SIXTEENTH CONGRESS OF THE) 
REPUBliC OF THE PHILIPPINES) 
First Regular Session 
} 
'14 
JUN -3 A 9 :46 
SENATE 
S, B. No. 2268 
Introduced by Senator Sergio Osmeiia III 
AN ACT AMENDING REPUBLIC ACT NUMBERED THREE THOUSAND FIVE 
HUNDRED NINETY-ONE:, AS AMENDED, 
AND OTHER RElATED LAWS, TO 
ENHANCE THE RESOLUTION AND LIQUIDATION FRAMEWORK FOR BANKS AND 
BANKING 
INSTITUTIONS, 
AND 
TO 
STRENGTHEN 
THE 
INDEPENDENCE, 
AUTHORITY AND FINANCIAl CAPABILITY OF THE PHILIPPINE DEPOSIT 
INSURANCE CORPORATION, AND FOR OTHER PURPOSES 
EXPLANATORY NOTE 
The spate of bank closures in the last five (5) years has seriously affected the 
savings and/or business processes of countless individuals, families and businesses. 
The unsuccessful attempts by the POIC to rehabilitate many of these banks after they 
have been ordered closed has brought to forefront the need for a preventive regulatory 
framework to help troubled banks before they are closed. 
An efficient and stronger bank resolution framework is needed that would ensure 
that all efforts will have been exhausted to save a failing bank before it is ordered 
closed. This will minimize disruption of critical banking functions. Should closure still be 
imminent, despite these efforts, the resolution framework should clothe the regulators 
with the necessary authority to minimize the negative impact of bank closures on the 
stability of the banking system and its adverse repercussions on the depositing public. 
An effective bank resolution and liquidation framework would better protect the 
interests of the bank's depositors and other creditors. A more prompt settlement of 
deposit insurance claims will further promote public confidence in the banking system. 
On the other hand, a mom efficient bank liquidation process would enhance recovery by 
depositors and creditors of their claims against the assets of the closed bank. 
The bill introduces much needed reforms in the charter of the Philippine Deposit 
Insurance Corporation (pole). It seeks to address the concerns and gaps to make 
1 
·····f 


POIC a more effective anci efficient insurer of deposits consistent with international best 
practices. The highlights of this measure include: 
1. A New Resolution Framework to deal with problem banks and removal of 
the 90-day receivership period- The proposed framework is based on the principle 
that bank rehabilitation should commence while the bank is still open so that it would be 
less disruptive to the system and recovery for all creditors is enhanced. 
Based on . 
experience, successful rehabilitation after foreclosure is practically nil in view of the 
significantly deteriorated financial position of banks. Under this proposal, the resolution 
authority of PDIC would be triggered upon failure of Prompt Corrective Action (PCA) or 
upon request of the problem bank to be placed under resolution. A seamless transition 
from closure to liquidation by removing the gO-day receivership period is likewise 
proposed in order to facilitate the settlement of the claims of depositors and other 
creditors against the assets of the closed bank. 
2. An Enhanced IUquidation Authority. -
In the event of bank closure, the 
challenge is to be able to preserve critical banking functions and enhance the recovery 
of creditor claims against the assets of the closed bank. Towards this end, POIC's 
mandate as bank liquidator needs to be enhanced by making available other modes of 
liquidating a closed bank, such as, Purchase of Assets and/or Assumption of Liabilities, 
and Bridge Banking. This will increase the chances of recovery of depositors and other 
creditors. 
3. Deposit Insuralilce Amendments and Limited Access to Deposits. - pOle 
seeks to authorize banks to disclose deposit information and data to pOle for deposit 
insurance purposes only, and subject pOle to the same prohibitions under existing 
bank secrecy laws. 
Moreover, to contain moral hazard and enforce market discipline, 
pOle seeks authority to terminate deposit insurance status of banks which do not 
comply with its directives. pOle likewise proposes to have the authority to charge risk-
based premium and impose special assessments under certain specified conditions in 
the law. 
4. Governance and Institutional Capability Building Measures. - To carry out 
these enhanced responsibilities, there is a need to strengthen POIC structurally and 
operationally. It should also be able to expand its investment alternatives to enable it to 
better manage the Deposit Insurance Fund . 
. 2 


5. Additional Sanctions and Increased Penalty. -
Increased penalties are 
proposed for various offE~nses, including performing acts inimical to the interest of a 
bank. New offenses are likewise penalized, such as filing a fictitious and/or fraudulent 
claim, certifying the validity of fictitious deposit liabilities, and bank fraud. 
The proposed amendments will contribute to a resilient financial system that can 
more effectively deal with bank failures. What we have before us is an opportunity to 
advance and to apply the lessons learned, not only from the recent global financial 
crisis, but also from the experiences of the past and to adopt international best practices 
in the field of deposit insurance, bank resolution and liquidation. The power of legislative 
inpovation as well as thB benefit of hindsight permit us to fortify that which proved 
advantageous and to reform those which proved deficient in maintaining the stability of 
our financial system. 
Thus, the approval of this bill is earnestly sought. 
3 
;4,~~ 
SERGIO OSMENA III 
Senator 


SIXTEENTH CONGRESS OF THE) 
REPUBLIC OF THE PHILIPPINES) 
First Regular Session 
) 
SENATE 
S. B. No. 2268 
Introduced by Senator Sergio Osmena III 
Sl'twtl' 
(i)th;r uf t~e ,~fftVI~t~ 
'14 
JUN -3 119 :46 
AN ACT AMENDING REPUBLIC ACT NUMBERED THREE THOUSAND FIVE 
HUNDRED NINETY-ONE:. AS AMENDED. 
AND OTHER RELATED LAWS, TO 
ENHANCE THE RESOLUTION AND LIQUIDATION FRAMEWORK FOR BANKS AND 
BANKING 
INSTITUTIONS, 
AND 
TO 
STRENGTHEN 
THE 
INDEPENDENCE, 
AUTHORITY AND FINANCIAL CAPABILITY OF THE PHILIPPINE DEPOSIT 
INSURANCE CORPORATION, AND FOR OTHER PURPOSES 
Be it enacted by the S(~nate and House of Representatives of the Philippines in 
Congress assembled: 
1 
SECTION 1. Section 1 of Republic Act No. 3591, as amended, is' hereby 
2 
amended to read as follows: 
3 
"THE CREATION OF THE 
4 
PHILIPPINE DEPOSIT INSURANCE CORPORATION 
5 
SECTION 1. -
T~\ere is hereby created a Philippine Deposit Insurance 
6 
Corporation hereinafter referred to as the "Corporation" which shall insure 
7 
as herein provided, the deposits of all banks which are entitled to the 
8 
benefits of insurance under this Act, and which shall have the powers 
9 
hereinafter granted. 
10 
The Corporation shall, as a basic policy, promote and safeguard the 
11 
interests of the depositing public by [way of] providing [permanent and 
12 
continuing] insurance coverage on all insured depOSits AND HELPING 
1 


1 
MAINTAIN A SOlJlND AND STABLE BANKING SYSTEM THROUGH 
2 
THE ADOPTION OF BANK RESOLUTION MEASURES." 
3 
SECTION 2. A new section entitled Section 2 of the same Act shall be inserted 
4 
between Sections 1 and 3 which shall read as follows: 
5 
"STATE POLICY 
6 
SECTION 2. - IT IS HEREBY DECLARED TO BE THE POLICY OF THE 
7 
STATE TO STRENGTHEN THE MANDATORY DEPOSIT INSURANCE 
8 
COVERAGE SYSTEM TO GENERATE, PRESERVE, MAINTAIN FAITH 
9 
AND CONFIDENCE IN THE COUNTRY'S BANKING SYSTEM, AND 
10 
PROTECT IT FROIIIIILLEGAL SCHEMES AND MACHINATIONS. 
11 
TOWARDS THIS END, THE GOVERNMENT MUST EXTEND ALL 
12 
MEANS AND MECHANISMS NECESSARY FOR THE CORPORATION 
13 
TO EFFECTIVELY FULFILL ITS VITAL TASK OF PROMOTING AND 
14 
SAFEGUARDING THE INTERESTS OF THE DEPOSITING PUBLIC BY 
IS 
WAY OF PROVIDING INSURANCE COVERAGE ON BANK DEPOSITS 
16 
AND IN HELPING DEVELOP A SOUND AND STABLE BANKING 
17 
SYSTEM. 
18 
IN VIEW OF THIE CRUCIAL ROLE AND THE NATURE OF THE 
19 
FUNCTIONS AND RESPONSIBILITIES OF THE CORPORATION AS 
20 
DEPOSIT INSURER, STATUTORY RECEIVER, AND CO-REGULATOR 
21 
OF BANKS, THE CORPORATION, WHILE BEING A GOVERNMENT 
22 
INSTRUMENTALITY WITH CORPORATE POWERS, SHALL ENJOY 
23 
FISCAL AND ADMINISTRATIVE AUTONOMY. THE CORPORATION 
24 
SHALL BE EXEMPT FROM ALL EXISTING LAWS, RULES AND 
25 
REGULATIONS ON COMPENSATION, POSITION CLASSIFICATION 
2 


1 
AND QUALIFICATION STANDARDS INCLUDING, BUT NOT LIMITED 
2 
TO PRESIDENTIAIL DECREE NO. 985, PRESIDENTIAL DECREE NO. 
3 
1597, REPUBLIC ACT NO. 6758 AS AMENDED, JOINT RESOLUTION 
4 
NO.4 (2009), AND REPUBLIC ACT NO. 10149." 
5 
SECTION 3. Section 2 of the same Act is accordingly renumbered as Section 3 
6 
and is hereby amended to read as follows: 
7 
"BOARD OF DIRECTORS: COMPOSITION AND AUTHORITY 
8 
SECTION 3. (A) The powers and functions of the Corporation shall be 
9 
vested in and exercised by a Board of Directors which shall be composed 
10 
of SEVEN (7) [five {5)] members as follows: 
11 
[(a)] 1) The Secretary of Finance who shall be the ex-officio Chairman of 
12 
the Board without compensation. 
13 
[(b)] 2) The Governor of the Bangko Sentra/ ng Pilipinas, who shall be ex-
14 
officio member of the Board without compensation. 
15 
[(c)] 3) The President of the Corp?ration, who shall be appointed by the 
16 
President of the Philippines [from either the Government or private 
17 
sector] to serve on a full-time basis for a term of six (6) years. The 
18 
President of the Corporation shall also serve as Vice Chairman of 
19 
the Board. 
20 
[(d)] 4) FOUR (4) [Two (2)] members from the private sector, to be 
21 
appointed BY THE PRESIDENT OF THE PHILIPPINES for a term 
22 
of six (6) years SUBJECT TO ONLY ONE [without] reappointment 
23 
[by the President of the Philippines]: Provided, That of those first 
24 
appointed, the first lWO appointeeS shall serve for a period of [two 
25 
(2)] THREE (3) years. 
3 


1 
ANY VACANCY 1111 THE BOARD OF DIRECTORS CREATED BY THE 
2 
DEATH, 
RESIGNATION, 
OR REMOVAL OF ANY APPOINTIVE 
3 
MEMBER SHALL BE FILLED BY THE APPOINTMENT OF A NEW 
4 
MEMBER TO COMPLETE THE UNEXPIRED PERIOD OF THE TERM 
5 
OF THE MEMBER CONCERNED. 
6 
No person shall be appointed as member of the Board unless he be of 
7 
good moral character, of unquestionable integrity and responsibility, OF 
8 
KNOWN PROBITY AND PATRIOTISM, and who is of recognized 
9 
competence in economics, banking and finance, law, management 
10 
administration or insurance, and shall be at least thirty-five (35) years of 
11 
age. For the duration of their tenure or term in office and for a period of 
12 
one year thereafter, the appointive members of the Board shall be 
13 
disqualified from holding any office, position or employment in any insured 
14 
banI<. 
15 
The Secretary of Finance and the Governor of the Bangko Sentra/ may 
16 
each designate a representative, whose position Shall not be lower than 
17 
an undersecretary or deputy governor respectively, to attend such 
18 
meetings and to vote on behalf of their respective principals. Whenever 
19 
the Chairman of the Board is unable to attend a meeting of the Board, or 
20 
in the event of a vacancy in the office of the Secretary of Finance, the 
21 
President of the Corporation shall act as Chairman. 
22 
THE PRESIDENT OF THE PHILIPPINES MAY REMOVE ANY 
23 
APPOINTIVE MEMBER OF THE BOARD OF DIRECTORS FOR ANY 
24 
OF THE FOLLOWING REASONS: 
4 


1 
2 
3 
4 
5 
6 
7 
8 
9 
1) IF HE IS PHYSICALLY OR MENTALLY INCAPACITATED THAT 
HE CANNOT PROPERLY DISCHARGE HIS DUTIES AND 
RESPONSIBILITIES, AND SUCH INCAPACITY HAS LASTED 
FOR MORE THAN SIX (6) MONTHS; OR 
2) IF THE MEMBER IS GUILTY OF ACTS OR OPERATIONS 
WHICH ARE: OF FRAUDULENT OR ILLEGAL CHARACTER OR 
WHICH ARE MANIFESTLY OPPOSED TO THE AIMS AND 
INTERESTS OF THE CORPORATION; OR 
3) IF 
THE 
MEMBER 
NO 
LONGER 
POSSESSES 
THE 
10 
QUALIFICATIONS SPECIFIED IN THIS ACT. 
11 
The presence of FOUR (4) [three (3)] members shall constitute a quorum. 
12 
All decisions of the Board of Directors shall require the concurrence of at 
13 
least FOUR (4) [three (3)] members. 
14 
The Secretary of Finance shall fix the rate of per diem for every Board 
15 
meeting attended by the members of the Board of Directors from the 
16 
private sector, AND THEIR OTHER EMOLUMENTS, INCLUDING 
17 
PERFORMANCE IINCENTIVES, SUBJECT TO REVIEW EVERY TWO 
18 
(2) YEARS. [The President of the Philippines may fix such emoluments 
19 
that may be received by the Board of Directors comparable to the 
20 
emoluments of members of the Board of Directors of other government 
21 
financial institutions]. 
22 
IN ADDITION TO THE REQUIREMENTS OF REPUBLIC ACT NO. 6713, 
23 
ANY MEMBER OIF THE BOARD OF DIRECTORS WITH PERSONAL 
24 
OR PECUNIARY INTEREST IN ANY MATTER IN THE AGENDA OF 
25 
THE BOARD OF DIRECTORS SHALL DISCLOSE HIS INTEREST TO 
26 
THE BOARD AND SHALL RETIRE FROM THE MEETING WHEN THE 
27 
MATTER IS TAKEN UP. THE MINUTES SHALL REFLECT THE 
5 


1 
DISCLOSURE MADE AND THE RETIREMENT OF THE MEMBER 
2 
CONCERNED. 
3 
(B) The Board of Directors shall have the authority: 
4 
1. To APPROVE {prepare] and issue rules and regulations FOR 
5 
BANKS AND THE DEPOSITING PUBLIC as it considers 
6 
necessary for the effective discharge of its responsibilities; 
7 
2. To 
ACT 
.AS 
THE 
POLICY-MAKING 
BODY 
OF 
THE 
8 
CORPORATION AND CONSTITUTE BOARD COMMITTEES TO 
9 
OVERSEE [direct] the management, operations and administration 
10 
of the Corporation; 
11 
3. To establish a human resource management system which shall 
12 
govern the selection, hiring, appointment, transfer, promotion, or 
13 
dismissal of [all] personnel. Such system shall aim to establish 
14 
professionalism and excellence at all levels of the Corporation in 
15 
accordance with sound principles of management;[.] 
16 
4. TO APPROVE, [A] a compensation structure[,]AS AN INTEGRAL 
17 
COMPONENT OF THE CORPORATION'S HUMAN RESOURCE 
18 
DEVELOPMENT PROGRAM based on job evaluation studies and 
19 
wage surveys, AND REVISE THE SAME FROM TIME TO TIME 
20 
AS IT MAY DEEM NECESSARY [and subject to the Board's 
21 
approval, shall be, instituted as an integral component of the 
22 
Corporation's human resource development program): Provided, 
23 
That all positions in the Corporation shall be governed by a 
24 
compensation, position classification system and qualification 
6 


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 
standards approved by the Board based on a comprehensive job 
analysis and audit of actual duties and responsibilities. The 
compensation STRUCTURE [plan] shall be comparable TO THAT 
OF THE BANGKO SENTRAL, AND SHALL PROVIDE FOR 
YEARLY MERIT REVIEWS OR INCREASES BASED ON 
PRODUCTIVITY [with the prevailing compensation plans of other 
government financial institutions and shall be subject to review by 
the Board no more than once every two (2) years without prejudice 
to yearly merit reviews or increases based on productivity and 
profitability]. The Corporation shall therefore be exempt from 
existing laws, rules and regulations on compensation, position 
classification and qualification standards, SUCH AS, BUT NOT 
LIMITED 
TO, 
PRESIDENTIAL 
DECREE 
NO. 
985, 
PRESIDENTIAL DECREE NO. 1597, REPUBLIC ACT NO. 6758, 
AS AMEN[)ED, JOINT RESOLUTION NO. 4 (2009), AND 
REPUBLIC ACT NO. 10149. It shall however endeavor to make 
its system conform as closely as possible with the principles under 
Republic Act No. 6758, as amended. 
(4.] 5. To appoint, establish the rank, fix the remuneration, BENEFITS, 
INCLUDING HEALTH CARE SERVICES THROUGH A HEALTH 
MAINTENANCE 
ORGANIZATION 
(HMO) 
AND 
MEDICAL 
BENEFITS OTHER THAN THOSE PROVIDED FOR UNDER 
REPUBLIC ACT NO. 7875, AS AMENDED, [approve local and 
foreign training of,] and remove any officer or employee of the 
Corporation, for cause, subject to pertinent civil service laws: 
Provided, That the Board of Directors may delegate this authority to 
the 
Presid~~nt subject 
to 
specific 
guidelines; 
PROVIDED, 
, 
FURTHER, THAT IN NO CASE SHALL THERE BE ANY 
7 


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 
DIMINUTION OF EXISTING SALARIES, BENEFITS AND OTHER 
EMOLUMENTS; 
6. 
TO APPROVE POLICY ON LOCAL AND FOREIGN TRAVEL, 
AND THE CORRESPONDING EXPENSES, ALLOWANCES AND 
PER DIEMS, OF OFFICERS, EMPLOYEES, AGENTS OF THE 
CORPORATION, WHICH SHALL BE COMPARABLE WITH THE 
EXPENSES, ALLOWANCES AND PER DIEMS OF PERSONNEL 
OF THE 
IBANGKO SENTRAL, 
NOTWITHSTANDING 
THE 
PROVISIONS 
OF 
PRESIDENTIAL 
DECREE 
NO. 
1177, 
EXECUTIVE. ORDER NO. 292, EXECUTIVE ORDER NO. 248, AS 
AMENDED, EXECUTIVE ORDER NO. 298, AND SIMILAR LAWS; 
[5] 7. To adopt an annual budget for, and authorize such expenditures 
by the Corporation, as are in the interest of the effective 
administration and operation of the Corporation; 
[6] 8. To approve the TARGET LEVEL OF THE DEPOSIT INSURANCE 
FUND AND THE methodology for determining [the level and 
amount of] RESERVES [provisioning] for insurance and financial 
assistance losses [,which shall 
establish reasonable levels of 
deposit insurance reserves.]; 
[7] 9. To review the organizational set-up of the Corporation and adopt 
a new or revised organizational structure AT ANY TIME as it may 
deem necessary for the Corporation to undertake its mandate and 
functions;[.] 
10. TO DESIGN, ADOPT AND REVISE, FROM TIME TO TIME AS IT 
MAY DEEM NECESSARY, AN EARLY SEPARATION PLAN FOR 
8 


1 
EMPLOYEES 
OF 
THE 
CORPORATION 
TO 
ENSURE 
2 
AVAILABILITY OF A HUMAN RESOURCE POOL QUALIFIED 
3 
AND CAPABLE OF IMPLEMENTING THE CORPORATION'S 
4 
AUTHORITIIES 
UNDER THIS 
CHARTER IN 
A 
MANNER 
5 
RESPONSIVE AND ATTUNED TO MARKET DEVELOPMENTS, 
6 
AND TO PROVIDE INCENTIVES FOR ALL THOSE WHO SHALL 
7 
RETIRE 
OR 
BE 
SEPARATED 
FROM 
THE 
SERVICE. 
8 
NOTWITHSTANDING ANY LAW TO THE CONTRARY, THESE 
9 
INCENTIVES SHALL BE IN ADDITION TO ALL GRATUITIES 
10 
AND BENEFITS THE EMPLOYEE IS ENTITLED TO UNDER 
11 
EXISTING LAWS; AND 
12 
11. TO PROMOTE AND SPONSOR THE LOCAL OR FOREIGN 
13 
TRAINING lOR STUDY OF PERSONNEL IN THE FIELDS OF 
14 
BANKING, 
FINANCE, 
MANAGEMENT, 
INFORMATION 
15 
TECHNOLOGY 
AND 
LAW. 
TOWARD 
THIS 
END, 
THE 
16 
CORPORAnON IS HEREBY AUTHORIZED TO DEFRAY THE 
17 
COSTS OF SUCH TRAINING OR STUDY. THE BOARD SHALL 
18 
PRESCRIBE RULES AND REGULATIONS TO GOVERN THE 
19 
TRAINING OR STUDY PROGRAMS OF THE CORPORATION." 
20 
SECTION 4. Section 3 of the same Act is accordingly renumbered as Section 4. 
21 
SECTION 5. The first paragraph of Section 4 of the same Act, as renumbered, is 
22 
h€lreby amended to read as follows: 
23 
"PRESIDENT OF THE CORPORATION 
24 
COMPENSATION, POWERS AND DUTIES 
9 


1 
SECTION [3] 4. The President of the Corporation shall be ITS [the] Chief 
2 
Executive [thereof]. THE PRESIDENT OF THE PHILIPPINES, UPON 
3 
THE RECOMMENDATION OF THE SECRETARY OF FINANCE, SHALL 
4 
FIX THE [and his) salary, ALLOWANCES, BENEFITS AND OTHER 
5 
EMOLUMENTS OF THE PRESIDENT OF THE CORPORATION [shall be 
6 
fixed by the President of the Philippines,] at a sum commensurate to the 
7 
importance and responsibility attached to the position, AND SHALL 
8 
REVIEW AND ADJUST SUCH SALARY, ALLOWANCES, BENEFITS 
9 
AND OTHER EMOILUMENTS EVERY TWO (2) YEARS. The sum total of 
10 
the salary, ALLOWANCES, BENEFITS [of the President and the 
11 
allowances] and other emoluments OF THE PRESIDENT OF THE 
12 
CORPORATION [which the Board of Directors may grant him] shall be 
13 
the ceiling for fixing the salary, allowances and other emoluments of all 
14 
other personnel in the Corporation. 
15 
SECTION 6. Section 4, paragraphs (d) and (f), of the same Act, as renumbered, 
16 
are hereby amended to read as follows: 
17 
"(d) To represent the Corporation[, upon prior authority of the 
18 
Board,] in all dealings with other offices, agencies and instrumentalities of 
19 
the government and with all other persons or entities, public or private, 
20 
whether domestic, Ioreign or international; 
21 
(f) To represent the Corporation, either personally or through 
22 
counsel, INCLUDING PRIVATE COI,.INSEL, AS MAY BE AUTHORIZED 
23 
BY THE PDIC BOARD, in ANY [all] legal proceeding or action;" 
24 
SECTION 7. Section 4 of the same Act is accordingly renumbered as Section 5, 
25 
and is hereby amended to read as follows: 
10 


1 
"DEFINITION OF TERMS 
2 
SECTION [4] 5. As used in this Act -
3 
(A) THE 
TERM 
"ASSET" 
SHALL 
REFER 
TO 
MOVABLE, 
4 
IMMOVABLE, TANGIBLE, OR INTANGIBLE RESOURCES OR 
5 
PROPERTIES OVER WHICH A BANK HAS AN ESTABLISHED OR 
6 
EQUITABLE INTEREST, INCLUDING THE PROCEEDS OF THE 
7 
SALE OF ITS BANK AND BRANCH LICENSES. 
8 
(B) THE TERM "ASSET DISTRIBUTION PLAN" OR "ADP" SHALL 
9 
REFER TO THIE PLAN OF DISTRIBUTION OF THE ASSETS OF A 
10 
CLOSED BANK TO ITS CREDITORS, BASED ON ITS ESTIMATED 
11 
REALIZABLE VALUE AS OF A CERTAIN CUT-OFF DATE, 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
PREPARED 
liN 
ACCORDANCE 
WITH 
THE 
RULES 
ON 
CONCURRENCE AND PREFERENCE OF CREDITS UNDER THE 
CIVIL CODE OR OTHER LAWS. 
AN ADP MAY BE PARTIAL WHEN IT PERTAINS TO THE 
DISTRIBUTION OF A PORTION OR SOME OF THE ASSETS OF 
THE CLOSED BANK, OR FINAL WHEN IT PERTAINS TO THE 
DISTRIBUTION OF ALL THE ASSETS OF THE CLOSED BANK. 
(C) [(a)] The term "Board of Directors" means the Board of Directors of 
the Corporation. 
(D) [(b)] The term "Bank" 
and "Banking 
Institution" shall 
be 
synonymous and interchangeable and shall include banks, commercial 
banks, savings bank, mortgage banks, rural banks, development 
banks, cooperative banks, stock savings and loan associations and 
11 


1 
2 
3 
4 
branches and a!Jencies in the Philippines of foreign banks and all other 
corporations 
authorized 
to 
perform 
banking functions 
in 
the 
Philippines. 
(E) THE 
TERM 
"BRIDGE 
BANK" 
SHALL 
REFER 
TO 
A 
5 
CORPORATION THAT IS LICENSED BY THE BANGKO SENTRAL 
6 
TO OPERATE AS A TEMPORARY BANK, ESTABLISHED AND 
7 
OPERATED TO ACQUIRE ASSETS AND ASSUME THE INSURED 
8 
DEPOSITS OF A CLOSED BANK. 
9 
(F) THE TERM "CLOSED BANK" SHALL REFER TO A BANK 
10 
PLACED UNDER LIQUIDATION BY THE MONETARY BOARD. 
11 
(G) THE TERM "CREDITOR" SHALL REFER TO ANY INDIVIDUAL 
12 
OR ENTITY WITH A VALID CLAIM AGAINST THE ASSETS OF THE 
13 
CLOSED BANK. 
14 
[(c) The term "receiver" includes a receiver, commission, person or other 
15 
agency charged bjl law with the duty to take charge of the assets and 
16 
liabilities of a bank which has been forbidden from doing business in the 
17 
Philippines, as well as the duty to gather, preserve and administer such 
18 
assets and liabilities for the benefit of the depositors and creditors of said 
19 
bank, and to continue into liquidation whenever authorized under this Act 
20 
or other laws, and to dispose of the assets and to wind up the affairs of 
21 
such bank.] 
22 
[(d) The term "insured bank" means any bank the deposits of which are 
23 
insured in accordance with the provisions of this Act.] 
12 


1 
[(e)] The term "non-insured bank" means any bank the deposits of which 
. 
2 
are not insured.] 
3 
[(f)] (H) The term "deposit" means the unpaid balance of money or its 
4 
equivalent received by a bank in the usual course of business and for 
5 
which it has given or is obliged to give credit to a commercial, checking, 
6 
savings, time or thrift account, EVIDENCED BY A PASSBOOK, CHECK 
7 
AND/OR CERTIFICATE OF DEPOSIT, OR OTHER EVIDENCE OF 
8 
DEPOSIT, issued 
in accordance with 8angko Sentra/ rules and 
9 
regulations and other applicable· laws, together 
with such other 
10 
obligations of a bank, which, consistent with banking usage and practices, 
11 
the Board of Directors shall determine and prescribe by regulations to be 
12 
deposit liabilities of the bank: Provided, That any obligation of a bank 
13 
which is payable at the office of the bank located outside of the 
14 
Philippines shall not be a deposit for any of the purposes of this Act or 
15 
included as part of the total deposits or of insured deposit: Provided, 
16 
further, That, subject to the approval of the Board of Directors, any 
17 
insured bank which is incorporated under the laws of the Philippines 
18 
which maintains a branch outside the Philippines may elect to include for 
19 
insurance its deposit obligations payable only at such branch. 
20 
The Corporation shall not pay deposit insurance[,] for the following 
21 
accounts or transactions [, whether denominated, documented, recorded 
22 
or booked as deposit by the bank]: 
23 
1) Investment products such as bonds and securities, trust accounts, 
24 
and other similar instruments; 
13 


1 
2) Deposit accounts or transactions which are [unfunded, or that are] 
2 
fictitious 
or 
fraudulent 
AS 
DETERMINED 
BY 
THE 
3 
CORPORATION; 
4 
3) Deposit accounts or transactions constituting, and/or emanating 
5 
from, unsafe and unsound banking practice/s, as determined by the 
6 
Corporation, in consultation with the BANGKO SENTRAL [BSP], 
7 
after due notice and hearing, and publication of a DIRECTIVE TO 
8 
cease and desist [order] issued by the Corporation against such 
9 
deposit accounts, transactions OR PRACTICES; and 
10 
4) Deposits that are determined to be the proceeds of an unlawful 
11 
activity as defined under Republic Act 9160, as amended. 
12 
The actions of the Corporation taken under [this] section 5(h) shall be 
13 
final and executory, and may ONLY [not] be restrained or set aside by the 
14 
[court] COURT OF APPEALS, [except] UPON [on] appropriate petition 
15 
for certiorari on the ground that the action was taken in excess of 
16 
jurisdiction or with such grave abuse of discretion as to amount to a lack 
17 
or excess of jurisdiction. The petition for certiorari may only be filed within 
18 
thirty (30) days from notice of denial of claim for deposit insurance. 
19 
(I) THE TERM "'DISPUTED CLAIM" SHALL REFER TO A CLAIM OR 
20 
SUIT AGAINST THE ASSETS OF A CLOSED BANK, OR FOR 
21 
SPECIFIC PERFORMANCE, OR BREACH OF CONTRACT, OR 
22 
DAMAGES, 
OF WHATEVER NATURE OR CHARACTER, 
23 
WHETHER FOR MONEY OR OTHERWISE, LIQUIDATED OR 
24 
UNLIQUIDATED, FIXED OR CONTINGENT, MATURED OR 
25 
CURRENT, DENIED BY THE RECEIVER. 
14 


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 
(J) THE TERM "INSURED BANK" MEANS ANY BANK THE 
DEPOSITS OF WHICH ARE INSURED IN ACCORDANCE WITH 
THE PROVISIONS OF THIS ACT. 
(K) [(g)]The term "insured deposit" means the amount due to any 
bona fide depositor for legitimate deposits in an insured bank 
EXCLUSIVE [net] of any obligation of the depositor to the insured 
bank as of the date of closure, EXCEPT FOR DEPOSITS WHICH 
ARE 
USED 
AS 
SECURITY 
FOR 
LOANS 
OR 
OTHER 
OBLIGATIONS, but not to exceed Five Hundred Thousand Pesos 
(P500,OOO.OO). Such [net] amount shall be determined according to 
such regulations as the Board of Directors may prescribe. In 
determining such amount due to any depositor, there shall be 
added together all deposits in the bank maintained in the same 
right and capacity for his benefit either in his own name or in the 
name of others. A joint account regardless of whether the 
conjunction "and," "or," "and/or" is used, shall be insured separately 
from any individually-owned deposit account: Provided, That (1) If 
the account is held jointly by two or more natural persons, or by two 
or more juridical persons or entities, the maximum insured deposit 
shall be divided into as many equal shares as there are individuals, 
juridical persons or entities, unless a different sharing is stipulated 
in the document of deposit, and (2) if the account is held by" a 
juridical person or entity jointly with one or more natural persons, 
the maximum insured deposit shall be presumed to belong entirely 
to such juridical person or entity: Provided, further, That the 
aggregate of the interest of each co-owner over several joint 
accounts, whether owned by the same or different combinations of 
l5 


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 
individuals, juridical persons or entities, shall likewise be subject to 
the maximum insured deposit of Five Hundred Thousand Pesos 
(P500,OOO.OO): Provided, furthermore, That the provisions of any 
law to the contrary notwithstanding, no owner/holder of any 
PASSBOOK, certificate of deposit, OR OTHER EVIDENCE OF 
DEPOSIT shall be recognized as a depositor entitled to the rights 
provided in this Act unless THE PASSBOOK, CERTIFICATE OF 
DEPOSIT OR OTHER EVIDENCE OF DEPOSIT IS DETERMINED 
BY THE CORPORATION TO BE AN AUTHENTIC DOCUMENT 
OR RECORD of the issuing bank [his name is registered as 
owner/holder thereof in the books]: Provided, finally, That, in case 
of a condition that threatens the monetary and financial stability of 
the banking system that may have systemic consequences, as 
defined in section 23 [17] hereof, as determined by the Monetary 
Board, the maximum deposit insurance cover may be adjusted in 
such amount, for such a period, and/or for such deposit products, 
as may be determined by a . unanimous vote of the Board of 
Directors in· a meeting called for the purpose and chaired by the 
Secretary of Finance, subject to the approval of the President of 
the Philippines. 
(L) 
THE 
TERM 
"LIQUIDATION" 
SHALL 
REFER 
TO 
THE 
PROCEEDINGS UNDER SECTIONS 12 TO 17 OF THIS ACT. 
(M) THE TERM "LIQUIDATION COURT" SHALL REFER TO THE 
REGIONAL. TRIAL COURT OF GENERAL JURISDICTION 
WHERE 
THE 
PETITION 
FOR 
ASSISTANCE 
IN 
THE 
LIQUIDATION OF A CLOSED BANK IS FILED AND GIVEN DUE 
COURSE. 
16 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
(N) THE TERM "PAYOUT" SHALL REFER TO THE PAYMENT OF 
INSURED DEPOSITS. 
(0) THE 
TERM 
"PETITION 
FOR 
ASSISTANCE 
IN 
THE 
LIQUIDATION OF A CLOSED BANK" OR "PAL" SHALL 
REFER TO THE PETITION FILED BY THE RECEIVER WITH 
THE REGIONAL TRIAL COURT (RTC) IN ACCORDANCE 
WITH SEC:TION 17 OF THIS ACT. 
(P) THE TERM "PURCHASE OF ASSETS AND ASSUMPTION OF 
LIABILITIES" OR "P&A" SHALL REFER TO A TRANSACTION 
WHERE AN INSURED BANK PURCHASES ANY OR ALL 
ASSETS AND ASSUMES ANY OR ALL LIABILITIES OF 
ANOTHER BANK UNDER RESOLUTION OR LIQUIDATION, 
AS PROVIDED IN THIS ACT. 
(Q) THE 
TERM 
"RECEIVER" 
SHALL 
REFER 
TO 
THE 
CORPORATION OR ANY OF ITS DULY AUTHORIZED 
AGENTS ACTING AS RECEIVER OF A CLOSED BANK. 
(R) THE TERM "RECORDS" SHALL INCLUDE ALL DOCUMENTS, 
TITLES, PAPERS AND ELECTRONIC DATA OF THE CLOSED 
BANK, 
INCLUDING THOSE PERTAINING TO 
DEPOSIT 
ACCOUNTS OF AND WITH THE CLOSED BANK, ITS 
ASSETS, TRANSACTIONS AND CORPORATE AFFAIRS. 
(S) THE TERM 
"RESIDUAL ASSETS" SHALL 
REFER TO 
ASSETS, IN CASH OR IN KIND, TO BE TURNED OVER TO 
17 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
THE CLOSED BANK'S STOCKHOLDERS OF RECORD, IN 
PROPORTION TO THEIR INTEREST IN THE CLOSED BANK 
AS OF DATE OF CLOSURE, AFTER PAYMENT IN FULL OF 
LIQUIDATION COSTS, FEES AND EXPENSES, AND THE 
VALID CLAIMS AND SURPLUS DIVIDENDS TO ALL THE 
CREDITOIRS. 
(T) THE TERN! "RESOLUTION" SHALL REFER TO THE ACTIONS 
UNDERTAKEN BY THE CORPORATION UNDER SECTION 11 
OF THIS ACT TO: 
1) 
PROTECT 
DEPOSITORS, 
CREDITORS 
AND 
THE 
DEPOSIT INSURANCE FUND; 
2) 
SAFEGUARD 
THE 
CONTINUITY 
OF 
ESSENTIAL 
BANKING SERVICES OR MAINTAIN FINANCIAL STABILITY; 
AND 
3) 
PREVENT DETERIORATION OR DISSIPATION OF BANK 
ASSETS. 
(U) THE TERM "RISK-BASED ASSESSMENT SYSTEM" SHALL 
PERTAIN TO A METHOD FOR CALCULATING AN INSURED 
BANK'S ASSESSMENT ON THE PROBABILITY THAT THE 
DEPOSIT INSURANCE FUND WILL INCUR A LOSS WITH 
RESPECT TO THE BANK, AND THE LIKELY AMOUNT OF 
ANY SUCH LOSS, BASED ON ITS RISK RATING THAT 
TAKES INTO CONSIDERATION THE FOLLOWING-
1) 
QUAILITY AND CONCENTRATION OF ASSETS 
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 
2) 
CATEGORIES AND CONCENTRATION OF LIABILITIES, 
Boni INSURED AND UNINSURED, CONTINGENT AND 
NON-CONTINGENT 
3) 
CAPITAL POSITION 
4) 
LIQUIDITY POSITION 
5) 
MANAGEMENT AND GOVERNANCE 
6) 
OTHER FACTORS RELEVANT TO ASSESSING SUCH 
PROBABILITY, AS MAY BE DETERMINED BY THE 
CORPORATION. 
(V)THE TERM "STATEMENT OF AFFAIRS" OR "SOA" SHALL 
REFER TO A REPORT OF FINANCIAL CONDITION OF THE 
CLOSED BANK AT A GIVEN DATE, SHOWING THE: 1) 
ESTIMATE[) 
REALIZABLE 
VALUE 
OF 
ASSETS; 
2) 
CLASSIFICATION 
OF 
CREDITS; 
AND 
3) 
ESTIMATED 
LIABILITIES TO BE SETTLED. 
(W) THE TERM "SURPLUS DIVIDENDS" SHALL REFER TO THE 
REMAINING ASSETS OF THE CLOSED BANK AFTER 
SATISFAGTION IN FULL OF ALL THE LIQUIDATION COSTS, 
FEES AND EXPENSES, AND VALID CLAIMS. THE SURPLUS 
DIVIDENDS SHALL BE COMPUTED AT THE LEGAL RATE OF 
INTEREST FROM THE DATE OF TAKEOVER TO CUT-OFF 
DATE OF THE DISTRIBUTION PLAN, AND SHALL BE PAID, 
IN CASH OR IN KIND, TO CREDITORS OF THE CLOSED 
BANK 
IN 
ACCORDANCE 
WITH 
THE 
RULES 
ON 
CONCURI~ENCE AND PREFERENCE OF CREDITS UNDER 
THE CIVIL. CODE OR OTHER LAWS. 
19 


1 
(X) THE TERM "TAKEOVER" SHALL REFER TO THE ACT OF 
2 
PHYSICALLY TAKING POSSESSION AND CONTROL OF THE 
3 
PREMISES, ASSETS AND AFFAIRS OF A CLOSED BANK 
4 
FOR THE PURPOSE OF LIQUIDATING THE BANK. 
5 
(Y) [(h)] The term "transfer deposit" means a deposit in an insured 
6 
bank maole available to a depositor by the Corporation as 
7 
payment of insured deposit of such depositor in a closed bank 
8 
and assumed by another insured bank. 
9 
(Z) [(i)l The term "trust funds" means funds held by an insured bank in 
10 
a fiduciary capacity and includes without being limited to, funds 
11 
held as trustee, executor, administrator, guardian or agent. 
12 
(AA)THE TERM 
"VALID CLAIM" REFERS 
TO THE CLAIM 
13 
RECOGNI2~ED BY THE RECEIVER OR ALLOWED BY THE 
14 
LIQUIDATION COURT. 
15 
(BB) THE TERM "WINDING UP PERIOD" SHALL REFER TO THE 
16 
PERIOD IPROVIDED IN SECTION 17 OF THIS ACT." 
17 
SECTION 8. Section 5 of the same Act is accordingly renumbered as Section 6, 
18 
and is hereby amended to read as follows: 
19 
"DEPOSIT INSURANCE COVERAGE 
20 
SECTION 6. The deposit liabilities of any bank [or banking institution,] 
21 
which is engaged in the business of receiving deposits as herein defined 
20 


1 
on the effective date of this Act, or which thereafter may engage in the 
2 
business of receiving deposits, shall be insured with the Corporation. 
3 
THE CORPORATION MAY CONDUCT A PERIODIC INSURANCE RISK 
4 
EVALUATION ON BANKS TO ENABLE IT TO ASSESS THE RISKS TO 
5 
THE DEPOSIT INSURANCE FUND. 
SUCH 
EVALUATION MAY 
6 
INCLUDE THE DETERMINATION OF THE (i) THE. FAIR MARKET 
7 
VALUE OF THE ASSETS AND LIABILITIES OF A BANK, OR (ii) THE 
8 
RISK 
CLASSIFICATION 
OF 
A 
BANK, 
OR 
(iii) 
POSSIBLE 
9 
RESOLUTION 
MODES, 
SUBJECT 
TO 
SUCH 
TERMS 
AND 
IP 
CONDITIONS AS THE PDIC BOARD MAY PRESCRIBIE. 
11 
BANKS, 
THEIR OFFICERS 
AND 
EMPLOYEES 
ARE 
HEREBY 
12 
MANDATED TO DISCLOSE AND REPORT TO THE CORPORATION, 
13 
OR ITS DULY AUTHORIZED OFFICERS OR EMPLOYEES, THE 
14 
BALANCES IN ALL DEPOSIT ACCOUNTS OF EACH DEPOSITOR 
15 
SOLELY TO ENABLE THE CORPORATION TO DETERMINE THE 
16 
INSURED AND UNINSURED DEPOSITS. 
17 
THE CORPORATION, ITS DULY AUTHORIZED OFFICERS OR 
18 
EMPLOYEES, SHALL HAVE THE AUTHORITY TO EXAMINE, INQUIRE 
19 
OR LOOK INTO THE DEPOSIT RECORDS PERT,"INING TO THE 
20 
INFORMATION DISCLOSED AND REPORTED UNDER THIS SECTION 
21 
AND ALL INFORMATION RELATED THERETO. 
22 
THE CORPORATION, ITS DULY AUTHORIZED OFFICERS OR 
23 
EMPLOYEES, ARE PROHIBITED FROM DISCLOSING INFORMATION 
24 
OBTAINED UNDER THIS SECTION TO ANY PERSON, GOVERNMENT 
25 
OFFICIAL, 
BUREAU 
OR 
OFFICE, 
EXCEPT 
UPON 
WRITTEN 
26 
PERMISSION 
OF 
THE 
DEPOSITOR, 
OR 
IN 
CASES 
OF 
21 


1 
IMPEACHMENT, OR UPON ORDER OF A COMPETENT COURT IN 
2 
CASES OF BRIBERY OR DERELICTION OF DUTY OF PUBLIC 
:3 
OFFICIALS, OR IN CASES WHERE THE MONEY DEPOSITED OR 
4 
INVESTED IS THE SUBJECT MATTER OF THE ILITIGATION, OR 
5 
WHEN THE DISCLOSURE OF THE INFORMATION OBTAINED UNDER 
6 
THIS SECTION IS NECESSARY FOR EXPEDITIOUS PAYMENT OF 
7 
DEPOSIT INSURANCE OR THE PROTECTION OF THE DEPOSIT 
8 
INSURANCE SYSTEM, OR TO CARRY OUT THE MANDATE OF THE 
9 
CORPORATION AS A RESOLUTION AUTHORITY. 
10 
ANY ACT DONE PURSUANT TO THIS SECTION SHALL NOT BE 
11 
DEEMED TO HAVE VIOLATED REPUBLIC ACT NO. 1405, AS 
12 
AMENDED, REPUBLIC ACT NO. 6426, AS AMENIDED, REPUBLIC 
13 
ACT NO. 8791, AND OTHER SIMILAR LAWS PIROTECTING OR 
14 
SAFEGUARDING THE SECRECY OR CONFIDENTIALITY OF BANK 
15 
DEPOSITS: PROVIDED, THAT ANY UNAUTHORIZED DISCLOSURE 
16 
OF THE INFORMATION UNDER THIS SECTION SHALL BE SUBJECT 
17 
TO THE 
SAME 
PENALTY 
UNDER THE 
FOREGOING 
LAWS 
18 
PROTECTING THE SECRECY OR CONFIDENTIALITY OF BANK 
19 
DEPOSITS." 
20 
SECTION 9. Section 6 of the same Act is accordingly renumbered as Section 7. 
21 
SECTION 10. Section 7 paragraph (a) of the same Act, as renumbered, is 
22 
hereby amended to read as follows: 
23 
"ASSESSMENT OF MEMBER BANKS 
24 
SECTION [6] 7. (a) The assessment rate shall be determined by the 
25 
Board of Directors: Provided, That the assessment ratE! shall not exceed 
22 


1 
one-fifth (1/5) of one per centum (1 %) per annum. The semi-annual 
2 
assessment for each insured bank shall be in the amount of the product of 
3 
one-half (1/2) the assessment rate multiplied by the assessment base but 
4 
in no case shall it be less than Five thousand pesos (P5,OOO.OO). The 
5 
assessment base shall be the amount of the liability of the bank for 
6 
deposits as defined under subsection (H) [(f)] of Section 5 [4) without any 
7 
deduction for indebtedness of depositors. 
8 
IN ADDITION, THE BOARD OF DIRECTORS MAY ESTABLISH A 
9 
RISK-BASED ASSESSMENT SYSTEM AND IMPOSE: A RISK-BASED 
10 
ASSESSMENT RATE WHICH SHALL NOT EXCEED TWO-FIFTH (2/5) 
11 
OF ONE PER CENTUM (1%) PER ANNUM MULTIPLIED BY THE 
12 
ASSESSMENT BASE. 
13 
The semi-annual assessment base for one semi-annual period shall be 
14 
the average of the assessment base of the bank as of the close of 
15 
business on March thirty-one and June thirty and the semi-annual 
16 
assessment base for the other semi-annual period shall be the average of 
17 
the assessment base of the bank as of the close of business on 
18 
September thirty and December thirty-one: Provided, That when any of 
19 
said days is a non-business day or legal holiday, either national or 
20 
provincial, the preceding business day shall be used. The certified 
21 
statements required to be filed with the Corporation under subsections (b) 
22 
and (c) of this Section shall be in such form and set forth such supporting 
23 
information as the Board of Directors shall prescribe. The assessment 
24 
payments required from the insured banks under subslections (b) and (c) 
25 
of this Section shall be made in such manner and at such time or times as 
26 
the Board of Directors shall prescribe[, provided the time or times so 
23 


1 
prescribed shall not be later than sixty (60) days after filing the certified 
2 
statement setting forth the amount of assessment)." 
3 
SECTION 11. Section 7, paragraphs (d) and (h), of the same Act, as renumbered, 
4 
is hereby amended to read as follows: 
5 
"(d) All assessment collections and income from operations after 
6 
expenses and charges shall be added to the Deposit Insurance Fund 
7 
under Section 18 [13] hereof. Such expenses and charges are: (1) the 
8 
operating costs and expenses of the Corporation for the calendar year; (2) 
9 
additions to reserve to provide for insurance and financial assistance 
10 
losses, net of recoverable amounts from applicable assElts and collaterals, 
11 
during the calendar year; and (3) the net insurance and financial 
12 
assistance losses sustained in said calendar year. 
13 
(h) [The Corporation shall not terminate the insured status of any bank 
14 
which continues to operate or receive deposits.] Should any insured bank 
15 
fail or refuse to pay any assessment required to be paid by such bank 
16 
under any provision of this Act, and should the bank not correct such 
17 
failure or refusal within thirty (30) days after written notice has been given 
18 
by the Corporation to an officer of the bank citing this subsection, and 
19 
stating that the bank has failed or refused to pay as required by the law, 
20 
the Corporation may, at its discretion, file a case for collection before the 
21 
appropriate court without prejudice to the imposition of administrative 
22 
sanctions allowed under the provisions of this Law on the bank officials 
23 
responsible for the non-payment of assessment fees." 
24 
SECTION 12. An additional paragraph to Section 7 of the same Act, as 
25 
renumbered, is hereby inserted after paragraph (h) which shall read as follows: 
24 


1 
"(I) THE CORPORATION SHALL HAVE THE 
I~UTHORITY TO 
2 
COLLECT A SPECIAL ASSESSMENT FROM ANY MEMBER BANK 
3 
AND PRESCRIBE THE TERMS AND CONDITIONS THEREOF TO 
4 
MAINTAIN THE TARGET LEVEL OF THE DEPOSIT INSURANCE 
5 
FUND SET BY THE BOARD OF DIRECTORS IN ACCORDANCE WITH 
6 
THIS ACT: PROVIDED, THAT, THE COLLECTION OF A SPECIAL 
7 
ASSESSMENT MAY LIKEWISE BE MADE FOR THE PURPOSE OF 
8 
REIMBURSING THE NATIONAL GOVERNMENT FOR ANY FINANCIAL 
9 
ASSISTANCE 
IT 
MAY 
HAVE 
EXTENDED 
TO 
AFFECTED 
10 
INSTITUTIONS 
OR 
ORGANIZATIONS 
DURING 
A 
SYSTEMIC 
11 
SCENARIO." 
12 
SECTION 13. Section 7 of the same Act is accordingly renumbered as Section 
13 
.8, and is hereby amended to read as follows: 
14 
"SANCTIONS AGAINST UNSAFE AND 
15 
UNSOUND BANKING PRACTICES 
16 
SECTION [7] 8. (a) Whenever upon examination by the Corporation into 
17 
the condition of any insured bank, it shall be disclosed that an insured 
18 
bank or its directors or agents have committed, are committing or about to 
19 
commit unsafe or unsound practices in conducting the business of the 
20 
bank, or have violated, are violating or about to violate any provisions of 
21 
any law or regulation to which the insured bank is subject, the Board of 
22 
Directors shall submit the report of the examination to the Monetary Board 
23 
to secure corrective action thereon. If no such corrective action is taken by 
24 
the Monetary Board within forty-five (45) days from the submission of the 
25 
report, the Board of Directors shall, motu propriO, institute corrective 
26 
action which it deems necessary. The Board of Directors may thereafter 
25 


1 
issue a cease and desist order, and require the bank or its directors or 
2 
agents concerned to correct the practices or violations within forty-five 
3 
(45) days. However, if the practice or violation is likely to cause insolvency 
4 
or substantial dissipation of assets or earnings of the bank, or is likely to 
5 
seriously weaken the condition of the bank or otherwise seriously 
6 
prejudice the interests of its depositors and the Corporation, the period to 
7 
take corrective action shall not be more than fifteen (15) days. The order 
8 
may also include the imposition of fines provided in Section 27 (9) [21 (f)] 
9 
hereof. The Board of Directors shall duly inform the Monetary Board of the 
10 
8angko Sentra/ ng Pilipinas of action it has taken under this subsection 
11 
with respect to such practices or violations. 
12 
(b) The actions and proceedings provided in the preceding subsections 
13 
may be undertaken by the Corporation if, in its opinion, an insured bank or 
14 
its directors or agents have violated, are violating or about to violate any 
15 
provision of this Act or any order, rule or instruction issued by the 
16 
Corporation or any written condition imposed by the Corporation in 
17 
connection with any transaction with or grant by the Corporation. 
18 
19 
(c) THE CORPORATION MAY TERMINATE THE INSURED STATUS OF 
20 
ANY BANK THAT FAILS OR REFUSES TO COMPLY" WITHIN THIRTY 
21 
(30) DAYS FROM NOTICE, WITH ANY CEASE-AND-DESIST ORDER 
22 
ISSUED BY THE CORPORATION, OR WITH ANY CORRECTIVE 
23 
ACTION IMPOSED BY THE MONETARY BOARD, UNDER THIS 
24 
SECTION PERTAINING TO A DEPOSIT-RELATED UNSAFE AND/OR 
25 
UNSOUND BANKING PRACTICE. 
26 
SUCH TERMINATION SHALL BE FINAL AND EXECUTORY, AND 
27 
SHALL BE EFFECTIVE UPON PUBLICATION OF THE NOTICE OF 
28 
TERMINATION IN A NEWSPAPER OF GENERAL CIRCULATION. 
26 


1 
THE DEPOSITS OF EACH DEPOSITOR IN THE BANK ON THE 
2 
EFFECTIVE 
DATE 
OF 
THE 
TERMINATION 
OF 
INSURANCE 
3 
COVERAGE, LESS ALL SUBSEQUENT WITHDR,I:\WALS, SHALL 
4 
CONTINUE TO BE INSURED UP TO THE MAXIMUM DEPOSIT 
5 
INSURANCE COVERAGE FOR A PERIOD OF ONE HUNDRED EIGHTY 
6 
(180) DAYS. ADDITIONS TO, OR RENEWAL OF, EXISTING DEPOSITS 
7 
AND NEW DEPOSITS IN SUCH BANK AFTER THE EFFECTIVE DATE 
8 
OF TERMINATION OF INSURED STATUS OF THE BANK SHALL NOT 
9 
BE INSURED BY THE CORPORATION. 
10 
THE BANK SHALL IMMEDIATELY GIVE WRITTEN NOTICE OF SUCH 
11 
TERMINATION 
AND 
THE 
INTERIM 
DEPOSIT 
INSURANCE 
12 
COVERAGE TO EACH OF ITS DEPOSITORS AT THEIR ADDRESS AS 
13 
RECORDED IN THE BOOKS OF THE BANK. 
14 
THE BANK SHALL NOT ADVERTISE OR REPRESENT THAT 
15 
ADDITIONS TO, OR RENEWAL OF, EXISTING DEPOSITS AND NEW 
16 
DEPOSITS MADE AFTER THE EFFECTIVE DATE OF TERMINATION 
17 
ARE COVERED BY DEPOSIT INSURANCE." 
18 
SECTION 14. Section 8 of the same Act is accordingly renumbered as Section 9. 
19 
SECTION 15. Section 9, paragraph Twelfth of the same Act, as renumbered, is 
20 
hereby amended to read as follows: 
21 
"Twelfth - THE PROVISIONS OF PRESIDENTI.AL DECREE NO. 
22 
1445, AS AMENDED, EXECUTIVE ORDER NO. 292, AND OTHER 
23 
SIMILAR LAWS NOTWITHSTANDING, [T) to compromise, condone or 
24 
release, in whole or in part, any claim or settled liability to the Corporation, 
27 


1 
regardless of the amount involved, under such terms and conditions as 
2 
may be imposed by the Board of Directors to protect the interest of the 
3 
Corporation, 
AND 
TO 
WRITE 
OFF 
THE 
CORPORATION'S 
4 
RECEIVABLES 
AND 
ASSETS 
WHICH 
ARE 
NO 
LONGER 
5 
RECOVERABLE OR REALIZABLE;" . 
6 
SECTION 16. Section 9 of the same Act, as renumbered, is further amended by 
7 
inserting additional paragraphs after paragraph Twelve, which shall read as follows: 
8 
"THIRTEENTH - TO DETERMINE QUALIFIED INTERESTED 
9 
ACQUIRERS OR INVESTORS FOR ANY OF TliE MODES OF 
. 
10 
RESOLUTION OR LIQUIDATION OF BANKS; 
11 
FOURTEENTH 
-
TO 
DETERMINE 
THE 
APPROPRIATE 
12 
RESOLUTION METHOD AND TO IMPLEMENT THE SAME FOR A 
13 
BANK SUBJECT OF RESOLUTION; 
14 
FIFTEENTH - TO DETERMINE THE APPROPRIATE MODE OF 
15 
LIQUIDATION OF A CLOSED BANK AND TO IMPLEMENT THE SAME; 
16 
SIXTEENTH - TO ESTABLISH A BRIDGE BANK FOR THE 
17 
PURPOSE OF FACILITATING THE LIQUIDATION OF A CLOSED 
18 
BANK AND FOR THIS PURPOSE, MAKE ADVANCES TO THE 
19 
BRIDGE BANK FOR PAYMENT OF INSURED DEPOSITS ASSUMED 
20 
BY THE BRIDGE BANK AND FOR THE OPERATIONS OF THE 
21 
BRIDGE BANK, UPON SUCH TERMS AND CON[)ITIONS AND IN 
22 
SUCH 
FORM 
AND 
AMOUNTS AS 
THE 
PDIC 
BOARD 
MAY 
23 
PRESCRIBE: PROVIDED, THAT, SUCH ADVANCES FOR INSURED 
24 
DEPOSITS SHALL TAKE THE NATURE OF A SUBROGATED CLAIM 
28 


1 
AS PROVIDED UNDER SECTION 21 OF THIS ACT: PROVIDED, 
2 
FURTHER, THAT, ADVANCES FOR OPERATIONS SHALL BE PAID 
,J 
IMMEDIATELY BY THE BRIDGE BANK AS SOON AS IT IS ABLE TO 
4 
GENERATE SUFFICIENT FUNDS: PROVIDED, FIN,ALL Y, THAT, IN 
5 
THE EVENT THAT THE BRIDGE BANK IS TERMINATED PURSUANT 
6 
TO PARAGRAPHS (i)(4) AND (i)(5) OF SECTION 16 OF THIS ACT, 
7 
THE ADVANCES FOR OPERATIONS SHALL PARTAKE OF THE 
8 
NATURE OF LIQUIDATION EXPENSES." 
9 
SECTION 17. Section 9 of the same Act is accordingly renumbered as Section 
10 
10. 
11 
SECTION 18. Section 10 paragraph (b-1) of the same Act, as renumbered, is 
12 
hereby amended to read as follows: 
13 
"(b-1) The investigators appointed by the Board of Directors shall have the 
14 
power on behalf of the Corporation to conduct investiIJations on frauds, 
15 
irregularities and anomalies committed in banks, bas;ed on reports of 
16 
examination conducted by the Corporation and 861ngko Sentral ng 
17 
Pilipinas or complaints from depositors or from other government agency. 
18 
Each such investigator shall have the power to administer oaths, and to 
19 
examine and take and preserve the testimony of any person relating to 
20 
the subject of investigation. FOR THIS PURPOSE, THE CORPORATION 
21 
MAY APPOINT OR HIRE PERSONS OR ENTITIES OF RECOGNIZED 
22 
COMPETENCE IN FORENSIC AND FRAUD INVESTIGATIONS AS ITS 
23 
AGENTS." 
24 
SECTION 19. Section 10 paragraph (c) of the same Act, as renumbered, is 
25 
hereby amended to read as follows: 
29 


1 
"(c) Each insured bank shall make to the Corporation reports of condition 
2 
in such form and at such times as the Board of Directors may require such 
3 
reports to be published in such manner, not inconsistent with any 
4 
applicable law, as it may direct. Every such bank whiclh fails to make or 
5 
publish any such report within such time, as the Board of Directors may 
6 
require, shall be subject to a penalty of not more than P'10,000 [P100] for 
7 
each day of such failure recoverable by the Corporation for its use." 
8 
SECTION 20. Section 10 paragraph (d-1) of the same Act, as renumbered 
9 
herein, is hereby amended to read as follows: 
10 
"(d-1) Each insured bank shall keep and maintain a true and accurate 
1.1 
record or statement of its daily deposit transactions consistent with the 
12 
standards set by the Bangko Sentral ng Pilipinas and the Corporation. 
13 
Compliance with such standards shall be duly certified by the president of 
14 
the bank [or] 
AND the compliance officer: Provided, That refusal or 
15 
willful failure to issue the required certification shall constitute a violation 
16 
of this Section and shall subject such officers of the bank to the sanctions 
17 
provided for under Section 27 [21] (f) of this Act." 
18 
SECTION 21. Section 1 0 paragraph (f) of the same Act, as renumbered, is 
19 
hereby amended to read as follows: 
20 
"(f) The Corporation shall underwrite or advance ALL LEGAL [litigation] 
21 
costs and expenses, including legal fees and other expenses of external 
22 
counsel, or provide legal assistance to, directors, officers, employees or 
23 
agents of the Corporation in connection with any civil, criminal, 
24 
administrative or any other action or proceeding, to which such director, 
30 


1 
officer, employee or agent is made a party by reason of, or in connection 
2 
with, the exercise of authority or performance of functions and duties 
3 
under this Act: Provided, That such legal protection shall not apply to any 
4 
civil, criminal, administrative or any action or proceeding that may be 
5 
initiated by the Corporation, in whatever capacity, agailnst such director, 
6 
officer, employee or agent: Provided, Further, That directors, officers, 
7 
employees or agents who shall resign, retire, transfer to another agency 
8 
or be separated from the service, shall continue to be provided witli such 
9 
legal protection in connection with any act done or omitted to be done by 
10 
them in good faith during their tenure or employment with the Corporation: 
11 
Provided, finally, That in the event of a settlement or compromise, 
12 
indemnification shall be provided only in connection with such matters 
13 
covered by the settlement as to which the Corporation is advised by 
14 
counsel that the persons to be indemnified did not commit any negligence 
15 
or misconduct." 
16 
SECTION 22. The second paragraph of Section 10 paragraph (i) of the same 
17 
Act, as renumbered, is hereby amended to read as follows: 
18 
19 
"(i) Notwithstanding the provisions of this Section and Section 3 [2]. 
20 
members of the Board of Directors and personnel of the Corporation may 
21 
become directors and officers of any bank and bankin~l institution and of 
22 
any entity related to such institution in connection with financial assistance 
23 
extended by the Corporation to such institution and when, in the opinion of 
24 
the Board, it is appropriate to make such designation to protect the 
25 
interest of the Corporation." 
26 
SECTION 23. A new section entitled Section 11 of the same Act is hereby 
27 
inserted between Sections 10 and 12 which shall read as follows: 
31 


1 
"BANK RESOLUTION 
2 
SECTION 11. (A) THE CORPORATION, IN COORDINATION WITH THE 
3 
BANGKO SENTRAL, MAY COMMENCE THE RESOLUTION OF A 
4 
BANK UNDER THIS SECTION UPON: 
5 
1) FAILURE OF PROMPT CORRECTIVE ACTIO"I AS DECLARED 
6 
BY THE MONETARY BOARD; OR 
7 
2) REQUEST BY A BANK TO BE PLACED UNDER RESOLUTION. 
8 
THE CORPORATION SHALL INFORM THE BANK OF ITS ELIGIBILITY 
9 
FOR ENTRY INTO RESOLUTION. 
10 
(B) THE BANGKO SENTRAL SHALL INFORM THE CORPORATION 
11 
OF THE INITIATION OF PROMPT CORRECTIVE .lI,CTION ON ANY 
1"2 
BANK AND SHALL BE AUTHORIZED TO SHt\RE WITH THE 
13 
CORPORATION 
ALL 
INFORMATION, 
AGRIEEMENTS 
OR 
14 
DOCUMENTS, INCLUDING ANY ORDER OF THE MONETARY 
15 
BOARD, 
IN RELATION TO THE PROMPT CORRECTIVE ACTION. 
16 
THE CORPORATION SHALL HAVE THE AUTHORIITY TO INQUIRE 
17 
AND 
MONITOR THE STATUS 
OF BANKS 
UNDER PROMPT 
18 
CORRECTIVE ACTION. 
19 
(C) THE STOCKHOLDERS, DIRECTORS, OFFICERS OR EMPLOYEES 
20 
OF THE BANK SHALL HAVE THE FOLLOWING OBLIGATIONS: 
21 
22 
23 
1) ENSURE 
BANK 
COMPLIANCE 
WITH 
TERMS 
AND 
CONDITIONS PRESCRIBED BY THE CORPORATION FOR THE 
RESOLUTION OF THE BANK; 
32 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
2) CAUSE THE ENGAGEMENT, WITH THE CONSENT OF THE 
CORPORATION, OF AN 
INDEPENDENT Jl\PPRAISER OR 
AUDITOR FOR THE PURPOSE OF DETERMINING THE 
VALUATION OF THE BANK CONSISTENT WIITH GENERALLY 
ACCEPTED VALUATION STANDARDS; 
3) ENSURE PRUDENT MANAGEMENT AND ADMINISTRATION 
OF THE BANK'S ASSETS, LIABILITIES AND RECORDS; 
4) COOPERATE WITH THE CORPORATION IN THE CONDUCT OR 
EXERCISE OF ANY OR ALL OF ITS AUTHORITIES UNDER 
THIS ACT AND HONOR IN GOOD FAITH ITS COMMITMENT OR 
UNDERTAKING 
WITH 
THE 
CORPORATION 
ON 
THE 
RESOLUTION OF THE BANK. 
13 
(d) WITHIN A PERIOD OF ONE HUNDRED EIGHTY (180) DAYS FROM 
14 
A 
BANK'S ENTRY INTO RESOLUTION, 
THE CORPORATION, 
15 
THROUGH THE AFFIRMATIVE VOTE OF AT LEAST FIVE MEMBERS 
16 
OF THE PDIC BOARD, SHALL DETERMINE WHETHER THE BANK 
17 
MAY BE RESOLVED THROUGH THE PURCHASE OF ALL ITS 
18 
ASSETS AND ASSUMPTION OF ALL ITS LIABILITIES, OR MERGER 
19 
OR CONSOLIDATION WITH, OR ITS ACQUISITION, BY A QUALIFIED 
20 
INVESTOR. 
21 
FOR THIS PURPOSE, THE CORPORATION MAY: 
22 
1) DETERMINE A RESOLUTION PACKAGE FOR THE BANK; 
23 
2) IDENTIFY AND, WITH THE APPROVAL OF THE MONETARY 
24 
25 
BOARD, 
PRE-QUALIFY 
POSSIBLE 
ACQUIRERS 
OR 
INVESTORS; 
33 


1 
3) AUTHORIZE PRE-QUALIFIED ACQUIRERS OR INVESTORS TO 
2 
CONDUCT DUE DILIGENCE ON THE BANK, FOR PURPOSES 
3 
OF DETERMINING THE VALUATION OF A flANK THROUGH 
4 
AN OBJECTIVE AND THOROUGH REVIEW AND APPRAISAL 
5 
OF ITS ASSETS AND LIABILITIES, AND ASSESSMENT OF 
6 
RISKS OR EVENTS THAT MAY AFFECT ITS VALUATION; 
7 
4) CONDUCT A BIDDING TO DETERMINE THE: ACQUIRER OF 
8 
THE BANK. 
9 
(E) IN DETERMINING THE APPROPRIATE RESOLUTION METHOD 
10 
FOR A BANK, THE CORPORATION SHALL CONSIDER THE: 
11 
1) FAIR MARKET VALUE OF THE ASSETS OF THE BANK, ITS 
12 
FRANCHISE, AS WELL AS THE AMOUNT OF ITS LIABILITIES; 
13 
2) AVAILABILITY OF A QUALIFIED INVESTOR; 
14 
3) LEAST COST TO THE DEPOSIT INSURANCE FUND; 
15 
4) INTEREST OF THE DEPOSITING PUBLIC. 
16 
(F) THE CORPORATION MAY APPOINT OR HIRE PERSONS OR 
17 
ENTITIES OF RECOGNIZED COMPETENCE IN BANKING, FINANCE, 
18 
ASSET MANAGEMENT OR REMEDIAL MANAGEMENT, AS ITS 
19 
AGENTS, TO PERFORM SUCH POWERS AND FUNCTIONS OF THE 
20 
CORPORATION IN THE RESOLUTION OF A BANK, OR ASSIST IN 
21 
THE PERFORMANCE THEREOF. 
22 
(G) THE PDIC BOARD SHALL PRESCRIBE THE GUIDELINES OR 
23 
CRITERIA FOR A BANK TO BE PLACED UNDER RESOLUTION. 
24 
34 


1 
(h) UPON A DETERMINATION BY THE CORPORATION THAT THE 
2 
BANK MAY NOT BE RESOLVED, THE MONETARY BOARD MAY ACT 
3 
IN ACCORDANCE WITH SECTION 30 OF REPUBLIC ACT NO. 7653, 
4 
AS AMENDED. 
5 
(i) BANK RESOLUTION INVOLVING THE PURCHASE OF ALL 
6 
ASSETS AND ASSUMPTION OF ALL LIABILITIES OF A BANK SHALL 
7 
BE 
EXEMPT 
FROM 
THE 
PROVISIONS 
OF ACT 
NO. 
3952, 
8 
OTHERWISE KNOWN AS THE BULK SALES LAW. 
9 
(j) THE PROVISIONS OF THIS SECTION ARE WITHOUT PREJUDICE 
10 
TO ANY ACTION THAT THE MONETARY BOARD MAY TAKE UNDER 
11 
EXISTING LAWS." 
12 
SECTION 24. Sections 10, 11 and 12 of the same Act are hereby deleted. 
13 
SECTION 25. A new section entitled Section 12 of the same Act is hereby 
14 
inserted between Sections 11 and 13 which shall read as follows: 
15 
"LIQUIDATION OF A CLOSED BANK 
16 
SECTION 12. (a) WHENEVER A BANK IS ORDERED CLOSED BY THE 
17 
MONETARY BOARD, THE CORPORATION SHALL BE DESIGNATED 
18 
AS RECEIVER AND IT SHALL PROCEED WITH THE TAKEOVER AND 
19 
LIQUIDATION OF THE CLOSED BANK. FOR THIS PURPOSE, THE 
20 
FOLLOWING CLAUSE IN SECTION 30 OF REPUBLIC ACT NO. 7653, 
21 
AS AMENDED, SHALL NOT BE APPLICABLE TO BANKS: 
35 


1 
'THE RECEIVER SHALL DETERMINE, AS SOON AS 
2 
POSSIBLE, BUT NOT LATER THAN NINETY (90) DAYS 
.3 
FROM TAKE-OVER, WHETHER THE INSTITUTION MAY 
4 
BE REHABILITATED OR OTHERWISE PLACEID IN SUCH 
5 
A CONDITION SO THAT IT MAY BE PERIIIlITTED TO. 
6 
RESUME 
BUSINESS 
WITH 
SAFETY 
TO 
ITS 
7 
DEPOSITORS AND CREDITORS AND THE GENERAL 
8 
PUBLIC: PROVIDED, THAT ANY DETERMINATION FOR 
9 
THE RESUMPTION OF BUSINESS OF THE INSTITUTION 
10 
SHALL BE SUBJECT TO PRIOR APPROVAL OF THE 
11 
MONETARY BOARD.'" 
12 
SECTION 26. A new section entitled Section 13 of the same Act is hereby 
13 
inserted between Sections 12 and 14 which shall read as follows: 
14 
"AUTHORITIES OF A RECEIVER AND EFFECTS OF PLACEMENT OF 
15 
A BANK UNDER LIQUIDATION 
16 
SECTION 13. (a) THE RECEIVER IS AUTHORIZED TO ADOPT AND 
17 
IMPLEMENT, 
WITHOUT 
NEED 
OF 
CONSENT 
OF 
THE 
18 
STOCKHOLDERS, 
BOARD 
OF 
DIRECTORS, 
CREDITORS 
OR 
19 
DEPOSITORS OF THE CLOSED BANK, ANY OR A COMBINATION OF 
20 
THE FOLLOWING MODES OF LIQUIDATION: 
21 
1) CONVENTIONAL LIQUIDATION 
22 
23 
24 
2) PURCHASE 
OF 
ASSETS 
ANDIOR 
ASSUMPTION 
OF 
LIABILITIES 
3) BRIDGE BANK 
36 


1 
(b) IN ADDITION TO THE POWERS OF A RECEIIVER PROVIDED 
2 
UNDER EXISTING LAWS, THE CORPORATION, AS RECEIVER OF A 
3 
CLOSED BANK, IS EMPOWERED TO: 
4 
1) REPRESENT AND ACT FOR AND IN BEHALF OF THE CLOSED 
5 
BANK; 
6 
2) GATHER AND TAKE CHARGE OF ALL THE ASSETS, 
7 
RECORDS AND AFFAIRS OF THE CLOSED BANK, AND 
8 
ADMINISTER 
THE 
SAME 
FOR THE 
BENEFIT OF 
ITS 
9 
CREDITORS; 
10 
3) CONVERT THE ASSETS OF THE CLOSED BANK TO CASH OR 
1.1 
OTHER 
FORMS 
OF 
LIQUID 
ASSETS, 
AS 
FAR 
AS 
12 
PRACTICABLE; 
13 
4) BRING SUITS TO ENFORCE LIABILITIES OF THE DIRECTORS, 
14 
OFFICERS, EMPLOYEES, AGENTS OF THE CLOSED BANK 
15 
AND OTHER ENTITIES RELATED OR CONNECTED TO THE 
16 
CLOSED BANK OR TO COLLECT, RECOVER, AND PRESERVE 
17 
ALL ASSETS, INCLUDING ASSETS OVER WHICH THE BANK 
18 
HAS EQUITABLE INTEREST; 
19 
5) APPOINT OR HIRE PERSONS OR ENTITIES OF RECOGNIZED 
20 
COMPETENCE IN BANKING, FINANCE, ASSET MANAGEMENT 
21 
OR 
REMEDIAL 
MANAGEMENT, 
AS 
ITS 
DEPUTIES, 
22 
ASSISTANTS OR AGENTS, TO PERFORM SUCH POWERS 
23 
AND FUNCTIONS OF THE CORPORATION AS RECEIVER OF 
37 


1 
2 
3 
4 
) 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
~1 
22 
23 
24 
25 
THE CLOSED BANK, OR ASSIST IN THE PERFORMANCE 
THEREOF; 
6) PAY ACCRUED UTILITIES, RENTALS AND SALARIES OF 
PERSONNEL OF THE CLOSED BANK FOR A PERIOD NOT 
EXCEEDING THREE (3) MONTHS, FROM AVJ~ILABLE FUNDS 
OF THE CLOSED BANK; 
7) COLLECT LOANS AND OTHER CLAIMS OIF THE CLOSED 
BANK AND FOR THIS PURPOSE, MODIFY, COMPROMISE OR 
RESTRUCTURE 
THE TERMS AND CONDITIONS OF SUCH 
LOANS OR CLAIMS AS MAY BE DEEMED ADVANTAGEOUS 
TO THE INTERESTS OF THE CREDITORS OF THE CLOSED 
BANK; 
8) HIRE 
OR 
RETAIN 
PRIVATE 
COUNSEL 
AS 
MAY 
BE 
NECESSARY; 
9) BORROW OR OBTAIN A LOAN, OR MORTGAGE, PLEDGE OR 
ENCUMBER ANY ASSET OF THE CLOSED BANK, WHEN 
NECESSARY TO PRESERVE OR PREVENT DISSIPATION OF 
THE ASSETS, OR TO REDEEM FORECLOSED ASSETS OF 
THE CLOSED BANK, OR TO MINIMIZE LOSSES TO ITS 
DEPOSITORS AND CREDITORS; 
10) IF THE STIPULATED INTEREST RATE ON DEPOSITS IS 
UNUSUALLY 
HIGH 
COMPARED 
Wlnl 
PREVAILING 
APPLICABLE INTEREST RATES, THE CORPORATION AS 
RECEIVER, MAY EXERCISE SUCH POWERS WHICH MAY 
INCLUDE A REDUCTION OF THE INTEREST RATE TO A 
38 


I 
2 
3 
4 
5 
6 
7 
8 
9 
10 
l! 
12 
13 
14 
IS 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
REASONABLE RATE: PROVIDED, THAT ANY MODIFICATIONS 
OR REDUCTIONS SHALL APPLY ONLY TO EARNED AND 
UNPAID INTEREST; 
11) UTILIZE AVAILABLE FUNDS OF THE BAINK, INCLUDING 
FUNDS 
GENERATED 
BY THE 
RECEIVER 
FROM 
THE 
CONVERSION OF ASSETS TO PAY FOR REASONABLE 
COSTS 
AND 
EXPENSES 
INCURRED 
FOR 
THE 
PRESERVATION OF THE ASSETS, AND LIQUIDATION OF, THE 
CLOSED BANK, WITHOUT NEED FOR APPROVAL OF THE 
LIQUIDATION COURT; 
FOR 
BANKS 
WITH 
INSUFFICIENT 
FUNDS, 
THE 
CORPORATION 
IS 
AUTHORIZED 
TO 
ADVANCE 
THE 
FOREGOING 
COSTS 
AND 
EXPENSES, 
AND 
COLLECT 
PAYMENT, AS AND WHEN FUNDS BECOME AVAILABLE. 
12) CHARGE REASONABLE FEES FOR THE LIQUIDATION OF 
THE BANK FROM THE ASSETS OF THE BANK: PROVIDED 
THAT, PAYMENT OF THESE FEES, INCLUDING ANY UNPAID 
ADVANCES 
UNDER 
THE 
IMMEDIATELY 
PRECEDING 
PARAGRAPH, SHALL BE SUBJECT TO APPROVAL BY THE 
LIQUIDATION COURT; 
13) DISTRIBUTE THE AVAILABLE ASSETS OF THE CLOSED 
BANK, IN CASH OR IN KIND, TO ITS CREDITORS IN 
ACCORDANCE WITH THE RULES ON CONCURRENCE AND 
PREFERENCE OF CREDITS UNDER THE CIVIL CODE OR 
OTHER LAWS; 
39 


1 
14) DISPOSE RECORDS OF THE CLOSED BANK THAT ARE NO 
2 
LONGER NEEDED IN THE LIQUIDATION IN ACCORDANCE 
3 
WITH GUIDELINES SET BY THE PDIC BOARD OF DIRECTORS, 
4 
NOTWITHSTANDING THE LAWS ON ARCHIVJ~L PERIOD AND 
5 
DISPOSAL OF RECORDS; 
6 
15} EXERCISE SUCH OTHER POWERS AS ARE INHERENT AND 
7 
NECESSARY FOR THE EFFECTIVE DISCHIARGE OF THE 
8 
DUTIES OF THE CORPORATION AS RECEIVER. 
9 
THE BOARD OF DIRECTORS SHALL ADOPT SUCH POLICIES AND 
10 
GUIDELINES AS MAY BE NECESSARY FOR THE PERFORMANCE 
11 
OF THE ABOVE POWERS BY PERSONNEL, DEPUTIES, ASSISTANTS 
12 
AND AGENTS OF THE CORPORATION. 
13 
(e) AFTER THE PAYMENT OF ALL LIABILITIES AND CLAIMS 
14 
AGAINST THE CLOSED BANK, THE CORPORATION SHALL PAY 
15 
ANY SURPLUS DIVIDENDS AT THE LEGAL RATIE OF INTEREST 
16 
FROM DATE OF TAKEOVER TO DATE OF DISTRIBUTION TO 
17 
CREDITORS 
AND 
CLAIMANTS 
OF 
THE 
CLOSED 
BANK 
IN 
18 
ACCORDANCE WITH THE RULES ON 
CONCURRENCE AND 
19 
PREFERENCE OF CREDITS UNDER THE CIVIL CODE OR OTHER 
20 
LAWS BEFORE DISTRIBUTION TO THE SHAREHOLDERS OF THE 
21 
CLOSED BANK. 
22 
(d) THE OFFICERS, EMPLOYEES, DEPUTIES, ASSISTANTS "AND 
23 
AGENTS OF THE RECEIVER SHALL HAVE NO LIABILITY AND 
24 
SHALL NOT BE SUBJECT TO ANY ACTION, CLAIM OR DEMAND IN 
40 


1 
CONNECTION WITH ANY ACT DONE OR OMITTED TO BE DONE BY 
2 
THEM IN GOOD FAITH IN CONNECTION WITH THE EXERCISE OF 
3 
THEIR POWERS AND FUNCTIONS UNDER THIS ACT AND OTHER 
4 
APPLICABLE LAWS, OR OTHER ACTIONS DULY APPROVED BY 
5 
THE COURT. 
6 
(el THE PLACEMENT OF A BANi< UNDER LIQUIDATION SHALL 
7 
HAVE THE FOLLOWING EFFECTS: 
8 
1) ON THE CORPORATE FRANCHISE OR EXISTENCE 
9 
UPON PLACEMENT BY THE MONETARY BO,"RD OF A BANK 
10 
UNDER LIQUIDATION, IT SHALL CONTINUE AS A BODY 
11 
CORPORATE UNTIL THE TERMINATION OF THE WINDING-UP 
12 
PERIOD 
UNDER 
SECTION 17 
OF 
THIS 
ACT. 
SUCH 
13 
CONTINUATION AS A BODY CORPORATE SHALL ONLY BE 
14 
FOR THE PURPOSE OF LIQUIDATING, SETTLING AND 
15 
CLOSING 
ITS 
AFFAIRS 
AND 
FOR 
THE 
DISPOSAL, 
16 
CONVEYANCE OR DISTRIBUTION OF ITS ASSETS PURSUANT 
17 
TO THIS ACT. THE RECEIVER SHALL REPRESENT THE 
18 
CLOSED BANK IN ALL CASES BY OR AGAINST THE CLOSED 
19 
BANK AND PROSECUTE AND DEFEND SUITS BY OR 
20 
AGAINST IT. IN NO CASE SHALL THE BANK BE REOPENED 
21 
AND PERMITTED TO RESUME BANKING BUSINESS AFTER 
22 
BEING PLACED UNDER LIQUIDATION. 
23 
2) ON THE POWERS AND FUNCTIONS OF ITS DIRECTORS, 
24 
OFFICERS AND STOCKHOLDERS 
41 


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 
THE POWERS, VOTING RIGHTS, FUNCTIONS AND DUTIES, 
AS WELL AS THE ALLOWANCES, REMUNERATION AND 
PERQUISITES 
OF 
THE 
DIRECTORS, 
OFFICERS, 
AND 
STOCKHOLDERS OF SUCH BANK ARE TERMINATED UPON 
ITS CLOSURE. ACCORDINGLY, THE DIRECTORS, OFFICERS, 
AND 
STOCKHOLDERS 
SHALL 
BE 
BARRED 
FROM 
INTERFERING IN ANY WAY WITH THE ASSETS, RECORDS, 
AND AFFAIRS OF THE BANK. 
THE RECEIVER SHALL EXERCISE ALL AUTHORITIES AS MAY 
BE REQUIRED TO FACILITATE THE LIQUIDATION OF THE 
CLOSED BANK FOR THE BENEFIT OF ALL ITS CREDITORS. 
3) ON THE ASSETS 
UPON SERVICE OF NOTICE OF CLOSURE AS PROVIDED IN 
SECTION 14 OF THIS ACT, ALL THE ASSETS OF THE CLOSED 
BANK SHALL BE DEEMED· IN CUSTODIA LEGIS IN THE 
HANDS OF THE RECEIVER AND AS SUCH THESE ASSETS 
MAY NOT BE SUBJECT TO ATTACHMENT, GARNISHMENT, 
EXECUTION, LEVY OR ANY OTHER COURT PROCESSES. A 
JUDGE, OFFICER OF THE COURT OR ANY PERSON WHO 
SHALL ISSUE, ORDER, PROCESS OR CAUSE THE ISSUANCE 
OR IMPLEMENTATION OF THE WRIT OF GARNISHMENT, 
LEVY, ATTACHMENT OR EXECUTION, SHJ!\LL BE LIABLE 
UNDER SECTION 28 OF THIS ACT. 
ANY PRELIMINARY ATTACHMENT OR GARNISHMENT ON 
ANY OF THE ASSETS OF THE CLOSED BANK EXISTING AT 
42 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 . 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
THE TIME OF CLOSURE SHALL NOT GIVE ANY PREFERENCE 
TO THE ATIACHING OR GARNISHING PARTY. 
UPON 
MOTION 
OF 
THE 
RECEIVER, 
THE 
PRELIMINARY 
ATIACHMENT OR GARNISHMENT SHALL BE LIFTED AND/OR 
DISCHARGED. 
4) ON LABOR RELATIONS 
NOTWITHSTANDING THE PROVISIONS OF THE LABOR 
CODE, 
THE 
EMPLOYER-EMPLOYEE 
RELATIONSHIP 
BETWEEN THE CLOSED BANK AND ITS EMPLOYEES SHALL 
BE DEEMED TERMINATED UPON SERVICE OF THE NOTICE 
OF CLOSURE OF THE BANK IN ACCORDANCE WITH THIS 
ACT. 
PAYMENT OF 
SEPARATION 
PAY OR BENEFITS 
PROVIDED FOR BY LAW SHALL BE MADE FROM AVAILABLE 
ASSETS OF THE BANK[,] IN ACCORDANCE WITH THE RULES 
ON CONCURRENCE AND PREFERENCE OF CREDITS UNDER 
THE CIVIL CODE OR OTHER LAWS. 
5) CONTRACTUAL OBLIGATIONS 
THE RECEIVER MAY CANCEL, TERMINATE, RESCIND OR 
REPUDIATE ANY CONTRACT OF THE CLOSED BANK THAT IS 
NOT NECESSARY FOR THE ORDERLY LIQUIDATION OF THE 
BANK, OR IS GROSSLY DISADVANTAGEOUS TO THE 
CLOSED BANK, OR FOR ANY GROUND PROVIDED BY LAW. 
6) ON INTEREST PAYMENTS 
43 


1 
2 
3 
4 
5 
6 
7 . 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
. 
23 
24 
2S 
THE LIABILITY OF A BANK TO PAY INTEREST ON DEPOSITS 
AND ALL OTHER OBLIGATIONS AS OF CLOSURE SHALL 
CEASE UPON ITS CLOSURE BY THE MONETARY BOARD: 
PROVIDED, 
THAT, 
THE 
RECEIVER SHALL HAVE THE 
AUTHORITY, WITHOUT NEED FOR APPROVAL OF THE 
LIQUIDATION 
COURT, 
TO 
ASSIGN, 
AS 
PAYMENT TO 
SECURED CREDITORS, THE BANK ASSET'S SERVING AS 
COLLATERALS TO THEIR RESPECTIVE LOANS UP TO THE 
EXTENT OF THE OUTSTANDING OBLIGATIONS, INCLUDING 
INTEREST AS OF DATE OF CLOSURE OF THE BANK, AS 
VALIDATED BY THE RECEIVER. 
THE VALUATION OF THE 
ASSET SHALL BE BASED ON THE PREVAILING MARKET 
VALUE OF THE COLLATERALS AS APPRAISED BY AN 
INDEPENDENT APPRAISER ON AN "AS IS WHERE IS" BASIS. 
7) LIABILITY FOR PENALTIES AND SURCHAIRGES FOR LATE 
PAYMENT AND NON-PAYMENT OF TAXES 
FROM THE TIME OF CLOSURE, THE CLOSE:D BANK SHALL 
NOT BE LIABLE FOR THE PAYMENT OF PENALTIES AND 
SURCHARGES ARISING FROM THE LATE: PAYMENT OR 
NONPAYMENT OF REAL PROPERTY TAX, CAPITAL GAINS 
TAX, TRANSFER TAX AND SIMILAR CHARGES. 
8) BANK CHARGES AND FEES ON SERVICES 
THE RECEIVER MAY IMPOSE, ON BEHALF OF THE CLOSED 
BANK, CHARGES AND FEES FOR SERVICES RENDERED 
AFTER BANK CLOSURE, SUCH AS, BUT NOT LIMITED TO, 
44 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
THE 
EXECUTION 
OF 
PERTINENT 
DEEDS 
AND 
CERTIFICATIONS. 
9) ACTIONS PENDING FOR OR AGAINST THE CLOSED BANK 
EXCEPT FOR ACTIONS PENDING BEFORE THE SUPREME 
COURT, ACTIONS PENDING FOR OR AGAINST THE CLOSED 
BANK IN ANY COURT OR QUASI-JUDICIAL. BODY SHALL, 
UPON MOTION OF THE RECEIVER, BE SUSPENDED FOR A 
PERIOD NOT EXCEEDING ONE HUNDRED EIGHTY (180) DAYS 
AND 
REFERRED 
TO 
MANDATORY 
MEDIATION. 
UPON 
TERMINATION OF THE MEDIATION, THE CASE SHALL BE 
REFERRED BACK TO THE COURT OR QUASI··JUDICIAL BODY 
FOR FURTHER PROCEEDINGS. 
10) FINAL DECISIONS AGAINST THE CLOSED BANK 
THE EXECUTION AND ENFORCEMENT OF A IFINAL DECISION 
OF A COURT OTHER THAN THE LIQUIDATION COURT 
AGAINST THE ASSETS OF A CLOSED BANK SHALL BE 
STAYED. THE PREVAILING PARTY SHALL FILE THE FINAL 
DECISION AS A CLAIM WITH THE LIQUIDATION COURT AND 
SETTLED 
IN 
ACCORDANCE 
WITH 
THE 
RULES 
ON 
CONCURRENCE AND PREFERENCE OF CREDITS UNDER 
THE CIVIL CODE OR OTHER LAWS. 
11) DOCKET AND OTHER COURT FEES 
45 


I 
2 
3 
4 
5 
6 
7 
8 
9 
!.O 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
PAYMENT OF DOCKET AND OTHER COURT FEES RELATING 
TO ALL CASES OR ACTIONS FILED BY THE RECEIVER WITH 
ANY JUDICIAL OR QUASI-JUDICIAL BODIES SHALL BE 
DEFERRED UNTIL THE ACTION IS TERMINATED WITH 
FINALITY. ANY SUCH FEES SHALL CONSTITUTE AS A FIRST 
LIEN ON ANY JUDGMENT IN FAVOR OF THE: CLOSED BANK 
OR IN CASE OF UNFAVORABLE JUDGMENT, SUCH FEES 
SHALL BE PAID AS LIQUIDATION COSTS AND EXPENSES 
DURING THE DISTRIBUTION OF THE ASSETS OF THE 
CLOSED BANK. 
12)ALL ASSETS, RECORDS, AND DOCUMENTS IN THE 
POSSESSION OF THE CLOSED BANK AT THE TIME OF ITS 
CLOSURE ARE PRESUMED HELD BY THE BANK IN THE 
CONCEPT OF AN OWNER. 
13) THE EXERCISE OF AUTHORITY, FUNCTIONS, AND DUTIES 
BY THE RECEIVER UNDER THIS ACT SHALL. BE PRESUMED 
TO HAVE BEEN PERFORMED IN THE REGULAR COURSE OF 
BUSINESS. 
14}ASSETS AND DOCUMENTS OF THE CLOSED BANK SHALL 
RETAIN THEIR PRIVATE NATURE EVEN IF ADMINISTERED BY 
THE RECEIVER. MATTERS RELATING TO THE EXERCISE BY 
THE RECEIVER OF THE FUNCTIONS UNDER THIS ACT SHALL 
BE 
SUBJECT TO VISITORIAL 
AUDIT 
ONLY BY THE 
COMMISSION ON AUDIT. 
46 


1 
SECTION 27. A new section entitled Section 14 of Ithe same Act is hereby 
2 
inserted between Sections 13 and 15 which shall read as follolllls: 
3 
"NOTICE OF CLOSURE AND TAKEOVER ACTIVITIES 
4 
SECTION 14. (a) UPON THE DESIGNATION OF THE CORPORATION 
5 
AS RECEIVER OF A CLOSED BANK, IT SHALL SERVE A NOTICE OF 
6 
CLOSURE TO THE HIGHEST-RANKING OFFICER OF THE BANK 
7 
PRESENT IN THE BANK PREMISES, OR IN THE ABSENCE OF SUCH 
8 
OFFICER, POST THE NOTICE OF CLOSURE IN 
THE BANK 
9 
PREMISES OR ON ITS MAIN ENTRANCE. THE CLOSURE OF THE 
10 
BANK SHALL BE DEEMED EFFECTIVE UPON THE SERVICE OF THE 
11 
NOTICE OF CLOSURE. 
THEREAFTER, THE RECEIVER SHALL 
12 
TAKEOVER THE BANK AND EXERCISE THE POWERS OF THE 
13 
RECEIVER AS PROVIDED IN THIS ACT. 
14 
(b) 
THE 
RECEIVER 
SHALL 
HAVE 
AUTHORITY 
TO 
USE 
15 
REASONABLE FORCE, INCLUDING THE AUTHORITY TO FORCE 
16 
OPEN THE PREMISES OF THE BANK, AND EXERC:ISE SUCH ACTS 
17 
NECESSARY TO TAKE ACTUAL PHYSICAL POSSESSION AND 
\8 
CUSTODY OF THE BANK AND ALL ITS ASS lETS, RECORDS, 
19 
DOCUMENTS, AND TAKE CHARGE OF ITS AFFAIRS UPON THE 
20 
SERVICE OF THE NOTICE OF CLOSURE. 
21 
(e) DIRECTORS, OFFICERS, EMPLOYEES OR AGENTS OF A BANK 
22 
HOLD MONEY AND OTHER ASSETS OF THE BANK IN TRUST OR 
23 
UNDER ADMINISTRATION OR MANAGEMENT BY THEM FOR THE 
24 
BANK IN THEIR FIDUCIARY CAPACITY. UPON SERVICE OF THE 
25 
NOTICE OF CLOSURE TO THE BANK, ALL DIRECTORS, OFFICERS, 
47 


1 
EMPLOYEES OR AGENTS OF THE CLOSED BANK SHALL HAVE 
2 
THE DUTY TO IMMEDIATELY ACCOUNT FOR, SURRENDER AND 
3 
TURN OVER TO THE RECEIVER, AND PROVIDE INFORMATION 
4 
RELATIVE TO, THE ASSETS, RECORDS, AND AIFFAIRS OF THE 
5 
CLOSED 
BANK 
IN 
THEIR 
POSSESSION, 
CUSTODY, 
6 
ADMINISTRATION OR MANAGEMENT. 
7 
(d) WHEN THE CIRCUMSTANCES SO WARRANlT, THE LOCAL 
8 
GOVERNMENT 
UNIT 
AND 
LAW 
ENFORCEMENT 
AGENCIES 
9 
CONCERNED SHALL, UPON REQUEST, IMMEDIATELY PROVIDE 
10 
ASSISTANCE TO THE RECEIVER DURING THE SERVICE OF NOTICE 
11 
OF CLOSURE AND ACTUAL TAKEOVER OPERATIONS TO ENSURE 
1'2 
THE ORDERLY CONDUCT THEREOF AND THE SECURITY AND 
13 
SAFETY OF THE PERSONNEL OF THE RECEiVER AND THE 
14 
EMPLOYEES OF THE CLOSED BANK." 
15 
SECTION 28. A new section entitled Section 15 of the same Act is hereby 
16 
inserted between Sections 14 and 16 which shall read as follows: 
17 
"PURCHASE OF ASSETS AND ASSUMPTION OF UABILITIES (P&A) 
18 
SECTION 15. (a) THE RECEIVER SHALL HAVE THE AUTHORITY TO 
19 
FACILITATE AND IMPLEMENT THE PURCHASE OF THE ASSETS OF 
20 
THE CLOSED BANK AND THE ASSUMPTION OF ITS LIABILITIES BY 
21 
ANOTHER INSURED BANK IN ACCORDANCE WITH THE RULES ON 
22 
CONCURRENCE AND PREFERENCE OF CREDITS UlNDER THE CIVIL 
23 
CODE OR OTHER LAWS, SUBJECT TO SUCH TERMS AND 
24 
CONDITIONS AS THE CORPORATION MAY PRESCRIBE, WITHOUT 
25 
NEED FOR PRIOR APPROVAL OF THE LIQUIDATION COURT. 
48 


1 
(b) SUCH ACTION OF THE RECEIVER TO DETERMINE WHETHER A 
2 
BANK MAY BE THE SUBJECT OF A PURCHASE OF ASSETS AND 
3 
ASSUMPTION OF LIABILITIES TRANSACTION SHAl.L BE FINAL AND 
4 
EXECUTORY, AND MAY NOT BE SET ASIDE BY ANY COURT." 
5 
SECTION 29. A new section entitled Section 16 of the same Act is hereby 
6 
inserted between Sections 15 and 17 which shall read as follows: 
7 
"BRIDGE BANK 
8 
SECTION 16. (A) THE CORPORATION MAY FORM, ESTABLISH, 
9 
ORGANIZE, 
OPERATE, 
ANDIOR 
CONTRACT 
TO 
OPERATE 
10 
CORPORATIONS WHOSE PRIMARY PURPOSE IS TO OPERATE AS 
11 
A BRIDGE BANK. THE SECURITIES AND EXCHANGE COMMISSION 
12 
AND 
THE 
BANGKO 
SENTRAL 
SHALL 
PRESCRIBE 
THE 
13 
REQUIREMENTS FOR THE ESTABLISHMENT, LICENSING AND 
14 
SUPERVISION OF A BRIDGE BANK. A BRIDGE BANK SHALL NOT 
15 
BE SUBJECT TO THE MINIMUM CAPITALIZATION REQUIREMENTS 
16 
FOR CORPORATIONS AND BANKS. 
17 
(B) A BRIDGE BANK MODE OF LIQUIDATION MAY BE ADOPTED 
18 
ONLY IF THE CORPORATION DETERMINES THAT: 
19 
1) THE PRESERVATION OF CRITICAL BANKING FUNCTIONS IS 
20 
IN THE BEST INTEREST OF THE DEPOSITORS AND THE 
21 
PUBLIC; 
49 


1 
2) IT IS LESS COSTLY COMPARED TO PAYOUT, AND WILL AID 
2 
IN THE EXPEDITIOUS DISPOSITION OF THE ASSETS AND 
3 
PROMPT SETTLEMENT OF THE CLAIMS OF THE CREDITORS 
4 
OF THE CLOSED BANK; 
5 
3) THE CONTINUED OPERATION OF A BANK IS ESSENTIAL TO 
6 
PROVIDE 
ADEQUATE 
BANKING 
SERVICES 
IN 
THE 
7 
COMMUNITY; 
8 
4) THERE 
ARE 
QUALIFIED 
INVESTORS 
INTERESTED 
IN 
9 
ACQUIRING THE BANK; AND 
10 
5) THERE ARE ENOUGH ASSETS RETAINED liN THE CLOSED 
11 
BANK TO COVER PREFERRED CREDITS. 
12 
SUCH DETERMINATION OF THE CORPORATION SHALL BE FINAL 
13 
AND EXECUTORY, AND MAY NOT BE SET ASIDE BY ANY COURT. 
14 
(C) ALL BRANCH LICENSES AND OTHER BANK LICENSES OF THE 
15 
CLOSED BANK SHALL BE TRANSFERRED TO THE BRIDGE BANK. IN THE 
16 
EVENT OF THE SALE OF THE BRIDGE BANK UNDER (j)(1) and (j)(2), 
17 
THESE LICENSES SHALL BE TRANSFERRED TO nlE ACQUIRER. 
18 
(D) THE BRIDGE BANK SHALL HAVE THE AUTHORITY TO: 
19 
1) PURCHASE ASSETS, ASSUME INSURED DEPOSITS AND 
20 
OTHER LIABILITIES OF THE CLOSED BANK WHICH THE 
21 
RECEIVER MAY DETERMINE TO BE APPROPRIATE; 
50 


1 
2) PERFORM BANKING FUNCTIONS AS MAY BE AUTHORIZED 
2 
BY THE MONETARY BOARD. 
3 
(E) UPON MOTION BY THE BRIDGE BANK, ALL AC:TIONS PENDING 
4 
BEFORE ANY COURT WHERE THE BRIDGE BANK IS A PARTY BY 
5 
VIRTUE OF ITS ACQUISITION OF ASSETS OR ASStJlMPTION OF ANY 
6 
LIABILITIES OF A CLOSED BANK SHALL BE :STAYED FOR A 
7 
PERIOD OF UP TO ONE HUNDRED (180) DAYS. 
8 
(F) TO CARRY OUT ITS AUTHORITY UNDER THIS SECTION, THE 
9 
RECEIVER, IN ADDITION TO THE AUTHORITIES ENUMERATED 
10 
UNDER THIS ACT, SHALL HAVE THE POWER TO: 
11 
1) SELL, 
ASSIGN, 
TRANSFER, 
OR 
CONVEY 
ITS 
12 
SHAREHOLDINGS IN THE BRIDGE CORPOIRATION TO THE 
13 
CLOSED BANK; 
14 
2) TRANSFER SUCH ASSETS AND INSURED DEPOSITS OF A 
15 
CLOSED BANK TO THE BRIDGE BANK IN ACCORDANCE 
16 
WITH THE RULES ON CONCURRENCE AND f'REFERENCE OF 
17 
CREDITS UNDER THE CIVIL CODE OR OTHER LAWS, AS THE 
18 
RECEIVER MAY DEEM ·APPROPRIATE: P/~OVIDED, THAT, 
19 
WITHIN ONE HUNDRED (180) DAYS FROM ESTABLISHMENT 
20 
OF THE BRIDGE BANK, THE RECEIVER MJW REPLACE OR 
21 
SUBSTITUTE 
ANY 
ASSET 
PURCHASED 
OR 
LIABILITY 
22 
ASSUMED FROM THE CLOSED BANK SUBJECT TO SUCH 
23 
TERMS AND CONDITIONS AS THE PDle BOARD MAY 
24 
PRESCRIBE. ALL TRANSFERS OF ASSETS UNDER THIS 
25 
SUBSECTION SHALL: 
51 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
a. NOT BE SUBJECT TO ANY TAXES, SUCH AS CAPITAL 
GAINS 
TAX, 
INCOME 
TAX, 
VALUE 
ADDED 
TAX, 
DOCUMENTARY STAMP TAX, TRANSFER TAX, AND 
OTHER NATIONAL AND LOCAL TAXES, AS MAY BE 
APPLICABLE; 
b. BE EFFECTIVE WITHOUT NEED OF CONSENT FROM THE 
STOCKHOLDERS, DEPOSITORS AND CREDITORS OF THE 
CLOSED BANK, NOTWITHSTANDING ANY PROVISION OF 
LAW TO THE CONTRARY. 
3) APPOINT, INSTALL, DESIGNATE, AND/OR: REMOVE THE 
DIRECTORS, OFFICERS AND OTHER PERSONNEL OF A 
BRIDGE BANK, AND FIX THEIR COMPENSATIION. 
THE PROVISIONS OF EXISTING LAWS NOTWITHSTANDING, 
THE APPOINTIVE MEMBERS OF THE BOARD, OFFICERS AND 
EMPLOYEES OF THE CORPORATION MAY BE ASSIGNED 
AND/OR SECONDED AS DIRECTORS, OFFICERS OR OTHER 
PERSONNEL OF A BRIDGE BANK UNDER SIJCH TERMS AND 
CONDITIONS AS THE PDIC BOARD OF DIRECTORS MAY 
PRESCRIBE: PROVIDED, THAT, IF ASSIGNE[) OR SECONDED 
ON FULL TIME BASIS AS OFFICERS OR EMPLOYEES OF THE 
BRIDGE BANK, THEY SHALL NOT, SOLELY BY VIRTUE OF 
SUCH ASSIGNMENT AND/OR SECONDMENT, LOSE ANY 
EXISTING STATUS AS AN OFFICER OR EMPLOYEE OF THE 
CORPORATION. 
52 


1 
SECTION 10 OF THIS ACT SHALL LIKEWISE APPLY TO ALL 
2 
DIRECTORS, OFFICERS AND OTHER EMPLOYEES OF A 
3 
BRIDGE BANK WHO ARE APPOINTED, INSTALLED OR 
4 
DESIGNATED BY THE CORPORATION. 
5 
(G) THE BRIDGE BANK IS NOT AN AGENCY, CORPORATION, OR 
6 
INSTRUMENTALITY OF THE GOVERNMENT OF THE REPUBLIC OF 
7 
THE PHILIPPINES. THE BRIDGE BANK IS AN ENTITY SEPARATE 
8 
AND DISTINCT FROM THE CLOSED BANK. 
9 
(H) THE BRIDGE BANK SHALL BE EXEMPT FROM THE PAYMENT 
10 
OF ASSESSMENT UNDER SECTION 7 OF THIS ACT. 
11 
(I) THE BRIDGE BANK LICENSE SHALL BE EFFECTIVE FOR TWO (2) 
12 
YEARS FOLLOWING THE DATE IT WAS GRANTED A BANKING 
13 
LICENSE: PROVIDED, THAT, THE RECEIVER, WITH THE CONSENT 
14 
OF THE BANGKO SENTRAL, MAY EXTEND THE STATUS OF THE 
15 
BRIDGE BANK IF DEEMED NECESSARY TO CONCLUDE PENDING 
16 
NEGOTIATIONS FOR THE MERGER OR CONSOLIDATION, SALE, OR 
17 
ACQUISITION 
OF 
THE 
BRIDGE 
BANK 
BY 
I~N ACQUIRER: 
18 
PROVIDED, FURTHER, THAT THE MAXIMUM EXTENSION SHALL BE 
19 
FOR ANOTHER YEAR. 
20 
(J) THE BRIDGE BANK SHALL TERMINATE UPONI THE EARLIEST 
21 
OF ANY OF THE FOLLOWING OCCURRENCES: 
22 
1) THE MERGER OR CONSOLIDATION OF THE BRIDGE BANK 
23 
WITH ANOTHER BANK THAT IS NOT A BRIDGE BANK; OR 
53 


1 
2 
3 
4 
5 
6 
7 
2) THE SALE OF THE BRIDGE BANK TO A QUALIFIED BUYER, 
AS MAY BE DETERMINED BY THE RECEIVER; OR 
3) THE PURCHASE OF ALL OR SUBSTANTIALILY ALL OF THE 
ASSETS AND ASSUMPTION OF ALL OR SUBSTANTIALLY 
ALL OF THE DEPOSITS AND OTHER LIABiLITIES OF THE 
BRIDGE BANK BY A QUALIFIED THIRD PARTY; OR 
4) THE 
EXPIRATION 
OF 
THE 
PERIOD 
PROVIDED 
IN 
8 
PARAGRAPH (h) OF THIS SECTION; OR 
9 
5) THE 
DETERMINATION 
BY THE 
RECEIVER 
THAT 
THE 
10 
OPERATION OF THE BRIDGE BANK IS NO LONGER VIABLE, 
11 
NOTWITHSTANDING ANY OTHER PROVISION OF LAW TO 
12 
THE CONTRARY. 
13 
(K) EFFECTS OF TERMINATION EVENTS.-
14 
1) FOLLOWING THE TERMINATION OF A BRIDGE BANK UNDER 
15 
PARAGRAPHS (i)(1), (i)(2) and (i)(3), THE NET PROCEEDS 
16 
FROM SUCH TRANSACTION SHALL FORM PART OF THE 
17 
18 
19 
20 
21 
22 
23 
24 
ASSETS 
OF 
THE 
CLOSED 
BANK 
AVAILABLE 
FOR 
DISTRIBUTION TO THE CREDITORS OF THE CLOSED BANK IN 
ACCORDANCE WITH THE RULES ON CONCURRENCE AND 
PREFERENCE OF CREDITS UNDER THE CIVIL CODE OR 
OTHER LAWS. 
2) ONCE THE TERM OF A BRIDGE BANK HAS EXPIRED AS 
PROVIDED IN PARAGRAPH (h) OR IS TERMINATED OR 
DISSOLVED EARLIER BY THE RECEIVER PURSUANT TO 
54 


1 
PARAGRAPH (i)(5) OF THIS SECTION, THE CORPORATION 
2 
SHALL PAY DEPOSIT INSURANCE, SUBJECT TO ITS RIGHT 
3 
TO SUBROGATION UNDER SECTION 21 OF THIS ACT. FOR 
4 
THIS PURPOSE, ALL OUTSTANDING DEPOSITS OF THE 
5 
BRIDGE BANK AS OF THE TIME OF EXPIRATION OF ITS 
6 
TERM UNDER PARAGRAPH (h) OR EARLY TERMINATION 
7 
UNDER PARAGRAPH (i)(5) ARE DEEMED INSURED WITH THE 
8 
CORPORATION. THE BRIDGE BANK SHALL PAY ALL 
9 
LIABILITIES AND THE REMAINING ASSETS, IF ANY, SHALL 
10 
BE TURNED OVER TO THE RECEIVERSHIP ESTATE. 
11 
(L) MATTERS RELATING TO THE EXERCISE BY HIE PDIC OF THE 
1-2 
FUNCTIONS UNDER THIS SECTION SHALL BE: SUBJECT TO 
13 
VISITORIAL AUDIT ONLY. 
14 
(M) THE CORPORATION SHALL PROMULGATIE RULES AND 
15 
REGULATIONS 
TO IMPLEMENT THE 
PROVISIONS 
OF 
THIS 
16 
SECTION. IN ALL THE FOREGOING CASES, THE RECEIVER SHALL 
17 
HAVE ALL THE RIGHTS, POWERS, AND PRIVILEGES, AND SHALL 
18 
PERFORM THE DUTIES RELATED TO THE EXERCISE OF SUCH 
19 
RIGHTS, POWERS, OR PRIVILEGES, GRANTED BY THIS ACT TO 
20 
THE RECEIVER OF A CLOSED BANK." 
21 
SECTION 30. A new section entitled Section 17 of the same Act is hereby 
22 
inserted between Sections 16 and 18 which shall read as follows: 
23 
"CONVENTIONAL LIQUIDATION 
24 
A. ASSET MANAGEMENT AND CONVERSION 
55 


1 
SECTION 17. (A) THE ASSETS GATHERED BY THE RECEIVER 
2 
SHALL BE EVALUATED AND VERIFIED AS TO THEIR EXISTENCE, 
3 
OWNERSHIP, CONDITION, AND OTHER FACTORS TO DETERMINE 
4 
THEIR 
REALIZABLE 
VALUE. 
IN 
THE 
MANAGEMENT, 
5 
PRESERVATION AND DISPOSITION OF ASSETS, THE RECEIVER 
6 
SHALL 
BE 
GUIDED 
BY 
COST-BENEFIT 
CONSIDERATIONS, 
7 
RESOURCES OF THE CLOSED BANK, AND POTENTIAL ASSET 
8 
RECOVERY. 
9 
(B) THE CONVERSION OF THE ASSETS OF THE CLOSED BANK 
10 
SHALL BE CARRIED OUT IN A FAIR AND TRANSPj~RENT MANNER 
11 
IN ACCORDANCE WITH THE RULES AND PROCEDURES AS MAY 
12 
BE DETERMINED BY THE RECEIVER. 
13 
(C) IN THE MANAGEMENT AND/OR CONVERSION OF THE ASSETS 
14 
OF THE CLOSED BANK, THE RECEIVER SHALL HAVE THE 
15 
AUTHORITY TO: 
16 
1) REPRESENT THE CLOSED BANK BEFORE THE LAND 
17 
REGISTRATION AUTHORITY (LRA), BURE.AU OF LANDS, 
18 
REGISTER OF DEEDS, THE LAND TRANSPORTATION OFFICE 
19 
(LTO), THE ASSESSOR'S OFFICE OR OTHER APPROPRIATE 
2.0 
OFFICE 
OF 
THE 
LOCAL 
GOVERNMENT 
UNIT, 
THE 
21 
SECURITIES AND EXCHANGE COMMISSION (SEC), OR SUCH 
22 
OTHER SIMILAR GOVERNMENT AGENCIES OR PRIVATE 
23 
ENTITIES IN ---
24 
25 
A. VERIFYING 
THE 
AUTHENTICITY 
OF 
OWNERSHIP 
DOCUMENTS; 
56 


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 
B. REGISTERING THE INTEREST OF THE CLOSED BANK ON 
A SPECIFIC PROPERTY; 
C. CONSOLIDATING OWNERSHIP OVER AN ASSET OF THE 
CLOSED BANK; 
D. SECURING CERTIFIED TRUE COPIES OF DOCUMENTS 
HELD BY THE 
FOREGOING 
AGENCIIES/ENTITIES 
IN 
RELATION TO AN ASSET OF THE CLOSED BANK; 
E. SECURING THE APPROPRIATE CERTIFICATION FROM 
THE FOREGOING AGENCIES/ENTITIES IN RELATION TO 
AN ASSET OF THE CLOSED BANK; AND 
F. PERFORMING OTHER RELATED ACTIVITIES; 
2) CONDUCT A PHYSICAL OR OCULAR INSPECTION OF THE 
PROPERTIES OWNED BY, OR MORTGAGED TO, THE CLOSED 
BANK, TO DETERMINE THEIR EXISTENCE AND PRESENT 
CONDITION; 
3) DETERMINE 
THE 
DISPOSAL 
PRICE 
OF 
ASSETS 
IN 
ACCORDANCE WITH GENERALLY ACCEPTED VALUATION 
PRINCIPLES, STANDARDS AND PRACTICES, SUBJECT TO 
SUCH GUIDELINES AS THE RECEIVER MAY DETERMINE; 
4) DISPOSE REAL OR PERSONAL PROPERTIES OF THE 
CLOSED BANK THROUGH BIDDING, NEGOTIATED SALE OR 
ANY OTHER MODE INCLUDING LEASE WITH OPTION TO 
PURCHASE, WHETHER BY PIECE OR BY LOT, AS MAY BE 
REASONABLY DETERMINED BY THE RECEIVER BASED ON 
COST 
BENEFIT 
CONSIDERATIONS 
AND 
TO 
ALLOW 
EFFICIENT DISTRIBUTION OF ASSETS TO CREDITORS; AND 
57 


1 
5) ENGAGE THIRD PARTIES TO ASSIST IN THE LIQUIDATION, 
2 
MANAGE AND/OR DISPOSE THE ASSETS, HANDLE CASES 
3 
FILED AGAINST OR BY THE CLOSED BAN 1<, SUBJECT TO 
4 
SUCH GUIDELINES AS DETERMINED BY THE RECEIVER. 
5 
(D) NOTWITHSTANDING ANY PROVISION OF LAW TO THE 
6 
CONTRARY, THE FOLLOWING RULES SHALL APPLY TO THE 
7 
MANAGEMENT AND/OR CONVERSION BY THE RECEIVER OF THE 
8 
ASSETS OF THE CLOSED BANK: 
9 
1) UPON NOTIFICATION OF THE CLOSURE OIF A BANK, THE 
10 
LAND REGISTRATION AUTHORITY, BUREII),U OF LANDS, 
11 
REGISTER OF DEEDS, LAND TRANSPORTATION OFFICE, 
12 
ASSESSOR'S OFFICE OR OTHER APPROPRIATE OFFICE OF 
13 
THE LOCAL GOVERNMENT UNIT, OR SUCH OTHER SIMILAR 
14 
GOVERNMENT 
AGENCIES 
SHALL 
NOT 
ALLOW 
ANY 
15 
TRANSACTION AFFECTING THE ASSETS OF THE CLOSED 
16 
BANK WITHOUT THE CONSENT OF THE RECEIVER. 
17 
2) 
UPON ISSUANCE BY THE MONETARY BOARD OF THE 
18 
RESOLUTION ORDERING THE CLOSURE Of A BANK, ANY 
19 
PERSON OR ENTITY IN CUSTODY OR POSSESSION OF 
20 
21 
22 
23 
24 
25 
ASSETS OR RECORDS OF THE CLOSED BANK, INCLUDING, 
BUT NOT LIMITED TO, 
THE CLOSED BANK'S DEPOSIT 
ACCOUNTS, TITLES TO REAL PROPERTY, COLLATERALS, 
PROMISSORY NOTES, EVIDENCE OF INDEBTEDNESS OR 
INVESTMENTS SHALL IMMEDIATELY TURN OVER CUSTODY 
OF SAID ASSETS AND RECORDS TO THE RECEIVER. SUCH 
58 


1 
OBLIGATION SHALL NOT COVER EVIDENCES OF DEPOSIT 
2 
SUCH AS PASSBOOKS OR CERTIFICATES OF DEPOSIT 
3 
ISSUED BY THE BANK TO ITS DEPOSITORS. PENDING 
4 
TURNOVER, ALL PERSONS OR ENTITIES 1111 CUSTODY OR 
5 
POSSESSION OF ANY ASSET OR RECORD OF THE CLOSED 
6 
BANK SHALL HOLD THE SAID ASSETS OR RECORDS IN 
7 
TRUST FOR THE RECEIVER. 
8 
3) THE PERSONS OR ENTITIES IN CUSTODY OR POSSESSION 
9 
OF SUCH ASSET SHALL NOT ALLOW, ,I\UTHORIZE OR 
10 
CAUSE 
THE 
WITHDRAWAL, 
TRANSFER, 
DISPOSITION, 
11 
REMOVAL, 
CONVERSION, 
CONCEALMENT, 
OR 
OTHER 
12 
TRANSACTION INVOLVING OR RELATING TO THE SUBJECT 
13 
ASSET, UNLESS OTHERWISE DIRECTED BY THE RECEIVER. 
14 
(E) THE RECEIVER SHALL HAVE THE AUTHORITY TO INVEST 
15 
FUNDS RECEIVED FROM THE CONVERSION OF THE ASSETS OF 
16 
THE CLOSED BANK IN 
GOVERNMENT SECURITIES, OTHER 
17 
GOVERNMENT-GUARANTEED 
MARKETABLE 
SECURITIES 
OR 
18 
INVESTMENT-GRADE DEBT INSTRUMENTS. 
19 
(F) THE PROCEEDS OF THE SALE OF THE BANKING FRANCHISE 
20 
SHALL BE FOR THE BENEFIT OF THE CREDITORS OF THE CLOSED 
21 
BANK WHICH SHALL BE DISTRIBUTED IN ACCORDANCE WITH 
22 
THIS ACT AND THE RULES ON CONCURRENCE AND PREFERENCE 
23 
OF CREDITS UNDER THE CIVIL CODE OR OTHER LAWS. 
24 
B. PETITION FOR ASSISTANCE 
25 
IN THE LIQUIDATION (PAL) OF A CLOSE[) BANK 
59 


1 
(G) A PETITION FOR ASSISTANCE IN THE LIQUIDATION (PAL) IS A 
2 
SPECIAL PROCEEDING FOR THE LIQUIDATION OF A CLOSED 
3 
BANK, AND INCLIlJDES THE DECLARATION OF THE CONCOMITANT 
4 
RIGHT OF ITS CREDITORS AND THE ORDER OF PAYMENT OF 
5 
THEIR VALID CLAIMS IN THE DISPOSITION OF ITS ASSETS. 
6 
ANY PROCEEDING INITIATED UNDER THIS SECTION SHALL BE 
7 
CONSIDERED IN REM. 
JURISDICTION 
OVER ALL PERSONS 
8 
AFFECTED BY THE PROCEEDING SHALL BE CONSIDERED AS 
9 
ACQUIRED UPON PUBLICATION OF THE ORDER SETTING THE 
10 
CASE FOR INITIAL HEARING IN ANY NEWSPAPER OF GENERAL 
11 
CIRCULATION IN THE PHILIPPINE;S. 
12 
(H) 
THE 
LIQUIDATION 
COURT 
SHALL 
HAVE 
EXCLUSIVE 
13 
JURISDICTION TO ADJUDICATE DISPUTED CLAIMS AGAINST THE 
14 
CLOSED BANKS" ASSIST IN THE ENFORCEMENT OF INDIVIDUAL 
15 
LIABILITIES OF THE STOCKHOLDERS, DIRECTORS AND OFFICERS 
16 
AND DECIDE ON ALL OTHER ISSUES AS MAY BE MATERIAL TO 
17 
IMPLEMENT 
THE 
DISTRIBUTION 
PLAN 
ADOPTED 
BY 
THE 
18 
CORPORATION IFOR GENERAL APPLICATION TO ALL CLOSED 
19 
BANKS. 
20 
(I) THE PROVISIONS OF REPUBLIC ACT NO. 8799, OTHERWISE 
21 
KNOWN 
AS 
"THE 
SECURITIES 
REGULATION 
CODE," 
AND 
22 
SUPREME COURT ADMINISTRATIVE MATTER NO. 00-8-10-SC, 
23 
ENTITLED, "THE RULES OF 
PROCEDURE ON 
CORPORATE 
24 
REHABILITATION," SHALL NOT BE APPLICABLE TO THE PAL OF 
25 
THE CLOSED BANK. 
60 


1 
(J) THE PETITION SHALL BE FILED IN THE REGIONAL TRIAL 
2 
COURT WHICH HAS JURISDICTION OVER THE PRINCIPAL OFFICE 
3 
OF THE CLOSED BANK OR THE PRINCIPAL OFFICE OF THE 
4 
RECEIVER, AT THIE OPTION OF THE LATTER. 
5 
6 
(K) THE PETITION SHALL BE FILED EX PARTE WITHIN A 
7 
REASONABLE PERIOD FROM RECEIPT OF THE MONETARY BOARD 
8 
RESOLUTION PLACING THE BANK UNDER LIQUIDATION. 
9 
(L) ALL PERSONS OR ENTITIES WITH CLAIMS AGAINST THE 
10 
ASSETS OF THE CLOSED BANK SHALL FILE THEIR CLAIMS WITH 
11 
THE RECEIVER WITHIN SIXTY (60) DAYS FROM 
DATE OF 
12 
PUBLICATION OF THE NOTICE OF CLOSURE. CLAIMS FILED 
13 
OUTSIDE THE FOREGOING PRESCRIBED PERIOD SHALL BE 
14 
DISALLOWED. 
15 
CLAIMS DENIED BY THE RECEIVER SHALL BE FILED WITH THE 
16 
LIQUIDATION COURT WITHIN SIXTY (60) DAYS FROM RECEIPT OF 
17 
THE FINAL NOTICE OF DENIAL OF CLAIM. 
18 
(M) A CLAIM WHOSE VALIDITY HAS NOT YET BEEN DETERMINED 
. 19 
WITH FINALITY AT THE TIME OF THE SUBMISSION OF THE FINAL 
20 
ASSET DISTRIBUTION PLAN (FADP), EITHER BY REASON OF A 
21 
PENDING 
SUIT 
OR FOR WHATEVER 
REASON, 
SHALL 
BE 
22 
CONSIDERED AS CONTINGENT CLAIM AND SHALL NOT BE PAID 
23 
UNDER THE PROPOSED FINAL ASSET DISTRIBUTION PLAN 
24 
(FADP). 
61 


1 
(N) UPON FINALITY OF THE ORDER APPROVING THE FINAL ASSET 
2 
DISTRIBUTION PLAN (FADP), THE PETITION FOR ASSISTANCE IN 
3 
THE LIQUIDATION OF A CLOSED BANK SHALL HENCEFORTH BE, 
4 
FOR ALL INTENTS AND PURPOSES, CONSIDERED CLOSED AND 
5 
TERMINATED AND THE RECEIVER, ITS OFFICERS, EMPLOYEES OR 
6 
AGENTS, ARE FOREVER DISCHARGED FROM ANY AND ALL 
7 
CLAIMS AND/OR LIABILITY ARISING FROM OR IN CONNECTION 
8 
WITH THE LIQUIDATION OF THE CLOSED BANK. 
9 
(0) THE RECEIVER SHALL SUBMIT A FINAL REPORT ON THE 
10 
IMPLEMENTATION 
OF 
THE 
APPROVED 
FINAL 
ASSET 
11 
DISTRIBUTION PLAN (FADP) TO THE MONETARY BOARD AND THE 
12 
SECURITIES AND EXCHANGE COMMISSION (SEC) AFTER THE 
13 
EXPIRATION OF THE WINDING-UP PERIOD PROVIDED IN SECTION 
14 
17 OF THIS ACT. 
15 
(P) 
THE 
SUPREME 
COURT 
SHALL 
PROMULGATE 
THE 
16 
APPROPRIATE 
PROCEDURAL 
RULES 
TO 
IMPLEMENT 
THIS 
17 
SECTION. 
18 
C. WINDING-UP 
19 
(Q) THE CREDITORS SHALL HAVE A PERIOD OF SIX (6) MONTHS 
20 
FROM DATE OF PUBLICATION OF NOTICE OF THE APPROVAL BY 
21 
THE COURT OF THE FINAL ASSET DISTRIBUTION PLAN (FADP) OF 
22 
THE CLOSED BANK WITHIN WHICH TO CLAIM PAYMENT OF THE 
23 
PRINCIPAL OBLIGATIONS AND SURPLUS DIVIDENDS. DURING 
24 
THIS SIX-MONTH PERIOD, THE RECEIVER SHALL HOLD AS 
25 
TRUSTEE THE ASSETS ALLOCATED IN THE FINAL ASSET 
26 
DISTRIBUTION PLAN (FADP) FOR SAID CREDITORS. 
62 


1 
FAILURE 
BY 
THE 
CREDITOR 
TO 
COMPLY 
WITH 
THE 
2 
DOCUMENTARY 
REQUIREMENTS 
WITHIN 
THE 
PRESCRIBED 
3 
PERIOD AND/OR REFUSAL TO ACCEPT THE ASSET AS PAYMENT 
4 
SHALL BE DEEMED AS ABANDONMENT OR WAIVER OF HIS RIGHT 
5 
TO PAYMENT. 
6 
(R) THE INDIVIDUAL STOCKHOLDERS OF RECORD OR THEIR 
7 
DULY-AUTHORIZED 
REPRESENTATIVE 
OR 
THE 
COURT-
8 
APPOINTED STOCKHOLDERS' REPRESENTATIVE SHALL HAVE A 
9 
PERIOD OF SIX (6) MONTHS FROM PUBLICATION OF NOTICE OF 
10 
THE 
APPROVAl. 
BY THE 
COURT 
OF 
THE 
FINAL 
ASSET 
11 
DISTRIBUTION PL.AN (FADP) OF THE CLOSED BANK WITHIN WHICH 
12 
TO CLAIM THE RESIDUAL ASSETS. DURING THIS SIX- MONTH 
13. 
PERIOD, THE RECEIVER SHALL HOLD AS TRUSTEE THE ASSETS 
14 
ALLOCATED IN THE FINAL ASSET DISTRIBUTION PLAN (FADP) 
15 
FOR SAID STOCKHOLDERS OF RECORD. 
16 
FAILURE BY THI: INDIVIDUAL STOCKHOLDERS OF RECORD OR 
. 17 
THEIR DULY-AUTHORIZED REPRESENTATIVE OR THE COURT-
18 
APPOINTED STOCKHOLDERS' REPRESENTATIVE TO COMPLY 
19 
WITH 
THE 
DOCUMENTARY 
REQUIREMENTS 
WITHIN 
THE 
20 
PRESCRIBED 
PERIOD 
AND/OR 
REFUSAL 
TO 
ACCEPT THE 
21 
RESIDUAL 
ASSETS 
IN 
KIND 
SHALL 
BE 
DEEMED 
AS 
22 
ABANDONMENT OR WAIVER OF RIGHT TO 
RECEIVE 
THE 
23 
RESIDUAL ASSETS. 
24 
(S) AFTER THE l.APSE OF THE SIX-MONTH PERIOD PROVIDED IN 
25 
PARAGRAPHS (q) AND (r) OF THIS SECTION, ALL ASSETS WHICH 
63 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
REMAIN 
UNCLAIMED 
BY 
THE 
CREDITORS 
AND/OR 
STOCKHOLDERS OF RECORD SHALL BE TURNED OVER TO THE 
BUREAU OF TREASURY. 
(T) THE RECEIVER SHALL CONTINUE TO KEEP ALL THE 
PERTINENT RECORDS OF THE CLOSED BANK FOR A PERIOD OF 
SIX (6) MONTHS FROM DATE OF PUBLICATION OF THE APPROVAL 
OF THE FINAL ASSET DISTRIBUTION PLAN (FADP). AFTER THE 
LAPSE OF THIS PERIOD, THE RECEIVER IS AUTHORIZED TO 
DISPOSE 
OF 
THE 
SAME 
IN 
ACCORDANCE 
RULES 
AND 
REGULATIONS TO BE PRESCRIBED BY THE RECEIVER." 
SECTION 31. Section 13 of the same Act is hereby renumbered as Section 18. 
SECTION 32. A new section entitled Section 19 of the same Act is hereby 
inserted between Sections 18 and 20 which shall read as follows: 
"DIVIDEND DECLARATION 
SECTION 19. CONSISTENT WITH THE POLICY OF THE STATE TO 
GENERATE, PRESERVE, MAINTAIN FAITH AND CONFIDENCE IN 
THE COUNTRY'S BANKING SYSTEM, THE CORPORATION SHALL 
BUILD UP AND MAINTAIN THE DEPOSIT INSURANCE FUND (DIF) AT 
THE TARGET LEVEL SET BY THE PDIC BOARD OF DIRECTORS. 
SUCH TARGET LEVEL SHALL BE SUBJECT TO PERIODIC REVIEW 
AND MAY BE AD.IUSTED AS NECESSARY. 
THE CORPORATION SHALL REMIT DIVIDENDS TO THE NATIONAL 
GOVERNMENT ONLY IF THE TARGET DIF LEVEL FOR THE 
64 


1 
APPLICABLE YEAR HAS BEEN REACHED. THE DIVIDEND RATE 
2 
SHALL BE AT LEAST FIFTY PERCENT (50%) OF THE NET INCOME 
3 
OF THE CORPORATION AFTER DEDUCTING ANY ADDITION TO 
4 
RESERVES 
FOR INSURANCE 
AND 
FINANCIAL 
ASSISTANCE 
5 
LOSSES, AND OTliER PROVISIONS FOR LOSSES. 
6 
THE PROVISIONS OF REPUBLIC ACT NO. 7656 SHALL NOT APPLY 
7 
TO THE CORPORATION." 
8 
SECTION 33. Section 14 of the same Act is accordingly renumbered as Section 
9 
20 and is hereby amended to read as follows: 
10 
"PAYMENT OF INSURED DEPOSITS 
11 
SECTION 20. Whenever an insured bank shall have been closed by the 
12 
Monetary Board pursuant to Section 30 of R.A. 7653, OR UPON 
13 
EXPIRATION OR REVOCATION OF A BANK'S CORPORATE TERM, 
14 
payment of the insured deposits on such closed bank shall be made by 
15 
the Corporation as soon as possible either (1) by cash or (2) by making 
16 
available to each depositor a transferred deposit in another insured bank 
17 
in an amount equal to insured deposit of such depositor: Provided, 
18 
however, That the Corporation, in its discretion, may require proof of 
19 
claims to be filed before paying the insured deposits, and that in any case 
20 
where the Corporation is not satisfied as to the [viability] VALIDITY of a 
21 
claim for an insured deposit, it may require final determination of a court of 
22 
competent jurisdiction before paying such claim: Provided, further, That 
23 
failure to settle the claim, within six (6) months from the date of filing of 
24 
claim for insured deposit, where such failure was due to grave abuse of 
25 
discretion, gross negligence, bad faith, or malice, shall, upon conviction, 
65 


1 
subject the directors, officers or employees of the Corporation responsible 
2 
for the delay, to imprisonment from six (6) months to one (1) year: 
3 
Provided, furthermore, That the period shall not apply if the validity of the 
4 
claim requires the resolution of issues of facts and or law by another 
5 
office, body or agency including the 'case mentioned in the first proviso or 
6 
by the Corporation together with such other office, body or agency." 
7 
SECTION 34. Section 15 of the same Act is accordingly renumbered as Section 
8 
21 and is hereby amended to read as follows: 
9 
"SECTION 21. HIe Corporation, upon payment of any depositor as 
10 
provided for in [subsection (c) of this] Section 20 OF THIS ACT, shall be 
11 
subrogated to all rights of the depositor against the closed bank to the 
12 
extent of such payment. Such subrogation shall include the right on the 
13 
part of the Corporation to receive the same dividends and payments from 
14 
the proceeds of the assets of such closed bank and recoveries on account 
15 
of stockholders' liability as would have been payable to the depositor on a 
16 
claim for the insured deposits: [but,] PROVIDED, THAT such depositor 
17 
shall retain his claim for any uninsured portion of his deposit, WHICH 
18 
LEGAL PREFERENCE SHALL BE IMMEDIATELY BELOW THAT OF 
19 
THE SUBROGATED CLAIM OF THE CORPORATION FOR ITS 
20 
PAYMENT OF INSURED DEPOSITS. All payments by the Corporation of 
21 
insured deposits in closed banks partake of the nature of public funds, 
22 
and as such, must be considered a preferred credit similar to taxes due to 
23 
the National Government in the order of preference under Article 2244 of 
24 
the New Civil Code.[: Provided, further, That this preference shall be 
25 
likewise effective IUpon liquidation proceedings already commenced and 
26 
pending as of the .approval of this Act, where no distribution of assets has 
27 
been made.]" 
66 


1 
SECTION 35. Section 16 of the same Act is accordingly renumbered as Section 
2 
22 and paragraph (c) thereof is hereby amended to read as follows: 
3 
"(c) Except as otherwise prescribed by the Board of Directors, neither the 
4 
Corporation nor such other insured bank shall be required to recognize as 
5 
the owner of any portion of a deposit [appearing on the records] 
6 
EVIDENCED BY A PASSBOOK, 
CERTIFICATE OF DEPOSIT OR 
7 
OTHER 
EVIDENCE 
OF 
DEPOSIT 
DETERMINED 
BY 
THE 
8 
CORPORATION TO BE AN AUTHENTIC DOCUMENT OR RECORD of 
9 
the closed bank under a name other than that of the claimant, any person 
10 
whose name or interest as such owner is not disclosed on the 
11 
PASSBOOK, CERTIFICATE OF DEPOSIT OR OTHER EVIDENCE OF 
12 
DEPOSIT [records] of such closed bank as part owner of said deposit, if 
13 
such recognition would increase the aggregate amount of the insured 
14' 
deposits in such closed bank." 
15 
SECTION 36. Section 17 of the same Act is accordingly renumbered as Section 
16 
23. 
17 
SECTION 37. Section 23 paragraph (a) of the same Act, as renumbered, is 
18 
hereby amended to read as follows: 
19 
"CORPORATE FUNDS AND ASSETS 
20 
SECTION 23. 
(81) SUBJECT TO GUIDELINES AND LIMITS AS 
21 
APPROVED BY THE BOARD OF DIRECTORS, [MJmoney of the 
22 
Corporation denominated in the local currency, not otherwise employed, 
23 
shall be invested in obligations of the Republic of the Philippines or in 
67 


1 
obligations guaranteed as to principal and interest by the Republic of the 
2 
Philippines. 
3 
THE CORPORATION MAY ALSO INVEST IN DEBT INSTRUMENTS 
4 
DENOMINATED 
IN 
FOREIGN 
CURRENCIES 
ISSUED 
OR 
5 
GUARANTEED BV THE REPUBLIC OF THE PHILIPPINES, OR DEBT 
6 
INSTRUMENTS DENOMINATED IN FREELY CONVERTIBLE FOREIGN 
7 
CURRENCIES ISSUED BY SUPRANATIONALS, MULTILATERAL 
8 
AGENCIES, OR FOREIGN GOVERNMENTS WITH AT LEAST AN 
9 
INVESTMENT GRADE CREDIT RATING. 
10 
THE CORPORATIION SHALL LIKEWISE BE AUTHORIZED TO BUY 
11 
ANDIOR SELL DIEBT INSTRUMENTS AND FOREIGN CURRENCIES 
12 
FROM 
ANY 
GOVERNMENT SECURITIES 
ELIGIBLE 
DEALERS 
13 
(GSEDs), OR ANV COUNTERPARTIES OR BROKERS, ACCREDITED 
14 
BY THE PDIC BOARD. 
15 
FOR THIS PURPOSE, THE CORPORATION SHALL BE AUTHORIZED 
16 
TO 
OPEN 
SECURITIES 
CUSTODIANSHIP 
AND 
SETTLEMENT 
17 
ACCOUNTS." 
18 
SECTION 38. Section 23 paragraph (b) of the same Act, as renumbered, is 
19 
hereby amended to read as follows: 
20 
"(b) The banking or checking accounts of the Corporation shall be kept 
21 
with the Bangko Sentra/ ng Pilipinas, [with the Philippine National Bank,] 
22 
or with any other bank designated as depository or fiscal agent of the 
23 
Philippine government" 
68 


1 
SECTION 39. An additional paragraph to Section 23 of the same Act, as 
2 
renumbered, is hereby inserted after paragraph (c) which shall read as follows: 
3 
"(d) ASSETS OF THE CORPORATION SHALL BE EXEMPT FROM 
4 
ATTACHMENT, 
GARNISHMENT OR ANY OTHER ORDER OR 
5 
PROCESS 
OF 
ANY 
COURT, 
AGENCY 
OR 
ANY 
OTHER 
6 
ADMINISTRATIVE BODY." 
7 
SECTION 40. Section 17 paragraph (d) of the same Act is accordingly 
8 
renumbered as Section 2~\ paragraph (e) and is hereby amended to read as follows: 
9 
"FINANCIAL ASSISTANCE 
10 
(e) [When the Corporation has determined that an insured bank is in 
11 
danger of closing, in order to prevent such closing,] IN THE EXERCISE 
12 
OF ITS AUTHORITIES UNDER SECTION 11 OF THIS ACT, the 
13 
Corporation [, in the discretion of its Board of Directors,] is authorized to 
14 
make loans to, or purchase the assets of, or assume liabilities of, or make 
15 
deposits in[, such insured bank,]: 
16 
1) A BANK IN DANGER OF CLOSING, UPON ITS ACQUISITION 
17 
BY A QUALIFIED INVESTOR; OR 
18 
2) A QUALIFIED INVESTOR, UPON ITS PURCHASE OF ALL 
19 
ASSETS AND ASSUMPTION OF ALL LIABILITIES OF A BANK 
20 
IN DANGER OF CLOSING; OR 
21 
3) A SURVIVIING OR CONSOLIDATED INSTITUTION THAT HAS 
22 
MERGED OR CONSOLIDATED WITH A BANK IN DANGER OF 
23 
CLOSING; 
69 


1 
upon such terms and conditionS as the Board of Directors may prescribe, 
2 
when in the opinion of the Board of Directors, [the continued operation of 
3 
such 
bank] 
SUCH 
ACQUISITION, 
PURCHASE 
OF 
ASSETS, 
4 
ASSUMPTION OF LIABILITIES, MERGER OR CONSOLIDATION, is 
5 
essential to provide adequate banking service in the community or 
6 
maintain financial stability in the economy. 
7 
[The authority of the Corporation under the foregoing paragraph to extend 
8 
financial assistance to, assume liabilities of, purchase the assets of an 
9 
insured bank may also be exercised in the case of a closed insured bank 
10 
if the Corporation finds that the resumption of operations of such bank is 
11 
vital to the interests of the community, or a severe financial climate exists 
12 
which threatens the stability of a number of banks possessing significant 
13 
resources: Provided, That the reopening and resumption of operations of 
14 
the closed bank shall be subject to the prior approval of the Monetary 
15 
Board.] 
16 
[The Corporation may provide any corporation acquiring control of, 
17 
merging or consolidating with or acquiring the assets of an insured bank in 
18 
danger of closing in order to prevent such closing or of a closed insured 
19 
bank in order to restore to normal operations, with such financial 
20 
assistance as it could provide an insured bank under this subsection: 
21 
Provided, That, within sixty (60) days from date of assistance the 
22 
Corporation shall submit a report thereof to the Monetary Board.] 
23 
The Corporation, prior to the exercise of the powers under this Section, 
24 
shall determine that actual payoff and liquidation thereof will be more 
25 
expensive than the exercise of this power: Provided, That when the 
26 
Monetary Board has determined that there are systemic consequences of 
70 


1 
a probable failure or closure of an insured bank, the Corporation may 
2 
grant financial assistance to such insured bank in such amount as may be 
3 
necessary to prevent its failure or closure and/or restore the insured bank 
4 
to viable operations, under such terms and conditions as may be deemed 
5 
necessary by the Board of Directors, subject to concurrence by the 
6 
Monetary Board and without additional cost to the Deposit Insurance 
7 
Fund. 
8 
A systemic risk refers to the possibility that failure of one bank to settle net 
9 
transactions with other banks will trigger a chain reaction, depriving other 
10 
banks of funds leading to a general shutdown of normal clearing and 
11 
settlement activity. Systemic risk also means the likelihood of a sudden, 
12 
unexpected collapse of confidence in a significant portion of the banking 
13 
or financial system with potentially large real economic effects. Finally, the 
14 
Corporation may not use its authority under this subsection to purchase 
15 
the voting or common stock of an insured bank but it can enter into and 
16 
enforce agreements that it determines to be necessary to protect its 
17 
financial interests: Provided, That the financial assistance may take the 
18 
form of equity or quasi-equity of the insured bank as may be deemed 
19 
necessary by the Board of Directors with concurrence by the Monetary 
20 
Board: Provided, further, That the Corporation shall dispose of such equity 
21 
as soon as practicable." 
22 
SECTION 41. Section 18 of the same Act is accordingly renumbered as Section 
23 
24 and is hereby amended to read as follows: 
24 
"AUTHORITY TO BORROW 
71 


1 
SECTION 24. The Corporation is authorized to borrow from the Bangko 
2 
Sentra! ng Pilipinas: and the Bangko Sentra! is authorized to lend TO the 
3 
Corporation on such terms as may be agreed upon by the Corporation 
4 
and the Bangko Sentra!, such funds as in the judgment of the Board of 
5 
Directors of the Corporation are from time to time required for insurance 
6 
purposes and financial assistance provided for in Section [17] 23(e) of this 
7 
Act: Provided, That any such loan as may be granted by the Bangko 
8 
Sentra! shall be consistent with monetary policy; Provided, further, That 
9 
the rate of interest thereon shall be fixed by the Monetary Board but shall 
10 
not exceed the [t]Treasury [bill] rate 
CORRESPONDING TO THE 
11 
MATURITY OF SUCH LOAN. 
12 
When in the judfJment of the Board of Directors the funds of the 
13 
Corporation are not sufficient to provide for an emergency or urgent need 
14 
to attain the purposes of this Act, the Corporation is likewise authorized to 
15 
borrow money, obtain loans or arrange credit lines or other credit 
16 
accommodations from any bank [designated as depository or fiscal agent 
17 
of the Philippine Government]: Provided, That such loan shall be of shorl-
18 
term duration, PROVIDED, FURTHER, THAT SECTION 123 OF THE 
19 
NEW CENTRAL BANK ACT, AS AMENDED, SHALL NOT APPLY." 
20 
SECTION 42. Section 19 of the same Act is accordingly renumbered as Section 
21 
25 and is hereby amended to read as follows: 
22 
"ISSUANCE OF BONDS, DEBENTURES AND OTHER 
23 
OBLIGATIONS 
24 
SECTION [19] 25. With the approval of the President of the Philippines, 
25 
the Corporation is authorized to issue bonds, debentures, and other 
72 


1 
obligations, both local or foreign, as may be necessary for purposes of 
2 
providing liquidity for settlement of insured deposits in closed banks, TO 
3 
FACILITATE THE 
IMPLEMENTATION 
OF 
BANK 
RESOLUTION 
4 
UNDER SECTION 11 OF THIS ACT, as well as for financial assistance 
5 
as provided herein, Provided, That the Board of Directors shall determine 
6 
the interest rates, maturity and other requirements of said obligations: 
7 
Provided, further, That the Corporation shall provide for appropriate 
8 
reserves for the redemption or retirement of said obligation. 
9 
All notes, debentures, bonds, or such obligations issued by the 
10 
Corporation shall be exempt from taxation both as to principal and 
11 
interest, and shall be fully guaranteed by the Government of the Republic 
12 
of the Philippines. Such guarantee, which in no case shall exceed two 
13 
times the Deposit Insurance Fund as of date of the debt issuance, shall be 
14 
expressed on the face thereof. 
15 
THE CORPORAnON MAY ISSUE NOTES, DEBENTURES, BONDS, 
16 
OR OTHER DEBT INSTRUMENTS WITHOUT THE APPROVAL OF THE 
17 
PRESIDENT OF THE PHILIPPINES, PROVIDED THAT THESE SHALL 
18 
NOT BE GUARANTEED BY THE NATIONAL GOVERNMENT. 
19 
The Board of Directors shall have the power to prescribe THE TERMS 
20 
AND CONDITIONS, rules and regulations for the issuance, reissuance, 
21 
servicing, placement and redemption of the bonds herein authorized to be 
22 
issued as well as the registration of such bonds at the request of the 
23 
holders thereof." 
24 
:SECTION 43. Section 20 of the same Act is accordingly renumbered as. Section 
25 
26. 
73 


1 
SECTION 44. Section 21 of the same Act is accordingly renumbered as Section 
2 
27. 
3 
SECTION 45. Section 27 paragraph (f) of the same Act, as renumbered, is 
4 
hereby amended to read as follows: 
5 
"(f) The penalty of IMPRISONMENT OF NOT LESS THAN SIX YEARS 
6 
BUT NOT MORE THAN TWELVE YEARS [prision mayor] or a fine of not 
7 
less than Fifty thousand pesos (P50,OOO.OO) but not more than TEN [Two] 
8 
million pesos (P'IO,OOO,OOO.OO), 
[(P2,OOO,OOO.OO),] or both, at the 
9 
discretion of the court, shall be imposed upon [any director, officer, 
10 
employee or agent of a bank]: 
11 
1) ANY DIRECTOR, OFFICER, EMPLOYEE OR AGENT OF A 
12 
BANK FOR:: 
13 
a. [for] any willful refusal to submit reports as required by law, 
14 
rules and regulations; 
15 
b. any unjustified refusal to permit examination and audit of the 
16 
deposit records or the affairs of the institution; 
17 
c. any willful making of a false statement or entry in any bank 
18 
report or document required by the Corporation; 
19 
d. submission of false material information in connection with or in 
20 
relation to any financial assistance of the Corporation extended 
21 
to the bank; 
74 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
e. splitting of deposits or creation of fictitious OR FRAUDULENT 
loans or deposit accounts. 
Splitting of deposits occurs whenever a deposit account with an 
outstanding balance of more than the statutory maximum 
amount of insured deposit maintained under the name of 
natural or juridical persons is broken down and transferred into 
two (2) or more accounts in the name/s of natural or juridical 
persons or entities who have no beneficial ownership on 
transferrE~d deposits in their names within one hundred twenty 
(120) days immediately preceding or during a bank-declared 
bank holiday, or immediately preceding a closure order issued 
by the Monetary Board of the Bangko Sentra/ ng Pilipinas for 
the purpose of availing of the maximum deposit insurance 
coveragE~; 
f. REFUSAL TO RECEIVE THE NOTICE OF CLOSURE AS 
PROVIDED UNDER SECTION 14 OF THIS ACT; 
g. refusal to allow the Corporation to take over a closed bank 
[placed under its receivership] or obstructing such action of the 
Corporation; 
h. refusal to turn over or destroying or tampering bank records; 
i. 
fraudulent disposal, transfer or concealment of any asset, 
property or liability of the closed bank [under the receivership of 
the Corporation]; 
75 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
J. 
violation of, or causing any person to violate, the exemption 
from garnishment, levy, attachment or execution provided under 
this Act and the New Central Bank Act; 
k. any willful failure or refusal to comply with, or violation of any 
provision of this Act, or commission of any other irregularities, 
and/or conducting business in an unsafe or unsound manner as 
may be determined by the Board of Directors[,] IN RELATION 
TO SECTION 56 OF REPUBLIC ACT NO. 8791, OR THE 
GENERAL BANKING LAW OF 2000. 
NOTWITHSTANDING ANY LAW TO THE CONTRARY, THE 
FOREGOING 
ACTS 
OF 
DIRECTORS, 
OFFICERS, 
EMPLOYEES OR AGENTS OF THE BANK SHALL BE 
CONSIDERED AS ADDITIONAL GROUNDS FOR NON-
COMPLIANCE WITH THE FIT AND PROPER RULES OF THE 
BANGKO SENTRAL. 
I. 
OTHER ACTS INIMICAL TO THE INTEREST OF THE BANK 
OR THE CORPORATION, SUCH AS, BUT NOT LIMITED TO, 
CONFLICT 
OF 
INTEREST, 
DISLOYAL TV, 
AND 
DISCLOSURE OF CONFIDENTIAL INFORMATION, AS MAY 
BE DETERMINED BY THE CORPORATION. 
2) ANY PERSON FOR: 
76 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
a. REFUSAL TO DISCLOSE INFORMATION, RECORDS OR 
DATA PERTAINING TO THE BANK ACCOUNTS OF A 
CLOSED BANK TO THE RECEIVER; 
b. REFUSAL TO TURN OVER POSSESSION OR CUSTODY OF 
THE ASSET AND RECORD OF THE CLOSED BANK TO THE 
RECEIVER, NOTWITHSTANDING ANY AGREEMENT TO 
THE CONTRARY; 
c. REFUSAL OR DELAYING THE: 
i. VERIFICATION OF AUTHENTICITY OF THE OWNERSHIP 
DOCUMENTS; 
ii. REGISTRATION OF INTEREST OF THE CLOSED BANK 
ON A SPECIFIC PROPERTY; 
iii. CONSOLIDATION OF OWNERSHIP OVER AN ASSET OF 
THE CLOSED BANK; 
iv. ACT OF SECURING CERTIFIED TRUE COPIES OF 
DOCUMENTS IN RELATION TO AN ASSET OF THE 
CLOSED BANK; 
v. ACT 
OF 
SECURING 
THE 
APPROPRIATE 
CERTIFICATION FROM THE AGENCIES OR ENTITIES 
STATED IN SECTION 17 OF THIS ACT IN RELATION TO 
AN ASSET OF THE CLOSED BANK; 
77 


1 
vi. CON[)UCT OF A PHYSICAL OR OCULAR INSPECTION 
2 
OF THE PROPERTIES OWNED BY, OR MORTGAGED 
3 
TO, 
THE CLOSED BANK, TO DETERMINE THEIR 
4 
EXISTENCE AND PRESENT CONDITION; OR 
5 
vii.OTHER RELATED ACTIVITIES OF THE RECEIVER; OR 
6 
d. ALLOWING THE WITHDRAWAL FROM DEPOSITS OR 
7 
DISPOSITION OF ANY ASSET OF THE CLOSED BANK 
8 
OTHER THAN BY THE RECEIVER, 
9 
e. WILLFULLY VIOLATING ANY PROVISION OF THIS ACT; 
10 
3) ANY 
LAW 
ENFORCEMENT 
OFFICER 
OR 
LOCAL 
11 
GOVERNMENT OFFICIAL WHO REFUSES OR FAILS TO 
12 
ASSIST THIE RECEIVER IN THE SERVICE OF THE NOTICE OF 
13 
CLOSURE, AS PROVIDED UNDER SECTION 14 OF THIS ACT." 
14 
SECTION 46. Additional paragraphs to Section 27 of the same Act, as 
15 
renumbered, are hereby inserted after paragraph (g) which shall read as follows: 
16 
"(h) THE PENALTY OF IMPRISONMENT OF NOT LESS THAN TEN 
17 
(10) YEARS BUT NOT MORE THAN TWELVE (12) YEARS, OR A FINE 
18 
OF 
NOT 
LESS 
THAN 
FIVE 
HUNDRED 
THOUSAND 
PESOS 
19 
(P500,000.00) BUT NOT MORE THAN 
TEN 
MILLION 
PESOS 
20 
(P10,000,000.00), OR BOTH, AT THE DISCRETION OF THE COURT, 
21 
SHALL BE IMPOSED UPON: 
78 


1 
1) ANY 
DEPOSITOR WHO 
FILES 
A 
FICTITIOUS AND/OR 
2 
FRAUDULENT CLAIM FOR DEPOSIT INSURANCE; AND 
3 
2) ANY BANK OFFICER WHO CERTIFIES TO THE VALIDITY OF 
4 
THE 
DEPOSIT 
LIABILITIES WHICH 
IS 
SUBSEQUENTLY 
5 
VERIFIED TO BE FICTITIOUS AND/OR FRAUDULENT. 
6 
(i) THE PENAL TV OF IMPRISONMENT OF NOT LESS THAN TWELVE 
7 
(12) YEARS BUT INOT MORE THAN FOURTEEN (14) YEARS SHALL 
8 
BE IMPOSED UIPON ANY PERSON WHO PARTICIPATES, OR 
9 
ATTEMPTS TO PARTICIPATE, IN A SCHEME TO DEFRAUD A BANK. 
10 
IF THE OFFENSE SHALL HAVE BEEN COMMITTED BY A DIRECTOR 
11 
OR OFFICER OF THE BANK, THE PENAL TV OF IMPRISONMENT OF 
12 
NOT LESS THAN FIFTEEN (15) YEARS BUT NOT MORE THAN 
13 
SEVENTEEN (17) YEARS SHALL BE IMPOSED. 
14 
IF 
THE 
OFFENSE 
SHALL 
HAVE 
RESULTED 
IN 
SYSTEMIC 
15 
CONSEQUENCES, AS DETERMINED BY THE BANGKO SENTRAL, 
16 
THE PENALTY OF IMPRISONMENT OF NOT LESS THAN EIGHTEEN 
17 
(18) YEARS BUT NOT MORE THAN TWENTY (20) YEARS SHALL BE 
18 
IMPOSED." 
19 
SECTION 47. Section 22 of the same Act is accordingly renumbered as Section 
20 
28. 
21 
SECTION 48. Section 23 of the same Act is hereby renumbered as Section 29 
22 
and reinstated as follows: 
79 


1 
"SECTION 29. THE CORPORATION MAY BE REORGANIZED BY THE 
2 
BOARD OF DIRECTORS BY ADOPTING IF IT SO DESIRES, AN 
3 
ENTIRELY 
NEW 
STAFFING 
PATTERN 
OR 
ORGANIZATIONAL 
4 
STRUCTURE TO SUIT THE OPERATIONS OF THE CORPORATION 
5 
UNDER THIS ACT. NO PREFERENTIAL OR PRIORITY RIGHT SHALL 
6 
BE 
GIVEN 
TO 
OR 
ENJOYED 
BY 
ANY 
PERSONNEL 
FOR 
7 
APPOINTMENT TO ANY POSITION IN THE NEW STAFFING PATTERN 
8 
NOR SHALL ANY PERSONNEL BE CONSIDERED AS HAVING PRIOR 
9 
OR VESTED RIGHTS WITH RESPECT TO RETENTION IN THE 
10 
CORPORATION OR IN ANY POSITION WHICH MAY BE CREATED IN 
11 
THE NEW STAFFING PATTERN, EVEN IF HE SHOULD BE THE 
12 
INCUMBENT 
OF 
A 
SIMILAR 
POSITION 
PRIOR 
TO 
13 
REORGANIZATION. 
THE 
REORGANIZATION 
SHALL 
BE 
14 
COMPLETED WITHIN SIX (6) MONTHS AFTER THE EFFECTIVITY OF 
15 
THIS ACT. PERSONNEL WHO ARE NOT RETAINED ARE DEEMED 
16 
SEPARATED FROM THE SERVICE." 
17 
SECTION 49. Section 24 of the same Act is accordingly renumbered as Section 
18 
30. 
19 
SECTION 50. Section 25 of the same Act is accordingly renumbered as Section 
20 
31. 
21 
SECTION 51. A new section entitled Section 32 of the same Act is hereby 
22 
inserted between Sections 31 and 33 which shall read as follows: 
23 
"SECTION 32. EXEMPTING CLAUSE. - THE CORPORATION SHALL 
24 
BE EXEMPT FROM SECTION 30 OF REPUBLIC ACT NO. 7653, AS 
25 
AMENDED, 
PRESIDENTIAL 
DECREE 
NO. 
985, 
PRESIDENTIAL 
80 


1 
DECREE NO. 1597, REPUBLIC ACT NO. 6758, AS AMENDED, JOINT 
2 
RESOLUTION 
NO. 
4 
(2009), 
REPUBLIC 
ACT 
NO. 
10149, 
3 
PRESIDENTIAL DECREE NO. 1177, EXECUTIVE ORDER NO. 248, AS 
4 
AMENDED, AND EXECUTIVE ORDER NO. 298. 
5 
SECTION 52. A new section entitled Section 33 of the same Act is hereby 
6 
inserted between Sections 32 and 34 which shall read as follows: 
7 
"SECTION 33. TRANSITORY PROVISIONS. -
(a) THE INCUMBENT 
8 
PRESIDENT OF THE CORPORATION AND PRIVATE SECTOR 
9 
MEMBERS OF THE BOARD OF DIRECTORS SHALL CONTINUE TO 
10 
EXERCISE THEIRl RESPECTIVE DUTIES AND FUNCTIONS UNTIL 
11 
REPLACED BY THE PRESIDENT OF THE PHILIPPINES: PROVIDED, 
12 
THAT, SUCH NEW APPOINTEES SHALL BE SUBJECT TO THE TERM 
13 
OF OFFICE PROVIDED UNDER SECTION 3 OF THIS ACT, AS 
14 
AMENDED. 
15 
(b) PAYMENT OF SURPLUS DIVIDENDS UNDER SECTION 13(C) OF 
16 
THIS ACT, AS J~MENDED, SHALL BE APPLICABLE TO BANKS 
. 17 
WITHOUT A COUIRT-APPROVED FINAL ASSET DISTRIBUTION PLAN 
18 
AT THE TIME OF THE EFFECTIVITY OF THIS ACT. 
19 
(c) THE PREFERENCE INDICATED UNDER SECTION 21 OF THIS 
20 
ACT, AS AMENDED, SHALL BE LIKEWISE EFFECTIVE UPON 
21 
LIQUIDATION 
PROCEEDINGS 
ALREADY 
COMMENCED 
AND 
22 
PENDING AS OF THE EFFECTIVITY OF THIS ACT, WHERE NO 
23 
DISTRIBUTION Of ASSETS HAS BEEN MADE. 
81 


1 
(d) THE PROVISIONS IN SECTION 10 OF THIS ACT, AS AMENDED, 
2 
ON LEGAL ASSISTANCE, PROTECTION AND INDEMNIFICATION 
3 
SHALL APPLY TO ALL CASES PENDING BEFORE THE EFFECTIVITY 
4 
OF THIS ACT." 
5 
SECTION 53. Section 26 of the same Act is accordingly renumbered as Section 
6 
34. 
7 
SECTION 54. Section 27 of the same Act is accordingly renumbered as Section 
8 
35. 
9 
SECTION 55. Section 28 of the same Act is accordingly renumbered as Section 
10 
36. 
11 
SECTION 56. Sep~trability Clause. - If any provision or section of this Act or the 
12 
application thereof to any person or circumstances is held invalid, the other provisions 
13 
or sections of this Act, in the application of such provision or section to other persons or 
14 
circumstances, shall not be affected thereby. 
15 
SECTION 57. Repealing Clause. - All acts or parts of acts and executive orders, 
16 
administrative orders, or parts thereof which are inconsistent with the provisions of this 
17 
Act are hereby repealed. 
18 
SECTION 58. Effectivity Clause. - This Act shall take effect fifteen (15) days 
19 
following the completion of its publication in the Official Gazette or in two (2) 
20 
newspapers of general circulation. 
21 
Approved, 
82