SIXTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
14 FEB 10 A9 :O~ 
SENATE 
Senate Bill No. 2109 
Introduced by SENATOR FERDINAND R. MARCOS, JR. 
EXPLANATORY NOTE 
In 1993, the Philippine Congress enacted Republic Act (RA) No. 
7653 (The New Central Bank Act) creating the Bangko Sentra/ ng Pilipinas 
(BSP) pursuant to the directive in the 1987 Constitution mandating the 
establishment of an independent central monetary authority (Section 20, 
Article XII, 1987 Constitution). The BSP replaced the old Central Bank of 
the Philippines. which had been established by Republic Act No. 265 in 
1948. Twenty years hence. the economic milieu in the Philippines has 
changed, globalization has increased fhe integration of financial markets. 
and the scope of operations of financial institutions has evolved. In light 
of these. there is, undoubtedly. a need· to respond to contemporary 
challenges by amending R.A. NO.7 653 in order that the BSP shall remain 
effective in its conduct of monetary policy and supervision of entities 
within the financial system. 
Towards this end. this bill proposes to strengthen the tools which the 
BSP exercises in performing its mandates. supplement the mechanisms in 
protecting savings of depositors and in ensuring the smooth flow of 
transactions in the financial sytem. as well as to enhance the corporate 
viability of the BSP. The proposed amendments in this bill are three-fold. 
and the salient features thereof include: 
1. Strengthening BSP's Monetary Stability function 
a) 
Restoration of authority to obtain data from private persons 
or entities for purposes of statistical and policy development, as well as 
ascertaining compliance with laws and banking regulations. and 
authority to issue negotiable certificates of indebtedness even during 
normal times. both of which were powers granted to the old Central Bank 
of the Philippines; and 
b) 
Removal of thresholds in the growth of monetary aggregates. 
credit and prices as guiding principles in monetary administration. in view 
of current international trends in monetary policy frameworks adopting 
inflation targeting. 
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2. strengthening BSP's Financial Stability function 
a) 
Formal statutory recognition of the BSP's mandate of 
promoting and maintaining financial stability, as well as grant of statutory 
oversight of payment and settlement systems; 
b) 
Enhancement of BSP's supervisory authority by: i) expanding 
the entities it supervises to include other categories of financial institutions; 
ii) granting authority to impose sanctions on transfers and acquisitions of 
substantial shares of banks and quasi-banks without BSP approval; iii) 
. 
. 
allowing full flexibility to conduct risk-based supervision of financial 
institutions; iv) strengthening of administrative and criminal sanctions to 
include, among other things, forfeiture of profits from unauthorized 
financial transactions; and v) improving resolution mechanisms to deal 
with problematic financial institutions; and 
c) 
Legal protection for BSP officials and staff when performing 
official duties similar to that provided to officers and employees of the 
Philippine Deposit Insurance Corporation (PDIC) under the latter's charter 
(Republic Act No. 9576). 
3. Strengthening BSP's Corporate and Financial Viability 
a) 
Additional BSP capitalization of P 150 billion, payable in three 
(3) years; 
b) 
Grant of flexibility to establish adequate loss allowances and 
create reserve buffers against future risks and contingencies, and 
restoration of tax exemption, simiJar to other central banks.in the world; 
c) 
Enhancement to credit operations by granting exemption 
from court processes relating to collateral obtained from banks, similar to 
that enjoyed by Land Bank of the Philippines (LBP), and the authority to 
deputize the BSP legal staff in extrajudicial foreclosure of mortgaged 
properites in the same manner that the legal staff of LBP and 
Development Bank of the Philippines (DBP) may so be deputized under 
their respective charters. 
These amendments, once enacted into law, will empower the BSP 
to effectively respond to challenges'and innovations of a globalized 
economy and, more significantly, to better perform its constitutional 
mandates. Indeed, an empowered BSP is indispensable in ensuring a 
competitive, robust and inclusive economy, and a financial system that 
will support a higher quality of life for Filipinos. 
In view of the foregoing, approval of this bill is earnestly· sought. 
FERDINAND . M/1.RCOS, JR. 
Page 2 of 28 
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SIXTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
SENAT2109 
S. B. No. _-=-==--=-
Introduced by SENATOR FERDINAND R. MARCOS, JR. 
AN ACT AMENDING REPUBLIC ACT NUMBER 7653, 
OTHERWISE KNOWN AS "THE NEW CENTRAL BANK ACT", .. 
AND FOR OTHER PURPOSES 
"14 
FEB lOA 9 :03 
Be it enacted by the Senate anid the House of Representatives of 
the Philippines in Congress assembled: 
. 
1 
SECTION 1. Section 2 of Republic Act No. 7653, otherwise known as 
2 
"The New Central Bank Act" is hereby amended to read as follows: 
3 
4 
"SEC. 2. Creation of the Bangko Sentral. -
There is 
5 
hereby established an independent central monetary 
6 
authority, which shall be a body corporate known as the 
7 
Bangko Sentral ng Pilipinas, hereafter referred to as the 
8 
Bangko Sentral. 
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"The capital of the Barigko Sentral shall be TWO 
HUNDRED [fi#y] billion pesos (P[aQ,]200,OOO,OOO,OOO), to be 
fully subscribed by the Government of the Republic, 
hereafter referred to as the Government. [Ten billion--pe50£ 
(1210,000,000,000) of which] THE UNPAID SUBSCRIPTION shall 
be fully paid for by the Gov~rnment IN CASH AND/OR 
GOVERNMENT SECURITIES IMMEDIATELY UPON EFFECTIVITY OF 
THIS ACT. THE CAPITALIZATION SHALL BE SUBJECT TO REVIEW' 
EVERY FIVE (5) YEARS UPON JOINT RECOMMENDATION By THE 
SECRETARY OF FINANCE, THE SECRETARY OF BUDGET AND 
MANAGEMENT AND THE MONETARY BOARD. THE PAYMENT OF 
ANY 
UNPAID 
SUBSCRIPTION 
AND/OR 
INCREASE 
IN 
CAPITALIZATION SHALL BE AUTOMATICALLY APPROPRIATED IN 
THE ANNUAL GENERAL APPROPRIATIONS ACT. [tlf3on the 
effeetivit-y-of-t·hi5-Aet-oHEl-t.Ae-BeJe.Aee-te--eG-JdoiEl-for-with in a 
JderioEl of two (2) years from-l-he-effectivity of thjs Act in Stleh 
manner and form as the Govem-mern, through the Secretary 
ef-FiAance and the Secret8Pf-Of-B-uElget and Managemenf, 
may thereafter determine.]" 
Page 3 of 28 
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SEC. 2. Section 3 of the some Act is hereby amended to read os 
2 
follows: 
. 
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"SEC. 3. Responsibility and Primary Objective. - The 
Bangko Sentral sholl provide policy directions in the ar,eos of 
money, bonking, and credit. It sholl have supervision over 
the operations of bonks and exercise such regulatory 
powers as provided in this Act and other pertinent lows over 
the operations of finance companies and non-bank 
financial institutions 
perf~rming quasi-bonking functions, 
[hereafter referred 
to 
as 
qW5i banks,] 
CREDIT 
CARD 
COMPANIES, 
MONEY 
CHANGERS, 
E-MONEY 
ISSUERS, 
REMITTANCE AGENTS, PAYMENT AND SETTLEMENT SYSTEM 
OPERATORS 
and 
OTHER 
institutions 
performing 
similar 
functions AS MAY BE DETERMINED BY THE MONETARY BOARD, 
CONSISTENT WITH THE MANDATE OF THE BANGKO SENTRAL 
TO PROVIDE POLICY DIRECTION IN THE AREAS OF MONEY, 
BANKING AND CREDIT. 
"The primary objective of· the Bangko Sentral is to 
maintain price stability conducive to a balanced and 
sustainable growth of the economy. It shall also promote 
and maintain monetary AND FINANCIAL stability and the 
convertibility of the peso. 
, 
"THE BANGKO SENTRAL SHALL OVERSEE THE PAYMENT 
AND 
SETTLEMENT 
SYSTEMS 
IN 
THE 
PHILIPPINES 
IN 
ACCORDANCE WITH SOUND AND PRUDENT PRACTICES. FOR 
PURPOSES OF THIS ACT, "PAYMENT AND SETTLEMENT SYSTEM" 
SHALL REFER TO ANY SYSTEM THAT CONSISTS OF A SET OF 
INSTRUMENTS 
AND 
ARRANGEMENTS 
THAT 
ENSURES 
THE 
EFFICIENT CIRCULATION OF MONEY AND SAFE TRANSFER OF 
FINANCIAL VALUES." 
36 
SEC. 3. Section 11 of the same Act is hereby amended to read as 
37 
follows: 
38 
39 
"SEC. 11. Meetings. -
The Monetary Board shall meet 
40 
at least once a week. The Board.may be called to a meeting 
41 
by the Govemor of the Bangko Sentral or by two (2) other 
42 
members of the Board. 
. 
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"The presence of four (4) members sholl constitute a 
quorum: Provided, That in all cases the Governor or his duly 
designated alternate sholl be among the four (4). 
"Unless otherwise provided in this Act, all decisions of 
the Monetary Board shall require the concurrence of at leost 
four (4) members. 
"The Bangko Sentral sholl maintain and preserve a 
complete record of the proceedings and deliberations of the 
Page 4 of 28 
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Monetary Board, including the tapes and transcripts of the 
2 
stenographic notes, either in their original form or in microfilm. 
3 
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"THE MEETINGS OF ;THE MONETARY BOARD MAY 'BE 
5 
CONDUCTED THROUGH MODERN TECHNOLOGIES SUCH AS, 
6 
BUT 
NOT 
LIMITED 
TO, 
telECONFERENCING 
AND 
7 
VIDEOCONFERENCING." 
8 
9 
10 
SEC. 4. Section 16 of the same Act is hereby amended to read as 
11 
follows: 
12 
13 
"SEC. 16. Responsibility . . THE GENERAL RULE AND THE 
14 
EXCEPTION THEREFROM ON THE L,IABI.LlTY OF PUBLIC OFFICERS AS 
15 
PROVIDED IN SECTIONS 38 AND 39 OF CHAPTER 9, BOOK 1 OF THE 
16 
REVISED ADMINISTRATIVE CODE OF '1987 SHALL APPLY TO THE 
17 
members of the Monetary Board [, officials, examiners, 000 
18 
employees] AND OTHER PERSONNEL of the Bangko Sentra/ [wOO 
19 
willft/lly-violeto-tRis·-.A&t-Gf--WRe--e@-§'t/ilt-y--.ef-.Aegligence, aooses 
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or acts of malfeasance er mipfeasance or fail to exercise 
21 
extr-aeFEiiooFy--EliHgeAco-in-tR8-J3e,formance-'ol-Ri5-€lutie's sRoll-bo 
22 
Reid liable fer any 1OSS-GF-inj1olry 'st/ffored by-tRe Ban§ko Sen#al 
23 
or-otRer-banking--insfiMions es a rest/It of 
sucR---¥i0Iet~0R, 
24 
ROgligence, abt/se, malfeasance, misfeasance or failt/re to 
25 
OJ(ercise ~i§BR€e].' 
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"Similar responsibility shall apply to members, officers, and 
employees of the Bangko Sentra/ for: (1) the disclosure of any 
information of a confidential nature, or any information on the 
discussions or resolutions of the Monetary Board, or about the 
confidential operations of the Bangko Sentra/, unless the 
disclosure is in connection with the performance of official 
functions with the Bangko Sentra/, or is with prior authorization of 
the Monetary Board or the Governor; or (2) the use of such 
information for personal gain or. to :the detriment of the 
Government, the Bangko Sentra/ or third parties: Provided, 
however, That any data or information required to be submitted 
to the President and/or the Congress, or to be published under 
the provisions of this Act shall not be considered confidential. 
41 
"THE 
FOREGOING ;NOTW,ITHSTANDING, 
UNLESS' THE 
42 
ACTION OF THE BANGKO SENTRAL OR ANY OF ITS OFFICIALS 
43 
AND EMPLOYEES IS FOUND TO BE IN WILLFUL VIOLATION OF 
44 
THIS ACT OR PERFORMED IN BAD FAITH, WITH MALICE AND/OR 
45 
GROSS NEGLIGENCE, THE BANGKO SENTRAL, ITS OFFICIALS, 
46 
EMPLOYEES AND AGENTS ARE HELD FREE AND HARMLESS TO 
47 
THE FULL EXTENT PERMITTED BY LAW FROM ANY LIABILITY AND 
48 
SHALL BE INDEMNIFIED FOR ANY AND ALL LIABILITIES, CLAIMS 
49 
DEMANDS, DAMAGES, DEFICIENCIES, COSTS AND EXPENSES 
50 
OF WHATSOEVER KIND AND NATURE THAT MAY ARISE IN 
51 
CONNECTION WITH THE PERFORMANCE OF THEIR FUNCTIONS." 
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Page 5 of 28 
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SEC. 5. Section 21 of the same Act is hereby amended to read as 
follows: 
"SEC. 21. Deputy Governors. -
The Governor of the 
Bangko Sentral, with the approval of the Monetary Board, 
shall appoint not more than [:fffiee----fJt] FIVE (5) Depufy 
Governors who shall perform duties as may be assigned ito 
them by the Governor and the Board. 
"In the absence of the Governor, a Deputy Governor 
designated by the Governor shall act as chief executive of 
the Bangko Sentral and shall exercise the powers and 
perform 
the 
duties 
of the 
Governor. 
Whenever the 
Government is unable to attend meetings of government 
boards or councils in which he is' an ex officio member 
pursuant to provisions of special laws, a Deputy Governor as 
may be designated by the Governor shall be vested with 
authority to participate and exercise the right to vote in such 
meetings." 
22 
SEC. 6. Section 23 of the same Act is hereby amended to read as 
23 
follows: 
24 
25 
"SEC. 23. Authority to Obtdin Data and Information.-
26 
The Bangko Sentral sholl have the authority to REQUIRE 
27 
[request] 
from 
ANY 
PERSON 
OR 
ENTITY, 
INCLUDING 
28 
government offices and instrur;nentalities, or government-
29 
owned or -controlled corporations, any data which it may, 
30 
FOR 
STATISTICAL 
AND 
POLlCX 
DEVELOPMENT 
PURPOSES 
31 
require for IN RELATION TO the proper discharge of its 
32 
functions 
and 
responsibilities, 
PROVIDED, 
THAT 
33 
DISAGGREGATED 
DATA 
GATHERED 
ARE 
SUBJECT 
TO 
34 
PREVAILING CONFIDENTIALITY LAWS. The Bangko Sentral 
35 
through the Governor or in his absence, a duly authorized 
36 
representative shall have the power to issue a subpoena for 
37 
the production of the' books and records for the aforesaid 
38 
purpose. Those who refuse the subpoena without justifiable 
39 
cause, or who refuse to supply the [bank] BANGKO SENTRAL 
40 
with data [requested or] required, shall be subject to 
41 
punishment for contempt in accordance with the provisions 
42 
of the Rules of Court. 
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53 
Data on individualS AND firms, other than banks, 
gathered by the [Qepartment of Economic Research and 
et-heHoIepGrtments or-1cJflits-of...ff:tej Bangko Sentral shall not be 
made available to any person or entity outside of the 
Bangko Sentral whether public or private except under order 
of the court or under such conditions as may be prescribed 
by the Monetary Board: Provided, however, That the 
collective data on firms maY·'.be. released to interested 
persons or entities: Provided, finally, That in the case of data 
on banks, the provisions of Section 27 of this Act shall apply." 
Page 6 of 28 
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SEC. 7. Section 25 of the same Act is hereby amended to read as 
2 
follows: 
3 
4 
"SEC. 25. Supervision and Examination. -
The 8angko 
5 
Sentra/ shall have supervision over, and conduct REGULAR or 
6 
special examinations of, banking institutions and quasi-banks, 
7 
including their subsidiaries and affiliates engaged in allied 
8 
act'lvities. 
9 
10 
"THE 
BANGKO SENTRALiSHALL HAVE REGULATORY 
11 
AUTHORITY OVER, AND 
COND~CT REGULAR OR SPECIAL 
12 
EXAMINATIONS OF, ENTITIES WHICH UNDER THIS ACT OR BY 
13 
SPECIAL LAWS ARE SUBJECT TO ITS JURISDICTION. 
14 
15 
"THE 
BANGKO SENTRAL· SHALL, 
FOR 
SUPERVISORY 
16 
PURPOSES, ALSO HAVE THE POWER TO OBTAIN INFORM'ATlON 
17 
ON AND EXAMINE TRANSACTIONS BETWEEN AND AMONG A 
18 
SUPERVISED INSTITUTION AND ITS PARENT OR OTHER AFFILIATE 
19 
COMPANIES, PROVIDED THAT THE TRANSACTIONS TO 
BE 
20 
LOOKED INTO SHALL BE LIMITED TO THOSE HAVING MATERIAL 
21 
IMPACT ON THE SAFETY AND SOUNDNESS OF THE BANK AND 
22 
THE BANKING GROUP. 
23 
24 
25 
26 
27 
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"A PARENT COMPANY MEANS A CORPORATION WHICH 
OWNS DIRECTLY OR INDIRECTLY THE VOTING STOCK OF A 
SUPERVISED INSTITUTION OF THE BANGKO SENTRAL SUFFICIENT 
TO CONTROL ITS MANAGEMENT. AND OPERATIONS, SUBJECT 
TO THE GUIDELINES ISSUED BY THE MONETARY BOARD. 
30 
"AS USED IN THIS SECTION AND SECTION 25-A, AND 
31 
SUBJECT TO THE GUIDELINES ISSUED BY THE MONETARY BOARD, 
32 
CONTROL EXISTS WHEN THE PARENT OWNS DIRECTLY OR 
33 
INDIRECTLY MORE THAN ONE HALF OF THE STOCK OF A 
34 
SUPERVISED INSTITUTION. CONTROL ALSO EXISTS EVEN WHEN 
35 
THE PARENT OWNS ONE HALF OR LESS OF THE VOTING STOCK 
36 
OF THE SUPERVISED INSTITUTION WHEN THERE IS POWER OVER 
37 
MORE THAN ONE HALF OF THE VOTING RIGHTS BY PROXY OR 
38 
BY VIRTUE OF AN AGREEMENT WITH OTHER INVESTORS, OR 
39 
OTHER SIMILAR ARRANGEMENTS, WHICH THEREBY ENABLES THE 
40 
PARENT COMPANY TO CAST THE MAJORITY OF VOTES AT 
41 
MEETINGS 
OF 
THE 
STOCKHOLDERS 
OF 
THE 
SUPERVISED 
42 
INSTITUTION, OR TO ELECT THE MAJORITY OF MEMBERS OF THE 
43 
BOARD OF DIRECTORS OF THE SUPERVISED INSTITUTION OR TO 
44 
APPOINT KEY EXECUTIVE OFFICERS WHO SHALL DIRECTLY OR 
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INDIRECTLY CONTROL THE MANAGEMENT AND OPERATIONS 
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OF THE SUPERVISED INSTITUTION. 
47 
48 
"For purposes of this section, a subsidiary means a 
49 
corporation more than fifty percent (50%) of the voting stock 
50 
of which is owned by a bank or quasi-bank and an affiliate 
51 
means a corporation the voting stock of which, to the extent 
52 
of fifty percent (50%) or less, is owned by a bank or ,quasi-
53 
bank or which is related or linked to such institution or 
Page 7 of 28 
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1 
intermediary through common stockholders or such other 
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factors as may be determined by the Monetary Board. 
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"The department heads and the examiners of the 
supervising and/or examining departments are hereby 
authorized to administer oaths .to any director, officer, or 
employee of any institution under their respective supervision 
or subject to their examination, [efl€I] to compel the 
presentation of all books, docl!ments,' papers or records 
necessary in their judgment to a~certain the facts relative to 
the true condition of any institution as well as the books and 
records of persons and entities relative to or in connection 
with the operations, activities or transactions of the institution 
under examination, AND TO INQUIRE INTO BANK DEPOSiTS 
AND 
INVESTMENT 
ACCOUNTS 
IN 
THE 
COURSE' OF 
AN 
EXAMINATION IN ORDER TO ASCERTAIN COMPLIANCE WITH 
THE LAWS AND BANKING REGULATIONS. [.subject to the 
provision of e)(isting laws protecting or safeguarding the 
seGfeGY---oF---G0RfiEleflfielfty-Bf---l:::>enk depe;;it!; GS well O£ 
fRvestments of privete persons, natural or juridical, in debt 
in5trumeRts-i5sueEl-Gy-the-GovemmOfth] 
23 
"No restraining order or injunction shall be issued by the 
24 
court enjoining the Bangko Sentral from examining any 
25 
institution subject to supervision or examination by the 
26 
Bangko Sentra/, unless there is convincing proof that the 
27 
action of the Bangko Sentral is plainly arbitrary and made in 
28 
bad faith and the petitioner or plaintiff files with the clerk or 
29 
judge of the court in which the action is pending a bond 
30 
executed in favor of the Bangko Sentral, in an amount to be 
31 
fixed by the court. The provisions of Rule 58.of the New Rules 
32 
of Court insofar as they are applicable and not inconsistent 
33 
with the provisions of this section shall govern the issuance 
34 
and dissolution 
of the restraining 
order or injunction 
35 
contemplated in this section." 
36 
37 
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SEC. 8. A new section entitled Section 25-A is hereby inserted in the 
39 
same Act to read as follows: 
40 
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47 
48 
49 
50 
51 
52 
53 
"SEC. 2S-A. AUTHORITY TO APPROVE TRANSFER OF 
SHARES - TRANSFERS OR ACQUISITIONS, OR A SERIES THEREOF, 
OF AT LEAST TEN PERCENT (10%) OF THE VOTING STOCK IN 
BANKS OR QUASI-BANKS SHALL REQUIRE THE PRIOR APPROVAL 
OF THE BANGKO SENTRAL. THE SELLING OR CONVEYING 
STOCKHOLDER SHALL SUBMIT SUCH TRANSFER OR ACQUISITON 
FOR APPROVAL BY THE BANGKO SENTRAL WITHIN SUCH 
PERIOD AS MAY BE PRESCRIBED BY THE MONETARY BOARD. IN 
APPROVING SUCH TRANSFERS OR ACQUISITIONS, REGARD 
SHALL BE GIVEN BY THE BANGKO SENTRAL TO THE FITNESS OF 
THE INCOMING STOCKHqLDERS' AS MAY BE INDICATED IN 
THEIR INTEGRITY, REPUTATION AND FINANCIAL CAPACITY. 
WITHOUT BANGKO SENTRAL APPROVAL, NO SUCH TRANSFER 
Page 8 aU8 
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OR ACQUISITION SHALL HAVE LEGAL EFFECT NOR SHALL THE 
SAME BE RECOGNIZED IN THE BOOKS OF THE INSTITUTION OR 
BY ANY GOVERNMENT AGENCY, AND THE TRANSFEROR-
STOCKHOLDERS 
SHALL 
REMAIN' ACCOUNTABLE 
AND 
RESPONSIBLE THEREFOR. TRANSFER OF ACTUAL CONTROL OR 
MANAGEMENT 
OF 
THE 
INSTITUTION 
TO 
THE 
NEW 
STOCKHOLDERS OR THEIR REPRESENTATIVES PRIOR TO BANGKO 
SENTRAL 
APPROVAL SHALL MAKE 
THE TRANSFEROR, 
THE 
TRANSFEREE AND ANY PERSON RESPONSIBLE THEREFOR LIABLE 
UNDER SECTIONS 36 AND 37 OF THIS ACT. NOTWITHSTAt:-IDING 
ANY PROVISION OF LAW TO THE CONTRARY, THE BANGKO 
SENTRAL MAY SHARE WITH THE PHILIPPINE DEPOSIT INSURANCE 
CORPORATION 
ANY 
INFORMATION 
THAT 
THE 
BANGKO 
SENTRAL 
MAY 
OBTAIN 
PERTAINING 
TO 
TRANSFER 
OR 
ACQUISITION 
OF 
SHARES OR; SERIES 
OF TRANSFERS OR 
, 
ACQUISITION OF SHARES IN BANKS AND QUASI-BANKS." 
19 
SEC. 9. Section 28 of the same Act is hereby amended to read as 
20 
follows: 
21 
22 
"SEC. 28. Examination and Fees. -
The supervising and 
23 
examining department head, personally or by deputy, shall 
24 
examine the [books] OPERATIONS of eyery bank[iRg] AND 
25 
QUASI-BANK, INCLUDING THEIR SUBSIDIARIES AND AFFILIATES 
26 
ENGAGED IN ALLIED ACTIVITIES, AND OTHER ENTITIES WHICH 
27 
UNDER THIS ACT OR SPECIAL LAWS ARE SUBJECT TO BANGKO 
28 
SENTRAL SUPERVISION, IN ACCORDANCE WITH THE GUIDELINES 
29 
SET BY THE MONETARY BOARD TAKING INTO CONSIDERATION 
30 
SOUND AND PRUDENT PRACTICES. [onGe in ever~twolve (12) 
31 
months, and at SUGh other tim05-as the Monetary Boar-EJ--ey 
32 
an affirmative vote of five 
(5) 
members, may deem 
33 
O*l"odioRt and to make a rel"ort on the same to tho 
34 
~fd.o] Provided, That there shall be an interval of 
35 
at least twelve (12) months between [eRf\OO] REGULAR 
36 
examinations; PROVIDED, 
FURTHER, 
THAT THE MONETARY 
37 
BOARD, BY AN AFFIRMATIVE VOTE OF AT LEAST FIVE (5) 
38 
MEMBERS, MAY AUTHORIZE A SPECIAL EXAMINATION IF THE 
39 
CIRCUMSTANCES WARRANT. 
40 
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"The INSTITUTION [~] concerned shall afford to the 
42 
head 
of the 
appropriate supervising 
and 
examining 
43 
departments and to his authorized deputies full opportunity 
44 
to examine its books AND RECORDS, cash and [e¥EIileldlo] 
45 
assets and general condition AND REVIEW ITS SYSTEMS AND 
46 
PROCEDURES at any time during BUSINESS [GaOOR§t] hours 
47 
when requested to do so by the Bangko Sentra/: Provided, 
48 
however, That none of the reports and other papers relative 
49 
to such examinations shall be open to inspection by the 
50 
public except insofar as such publicity is incidental to the 
51 
proceedings hereinafter authorized or is necessary for the 
52 
prosecution of violations in ,connection with the business of 
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such institutions. 
Page 9 of,28 
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"[Banking and quasi baRking institutions WAiGh are 
2 
subject to eXBffiination by.-fRe-Bangke SenfFel] SUPERVIS~D 
3 
INSTITUTIONS shall pay to the Bangko Sentra/, NO LATER THAN 
4 
MAY 31 OF EACH YEAR [within tho first thirty (30) days of each 
5 
yeer] , an annual SUPERVISION fee [in-EIfl-Bffiount equel--le--B 
6 
percentage,] as may be prescribed by the Monetary Board. 
7 
[,0f-it5 EI¥erElge totel-e5Set&--EIuring th0-jdrocoE:!iA§-'fOEIr as 
8 
£R0WA--0A-fts--en4-Gf month balance sheots, after deduct-ing 
9 
Gash on hand afld amounts due from banks, including the 
10 
B0Rgw---$eA-im1 and banks abF00d.J IN DETERMINING THE 
11 
AMOUNT OF THE ANNUAL SUPERVISION FEE, THE MONETARY 
12 
BOARD SHALL CONSIDER THE COSTS OF SUPERVISION." 
13 
14 
15 
SEC. 10. A new section entitled Section 28-A is hereby inserted in the 
16 
same Act to read as follows: 
17 
18 
"SEC. 28-A. BANGKO SENTRAL COORDINATION. -
THE 
19 
SUSPENSION OR REVOCATION OF ANY GOVERNMENT LICENSE 
20 
NECESSARY FOR THE OPERATION OF A BANGKO SENTRAL-
21 
SUPERVISED 
ENTITY 
MUST 
BE 'DONE 
ONLY 
WITH 
PRIOR 
22 
CONSULTATION WITH THE BANGKO SENTRAL." 
23 
24 
25 
SEC. 11. Section 30 of the same Act is hereby amended to read as 
26 
follows: 
27 
28 
"SEC. 30. Proceedings in Receivership and Liquidation. 
29 
-
Whenever, upon report of the head of the supervising or 
30 
examining department, the Monetary Board finds that a 
31 
bank or quasi-bank: 
32 
33 
34 
35 
36 
37 
"(a) is unable to pay its liabilities as they become due 
in the ordinary course of business: Provided, That this shall not 
include inability to pay caused by extraordinary demands 
induced by financial panic in the banking community; 
38 
"(b) has insufficient realizable assets, as determined by 
39 
the Bangko Sentra/, to meet its liabilities; or 
40 
41 
"(c) cannot continue in' business without involving 
42 
probable losses to its depositors or creditors; or 
43 
44 
"(d) has willfully violated a cease and desist order 
45 
under Section 37 that has become final, involving acts or 
46 
transactions which amOUr.lt to fraud or a dissipation of the 
47 
assets of the institution; in which cases, the MO(letary Board 
48 
may summarily and without need for prior hearing forbid the 
49 
institution from doing busines's 
in 
the Philippines and 
50 
designate the Philippine Deposit Insurance Corporation as 
51 
receiver of the banking institution. 
Page 10 of 28 
• 
• 
• 


1 
"[For 
a 
quasi bank, 
anv--i3Bf£E)A--of 
roco§niH7EI 
2 
competence in banking oF---fiRElflce may be designated as 
3 
roGeivof.] 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
"The receiver shall immediately gather and take 
charge of all the assets and' liabilities of the institution, 
administer the same for the benefit of its creditors, and 
exercise the general powers of q receiver under the Revised 
Rules of Court but shall not, with the exception of 
administrative expenditures,. payor commit any act that will 
involve the transfer or disposition of any asset of the 
institution: Provided, That the receiver may deposit or place 
the funds of the institution in nonspeculative investments. The 
receiver shall determine as soon as possible, but not later 
than ninety (90) days from takeover, whether the institution 
may be rehabilitated or otherwise placed in such a condition 
so that it may be permitted to resume business with safety to 
its depositors and creditors and the general public: Provided, 
That any determination for the resumption of business of the 
institution shall be subject to prior approval of the Monetary 
Board. 
23 
"IN ORDER TO REHABILITATE THE CLOSED INSTITUTION OR 
24 
TO RESTORE ITS OPERATIONS WITH SAFETY TO ITS DEPOSITORS, 
25 
CREDITORS AND THE GENERAL PUBLIC, OR TO MERGE OR 
26 
CONSOLIDATE 
THE 
CLOSED 
INSTITUTION 
WITH 
ANOTH,ER 
27 
QUALIFIED INSTITUTION, THE 
RECEIVER MAY IMMEDIATELY 
28 
TRANSFER OR DISPOSE OF ANY OR ALL OF THE ASSETS OF THE 
29 
CLOSED INSTITUTION, CAUSE QUASI-REORGANIZATION OF THE 
30 
INSTITUTION, AND SUCH OTHER ACTS AS MAY BE AUTHORIZED 
31 
BY LAW, 
32 
33 
"If the receiver determines that the institution cannot 
34 
be rehabilitated 
or permitted to resume 
business 
in 
35 
accordance with the next preceding paragraph, the 
36 
Monetary Board shall notify in writing the board of directors 
37 
of THE RECEIVER'S [its] findings and direct the receiver to 
38 
proceed with the liquidation of the institution. The receiver 
39 
shall: 
40 
41 
42 
43 
44 
45 
46 
47 
48 
49 
50 
51 
52 
"1. file ex parte with the proper regional trial court, and 
without requirement of prior notice or any other action, a 
petition for assistance in the liquidation of the institution 
pursuant to a liquidation plan adopted by the Philippine 
Deposit Insurance Corporation for general application to ,all 
closed banks. In case of quasi-banks, the liquidation plan 
shall be adopted by the Monetary Board. Upon acquiring 
jurisdiction, the court shall, upon motion by the receiver after 
due 
notice, 
adjudicate 
disputed 
claims 
against 
the 
institution, assist the enforcemeni of individual liabilities of the 
stockholders, directors and officers, and decide on other 
issues as may be material to implement the liquidation plan 
Page 11 of 28 
• 
• 
, 


1 
adopted. The receiver shall pay the cost of the proceedings 
2 
from the assets of the institution. 
3 
4 
"2. convert the as~ets of the institutions to m0ney, 
5 
dispose of the same to creditors and other parties, for the 
6 
purpose 
of paying 
the 
debts 
of such 
institution 
in 
7 
accordance with the rules on concurrence and preference 
8 
of credit under the Civil Code of the Philippines and he may, 
9 
in the name of the institution, and with the assistance 'of 
10 
counsel as he may retain, institute such actions as may be 
11 
necessary to collect and recover accounts and assets of, or 
12 
defend any action against, the institution. The assets of an 
13 
institution under receivership or liquidation shall be deemed 
14 
in custodia legis in the hands of the, receiver and shall, from 
15 
the moment the institution 
was 
placed 
under such 
16 
receivership or liquidation, be exempt from any order of 
17 
garnishment, levy, attachment, or execution. 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
"The actions of the Monetary Board taken under this 
section or under Section 29 of this Act shall be final and 
executory, and may not be restrained or set 'aside by the 
court except on petition for certiorari on the ground that the 
action taken was in excess of jurisdiction or with such grave 
abuse of discretion as to amount to lack or excess of 
jurisdiction. The petition for certiorari may only be filed by the 
stockholders of record representing the majority of the 
capital stock within ten (10) days from receipt by the board 
of directors of the institution of the order directing 
receivership, liquidation or conservatorship, The designation 
of a conservator under Section 29 of this Act or the 
appointment of a receiver under this section shall be vested 
exclusively with the Monetary Board. Furthermore, the 
designation of a conservator is not a precondition to the 
designation of a receiver. 
36 
"THE AUTHORITY OF THE MONETARY BOARD TO PLACE A 
37 
BANK OR QUASI-BANK UNDER RECEIVERSHIP AS PROVIDED 
38 
ABOVE MAY ALSO BE EXERCISED OVER NON-STOCK SAVINGS 
39 
AND LOAN ASSOCIATIONS, BASED ON THE SAME APPLICABLE 
40 
GROUNDS. FOR QUASI-BANKS AND NON-STOCK SAVINGS 
41 
AND LOAN ASSOCIATION'S, ANY PERSON OF RECOGNIZED 
42 
COMPETENCE IN BANKING, CREDIT OR FINANCE MAY BE 
43 
DESIGNATED BY THE BANGKO SENTRAL AS A RECEIVER." 
44 
45 
46 
SEC. 12. Section 31 of the same Act is hereby amended to read as 
47 
follows: 
48 
49 
"SEC, 31. Distribution of Assets. -
In case of liquidation 
50 
of a bank, quasi-bank OR NON-STOCK SAVINGS AND LOAN 
51 
ASSOCIATION, after payment of the cost of proceedings, 
52 
including reasonable expenses and fees of the receiver to be 
53 
allowed by the court, the receiver shall pay the debts of such 
Page 12 of 28 
• 


1 
institution, under order of the cO'Jrt, in accordance with the 
2 
rules on concurrence and preference of credit as provided in 
3 
the Civil Code." 
4 
5 
6 
SEC. 13. Section 32 of the same Act is hereby amended to read as 
7 
follows: 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
"SEC. 32. Disposition of Revenut;}s and Earnings. -
All 
revenues and earnings realized by the receiver in winding up 
the affairs and administering the assets of any bonk, qUdsi; 
bank o.R No.N-STOCK SAVINGS, AND Lo.AN ASSo.CIATl9N 
within the purview of this Act shall be used to pay the costs;, 
fees and expenses mentioned ,in .the· preceding section, 
salaries of such personnel whos,e employment is rendered 
necessary in the discharge of the liquidation together with 
other additional expenses caused thereby, The balance of 
revenues and earnings, after the payment of all said 
expenses, shall form part of the assets available for payment 
to creditors." 
23 
SEC. 14. Section 34 of the same Act is hereby amended to read as 
24 
follows: 
25 
26 
"SEC. 
34. 
Refusal 
to 
Make 
Reports 
or Permit 
27 
Examination. -
Any officer, owner, agent, manager, director 
28 
or officer-in-charge of any institution 
subject to 
the 
29 
supervision or examination by the Bangko Sentrol within the 
30 
purview of this act who, being required in writing by the 
31 
Monetary Board or by the head of the supervising and 
32 
examining department willfully refuses to file the required 
33 
report or permit any lawful examination into the affairs of 
34 
such institution shall be punished by a fine of not less than fifty 
35 
thousand pesos (P50,OOO) nor more than [ono hundrbd 
36 
thousand pesos (P10G,G0Gtl TWO. MILLlo.N PESOS (P2,OQO,OQO) 
37 
or by imprisonment of not less than one (1) year nor more 
38 
than five (5) years, or both, riAl AT the discretion of the court. 
39 
40 
"THIS SHALL ALSO. APPLY TO. THE o.FFICER, o.WNER, 
41 
AGENT, MANAGER, DIRECTo.,R o.R o.FFICER-IN-CHARGE o.F THE 
42 
AFFILIATE Co.MPANY liES AND PARENT Co.MPANY o.F A BANK 
43 
o.R QUASI-BANK, AS WELL AS THE AFFILIATES o.F SUCH PARENT 
44 
Co.MPANY, 
WHo.SE 
TRANSACTlo.NS 
ARE 
SUBJECT 
TO. 
45 
EXAMINATlo.N UNDER THIS LAW." 
46 
47 
48 
SEC. 15. Section 35 of the same Act is hereby amended to read as 
49 
follows" 
50 
51 
"SEC. 35. Folse Statement: -' The willful making of a 
52 
false or misleading statement on a material fact to the 
53 
Monetary Board or to the examiners of the Bangko Sentrol 
Page 13 Qf.28 
• 
• 
, 


1 
shall be punished by a fine of not less than One hundred 
2 
thousand pesos (P100,000) nor more than [Two hundred 
3 
tAauwne-j3esos (P200,OOG-t] TWO MILLION PESOS (P2,OOO,OOO), 
4 
or by imprisonment of not more than (5) years, or both, at the 
5 
discretion of the court." 
6 
7 
8 
SEC. 16. Section 36 of the same Act is hereby amended to read as 
9 
follows: 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
"SEC. 36. Proceedings Upon Violation of This Act and 
Other Banking Laws, Rules, Regulations, Orders or Instructions. 
-
Whenever a bank, [ef] quasi-bank, OR OTHER ENTITY 
WHICH UNDER THIS ACT OR SPECIAL LAWS IS SUBJECT TO 
BANGKO SENTRAL SUPERVISION or whenever any person or 
.' 
. . '  
entity willfully violates this Act or other pertinent banking laws 
being enforced or implemented by the Bangko Sentral or 
any order, instruction, rule or regulation issued by the 
Monetary Board, the person or persons responsible for such 
violation shall unless otherwise provided in this Act be 
punished by a fine of not less than Fifty thousand pesos 
(PSO,OOO) nor more than [Two huoomd thousand pesG£ 
{P-200,OGG-)-] 
TWO 
MILLION 
PESOS 
(P2,OOO,OOO.OO) 
or by 
imprisonment of not less than two (2) years nor more than ten 
(10) years, or both, at the discretion of the court. 
27 
"Whenever AN 
ENTITY 
UNDER 
BANGKO 
SENTRAL 
28 
SUPERVISION [G-BEfnk-oF--GtuG5i-89f\I<c] persists in carrying on its 
29 
business in an unlawful or unsafe man'1er, the Board may, 
30 
without prejudice to the penalties provided in the preceding 
31 
paragraph of this Section and the administrative sanctions 
32 
provided in Section 37 of this Act, take action under Section 
33 
30 of this Act." 
34 
3S 
36 
SEC. 17. Section 37 of the same Act is hereby amended to read as 
37 
follows: 
. 
38 
39 
"SEC. 37. Administrative Sanctions on BEIAks and Quasi-< 
40 
Banks SUPERVISED ENTITIES. -
Without prejudice to the 
41 
criminal sanctions against the culpable persons provided in 
42 
Sections 34, 35, and 36 of this Act. the Monetary Board may, 
43 
at its discretion, impose upon any bank or quasi-bank, 
44 
INCLUDING THEIR SUBSIDIARIES AND AFFILIATES ENGAGED IN 
45 
ALLIED ACTIVITIES, OR OTHER ENTlTIE~ WHICH UNDER THIS ACT 
46 
OR SPECIAL LAWS ARE SUBJECT TO THE BANGKO SENTRAL 
47 
SUPERVISION, 
AND/OR 
their 
directors, 
officers 
and/or 
48 
EMPLOYEES, for any willful violation of its charter or by-laws, 
49 
willful delay in the submission of reports or pUblications 
50 
thereof as required by law, rules and regUlations; any refusal 
51 
to permit examination into the Clffairs of the institution; any 
S2 
willful making of a false or misleading statement to the'Board 
S3 
or the appropriate supervising and examining department or 
Page 14 Qf;!8 
• 
, 


1 
2 
3 
4 
5 
6 
7 
8 
9 
its examiners; any willful failure or refusal to comply with, or 
violation of, any banking law or any order, instruction or 
regulation issued by the Monetary Board, or any order, 
instruction or ruling by the Governor; or any commission of 
irregularities, and/or conducting business in an unsafe or 
unsound manner as may be determined by the Monetary 
Board, the following administrative sanctions, whenever 
applicable: 
10 
"(a) fines in amounts as may be determined by the 
11 
Monetary Board to be appropriaie, but in no case to exceed 
12 
[+Ai~t-y--tA0IJSGfRGJ-Jde5G5--W~O,OOGt] 
ONE MILLION PESOS 
13 
(Pl,OOO,OOO,OO) FOR EACH TRANSACTIONAL VIOLATION OR 
14 
ONE HUNDRED THOUSAND PESOS (P100,000.00) PERBAN)<ING 
15 
[Gf]day 
for 
each 
CONTINUING 
violation, 
taking 
into 
16 
consideration the attendant circumstances, such as the 
17 
nature and gravity of the violation or irregularity and the size 
18 
of the INSTITUTION, [bank or quasi bank] PROVIDED: THAT 'IN 
19 
CASE PROFIT IS GAINED OR LOSS, IS AVOIDED AS A RESULT OF 
20 
THE VIOLATION, A FINE OF NO MORE THAN THREE (3) TIMES THE 
21 
PROFIT GAINED OR LOSS AVOIDED MAY BE IMPOSED; 
22 
23 
"(b) suspension of rediscounting privileges or access to 
24 
Bangko Sentra/ credit facilities; 
25 
26 
"(c) suspension of lending· or foreign exchange 
27 
operations or authority to accept new deposits or make new 
28 
investments; 
29 
30 
"(d) suspension of interbank clearing privileges; and/or 
31 
32 
"(e) SUSPENSION OR revocation of quasi-banking OR 
33 
OTHER SPECIAL licenseS, 
34 
35 
36 
37 
38 
39 
40 
41 
42 
43 
44 
45 
46 
47 
48 
49 
50 
"Resignation or termination 
exempt 
such 
director" 
officer 
administrative or criminal sanctions, 
from office shall not 
OR 
EMPLOYEE 
from 
"The Monetary Board may, whenever warranted by 
circumstances, preventively suspend any director or officer 
of [El---Benk or quasi benk] THE INSTITUTION pending an 
investigation: Provided, That should the case be not finally 
decided by the Bangko Sentral within a period of one 
hundred twenty (120) days after the date of suspension, said 
director or officer shall be reinstated in his position: Provided, 
further, That when the delay in the disposition of the case is 
due to the fault, negligence or petition of the director or 
officer, the period of delay shall not be counted in 
computing the period of suspension herein provided, 
51 
"The above administrative sanctions need not be 
52 
applied in the order of their severity, 
Page 15 of 28 
• 
• 


1 
"Whether or not there is an administrative proceeding, 
2 
if the institution and/or the '; directors, officers and/or 
3 
EMPLOYEES concerned continue' with or otherwise persist in 
4 
the commission of the indicated p'ractice or violation, the 
5 
Monetary Board may issue an order requiring the institution 
6 
and/or the directors, officers and/or EMPLOYEES concerned 
7 
to cease and desist from the indicated practice or violation, 
8 
and may further order that immediate action be taken to 
9 
correct the conditions resulting from such practice or 
10 
violation. The cease and desist order shall be immediately 
11 
effective upon service on the respondents. 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
"The respondents shall be afforded an opportunity to 
defend their action in a hearing before the Monetary Board 
or any committee chaired I;:>y any Monetary Board member 
created for the purpose, upon request made by the 
respondents within five (5) days from their receipt of the 
order. If no such hearing is requested within said period, the 
order shall be final. If a hearing is conducted, all issues sholl 
be determined on the basis of records, otter which the 
Monetary Board may either reconsider or make final its order. 
23 
"The Governor is hereby aIJthorized, at his discretion, to 
24 
impose upon [eEfnking institufieflSj, BANKS AND QUASI-
25 
BANKS, 
INCLUDING 
THEIR 
SUBSIDIARIES 
AND 
AFFILlATl:S 
26 
ENGAGED IN ALLIED ACTIVITIES, AND OTHER ENTITIES WHICH 
27 
UNDER SPECIAL LAWS ARE SUBJECT TO BANGKO SENTRAL 
28 
SUPERVISION for any failure to comply with the requirements 
29 
of law, Monetary Board regulations and policies, and/or 
30 
instructions issued by the Iv\onetary Board or by the Governor, 
31 
fines not in excess of [Ten thousand pesos (P 1 Q,QQGt] ONE 
32 
HUNDRED 
THOUSAND 
PESOS 
(P100,OOO.OO) 
FOR 
EACH 
33 
TRANSACTIONAL VIOLATION OR THIRTY THOUSAND PESOS 
34 
(P30,OOO.OO) PER BANKING [Ef] day for each CONTINUING 
35 
violation, the imposition of which shall be final and executory 
36 
until reversed, modified or lifted by the Monetary Board on 
37 
appeaL" 
38 
39 
40 
SEC. 18. A new section entitled Section 38-A is hereby inserted in the 
41 
same Act to read as follows: 
42 
43 
"SEC. 38-A. ISSUANCE OF INJUNCTIVE RELIEF AGAINST 
44 
BANGKO SENTRAL ACTIONS. - NO COURT, OTHER THAN THE 
45 
COURT OF APPEALS AND THE SUPREME COURT, SHALL ISSUE 
46 
ANY 
TEMPORARY 
RESTRAINING 
ORDER, 
PRELIMINARY 
47 
INJUNCTION 
OR 
PRELIMINARY 
MANDATORY INJUNCTION 
48 
AGAINST THE BANGKO SENTRAL FOR ANY ACTION UNDER THIS 
49 
ACT. 
50 
51 
"ANY RESTRAINING ORDER OR INJUNCTION ISSUED IN 
52 
VIOLATION OF THIS SECTION'IS VOID AND OF NO FORCE AND 
53 
EFFECT. 
Page 16 of 28 
• 
• 


1 
"THE PROVISIONS OF RULES OF COURT ON INJUNCTIONS 
2 
IN SO FAR AS THEY ARE APPLICABLE AND NOT INCONSISTENT 
3 
WITH THE PROVISIONS OF THIS ACT 
~HALL GOVERN THE 
4 
ISSUANCE AND DISSOLUTION OF RESTRAINING ORDERS OR 
5 
INJUNCTIONS AGAINST THE BANGKO SENTRAL." 
6 
7 
8 
SEC. 19. Section 43 of the same Act is hereby amended as follows: 
9 
10 
"SEC. 43. Computation of Profits and Losses. -
Within 
11 
the first thirty (30) days following the end of edch year, the 
12 
Bangko Sentral shall determine its net profits or losses. [In-tho 
13 
calculation of not profits, tho Bangko Seniral shall mako 
14 
ElEleE!uElte-EIllewEmco-or··o5tEl8IisR-~rOsoF¥05-for--800 
15 
€fRG-€loU&lfuI-Elccounts]. NOTWITHSTANDING ANY PROVISION 
16 
OF LAW TO THE CONTRARY, THE NET PROFIT OF THE BANGKO 
17 
SENTRAL 
SHALL 
BE 
DETERMINED 
AFTER 
ALLOWING 
FOR 
18 
EXPENSES OF OPERATION ADEQUATE ALLOWANCES AND 
19 
PROVISIONS FOR BAD AND DOUBTFU~ DEBTS, DEPRECIATION IN 
20 
ASSETS, 
AND 
SUCH 
OTHER 
ALLOWANCES 
AND 
21 
CONTINGENCIES OR PURPOSES AS THE MONETARY BOARD 
22 
MAY DETERMINE IN ACCORDANCE WITH PRUDENT FINANCIAL 
23 
MANAGEMENT." 
24 
25 
26 
SEC. 20. A new section entitled Section 43-A is hereby inserted in the 
27 
same Act to read as follows: 
28 
29 
30 
31 
32 
33 
34 
35 
36 
37 
"SEC. 43-A. BANGKO SENTRAL RESERVE FUND. - THE 
BANGKO SENTRAL SHALL ESTABLISH A RESERVE FUND TO 
MITIGATE FUTURE RISKS AND CONTINGENCIES INHERENT IN 
CARRYING OUT THE BANGKO SENTRAL-MANDATED FUNCTIONS 
AS CENTRAL MONETARY AUTHORITY. THE RESERVE FUND SHALL 
CONSIST OF FLUCTUATION RESERVE, CONTINGENCY RESERVE 
AND SUCH OTHER RESERVES AS THE MONETARY BOARD DEEMS 
PRUDENT OR NECESSARY. 
38 
"THE FLUCTUATION RESERVE SHALL COVER LOSSES FROM 
39 
EXCHANGE RATE AND PRICE VOLATILITY AND SHALL BE 
40 
DERIVED FROM THE NET 
PROFIT~ BEFORE DISTRIBUTION, AS 
41 
PROVIDED UNDER SECTION 44 OF THIS ACT. ALL OTHER 
42 
RESERVE FUNDS SHALL BE SOURCED FROM SURPLUS." 
43 
44 
45 
SEC. 21. Section 45 of the same Act is hereby amended to read as 
46 
follows: 
. 
47 
48 
"SEC. 45. Revaluation Profits and Losses. -
UNREALIZED 
49 
profits or losses arising from any revaluation of the Bangko 
50 
Sentra/'s 
[Ret] 
assets 
[or], -, liabilities 
OR 
DERIVATIVE 
51 
INSTRUMENTS DENOMINATED in [§Ole-or] foreign currencies 
52 
with respect to the MOVEMENTS OF PRICES AND EXCHANGE 
53 
RATES FROM THIRD CURRENCIES 'To Philippine peso shall not 
Page 17 of 28 
• 
• 


1 
be included in the computation of the annual profits and 
2 
losses of the Bangko Sentral. Any profits or losses arising in this 
3 
manner shall be offset by any amounts which, as a 
4 
consequence of such revaluations, are owed by the 
5 
Philippines to any international or regional intergovernmental 
, 
6 
financial institution of which the Philippines is a member or 
7 
are owed by these institutions to the Philippines. Any 
8 
remaining UNREALIZED profit or loss shall be carried ina 
9 
special frozen account which shall be named "Revaluation of 
10 
International Reserve {RIR),,: and the net balance of which 
11 
shall appear either among the liabilities or among the assets 
12 
of 
the 
Bangko 
Sentral, 
depending 
on 
whether 
the 
13 
revaluations have produced net profits or net losses. 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
"The 
[Revaluation 
of 
International--Re£ewe] 
RIR 
account shall be [RoimOf] credited [ReF] OR debited ONLY 
FOR THE PERIODIC REVALUATION AS AUTHORIZED IN THIS 
SECTION AND TO REFLECT THE CORRESPONDING ADJUSTMENT 
RESULTING TO REDUCTION IN THE BANGKO SENTRAL'S· NET 
FOREIGN 
ASSETS, 
LIABILITIES 
AND 
FOREIGN 
CURRENCY-
DENOMINATED DERIVATIVE INSTRUMENTS. THE RIR SHALL BE 
ADJUSTED AND RECOGNIZED IN THE INCOME STATEMENT 
UPON SALE OF GOLD AND FOREIGN SECURITIES, OR WHEN THE 
FOREIGN CURRENCY IS REPATRIATED TO LOCAL CURRENCY OR 
IS USED TO PAY FOREIGN OBLIGATIONS, OR UPON MATURITY 
OF A FOREIGN CURRENCY-DENOMINATED FORWARD OR 
OPTION CONTRACT INVOLVING THE PHILIPPINE PESO. 
[fOF any 
fdUFId058£-otRer---tRan~tRe5G---£ldecifically--authGFi;ceEl--in--t-Ri£ 
section-,] " 
32 
SEC. 22. Section 61 of the same Act is hereby amended to read as 
33 
follows: 
34 
35 
"SEC. 61. Guiding Principle. -' THE MONETARY BOARD 
36 
SHALL 
REGULARLY 
ASSESS 
PRICE 
DEVELOPMENTS 
AND 
37 
OUTLOOK AND, BASED ON ITS ANALYSIS AND EVALUATION OF 
38 
INFLATIONARY PRESSURES, USE ITS POLICY INSTRUMENTS TO 
39 
ATTAIN AND MAINTAIN PRICE STABILITY. [ffie-MenetOfY BoarEi 
40 
sRall enEleovOF to cen-tFGI-af'lY-8-*ldonsion OF contraction in 
41 
monetary aggregates '.'tRieR is prejuElicial to tRe-a-#ainment 
42 
eF-ffl€fint-en€fRGe-of.j3ri€e-sfability.-]" 
. 
43 
44 
45 
SEC. 23. Section 63 of the same Act is hereby amended to read as 
46 
follows: 
47 
48 
49 
50 
51 
52 
53 
"SEC. 63. Action when Abnormal Movements Occur in 
the [A40netoFJ' Aggregates, GreEiit, 0;] Price Level. -
Whenever 
abnormal 
movements 
in 
the 
[monetary 
a§§f6§1€ffes,-in--c-r-eElit,-er-ifl] priCes endanger the stability. of 
the Philippine economy or important sectors thereof, the 
Monetary Board shall: 
Page 18 of 28 
• 
• 
• 
• 


1 
"(a) take such remedial measures as are appropriate 
2 
and within the powers granted to the Monetary Board and 
3 
the Bangko Sentral under the provisions of this Act; and 
4 
5 
"(b) submit to the President of the Philippines and the 
6 
Congress, and make public, a detailed report which shall 
7 
include, as a minimum, a description and analysis of: 
8 
9 
"( 1) the causes of the rise or fall of [the mone-tefy 
10 
El§§Fe§Eltos, of credit or of] prices; 
11 
12 
"(2) the extent to which the changes in [fA8 
13 
moneter,! El§§re§ates, itl-"-Credit, or---if:t] prices have 
14 
been reflected in changes in the level of domestic 
15 
output, employment, wages and economic activity in 
16 
general, and the nature and significance of any £tJch 
17 
changes; and 
18 
19 
"(3) the measures which the Monetary Board has 
20 
taken and the other monetary, fiscal or administrative 
21 
measures which it recommends to be adopted .. 
22 
23 
24 
2S 
26 
27 
28 
29 
30 
31 
32 
33 
34 
3S 
36 
"Whenever the [monetapt-ElWfe§Btes, OF tRe-ievel·of 
credit, incree£es-or decreases by more than fifteen percoffi 
(15%), or the] cost of living index increases by more than ten 
percent (10%), in relation to the level existing at the end of 
the corresponding month of the preceding year, or even 
though [ElAY-of-these] THIS quanfitative guideline [s-Fttwe] HAS 
not been reached when in its judgment the circumstances so 
warrant, the Monetary Board shalf submit the reports 
mentioned in this Section, and shall state therein whether, in 
the opinion of the Board, said. changes in the [monetery 
aggregates, credit or] cost of living represent a threat to the 
stability of the Philippine economy or of important sectors 
thereof. 
. 
37 
"The Monetary Board shall continue to submit periodic 
38 
reports to the President of the Philippines and to Congress 
39 
until it considers that the [maneter!" 
credif----eJ:] 
price 
40 
disturbances have disappeared or have been adeql!ately 
41 
controlled." 
42 
43 
44 
SEC. 24. Section 81 of the same Act is hereby amended to read as 
45 
follows: 
46 
47 
"SEC. 
81. Guiding Principles. -
The rediscounts, 
48 
discounts, loans and advances which the Bangko Sentral is 
49 
authorized to extend to banking institutions, under the 
50 
provisions of the present article of this Act shall be used to 
51 
influence the volume of credit consistent with the objective 
52 
of 
price 
stability 
AND 
MAINTENANCE 
OF 
FINANCIAL 
53 
STABILITY." 
Page 19 of 28 
• 


1 
2 
SEC. 25. Section 84 of the same Act is hereby amended to read as 
3 
follows: 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
"SEC. 84. Emergency Loans and Advances. - In periods 
of national and/or local emergency or of imminent financial 
panic which directly threaten monetary and FINANCIAL 
[Banking] stability, the Monetary Board may, by a vote of at 
least five (5) of its members, authorize. the Bangko Sentral to 
grant extraordinary loans or advances to bonking institutions, 
secured by assets as defined hereunder: 
Provided, That 
while such loans or advances are outstanding, the debtor 
institution shall not, except uPOh prior authorization by the 
Monetary Board, expand the tqtal volume of its loans or 
investments. 
17 
"The Monetary Board may, at its discretion, likewise 
18 
authorize the Bangko Sentral t6 grant emergency loans or 
19 
advances to banking institutions, even during normal periods, 
20 
for the purpose of assisting a bank in a precarious' financial 
21 
condition or under serious financial pressures' brought by 
22 
unforeseen events, or events Which, though foreseeable, 
23 
could not be prevented by the bank concerned: Provided, 
24 
however, That the Monetary Board has ascertained that the 
25 
bank is not insolvent and has the assets defined hereunder to 
26 
secure the advances: Provided, further, That a concurrent 
27 
vote of at least five (5) members of the Monetary Board is 
28 
obtained. 
29 
30 
31 
32 
33 
34 
35 
36 
37 
38 
39 
40 
41 
42 
43 
44 
45 
46 
47 
48 
49 
50 
51 
52 
53 
"The amount of any emergency loan or advance shall 
not exceed the sum of fifty percent (50%) of total deposits 
and deposit substitutes of the banking institution, and shall be 
disbursed in two (2) or more tranches. The amount of the first 
tranche shall be limited to twenty-five percent (25%) of the 
total deposit and deposit substitutes of the institution and 
shall 
be 
secured 
by (A). government 
securities, 
(B) 
ACCEPTABLE GUARANTEES BACKED UP BY THE NATIONAL 
GOVERNMENT OR ITS SECURITIES; (C) [te-tRe-extent of theif 
eFlFlIiGel9le-loen-veluos onEl] other unencumbered first class 
collaterals and (D) OTHER KINDS OF COLLATERALS AS MAY BE 
AUTHORIZED BY THE MON~TARY BOARD IN ACCORDANCE 
WITH SOUND RISK MANAGEMENT PRINCIPLES [wRiGA--tho 
Moneter." Boord may OFlprO\<et: 
Provided, That if as 
determined by the Monetary Board, the circumstances 
surrounding the emergency warrant. a loan or advance 
greater than the amount provided hereinabove, the amount 
of the first tranche may exceed twenty-five percent (25%) of 
the bank's total deposit and deposit substitutes if the same is 
adequately 
secured 
by 
applicable 
loan 
values 
of 
government 
securities 
and 
unencumbered 
first 
class 
collaterals approved by the Monetary Board, and the 
principal stockholders of the institution furnish an acceptable 
undertaking to indemnify and: hold harmless from suit a 
Page 20 of 28 
• 
• 
• 
• 


1 
conservator whose appointment the Monetary Board may 
2 
find necessary at any time. 
3 
4 
"Prior to the release of the first tranche, the banking 
5 
institution shall submit to the Bangko Sentral a resolution of its 
6 
board of directors authorizing the Bangko Sentral to evaluate 
7 
other assets of the banking institution certified by its external 
8 
auditor to be good and available for collateral purposes 
9 
should the release of the subsequent tranche be thereafter 
10 
applied for. 
11 
12 
"The Monetary Board may, by a vote of at least five (5) 
13 
of its members, authorize the' release of a subsequent 
14 
tranche on condition that the principal stockholders of the 
15 
institution: 
16 
17 
"(a) furnish an acceptable undertaking to indemnify 
18 
and 
hold 
harmless 
from 
suit 
a 
conservator 
whose 
19 
appointment the Monetary Board may find necessary at any 
20 
time; and 
21 
22 
23 
24 
25 
26 
"(b) 
provide acceptable security which, in 
the 
judgment of the Monetary Board, would be adequate to 
supplement, where necessary, the assets tendered by the 
banking institution to collateralize the subsequent tranche. 
27 
"In connection with the exercise of these powers, the 
28 
prohibitions in Section 128 of this Act shall not apply insofar as 
29 
it refers to acceptance as collateral ,of shares and their 
30 
acquisition as a result of foreclosure proceedings, including 
31 
the exercise of voting rights, pertaining to said shares: 
32 
Provided, however, That should the Bangko Sentral acquire 
33 
any of the shares it has accepted as collateral as a result of 
34 
foreclosure proceedings, the Bahgko Sentral shall dispose of 
35 
said shares by public bid9ing within one (1) yem from the 
36 
date of consolidation of title by the Bangko Sentral. 
37 
38 
"Whenever a financial institution incurs an overdraft in 
39 
its account with the Bangko Sentral, the same shall be 
40 
eliminated within the period prescribed in Section 102 of this 
41 
Act." 
42 
43 
44 
SEC. 26. A new section entitled Section 88-A is hereby inserted in the 
45 
same Act to read as follows: 
46 
47 
"SEC. 
88-A. 
EXEMPTION 
OF 
COLLATERALS 
FROM 
48 
ATTACHMENTS, EXECUTIONS AND OTHER RESTRICTIONS. -
49 
COLLATERALS ON LOANS AND ADVANCES GRANTED BY THE 
50 
BANGKO SENTRAL, WHETHER OR NOT THE INTEREST OF THE 
51 
BANGKO SENTRAL IS REGISTERED, SHALL NOT BE SUBJECT TO 
52 
ATTACHMENT, EXECUTION OR ANY OTHER COURT PROCESS OR 
53 
ADMINISTRATIVE RESTRICTIONS ON LAND USE, NOR SHALL THEY 
Page 21 of 28 
• 


1 
BE INCLUDED IN THE PROPERTY OF INSOLVENT PERSONS OR 
2 
INSTITUTIONS." 
3 
4 
5 
SEC. 27. A new section entitled Section 88-B is hereby inserted in the 
6 
same Act to read as follows: 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
36 
37 
38 
39 
40 
41 
42 
43 
44 
45 
46 
"SEC. 88-B. DEPUTlZATlON OF LEGAL STAFF IN CASE OF 
FORECLOSURES. 
IN 
CASE, OF 
AN 
EXTRAJUDICIAL 
FORECLOSURE OF MORTGAGE IN CONNECTION WITH LOANS 
AND ADVANCES UNDER THIS ARTICLE, THE 8ANGKO SENTRAL 
MAY DEPUTIZE ANY OF ITS LAWYERS TO CONDUCT THE PUBLIC 
AUCTION PURSUANT TO ACT NO. 3135, AS AMENDED. 
LIKEWISE, IN CASE 'OF A JUDICIAL FORECLOSURE IN 
CONNECTION WITH LOANS AND ADVANCES' UNDER THIS 
ARTICLE, THE BANGKO SENTRAL MAY, WITH THE APPROVAL OF 
THE COURT, DEPUTIZE ANY OF ITS. LAWYERS TO ACT AS SPECIAL 
SHERIFF IN THE SALE OF A DEBTOR'S PROPERTIES AND IN THE 
ENFORCEMENT OF COURT WRllS AND PROCESSES RELATED 
THERETO. THE SPECIAL SHERIFF OF THE BANGKO SENTRAL SHALL 
MAKE A REPORT TO THE PROPER COURT AFTER ANY ACTION 
HAS BEEN TAKEN BY HIM, WHICH COURT SHALL TREAT SUCH 
ACTION AS IF IT WERE AN ACT OF ,ITS OWN SHERIFF IN ALL 
RESPECTS. 
"NO RESTRAINING ORDER OR INJUNCTION SHALL BE 
ISSUED BY THE COURT ENJOINING THE BANGKO SENTRAL FROM 
PROCEEDING WITH THE FORECLOSURE OF THE MORTGAGE 
UNLESS A BOND IS POSTED IN FAVOR OF THE BANGKO SENTRAL 
IN AN AMOUNT EQUIVALENT TO THE TOTAL CLAIM OF THE 
BANGKO SENTRAL. THE RESTRAINING ORDER OR INJUNCTION 
SHALL BE REFUSED OR, IF GRANTED, SHALL BE DISSOLVED UPON 
FILING BY THE BANGKO SENTRAL OF A BOND, WHICH SHALL BE 
IN THE FORM OF A BANGKO SENTRAL CHECK, IN AN AMOUNT 
TWICE 
THE 
AMOUNT OF· THE 
ORIGINAL 
BOND 
POSTED 
CONDITIONED THAT THE BANGKO SENTRAL WILL PAY THE 
DAMAGES WHICH THE PARTY MAY SUFFER BY THE REFUSAL OR 
DISSOLUTION OF THE INJUNCTION. THE PROVISIONS OF THE 
RULES OF COURT ON INJUNCTIONS INSOFAR AS THEY ARE 
APPLICABLE AND NOT INCONSISTENT WITH THE PROVISIONS OF 
THIS SECTION SHALL GOVERN THE ISSUANCE AND DISSOLUTION 
OF THE RESTRAINING ORDER OR INJUNCTION CONTEMPLATED 
IN THIS SECTION." 
47 
SEC. 28. A new section entitled Section 88-C is hereby inserted in 
48 
the same Act to read as follows: 
.. 
49 
50 
"SEC. 88-C. 
RIGHT OF REDEMPTION OF FORECLOSED 
51 
REAL PROPERTY; RIGHT OF POSSESSION DURING REDEMPTION 
52 
PERIOD. 
-
IN 
THE 
EVENT 
OF 
FORECLOSURE, 
WHETHER 
53 
JUDICIALLY OR EXTRAJUDICIALLY, THE MORTGAGOR, WHO IS 
Page 22 of 28 
• 
, 
• 
, 


1 
A NATURAL PERSON, SHALL HAVE THE RIGHT TO REDEEM THE 
2 
PROPERTY 
WITHIN 
ONE 
(1) 
YEAR 
FROM 
THE 
DATE 
OF 
3 
FORECLOSURE SALE. IN CASE THE MO~TGAGOR IS A JURIDICAL 
4 
PERSON, THE MORTGAGOR SHALL HAVE THE RIGHT TO REDEEM 
5 
THE PROPERTY SOLD IN AN EXTRAJUDICIAL FORECLOSURE SALE 
6 
UNDER ACT NO. 1135 WITHIN ONE (1) YEAR FROM THE DATE OF 
7 
FORECLOSURE SALE; PROVIDED, THAT IN CASE OF JUDICIAL 
8 
FORECLOSURE, THE MORTGAGOR SHALL HAVE THE RIGHT TO 
9 
REDEEM THE PROPERTY SOLD WITHIN NINETY (90) DAYS FROM 
10 
THE 
FORECLOSURE 
SALE 
BUT 
NOT 
LATER 
THAN 
THE 
11 
REGISTRATION OF THE CERTIFICATE OF FORECLOSURE SALE. 
12 
REDEMPTION SHALL BE EFFECTED. BY PAYING THE PRINCIPAL, 
13 
INTERESTS, CHARGES, COMMISSIONS AND ALL CLAIMS OF 
14 
WHATEVER NATURE OF THE BANGKO SENTRAL OUTSTANDING 
15 
AND DUE AS OF THE DATE OF FORECLOSURE SALE, INCLUDING 
16 
ALL COSTS AND OTHER EXPENSES INCURRED BY REASON OF 
17 
THE FORECLOSURE SALE AND CUSTODY OF THE PROPERTY. 
18 
19 
20 
21 
22 
23 
24 
25 
26 
"THE 
BANGKO 
SENTRAL, 
AS· PURCHASER 
IN 
THE 
FORECLOSURE SALE AND WITHOUT NEED OF POSTING A BOND, 
MAY TAKE 
POSSESSION 
OF 
THE 
FORECLOSED 
PROPERTY 
DURING THE REDEMPTION PERIOD. THE BANGKO SENTRAL 
SHALL BE ENTITLED TO THE FRUITS OF THE PROPERTY, THE SAME 
TO BE APPLIED AGAINST THE REDEMPT!ON PRICE." 
27 
SEC. 29. A new section entitled Section 88-D is hereby inserted in the 
28 
same Act to read as follows: 
29 
30 
"SEC. 88-D. UNSECURED BANGKO SENTRAL CLAIMS. -
31 
ALL UNSECURED CLAIMS OF THE BANGKO SENTRAL SHALL BE 
32 
CONSIDERED PREFERRED CREDITS SIMILAR TO TAXES DUE TO 
33 
THE NATIONAL GOVERNMENT IN THE ORDER OF PREFERENCE 
34 
UNDER ARTICLE 2244 OF THE NEW CIVIL CODE." 
35 
36 
37 
SEC. 30. A new section entitled Section 89-A is hereby inserted in the 
38 
same Act to read as follows: 
39 
40 
"SEC. 89-A. FINANCIAL FACILITIES FOR ISLAMIC BANKS. 
41 
- THE BANGKO SENTRAL MAY, TAKING INTO CONSIDERATION 
42 
THE 
PECULIAR 
CHARACTERISTICS 
OF 
ISLAMIC 
BANKING, 
43 
FORMULATE RULES AND REGULATIONS FOR THE EXTENSION OF 
44 
FINANCIAL FACILITIES TO ISLAMIC BANKS PROVIDED SUCH 
45 
EXPOSURES SHALL BE PROPERLY SECURED." 
46 
47 
48 
SEC. 31. A new section entitled S<pction 89-B is hereby inserted in the 
49 
same Act to read as follows: 
50 
51 
"SEC. 
89-B. 
LOANS 
TO 
THE 
PHILIPPINE 
DEPOSIT 
52 
INSURANCE 
CORPORATION. 
-
THE 
BANGKO 
SENTRAL, 
53 
PURSUANT TO ITS MANDATE OF MAINTAINING FINANCIAL 
Page 23 of 28 
• 
• 
• 


1 
STABILITY, MAY LEND FUNDS TO THE PHILIPPINE DEPOSIT 
2 
INSURANCE CORPORATION FOR INSURANCE PURPOSES AND 
3 
IN CASES OF FINANCIAL ASSISTANCE THAT THE LATTER IS 
4 
AUTHORIZED TO EXTEND UNDER SECTION 17(D) OF REPUBLIC 
5 
ACT NO. 3591, AS AMENDED, TO AN INSURED BANK IN 
6 
DANGER OF CLOSING IN ORDER TO MINIMIZE LOSSES TO ITS 
7 
DEPOSITORS AND CREDITORS. NOTWITHSTANDING SECTION 18 
8 
OF REPUBLIC ACT NO. 3591, AS AMENDED, THE MONETARY 
9 
BOARD SHALL PRESCRIBE INTEREST RATES AND SUCH OTHER 
10 
TERMS AND CONDITIONS OF THE LOAN." 
11 
12 
13 
SEC. 32. Section 92 of the same Act is hereby amended to read as 
14 
follows: 
15 
16 
"SEC. 92. Issue and Negotiation of Bangko Sentral 
17 
Obligations. -
In order to provide the Bangko Sentral with 
18 
effective instruments for open market operations, the Bangko 
19 
Sentral may, subject to such rules. and regulations as the 
20 
Monetary Board may prescribe and in accordance with the 
21 
principles stated in Section 90 of this Act, issue, place, buy 
22 
and sell freely negotiable evidences of indebtedness of the 
23 
Bangko Sentral. [:F'FeviEieEi,-=fmt-i55Uance ef -&uch certificefe5 
24 
ef-iHElehledness sool-ee-maEie enly in cases of e)(tr-eordinary 
25 
movement iH--f'riGe-level5.,] Said evidences of indebtedness 
26 
may be issued directly against the international reserve of 
27 
the Bangko Sentral or against the securities which it has 
28 
acquired under the provisions of Section 91 of this Act, or 
29 
may be issued without relation to specific types of assets of 
30 
the Bangko Sentral. 
31 
32 
33 
34 
35 
36 
"The Monetary Board shall determine the interest rates, 
maturities and other characteristics of said obligations of the 
Bangko Sentra/, 
and may, if 
it 
deems it advisable, 
denominate the obligations in gold or./oreign currencies. 
37 
"Subject to the principles stated in Section 90 of this 
38 
Act, the evidences of indebtedness of the Bangko Sentral to 
39 
which this section refers may be acquired by the Bangko 
40 
Sentral before their maturity, eith.er through purchases in the 
41 
open market or through redemptions at par and by lot if the 
42 
Bangko Sentral has reserved the right to make such 
43 
redemptions. The evidences of indebtedness acquired or 
44 
redeemed by the Bangko Sentral shall not be included 
45 
among its assets, and shall be immediately retired and 
46 
cancelled." 
. 
, 
47 
48 
49 
SEC. 33. Section 95 of the same Act is hereby amended to read as 
50 
follows: 
51 
52 
"SEC. 95. Definition of Deposit Substitutes. -
The term 
53 
"deposit substitutes" is defined as an alternative form· of 
Page 24 91 28. 
• 
• 


1 
obtaining funds from the public, other than deposits, through 
2 
the 
issuance, 
endorsement, 
or acceptance of debt 
3 
instruments for the borrower's own account, for the purpose 
4 
of relending or purchasing of receivables and other 
5 
obligations. These instruments may include, but need riot be 
6 
limited 
to, 
bankers 
acceptances, 
promissory 
notes, 
7 
participations, 
certificates 
of· assignment 
and 
similar 
8 
instruments with recourse, and repurchase agreements. THE 
9 
PHRASE 'OBTAINING FUNDS FROM THE PUBLIC' SHALL MEAN 
10 
11 
12 
13 
14 
BORROWING FROM TWENTY' (20) OR MORE LENDERS AT ANY 
ONE TIME, AND, FOR THIS PURPOSE, "LENDERS" SHALL REFER TO 
INDIVIDUALS AND CORPORATE ENTITIES THAT ARE NOT ACTING 
AS FINANCIAL INTERMEDIARIES, SUBJECT TO THE SAFEGUARDS 
AND REGULATIONS ISSUED BY THE MONETARY BOARD. 
The 
15 
Monetary Board shall determine what specific instruments 
16 
shall be considered as deposit substitutes for the purposes 'of 
17 
Section 94 of this Act: Provided, however, That deposit 
18 
substitutes of commercial, industrial and other non-financial 
19 
companies for the limited purpose of financing their own 
20 
needs or the needs of their agents or dealers shall not be 
21 
covered by the provisions of Section 94 of this Act." 
22 
23 
24 
SEC. 34. Section 101 of the same Act is hereby amended to read as 
25 
follows: 
. 
, 
26 
27 
"SEC. 
101. Reserve Deficiencies. -
Whenever the 
28 
reserve position of any bank or quasi-bank, computed in the 
29 
manner specified in the preceding section of this Act, is 
30 
below the required minimum, the bank or quasi-bank shall 
31 
pay the Bangko Sentra/ one-tenth of one percent (1 /l 0 of 
32 
1 %) per day on the amount of the deficiency or the 
33 
prevailing 
ninety-one-day treasury 
bill 
rate plus 
three 
34 
percentage points, whichever is. higher: Provided, however, 
35 
That banks and quasi-banks shall ordinarily be permitted to 
36 
offset any reserve deficiency occurring on one or more days 
37 
of the week with any excess reserves which they may hold on 
38 
other days of the same week and shall be required to pay 
39 
the penalty only on the average daily deficiency during the 
40 
week. In cases of abuse, the Monetary Board may deny any 
41 
bank or quasi-bank the privilege of offsetting reserve 
42 
deficiencies in the aforesaid manner. 
43 
44 
"If a bank or quasi-bank chronically has a reserve 
45 
deficiency, the Monetary Board may limit or prohibit the 
46 
making of new loans or in.vestr1ents by the institution and 
47 
may require that part or all of the net profits of the institution 
48 
be assigned to surplus. 
49 
50 
51 
52 
53 
"The Monetary Board maY modify or set aside the 
reserve deficiency penalties proyidedin this section, for part 
or the entire period of a strike or lockout affecting a bank or 
a quasi-bank as defined in the Labor Code, or of a national 
Page 25 o~ 28 . 
• 
• 


1 
emergency affecting operations· of banks or quasi-banks, OR 
2 
IN SUCH OTHER INSTANCES WHER.E THE GRANT OF WAIVER OF 
3 
PENALTIES IS DETERMINED BY THE MONETARY BOARD TO BE 
4 
JUSTIFIABLE. The Monetary Board may also modify or set 
5 
aside reserve deficiency penalties for rehabilitation program 
6 
of a bank." 
7 
8 
9 
SEC. 35. Section 104 of the same Act is hereby amended to read as 
10 
follows: 
11 
12 
"SEC. 104. Guiding Principle. -
The Monetary Board 
13 
shall use the powers granted to it under this Act to ensure 
14 
that the supply, availability and cost of money are in accord 
15 
with the needs of the Philippine economy and that bank 
16 
credit is not granted for speculative purposes prejudicial to 
17 
the national interests. Regulations on bank operations shdll 
18 
be applied to all banks of the same category, AS MAY BE 
19 
DEFINED BY THE MONETARY BOARD, uniformly and without 
20 
discrimination." 
21 
22 
23 
SEC. 36. Section 108 of the same Act is hereby amended to read as 
24 
follows: 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
36 
37 
"SEC. 108. Minimum Capital Ratios. -
The Monetary 
Board 
may 
prescribe 
minimum 
RISK-BASED 
CAPITAL 
ADEQUACY ratios BASED ON INTERNATIONALLY ACCEPTED 
STANDARDS [which the capital and surplus of the banks must 
eeaF-to-tJ:lQ--volume-ef-theiF-assets,-oF-to-speGific catogori05 
tRereof,] and may alter said ratios whenever it deems 
necessary. 
IN THE EXERCISE OF ITS AUTHORITY UNDER THIS 
SECTION, THE MONETARY BOARD MAY REQUIRE BANKS TO 
HOLD 
CAPITAL 
BEYOND 
THE 
MINI",:\UM 
REQUIREMENTS 
COMMENSURATE TO THEIR RISK PROFILE.'" 
38 
SEC. 37, Section 113 of the same,Act is hereby amended to read as 
39 
follows: 
40 
41 
"SEC. 113. Official o'eposits. -
The Bangko Sentral shall 
42 
be the official depository of the Government. its political 
43 
subdivisions and instrumentalities as well as of government-
44 
owned or -controlled corporations. anGI,---EI As a general 
45 
policy, their cash balances shc;>uld be deposited with the 
46 
Bangko Sentral, with only minimum working balances to be 
47 
held by government-owned banks and such other banks 
48 
LICENSED TO OPERATE incorporated in the Philippines as the 
49 
Monetary Board may AUTHORIZE. designate, subjec-t to such 
50 
rules and regulEfliBRs as the Board may prescribe: ProviEJeEb 
51 
+J:lElj----&uc-J:l-eElnks--may---RGld 
deposits of--·-tJ:le-pelitic-a1 
52 
~in&tfUmentalities of the Government beyonE! 
Page 26?f 28 
• 


1 
tAeif-.-minimum working balances whenever such subdivisions 
2 
and instrument.glit-ies have outstanding loam-with said banks.;' 
3 
4 
"The Bangko Sentral may ACCEPT DEPOSITS AND pay 
5 
interest on SUCH deposits AND OTHER SIMILAR PLACEMENTS of 
6 
the 
Government 
or 
of 
its 
political 
subdivisions 
and 
7 
instrumentalities, 
banks AND 
OTHER 
BANGKO 
SENTRAL-
8 
SUPERVISED INSTITUTIONS," 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
SEC. 38. Section 123 of the same Act is hereby amended to read as 
follows: 
"SEC. 
123. 
Financial 
Advice on 
Official 
Credit 
Operations. -
Before undertaking any credit operation 
abroad, the Government, through the Secretary of Finance, 
shall request the opinion, in writing, of the Monetary Board on 
the monetary implications of the contemplated action. Such 
opinions 
must 
similarly . be ri;,quested 
by 
all. pqlitical 
subdivisions and instrumentalities of the Government before 
any credit operation abroad is undertaken by them. 
"The opinion of the Monetary Board shall be based on 
the gold and foreign exchange' resources and obligations of 
the nation and on the effects of the proposed operation on 
the balance of payments and on monetary aggregates. 
28 
"Whenever the Government, or any of its political 
29 
subdivisions or instrumentalities, contemplates borrowing 
30 
within the Philippines, the prior opinion of the Monetary 
31 
Board shall likewise be requested in order that the Board 
32 
may render an opinion on the probable effects of the 
33 
proposed operation on monetary aggregates, the price 
34 
level, and the balance of payments. 
35 
36 
"A CREDIT OPERATION OR, BORROWING AS PROVIDED 
37 
HEREIN MAY TAKE THE FORM OF DIFFERENT CREDIT FACILITIES 
38 
SUCH AS BUT NOT LIMITED TO A SINGLE LOAN, SERIES OF 
39 
LOANS UNDER A BORROWING PROGRAM, OR CREDIT LINES. 
40 
NO PRIOR MONETARY BOARD OPINION SHALL BE REQUIRED 
41 
FOR INDIVIDUAL DRAWDOWNS OR BORROWINGS WITHIN 
42 
APPROVED CREDIT LINES OR BORROWING PROGRAMS." 
43 
44 
45 
SEC. 39. Section 125 of the same Act is hereby amended to read as 
46 
follows: 
47 
48 
"SEC. 125. Tax Exemptions. -
The Bangko Sentral shall 
49 
be exempt ffif-a perioe of five (5) years from the approval of 
50 
fRis-.ABI- from all national, provinCial, municipal and city taxes, 
51 
fees, charges and assessments. . 
52 
Page 27 of 28 
• 
• 


1 
"The 
exemption 
authorized 
in 
the 
preceding 
2 
paragraph of this section shall apply to all property of the 
3 
Bangko Sentral, to the resources, receipts, expenditures, 
4 
profits and income of the Bangko Sentral, as well as to 811 
5 
contracts, deeds, documents and transactions related to the 
6 
conduct of the business of the Bangko Sentra/: Provided; 
7 
however, That said exemptions shall apply only to such taxes, 
8 
fees, charges and assessments for which the Bangko Sentral 
9 
itself would otherwise be liable, and shall not apply to taxes, 
10 
fees, charges, or assessments payable by persons or other 
11 
entities doing business with the Bangko Sentra/: Provided, 
12 
further, That foreign loans and other obligations of the 
13 
Bangko Sentral shall be exempt, both as to principal and 
14 
interest, from any and all taxes if the payment of such taxes 
15 
has been assumed by the Bangko Sentral." 
16 
17 
18 
SEC. 40. Section 128 of the same Act is hereby amended to read as 
19 
follows: 
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21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
"SEC. 128, Prohibitions. -
The Bangko Sentral shall not 
acquire shares of any kind or accept them as collateral. and 
shall not participate in the ownership or management of any 
enterprise, either directly or indirectly: H EXCEPT WHEN THE 
MONETARY BOARD, BY A VOTE OF At LEAST FIVE (5) OF IJS 
MEMBERS, 
DETERMINES 
THAT 
.. SUCH 
ACQUISITION 
qR 
INVESTMENT IS ACTUALLY NECESSARY OR REQUIRED IN ORDER 
TO 
QUALIFY 
FOR 
MEMBERSHIP 
IN 
INTERNATIONAL AND 
REGIONAL ORGANIZATIONS. 
31 
"The Bangko Sentral shall not engage in development 
32 
banking or financing: Provided, however, That outstanding 
33 
loans obtained or extended for development financing shall 
34 
not be affected by the prohibition of this section," 
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36 
37 
SEC. 41. Repealing Clause. All provIsIons of existing Jaws, orders, 
38 
rules and regulations, or parts thereof which are in conflict or inconsistent 
39 
with the provisions of this Act are hereby repealed, amended or modified 
40 
accordingly, 
41 
42 
SEC. 42. Separability Clause. If any provision or section of this Act is 
43 
held to be unconstitutional or invalid, the other provisions or sections 
44 
hereof. which are not affected thereby shall continue to be in full force 
45 
and effect. 
46 
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SEC. 43. Effectivity. This Act shall take effect fifteen (15) days 
48 
following its publication in the Official Gazette or in a newSPaper of 
49 
general circulation in the Philippines. 
Page 28 of 28 
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