CONGRESS OF THE PHILIPPINES 
SIXTEENTH CONGRESS 
First Regular Session 
SENATE 
S. B.No.18S5 
INTRODUCED BY SENATOR FRANKLIN M. DRILON 
.st~tUittt 
tfJ:H,;r t)f HPI .~f'rHt<lr~ 
'13 
OCT 17 
A9 :00 
In 1993, the Congress enacted Republic Act No. 7653 (The New Central Bank Act) 
creating the Bangleo Sentral ng Pilipinas (BSP) pursuant to Article XII, Section 20 of the 
Constitution mandating the establishment of an independent central monetary 
authority. Twenty years hence, the economic milieu in the Philippines has changed. 
Globalization has increased the integration of financial markets and the scope of 
operations of financial institutions has. evolved. In light of these, there is, undoubtedly, a 
need to respond to contemporary challenges by amending R.A. No. 7653 in order that 
the BSP remains effective in its cond~ct of monetary policy and supervision of entities 
within the financial system. 
Towards this end, this bill proposes to strengthen the tools which the BSP utilizes 
in performing its policy-making and regulatory functions. The improvements sought to 
be incorporated in the BSP charter shall supplement the existing mechanisms in 
protecting the savings of depositors, ensure the smooth flow of transactions in the 
financial system, and enhance the corporate viability of the BSP. The proposed 
amendments in this bill,are three-fold: 
1. Strengthening BSP's Monetary Stability Function 
a. Restoration of authority to issue negotiable certificates of indebtedness 
even during normal times, a power granted to the old Central Bank of the 
Philippines; 
. 
b .. Removal of thresholds in the growth of monetary aggregates, credit and 
prices as guiding principles in monetary administration, in view of 
current international trends in monetary policy frameworks adopting 
inflation targeting. 
2. Strengthening BSP's Fin,lncial Stability Function 
a. Formal recognition of financial stability in BSP's statutory mandate, as 
well as providing statutory oversight of payment and settlement systems; 
.. 


b. Enhancement of BSP's supervisory authority by expanding the coverage 
of regulated entities to include other categories of financial institutions; 
grant of authority to impose sanctions on transfers and acquisitions of 
substantial shares of banks and quasi-banks without BSP approval; grant 
of full flexibility to conduct risk-based supervision of financial 
institutions; strengthening of administrative and criminal sanctions to 
include, among other things, forfeiture of profits from unauthorized 
financial transactions; and improvement of resolution mechanisms to deal 
with distressed financial institutions; and 
c. Legal protection for BSP officials and staff when performing official duties 
similar to that provided to officers and employees of the Philippine 
Deposit Insurance Corporation. 
3. Strengthening BSP's Corporate and Fin~ncial Viability 
a. Additional BSP capitalization of P150 billion, payable in 3 years; 
b. Flexibility to establish adequate loss allowances and create reserve buffers 
against future risks and contingencies, and restoration of tax exemption; 
c .. Enhancement of credit operations by granting exemption from court 
processes relating to collateral obtained from banks similar to that enjoyed 
by Land Bank of the Philippines (LBP); and authority to deputize legal 
staff in extrajudicial foreclosure of mortgaged properties in the same 
manner that legal staff of LBP and Development Bank of the Philippines 
(DBP) are authorized. to do so. 
These amendments, once enacted into law, will empower the BSP to aptly 
respond to challenges and innovations of a globalized economy and, more significantly, 
to effectively perform its constitutional mandates. Indeed, an empowered BSP is 
indispensable in ensuring a competitive, robtist and inclusive economy. It likewise 
fosters a financial system that delivers a high quality of life for Filipinos. 
In view of the foregoing, approval of this bill is earnestly sought. 
F 


CONGRESS OF THE PHILIPPINES 
SIXTEENTH c:ONGRESS 
'13 
OCT 17 A 9 :00 
First Regular Session 
SENATE 
• S.B.No.l8S5 
INTRODUCED BY SENATOR FRANKLIN M. DRILON 
AN ACT AMENDING REPUBLIC ACT NUMBERED SEVENTY-SIX HUNDRED 
AND FIFTY-THREE ENTITLED "THE NEW CENTRAL BANK ACT," AND FOR 
OTHER PURPOSES 
Be it enacted by the Senate and House of Representatives of the Philippines in Congress 
assembled: 
1 
SECTION 1. Section 2 of Republic Act No. 7653, otherwise known as "The New 
. . 
2 
Central Bank Act" is hereby amended to read as follows: 
3 
4 
"SEC. 2. Creation of the Bangleo Sentral. - There is hereby established 
5 
an independent central monetary authority, which shall be a body 
6 
corporate known as the Bangko Sentral ng Pilipinas, hereafter referred to as 
7 
the Bangleo Sentra/. 
8 
"The capital of the Bangleo Sentral shpJI be TWO HUNDRED [Fifty] 
• 
9 
billion pesos (P[50,]200,OOO,OOO,OOO), to be fully subscribed by the 
10 
Government of the Republic, hereafter referred to as the Government. 
11 
[Ten 
billion 
pesos 
(PlO,OOO,OOO,OOO) 
of 
which] 
THE 
UNPAID 
12 
SUBSCRIPTION shall b~ fully paid for by the Government IN THREE 
13 
(3) CONSECUTIVE ANNUAL INSTALLMENTS UNTIL 2017. [upon the 
14 
effectivity of this Act and the balance to be paid for within a period of two 
1 


1 
(2) years from the effectivity of this Act in such manner and form as the 
2 
Government, through the Secretary of Finance and the Secretary of 
3 
Budget and Management, may thereafter determine.]" 
4 
5 
6 
SEC. 2. Section 3 of the same Act is hereby amended to read as follows: 
7 
"SEC. 3. Responsibility and Primary Objective. -
The Bangko Sentral 
8 
shall provide policy directions in the areas of money, banking, and credit. 
9 
It shall have supervision over the operations of banks and exercise such 
10 
regulatory powers as provided in this Act and other pertinent laws over 
11 
the operations of finance companies and non-bank financial institutions 
12 
performing quasi-banking functions, [hereafter referred to as quasi-
13 
banks,], CREDIT CARD COMPANIES; MONEY CHANGERS, E-
14 
MONEY ISSUERS, 
REMITTANCE AGENTS, 
PAYMENT AND 
15 
SETTLEMENT SYSTEM OPERATORS and OTHER institutions 
16 
performing similar functions AS MAY BE DETERMINED BY THE 
17 
MONETARY BOARD. 
18 
"The primary objective of the Bangko Sentral is to maintain price 
19 
stability conducive to a balanced and sustainable growth of the economy. 
20 
It shall also promote and maintain monetary AND FINANCIAL stability 
21 
and the convertibility of the peso. 
22 
"THE BANGKO SENTRAL SHALL OVERSEE THE PAYMENTS 
23 
AND 
SETTLEMENTS 
SYSTEMS 
IN 
THE 
PHILIPPINES 
IN 
24 
ACCORDANCE WITH SOUND AND PRUDENT PRACTICES." 
25 
. 26 
SEC. 3. Section 11 of the same Act is hereby amended to read as follows: 
27 
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16 
17 
18 
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21 
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23 
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25 
26 
27 
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"SEC. 11. Meetings. - The Monetary Board shall meet at least once 
a week; The Board may be called to a ml'eting 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 
LIMITED 
TO, 
TELECONFERENCING 
AND 
VIDEOCONFERENCING." 
SEC. 4. Section 16 of the same Act is hereby amended to read as follows: 
. . 
"SEC. 16. Responsibility. -
Members of the Monetary Board, 
officials, examiners, and employees of the Bangko Sentral 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] THEIR duties shall be held liable for any loss or 
injury suffered by the Bangko Sentral or other banking institutions as a 
result df such violation, negligence, abuse, 'malfeasanceL] OR misfeasance 
[or failure to exercise extraordinary diligence]. 
3 


1 
"Similar responsibility shall apply to members, officers, and 
2 
employees of the Bangko Sentral for: (1) the disclosure of any information 
3 
of a confidential nature, or any information on the discussions or 
4 
resolutions of the Monetary Board, or about the confidential operations of 
5 
the. Bangko Sentral, unless the disclosure is in connection with the 
6 
performance of official functions with the Bangko Sentrai, or is with prior 
7 
authorization of the Monetary Board or the Governor; or (2) the use of 
8 
such information for personal gain or to the detriment of the government, 
9 
the Bangko Sentral or third parties: Provided, however, that any data or 
. . 
10 
information required to be submitted to the President and/or the 
11 
Congress, or to be published under the provisions of this act shall not be 
12 
considered confidential. 
13 
"THE 
ABOVE 
NOTWITHSTANDING, 
UNLESS 
THE 
14 
ACTIONS OF THE BANGKO SENTRAL OR ANY OF ITS OFFICERS 
15 
AND EMPLOYEES ARE FOUND TO BE IN WILLFUL VIOLATION OF 
16 
THIS ACT, PERFORMED IN BAD FAI1;H, WITH MALICE AND/OR 
• 
17 
GROSS NEGLIGENCE, THE BANGKO SENTRAL, MEMBERS OF THE 
18 
MONETARY BOARD, ITS OFFICERS AND EMPLOYEES, ARE HELD 
19 
FREE AND HARMLESS TO THE FULLEST EXTENT PERMITTED BY 
20 
LAW FROM ANY LIABILITY, AND THEY SHALL BE INDEMNIFIED 
21 
FOR ANY ANO ALL LIABILITIES, LOSSES, CLAIMS, DEMANDS, 
22 
DAMAGES, 
DEFICIENCIES, 
COSTS 
AND 
EXPENSES 
OF 
23 
WHATSOEVER KIND AND NATURE THAT MAY ARISE IN 
24 
CONNECTION WITH THE PERFORMANCE OF THEIR DUTIES 
25 
DONE IN GOOD FAITH AND CONSISTENT WITH THE POWERS 
26 
AND FUNCTIONS AUTHORIZED BY LAW." 
27 
28 
SEC. 5. Section 21 of the same Act is hereby amended to read as follows: 
29 
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. . 


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12 
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< 
, 
"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 ~f the Bangko Sentral and shall 
exercise the powers and perform the duties of the Governor. Whenever 
the Government is unable to attend meetings of government boards or 
councils in which he is an ex officio member pursuant to provisions of 
special laws, a Deputy Governor as may be designated by the Governor 
shall be vested with authority to participate and exercise the right to vote 
in such meetings." 
SEC 6. Section 23 of the same Act is hereby amended to read as follows: 
16 
"SEC 23, Authority to Obtain Data and Information, -
The Bangko 
17 
Sentral shall have the authority to REQUIRE [request] from government 
18 
offices and instrumentalities, or government-owned or -controlled 
. 19 
. corporations, any .data which it may require for the proper discharge of its 
20 
functions and responsibilities. The Bangko Sentral through the Governor 
21 
or in his absence, a duly authorized representative shall have the power to 
22 
issue a subpoena for the production of the books and records for the 
23 
aforesaid purpose. Those who refuse the subpoena without justifiable 
24 
25 
26 
27 
28 
29 
, . 
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 individual 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 
5 


1 
of the Bangko Sentral whether public or private except under order of the 
2 
court or under such condit!ons as may be prescribed by the Monetary 
3 
Board: Provided, however, That the collective data on firms may be released 
4 
to interested persons or entities: Provided, finally, That in the case of data 
5 
on banks, the provisions of Section 27 of this Act shall apply." 
6 
7 
SEC. 7. Section 25 of the same Act is hereby amended to read as follows: 
8 
9 
"SEC. 25. Supervision and Examination. -
The Bangko Sentral shall 
10 
have supervision over, and conduct [periodic] REGULAR or special 
11 
examinations of, banking institutions and quasi-banks, including their 
12 
subsidiaries and affiliates engaged in allied activities. 
13 
"THE BANGKO SENJ.'RAL SHALL HAVE REGULATORY 
14 
AUTHORITY OVER, AND CONDUCT REGULAR OR SPECIAL 
15 
EXAMINATIONS OF, ENTITIES WHICH UNDER THIS ACT OR BY 
16 
SPECIAL LAWS ARE SUBJECT TO ITS JURISDICTION. 
17 
"THE BANGKO SENTRAL SHALL ALSO HAVE THE POWER 
18 
TO OBTAIN INFORMATION FOR SUPERVISORY PURPOSES ON 
19 
TRANSACTIONS BETWEEN A SUPERVISED INSTITUTION AND 
20 
ITS PA'REN'f OR OTHER AFFILIATE COMPANIES, AND EXAMINE 
21 
THESE 
TRANSACTIONS. 
THIS 
POWER 
INCLUDES 
THE 
22 
AUTHORITY OF THE BANGKO SENTRAL TO LOOK INTO THE 
23 
MAIN ACTIVITIES OF COMPANIES AFFILIATED WITH THE 
24 
PARENT COMPANIES tHAT HAVE A MATERIAL IMP ACT ON THE 
25 
SAFETY AND SOUNDNESS OF THE BANK AND THE BANKING 
26 
GROUP. 
27 
"A PARENT COMPANY MEANS A CORPORATION WHICH 
28 
OWNS DIRECTLY OR INDIRECTLY VOTING STOCK OF A 
29 
SUPERVISED 
INSTITUTION 
OF 
THE 
BANGKO 
SENTRAL 
6 


1 
SUFFICIENT 
TO 
CONTROL 
ITS 
MANAGEMENT 
AND 
2 
OPERATIONS, SUBJECT TO THE GUIDELINES ISSUED BY THE 
.. 
3 
MONETARY BOARD. 
4 
"AS USED IN THIS SECTION AND SECTION 25-A, AND 
5 
SUBJECT TO THE GUIDELINES ISSUED BY THE MONETARY 
6 
BOARD, CONTROL EXISTS WHEN THE PARENT OWNS DIRECTLY 
7 
OR INDIRECTLY MORE THAN ONE HALF OF THE STOCK OF A 
8 
SUPERVISED INSTITUTION. CONTROL ALSO EXISTS EVEN 
, 
9 
WHEN THE PARENT OWNS ONE HALF OR LESS OF THE VOTING 
10 
STOCK OF THE SUPERVISED INSTITUTION WHEN THERE IS 
11 
POWER OVER MORE THAN ONE HALF OF THE VOTING RIGHTS 
12 
BY PROXY OR BY VIRTUE OF AN AGREEMENT WITH OTHER 
13 
INVESTORS, OR OTHER ,SIMILAR ARRANGEMENTS, WHICH 
14 
THEREBY ENABLES THE PARENT COMPANY TO CAST THE 
15 
MAJORITY OF VOTES AT MEETINGS OF THE STOCKHOLDERS OF 
16 
THE SUPERVISED INSTITUTION, OR TO ELECT THE MAJORITY 
17 
OF MEMBERS OF THE BOARD OF DIRECTORS OF THE 
18 
SUPERVISED INSTITUTION OR TO APPOINT KEY EXECUTIVE 
19 
OFFICERS WHO SHALL DIRECTLY OR INDIRECTLY CONTROL 
20 
THE MANAGEMENT AND OPERATIONS OF THE SUPERVISED 
21 
INSTITUTION. 
22 
"For purposes of this section, a subsidiary means a corporation 
23 
more than fifty pe'rcent (50%) of the voting stock of which is owned by a 
24 
bank or quasi-bank and an affiliate means a corporation the voting stock 
25 
of which, to the extent of fifty percent (50%) or less, is owned by a bank or 
26 
quasi-bank or which is related or linked to such institution or 
27 
intermediary through common stockholders or such other factors as may 
28 
be determined by the Monetary Board. 
7 


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"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 suoject 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 
supervision or examination by the Bangko Sentral, unless there is 
convincing proof that the action of the Banglco 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." 
25 
SEC. 8. A new section entitled Section 25-A is hereby inserted in the same Act to 
26 
read as follows: 
27 
28 
29 
"SEC. 25-A. AUTHORITY TO APPROVE TRANSFER OF 
SHARES 
-
TRANSFERS OR ACQUISITIONS, OR A 
SERIES 
8 


1 
THEREOF, OF TEN PERCENT (10%) OF VOTING RIGHTS IN BANKS 
2 
OR QUASI-BANKS SHALL REQUIRE THE PRIOR APPROVAL OF 
3 
THE 
BANGKO 
SENTRAL. 
THE 
SELLING 
OR 
CONVEYING 
4 
STOCKHOLDER 
SHALL 
SUBMIT 
SUCH 
TRANSFER 
OR 
5 
ACQUISITON FOR APPROVAL BY THE BANGKO SENTRAL 
6 
WITHIN SUCH PERIOD, <\S MAY BE PRESCRIBED BY THE 
7 
MONETARY BOARD, IN APPROVING SUCH TRANSFERS OR 
8 
ACQUISITIONS, REGARD SHALL BE GIVEN BY THE BANGKO 
9 
SENTRAL TO THE FITNESS OF THE INCOMING STOCKHOLDERS 
10 
AS MAY BE INDICATED IN THEIR INTEGRITY, REPUTATION 
11 
AND FINANCIAL CAPACITY, WITHOUT BANGKO SENTRAL 
12 
APPROVAL, NO SUCH TRANSFER OR ACQUISITION SHALL 
13 
HAVE LEGAL EFFECT NOR SHALL THIi SAME BE RECOGNIZED IN 
14 
THE BOOKS OF THE INSTITUTION OR BY ANY GOVERNMENT 
15 
AGENCY, AND THE TRANSFEROR-STOCKHOLDERS 
SHALL 
16 
REMAIN 
ACCOUNTABLE 
AND 
RESPONSIBLE 
THEREFOR. 
17 
TRANSFER OF ACTUAL CONTROL OR MANAGEMENT OF THE 
18 
INSTITUTION TO THE NEW STOCKHOLDERS OR THEIR 
19 
REPRESENTATIVES PRIOR TO BANGKO SENTRAL APPROVAL 
20 
SHALL MAKE THE TRANSFEROR, THE TRANSFEREE AND ANY 
21 
PERSON RESPONSIBLE THEREFOR LIABLE UNDER SECTIONS 36 
22 
AND 37 OF THIS ACT, NOTWITHSTANDING ANY PROVISION OF 
23 
LAW TO THE CONTRARY, THE BANGKO SENTRAL MAY SHARE 
24 
WITH THE PHILIPPINE DEPOSIT INSURANCE CORPORATION 
25 
ANY INFORMATION THAT THE BANGKO SENTRAL MAY OBTAIN 
26 
PERTAINING TO TRANSFER OR ACQUISITION OF SHARES OR 
27 
SERIES OF TRANSFERS OR ACQUISITION OF SHARES IN BANKS 
28 
AND QUASI-BANKS," 
29 
9 


1 
SEC. 9. Section 28 of the same Act is hereby amended to read as follows: 
2 
3 
"SEC. 28. Examination and Fees. - The supervising and examining 
4 
department head, personally or by deputy, shall examine the [books] 
5 
OPERATIONS of every bank[ing] AND QUASI-BANK, INCLUDING 
6 
THEW SUBSIDIARIES, AND AFFILIATES ENGAGED IN ALLIED 
7 
ACTIVITIES, AND OTHER ENTITIES WHICH UNDER THIS ACT OR 
8 
SPECIAL 
LAWS 
ARE 
SUBJECT 
TO 
BANGKO 
SENTRAL 
9 
SUPERVISION, IN ACCORDANCE WITH THE GUIDELINES SET BY 
10 
THE MONETARY BOARD TAKING INTO CONSIDERATION 
11 
SOUND AND PRUDENT PRACTICES. [once in every twelve (12) 
12 
months, and at such other times as the Monetary Board by an affirmative 
13 
vote of five (5) members, may deem expedient and to make a report on 
14 
the same to the Monetary Board:] Provided, That there shall be an interval 
15 
of at least twelve (12) months between [annual] REGULAR examinations; 
16 
PROVIDED, FURTHER, THAT tHE MONETARY BOARD, BY AN 
17 
AFFIRMATIVE VOTE OF AT LEAST FIVE (5) MEMBERS, MAY 
18 
AUTHORIZE A SPECIAL EXAMINATION IF THE CIRCUMSTANCES 
19 
WARRANT. 
20 
"The INSTITUTION thank] concerned shall afford to the head of 
21 
the appropriate supervising and examining departments and to his 
22 
authorized deputies full opportunity to examine its books AND 
23 
RECORDS, cash and [available] assets and general condition AND 
24 
REVIEW ITS SYSTEMS AND PROCEDURES at any time during 
25 
BUSINESS [banking] hours when requested to do so by the Bangko 
26 
Sentral: Provided, however, That none of the reports and other papers 
27 
relative' to such examinations shall be open to inspection by the public 
28 
except insofar as such publicity is incidental to the proceedings 
10 
.' 


1 
hereinafter authorized or is necessary for the prosecution of violations in 
2 
connection with the business of such institutions. 
3 
"[Banking and quasi-banking institutions which are subject to 
4 
examination by the Bangko Sentral] SUPERVISED INSTITUTIONS shall 
s 
pay to the Bangko Sentral, NO LATER THAN MAY 31 OF EACH YEAR 
6 
[within the first thirty (30) days of each year], an annual SUPERVISION 
7 
fee [in an amount equal to a percentage,] as may be prescribed by the 
8 
Monetary Board.[,of its average total assets during the preceding year as 
9 
shown on its end-of-month baiance sheets, after deducting cash on hand 
10 
and amounts due from banks: including the Bangko Sentral and banks 
11 
abroad.] IN DETERMINING THE ANNUAL SUPERVISION FEE, THE 
12 
MONETARY 
BOARD 
SHALL 
CONSIDER 
THE 
COST 
OF 
13 
SUPERVISION." 
14 
15 
SEC. 10. A new section entitled Section 28-A is hereby inserted in the same Act to 
16 
read as follows: 
17 
18 
"SEC. 28-A. BANGKO SENTRAL COORDINATION. -
THE 
19 
SUSPENSION OR REVOCATION OF ANY GOVERNMENT LICENSE 
20 
NECE.SSARY FOR THE OPERATION OF A BANGKO SENTRAL-
21 
SUPERVISED ENTITY MUST BE DONE ONLY WITH PRIOR 
22 
CONSULTATION WITH THE BANGKO SENTRAL." 
23 
24 
SEC. 11. Section 30 of the same Act is hereby amended to read as follows: 
2S 
26 
"SEC. 30. Proceedings in Receivership and Liquidation. - Whenever, 
27 
upon report of the head of the supervising or examining department, the 
28 
Monetary Board finds that a bank or quasi-bank: 
11 


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28 
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"(a) 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 as receiver of the 
banking institution, 
"[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 liabiliti,es 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, payor 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 
12 


1 
resumption of business of the institution shall be subject to prior approval 
2 
of the Monetary Board. 
3 
"IN ORDER TO REHABILITATE THE CLOSED INSTITUTION 
4 
OR TO RESTORE ITS OPERATIONS WITH SAFETY TO ITS 
5 
DEPOSITORS, CREDITORS AND THE GENERAL PUBLIC, OR TO 
6 
MERGE OR CONSOLIDATE THE CLOSED INSTITUTION WITH 
7 
ANOTHER QUALIFIED INSTITUTION, THE RECEIVER MAY 
8 
IMMEDIATELY TRANSFER OR DISPOSE OF ANY OR ALL OF THE 
9 
ASSETS' OF THE' CLOSED . INSTITUTlON, 
CAUSE 
QUASI-
10 
REORGANIZATION OF THE INSTITUTION, AND SUCH OTHER 
11 
ACTS AS MAY BE AUTHORIZED BY LAW. 
12 
"If the receiver determines that the institution cannot be 
13 
rehabilitated or permitted to re~ume business in accordance with the next 
14 
preceding paragraph,. the Monetary Board shall notify in writing the 
15 
board of directors of THE RECEIVER'S [its 1 findings and direct the 
16 
receiver to proceed with the liquidation of the institution. The receiver 
17 
shall: 
18 
"1. file ex parte with the proper regional trial court, and without 
19 
requirement of prior notice or any other action, a petition for assistance in 
20 
the liquidation of the institution pursuanf to a liquidation plan adopted 
21 
by the Philippine Deposit Insurance Corporation for general application 
22 
to all closed banks. In case of quasi-banks, the liquidation plan shall be 
23 
adopted by the Monetary Board. Upon acquiring jurisdiction, the court 
24 
shall, 'upon motion by the receiver after due notice, adjudicate disputed 
25 
claims against the institution, assist the enforcement of individual 
26 
liabilities of the stockholders, directors and officers, and decide on other 
27 
issues as may be material to implement the liquidation plan adopted. The 
28 
receiver shall pay the cost of the proceedings from the assets of the 
29 
institution. 
13 


1 
"2. convert the assets of the institutions to money, dispose of the 
2 
same to creditors and other parties, for the purpose of paying the debts of 
3 
such institution in accorda'nce with the rules on concurrence and 
4 
preference of credit under the Civil Code of the Philippines and he may, 
5 
in the name of the institution, and with the assistance of counsel as he 
6 
may retain, institute such actions as may be necessary to collect and 
7 
recover accounts and assets of, or defend any action against, the 
8 
institution. The assets of an institution under receivership or liquidation 
9 
shall b~ deemed in custodia legis in the h~nds of the receiver and shall, 
10 
from the moment the institution was placed under such receivership or 
11 
liquidation, be exempt from any order of garnishment, levy, attachment, 
12 
or execution. 
13 
. "The 'actions of the Monetary Board taken under this section or 
14 
under Section 29 of this Act shall be final and executory, and may not be 
15 
restrained or set aside by the court except on petition for certiorari on the 
16 
ground that the action taken was in excess of jurisdiction or with such 
17 
grave abuse of discretion as to amount to lack or excess of jurisdiction. 
18 
The petition for certiorari may only be filed by the stockholders of record 
19 
representing the majority of the capital .stock within ten (10) days from 
20 
receipt by the board of directors of the institution of the order directing 
21 
receivership, liquidation or conservatorship. The designation of a 
22 
conservator under Section 29 of this Act or the appointment of a receiver 
23 
. under this section shal! be vested exClusively with the Monetary Board. 
24 
Furthermore, the designation of a conservator is not a precondition to the 
25 
designation of a receiver. 
26 
"THE AUTHORITY OF THE MONETARY BOARD TO PLACE 
27 
A BANK OR QUASI-BAN~ UNDER RECEIVERSHIP AS PROVIDED 
28 
ABOVE MAY ALSO BE EXERCISED OVER NON-STOCK SAVINGS 
29 
AND LOAN ASSOCIATIONS, BASED ON THE SAME APPLICABLE 
14 


1 
GROUNDS. FOR QUASI-BANKS AND NON-STOCK SAVINGS AND 
2 
LOAN 
ASSOCIATIONS, 
ANY 
PERSON 
OF 
RECOGNIZED 
3 
COMPETENCE IN BANKING, CREDIT OR FINANCE MAY BE 
4 
DESIGNATED AS A RECEIVER." 
5 
6 
SEC. 12. Section 31 of the same Act is hereby amended to read as follows: 
7 
8 
"SEC. 31. Distribution of Assets. -
In case of liquidation of a bank, 
9 
quasi-bank OR NON-STOCK SAVINGS AND LOAN ASSOCIATION, 
10 
after payment of the cost of proceedings, including reasonable expenses 
11 
and fees of the receiver to be allowed by the court, the receiver shall pay 
12 
the debts of such institution, under order of the court, in accordance with 
13 
the rules on concurrence and preference of credit as provided in the Civil 
14 
Code." 
15 
16 
SEC. 13. Section 32 of the same Act is hereby amended to read as follows: 
.. 
17 
18 
"SEC. 32. Disposition of Revenues and Earnings. -
All revenues and 
19 
earnings realized by the receiver in winding up the affairs and 
20 
administering the assets of any bank, quasi-bank OR NON-STOCK 
21 
SAVINGS AND LOAN ASSOCIATION within the purview of this Act 
22 
shall be used to pay the costs, fees and expenses mentioned in the 
23 
preceding secti~n, salaries of such pers,onnel whose employment is 
. 
. 
24 
rendered necessary in the discharge of the liquidation together with other 
25 
additional expenses caused thereby. The balance of revenues and 
26 
earnings, after the payment of all said expenses, shall form part of the 
27 
assets available for payment to.creditors." 
28 
29 
SEC. 14. Section 34 of the same Act is hereby amended to read as follows: 
15 


1 
2 
"SEC. 34. Refusal to Make Reports or Permit Examination. -
Any 
3 
officer, owner, agent, manager, director or officer-in-charge of any 
4 
institution subject to the supervision or examination by the Bangko Sentral 
5 
within the purview of this ad who, being required in writing by the 
6 
Monetary Board or by the. I;tead of the supervising and examining 
7 
department willfully refuses to file the required report or permit any 
8 
lawful examination into the affairs of such institution shall be punished 
9 
by a fine of not less than fifty thousand pesos (P50,OOO) nor more than 
10 
[one hundred thousand pesos (PIOO,OOO)] TWO MILLION PESOS 
11 
(P2,OOO,OOO) or by imprisonment of not less than one (1) year nor more 
12 
than five (5) year;;, or both, [in] AT the discretion of the court. 
13 
'ITHIS SHALL ALSO APPLY TO THE OFFICER, OWNER, 
14 
AGENT, MANAGER, DIRECTOR OR OFFICER-IN-CHARGE OF THE 
15 
AFFILIATE COMPANY/lES AND PARENT COMPANY OF A BANK 
16 
OR QUASI-BANK, AS WELL AS THE AFFILIATES OF SUCH 
17 
PARENT COMPANY, WHOSE TRANSACTIONS ARE SUBJECT TO 
18 
EXAMINATION UNDER THIS LAW." 
19 
20 
SEC. 15. Section 35 of the same Act is hereby amended to read as follows" 
21 
22 
"SEC. 35. False Statement. -
The willful making of a false or 
23 
misleading statement on a material fact to the Monetary Board or to the 
24 
examiners of the Bangko Sentral shall be punished by a fine of not less than 
25 
One hundred thousand pesos (PIOO,OOO) nor more than [Two hundred 
26 
thousan~ pesos (P200,OOO)] TWO MILLION PESOS (P2,OOO,OOO), or by 
27 
imprisonment of not more than (5) years, or both, at the discretion of the 
28 
court." 
29 
16 
.. 


1 
SEC. 16. Section 36 of the same Act is hereby amended to read as follows: 
2 
. . 
3 
"SEC. 36. Proceedings Upon Violation of This Act and Other Banking 
4 
Laws, Rules, Regulations, Orders or Instructions, -
Whenever a bank, [or] 
5 
quasi-bank, OR OTHER ENTITY WHICH UNDER THIS ACT OR 
6 
SPECIAL LAWS IS SUBJECT, TO BANGKO SENTRAL SUPERVISION 
7 
or whenever any person or entity willfully violates this Act or other 
8 
pertinent banking laws being enforced or implemented by the Bangko 
9 
Sentral or any order, instruction, rule or regulation issued by the 
10 
Monetary Board, the person or persons responsible for such violation 
11 
shall unless otherwise provided in this Act be punished by a fine of not 
12 
less than Fifty thousand pesos (P50,000) nor more than [Two hundred 
13 
thousand pesos (P200,000)] TWO MILLION PESOS (P2,OOO,OOO.OO) or by 
14 
imprisonment of not less than two (2) years nor more than ten (10) years, 
15 
or both, at the discretion of the court. 
- 16 
"Whenever' 
AN 
ENTITY' UNDER 
BANGKO 
SENTRAL 
17 
SUPERVISION [a bank or quasi-bank] persists in carrying on its business 
18 
in an unlawful or unsafe manner, the Board may, without prejudice to the 
19 
penalties provided in the preceding paragraph of this Section and the 
20 
administrative sanctions proyi.ded in Section 37 of this Act, take action 
21 
under Section 30 of this Act," 
22 
23 
SEC. 17. Section 37 of the same Act is hereby amended to read as follows: 
24 
25 
"SEC. 37, Administrative Sanctions on Banks and Quasi-Banks, -
26 
Without prejudi~e to the criminal sanctions against the culpable persons 
27 
provided in Sections 34, 35, and 36 of this :Act, the Monetary Board may, 
28 
at its discretion, impose upon any bank or quasi-bank, INCLUDING 
29 
THEIR SUBSIDIARIES AND AFFILIATES ENGAGED IN ALLIED 
17 


1 
ACTIVITIES, OR OTHER ENTITIES WHICH UNDER THIS ACT OR 
2 
SPECIAL LAWS ARE SUBJECT TO THE BANGKO SENTRAL 
3 
SUPERVISION, AND/OR their directors, officers and/or EMPLOYEES, 
4 
for any willful violation of its charter or by-laws, willful delay in the 
5 
submission of reports or publication~ thereof as required by law, rules 
6 
and regulations; any refusal to permit examination into the affairs of the 
7 
institution; any willful making of a false or misleading statement to the 
8 
Board or the appropriate supervising and examining department or its 
9 
examiners; any willful failure or refusal to comply with, or violation of, 
10 
any banking law or any order, instruction or regulation issued by the 
11 
Monetary Board, or any order, instruction or ruling by the Governor; or 
12 
any commission of irregularities, and/or conducting business in an unsafe 
13 
or unsound manner as may be determined by the Monetary Board, the 
14 
following administrative sanctions, whenever applicable: 
15 
"(a) fines in amounts as may be determined by the Monetary 
16 
Board to be app~opriate, but in no case to ,exceed [Thirty thousand pesos 
17 
(P30,OOO)] 
ONE MILLION PESOS 
(Pl,OOO,OOO.OO) 
FOR EACH 
18 
TRANSACTIONAL VIOLATION OR ONE HUNDRED THOUSAND 
19 
PESOS (PlOO,OOO.OO) PER BANKING [a]day for each CONTINUING 
20 
violation, taking into consideration the attendant circumstances, such as 
21 
the nature and gravity of the violation or irregularity and the size of the 
22 
INSTITUTION, [bank or quasi-bank] PROVIDED: THAT IN CASE 
23 
PROFIT IS GAINED OR LOSS IS AVOIDED AS A RESULT OF THE 
, 
24 
VIOLATION, A FINE OF NO MORE THAN THREE (3) TIMES THE 
25 
PROFIT GAINED OR LOSS AVOIDED MAY BE IMPOSED; 
26 
"(b) suspension of rediscounting privileges or access to Bangko 
27 
Sentral credit facilities; 
28 
"(c) suspension of lending or foreign exchange operations or 
29 
authority to accept new deposits or make new investments; 
18 
.. 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
"(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 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 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. 
"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 
19 


1 
made by the respondents within five (5) days from their receipt of the 
2 
order. If no such hearing is requested within said period, the order shall 
3 
be final. If a hearing is conducted, all issues shall be determined on the 
4 
basis of records, after which the Monetary Board may either reconsider or 
5 
make final its order. 
6 
"The Governor is hereby authorized, at his discretion, to impose 
7 
upon 
[banking 
institutions], 
BANKS 
AND 
QUASI-BANKS, 
8 
INCLUDING THEIR SUBSIDIARIES AND AFFILIATES ENGAGED 
9IN ALLIED ACTIVITIES, AND OTHER ENTITIES WHICH UNDER 
10 
SPECIAL 
LAWS 
ARE 
SUBJECT 
TO 
BANGKO 
SENTRAL 
11 
SUPERVISION for any failure to comply with the requirements of law, 
12 
Monetary Board regulations and policies, and/or instructions issued by 
13 
the Monetary Board or by .tile Governor, fines not in excess of [Ten 
14 
thousand pesos (PIO,OOO)J ONE HUNDRED THOUSAND PESOS 
15 
(Pl00,OOO.OO) 
FOR EACH TRANSACTIONAL VIOLATION OR 
16 
THIRTY THOUSAND PESOS (P30,OOO.OO) PER BANKING [aJ day for 
17 
each CONTINUING violation, the imposition of which shall be final and 
18 
executory until reversed, modified or lifted by the Monetary Board on 
19 
appea1." 
20 
21 
SEC. 18. A new section entitled Section 38-A is hereby inserted in the same Act to 
22 
read as follows: 
23 
24 
"SEC. 
38-A. 
ISSUANCE 
OF PROVISIONAL 
REMEDIES 
25 
AGAINST BANGKO SENTRAL ACTIONS. -
NO COURT, OTHER 
26 
THAN THE COURT OF APPEALS AND THE SUPREME COURT, 
27 
SHALL 
ISSUE 
ANY ·TEMPORARY 
RESTRAINING 
ORDER, 
28 
PRELIMINARY INJUNCTION OR PRELIMINARY MANDATORY 
20 


1 
INJUNCTION AGAINST THE BANGKO SENTRAL FOR ANY 
2 
ACTION UNDER THIS ACT .. 
3 
"ANY RESTRAINING 'ORDER OR INJUNCTION ISSUED IN 
4 
VIOLATION OF THIS SECTION IS VOID AND OF NO FORCE AND 
5 
EFFECT. 
6 
"THE PROVISIONS OF RULE 58 OF THE 1997 RULES ON 
7 
CIVIL PROCEDURE IN SO FAR AS THEY ARE APPLICABLE AND 
8 
NOT INCONSISTENT WITH THE PROVISIONS OF THIS ACT 
9 
SHALL GOVERN THE ISSUANCE AND DISSOLUTION OF THE 
. 
. 
10 
RESTRAINING ORDER OR INJUNCTION AGAINST THE BANGKO 
11 
SENTRAL." 
12 
13 
SEC. 19. Section 43 of the same Act is hereby amended as follows: 
14 
15 
"SEC. 43. Computation of Profits and Losses. - Within the first thirty 
16 
(30) days following the end of each year, the Bangko Sentral shall 
, 
17 
determine its net profits or losses. [In the calculation of net profits, the 
18 
Bangko Sentral shall make adequate allowance or establish adequate 
19 
reserves for bad and doubtful accounts]. NOTWITHSTANDING ANY 
20 
PROVISION OF LAW TO THE CONTRARY, THE NET PROFIT OF 
21 
THE 
BANGKO 
SENTRAL 
SHALL 
BE 
DETERMINED 
AFTER 
22 
ALLOWING 
FOR 
EXPENSES 
OF 
OPERATION 
ADEQUATE 
. 23 
ALLOWANCES AND PROVISIONS FORBAD AND DOUBTFUL 
24 
DEBTS, 
DEPRECIATION 
IN 
ASSETS, 
AND 
SUCH 
OTHER 
25 
ALLOWANCES AND CONTINGENCIES OR PURPOSES AS THE 
26 
MONETARY BOARD MAY DETERMINE IN ACCORDANCE WITH 
27 
PRUDENT FINANCIAL MANAGEMENT." 
.. 
28 
21 


1 
SEC. 20. A new section entitled Section 43-A is hereby inserted in the Same Act to 
2 
read as follows: 
3 
4 
"SEC. 43-A. BANGKO SENTRAL RESERVE FUND. - THE 
5 
BANGKO SENTRAL SHALL ESTABLISH A RESERVE FUND TO 
6 
MITIGATE FUTURE RISKS AND CONTINGENCIES INHERENT IN 
7 
CARRYING 
OUT 
THE 
BANGKO 
SENTRAL-MANDATED 
8 
FUNCTIONS AS CENTRAL MONETARY AUTHORITY. 
THE 
9 
RESERVE FUND SHALL CONSIST OF FLUCTUATION RESERVE, 
10 
CONTINGENCY RESERVE AND SUCH OTHER RESERVES AS THE 
11 
MONETARY BOARD DEEMS PRUDENT OR NECESSARY. 
12 
"THE FLUCTUATION RESERVE SHALL COVER LOSSES 
13 
FROM EXCHANGE RATE AND PRICE VOLATILITY AND SHALL BE 
14 
DERIVED FROM THE NET PROFITS BEFORE DISTRIBUTION, AS 
15 
PROVIDED UNDER SECTION 44 OF THIS ACT. ALL OTHER 
16 
RESERVE FUNDS SHALL BE SOURCED FROM SURPLUS." 
.. 
17 
18 
SEC. 21. Section 45 of the same Act is hereby amended to read as follows: 
19 
20 
"SEC. 45. Revaluation Profits and Losses. -
UNREALIZED profits or 
21 
losses arising from any revaluation of the Bangko Sentral's [net] assets [or], 
22 
liabilities OR DERIVATIVE INSTRUMENTS DENOMINATED in [gold 
23 
or] foreign curr~ncies with respect to th~ MOVEMENTS OF PRICES 
24 
AND EXCHANGE RATES FROM THIRD CURRENCIES TO Philippine 
25 
peso shall not be included in the computation of the annual profits and 
26 
losses of the Bangko Sentral. Any profits or losses arising in this manner 
27 
shall be offset by any amqunts which, as a consequence of such 
28 
revaluations, are owed by the Philippines to any international or regional 
29 
intergovernmental financial institution of which the Philippines is a 
22 


1 
member or are owed by these institutions to the Philippines. Any 
2 
-remaining UNREALIZED profit or loss shall bF carried in a special frozen 
3 
account which shall be named "Revaluation of International Reserve 
4 
(RIR)", and the net balance of which shall appear either among the 
5 
liabilities or among the assets of the Bangko Sentral, depending on whether 
6 
the revaluations have produced net profits or net losses. 
. . 
7 
"The [Revaluation of International Reserve] RIR account shall be 
8 
[neither] credited [nor] OR debited ONLY FOR THE PERIODIC 
9 
REVALUATION AS AUTHORIZED IN THIS SECTION AND TO 
10 
REFLECT THE CORRESPONDING ADJUSTMENT RESULTING TO 
11 
REDUCTION IN THE BANGKO SENTRAL'S NET FOREIGN ASSETS, 
12 
LIABILITIES 
AND 
FOREIGN 
CURRENCY-DENOMINATED 
13 
DERIVATIYE INSTRUMENTS. THE RIR:SHALL BE ADJUSTED AND 
14 
RECOGNIZED IN THE INCOME STATEMENT UPON SALE OF 
15 
GOLD AND FOREIGN SECURITIES, OR WHEN THE FOREIGN 
16 
CURRENCY IS REPATRIATED TO LOCAL CURRENCY OR IS USED 
17 
TO PAY FOREIGN OBLIGATIONS OR UPON MATURITY OF A 
18 
FOREIGN CURRENCY-DENOMINATED FORWARD OR OPTION 
19 
CONTRACT INVOLVING THE PHILIPPINE PESO. [for any purposes 
20 
other than those specifically.authorized in this section.]" 
21 
22 
SEC. 22. Section 61 of the same Act is hereby amended to read as follows: 
23 
24 
"SEC. 61. Guiding Principle. - THE MONETARY BOARD SHALL 
25 
REGULARLY ASSESS PRICE DEVELOPMENTS AND OUTLOOK 
26 
AND, BASED ON ITS 
ANALYSIS AND EVALUATION OF 
27 
INFLATIONARY PRESSURES, USE ITS POLICY INSTRUMENTS TO 
28 
ATTAIN AND MAINTAIN PRICE STABILITY. [The Monetary Board 
29 
shall endeavor to control any expansion or contraction in monetary 
23 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
- 16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
aggregates which is prejudicial to the attainment or maintenance of price 
stability.]" 
SEC. 23. 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 Sentral 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: 
"(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 
recommerds 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 
24 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
" 
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." 
SEC. 24. Section 81 of the same Act is hereby amended to read as follows: 
"SEC. 81.' Guiding Principles. -
The rediscounts, discounts, loans 
and ad~ance's which the Bangko Sentral is authorized to extend 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. 25. 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 
25 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
. . 
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 
institut~ons, !2ven 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 ... 
"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 their 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 
26 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
same is adequately secured by applicable loan values of government 
securities and unencumbered first class collaterals approved by the 
Monetary Board, and the principal stockholders of the institution furnish 
an acceptable undertaking to indemnify and hold harmless from suit a 
conservator whose appointment the Monetary Board may find necessary 
at any time. 
"Prior to the release of the first tranche, 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 ~ay, by a vote of at least five (5) of its 
members, authorize the release of a subsequent tranche on condition that 
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) prov,ide acceptable security which, in the judgment of the 
Moneta,ry Bqard, 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, 1;hat 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 
.. 
27 


1 
bidding within one (1) year from the date of consolidation of title by the 
2 
Bangko Sentral. 
3 
"Whenever a iinancial'il'tstitution incurs an overdraft in its account 
4 
with the Banglco Sentral, the same shall be eliminated within the period 
5 
prescribed in Section 102 of this Act," 
6 
7 
SEC. 26. A new section entitled Section 88-A is hereby inserted in the same Act to 
8 
read as follows: 
9 
10 
)'SEC: 
88-A. 
EXEMPTION 
FROM 
ATTACHMENT. 
11 
COLLA TERALS ON LOANS AND ADVANCES GRANTED BY THE 
12 
BANGKO SENTRAL, WHETHER OR NOT THE INTEREST OF THE 
13 
BANGKO SENTRAL IS REGISTERED, SHALL NOT BE SUBJECT TO 
14 
ATTACHMENT, EXECUTION OR ANY OTHER COURT PROCESS 
15 
OR ADMINISTRATIVE RESTRICTIONS ON LAND USE, NOR 
16 
SHALL THEY BE INCLUDED IN THE PROPERTY OF INSOLVENT 
17 
PERSONS OR INSTITUTIONS." 
18 
19 
SEC. 27. A new section entitled Section 88-8 is hereby inserted in the same Act to 
20 
read as follows: 
21 
22 
"SEC. 88-B. DEPUTIZATION OF LEGAL STAFF. - IN CASE OF 
. 23 
AN EXTRAJUDICIAL 
FORECLOSURE 
OF MORTGAGE, THE 
24 
BANGKO SENTRAL MAY DEPUTIZE ANY OF ITS LAWYERS TO 
25 
CONDUCT THE PUBLIC AUCTION PURSUANT TO ACT NO. 3135, 
26 
AS AMENDED. IN CASE OF A JUDICIAL FORECLOSURE, THE 
27 
BANGKO SENTRAL MAY, WITH THE APPROVAL OF THE COURT, 
. . 
28 
LIKEWISE DEPUTIZE ANY OF ITS LAWYERS TO ACT AS SPECIAL 
29 
SHERIFF IN THE SALE OF A DEBTOR'S PROPERTIES AND IN THE 
28 


1 
ENFORCEMENT OF COURT WRITS AND PROCESSES RELATED 
2 
THERETO. THE SPECIAL SHERIFF OF THE BANGKO SENTRAL 
3 
SHALL MAKE A REPO,RT TO tHE PROPER COURT AFTER ANY 
4 
ACTION HAS BEEN TAKEN BY HIM, WHICH COURT SHALL 
5 
TREAT SUCH ACTION AS IF IT WERE AN ACT OF ITS OWN 
6 
SHERIFF IN ALL RESPEC,!;S. 
7 
"NO RESTRAINING ORDER OR INJUNCTION SHALL BE 
8 
ISSUED BY THE COURT ENJOINING THE BANGKO SENTRAL 
9 
FROM 
PROCEEDING 
WITH 
THE. FORECLOSURE 
OF 
THE 
10 
MORTGAGE UNLESS A BOND IS POSTED IN FAVOR OF THE 
11 
BANGKO SENTRAL IN AN AMOUNT EQUIVALENT TO THE TOTAL 
12 
CLAIM OF THE BANGKO SENTRAL. THE RESTRAINING ORDER 
13 
OR INJUNCTION SHALL BE REFUSED OR, IF GRANTED, SHALL BE 
14 
DISSOLVED UPON FILING BY THE BANGKO SENTRAL OF A 
15 
BOND, WHICH SHALL BE IN THE FORM OF A BANGKO SENTRAL 
16 
CHECK, IN AN AMOUNT TWICE THE AMOUNT OF THE 
17 
ORIGINAL BOND POSTED'CONDITIONED THAT THE BANGKO 
18 
SENTRAL WILL PAY THE DAMAGES WHICH THE PARTY MAY 
19 
SUFFER 
BY 
THE 
REFUSAL 
OR 
DISSOLUTION 
OF 
THE 
20 
INJUNCTION. THE PROVISIONS OF RULE 58 OF THE NEW RULES 
21 
OF COURT INSOFAR AS THEY ARE APPLICABLE AND NOT 
22 
INCONSISTENT WITH THE PROVISIONS OF THIS SECTION 
23 
SHALL GOVERN THE ISSUANCE AND DISSOLUTION OF THE 
24 
RESTRAINiNG ORDER OR INJUNCTION CONTEMPLATED IN 
25 
THIS SECTION." 
26 
27 
SEC. 28. A new section entitled Se~tion 88-C is hereby inserted in the same Act to 
28 
read as follows: 
29 
29 


1 
"SEC. 88-C. RIGHT OF REDEMPTION OF FORECLOSED REAL 
2 
PROPERTY; RIGHT OF POSSESSION DURING REDEMPTION 
3 
PERIOD. -
THE MORTGAGOR SHALL HAVE THE RIGHT TO 
4 
REDEEM THE PROPERTY WITHIN ONE (1) YEAR FROM THE DATE 
5 
OF FORECLOSURE SALE OF THE REAL ESTATE, IN CASE THE 
6 
MORTGAGOR IS A NATURAL PERSON, AND WITHIN NINETY (90) 
.. 
7 
DAYS BUT NOT LATER THAN THE DATE OF REGISTRATION OF 
8 
THE CERTIFICATE OF FORECLOSURE SALE, IN CASE THE 
9 
MORTGAGOR IS A JURIDICAL PERSON; PROVIDED HOWEVER, 
10 
THAT FORECLOSED REAL PROPERTIES IN THE NAME OF A 
11 
BORROWER BANK, OR OTHER CORPORATE THIRD PARTY 
12 
MORTGAGOR 
WHOSE 
PROPERTIES 
ARE 
DIRECTLY 
13 
MORT~AG.ED TO THE BANGKO SEN;fRAL, PURSUANT TO ACT 
14 
NO. 3135, THE APPLICABLE REDEMPTION PERIOD IS ONE (1) 
15 
YEAR. REDEMPTION SHALL BE EFFECTED BY PAYING THE 
16 
PRINCIPAL, INTERESTS, CHARGES, COMMISSIONS AND ALL 
17 
CLAIMS OF WHATEVER NATURE OF THE BANGKO SENTRAL 
18 
OUTSTANDING AND DUE AS OF THE DATE OF FORECLOSURE 
19 
SALE, 
INCLUDING 
ALL 
COSTS 
AND 
OTHER 
EXPENSES 
20 
INCURRED BY REASON OF THE FORECLOSURE SALE AND 
21 
CUSTODY OF THE PROPERTY. 
22 
"THE 
BANGKO 
SENTRAL, 
AS 
PURCHASER IN THE 
23 
FORECLOSURE SALE AND WITHOUT NEED OF POSTING A 
24 
BOND, MAY TAKE POSSESSION OF THE FORECLOSED PROPERTY 
25 
DURING THE REDEMPTION PERIOD. THE BANGKO SENTRAL 
26 
SHALL BE ENTITLED TO THE FRUITS OF THE PROPERTY, THE 
27 
SAME TO BE APPLIED AGAINST THE REDEMPTION PRICE." 
28 
30 


1 
SEC. 29. A new section entitled Section 88-D is hereby inserted in the same Act to 
2 
read as follows: 
3 
4 
"SEC. 88-D. UNSECURED BANGKO SENTRAL CLAIMS. - ALL 
5 
UNSECURED CLAIMS OF THE BANGKO SENTRAL SHALL BE 
6 
CONSIDERED PREFERRED CREDITS SIMILAR TO TAXES DUE TO 
7 
THE NATIONAL GOVERNMENT IN THE ORDER OF PREFERENCE 
8 
UNDER ARTICLE 2244 OF THE NEW CIVIL CODE." 
9 
10 
SEC. 30. A new section entitled Section 89-A is hereby inserted in the same Act to 
11 
read as follows: 
12 
13 
"SEC. 89-A. FINANCIAL FACILITIES FOR ISLAMIC BANKS. -
14 
THE BANGKO SENTRAL MAY, TAKING INTO CONSIDERATION 
15 
THE PECULIAR CHARACTERISTICS OF ISLAMIC BANKING, 
_ 16 
FORMULATE RULES AND REGULATIONS FOR THE EXTENSION 
17 
OF FINANCIAL FACILITIES TO ISLAMIC BANKS PROVIDED 
18 
SUCH EXPOSURES SHALL BE PROPERLY SECURED." 
19 
20 
SEC. 31. A new section entitled Section 89-B is hereby inserted in the same Act to 
21 
read as follows: 
22 
23 
"SEC. 
89-B. 
LOANS 
TO 
THE 
PHILIPPINE 
DEPOSIT 
24 
INSURANCE 
CORPORATION. 
THE 
BANGKO 
SENTRAL, 
25 
PURSUANT TO ITS MANDATE OF MAINTAINING FINANCIAL 
26 
STABILITY, 
MAY 
LEND 
TO 
THE 
PHILIPPINE 
DEPOSIT 
, 
27 
INSURANCE CORPORATION FUNDS FOR INSURANCE PURPOSE 
, 
. 
28 
AND FOR FINANCIAL ASSISTANCE THAT THE LATTER IS 
29 
AUTHORIZED TO EXTEND UNDER SECTION 17(0) OF REPUBLIC 
31 


1 
2 
3 
4 
5 
6 
7 
8 
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10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
.' 
ACT NO. 3591, AS AMENDED, TO AN INSURED BANK IN DANGER 
OF CLOSING IN ORDER TO MINIMIZE LOSSES TO ITS 
DEPOSITORS AND CREDITORS. NOTWITHSTANDING SECTION 
18 OF REPUBLIC ACT NO. 3591, AS AMENDED, THE MONETARY 
BOARD SHALL PRESCRIBE INTEREST RATES AND SUCH OTHER 
TERMS AND CONDITIONS OF THE LOAN." 
SEC. 32. Section 92 of the same Act is hereby amended to read as follows: 
"SEC. 92. Issue and Negotiation of Bangko Sentral Obligations. -
In 
order to provide the Bangko Sentral 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 Sentra/. 
[:Provided, That i~suance of such certificates of indebtedness shall be made 
only in' cases of extraordinary movement in price levels.] Said evidences 
of indebtedness may be issued directly against the international reserve of 
the Bangko Sentral or against the securities which it has acquired under the 
provisions of Section 91 of this Ac!, 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 advis;ble, 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 Banglco 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 
. . 
32 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
.. 
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. 33 .. 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,' thr'ough 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 in(1ude, but need not be limited to, bankers 
acceptances, promissory notes, participations, certificates of assignment 
and similar instruments with recourse, and repurchase agreements. THE 
TERM 'PUBLIC' MEANS BORROWING FROM TWENTY (20) OR 
MORE LENDERS AT ANY ONE TIME. FOR THIS PURPOSE, 
"LENDERS" SHALL REFER TO INDIVIDUALS AND CORPORATE 
ENTITIES 
THAT 
ARE 
NOT 
ACTING 
AS 
FINANCIAL 
INTERMEDIARIES, SUBJECT TO THE SAFEGUAR DS 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. 34. Section 101 of the same Act is hereby amended to read as follows: 
33 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
"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 deficie~cy or the prevailing ninety-one-
day treasury bill rate plus three percentage points, whichever is higher: 
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 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 
• 
deficie!,\cy p~nalties 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 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. 35. Section 104 of the same Act is hereby amended to read as follows; 
34 


1 
"SEC. 104. Guiding Principle. -
The Monetary Board shall use the 
2 
powers granted to it under this Act to ensure that the supply, availability 
3 
and cost of money are in accord with the needs of the Philippine economy 
4 
and that bank credit is not granted for speculative purposes prejudicial to 
5 
the national interests. Regulations on bank operations shall be applied to 
6 
all banks of the same category AS MAY BE DEFINED BY THE 
7 
MONETARY BOARD uniformly and without discrimination." 
8 
9 
SEC. 36. Section 108 of the same Act is hereby amended to read as follows: 
10 
11 
"SEC. 108. Minimum Capital Ratios. -
The Monetary Board may 
12 
prescribe minimum RISK-BASED CAPITAL ADEQUACY ratios BASED 
13 
ON INTERNATIONALLY ACCEPTED STANDARDS [which the 
14 
capital and surplus of the banks must bear to the volume of their assets, 
15 
or to specific categories thereof,] and may alter said ratios whenever it 
16 
deems necessary. IN THE EXERCISE OF ITS AUTHORITY UNDER 
17 
THIS SECTION, THE MONETARY BOARD MAY PRESCRIBE A 
18 
HIGHER 
MINIMUM 
CAPITAL 
ADEQUACY 
RATIO 
FOR 
19 
DIFFERENT BANK CATEGORIES AS MAY BE WARRANTED BY 
20 
THEIR RISK PROFILE." 
21 
22 
SEC. 37. Section 113 of the same Act is hereby amended to read as follows: 
23 
24 
"SEC. 113. Official Deposits. -
The Bangko Sentral shall be the 
25 
official depository of the Government, its political subdivisions and 
26 
instrumentalities as well as of government-owned or -controlled 
27 
corporations and, as a general policy, their cash balances should be 
. . 
28 
deposited with the Bangko Sentral, with only minimum working balances 
29 
to be held by government-owned banks and such other banks 
35 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
incorporated in the Philippines as the Monetary Board may designate, 
subject to such rules and regulations as the Board may prescribe: 
Provided, That such bank~ 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. 
"The Bangko Sentra! 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 SENTRAL-SUPERVISED INSTITUTIONS." 
SEC. 38. Section 125 of the same Act is hereby amended to read as follows: 
"SEe. 125. TAX EXEMPTIONS. -
The Bangleo Sentra! shall be 
exempt [for a period of five (5) years from the approval 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 Sentra!, to the resources, 
receipts, expenditures, profits and income of the Bangleo Sentral, as well as 
to all contracts, deeds, documents and transactions related to the conduct 
of the business of the Bangko Sentra!: Provided, however, That said 
exemptions shall apply only to such taxes, fees, charges and assessments 
for which the Bangleo Sentral itself would otherwise be liable, and shall not 
apply to taxes, fees, charges, or assessments payable by persons or other 
entities doing business with the Bangko Sentra!: Provided, further, That 
foreign loans and other obligatio,:s of the Bangleo Sen Ira! shall be exempt, 
both as to principal and fnterest, from any and all taxes if the payment of 
such taxes has been assumed by the Bangko Sentra!." 
36 


1 
2 
SEC. 39. Section 128 of the same Act is hereby amended to read as follows: 
3 
4 
"SEC. 128. Prohibitions. -
The Bangko Sen/tal shall not acquire 
5 
shares of any kind or accept them as collateral, and shall not participate in 
6 
the ownership or management of any enterprise, either directly or 
.. 
7 
indirectly; [.] PROVIDED, THAT THIS PROHIBITION SHALL NOT 
8 
APPLY WHENEVER THE MONETARY BOARD, BY A VOTE OF AT 
9 
LEAST FIVE (5) OF ITS MEMBERS, DEEMS AN ACQUISITION OR 
10 
INVESTMENT TO BE NECESSARY TO QUALIFY OR AS REQUIRED 
11 
FOR MEMBERSHIP 
IN 
INTERNATIONAL 
AND 
REGIONAL 
12 
ORGANIZATIONS. 
13 
"The Bangko Sentral shall not engage in development banking or 
. 
. 
. 
14 
financing: Provided, however, That outstanding loans obtained or extended 
15 
for development financing shall not be affected by the prohibition of this 
16 
section," 
17 
18 
SEC. 40. Repealing Clause. All provisions of existing laws, orders, rules and 
19 
regulations, or parts thereof which are in conflict or inconsistent with the provisions of 
20 
this Act are hereby repealed, amen?ed or modified accordingly. 
21 
22 
SEC. 41. Separability Clause. If any provision or section of this Act is held to be 
23 
unconstitutional or invalid, the other provisipns or sections hereof, which are not 
24 
affected thereby shall continue to be in full force and effect. 
25 
26 
SEC. 42. Effectivity. This Act shall take effect fifteen (15) days following its 
27 
publication in the Official Gazette or in a newspaper of general circulation in the 
28 
Philippines. 
37 
..