACT, PERFORMED IN EVIDENT BAD FAITH OR WITH 
GROSS NEGLIGENCE, THEY ARE HELD FREE AND HARMLESS 
TO THE FULLEST EXTENT PERMITTED BY LAW FROM ANY 
LIABILITY, AND THEY SHALL BE INDEMNIFIED FOR ANY AND 
ALL LIABILITIES, 
LOSSES, 
CLAIMS, 
DEMANDS, 
DAMAGES, 
DEFICIENCIES, COSTS AND EXPENSES OF WHATSOEVER KIND 
AND NATURE THAT MAY ARISE IN CONNECTION WITH THE 
EXERCISE OF THEIR POWERS AND PERFORMANCE OF THEIR 
DUTIES AND FUNCTIONS.”
SEC. 6. Section 21 of the same Act is hereby amended to read as follows:
“SEC. 21. Deputy Governors. — The Governor of the Bangko 
Sentral, with the approval of the Monetary Board, shall appoint not 
more than [three (3)] FIVE (5) Deputy Governors who shall perform 
duties as may be assigned to them by the Governor and the Board.
“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 the powers and perform the duties of the Governor. 
Whenever the [Government] GOVERNOR 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


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designated by the Governor shall be vested with authority to participate 
and exercise the right to vote in such meetings.”
SEC. 7. Section 23 of the same Act is hereby amended to read as follows:
“SEC. 23. 
Authority to Obtain Data and Information. — The 
Bangko Sentral shall have the authority to REQUIRE [request] from 
ANY PERSON OR ENTITY, INCLUDING government offices and 
instrumentalities, or government-owned or -controlled corporations, 
any 
data 
[which 
it 
may], 
FOR 
STATISTICAL 
AND 
POLICY 
DEVELOPMENT PURPOSES [require for] IN RELATION TO the 
proper discharge of its functions and responsibilities, PROVIDED, 
THAT DISAGGREGATED DATA GATHERED ARE SUBJECT TO 
PREVAILING 
CONFIDENTIALITY 
LAWS. 
The 
Bangko 
Sentral 
through 
the 
Governor or 
in 
his 
absence, 
a 
duly authorized 
representative shall have the power to issue a subpoena for the 
production of the books and records for the aforesaid purpose. 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 accordance 
with the provisions of the Rules of Court.
Data on individuals AND firms, other than banks, gathered by 
the [Department of Economic Research and other departments or units 
of the] Bangko Sentral shall not be made available to any person or 
entity outside of the Bangko Sentral whether public or private except 
under order of the court or under such conditions as may be prescribed 
by the Monetary Board; Provided, however. That the collective data on


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firms may be released to interested persons or entities: Provided, 
finally, That in the case of data on banks, the provisions of Section 27 
of this Act shall apply."
SEC. 8. Section 25 of the same Act is hereby amended to read as follows:
"SEC. 25. 
Supervision and Examination. —  The Bangko 
Sentral shall have supervision over, and conduct [periodic] REGULAR 
or special examinations of, banking institutions and quasi-banks, 
including their subsidiaries and affiliates engaged in allied activities.
For purposes of this section, a subsidiary means a corporation 
more than fifty percent (50%) of the voting stock of which is DIRECTLY 
OR INDIRECTLY owned, CONTROLLED OR HELD WITH POWER 
TO VOTE by a bank or quasi-bank and an affiliate means a 
corporation the voting stock of which, to the extent of fifty percent 
(50%) or less, is owned by a bank or quasi-bank or which is related or 
linked DIRECTLY OR INDIRECTLY to such institution or intermediary 
through common stockholders or such other factors as may be 
determined by the Monetary Board.
“ THE BANGKO SENTRAL SHALL HAVE REGULATORY 
AUTHORITY OVER, AND CONDUCT REGULAR OR SPECIAL 
EXAMINATIONS OF, ENTITIES WHICH UNDER THIS ACT OR BY 
SPECIAL LAWS ARE SUBJECT TO ITS JURISDICTION.
“ THE BANGKO SENTRAL SHALL ALSO HAVE THE POWER 
TO OBTAIN INFORMATION FROM THE PARENT OR OTHER 
AFFILIATE COMPANIES OF SUPERVISED INSTITUTIONS AND 
EXAMINE SPECIFIC TRANSACTIONS BETWEEN A SUPERVISED


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INSTITUTION AND SAID ENTITIES THAT MAY HAVE AN IMPACT 
ON THE SAFETY AND 
SOUNDNESS OF THE BANK, 
FOR 
SUPERVISORY PURPOSES.
“ A PARENT COMPANY MEANS A CORPORATION WHICH 
OWNS OR HOLDS WITH POWER TO VOTE DIRECTLY OR 
INDIRECTLY 
THE 
VOTING 
STOCK 
OF 
A 
SUPERVISED 
INSTITUTION 
OF THE 
BANGKO SENTRAL 
SUFFICIENT TO 
CONTROL ITS MANAGEMENT AND OPERATIONS, SUBJECT TO 
THE GUIDELINES ISSUED BY THE MONETARY BOARD.
“ AS USED IN THIS SECTION AND SECTION 25-A, AND 
SUBJECT TO THE GUIDELINES ISSUED BY THE MONETARY 
BOARD, CONTROL EXISTS WHEN THE PARENT COMPANY 
OWNS DIRECTLY OR INDIRECTLY MORE THAN ONE HALF OF 
THE VOTING STOCK OF A SUPERVISED INSTITUTION. CONTROL 
ALSO EXISTS EVEN WHEN THE PARENT COMPANY OWNS ONE 
HALF OR LESS OF THE VOTING STOCK OF THE SUPERVISED 
INSTITUTION WHEN: (1) THERE IS POWER OVER MORE THAN 
ONE HALF OF THE VOTING RIGHTS BY 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 
(2) THERE 
IS 
POWER TO 
DETERMINE THE FINANCIAL AND OPERATING POLICIES OF THE
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SUPERVISED 
INSTITUTION, 
OR 
OTHER 
SIMILAR 
ARRANGEMENTS.
“The department heads and the examiners of the supervising 
and/or examining departments are hereby authorized to administer 
oaths to any director, officer, or employee of any institution under their 
respective supervision or subject to their examination, [and] to compel 
the presentation of all books, documents, papers or records necessary 
in their judgment to ascertain the facts relative to the true condition of 
any institution as well as the books and records of persons and entities 
relative to or in connection 
with 
the operations, 
activities or 
transactions of the institution under examination, AND TO INQUIRE 
INTO BANK DEPOSITS AND INVESTMENT ACCOUNTS IN THE 
COURSE OF AN EXAMINATION IN ORDER TO ASCERTAIN 
COMPLIANCE WITH THE LAWS AND BANKING REGULATIONS, 
OR IN CASES WHERE THERE IS REASONABLE GROUND TO 
BELIEVE THAT A FRAUD, 
IRREGULARITY OR UNLAWFUL 
ACTIVITY HAS BEEN OR IS BEING COMMITTED AND THAT IT IS 
NECESSARY TO LOOK INTO THE DEPOSIT OR INVESTMENT TO 
ESTABLISH 
SUCH 
FRAUD, 
IRREGULARITY 
OR 
UNLAWFUL 
ACTIVITY. [,subject to the provision of existing laws protecting or 
safeguarding the secrecy or confidentiality of bank deposits as well as 
investments of private persons, natural or juridical, in debt instruments 
issued by the Government.]
“No restraining order or injunction shall be issued by the court 
enjoining the Bangko Sentral from examining any institution subject to
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supervision or examination by the Bangko Sentral. unless there is 
convincing proof that the action of the Bangko Sentral is plainly 
arbitrary and made in bad faith and the petitioner or plaintiff files with 
the clerk or judge of the court in which the action is pending a bond 
executed in favor of the Bangko Sentral, in an amount to be fixed by 
the court. The provisions of Rule 58 of the New Rules of Court insofar 
as they are applicable and not inconsistent with the provisions of this 
section shall govern the issuance and dissolution of the restraining 
order or injunction contemplated in this section."
SEC. 9. A new section entitled Section 25-A is hereby included in the same
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Act to read as follows;
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“ SEC. 25-A. AUTHORITY TO APPROVE TRANSFER OF 
SHARES - TRANSFERS 
OR ACQUISITIONS, 
OR A SERIES 
THEREOF, OF AT LEAST TEN PERCENT (10%) OF THE VOTING 
SHARES IN BANKS OR QUASI-BANKS SHALL REQUIRE THE 
PRIOR APPROVAL OF THE BANGKO SENTRAL. THE SELLING 
OR 
CONVEYING 
STOCKHOLDER 
SHALL 
SUBMIT 
SUCH 
TRANSFER OR ACQUISITON FOR APPROVAL BY THE BANGKO 
SENTRAL WITHIN SUCH PERIOD AS MAY BE PRESCRIBED BY 
THE MONETARY BOARD. IN APPROVING SUCH TRANSFERS OR 
ACQUISITIONS, REGARD SHALL BE GIVEN BY THE BANGKO 
SENTRAL TO THE FITNESS OF THE INCOMING STOCKHOLDERS 
AS MAY BE INDICATED IN THEIR INTEGRITY, REPUTATION AND 
FINANCIAL 
CAPACITY. 
WITHOUT 
BANGKO 
SENTRAL 
APPROVAL, NO SUCH TRANSFER OR ACQUISITION SHALL
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HAVE LEGAL EFFECT NOR SHALL THE SAME BE RECOGNIZED 
IN THE BOOKS OF THE INSTITUTION OR BY ANY GOVERNMENT 
AGENCY, 
AND 
THE 
TRANSFEROR-STOCKHOLDERS 
SHALL 
REMAIN 
ACCOUNTABLE 
AND 
RESPONSIBLE 
THEREFOR. 
TRANSFER OF ACTUAL CONTROL OR MANAGEMENT OF THE 
INSTITUTION 
TO 
THE 
NEW 
STOCKHOLDERS 
OR 
THEIR 
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. 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.”
SEC. 10. Section 27 (d) of the same Act is hereby amended to read as 
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follows;
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SEC. 27. Prohibitions. — In addition to the prohibitions found in 
Republic Act Nos. 3019 and 6713, personnel of the Bangko Sentral are 
hereby prohibited from:
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“(d) borrowing from any institution subject to supervision or 
examination by the Bangko Sentral [shall be prohibited] unless said 
borrowing[s are] IS TRANSACTED ON AN ARM’S LENGTH BASIS
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[adequately secured], fully disclosed to the Monetary Board, and shall 
be subject to such rules and regulations as the Monetary Board may 
prescribef. Provided, however. That personnel of the supervising and 
examining departments are prohibited from borrowing from a bank 
under their supervision and examination], xxx"
SEC. 11. Section 28 of the same Act is hereby amended to read as follows: 
SEC. 28. Examination and Fees. — The supervising and 
examining department head, personally or by deputy, shall examine 
the [books] OPERATIONS of every banking] AND QUASI-BANK, 
INCLUDING THEIR SUBSIDIARIES AND AFFILIATES ENGAGED IN 
ALLIED ACTIVITIES, AND OTHER ENTITIES WHICH UNDER THIS 
ACT OR SPECIAL LAWS ARE SUBJECT TO BANGKO SENTRAL 
SUPERVISION, IN ACCORDANCE WITH THE GUIDELINES SET BY 
THE MONETARY BOARD TAKING INTO CONSIDERATION SOUND 
AND PRUDENT PRACTICES, [once in every twelve (12) months, and 
at such other times as the Monetary Board by an affirmative vote of 
five (5) members, may deem expedient and to make a report on the 
same to the Monetary Board:] Provided, That there shall be an interval 
of at 
least twelve (12) 
months 
between 
[annual] 
REGULAR 
examinations: 
PROVIDED, 
FURTHER, THAT THE 
MONETARY 
BOARD, BY AN AFFIRMATIVE VOTE OF AT LEAST FIVE (5) 
MEMBEI^S, MAY AUTHORIZE A SPECIAL EXAMINATION IF THE 
CIRCUMSTANCES WARRANT.
“The INSTITUTION [bank] concerned shall afford to the head of 
the appropriate supervising and examining departments and to his
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authorized deputies full opportunity to examine its books AND 
RECORDS, cash and [available] assets and general condition AND 
REVIEW ITS SYSTEMS AND PROCEDURES at any time during 
BUSINESS [banking] hours when requested to do so by the Bangko 
Sentral: Provided, however, That none of the reports and other papers 
relative to such examinations shall be open to inspection by the public 
except insofar as such publicity is incidental to the proceedings 
hereinafter authorized or is necessary for the prosecution of violations 
in connection with the business of such institutions.
[Banking and quasi-banking institutions which are subject to 
examination by the Bangko Sentrai] SUPERVISED INSTITUTIONS 
shall pay to the Bangko Sentral, NO LATER THAN MAY 31 OF EACH 
YEAR [within the first thirty (30) days of each year], an annual 
SUPERVISION fee [in an amount equal to a percentage,] as may be 
prescribed by the Monetary Board. [, of its average total assets during 
the preceding year as shown on its end-of-month balance sheets, after 
deducting cash on hand and amounts due from banks, including the 
Bangko Sentral and banks abroad.] IN DETERMINING THE AMOUNT 
OF THE ANNUAL SUPERVISION FEE, THE MONETARY BOARD 
SHALL CONSIDER THE COSTS OF SUPERVISION.”
SEC. 12. A new section entitled Section 28-A is hereby included in the same 
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Act to read as follows;
“ SEC. 28-A. BANGKO SENTRAL COORDINATION. -  THE 
SUSPENSION OR REVOCATION OF ANY GOVERNMENT LICENSE 
NECESSARY FOR THE OPERATION OF A BANGKO SENTRAL-
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SUPERVISED ENTITY MUST BE DONE ONLY WITH PRIOR 
COORDINATION WITH THE BANGKO SENTRAL."
SEC. 13. Section 30 of the same Act is hereby amended to read as follows: 
“SEC. 30. Proceedings in Receivership and Liquidation. - 
Whenever, upon report of the head of the supervising or examining 
department, the Monetary Board finds that a bank or quasi-bank:
“(a) HAS NOTIFIED THE BANGKO SENTRAL OR PUBLICLY 
ANNOUNCED 
A 
UNILATERAL 
CLOSURE, 
OR 
HAS 
BEEN 
DORMANT FOR AT LEAST SIXTY (60) DAYS OR IN ANY MANNER 
HAS SUSPENDED THE PAYMENT OF ITS DEPOSIT/DEPOSIT 
SUBSTITUTE LIABILITIES, OR is unable to pay its liabilities as they 
become due in the ordinary course of business: Provided, That this 
shall not include inability to pay caused by extraordinary demands 
induced by financial panic in the banking community;
“(b) has insufficient realizable assets, as determined by the 
Bangko Sentral. to meet its liabilities; or
“(c) cannot continue in business without involving probable 
losses to its depositors or creditors; or
“(d) has willfully violated a cease and desist order under Section 
37 that has become final, involving acts or transactions which amount 
to fraud or a dissipation of the assets of the institution; 
in which cases, the Monetary Board may summarily and without need 
for prior hearing forbid the institution from doing business in the 
Philippines 
and 
designate 
the 
Philippine 
Deposit 
Insurance 
Corporation (PDIC) as receiver IN THE CASE OF BANKS [of the
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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, THROUGH THE RECEIVER, THE BOARD OF 
DIRECTORS OF THE CLOSED BANK OF ITS DECISION
[For a quasi-bank, any person of recognized competence in 
banking or finance may be designated as receiver.]
“[The receiver shall immediately gather and take charge of all 
the assets and liabilities of the institution, administer the same for the 
benefit of its creditors, and exercise the general powers of a receiver 
under the Revised Rules of Court but shall not. with the exception of 
administrative expenditures, pay or commit any act that will involve the 
transfer or disposition of any asset of the institution; Provided, That the 
receiver may deposit or place the funds of the institution in 
nonspeculative investments. The receiver shall determine as soon as 
possible, but not later than ninety (90) days from takeover, whether the 
institution may be rehabilitated or otherwise placed in such a condition 
so that it may be permitted to resume business with safety to its 
depositors and creditors and the general public: Provided, That any 
determination for the resumption of business of the institution shall be 
subject to prior approval of the Monetary Board.]
“[If the receiver determines that the institution cannot be 
rehabilitated or permitted to resume business in accordance with the 
next preceding paragraph, the Monetary Board shall notify in writing
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the board of directors of its findings and direct the receiver to proceed 
with the liquidation of the institution. The receiver shall:]
“[1. file ex parte with the proper regional trial court, and without 
requirement of prior notice or any other action, 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. Upon acquiring jurisdiction, the court 
shall, upon motion by the receiver after due notice, adjudicate disputed 
claims against the institution, assist the enforcement of individual 
liabilities of the stockholders, directors and officers, and decide on 
other issues as may be material to implement the liquidation plan 
adopted. The receiver shall pay the cost of the proceedings from the 
assets of the institution.]
[2. convert the assets of the institutions to money, dispose of 
the same to creditors and other parties, for the purpose of paying the 
debts of such institution in accordance with the rules on concurrence 
and preference of credit under the Civil Code of the Philippines and he 
may, in the name of the institution, and with the assistance of counsel 
as he may retain, institute such actions as may be necessary to collect 
and recover accounts and assets of, or defend any action against, the 
institution. The assets of an institution under receivership or liquidation 
shall be deemed in custodia legis in the hands of the receiver and 
shall, from the moment the institution was placed under such
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receivership or liquidation, be exempt from any order of garnishment, 
levy, attachment, or execution.]
“The actions of the Monetary Board taken under this section or 
under Section 29 of this Act shall be final and executory, and may not 
be restrained or set aside by the court except on petition for certiorari 
on the ground that the action taken was in excess of jurisdiction or with 
such grave abuse of discretion as to amount to lack or excess of 
jurisdiction. The petition for certiorari may only be filed by the 
stockholders of record representing the majority of the capital stock 
within ten (10) days from receipt by the board of directors of the 
institution 
of 
the 
order 
directing 
receivership, 
liquidation 
or 
conservatorship. 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.
THE 
AUTHORITY 
OF 
THE 
MONETARY 
BOARD 
TO 
SUMMARILY AND WITHOUT NEED FOR PRIOR HEARING FORBID 
THE BANK OR QUASI-BANK FROM DOING BUSINESS IN THE 
PHILIPPINES AS PROVIDED ABOVE MAY ALSO BE EXERCISED 
OVER NON-STOCK SAVINGS AND LOAN ASSOCIATIONS, BASED 
ON THE SAME APPLICABLE GROUNDS. FOR QUASI-BANKS AND 
NON-STOCK SAVINGS AND LOAN ASSOCIATIONS, ANY PERSON 
OF 
RECOGNIZED COMPETENCE 
IN 
BANKING, 
CREDIT OR
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FINANCE MAY BE DESIGNATED BY THE BANGKO SENTRAL AS 
A RECEIVER.”
SEC. 14. Section 31 of the same Act is hereby deleted.
[SEC. 31. Distribution of Assets. —  In case of liquidation of a 
bank or quasi-bank, after payment of the cost of proceedings, including 
reasonable expenses and fees of the receiver to be allowed by the 
court, the 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. 15. Section 32 of the same Act is hereby deleted.
[SEC. 32. Disposition of Revenues and Earnings. __ All
revenues and earnings realized by the receiver in winding up the 
affairs and administering the assets of any bank or quasi-bank within 
the purview of this Act shall be used to pay the costs, fees and 
expenses mentioned in the preceding section, salaries of such 
personnel whose employment is rendered necessary in the discharge 
of the liquidation together with other additional expenses caused 
thereby. The balance of revenues and earnings, after the payment of 
all said expenses, shall form part of the assets available for payment to 
creditors.]”
SEC. 16. Section 34 of the same Act is hereby amended to read as follows;
SEC. 34. Refusal to Make Reports or Permit Examination. —
Any officer, owner, agent, manager, director or officer-in-charge of any 
institution [subject to the supervision or examination by the Bangko 
Sentral within the purview of this act] who. being required in writing by
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the Monetary Board or by the head of the supervising and examining 
department WITHIN THE PURVIEW OF THIS ACT AND RELEVANT 
LAWS willfully refuses to file the required report or permit any lawful 
examination into the affairs of such institution shall be punished by a 
fine of not less than fifty thousand pesos (P50.000) 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 OFFICER, OWNER, 
AGENT, MANAGER, DIRECTOR OR OFFICER-IN-CHARGE OF THE 
AFFILIATE COMPANY/IES AND PARENT COMPANY OF A BANK 
OR QUASI-BANK, AS WELL AS THE AFFILIATES OF SUCH 
PARENT COMPANY, WHOSE TRANSACTIONS ARE SUBJECT TO 
EXAMINATION UNDER THIS LAW.”
SEC. 17. Section 35 of the same Act is hereby amended to read as follows" 
“SEC. 35. False Statement. —  The willful making of a false or 
misleading statement on a material fact to the Monetary Board or to 
the examiners of the Bangko Sentral shall be punished by a fine of not 
less than One hundred thousand pesos (P I00,000) nor more than 
Tw o hundred thousand pesos (P200,000)] TWO MILLION PESOS 
(P2,000,000), or by imprisonment of not more than (5) years, or both, 
at the discretion of the court.”
SEC. 18. Section 36 of the same Act is hereby amended to read as follows: 
“SEC. 36. Proceedings Upon Violation of This Act and Other 
Banking Laws, 
Rules, 
Regulations, 
Orders or Instructions. 
—
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Whenever 
a 
bank, 
[or] 
quasi-bank, 
INCLUDING 
THEIR 
SUBSIDIARIES 
AND 
AFFILIATES 
ENGAGED 
IN 
ALLIED 
ACTIVITIES OR OTHER ENTITY WHICH UNDER THIS ACT OR 
SPECIAL 
LAWS 
IS 
SUBJECT 
TO 
DANCKO 
SENTRAL 
s u p e r v is io n  or whenever any person or entity willfully violates this 
Act or other pertinent banking laws being enforced or implemented by 
the Bangko Sentral or any order, instruction, rule or regulation issued 
by the Monetary Board, the person or persons responsible for such 
violation shall unless otherwise provided in this Act be punished by a 
fine of not less than Fifty thousand pesos (P50,000) nor more than 
[Two hundred thousand pesos (P200,000)j TWO MILLION PESOS 
(P2,000,000.00) or by imprisonment of not less than two (2) years nor 
more than ten (10) years, or both, at the discretion of the court.
“Whenever 
AN 
ENTITY 
UNDER 
BANGKO 
SENTRAL 
SUPERVISION [a bank or quasi-bank] persists in carrying on its 
business in an unlawful or unsafe manner, the 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 
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 
FOURTH DEGREE OF CONSANGUINITY OR AFFINITY, WHO
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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 THE 
GRANT OF INFORMER’S REWARD, WHICH IN NO CASE SHALL 
EXCEED ONE MILLION PESOS (Pl.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. 19. Section 37 of the same Act is hereby amended to read as follows:
“SEC. 37. Administrative Sanctions on [Banks and Quasi- 
Banks] SUPERVISED ENTITIES -  Without prejudice to the criminal 
sanctions against the culpable persons provided in Sections 34. 35. 
and 36 of this Act. the Monetary Board may. at its discretion, impose 
upon any bank, [or] quasi-bank, INCLUDING THEIR SUBSIDIARIES
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AND AFFILIATES ENGAGED IN ALLIED ACTIVITIES, OR OTHER 
ENTITY WHICH UNDER THIS ACT OR SPECIAL LAWS ARE 
SUBJECT TO THE BANCKO SENTRAL SUPERVISION, AND/OR 
their directors, officers [and/]or EMPLOYEES, for any willful violation of 
its charier or by-laws, willful delay in the submission of reports or 
publications thereof as required by law, rules and regulations; any 
refusal to permit examination into the affairs of the institution; any 
willful making of a false or misleading statement to the Board or the 
appropriate supervising and examining department or its examiners; 
any willful failure or refusal to comply with, or violation of, any banking 
law or any order, instruction or regulation issued by the Monetary 
Board, or any order, instruction or ruling by the Governor; or any 
commission of irregularities, and/or conducting business in an unsafe 
or unsound manner as may be determined by the Monetary Board, the 
following administrative sanctions, whenever applicable:
(a) fines in amounts as may be determined by the Monetary 
Board to be appropriate, but in no case to exceed [Thirty thousand 
pesos (P30,000)] ONE MILLION PESOS (P1,000,000.00) FOR EACH 
TRANSACTIONAL VIOLATION OR ONE HUNDRED THOUSAND 
PESOS (P100,000.00) PER CALENDAR [a]day for [each] violations 
OF A CONTINUING NATURE, taking into consideration the attendant 
circumstances, such as the nature and gravity of the violation or 
irregularity and the size of the INSTITUTION, [bank or quasi-bank] 
PROVIDED: THAT IN CASE PROFIT IS GAINED OR LOSS IS 
AVOIDED AS A RESULT OF THE VIOLATION, A FINE NO MORE
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THAN THREE (3) TIMES THE PROFIT GAINED OR LOSS AVOIDED 
MAY ALSO BE IMPOSED;
"(b) suspension of rediscounting privileges or access to Bangko 
Sentral credit facilities;
“(c) suspension of lending or foreign exchange operations or 
authority to accept new deposits or make new investments;
“(d) suspension of interbank clearing privileges; and/or
(e) SUSPENSION OR revocation of quasi-banking OR OTHER 
SPECIAL licenses.
"Resignation or termination from office shall not exempt such
director, officer OR EMPLOYEE from administrative or criminal 
sanctions.
The 
Monetary 
Board 
may, 
whenever 
warranted 
by 
circumstances, preventively suspend any director, [or] officer OR 
EMPLOYEE of [a bank or quasi-bank] THE INSTITUTION pending an 
investigation: Provided, That should the case be not finally decided by 
the Bangko Sentral within a period of one hundred twenty (120) days 
after the date of suspension, said director, [or] officer OR EMPLOYEE 
shall be reinstated in his position: Provided, further. That when the 
delay in the disposition of the case is due to the fault, negligence or 
petition of the director or officer, the period of delay shall not be 
counted in computing the period of suspension herein provided.
“The above administrative sanctions need not be applied in the 
order of their severity. THE MONETARY BOARD MAY FORBEAR 
FROM 
IMPOSING ADMINISTRATIVE 
SANCTIONS, 
IF 
IN 
ITS
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DETERMINATION, 
ENFORCEMENT 
IS 
NOT 
AN 
EFFECTIVE 
MEANS TO ADDRESS THE BREACH COMMITTED SUBJECT TO 
SUCH TERMS AND CONDITIONS AS THE MONETARY BOARD 
MAY IMPOSE.
“Whether or not there is an administrative proceeding, if the 
institution 
and/or 
the 
directors, 
officers 
[and/]or 
EMPLOYEES 
concerned continue with or otherwise persist in the commission of the 
indicated practice or violation, the Monetary Board may issue an order 
requiring 
the 
institution 
and/or 
the 
directors, 
officers 
[and/]or 
EMPLOYEES concerned to cease and desist from the indicated 
practice or violation, and may further order that immediate action be 
taken to correct the conditions resulting from such practice or violation.
The cease and desist order shall be immediately effective upon service 
on the respondents.
The respondents shall be afforded an opportunity to defend 
their action in a hearing before the Monetary Board or any committee 
chaired by any Monetary Board member created for the purpose, upon 
request made by the respondents within five (5) days from their receipt 
of the order. If no such hearing is requested within said period, the 
order shall be final. If a hearing is conducted, all issues shall be 
determined on the basis of records, after which the Monetary Board 
may either reconsider or make final its order.
“The Governor is hereby authorized, at his discretion, to impose 
upon 
[banking 
institutions], 
BANKS 
AND 
QUASI-BANKS, 
INCLUDING THEIR SUBSIDIARIES AND AFFILIATES ENGAGED IN
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ALLIED ACTIVITIES, AND OTHER ENTITIES WHICH UNDER THIS 
ACT OR SPECIAL LAWS ARE SUBJECT TO BANCKO SENTRAL 
SUPERVISION for any failure to comply with the requirements of law, 
Monetary Board regulations and policies, and/or instructions issued by 
the Monetary Board or by the Governor, fines not in excess of [Ten 
thousand pesos (P10.000)] ONE HUNDRED THOUSAND PESOS 
(P100,000.00) 
FOR 
EACH 
TRANSACTIONAL VIOLATION 
OR 
THIRTY THOUSAND PESOS (P30,000.00) PER CALENDAR [a] day 
for [each] violations OF A CONTINUING NATURE, the imposition of 
which shall be final and executory until reversed, modified or lifted by 
the Monetary Board on appeal."
SEC. 20. A new section entitled Section 38-A is hereby included in the same 
13 
Act to read as follows:
“ SEC. 38-A. ISSUANCE OF INJUNCTIVE RELIEF AGAINST 
BANGKO SENTRAL ACTIONS. -  NO COURT, OTHER THAN THE 
COURT OF APPEALS AND THE SUPREME COURT. SHALL ISSUE 
ANY 
TEMPORARY 
RESTRAINING 
ORDER, 
PRELIMINARY 
INJUNCTION 
OR 
PRELIMINARY 
MANDATORY 
INJUNCTION 
AGAINST THE BANGKO SENTRAL FOR ANY ACTION UNDER 
THIS ACT.
“ ANY RESTRAINING ORDER OR INJUNCTION ISSUED IN 
VIOLATION OF THIS SECTION IS VOID AND OF NO FORCE AND 
EFFECT.
“ THE 
PROVISIONS 
OF 
THE 
RULES 
OF 
COURT ON 
INJUNCTIONS INSOFAR AS THESE ARE APPLICABLE AND NOT
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INCONSISTENT WITH THE PROVISIONS OF THIS ACT SHALL 
GOVERN THE ISSUANCE AND DISSOLUTION OF RESTRAINING 
ORDERS OR INJUNCTIONS AGAINST THE BANGKO SENTRAL." 
SEC. 21. Section 39 of the same Act is hereby amended as follows:
SEC. 39. 
Reports end Publicetions. - The Bengko SentrsI 
shall publish a general balance sheet showing the volume and 
composition of its assets and liabilities as of the last working day of the 
month within [sixty (60)] NINETY 
(90) days after the end of each 
month. WHICH MAY BE REASONABLY EXTENDED BY THE 
BANGKO SENTRAL AS WARRANTED, [except for the month of 
December, which shall be submitted within ninety (90) days after the 
end thereof.]
“The Monetary Board shall publish and submit the following 
reports to the President and to the Congress:
(a) 
not later than ninety (90) days after the end of each 
quarter, an analysis of economic and financial developments, including 
the condition of net international reserves and monetary aggregates!
“(b) 
within ninety (90) days after the end of the year, WHICH 
MAY BE REASONABLY EXTENDED BY THE BANGKO SENTRAL 
AS WARRANTED, the preceding year's budget and profit and loss 
statement of the Bangko Sentral showing in reasonable detail the 
result of its operations;
“(c) 
one hundred twenty (120) days after the end of each 
semester, a review of the state of the financial system; and
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(d) 
as 
soon 
as 
practicable, 
abnormal 
movements 
in 
monetary aggregates and the general price level, and, not later than 
seventy-two (72) hours after they are taken, remedial measures in 
response to such abnormal movements.”
SEC. 22. Section 40 of the same Act is hereby amended as follows:
"SEC. 40. 
Annual Report. - Before the end of [March] JUNE 
of each year, the Bangko Central 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 data:
“(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) 
the 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;
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“(0 
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 public debt, both domestic and 
foreign; and
“(h) 
the texts of the major iegal 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.
“The Bangko Sentral shall publish another version of the annual 
report 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 such requirements are complied with.]"
SEC. 23. Section 43 of the same Act is hereby amended as follows:
“SEC. 43. Computation of Profits and Losses. —  Within the first 
[thirty (30)] SIXTY (60) days following the end of each year, the 
Bangko Sentral shall determine its net profits or losses. [In the 
calculation of net profits, the Bangko Sentral shall make adequate 
allowance or establish adequate reserves for bad and doubtful 
accounts] NOTWITHSTANDING ANY PROVISION OF LAW TO THE 
CONTRARY, THE NET PROFIT OF THE BANGKO SENTRAL 
SHALL BE DETERMINED AFTER ALLOWING FOR EXPENSES OF 
OPERATION, ADEQUATE ALLOWANCES AND PROVISIONS FOR
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BAD AND DOUBTFUL DEBTS, DEPRECIATION IN ASSETS, AND
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SUCH ALLOWANCES AND PROVISIONS FOR CONTINGENCIES
3 
OR OTHER PURPOSES AS THE MONETARY BOARD MAY
4 
DETERMINE 
IN ACCORDANCE 
WITH 
PRUDENT 
FINANCIAL
5 
MANAGEMENT 
AND 
EFFECTIVE 
CENTRAL 
BANKING
6 
OPERATIONS."
7 
SEC. 24. A new section entitled Section 43-A is hereby included in the same
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Act to read as follows:
9 
“ SEC. 43-A. BANGKO SENTRAL RESERVE FUND. - THE 
BANCKO SENTRAL SHALL ESTABLISH A RESERVE FUND, 
WHENEVER IT HAS 
INCOME OR POSITIVE 
SURPLUS, TO 
MITIGATE FUTURE RISKS SUCH AS, BUT NOT LIMITED TO, THE 
IMPACTS OF FOREIGN EXCHANGE AND PRICE FLUCTUATIONS,
AND TO ADDRESS OTHER CONTINGENCIES INHERENT IN 
CARRYING 
OUT 
THE 
BANGKO 
SEA/TRAL-MANDATED 
FUNCTIONS 
AS 
CENTRAL 
MONETARY 
AUTHORITY. 
THE 
RESERVE FUND SHALL CONSIST OF FLUCTUATION RESERVE, 
CONTINGENCY RESERVE AND SUCH OTHER RESERVES AS THE 
MONETARY BOARD DEEMS PRUDENT OR NECESSARY.
SEC. 25. Section 45 of the same Act is hereby amended to read as follows:
SEC. 45. Revaluation Profits and Losses. — UNREALIZED 
profits or losses arising from any revaluation of the Bangko Sentral's 
[net] 
assets 
[or], 
liabilities 
OR 
DERIVATIVE 
INSTRUMENTS 
DENOMINATED in [gold or] foreign currencies with respect to the 
MOVEMENTS OF PRICES AND EXCHANGE RATES FROM THIRD
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CURRENCIES TO Philippine peso shall not be included in the 
computation of the annual profits and losses of the Bangko Sentral. 
Any profits or losses arising in this manner shall be offset by any 
amounts which, as a consequence of such revaluations, are owed by 
the Philippines to any international or regional intergovernmental 
financial institution of which the Philippines is a member or are owed 
by these institutions to the Philippines. Any remaining UNREALIZED 
profit or loss shall be carried in aN [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 Reserve] RIR account shall 
be 
[neither] 
credited 
[nor] 
OR 
debited 
FOR 
THE 
PERIODIC 
REVALUATION AS AUTHORIZED IN THIS SECTION AND TO 
REFLECT THE CORRESPONDING ADJUSTMENT RESULTING TO 
REDUCTION 
IN 
THE 
BANGKO 
SENTRAL’S 
NET 
FOREIGN 
ASSETS, LIABILITIES AND FOREIGN CURRENCY-DENOMINATED 
DERIVATIVE INSTRUMENTS. THE RIR SHALL BE ADJUSTED AND 
RECOGNIZED IN THE INCOME STATEMENT UPON SALE OF 
GOLD AND FOREIGN SECURITIES, OR WHEN THE FOREIGN 
CURRENCY IS REPATRIATED TO LOCAL CURRENCY OR IS 
USED TO PAY FOREIGN OBLIGATIONS, OR UPON MATURITY OF 
A FOREIGN CURRENCY-DENOMINATED FORWARD OR OPTION
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CONTRACT INVOLVING THE PHILIPPINE PESO, [for any purposes 
other than those specifically authorized in this section.]"
SEC. 26. Section 61 of the same Act is hereby amended to read as follows:
“SEC. 61. Guiding Principle. — THE MONETARY BOARD 
SHALL REGULARLY ASSESS 
PRICE 
DEVELOPMENTS AND 
OUTLOOK AND, BASED ON ITS ANALYSIS AND EVALUATION OF 
INFLATIONARY PRESSURES, USE ITS POLICY INSTRUMENTS 
TO ATTAIN AND MAINTAIN PRICE STABILITY. [The Monetary 
Board shall endeavor to control any expansion or contraction in 
monetary aggregates which is prejudicial to the attainment or 
maintenance of price stability.]"
SEC. 27. Section 63 of the same Act is hereby amended to read as follows: 
SEC. 63. Action when Abnormal Movements Occur in the 
[Monetary Aggregates. Credit, Or] Price Level. — Whenever abnormal 
movements in the [monetary aggregates, in credit, or in] prices 
endanger the stability of the Philippine economy or important sectors 
thereof, the Monetary Board shall:
“(a) take such remedial measures as are appropriate and within 
the powers granted to the Monetary Board and the Bangko Central 
under the provisions of this Act; and
“(b) submit to the President of the Philippines and the Congress, 
and make public, a detailed report which shall include, as a minimum, 
a description and analysis of:
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(1) the causes of the rise or fall of [the monetary 
aggregates, of credit or of] prices;
“(2) the extent to which the changes in [the monetary 
aggregates, in credit, or in] prices have been reflected in 
changes in the level of domestic output, employment, wages 
and 
economic activity in 
general, 
and 
the 
nature 
and 
significance of any such changes; and
“(3) the measures which the Monetary Board has taken 
and the other monetary, fiscal or administrative measures which 
it recommends to be adopted.
“Whenever the [monetary aggregates, or the level of credit, 
increases or decreases by more than fifteen percent (15%), or the] 
cost of living index increases by more than ten percent (10%), in 
relation to the level existing at the end of the corresponding month of 
the preceding year, or even though [any of these] THIS quantitative 
guideline[s have] HAS not been reached when in its judgment the 
circumstances so warrant, the Monetary Board shall submit the 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 submit periodic reports to 
the President of the Philippines and to Congress until it considers that 
the [monetary, credit or] price disturbances have disappeared or have 
been adequately controlled."
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SEC. 28. Section 66 of the same Act is hereby amended to read as follows: 
“SECTION 66. Composition of the International Reserves. —
The international reserves of the Bangko Sentral may include but shall 
not be limited to the following assets:
“(a) gold; and
“(b) assets in foreign currencies in the form of: documents 
and instruments customarily employed for the international transfer of 
funds; demand and time deposits in central banks, treasuries and 
commercial banks abroad; foreign government securities; and foreign 
notes and coins.
“The Monetary Board shall endeavor to hold the foreign 
exchange resources of the Bangko Sentral in freely convertible 
currencies[; moreover, the Board shall give particular consideration to 
the prospects of continued strength and convertibility of the currencies 
in which the reserve is maintained, as well as to the anticipated 
demands for such currencies]. The Monetary Board shall issue 
regulations determining the other qualifications which foreign exchange 
assets must meet in order to be included in the international reserves 
of the Bangko Sentral.
The Bangko Sentral shall be free to convert any of the assets in 
its international reserves into other assets as described in subsections 
(a) and (b) of this section."
SEC. 29. Section 81 of the same Act is hereby amended to read as follows: 
SEC. 81. Guiding Principles. —  The rediscounts, discounts, 
loans and advances which the Bangko Sentral is authorized to extend
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to banking institutions, under the provisions of the present article of this 
Act shall be used to influence the volume of credit consistent with the 
objective of price stability AND MAINTENANCE OF FINANCIAL 
STABILITY.”
SEC. 30. Section 84 of the same Act is hereby amended to read as follows:
“SEC. 84. Emergency Loans and Advances. - In periods of 
national and/or local emergency or of imminent financial panic which 
directly threaten monetary and FINANCIAL [banking] stability, the 
Monetary Board may. by a vote of at least five (5) of its members, 
authorize the Bangko Sentral to grant extraordinary loans or advances 
to banking institutions, secured by assets as defined hereunder; 
Provided, That 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 or investments.
“The Monetary Board may. at its discretion, likewise authorize 
the Bangko Sentral to grant emergency loans or advances to banking 
institutions, even during normal periods, for the purpose of assisting a 
bank in a precarious financial condition or under serious financial 
pressures brought by unforeseen events, or events which, though 
foreseeable, could not be prevented by the bank concerned: Provided, 
however, That the Monetary Board has ascertained that the bank is not 
insolvent and has the assets defined hereunder to secure the 
advances: Provided, further. That a concurrent vote of at least five (5) 
members of the Monetary Board is obtained.
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"The amount of any emergency loan or advance shall not 
exceed the sum of fifty percent (50%) of total deposits and deposit 
substitutes of the banking institution, and shall be disbursed in two (2) 
or more tranches. The amount of the first tranche shall be limited to 
twenty-five percent (25%) of the total deposit and deposit substitutes of 
the institution and shall be secured by (A) government securities, (B) 
ACCEPTABLE GUARANTEES BACKED UP BY THE NATIONAL 
GOVERNMENT OR ITS SECURITIES; (C) 
[to the extent of theit 
applicable loan values and] other unencumbered first class collaterals 
and 
(D) 
OTHER 
KINDS 
OF 
COLLATERALS 
AS 
MAY 
BE 
AUTHORIZED BY THE MONETARY BOARD IN ACCORDANCE 
WITH 
SOUND 
RISK 
MANAGEMENT PRINCIPLES 
[which the 
Monetary Board may approve]: Provided, That if as determined by the 
Monetary Board, the circumstances surrounding the emergency 
warrant a loan or advance greater than the amount provided 
hereinabove, the amount of the first tranche may exceed twenty-five 
percent (25%) of the bank’s total deposit and deposit substitutes if the 
same is adequately secured by [applicable loan values of government 
securities and unencumbered first class collaterals] ANY OF THE 
COLLATERALS SET FORTH ABOVE AS 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.
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“Prior to the release of the first tranche, the banking institution 
shall submit to the Bangko Sentral a resolution of its board of directors 
authorizing the Bangko Sentral to evaluate other assets of the banking 
institution certified by its external auditor to be good and available for 
collateral purposes should the release of the subsequent tranche be 
thereafter applied for.
“The Monetary Board may, by a vote of at least five (5) of its 
members, authorize the release of a subsequent tranche on condition 
thal the principal stockholders of the institution:
“(a) furnish an acceptable undertaking to indemnify and hold 
harmless from suit a conservator whose appointment the Monetary 
Board may find necessary at any time; and
(b) provide acceptable security which, in the judgment of the 
Monetary Board, would be adequate to supplement, where necessary, 
the assets tendered by the banking institution to collateralize the 
subsequent tranche.
“In 
connection 
with 
the exercise of these 
powers, 
the 
prohibitions in Section 128 of this Act shall not apply insofar as it refers 
to acceptance as collateral of shares and their acquisition as a result of 
foreclosure proceedings, including the exercise of voting rights 
pertaining to said shares: Provided, however, That should the Bangko 
Sentral acquire any of the shares it has accepted as collateral as a 
result of foreclosure proceedings, the Bangko Sentral shall dispose of 
said shares by public bidding within one (1) year from the date of 
consolidation of title by the Bangko Sentral.
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Whenever a financial institution incurs an overdraft in its 
account with the Bangko Sentral, the same shall be eliminated within 
the period prescribed in Section 102 of this Act."
SEC. 31. A new section entitled Section 88-A is hereby included in the same 
Act to read as follows:
“ SEC. 
88-A. 
EXEMPTION 
OF 
COLLATERALS 
FROM 
ATTACHMENTS, EXECUTIONS AND OTHER RESTRICTIONS. -  
COLLATERALS ON LOANS AND ADVANCES GRANTED BY THE 
BANGKO SENTRAL, WHETHER OR NOT THE INTEREST OF THE 
BANGKO SENTRAL IS REGISTERED, SHALL NOT BE SUBJECT 
TO 
ATTACHMENT, 
EXECUTION 
OR 
ANY 
OTHER 
COURT 
PROCESS OR ADMINISTRATIVE RESTRICTIONS ON LAND USE,
NOR SHALL THEY BE INCLUDED IN THE PROPERTY OF 
INSOLVENT PERSONS OR INSTITUTIONS.”
SEC. 32. A new section entitled Section 88-B is hereby included in the same 
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Act to read as follows:
“ SEC. 88-B. DEPUTIZATION OF LEGAL STAFF IN CASE OF 
FORECLOSURES. 
-  
IN 
CASE 
OF 
AN 
EXTRAJUDICIAL 
FORECLOSURE OF MORTGAGE IN CONNECTION WITH LOANS 
AND ADVANCES UNDER THIS ARTICLE, THE BANGKO SENTRAL 
MAY DEPUTIZE ANY OF ITS LAWYERS TO CONDUCT THE 
PUBLIC AUCTION PURSUANT TO ACT NO. 3135, AS AMENDED.
“ LIKEWISE, IN CASE OF A JUDICIAL FORECLOSURE IN 
CONNECTION WITH 
LOANS AND ADVANCES UNDER THIS 
ARTICLE, THE BANGKO SENTRAL MAY, WITH THE APPROVAL
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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 WERE AN 
ACT OF ITS OWN SHERIFF IN ALL RESPECTS.
“ NO RESTRAINING ORDER OR INJUNCTION SHALL BE 
ISSUED BY THE COURT ENJOINING THE BANGKO SENTRAL 
FROM 
PROCEEDING 
WITH 
THE 
FORECLOSURE 
OF 
THE 
MORTGAGE UNLESS A BOND IS POSTED IN FAVOR OF THE 
BANGKO SENTRAL IN AN AMOUNT EQUIVALENT TO THE TOTAL 
CLAIM OF THE BANGKO SENTRAL. THE RESTRAINING ORDER 
OR INJUNCTION SHALL BE REFUSED OR, IF GRANTED, SHALL 
BE DISSOLVED UPON FILING BY THE BANGKO SENTRAL OF A 
BOND, WHICH MAY BE IN THE FORM OF A BANGKO SENTRAL 
CHECK, IN AN AMOUNT TWICE THE AMOUNT OF THE ORIGINAL 
BOND POSTED CONDITIONED THAT THE BANGKO SENTRAL 
WILL PAY THE DAMAGES WHICH THE PARTY MAY SUFFER BY 
THE REFUSAL OR DISSOLUTION OF THE INJUNCTION. THE 
PROVISIONS OF THE RULES OF COURT ON INJUNCTIONS 
INSOFAR AS THEY ARE APPLICABLE AND NOT INCONSISTENT 
WITH THE PROVISIONS OF THIS SECTION SHALL GOVERN THE
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ISSUANCE AND DISSOLUTION OF THE RESTRAINING ORDER 
OR INJUNCTION CONTEMPLATED IN THIS SECTION.”
SEC. 33. A new section entitled Section 88-C is hereby included in the same 
Act to read as follows:
“ SEC. 88-C. 
RIGHT OF REDEMPTION OF FORECLOSED 
REAL 
PROPERTY; 
RIGHT 
OF 
POSSESSION 
DURING 
REDEMPTION PERIOD. -  IN THE EVENT OF FORECLOSURE, 
WHETHER 
JUDICIALLY 
OR 
EXTRAJUDICIALLY, 
THE 
MORTGAGOR, WHO IS A NATURAL PERSON, SHALL HAVE THE 
RIGHT TO REDEEM THE PROPERTY WITHIN ONE (1) YEAR FROM 
THE DATE OF FORECLOSURE SALE. IN CASE THE MORTGAGOR 
IS A JURIDICAL PERSON, THE MORTGAGOR SHALL HAVE THE 
RIGHT TO REDEEM THE PROPERTY SOLD IN A JUDICIAL 
FORECLOSURE SALE WITHIN ONE (1) YEAR FROM THE DATE 
OF FORECLOSURE SALE; PROVIDED, THAT IN CASE OF AN 
EXTRAJUDICIAL FORECLOSURE, NOTWITHSTANDING ACT NO.
3135, THE MORTGAGOR SHALL HAVE THE RIGHT TO REDEEM 
THE PROPERTY SOLD WITHIN NINETY (90) DAYS FROM THE 
FORECLOSURE 
SALE 
BUT 
NOT 
LATER 
THAN 
THE 
REGISTRATION OF THE CERTIFICATE OF FORECLOSURE SALE. 
REDEMPTION 
SHALL 
BE 
EFFECTED 
BY 
PAYING 
THE 
PRINCIPAL, INTERESTS, CHARGES, COMMISSIONS AND ALL 
CLAIMS OF WHATEVER NATURE OF THE BANGKO SENTRAL 
OUTSTANDING AND DUE AS OF THE DATE OF FORECLOSURE 
SALE, 
INCLUDING 
ALL 
COSTS 
AND 
OTHER 
EXPENSES
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INCURRED BY REASON OF THE FORECLOSURE SALE AND 
CUSTODY OF THE PROPERTY.
“ THE 
DANGKO 
SENTRAL, 
AS 
PURCHASER 
IN 
THE 
FORECLOSURE SALE AND WITHOUT NEED OF POSTING A 
BOND, 
MAY 
TAKE 
POSSESSION 
OF 
THE 
FORECLOSED 
PROPERTY DURING THE REDEMPTION PERIOD. THE BANGKO 
SENTRAL SHALL BE 
ENTITLED TO THE FRUITS OF THE 
PROPERTY, 
THE 
SAME 
TO 
BE 
APPLIED 
AGAINST 
THE 
REDEMPTION PRICE.”
SEC. 34. A new section entitled Section 88-D is hereby included in the same
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Act to read as follows;
“ SEC. 88-D. UNSECURED BANGKO SENTRAL CLAIMS. -  
ALL UNSECURED CLAIMS OF THE DANGKO SENTRAL SHALL 
BE CONSIDERED PREFERRED CREDITS SIMILAR TO TAXES 
DUE TO THE NATIONAL GOVERNMENT IN THE ORDER OF 
PREFERENCE UNDER ARTICLE 2244 OF THE NEW CIVIL CODE.”
SEC. 35. A new section entitled Section 89-A is hereby included in the same 
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Act to read as follows:
“ SEC. 89-A. FINANCIAL FACILITIES FOR ISLAMIC BANKS. - 
THE BANGKO SENTRAL MAY, TAKING INTO CONSIDERATION 
THE 
PECULIAR CHARACTERISTICS OF ISLAMIC 
BANKING, 
FORMULATE RULES AND REGULATIONS FOR THE EXTENSION 
OF FINANCIAL FACILITIES TO ISLAMIC BANKS PROVIDED SUCH 
EXPOSURES SHALL BE PROPERLY SECURED.”
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SEC. 36. A new section entitled Section 89-B is hereby inciuded in the same
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Act to read as foiiows:
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“ SEC. 
89-B. 
LOANS 
TO 
THE 
PHILIPPINE 
DEPOSIT 
INSURANCE 
CORPORATION. 
-  
THE 
BANCKO 
SENTRAL, 
PURSUANT TO ITS MANDATE OF MAINTAINING FINANCIAL 
STABILITY, MAY LEND FUNDS TO THE PHILIPPINE DEPOSIT 
INSURANCE CORPORATION FOR INSURANCE PURPOSES AND 
IN CASES OF FINANCIAL ASSISTANCE TIfAT THE LATTER IS 
AUTHORIZED TO EXTEND UNDER SECTION 22(E) OF REPUBLIC 
ACT NO. 3591, AS AMENDED. NOTWITHSTANDING SECTION 23 
OF REPUBLIC ACT NO. 3591, AS AMENDED, THE MONETARY 
BOARD 
SHALL 
PRESCRIBE 
INTEREST RATES AND 
SUCH 
OTHER TERMS AND CONDITIONS OF THE LOAN.”
SEC. 37. Section 92 of the same Act is hereby amended to read as follows: 
“SEC. 92. Issue and Negotiation of Bangko Central Obligations.
In order to provide the Bangko Central with effective instruments for 
open market operations, the Bangko Sentral may, subject to such rules 
and regulations as the Monetary Board may prescribe and in 
accordance with the principles stated in Section 90 of this Act. issue, 
place, buy and sell freely negotiable evidences of indebtedness of the 
Bangko Sentral. [.Provided, That issuance of such certificates of 
indebtedness shall be made only in cases of extraordinary movement 
in price ieveis.] Said evidences of indebtedness may be issued directiy 
against the international reserve of the Bangko Sentral or against the 
securities which it has acquired under the provisions of Section 91 of
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this Act, or may be issued without relation to specific types of assets of 
the Bangko Sentral.
The Monetary Board shall determine the interest rates, 
maturities and other characteristics of said obligations of the Bangko 
Sentral, and may, if it deems it advisable, denominate the obligations 
in gold or foreign currencies.
“Subject to the principles stated in Section 90 of this Act, the 
evidences of indebtedness of the Bangko Sentral to which this section 
refers may be acquired by the Bangko Sentral before their maturity, 
either through purchases in the open market or through redemptions at 
par and by lot if the Bangko Sentral has reserved the right to make 
such redemptions. The evidences of indebtedness acquired or 
redeemed by the Bangko Sentral shall not be included among its 
assets, and shall be immediately retired and cancelled."
SEC. 38. Section 95 of the same Act is hereby amended to read as follows:
"SEC. 95. Definition of Deposit Substitutes. — The term "deposit 
substitutes is defined as an alternative form of obtaining funds from 
the public, other than deposits, through the issuance, endorsement, or 
acceptance of debt instruments for the borrower's own account, for the 
purpose of relending 
or purchasing 
of receivables and 
other 
obligations. These instruments may include, but need not be limited to, 
bankers acceptances, promissory notes, participations, certificates of 
assignment and similar instruments with recourse, and repurchase 
agreements. 
THE 
PHRASE 
'OBTAINING 
FUNDS 
FROM 
THE 
PUBLIC’ SHALL MEAN BORROWING FROM TWENTY (20) OR
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MORE LENDERS AT ANY ONE TIME, AND, FOR THIS PURPOSE, 
“ LENDERS” SHALL REFER TO INDIVIDUALS AND CORPORATE 
ENTITIES 
THAT 
ARE 
NOT 
ACTING 
AS 
FINANCIAL 
INTERMEDIARIES, 
SUBJECT 
TO 
THE 
SAFEGUARDS 
AND 
REGULATIONS ISSUED BY THE MONETARY BOARD. 
The 
Monetary Board shall determine what specific instruments shall be 
considered as deposit substitutes for the purposes of Section 94 of this 
Act; Provided, however, That deposit substitutes of commercial, 
industrial and other non-financial companies for the limited purpose of 
financing their own needs or the needs of their agents or dealers shall 
not be covered by the provisions of Section 94 of this Act."
SEC. 39. Section 101 of the same Act is hereby amended to read as follows: 
“SEC. 101. Reserve Deficiencies. - Whenever the reserve 
position of any bank or quasi-bank, computed in the manner specified 
in the preceding section of this Act, is below the required minimum, the 
bank or quasi-bank shall pay the Bangko Sentral [one-tenth of one 
percent (1/10 of 1%) per day on the amount of the deficiency or the 
prevailing ninety-one-day treasury bill rate plus three percentage 
points, whichever is higher] MONETARY PENALTY AS MAY BE 
PRESCRIBED BY THE MONETARY BOARD; Provided, however.
That banks and quasi-banks shall ordinarily be permitted to offset any 
reserve deficiency occurring on one or more days of the week with any 
excess reserves which they may hold on other days of the same week 
and shall be required to pay the penalty [only on the average daily 
deficiency 
during 
the 
week] 
IN 
ACCORDANCE 
WITH 
THE
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MECHANISM APPROVED BY THE MONETARY BOARD. 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 a reserve deficiency, 
the Monetary Board may limit or prohibit the making of new loans or 
investments by the institution and may require that part or all of the net 
profits of the institution be assigned to surplus.
"The Monetary Board may modify or set aside the reserve 
deficiency penalties provided in this section, for part or the entire 
period of a strike or lockout affecting a bank or a quasi-bank as defined 
in the Labor Code, or of a national emergency affecting operations of 
banks or quasi-banks, OR IN SUCH OTHER INSTANCES WHERE 
THE GRANT OF WAIVER OF PENALTIES IS 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."
SEC. 40. Section 104 of the same Act is hereby amended to read as follows:
“SEC. 104. Guiding Principle. —  The Monetary Board shall use 
the powers granted to it under this Act to ensure that the supply, 
availability and cost of money are in accord with the needs of the 
Philippine economy and that bank credit is not granted for speculative 
purposes prejudicial to the national interests. Regulations on bank 
operations shall be applied to all banks of the same category, AS MAY
BE DEFINED BY THE MONETARY BOARD, uniformly and without 
discrimination."
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SEC. 41. Section 108 of the same Act is hereby amended to read as follows: 
"SEC. 108. Minimum Capital Ratios. — The Monetary Board 
may prescribe minimum RISK-BASED CAPITAL ADEQUACY ratios 
BASED ON INTERNATIONALLY ACCEPTED STANDARDS [which 
the capital and surplus of the banks must bear to the volume of their 
assets, or to specific categories thereof,] and may alter said ratios 
whenever it deems necessary. 
IN THE EXERCISE OF ITS 
AUTHORITY UNDER THIS SECTION. THE MONETARY BOARD 
MAY 
REQUIRE 
BANKS 
TO 
HOLD 
CAPITAL 
BEYOND THE 
MINIMUM REQUIREMENTS COMMENSURATE TO THEIR RISK 
PROFILE.”
SEC. 42. Section 113 of the same Act is hereby amended to read as follows: 
“SEC. 113. Official Deposits. — The Bangko Central shall be the 
official depository of the Government, its political subdivisions and 
instrumentalities as well as of government-owned or -controlled 
corporations, [and. a] As a general policy, their cash balances should 
be deposited with the Bangko Central, with only minimum working 
balances to be held by government-owned banks and such other 
banks LICENSED TO OPERATE [incorporated] in the Philippines as 
the Monetary Board may AUTHORIZE, [designate, subject to such 
rules and regulations as the Board may prescribe: 
Provided, That 
such banks may hold deposits of the political subdivisions and 
instrumentalities of the Government beyond their minimum working 
balances whenever such subdivisions and instrumentalities have 
outstanding loans with said banks.]
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"The Bangko Sentral may ACCEPT DEPOSITS AND pay 
interest on SUCH deposits AND OTHER SIMILAR PLACEMENTS of 
the Government or of its political subdivisions and instrumentalities, 
banks 
AND 
OTHER 
BANGKO 
SEA/TRAL-SUPERVISED 
INSTITUTIONS.”
SEC. 43. Section 123 of the same Act is hereby amended to read as follows:
“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 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
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FACILITIES SUCH AS BUT 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. 44. Section 125 of the same Act is hereby amended to read as follows:
“SEC. 125. Tax Exemptions. —  The Bangko Sentral shall be 
exempt [for a period of five (5) years from the approvai of this Act] from 
all national, provincial, municipal and city taxes, fees, charges and 
assessments.
The exemption authorized in the preceding paragraph of this 
section shall apply to all property of the Bangko Sentral. to the 
resources, receipts, expenditures, profits and income of the Bangko 
Sentral, as well as to all contracts, deeds, documents and transactions 
related to the conduct of the business of the Bangko Sentral: Provided, 
however. That said exemptions shall apply only to such taxes, fees, 
charges and assessments for which the Bangko Sentral itself would 
otherwise be iiable. and shall not apply to taxes, fees, charges, or 
assessments payable by persons or other entities doing business with 
the Bangko Sentral: Provided, further. That foreign loans and other 
obligations of the Bangko Sentral shall be exempt, both as to principal 
and interest, from any and all taxes if the payment of such taxes has 
been assumed by the Bangko Sentral."
SEC. 45. Section 128 of the same Act is hereby amended to read as follows:
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“SEC. 128. Prohibitions. —  The Bangko Sentral shall not 
acquire shares of any kind or accept them as collateral, and shall not 
participate in the ownership or management of any enterprise, either 
directly or indirectly: [.] PROVIDED, THAT THIS PROHIBITION 
SHALL NOT APPLY WHENEVER THE MONETARY BOARD, BY A 
VOTE OF AT LEAST FIVE (5) OF ITS MEMBERS, (1) DEEMS AN 
ACQUISITION OR INVESTMENT TO BE NECESSARY TO QUALIFY 
OR AS REQUIRED FOR MEMBERSHIP IN INTERNATIONAL AND 
REGIONAL 
ORGANIZATIONS 
OR 
(2) 
DETERMINES 
THAT 
INVESTING IN AND/OR OPERATING AN ENTERPRISE WILL BE 
CONSISTENT WITH THE 
EFFECTIVE FULFILLMENT OF ITS 
MANDATE AND WILL NOT CONSTITUTE ANY CONFLICT OF 
INTEREST.
“The Bangko Sentral shall not engage in development banking 
or financing: Provided, however, That outstanding loans obtained or 
extended for development financing shall not be affected by the 
prohibition of this section."
SEC. 46. Section 132 of the same Act is hereby amended to read as follows: 
"SEC. 132. Transfer of Assets and Liabilities, -xxx
(b) the Bangko Sentral shall remit seventy five percent (75%) of 
its net profits AS COMPUTED IN THIS ACT to a special deposit 
account (sinking fund) OR TO THE NATIONAL TREASURY AS 
DIVIDENDS, until such time as the net liabilities of the Central Bank 
shall 
have been liquidated through generally accepted finance 
mechanisms 
such 
as, 
but 
not 
limited 
to, 
write-offs, 
setoffs,
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condonation, collections, reappraisal, revaluation and bond issuance 
by the National Government[, or to the National Government as 
dividends]. THEREAFTER, IT SHALL REMIT FIFTY PERCENT (50%)
OF ITS SAID NET PROFITS TO THE NATIONAL TREASURY;
SEC. 47. Repealing Clause. All provisions of existing laws, orders, rules and 
regulations, or parts thereof which are in conflict or inconsistent with the provisions of 
this Act are hereby repealed, amended or modified accordingly.
SEC. 48. Separability Clause. If any provision or section of this Act is held to 
be unconstitutional or invalid, the other provisions or sections hereof, which are not
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affected thereby shall continue to be in full force and effect.
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SEC. 49. Effectivity. This Act shall take effect fifteen (15) days following its
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publication in the Official Gazette or in a newspaper of general circulation in the
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Philippines.
Approved,
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