FOURTEENTH CONGRESS OF THE REPUSLIC) 
First Regular Session 
OF THE PHILIPPINES 
Introduced by Senator Miriam Defensor Santiago 
EXPLANATORY NOTE 
Republic Act No. 7353, Section 8, aims to provide ailing rural banks and supplemental 
capital until they have accumulated enough capital of their own or have simulated enough private 
investments. This section mandates that the Land Bank of the Philippines, the Development 
Bank of the Philippines or any government-owned or controlled bank or financial institution, 
shall subscribe to the capital stock of any rural bank from time to time. 
The second paragraph of Section 8 further provides the graduated dividend rates to be 
paid to the Land Bank of the Philippines, the Development Bank of the Philippines or any 
government-owned or controlled bank or financial institution for their respective equity 
investments. These prescribed rates, however, have proven to be too onerous for the banks. 
There is a need for a more reasonable dividend rate to provide for and to help rehabilitate ailing 
rural banks.* 
*This bill was originally filed during the Thirteenth Congress, First Regular Session. 


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FOURTEENTH CONGRESS’OE”THE REPUBLIC ) 
First Regular Session 
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OF THE PHILIPPINES 
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S. B. No. 
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Introduced by Senator Miriam Defensor Santiago 
AN ACT 
AMENDING SECTION 8 OF REPUBLIC ACT NO. 7353, 
ALSO KNOWN AS THE RURAL BANKS OF 1992 
Be it enacted by the Senate and House of Representatives ofthe Philippines in Congress 
assembled: 
SECTION 1. Republic Act No. 7353, Section 8, Paragraph 2 is hereby amended to read 
as follows: 
“Stocks held by the Land Bank of the Philippines, the Development Bank 
of the Philippines or by any government-owned or controlled bank or financial 
institution, under the terms of this Section, shall be made preferred only as to 
assets upon liquidation and without the power to vote and shall share in dividend 
distributions from the date of issuance in the amount of four percent (4%) on the 
first and second years, six percent (6%) on the third and fourth years, eight 
percent (8%) on the fifth and sixth years, ten percent (10%) on the seventh and 
eighth years and twelve percent (12%) on the ninth to the fifteenth years without 
preference;) SIX PERCENT (6%) FROM THE FIRST YEAR UP TO THE 
FIFTEENTH (1 5%) YEARS WITHOUT PREFERENCE: Provided, however, 
that if such stock o f  the Land Bank of the Philippines, the Development Bank of 
the Philippines or any government-owned or controlled bank or financial 
institution is sold to private shareholders, the same may be converted into 
common stock of the class provided for in Section 10 hereof: Provided, further, 
That pending the amendment of the Articles of Incorporation of the rural bank, if 
necessary, for thc purpose of reflecting the conversion into common stock of 
preferred stock sold to private shareholders, the transfer shall be recorded by the 
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rural bank ins the stock and transfer book and such shareholders shall thereafter 
enjoy all the rights and privileges of common stockholders. The preferred stocks 
so transferred shall be surrendered and cancelled and the corresponding common 
stocks shall be issued.” 
SECTION 2. Separability Clause. - If any provision or part hereof is held invalid or 
unconstitutional, the remainder of the law or the provision not otherwise affected shall remain 
valid and subsisting. 
SECTION 3. Repealing Clause. - Any law, presidential decree or issuance, executive 
order, letter of instruction, administrative order, rule or regulation contrary to or inconsistent 
with, the provisions of this Act is hereby repealed, modified or amended accordingly. 
SECITON 4. Effectivity Clause. - This Act shall take effect fifteen (15) days after its 
publication in at least two (2) newspapers of general circulation. 
Approved, 
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