1
Republic of the Philippines 
House of Representatives 
Quezon City, Metro Manila 
Nineteenth Congress 
First Regular Session 
HOUSE BILL NO. _____ 
Introduced by Representative Rudys Caesar G. Fariñas I 
EXPLANATORY NOTE 
This bill provides a new charter for the Development Bank of the Philippines. 
The Bank shall support the government's programs to enable growth and 
productivity, such as infrastructure, tourism development, agriculture-based 
entrepreneurial ventures, socially-beneficial programs in education, health care, 
and socialized housing, and those that support the protection of the 
environment. However, it must also protect its financial viability from remaining 
globally competitive and participating in the national goal of attaining 
meaningful and inclusive economic growth. 
The new charter aims to strengthen the DBP's governance structure and 
operations by clearly delineating its roles, responsibilities, and accountabilities. 
It will also establish a new governance framework ensuring transparency, 
accountability, and risk management. Also, the new charter aims to expand the 
DBP's lending activities, notably to support priority sectors such as 
infrastructure, agribusiness, social services, micro, small, and medium 
enterprises (MSMEs), and local government units (LGUs). In addition, this 
measure empowers the DBP to offer new lending programs and the issuance of 
new financial instruments that will enable the DBP to provide more flexible and 
innovative financial services. 
This bill ensures that the DBP remains financially sound and sustainable, and 
this new charter provides a more comprehensive regulatory and supervisory 
framework by the Bangko Sentral ng Pilipinas (BSP). The law also establishes a 
risk management framework that will guide the DBP in managing its credit, 
market, operational, and other risks. 
Hence, this representation seeks the passage of this measure.   
RUDYS CAESAR G. FARIÑAS I 
February 21, 2023
1:50 pm
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 2
Republic of the Philippines 
House of Representatives 
Quezon City, Metro Manila 
Nineteenth Congress 
First Regular Session 
HOUSE BILL NO. _____ 
Introduced by Representative Rudys Caesar G. Fariñas I 
AN ACT 
PROVIDING FOR A NEW CHARTER OF THE  
DEVELOPMENT BANK OF THE PHILIPPINES,  
REPEALING FOR THE PURPOSE EXECUTIVE ORDER NO. 81, AS 
AMENDED 
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled: 
Section 1. Title. – This Act shall be known as “The New Development Bank 
1 
of the Philippines (DBP) Act”. 
2 
3 
Sec 2. Declaration of Policy.  It is the policy of the State to strengthen the 
4 
powers and functions of the Development Bank of the Philippines, hereinafter 
5 
referred to as the Bank, as a premier government developmental financial 
6 
institution that provides developmental financing and banking services 
7 
necessary in the achievement of sustained economic growth. The State 
8 
recognizes that the Bank plays an important role in the country’s aspiration to 
9 
meet the challenges of globalization and the integration of the Association of 
10 
South East Asian Nations (ASEAN) by assisting Philippine industries and other 
11 
strategic sectors of the economy and enhancing their capability to compete in 
12 
the global market. 
13 
14 
The State shall support the Bank in pursuing corporate citizenship 
15 
programs through initiatives that promote the welfare of the Filipino people, 
16 
particularly the underprivileged.  The Bank shall carry out relevant and 
17 
meaningful programs through its flagship initiatives in education, health, 
18 
environmental preservation and social outreach programs. 
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Sec. 3. Name and Corporate Existence. – The Bank, shall henceforth 
2 
operate under the provisions of this Act. The Bank shall continue to exist as a 
3 
body corporate and shall have perpetual existence from the date of effectivity of 
4 
this Act.  
5 
 
6 
Sec. 4. Primary Objective of the Bank. – As a partner in national 
7 
development, the Bank shall support the programs of the government that 
8 
enable growth and productivity  such as  infrastructure programs, tourism 
9 
development projects, agriculture-based entrepreneurial ventures, socially-
10 
beneficial programs in education, health care, and socialized housing, those that 
11 
support the protection of the environment, and other public sector programs: 
12 
Provided, That this objective shall be pursued with utmost consideration of the 
13 
need and responsibility to preserve and protect the financial viability of the Bank 
14 
while ensuring that it remains globally competitive. As a universal bank, it shall 
15 
at all times safeguard its financial position in order that it can effectively 
16 
participate in the accomplishment of the national goal of attaining meaningful 
17 
and inclusive economic growth. 
18 
 
19 
Sec. 5. Corporate Powers. —  In addition to the general powers of a 
20 
corporation under RA 11232 otherwise known as the ‘’Revised Corporation Code 
21 
of the Philippines’’, the Bank shall have the power to: 
22 
 
23 
a) 
Exercise all such powers and services as may be necessary to carry 
24 
on the business of a universal bank under R.A. 8791 or “The General Banking 
25 
Law of 2000” subject to the existing rules and regulations of the Monetary Board 
26 
in order to perfom its mandate under this Act;  
27 
 
28 
b) Accept and manage trust funds and properties and carry on the 
29 
business of a trust corporation;    
30 
 
31 
 
c) Act as official government depository with authority to maintain deposits 
32 
and deposit substitutes of the national government, its agencies, bureaus and 
33 
instrumentalities, and government-owned or controlled corporations, and local 
34 
government units, subject to such rules and regulations as the Monetary Board 
35 
may prescribe;  
36 
 
37 
 
d) Adopt, amend, or change its by-laws; to adopt, alter and use a seal; to 
38 
lease or own real and personal property and to sell or otherwise dispose of the 
39 
same; to make contracts; to sue and be sued; and to exercise the general powers 
40 
of a corporation mentioned in the Revised Corporation Code of the Philippines, 
41 
including the power to acquire or establish subsidiaries registered with the 
42 
Securities and Exchange Commission (SEC) and enter into  joint venture 
43 
agreements for purposes of developing or disposing acquired assets and Bank 
44 
properties, insofar as such powers  are not inconsistent or incompatible with the 
45 
provisions of this Act and banking laws, rules and regulations;  
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e) Obtain from the Government Service Insurance System (GSIS) or other 
1 
reputable insurance companies duly accredited by the appropriate regulatory 
2 
body, directors, officers and liability insurance coverage, without prejudice to the 
3 
right of the bank, as may be determined by its board of directors, to put up its 
4 
own legal insurance fund;  
5 
 
6 
f)  Act as loan or credit facility programs administrator with respect to the 
7 
loans granted by the national government;  
8 
 
9 
g)  Develop and dispose the Bank’s owned properties. To add value to, 
10 
improve profitability on, and enhance the marketability of bank’s owned 
11 
property, the bank may further develop or renovate the same either with its own 
12 
capital or through a joint venture arrangement with private companies or 
13 
individuals, without need of approval by the National Economic Development 
14 
Authority (NEDA); 
15 
 
16 
h) Dispose of its acquired assets which shall not be subject to any 
17 
injunction or restraining order issued by any court, commission, tribunal or 
18 
office which shall bar, impede or delay the sale and disposition thereof except on 
19 
questions of ownership and national or public interest; and  
20 
 
21 
i)  Engage in financial leasing of movable and immovable properties in 
22 
connection with government projects.  
23 
 
24 
Unless otherwise provided for in this Act, the exercise of the above-
25 
mentioned powers shall be subject to applicable laws, as well as regulations 
26 
promulgated by the Bangko Sentral ng Pilipinas (BSP) and other applicable 
27 
prevailing laws, rules and regulations. The Bank shall observe utmost 
28 
transparency in dispensing loans and selling of government assets. The  Bank 
29 
must ensure that its resources are not being unduly taken advantage of by its 
30 
management to favor certain private interests: Provided, That, in any case: (a) no 
31 
grant of loan or disposition of asset shall be implemented by the Bank unless it 
32 
undergoes the requisite evaluation and approval process; and (b) the file 
33 
pertaining to the transaction contains a full disclosure of: (i) how the account 
34 
originated and endorsed to the approving bodies; and (ii) the deliberation made 
35 
by the approving bodies on the transaction is faithfully recorded and the record 
36 
of such deliberation and pertinent account files are kept and made available for 
37 
audit in the future by authorized officials, subject to prevailing laws, rules and 
38 
regulations on retention and management of public records.  
39 
 
40 
Sec. 6. Principal Office, Branches, and other Offices. – The Bank's principal 
41 
office and place of business shall be in Metro Manila. It may open and maintain 
42 
branches and agencies in accordance with existing regulations of the BSP. 
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Sec. 7. Authorized Capital Stock-Par Value.— The capital stock of the Bank 
1 
shall be One hundred billion pesos (₱100,000,000,000.00) to be divided into one 
2 
billion (1,000,000,000) common shares with par value of  One hundred pesos 
3 
(P100.00) per share, which shall be fully subscribed by the national government.  
4 
 
5 
The President of the Philippines, may approve the increase of the 
6 
capitalization of the Bank to be fully subscribed by the national government, 
7 
upon the recommendation of the Board and the concurrence of the Secretary of 
8 
Finance, up to such an amount as may be necessary to attain the objectives of 
9 
this Act.  
10 
 
11 
Sec. 8. Voting of Shares. — The voting power of all the common shares of 
12 
stock of the Bank shall be vested in the President of the Philippines or to the 
13 
delegated or authorized representative, subject to prevailing laws, rules and 
14 
regulations. 
15 
 
16 
Sec. 9. Loans and Other Investments. — Loans and other investments of 
17 
the Bank shall be subject to the same limits and ceilings imposed on universal 
18 
banks by the Monetary Board. 
19 
 
20 
Sec. 10. Issuance of Bonds, Eligible Capital Instruments, and other 
21 
Securities. — The Bank may issue all kinds of bonds, notes, debentures, other 
22 
evidences of indebtedness, derivatives, commodities, negotiable instruments, 
23 
eligible capital instruments, and other securities, and the renewal or refunding 
24 
thereof within or outside the Philippines, at such terms, rates, and conditions as 
25 
the Board may determine, subject to compliance with the provisions of applicable 
26 
laws, and rules and regulations promulgated by the Monetary Board.  
27 
 
28 
The Bank shall provide for appropriate reserves for the redemption or 
29 
retirement of the bonds. These bonds and other obligations shall be redeemable 
30 
at the option of the Bank at or before maturity and in such manner as may be 
31 
stipulated therein and shall bear such rate of interest as may be fixed by the 
32 
Bank. 
33 
 
34 
Such obligations shall be secured by the assets of the Bank, including the 
35 
stocks, bonds, debentures, and other securities purchased or held by it under 
36 
the provisions of this Act. These bonds and debentures may be long-term, 
37 
medium, or short-term, with fixed interest rate or floating interest rate. 
38 
 
39 
           Sec. 11. Board of Directors; Composition; Tenure; Per Diems. — The affairs 
40 
and business of the Bank shall be directed, and its properties managed and 
41 
preserved, by a Board of Directors consisting of nine (9) members, headed by the 
42 
Secretary of Finance as Chairperson. The other members of the board shall be 
43 
appointed by the President of the Philippines from a shortlist prepared by the 
44 
Governance Commission for Government –Owned and –Controlled Corporations 
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(GCG) subject to prior vetting from the BSP and its rules on disqualification, 
1 
watchlist files and the fit and proper rule, in accordance with the procedure laid 
2 
down in R.A. No. 10149 otherwise known as the “GOCC Governance Act of 2011”:  
3 
Provided, however, That, the position of Chairperson of the Board and President 
4 
of the Bank shall not be held by the same person. 
5 
 
The directors must always meet the fit and proper requirements under 
6 
R.A. No. 8791 and the guidelines of the BSP and the GCG. 
7 
 
8 
The Chairperson shall preside over the meetings of the Board. 
9 
 
10 
The President of the Bank shall be the Vice-Chairperson of the Board. In 
11 
case the Chairperson is absent or incapacitated, the President shall act as 
12 
Chairperson.  In case of incapacity or absence of both the Chairperson and the 
13 
Vice-Chairperson, the Board shall designate a temporary chairperson from 
14 
among its members. 
15 
 
16 
No person shall be appointed director of the Bank unless that person is a 
17 
natural-born citizen of the Philippines, not less than thirty-five (35) years of age, 
18 
of good moral character and has attained proficiency, expertise and recognized 
19 
competence in one or more of the following: banking, finance, accounting, 
20 
information technology, information security, economics, law, agriculture, 
21 
business management, public utility or government administration. 
22 
 
23 
At least four (4) of the members of the Board shall come from the private 
24 
sector. Except for the Chairperson and the President, no incumbent officer or 
25 
employee of the Bank may be appointed as a member of the Board; nor shall any 
26 
incumbent director, officer, or employee of any other bank be eligible as a 
27 
member of the Board. 
28 
 
29 
The President and Chief Executive Officer (CEO) shall be elected annually 
30 
by the members of the Board in accordance with Section 13 hereof.  
31 
 
32 
The term of office of the President and the members of the Board shall be 
33 
for a period of one (1) year or until such time as their successors are appointed. 
34 
 
35 
The members of the Board, including the President and CEO, shall receive 
36 
per diems for every meeting actually attended, and receive such other 
37 
allowances, incentives and emoluments, including reasonable transportation 
38 
and representation allowances and performance-based incentives, comparable 
39 
to those received by directors in private banks of the universal bank category, 
40 
subject, however, to existing laws and regulations. 
41 
 
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Sec. 12. Powers and Duties of the Board of Directors. — The Board shall 
1 
have the following duties, powers, and authority:  
2 
 
3 
      
a)  
To formulate policies necessary to carry out effectively the provisions 
4 
of this Act and to prescribe, amend, and repeal by-laws, rules and regulations 
5 
for the effective operation of the Bank, and the manner in which the general 
6 
business of the Bank may be conducted and the powers granted by law to the 
7 
Bank are exercised; 
8 
 
9 
b)  
To approve loans, other credit accommodations and guarantees 
10 
issued or obtained by the Bank, and prescribe terms and conditions to govern 
11 
the granting of the foregoing, and engage in such other financial activities under 
12 
such terms and conditions as it may be deemed necessary, consistent with the 
13 
provisions of this Act and the existing banking laws and regulations promulgated 
14 
by the Monetary Board: Provided, That, the Board may delegate the authority to 
15 
approve loans to such officers or committees as may be deemed necessary; 
16 
 
17 
 
c)  
To approve investment activities with terms and conditions 
18 
beneficial to the Bank and subject to the regulations promulgated by the 
19 
Monetary Board; 
20 
 
21 
d)  
To adopt an annual budget for the effective operation and 
22 
administration of the Bank; 
23 
 
e)  
To create and establish a "Provident Fund" which shall consist of 
24 
contributions, made both by the Bank and its officers or employees, to a common 
25 
fund for the payment of benefits to such officers or employees, or their heirs, 
26 
under such terms and conditions as the Board may fix; 
27 
 
28 
f)  
To compromise or release, in whole or in part, any claim or settled 
29 
liability to the Bank regardless of the amount involved, under such terms and 
30 
conditions it may impose to protect the interests of the Bank. This authority to 
31 
compromise shall extend to claims against the Bank; 
32 
 
33 
g)  
To appoint, promote or remove officers from the rank of Vice 
34 
President or its equivalent, and other more senior officer positions, excluding the 
35 
Chairperson and the Vice Chairperson: Provided, That no person shall be 
36 
appointed to any executive position in the Bank mentioned in the preceding 
37 
section unless one is of good moral character, of unquestionable integrity and 
38 
responsibility, who is of recognized competence in the field of one or more of the 
39 
following: economics, agriculture, industry, law, banking or finance, accounting, 
40 
information technology, information security, and possesses demonstrated 
41 
administrative skill and ability;  
42 
 
 
43 


 
 
 
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h)  
To establish such branches, agencies and other offices which the 
1 
Board shall determine to be necessary and convenient in accordance with 
2 
existing rules and regulations of the BSP; 
3 
 
4 
 
i)  
To establish a human resource management system which shall 
5 
govern the selection, hiring, appointment, transfer, promotion or dismissal of all 
6 
personnel, and determination of compensation and benefits of all employees, 
7 
subject to existing laws and regulations such as R. A. No. 10149. Such system 
8 
shall aim to establish professionalism and excellence at all levels of the Bank in 
9 
accordance with sound principles of management;  
10 
 
11 
 
j)  
To reorganize the bank personnel as the Board may deem necessary; 
12 
and to rationalize the organization and structure of the Bank to promote cost-
13 
savings and efficiency. The Board is authorized to design and adopt an early 
14 
retirement or separation incentive plan for the purpose of providing a financial 
15 
package of benefits, apart from that granted under the GSIS law, due to 
16 
retrenchment, reorganization, streamlining of its organization, merger with 
17 
another bank or a similar occurrence to enable its personnel who may or may 
18 
not yet be qualified for optional retirement under existing retirement laws to 
19 
retire or be separated from the service with additional financial benefits: 
20 
Provided, That the provisions of the Civil Service Law and its implementing rules 
21 
shall, at all times, be observed: Provided, further, That any separation benefit 
22 
and incentive which may be granted by the  Bank equivalent to at least two 
23 
months basic salary for every year of service, in addition to those provided under 
24 
existing laws, for those personnel referred to in this section shall be sourced from 
25 
the corporate funds of the Bank.  This provision shall be subject to applicable 
26 
existing laws, rules and regulations; 
27 
 
 
28 
 
k)  
To promote and sponsor the local or foreign training or study of 
29 
officers and employees in the related fields such as banking, finance, treasury, 
30 
money market, risk management, information technology and law. Toward this 
31 
end, the Bank is authorized to defray the costs of such training or study. The 
32 
Board shall provide rules and regulations to govern the training or study 
33 
programs of the Bank, subject to applicable existing regulations on training and 
34 
study, as well as accounting and auditing rules; and 
35 
 
36 
l)   
To obtain from GSIS or other reputable insurance companies, duly 
37 
accredited by the appropriate regulatory body, directors, officers and liability 
38 
insurance coverage, without prejudice to the right of the Bank, as may be 
39 
determined by the Board, to put up its own legal insurance fund, subject to the 
40 
regulations issued by the GCG. 
41 
     
42 
        The Board shall exercise its powers in a manner consistent with the 
43 
principles of transparency, fairness and accountability. 
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Sec. 13. President and Chief Executive Officer. — The President of the Bank 
1 
shall be the Chief Executive Officer who shall be elected by the Board from among 
2 
themselves with the written advice and consent of the President of the 
3 
Philippines. No person shall be appointed President of the Bank unless one is at 
4 
least forty (40) years of age, of good moral character and reputation, with at least 
5 
ten (10) year previous experience in banking, and has a reputed proficiency, 
6 
expertise and recognized competence in banking or financial management. 
7 
 
8 
The President shall, among other powers and duties, execute, carry out 
9 
and administer the policies, measures, orders and resolutions approved by the 
10 
Board; direct and supervise the operation and administration of the Bank; and 
11 
exercise such other powers and perform such other function or duty as may be 
12 
directed or assigned by law, regulations, executive issuances or by the Board 
13 
from time to time. 
14 
 
15 
  
The President shall have the following powers and duties: 
16 
 
17 
(a)  
To sign and execute all contracts concluded by the Bank and enter 
18 
into all necessary obligations required or permitted by this Act, upon proper 
19 
authorization by the Board; and sign all notes, securities certificates, and other 
20 
major documents of the Bank;    
21 
 
22 
(b)  
To exercise, as Chief Executive Officer of the Bank, the powers of 
23 
control and supervision over decisions and actions of subordinate officers and 
24 
all other powers that may be granted by the Board; 
25 
 
26 
(c)  
To report to the Board the main facts concerning the operations of 
27 
the Bank and to recommend changes in policies which one may deem advisable; 
28 
 
29 
(d)  
To submit an annual report to the President of the Philippines on 
30 
the result of the operations of the Bank; 
31 
 
32 
(e)  
To recommend to the Board the appointment, promotion, or removal 
33 
of all officers of the Bank, with the rank of at least vice-president or its 
34 
equivalent; 
35 
 
36 
(f)  
To appoint, promote or remove employees and officers below the 
37 
rank of vice-president or its equivalent: Provided, That promotions, transfers, 
38 
assignments or reassignments of officers and personnel of the Bank are 
39 
personnel actions deemed made in the interest of the service and not 
40 
disciplinary, any provision of the Civil Service Law to contrary notwithstanding; 
41 
and 
42 
 
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(g)  
As required by circumstances, to delegate any of the powers, duties 
1 
or functions to any officer or director of the Bank, with the approval of the Board.  
2 
 
3 
Sec. 14. Legal Matters and Cases. — The Bank shall have its own chief 
4 
legal counsel as head of the legal department, who shall be appointed by the 
5 
Board of the Bank upon recommendation of its President. The other members of 
6 
the legal department shall be appointed in accordance with the Bank’s policies 
7 
on hiring and promotion. 
8 
 
9 
In appropriate cases, the Bank may avail also of the legal services of any 
10 
government legal office authorized to render such services to government-owned 
11 
or controlled corporations. 
12 
 
13 
          Notwithstanding Section 10 of Chapter 3, Title III, Book IV of Executive 
14 
Order 292, otherwise known as the “Administrative Code of 1987”, the Legal 
15 
Department can also act as the principal law office of the Bank duly authorized 
16 
to appear in its behalf in any court or quasi-judicial body. The hiring of any 
17 
external private counsel may be authorized by the Board, upon the 
18 
recommendation of the chief legal counsel, without need of securing the approval 
19 
of the Office of the Government Corporate Counsel (OGCC) and the Commission 
20 
on Audit (COA), any provision of a general or special law to the contrary 
21 
notwithstanding.  
22 
 
23 
           The Bank may, upon the recommendation of its chief legal counsel, 
24 
deputize any member of its legal staff to act as special sheriff in foreclosure cases, 
25 
in the sale or attachment of the debtor's properties and in the enforcement of 
26 
court writs and processes in cases involving the Bank. The special sheriff of the 
27 
Bank shall make a report to the proper court after any action taken which shall 
28 
treat such action as if it were an act of its own sheriffs in all respects. 
29 
 
30 
The sale of mortgaged properties under the provisions of existing laws or 
31 
of this Act shall be conducted under the direction of the sheriff of the province 
32 
or any special sheriff of the Bank, or of a municipal judge or notary public of the 
33 
city or municipality where the sale is to be made, who shall be entitled to collect 
34 
the fees provided for in the Rules of Court with respect to sale of properties under 
35 
execution. 
36 
 
37 
Sec. 15. Foreclosure by the Bank. — Unless warranted by the 
38 
circumstances as may be determined by the Board or otherwise directed by the 
39 
President of the Bank or his duly authorized representative for justifiable 
40 
reasons, the Bank, after the lapse of sixty (60) days from the date the account 
41 
became past due as defined under the rules and regulations of the BSP, shall 
42 
immediately foreclose the collaterals and/or securities for any loan, credit, 
43 
accommodation, and/or guarantees granted by the  Bank whenever the 
44 
arrearages on such account, including accrued interest and other charges, 
45 
amount to at least twenty percent (20%) of the total outstanding obligations, 
46 


 
 
 
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including interest and other charges, as appearing in the books of account 
1 
and/or related records of the Bank.   
2 
 
3 
Upon application of foreclosure of the collateral of delinquent borrowers, 
4 
whether judicially or extra-judicially, by the Bank, the court and/or officials 
5 
concerned shall immediately act and give priority to the same and schedule the 
6 
publication thereof within five (5) days from receipt of the application, the auction 
7 
sale to be held not later than ten (10) days from date of the last publication. The 
8 
certificate of sale must be issued on the date of sale and the same must be 
9 
registered by the Register of Deeds concerned not later than five (5) days after 
10 
submission of the certificate of sale. 
11 
 
12 
           
As a result of foreclosure or any other legal proceedings wherein the 
13 
properties of the debtor which are foreclosed, attached, or levied upon in 
14 
satisfaction of a judgment are sold to the Bank, the said properties shall be 
15 
placed in the possession and control of the Bank, with the assistance of the 
16 
Philippine National Police whenever necessary. The petition for writ of possession 
17 
shall be acted upon by the court within fifteen (15) days from the date of filing. 
18 
 
19 
         The Bank is hereby directed to report to the Office of the President of the 
20 
Philippines any official who delays the proceedings as provided herein or who 
21 
violates any of the provisions of this section. 
22 
 
23 
         This provision is without prejudice to the right of the Bank to enter into a 
24 
compromise agreement pursuant to Section 12(f) of this Act.  
25 
 
26 
Sec. 16. Right of Redemption. — Any individual or juridical mortgagor of 
27 
the Bank whose real property has been judicially sold at public auction, or any 
28 
individual mortgagor of the Bank whose real property has been extra-judicially 
29 
sold at public auction shall, within one (1) year counted from the date of 
30 
registration of the certificate of foreclosure sale with the applicable Register of 
31 
Deeds, has the right to redeem the real property by paying to the Bank all of the 
32 
latter's claims as determined by the Bank. 
33 
 
34 
Notwithstanding the provisions of Act No. 3135 entitled “An Act to Regulate 
35 
the Sale of Property Under Special Powers Inserting In or Annexed to Real Estate 
36 
Mortgage”, as amended, juridical mortgagors whose real property has been extra-
37 
judicially sold at public auction shall have the right to redeem the property until, 
38 
but not after the registration of the certificate of foreclosure sale with the 
39 
applicable Register of Deeds, which registration shall in no case be more than 
40 
three (3) months from the date of foreclosure, whichever is earlier. 
41 
 
The Bank may take possession of the foreclosed property during the 
42 
redemption period. When the Bank takes possession during such period, it shall 
43 
be entitled to the fruits of the property with no obligation to account for them, 
44 
the same being considered compensation for the interest that would otherwise 
45 


 
 
 
12
accrue on the account. Neither shall the Bank be obliged to post a bond for the 
1 
purpose of such possession.    
2 
 
3 
Sec. 17. Exemption from Attachment. — The provisions of any law to the 
4 
contrary notwithstanding, collaterals, securities on loans or other credit 
5 
accommodation and guarantees granted by the Bank or its predecessors-in-
6 
interest shall not be subject to attachment, execution or any other court process, 
7 
nor shall they be included in the property of insolvent persons or institutions, 
8 
unless all debts and obligations of the debtor to the Bank and its predecessors-
9 
in-interest have been previously paid, including accrued interest, penalties, 
10 
collection expenses, and other charges. 
11 
 
12 
No attachment or execution shall be issued against the Bank or its 
13 
property before final judgment in any suit, action or proceeding in any court. 
14 
 
15 
         Sec. 18. Personnel. — The Board shall provide for an organization and staff 
16 
of officers and employees of the Bank and establish a bank personnel 
17 
management system which shall govern the selection, hiring, appointment, 
18 
transfer, promotion, or dismissal of all bank personnel, including the continuous 
19 
reorganization thereof. 
20 
                        
21 
             The appointments in the Bank, except those which are policy-
22 
determining, primarily confidential or highly technical in nature, shall be made 
23 
only according to the Civil Service Law and regulations: Provided, That no 
24 
qualification or eligibility requirements for positions in the Bank shall be 
25 
imposed other than those set by the Board: Provided, further, That the Monetary 
26 
Board shall prescribe, pass upon and review the qualifications of individuals 
27 
appointed as officers and disqualify those found unfit: Provided, finally, That the 
28 
Board or the President in accordance with Sections 12 and 13 of this Act, 
29 
respectively, may without need of obtaining prior approval from any other 
30 
government agency, appoint its contractual personnel whose services are 
31 
deemed necessary in order not to unduly disrupt the operations of the Bank 
32 
except in the conduct of business involving bank deposits. 
33 
 
34 
 All positions in the bank shall be governed by the compensation and 
35 
position classification system (CPCS) and qualification standards subject to the 
36 
approval of the President of the Philippines based on a comprehensive job 
37 
analysis of actual duties and responsibilities and the compensation plan shall 
38 
be comparable with the prevailing compensation plans of universal banks in the 
39 
private sector.  
40 
 
41 
The Board shall fix the total compensation package and other 
42 
remunerations and emoluments of bank personnel, including the President and 
43 
Chief Executive Officer. The total compensation package shall include 
44 
reasonable allowances, incentives, bonuses, privileges and other benefits, 
45 
comparable to those given in private banks of the universal bank category, as 
46 


 
 
 
13
may be necessary or proper for the effective management, operation and 
1 
administration of the Bank.  
2 
 
3 
The Bank’s CPCS shall be subject to periodic review by the Board once 
4 
every two (2) years, without prejudice to yearly merit or increases based on the 
5 
bank's productivity and profitability. The Bank shall be exempt from all existing 
6 
laws, rules, and regulations on compensation, position classification and 
7 
qualification standards.  
8 
 
9 
The foregoing actions of the Board in the immediately preceding three (3) 
10 
paragraphs of this section shall be subject to existing laws and regulations, such 
11 
as R. A. No. 10149. 
12 
 
13 
 
No officer or employee of the Bank subject to the Civil Service Law shall be 
14 
dismissed except for cause as provided by law.  
15 
       
16 
Sec. 19. Inhibition from Board Meeting of Member with Personal Interest. — 
17 
Whenever any member attending a meeting of the Board of Directors, or any of 
18 
one’s relatives within the fourth civil degree or consanguinity or affinity has a 
19 
personal or pecuniary interest, directly or indirectly, in any matter in the agenda 
20 
of the board meeting or in the discussion or resolution of any given matter, said 
21 
member shall disclose said interest to the Board and shall not participate in the 
22 
discussion or resolution of the matter and must retire from the meeting during 
23 
the deliberation thereon. The members of the Board of Directors present in the 
24 
meeting should still constitute a quorum despite the inhibition of the member 
25 
with personal or pecuniary interest in any matter, discussion or resolution in 
26 
the same meeting.  
27 
 
28 
The minutes of the meeting, which shall note the subject matter, the fact 
29 
that a member had a personal interest in it, and the withdrawal of the member 
30 
concerned, may be made available to the public. 
31 
 
32 
For this purpose, the member of the Board shall, at the beginning of their 
33 
respective terms, disclose to the Board any and all interests they may have in 
34 
any corporation, partnership or association and shall, thereafter, disclose to the 
35 
Board, any change thereto. 
36 
 
37 
Sec. 20. Prohibition on Persons with Personal/Pecuniary Interest. — No 
38 
member of the Board, officer, attorney, agent, or employee of the Bank shall in 
39 
any manner, directly participate in the deliberation upon or the determination of 
40 
any question affecting one’s direct personal interest or the personal interests of 
41 
relatives within the fourth civil degree of consanguinity or affinity, or of any 
42 
corporation, partnership, or association in which the member has a direct 
43 
interest. Any person violating the provisions of this section shall be removed from 
44 
office and shall upon conviction be punished with a fine of not less than Fifty 
45 


 
 
 
14
thousand pesos (P50,000) nor more than Two million pesos (P2,000,000) or by 
1 
imprisonment of not less than two (2) years nor more than ten (10) years, or by 
2 
both fine and imprisonment at the discretion of the court. 
3 
 
4 
Sec. 21. Borrowing by Directors, Officers and Employees; Restriction and 
5 
Limitation. — No (1) director, officer or employee of the Bank; or (2) any 
6 
corporation, partnership, or company wherein any member of the Bank’s Board 
7 
of Directors, officer or employee, or their relatives within the first civil degree of 
8 
consanguinity or affinity is a director, officer or controlling shareholder either 
9 
directly or indirectly, for one’s self or as representative or agent of others, borrow 
10 
any of the deposits of funds from the Bank, nor shall become a guarantor, or in 
11 
any manner be an obligor for money borrowed from the Bank or loaned by it: 
12 
Provided, That this prohibition on loans to directors, officers and employees shall 
13 
not include loans allowed in the form of fringe benefits granted in accordance 
14 
with rules and regulations as may be prescribed by the Monetary Board: 
15 
Provided, further, That this prohibition shall not apply to loans to corporations 
16 
wherein the director, officer or employee of the  Bank sits on the board of the 
17 
borrower corporation to represent the interest of the Bank. 
18 
 
19 
Sec. 22. Rules and Regulations on Conflict of Interest. — The Board of 
20 
Directors is hereby authorized to issue rules and regulations for the purposes of 
21 
determining and resolving conflict of interest questions, which rules shall, in 
22 
particular, include the requirement on all officers and employees of the  Bank to 
23 
disclose any shareholdings they, or their relatives within the fourth civil degree 
24 
of consanguinity or affinity, may have in any corporation, partnership, or 
25 
company in excess of 2% of the equity of said corporation, partnership, or 
26 
company or in any related party transactions defined by the Monetary Board of 
27 
the BSP and the Board of Directors of the Bank. 
28 
 
29 
Sec. 23. Prohibition on Officers and Employees of the Bank. — Except as 
30 
required by law, or upon order of a court of competent jurisdiction, or the express 
31 
order of the President of the Philippines or written permission of the client, no 
32 
officer or employee of the Bank shall reveal nor allow to be examined, inquired 
33 
or looked into, by any third person, government official, bureau or office any 
34 
information relative to details of individual accounts or specific banking 
35 
transactions,  condition or business of any of its clients, or funds or properties 
36 
in the custody of the Bank belonging to private individuals: Provided, That in 
37 
respect to deposits or whatever nature, the provisions of existing law  shall apply. 
38 
 
This prohibition shall not apply to the exchange of confidential credit 
39 
information among government financial institutions or among banks, in 
40 
accordance with established banking practices or as may be allowed by law. 
41 
 
42 
Sec. 24. Exaction of Fee, Commission, Gift or Charge. — No unauthorized 
43 
fee, commission, gift, or charge of any kind shall be exacted, demanded, or paid, 
44 
for obtaining loans from the Bank, and any officer, employee, or agent of the  
45 
Bank found guilty of exacting, demanding, or receiving any fee services in 
46 
obtaining  any service or transaction from the Bank, shall be punished by a fine 
47 
of not less than Fifty thousand pesos (P50,000) nor more than Two million pesos 
48 


 
 
 
15
(P2,000,000), imprisonment for not less than six (6) years and one (1) month nor 
1 
more than fifteen (15) years, and perpetual disqualification from public office and 
2 
confiscation or forfeiture in favor of the government of any prohibited interest 
3 
and unexplained wealth.  
4 
 
5 
Sec. 25. Examination of the Bank. — The Bank shall be subject to 
6 
supervision and examination by the appropriate department of the BSP, and 
7 
audit by the COA. 
8 
 
9 
Sec. 26. General Penal Provisions. — Any director, officer or employee of 
10 
the Bank who violates, or permits any of the officers, employees or agents of said 
11 
Bank or any other person to violate, any of the provisions of this Act not 
12 
specifically punished in the preceding sections and any person violating any 
13 
provision of this Act or aiding and abetting the violation thereof, shall be 
14 
punished with a fine not less than Fifty thousand pesos (P50,000) nor more than 
15 
Two million pesos (P2,000,000) or by imprisonment not less than two (2) years 
16 
nor more than ten (10) years, or both, at the discretion of the court. 
17 
 
18 
Sec. 27. Other Liability of Guilty Officer or Employee. — Any member of the 
19 
Board of Directors or officer or employee of the Bank who willfully violates any 
20 
of the provisions of this Act shall, in addition to the criminal and administrative 
21 
liability resulting from such act, be held liable for any loss or injury suffered by 
22 
the Bank as a result of such violation. 
23 
 
24 
Sec. 28. Liability of Directors, Officers or Partners of Offending Corporation 
25 
or Partnership. — If the violation of the provisions of this Act is committed by a 
26 
corporation or partnership, the directors, officers or partners hereof who 
27 
participated in the violation shall be criminally liable for such violation.    
28 
 
29 
Sec. 29. Applicability of Banking Laws. — The provisions of Republic Act 
30 
No. 7653, otherwise known as the New Central Bank Act, as amended by R.A. 
31 
11211, Republic Act No. 8791, and other applicable banking laws, insofar as not 
32 
in conflict with any provision of this Act, shall apply to the Bank. 
33 
 
34 
The penal provisions of Section 66 R.A. No. 8791, in relation to secs. 34, 
35 
35, 36 and 37 of R.A. No. 7653, as amended by R.A. 11211 shall be applicable 
36 
to directors, officers, employees and borrowers of the Bank. 
37 
 
38 
Sec. 30. Separability Clause. — In the event that any provision of this Act 
39 
or the applicability of such provisions to any person or circumstances is declared 
40 
invalid, the remainder of the Act or the application of said provision to other 
41 
persons or circumstances shall not be affected by such declaration.    
42 
 
43 


 
 
 
16
Sec. 31. Repealing Clause. —The provisions of Presidential Decree No. 985, 
1 
Presidential Decree No. 1597, Republic Act No. 6758, as amended, Joint 
2 
Resolution No. 4, the provisions of any other law, special charters, executive 
3 
orders, administrative orders, proclamations, rules and regulations issued 
4 
pursuant to Executive Order No. 81, as amended, or parts thereof, or any other 
5 
laws, rules and regulations which may be inconsistent with any of the provisions 
6 
of this Act, are hereby amended accordingly. 
7 
Executive Order No. 81, as amended, is hereby repealed. 
8 
Sec. 32. Effectivity. —This Act shall take effect fifteen (15) days after its 
9 
publication in the Official Gazette or in a newspaper of general circulation in the 
10 
Philippines. 
11 
 
Approved,