FIFTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
} 
} 
} 
SENATE 
S.B. No. 
[;4 
Introduced by SENATOR EDGARDO J. ANGARA 
EXPLANATORY NOTE 
Experjence in the past highlighted the inability of the Bangko Sentral ng Pilipinas (BSP) 
to deaJ effectively and expeditiously with problem banks. The authority of the BSP over problem 
banks; in general, is limited to the grant of emergency advances in case of illiquidity, or closure 
in case of'insolvency. Prompt corrective actions cannot be implemented due to the absence of 
clear and strong legal basis. Such inability of the BSP often causes losses of hard-earned money 
ofthe depositors and also losses of public funds. 
Therefore, to better protect the interest of the depositors and to avoid losses of the public 
funds, this Bill seeks to adopt, among others, the following international best practices in 
banking supervision and other measures tbal will strengthen the regulatory and supervisory 
powers of the BSP over banks and other financial institutions: 
1. 
The principle of consolidated supervision - This will authorize the BSP, when 
examining a bank or other financial institution under its supervision, to examine 
its subsidiaries and affiliates engaged in allied activities. This is an international 
best practice and very important in our jurisdiction since the parent institution can 
be adversely affected by the failure of its subsidiaries and affiliates. Hence, the 
BSP should be able to evaluate and determine the financial condition, not only of 
the parent institution under its supervision but also of its subsidiaries and 
affiliates. 
2. 
BSP's authority to approve transfers or acqUIsItIOns of shares in a supervised 
institution where such transfer or acquisition or series of transfers or acquisitions 
should be sufficient to elect at least one seat in the board or would effect a change 
in the majority ownership or control of the voting stock of the institution - This is 
a proactive measure that would empower the BSP to prevent the entry of 
undesirable persons into the supervised institution. This is very important because 
failure of institutions is usually caused by the actions of controlling stockholders. 
3. 
The authority of the Monetary Board to prescribe guidelines for the examination 
of supervised authorities - This proposal will result in more effective supervision 
since the resources and manpower of the BSP can be properly allocated and the 
examination of problem institutions can be prioritized. 
4. 
The authority of the Monetary Board to direct existing stockholders to infuse 
additional capital or in case of their inability or refusal, to direct them to accept 
new investors or merge or consolidate with a qualified financial institution - This 
is also a proactive measure that could prevent failures of supervised institutions. 
5. 
, Prescribing additional and transparent grounds for bank closLlre announcement of 
unilateral closure, suspension of payment of deposit substitutes, or inability to pay 
liabilities as they become due - These proposed additional grounds for closing a 


bank will minimize losses on the part of the depositors and of public funds. This 
will even enable the PDIC to recover their payments of insured deposits. 
6. 
Increase in penalties for violation of applicable laws and regulations - This is 
necessary because it has been observed in the past that banks opted to commit 
violations and just pay the penalty because the income from prohibited 
transactions was greater than the penalty. If not corrected, these practices would 
render useless some ofBSP's monetary policies. 
7. 
Indemnify BSP personnel for cost and expenses incurred by them in connection 
with any civil, administrative or criminal action, suit or proceedings - This will 
encourage BSP personnel, particularly the examiners, to discharge their duties and 
responsibilities properly without fear of retaliation. 
The Bill also aims to enhance the ability of the BSP to provide policy directions in the 
areas of money, banking and credit through the following: 
1. 
Grant of authority to the BSP to request date not only from government entities 
but also from any person. 
2. 
Authority of the Monetary Board to require all sl)pervised institutions including 
their subsidiaries and affiliates to maintain balanced currency position between 
their assets -and liabilities. 
Approval of this Bill which is primarily aimed at providing better protection to the 
public, particularly the depositors and creditors of BSP's supervised institutions, is therefore 
earnestly sought. 
$vt/~ 
EDGARDO J. ANGARA 


1 
2 
FIFTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
} 
} 
I 
SENATE 
S.B. No. 
\, 
Introduced by SENATOR EDGARDO J. ANGARA 
AN ACT AMENDING REPUBLIC ACT NUMBERED SEVENTY-SIX 
HUNDRED AND FIFTY-THREE ENTITLED "THE NEW CENTRAL 
BANK ACT" AND FOR OTHER PURPOSES 
Be it enacted by the Senate and the House of Representatives of the Philippines zn 
Congress assembled: 
SECTION 1. Section 2 of Republic Act No. 7653 is hereby amended to read as follows: 
3 
"SECTION 2. Creation of the Bangko Sentral. -
There is hereby 
4 
established an independent central monetary authority, which shall be a body 
5 
corporate known as the Bangko Sentral ng Pilipinas, hereafter referred to as the 
6 
Bangko Sentral. The capital of the Bangko Sentral shall be Fifty billion pesos 
7 
(P50,OOO,OOO,OOO), to be fully subscribed by the Government of the Republic, 
8 
hereafter referred to as the Govemment, Ten billion pesos (PIO,OOO,OOO,OOO) of 
9 
which shall be fully paid lor by the Govemment upon the effectivity of this Act. 
10 
[and] T[t]he balance SHALL [to] be paid for IMMEDIATELY UPON (within a 
11 
period of two years from] the effectivity of this Act THROUGH THE 
12 
ISSUANCE 
OF 
TRADABLE 
GOVERNMENT 
SECURITIES, 
OF 
13 
EQUIVALENT 
MARKET 
VALUE 
PROVIDED 
THAT 
ANY 
14 
GOVERNMENT SECURITIES ISSUED PURSUANT HERETO SHALL 
15 
BE DEEMED APPROPRIATED FOR THIS PURPOSE. [in such manner and 
16 
fOl'm as the Government, through the Secretary of Finance and the Secretary of 
17 
Budget and Management, may thereafter determine.)" 
18 


2 
SEC. 2. Section 3, Republic Act No. 7653, otherwise known as the "The New Central 
2 
Bank Act", is hereby amended to read as follows: 
3 
4 
"SECTION 3. Responsibility and Primary Objective. -
The Bangko 
5 
Sentral shall provide policy directions in the areas of money, banking and credit. 
6 
It shall have supervision over the operations of banks and exercise such regulatory 
7 
powers as provided in this Act and other pertinent laws over the operations of 
8 
finance companies and non-bank financial institutions perfonning quasi-banking 
9 
functions, hereafter referred to as quasi-banks, CREDIT CARD COMPANIES, 
10 
MONEY CHANGERS, E-MONEY ISSUERS, REMITTANCE AGENTS and 
II 
institutions perrol111ing OTHER [similar] functions REGULATED BY THE 
12 
BANGKO SENTRAL UNDER THIS ACT OR UNDER SPECIAL LAWS. 
13 
14 
"The primary objective of the Bangko Sentral is to maintain price stability 
15 
conducive to a balanced and sustainable growth of the economy. It shall also 
16 
promote and maintain FINANCIAL [monetary] stability and the convertibility of 
17 
the peso. IT SHALL LIKEWISE PROMOTE, OVERSEE AND MAINTAIN 
18 
THE STABILITY OF THE PAYMENT AND SETTLEMENT SYSTEM OF 
19 
THE COUNTRY IN ACCORDANCE WITH SOUND AND PRUDENT 
20 
PRACTICES TOWARDS ACHIEVING THE END OF OVERALL 
21 
MONETARY AND FINANCIAL STABILITY, THE BANGKO SENTRAL 
22 
SHALL ISSUE AND ENFORCE APPROPRIATE REGULATIONS. 
23 
24 
SEC. 3. Section 11 of the same Act is hereby amended by inserting a new paragraph 
25 
between the third and the fourth paragraphs which shall read as follows: 
26 
27 
28 
"THE MEETING OF THE MONETARY BOARD, AS REQUIRED 
BY CIRCUMSTANCES, MAY BE CONDUCTED THROUGH THE USE 


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3 
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5 
6 
7 
8 
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10 
3 
OF MODERN TECHNOLOGY INCLUDING, BUT NOT LIMITED TO, 
TELE-CONFERENCING OR VIDEO-CONFERENCING." 
The last paragraph of Section 11 ofthe same Act shall be amended (0 read as follows: 
"The Bangko Sentral shall maintain and preserve a complete record of the 
proceedings and deliberations of the Monetary Board, including the tapes and 
transcripts of (he stenographic notes, either in their original form or OTHER 
RECORDING MEDIA [in microfilm]." 
11 
SEC. 4. Section 15 (Exercise of the Authority of the Monetary Board), paragraphs (b) 
12 
and (e), of the same Act is hereby amended to read as follows: 
13 
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15 
16 
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19 
20 
21 
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27 
28 
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"(b) direct the management, operations, and administration of the Bangko 
Sentral, reorganize its personnel, AND IN CONNECTION THEREWITH 
PROVIDE SEPARATION BENEFITS WHENEVER NECESSARY, and 
issLle sLlch rules and regulations as i( may deem necessary or convenient for this 
purpose. 
The legal units of the Bangko Sentral shall be under the exclusive 
supervision and control of the Monetary Board; 
"(e) indemnify its members and other PERSONNEL (officials] of the 
Bangko Sentral, including personnel of the departments performing supervision 
and examination functions against all costs and expenses reasonably incurred by 
such persons in connection with any civil or criminal action, suit or proceedings 
to which he may be, or is, made a party by reason of the perfom1ance of his 
functions or duties, unless he is finally adjudged in such action or proceeding to 
be liable for BAD FAITH, MALICE, GROSS negligence or GROSS 
misconduct. 


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3 
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10 
1 1 
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13 
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15 
16 
17 
4 
In 
the event of a settlement or compromise, indemmfication shall be 
provided only in connection with such matters covered by the settlement as to 
which the Bangko Sentral is advised by external counsel that the person to be 
indemnified [did not commit any] HAD NOT ACTED WITH BAD FAITH, 
MALICE, GROSS negligence or GROSS misconduct. 
The 
costs 
and 
expenses 
incurred in defending the aforementioned 
action, suit or proceeding may be paid by the Bangko Sentral in advance of the 
final disposition of such action, suit or proceeding upon receipt of an undertaking 
by or on behalf of the member [, officer, or 
employee] AND OTHER 
PERSONNEL 
to 
repay 
the 
amount 
advanced should it ultimately be 
d~telmined by the Monetary Board that he is not entitled to be indemmfied as 
provided in this subsection ON ACCOUNT OF BAD FAITH, MALICE, 
GROSS NEGLIGENCE OR GROSS MISCONDUCT. 
SEC. 5. Section 16 of the same Act is hereby amended to read as follows: 
18 
"SECTION 16. Responsibility. - THE GENERAL RULE AND THE 
19 
EXCEPTION THEREFROM 
ON 
THE LIABILITY OF PUBLIC 
20 
OFFICERS AS PROVIDED IN SECTIONS 38 AND 39 OF CHAPTER 9, 
21 
BOOK I OF THE REVISED ADMINISTRATIVE CODE OF 1987 SHALL 
22 
APPLY TO M[m]embers of the Monetary Board [,officials, examiners, and 
23 
employees] 
AND 
OTHER PERSONNEL of the Bangko Sentral [who 
24 
willfully violate this Act or who are guilty of negligence, abuses or acts of 
25 
malfeasance or misfeasance or fail to exercise extraordinary diligence in the 
26 
perfonnance of his duties shall be held liable for any loss or injury suffered by 
27 
the Bangko Sentral or other banking institutions as a result of such violation, 
28 
negligence, abuse, malfeasance, misfeasance or failure to exercise extraordinary 
29 
diligence]. 


5 
xxx 
2 
"THE 
FOREGOING 
NOTWITHSTANDING, 
UNLESS 
THE 
3 
ACTION OF THE MEMBERS OF THE MONETARY BOARD OR ANY 
4 
PERSONNEL OF THE BANGKO SENTRAL IS FOUND TO BE IN 
5 
WILLFUL VIOLATION OF THIS ACT OR PERFORMED IN BAD 
6 
l1AITH, 
WITH 
MALICE 
AND/OR 
GROSS 
NEGLIGENCE, 
THE 
7 
MEMBERS OF THE MONETARY BOARD AND THE PERSONNEL 011 
8 
THE BANGKO SENTRAL SHALL BE HELD FREE AND HARMLESS TO 
9 
THE FULL EXTENT PERMITTED BY LAW FROM ANY LIABILITY 
10 
AND SHALL BE INDEMNIFIED FOR ANY AND ALL LIABILITIES, 
11 
CLAIMS, 
DEMANDS, 
DAMAGES, DEFICIENCIES, 
COSTS 
AND 
12 
EXPENSES OF WHATSOEVER KIND AND NATURE THAT MAY 
13 
ARISE IN CONNECTION WITH THE PERFORMANCE OF THEIR 
14 
FUNCTIONS." 
15 
16 
SEC. 6. The first paragraph of Section 21 of the same Act is hereby amended to read as 
17 
follows: 
18 
19 
"SECTION 21. 
Deputy Governors. - The Governor of the Bangko 
20 
, 
Sentral, with the approval of the Monetary Board, shall appoint not more than 
21 
. [three (3)] FIVE (5) Deputy Governors who shall perfoDn duties as may be 
22 
assigned to them by the Governor and the Board." 
23 
24 
SEC. 7. The first paragraph of Section 23 of the same Act is hereby amended to read as 
25 
follows: 
26 
"SECTION 23. 
Authority to Obtain Data and Information.- The 
27 
Bangko Sentral shall have the authority to REQUIRE [request] from ANY 
28 
PERSON 
OR 
ENTITY, 
INCLUDING 
government 
offices 
and 
29 
instrumentalities, or government-owned or controlled corporations, any data 


6 
PERT AINING TO THE (which it may require for the proper discharge of its] 
2 
functions and representatives OF THE BANGKO SENTRAL. The Bangko 
3 
Sentral through the Governor or in his absence, a duly authorized representative 
4 
shall have the power to issue a subpoena for the production of the books and 
5 
records for the aforesaid purpose. Those who refuse the subpoena without 
6 
justdiable cause, or who refuse to supply the BANGKO SENTRAL (bank] 
7 
with data (requested or] required, shall be subject to punishment for contempt 
8 
AND SHALL BE SUBJECT TO A FINE in accordance with the provisions of 
, 
9 
the Rules of Court." 
10 
1 I 
"Data on individualS AND PRIVATE firms, other than banks, gathered 
12 
by the [Department of Economic Research and other departments or units of the] 
13 
Bangko Sentral shall not be made available to any person or entity outside of the 
14 
Bangko Sentral whether public or private except under order of the court or under 
15 
such conditions as may be prescribed by the Monetary Board: Provided, however, 
16 
That the collective data on firms may be released to interested persons or entilJes: 
17 
Provided, finally, That in the case of data on banks, the provisions of Section 27 
18 
of this Act shall apply." 
19 
20 
SEC. 8. Section 25 of the same Act is hereby amended to read as follows: 
21 
22 
"SECTION 25. 
Supervision and Examination. - The Bangko Sentral 
23 
shall have 
supervlslon over, and condnct REGULAR [periodic J or speclal 
24 
examination[s] of (,] banking institutions, and quasi-banks, including their 
25 
subsidiaries and affiliates engaged in allied activities. THE BANGKO 
26 
SENTRAL SHALL HAVE THE POWER TO REGULATE AND EXAMINE 
27 
TRANSACTIONS BETWEEN THE SUPlmVISED INSTITUTIONS AND 
28 
THEIR PARENT OR OTHER AFFILIATE COMPANIES. 
29 


7 
1 
"TRANSFERS OR ACQUISITIONS OR A SERIES THEREOF OF 
2 
SHARES OF STOCK IN BANKS OR QUASI-BANKS SUFFICIENT TO 
3 
ELECT AT LEAST ONE SEAT IN THE BOARD OF DIRECTORS OR 
4 
TO EFFECT A CHANGE IN THE MAJORITY 
OWNERSHIP 
OR 
5 
CONTROL OF THESE INSTITUTIONS, SHALL REQUIRE THE PRIOR 
6 
APPROV AL BY THE BANGKO SENTRAL. THE SELLING OR 
7 
CONVEYING STOCKHOLDER SHALL SUBMIT SUCH TRANSFER OR 
8 
ACQUISITION FOR APPROVAL BY THE BANGKO SENTRAL WITHIN 
9 
SUCH PERIOD AS MAY BE PRESCRIBED BY THE MONETARY 
10 
BOARD. IN APPROVING SAID TRANSFERS OR ACQUISITIONS, 
11 
REGARD SHALL BE GIVEN BY THE BANGKO SENTRAL TO THE 
12 
FITNESS OF THE INCOMING STOCKHOLDERS AS 
MAY BE 
13 
INDICATED BY THEIR REPUTATION AND FINANCIAL CAPACITY. 
14 
15 
"PRIOR 
TO 
BANGKO SENTRAL APPROVAL, 
NO SUCH 
16 
TRANSFER OR ACQUISITION SHALL 
BE RECOGNIZED IN THE 
17 
BOOKS OF THE INSTITUTION NOR BY ANY GOVERNMENT 
18 
AGENCY 
AND 
THE 
TRANSFEROR-STOCKHOLDERS, 
SHALL 
19 
REMAIN 
ACCOUNTABLE 
AND 
RESPONSIBLE 
THEREFOR. 
20 
MOREOVER, TRANSFER OF ACTUAL CONTROL OR MANAGEMENT 
21 
OF THE INSTITUTION TO THE NEW STOCKHOLDERS OR THEIR 
22 
REPRESENTATIVES PRIOR TO BANGKO SENTRAL APPROVAL 
23 
SHALL MAKE THE TRANSFEROR, THE TRANSFEREE AND ANY 
24 
PERSON RESPONSIBLE THEREFOR LIABLE UNDER SECTIONS 36 
25 
AND 37 OF THIS ACT. NOTWITHSTANDNIG ANY PROVISION OF 
26 
LA W TO THE CONTRARY, THE BANGKO SENTRAL SHALL SHARE 
27 
WITH THE PHILIPPINE DEPOSIT INSURANCE CORPORATION ANY 
28 
INFORMATION 
THAT 
BANGKO 
SENTRAL 
MAY 
OBTAIN 


8 
1 
PERT AINING TO TRANSFER OR ACQUISITION OF SHARES OR 
2 
SERIES OF TRANSFERS OR ACQUISITIONS OF SHARES IN BANKS. 
3 
4 
For purposes of this section, a subsidiary means a corporation more than 
5 
fifty percent (50%) of the voting stock of which is owned DIRECTLY OR 
6 
INDIRECTLY by a bank or quasi-bank and an affiliate means a corporation 
7 
.the voting stock of which, to the extent of fifty percent (50%) or less, is 
8 
owned by a bank, quasi-bank or which is related or linked to such institution or 
9 
intem1ediary through common stockholders or such other factors as may be 
10 
detennined by the Monetary Board. A PARENT COMPANY MEANS A 
II 
CORPORATION 
WHICH 
OWNS 
DIRECTLY 
OR 
INDIRECTLY 
12 
VOTING STOCK OF A SUPERVISED INSTITUTION SUFFICIENT TO 
13 
CONTROL ITS MANAGEMENT AND OPERATIONS. 
14 
15 
CONTROL EXISTS WHEN THE PARENT OWNS DIRECTLY 
16 
OR INDIRECTLY MORE THAN 
ONE HALF OF THE 
VOTING 
17 
STOCK OF AN ENTERPRISE. CONTROL MAY ALSO EXIST EVEN 
18 
WHEN THE PARENT OWNS ONE HALF OR LESS OF THE VOTING 
19 
STOCK OF AN ENTERPRISE WHEN THERE IS: 
20 
21 
(A) POWER OVER MORE THAN ONE HALF OF THE VOTING 
22 
RIGHTS 
BY 
VIRTUE 
OF 
AN 
AGREEMENT 
WITH 
OTHER 
23 
INVESTORS; OR 
24 
25 
(B) 
POWER TO GOVERN THE FINANCIAL AND OPERATING 
26 
POLICIES OF THE ENTERPRISE UNDER A STATUTE OR AN 
27 
AGREEMENT; OR 
28 


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25 
26 
27 
28 
29 
9 
(C) POWER TO APPOINT OR REMOVE THE MAJORITY OF 
THE MEMBERS OF THE BOARD OF DIRECTORS; OR 
(D) 
POWER TO CAST THE MAJORITY OF VOTES AT 
MEETINGS OF THE BOARD OF DIRECTORS; OR 
(E) 
ABOVE. 
OTHER ARRANGEMENTS SIMILAR TO ANY OF THE 
The department heads and the exammers of the supervising and/or 
examining 
departments 
are 
hereby 
authorized to administer oaths to any 
dIrector, officer, or employee of 
any 
institution 
under 
their respective 
supervision or subject to their examination and to compel the presentation of 
all, books, documents, papers or records necessary in their judgment to ascertain 
tlie 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. 
THE 
BANGKO 
SENTRAL 
AND 
THE 
PHILIPPINE 
DEPOSIT 
INSURANCE CORPORATION ARE FURTHER HEREBY AUTHORIZED 
TO 
EXAMINE 
DEPOSIT 
AND 
INVESTMENT 
ACCOUNTS, 
NOTWITHST ANDING [, subject 
to 
the provision 
of] 
existing 
laws 
protecting or safeguarding the secrecy or confidentiality of bank depOSIts as 
well 
as 
investments of private persons, 
natural 
or juridical, 
in debt 
instruments issued by the Government. 
[No restraining order or injunction shall be issued by the court 
enjoining the. Bangko 
Sentral 
from exammmg any institution subject to 
supervision 
or 
exammation 
by 
the 
Bangko 
Sentral, 
unless 
there 
IS 
cOllvmcing proof that the action of the Bangko Sentra1 is plainly arbitrary 


10 
ane! made in bad faith and the petitioner Or plaintiff files with the clerk or 
2 
Judge of court in which the action is pending a bond executed in favor of the 
3 
Bangko Sentral, in an amount to be fixed by the court. The provisions of Rule 
4 
58 
of the New Rules of Court insofar as they 
are 
applicable 
and 
not 
5 
inconsistent with the provisions of this section shall govem the issuance and 
6 
dissolution of the restraining order or injunction contemplated in this Section.] 
7 
8 
SI~CTION 9. Section 28 of the same Act is hereby amended to read as follows: 
9 
10 
"SECTION 28. Examination and Fees. - The supervising and examining 
11 
department head, personally or by deputy, shall examine the OPERATIONS 
12 
[books] of every [banking 
institution] 
BANK AND QUASI"BANK, 
13 
INCLUDING THEIR SUBSIDIARIES AND AFFILIATES ENGAGED IN 
14 
ALLIED 
ACTIVITIES 
AND 
OTHER FINANCIAL 
INSTITUTIONS 
15 
WHICH UNDER THIS ACT OR SPECIAL LAWS ARE SUBJECT TO 
16 
BANGKO SENTRAL SUPERVISION, IN ACCORDANCE WITH THE 
17 
GUIDELINES SET BY THE MONETARY BOARD TAKING INTO 
18 
CONSIDERATION SOUND AND PRUDENT PRACTICES: [once in every 
19 
twelve (12) months, and at such other times as the Monetary Board by an 
20 
affirmative vote of five (5) members, may deem expedient and 
to make 
a 
21 
I·eporl on the same to tbe Monetary Board:) Provided, That there shall be an 
22 
23 
24 
25 
26 
27 
28 
29 
interval of at least twelve (12) months between 
REGULAR 
[annual] 
examinations: PROVIDED, FURTHER, THAT THE MONETARY BOARD 
BY AN AFFIRMATIVE VOTE OF AT LEAST FIVE (5) MEMBERS MAY 
AUTHORIZE A SPECIAL EXAMINATION IF THE CIRCUMSTANCES 
WARRANT. 
The [bank] INSTITUTION concerned shall afford to the head of the 
appropriate 
supervising 
and 
examining departments and to his authorized 


11 
deputies 
full opportunity to examiue its books AND RECORDS, cash and 
2 
available assets and general condition at any time during [banking] BUSINESS 
3 
hours when requested to do so by the Bangko Sentral: Provided, however, That 
4 
none of the reports and other papers relative to such examinations shall 
be 
5 
open to 
ll1spection 
by the public except insofar as such publicity is 
6 
incidental to the proceedings hereinafter anthorized or is necessary for 
the 
7 
prosecution of violations in connection with the business of such institutions. 
8 
9 
SUPERVISED 
INSTITUTIONS 
[Banking 
and 
quasi-banking 
10 
institutions which are subject to examination by the Bangko Sentral] shall pay to 
11 
the Bangko Sentral, within the first thirty (30) days of each year, an annual 
12 
S.UPERVISION fee in an amount equal to a percentage as may be prescribed by 
13 
the Monetary Board [of] BASED ON its [average] total assets AS OF THE 
14 
END OF [during] the preceding year [as shown on its end-of-month balance 
15 
sheets, after deducting cash on hand and amounts due from banks, including the 
16 
Bangko Sentral and banks abroad]." 
17 
18 
SEC, 10, A NEW SECTION ENTITLED SECTION 28-A OF THE SAME ACT 
19 
SHALL BE INSERTED BETWEEN SECTIONS 28 AND 29 WHICH SHALL READ AS 
20 
FOLLOWS: 
21 
22 
23 
24 
25 
26 
"SECTION 28-A. BSP COORDINATION. - THE SUSPENSION OR 
REVOCATION OF ANY GOVERNMENT LICENSE NECESSARY FOR 
THE OPERATION OF A BSP-SUPERVISED ENTITY MUST BE DONE 
ONL Y WITH PRIOR CONFORMITY FROM BANGKO SENTRAL." 
27 
SEC. 11. Section 30 of the same Act is hereby amended to read as follows: 
28 


12 
"SECTION 
30. Proceedings 
in Receivership and Liquidation.-
2 
Whenever, 
upon report of the head of the supervising [or] AND examining 
3 
department, the Monetary Board finds that a bank, or quasi-bank: 
4 
5 
(a) HAS NOTIFIED THE BANGKO SENTRAL OR PUBLICLY 
6 
ANNOUNCED A UNILATERAL CLOSURE, OR HAS BEEN DORMANT 
7 
FOR AT LEAST SIXTY (60) DAYS, 
OR IN ANY 
MANNER HAS 
8 
SUSPENDED 
THE 
PAYMENT 
OF 
ITS 
DEPOSITIDEPOSIT 
9 
SUBSTITUTES LIABILITIES, OR is unable to pay its liabilities as they 
10 
become due in the ordinary course of business: Provided, That this shall not 
II 
include 
inability to 
pay caused by extraordinary demands 
induced by 
12 
financial panic in the banking OR FINANCIAL community; OR 
13 
14 
15 
16 
17 
(b) has insufficient realizable assets TO MEET ITS LIABILITIES, 
as detem1ined 
by the Bangko Sentral IN ACCORDANCE WITH THE 
BANKING REGULATIONS [to meet its liabilities]; or 
18 
(c) cannot continue in business without involving probable losses to its 
19 
depositors or creditors; or 
20 
21 
(d) HAS REFUSED TO PERMIT ANY LAWFUL EXAMINATION 
22 
INTO THE AFFAIRS OF SUCH INSTITUTION; OR 
23 
24 
(E) has willfully vlOlated a cease and desist order under Section 37 that 
25 
has become final, involving acts or transactions which amount to fraud or a 
26 
dissipation of the assets of the institution; in which cases, the Monetary Board 
27 
may summarily and without need for prior hearing forbid the institution from 
28 
dOJJ1g business in the Philippines and IN CASE IT IS A BANK, designate the 
29 
Philippine Deposit Insurance Corporation (PDIC) as receiver of the banking 


13 
institution. THE MONETARY BOARD SHALL NOTIFY IN WRITING 
2 
THE BOARD OF DIRECTORS OF ITS FINDINGS AND DIRECT THE 
3 
PDIC TO PROCEED WITH THE LIQUIDATION OF THE CLOSED 
4 
BANKING INSTITUTION PURSUANT TO PARAGRAPH 6 OF THIS 
5 
SECTION. 
6 
7 
For a quasi-bank, any person of recognized competence in banking or 
8 
finance may be designated as receiver. 
9 
10 
THE AUTHORITY OF THE MONETARY BOARD TO PLACE A 
II 
BANK OR QUASI-BANK UNDER RECEIVERSHIP AS PROVIDED 
12 
ABOVE MAY ALSO BE EXERCISED OVER OTHER NON-BANK 
13 
FINANCIAL INSTITUTIONS WHICH ARE UNDER THIS ACT OR 
14 
SPECIAL 
LAWS 
ARE 
SUBJECT 
TO 
BANGKO 
SENTRAL 
IS 
SUPERVISION, BASED ON THE SAME APPLICABLE GROUNDS. FOR 
16 
THIS PURPOSE, ANY PERSON OF RECOGNIZED COMPETENCE IN 
17 
BANKING, CREDIT AND FINANCE MAY BE DESIGNATED AS A 
18 
RECEIVER. 
19 
20 
The receiver shall immediately gather and take charge of all the assets and 
21 
liabilities of the institution, administer the same for the benefit of its creditors, and 
22 
exercise the general powers of a receiver under EXISTING LAWS AND the 
23 
Revised Rules of Court. [but shall not, with the exception of] THE RECEIVER 
24 
SHALL ADDITIONALLY HAVE THE AUTHORITY TO: (1) PAY 
25 
administrative expenditures, [payor commit any act that will involve the transfer 
26 
or disposition of any asset of the institution: Provided, That the receiver may] 
27 
AND (2) deposit or place the funds of the institution in non-speculative 
28 
investments; OR (3) ADOPT, IF APPROPRIATE, BRIDGE BANKING AS A 
29 
. RESOLUTION METHOD, AS GOVERNED BY SECTION 30-B OF THIS 


14 
ACT. 
HOWEVER, THE RECEIVER OF QUASI-BANKS AND OTHER 
2 
NON-BANK FINANCIAL INSTITUTIONS CANNOT PAY OR COMMIT 
3 
ANY ACT THAT WILL INVOLVE THE TRANSFER OR DISPOSITION 
4 
OF ANY ASSET OF THE INSTITUTION. 
The 
receiver OF QUASI-
5 
BANKS AND NON-BANK FINANCIAL INSTITUTIONS shall detennine as 
6 
soon as possible, but not later than ninety (90) days from take-over, whether 
7 
SUCH [the] institution may be rehabilitated or otherwise placed in such a 
8 
condition so that it may be pennitted to resume business with safety to its 
9 
[depositors and] creditors 
and 
the 
general 
public: Provided, That any 
10 
determination for the resumption of business of the institution shall be subject to 
II 
prior approval of the Monetary Board. 
12 
13 
IN ORDER TO REHABILITATE THE CLOSED INSTITUTION 
14 
OR TO RESTORE ITS OPERATIONS WITH SAFETY TO ITS 
15 
CREDITORS AND THE GENERAL PUBLIC OR TO MERGE OR 
16 
CONSOLIDATE THE 
CLOSED INSTITUTION 
WITH ANOTHER 
17 
QUALIFIED INSTITUTION, THE RECEIVER OF QUASI-BANKS AND 
18 
. OTHER 
NON-BANK 
FINANCIAL 
INSTITUTIONS 
MAY 
19 
IMMEDIATELY TRANSFER OR DISPOSE OF ANY OR ALL OF THE 
20 
ASSETS OF THE CLOSED INSTITUTION AND PERFORM SUCH 
21 
OTHER ACTS AS MAY BE AUTHORIZED BY LAW. 
22 
23 
If the receiver OF QUASI-BANKS AND OTHER NON-BANK 
24 
FINANCIAL INSTITUTIONS detennines that the institution cannot be 
25 
rehabilitated or permitted to 
resume business in accordance with [the next 
26 
preceding paragraph] 
THIS SECTION, the Monetary Board shall notify in 
27 
writing the board of directors of its findings and direct the receiver to proceed 
28 
with the liquidation ofthe institutions. The receiver shall: 
29 


2 
3 
4 
5 
6 
7 
8 
9 
10 
II 
12 
13 
14 
IS 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
15 
(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 (0 all closed 
banks. In case of quasi-banks, the liquidation plan shall be adopted by the 
Mbnetary Board. Upon acquiring jurisdiction, the court shall, upon motion by the 
. receiver after due notice, adjudicate disputed claims against the institution, assist 
the enforcement of individual liabilities of the stockholders, directors and officers, 
and decide on other issues as may be material (0 implement the liquidation plan 
adopted. The receiver shall pay the cost of the proceedings from the assets of the 
institution. 
(2) convert the assets of the institution to money, dispose of the same to 
creditors 
and 
other 
parties, for the purpose of paying the debts of such 
institution 
111 
accordance with the rules on concurrence and preference of 
credit 
under the Civil Code of (he Philippines and he may, in the name of the 
institution, and with the assistance of counsel as he may retain, institute such 
actions as may be necessary to collect and recover accounts and assets of, or 
defend any action against the institution. The assets of an institution under 
receivership or liquidation shall be deemed in custodia legis in the hands of the 
receiver and shall, from the moment the institution was placed under such 
receivership or liquidation, be exempt from any order of garnishment, levy, 
attachment, or execution. 
The actions of the Monetary Board taken under this section or under 
S'ection 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 AND 
UPON A FINDING AFTER DUE HEARING that the action taken was 
111 
excess of jurisdiction or with such grave abuse of discretion as to amount to lack 


16 
or excess of junsdiction. The petition for certiorari may only be filed by the 
2 
stockholders of record representing the majority of the capital stock within ten 
3 
(10) days from receipt by the board of directors of the institution of the order 
4 
directing receivership, liquidation or conservatorship. 
5 
6 
The designation of a conservator under Section 29 of this Act or the 
7 
appointment of a receiver under this section shall be vested exclusively with the 
8 
Monetary Board. Furthermore, the designation of a conservator is not a 
9 
precondition to the designation of receiver." 
10 
11 
SEC. 12. New sections entitled Section 30-A and Section 30-B of the same Act shall be 
12 
inserted between Sections 30 and 31 which shall read as follows: 
13 
14 
"SECTION 30-A. QUICK RESOLUTION ACTION. - WHENEVER 
15 
UPON THE REPORT OF THE HEAD OF THE SUPERVISING AND 
16 
EXAMINING 
DEPARTMENT, 
THE MONETARY BOARD FINDS A 
17 
BANK OR QUASI-BANK OR OTHER SUPERVISED FINANCIAL 
18 
INSTITUTION HAS INSUFFICIENT REALIZABLE ASSETS TO MEET 
19 
ITS LIABILITIES, THE MONETARY BOARD SHALL HAVE THE 
20 
AUTHORITY TO DIRECT THE EXISTING STOCKHOLDERS OF SAID 
21 
BANK OR QUASI-BANK OR SUPERVISED FINANCIAL INSTITUTION 
22 
TO 
INFUSE 
CAPITAL 
WITHIN A PERIOD NOT EXCEEDING 
23 
NINETY (90) DAYS FROM THE DATE OF DIRECTIVE 
IN 
SUCH 
24 
AMOUNT AS MAY BE NECESSARY TO RESTORE THE ENTITY'S 
25 
CAPITAL TO THE MINIMUM REQUIRED AMOUNT OR RATIO. IN 
26 
27 
CASE 
OF 
INABILITY 
STOCKHOLDERS 
TO 
OR 
UNWILLINGNESS 
OF 
THE 
INFUSE THE REQUIRED AMOUNT OF 
28 
ADDITIONAL CAPITAL WITHIN THE PRESCRIBED PERIOD, THE 
29 
MONETARY BOARD MAY ORDER A QUASI-REORGANIZATION OF 


17 
SAID ENTITY TO REFLECT THE FAIR VALUE OF ITS CAPITAL 
2 
AND/OR DIRECT SAID ENTITY TO ACCEPT INVESTMENTS FROM 
3 
QUALIFIED INVESTORS OR TO MERGE OR CONSOLIDATE WITH 
4 
A QUALIFIED FINANCIAL INSTITUTION." 
5 
6 
"SECTION 30-B. BRIDGE BANKING. - THE PDIC MAY FORM, 
7 
ESTABLISH, ORGANIZE, AND OPERATE AND/OR CONTRACT TO 
8 
OPERATE SUBSIDIARIES OR CORPORATIONS WHOSE PRIMARY 
9 
PURPOSE IS TO OPERATE AS A BRIDGE BANK AND/OR MANAGE 
10 
ACQUIRED ASSETS OF THE PDIC. 
11 
12 
(1) A BRIDGE BANK REFERS TO A TEMPORARY BANK 
13 
LICENSED BY THE BANGKO SENTRAL NG PILIPINAS (BSP), 
14 
ESTABLISHED AND OPERATED TO ACQUIRE ASSETS AND ASSUME 
15 
LIABILITIES 
OF 
A 
FAILED 
BANK 
TO 
FACILITATE 
ITS 
16 
RESOLUTION. THE BRIDGE BANK SHALL: 
17 
18 
(A) 
HAVE AUTHORITY TO PURCHASE ASSETS, ASSUME 
19 
DEPOSITS AND OTHER LIABILITIES WHICH THE PDIC MAY 
20 
DETERMINE TO BE APPROPRIATE; AND 
21 
22 
(B) 
PERFORM SUCH BANKING 
FUNCTIONS 
AS 
THE 
23 
MONETARY BOARD MAY AUTHORIZE, CONSISTENT WITH THE 
24 
OBJECTIVES OF THIS SECTION. 
25 
26 
(2) A BRIDGE BANK RESOLUTION MEASURE MAY BE 
27 
. ADOPTED ONLY IF THE PDIC DETERMINES THA T-
28 


18 
(A) IT IS A COST-EFFECTIVE AND VIABLE RESOLUTION 
2 
MEASURE AND THE AMOUNT NECESSARY TO IMPLEMENT SUCH 
3 
MEASURE IS LESS THAN THE ESTIMATED INSURED DEPOSITS OF 
4 
THE FAILED BANK; AND 
5 
6 
(B) THE 
PRESERVATION 
OF 
CRITICAL 
BANKING 
7 
FUNCTIONS IS IN THE BEST INTEREST OF THE DEPOSITORS AND 
8 
THE PUBLIC. 
9 
10 
(3) FOR THE EFFECTIVE IMPLEMENTATION OF A BRIDGE 
11 
BANK RESOLUTION MEASURE, THE PDIC MAY: 
, 
12 
13 
(A) SELL, 
ASSIGN, 
TRANSFER, 
OR 
CONVEY 
ITS 
14 
SHAREHOLDINGS IN ITS SUBSIDIARY TO THE FAILED BANK; 
15 
16 
(B) TRANSFER SUCH ASSETS AND DEPOSIT LIABILITIES OF 
17 
A FAILED BANK TO THE BRIDGE BANK, AS THE PDIC MAY DEEM 
18 
APPROPRIATE. 
ALL TRANSFERS 
UNDER THIS 
SUBSECTION 
19 
SHALL: 
20 
21 
(1) 
NOT BE SUBJECT TO ANY TAXES, SUCH AS CAPITAL 
22 
GAINS TAX, AS WELL AS INCOME TAX, VALUE ADDED TAX AND 
23 
DOCUMENTARY STAMP TAX, AND OTHER TAXES, AS MAY BE 
24 
APPLICABLE; 
25 
26 
(2) 
BE CONSIDERED IN CUSTODIA LEGIS IN THE HANDS OF 
27 
THE 
BRIDGE 
BANK. 
FROM THE TIME THE 
ASSETS 
ARE 
28 
TRANSFERRED TO A BRIDGE BANK, ITS ASSETS SHALL NOT HE 
29 
SUBJECT TO ATTACHMENT, EXECUTION, GARNISHMENT, LEVY, 


19 
FORECLOSURE OR ANY OTHER COURT PROCESSES. THEREFORE, 
2 
A JUDGE, OFFICER OF THE COURT OR ANY PERSON WHO SHALL 
3 
ISSUE, 
ORDER, 
PROCESS 
OR 
CAUSE 
THE 
ISSUANCE 
OR 
4 
IMPLEMENTATION OF THE WRIT OF GARNISHMENT, LEVY, 
5 
ATTACHMENT 
OR EXECUTION 
SHALL 
BE 
LIABLE 
UNDER 
6 
SECTION 21 OF REPUBLIC ACT NO. 3591, AS AMENDED. 
7 
8 
(3) 
BE EFFECTIVE WITHOUT ANY CONSENT FROM THE 
9 
STOCKHOLDERS, CREDITORS, STAKEHOLDERS OF THE FAILED 
10 
BANK, NOTWITHSTANDING ANY PROVISION OF LAW TO THE 
II 
CONTRARY. 
12 
13 
(C) MAKE ADVANCES TO THE BRIDGE BANK OR CLOSED 
14 
BANK, UPON SUCH TERMS AND CONDITIONS AND IN SUCH FORM 
IS 
AND AMOUNTS AS THE PDIC 
MAY PRESCRIBE, SUFFICIENT 
16 
FUNDS FOR THE BRIDGE BANK TO OPERATE. THESE ADVANCES 
17 
SHALL PARTAKE OF THE NATURE OF PUBLIC FUNDS, AND AS 
18 
SUCH, MUST BE CONSIDERED A PREFERRED CREDIT SIMILAR TO 
19 
TAXES DUE TO THE NATIONAL GOVERNMENT IN THE ORDER OF 
, 
20 
PREFERENCE UNDER ARTICLE 2224 OF THE NEW CIVIL CODE; 
21 
22 
(D) CONDUCT DUE DILIGENCE ON AN INSURED BANK, AND 
23 
EXAMINE 
AND 
AUDIT 
THE 
DEPOSIT 
ACCOUNTS 
AND/OR 
24 
RECORDS, OF AN INSURED BANK, SO AS TO ESTABLISH A DEPOSIT 
25 
PROFILE OF THE BANK AS TO THE NUMBER OF DEPOSIT 
26 
ACCOUNTS AND TOTAL INSURED DEPOSITS: PROVIDED, THAT 
27 
THE INFORMATION ON 
INDIVIDUAL ACCOUNTS 
OBTAINED 
28 
THROUGH SUCH EXAMINATION OR AUDIT SHALL NOT BE 
29 
DISCLOSED OR RELEASED TO ANY OTHER PARTY EXCEPT TO 


20 
1 
THE BOARD OF DIRECTORS OF PDIC OR UPON ORDER OF THE 
2 
COURT; AND 
3 
4 
(E) APPOINT, INSTALL, DESIGNATE, AND/OR REMOVE THE 
5 
DIRECTORS AND OFFICERS OF A BRIDGE BANK AND FIX THEIR 
6 
COMPENSATION. 
7 
8 
(4) THE 90-DAY PERIOD PROVIDED UNDER SECTION 30 OF 
9 
REPUBLIC 
ACT 
7653, 
AS 
AMENDED, 
WITHIN 
WHICH THE 
10 
RECEIVER SHALL DETERMINE WHETHER THE INSTITUTION MAY 
11 
BE REHABILITATED SHALL NOT BE APPLICABLE. 
12 
13 
(5) THE BRIDGE BANK SHALL TERMINATE AT THE END OF 
14 
TWO (2) YEARS FOLLOWING THE DATE IT WAS GRANTED A 
15 
BANKING 
LICENSE, 
SUBJECT 
TO 
THE 
PROVISIONS 
IN 
16 
PARAGRAPHS (6) AND (7); PROVIDED, FURTHER, THAT THE PDIC 
l7 
MAY EXTEND THE STATUS OF THE BRIDGE BANK IF DEEMED 
18 
NECESSARY TO CONCLUDE PENDING NEGOTIATIONS FOR THE 
19 
SALE, MERGER OR ACQUISITION OF THE BRIDGE BANK BY A 
20 
BUYER OR ACQUIRER: PROVIDED, FINALLY, THAT THE MAXIMUM 
21 
EXTENSION SHALL BE ONE (1) YEAR. 
22 
23 
(6) TERMINATION OF BRIDGE BANK.-THE STATUS OF ANY 
24 
BRIDGE BANK AS SUCH SHALL TERMINATE UPON THE EARLIEST 
25 
OF-
26 
27 
(A) THE MERGER OR CONSOLIDATION OF THE BRIDGE 
28 
Bi\NK WITH ANOTHER BANK THAT IS NOT A BRIDGE BANK; OR 
29 


21 
(B) THE SALE OF THE BRIDGE BANK TO A QUALIFIED 
2 
BUYER, AS MAY BE DETERMINED BY THE PDIC; OR 
3 
4 
(C) THE ASSUMPTION OF ALL OR SUBSTANTIALLY ALL OF 
5 
THE (1) DEPOSITS AND OTHER LIABILITIES AND/OR (2) ASSETS OF 
6 
THE BRIDGE BANK BY AN INSURED BANK THAT IS NOT A BRIDGE 
7 
BANK, OR OTHER ENTITY AS PERMITTED UNDER APPLICABLE 
8 
LAW. FOLLOWING THE ASSUMPTION OF ALL OR SUBST ANTIALL Y 
9 
ALL OF THE LIABILITIES OF THE BRIDGE BANK AND THE SALE 
10 
OF ALL OR SUBSTANTIALLY ALL OF THE ASSETS OF THE BRIDGE 
II 
BANK, 
THE 
BRIDGE 
BANK 
SHALL 
BE 
LIQUIDATED 
IN 
12 
ACCORDANCE WITH THE PROVISIONS OF LAW RELATING TO 
13 
THE LIQUIDATION OF CLOSED BANKS; AND 
14 
15 
(D) THE 
EXPIRATION 
OF THE 
PERIOD 
PROVIDED 
IN 
16 
PARAGRAPH (5), OR THE EARLIER DISSOLUTION OF THE BRIDGE 
, 
17 
BANK AS PROVIDED IN PARAGRAPH (7). 
18 
19 
(7) DISSOLUTION OF BRIDGE BANK.-
20 
21 
(A) NOTWITHSTANDING ANY OTHER PROVISION OF LAW 
22 
TO THE CONTRARY, IF THE BRIDGE BANK'S STATUS AS SUCH HAS 
23 
NOT PREVIOUSLY BEEN TERMINATED BY THE OCCURRENCE OF 
24 
AN EVENT SPECIFIED IN SUBPARAGRAPHS (A), (B) OR (C), OF 
25 
PARAGRAPH (6), THE BOARD OF DIRECTORS OF PDIC MAY 
26 
DISSOLVE A BRIDGE BANK AT ANY TIME IT DEEMS NECESSARY. 
27 
28 
(B) THE PDIC, AS SUCH RECEIVER, SHAI,L WIND UP THE 
29 
AFFAIRS OF THE BRIDGE BANK IN CONFORMITY WITH THE 


22 
PROVISIONS OF LAW RELATING TO THE LIQUIDATION OF 
2 
CLOSED BANKS. WITH RESPECT TO ANY SUCH BRIDGE BANK, 
3 
THE PDlC, AS SUCH RECEIVER, SHALL HAVE ALL THE RIGHTS, 
4 
POWERS, AND PRIVILEGES, AND SHALL PERFORM THE DUTIES 
5 
RELATED TO THE EXERCISE OF SUCH RIGHTS, POWERS, OR 
6 
PR)VILEGES GRANTED BY LAW TO A RECEIVER OF ANY INSURED 
7 
-BANK. 
S 
9 
(8) MATTERS RELATING TO THE EXERCISE BY THE PDlC OF 
10 
THE FUNCTIONS UNDER THIS SECTION SHALL BE SUBJECT TO 
11 
VISITORIAL AUDIT ONLY. 
12 
13 
(9) THE ACTIONS OF THE PDlC UNDER THIS SECTION SHALL 
14 
BE FINAL AND EXECUTORY, AND MAY NOT BE RESTRAINED OR 
15 
SET 
ASIDE 
BY 
THE 
COURT, 
EXCEPT 
ON 
PETITION 
FOR 
16 
CERTIORARI WITH THE COURT OF APPEALS ON THE GROUND 
17 
THAT THE ACTION WAS TAKEN IN EXCESS OF JURISDICTION OR 
18 
WITH SUCH GRAVE ABUSE OF DISCRETION AS TO AMOUNT TO A 
19 
LACK OR EXCESS OF JURISDICTION. THE PETITION FOR 
20 
CERTIORARI MAY ONLY BE FILED WITHIN TEN (10) DAYS FROM 
21 
PUBLICATION OF THE NOTICE ON THE ESTABLISHMENT OF A 
22 
BRIDGE BANK. 
23 
24 
(10) THE PDlC SHALL PROMULGATE THE IMPLEMENTING 
25 
RilLES AND REGULATIONS TO IMPLEMENT THE PROVISIONS OF 
26 
THIS SECTION." 
27 
28 
SEC. 13. Section 34 of the same Act is hereby amended to read as follows: 
29 


2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
23 
"SEC. 
34. 
REFUSAL 
TO 
MAKE 
REPORTS 
OR 
PERMIT 
EXAMINATION. -
Any officer, owner, agent, manager, director or officer-in-
charge of any institution subject to the supervision or examination by the Bangko 
Sentral within the purview of this Act who, being required in writing by the 
Monetary Board or by the head of the supervising and examining department 
v.:illfully refuses to file the required report or permit any lawful examination into 
the affairs of such institution shall be punished by a fine of not less than Fifty 
thousand pesos (P50,000) nor more than TWO MILLION PESOS (P2,OOO,OOO) 
[One hundred thousand pesos (P100,OOO)] or by imprisonment of not less than 
one (1) year nor more than five (5) years, or both, in the discretion of the court," 
SEC. 14. Section 35 of the same Act is hereby amended to read as follows: 
"SECTION 35. False Statement. -
The willful making of a false or 
nlisleading statement on a material fact to the Monetary Board or to the examiners 
of the Bangko Sentral shall be punished by a' fine of not less than One hundred 
thousand pesos (P100,OOO) 
nor more than TWO MILLION PESOS 
(P2,OOO;OOO) [Two hundred thousand pesos (P200,OOO)], or by imprisonment of 
not more than (5) years, or both, at the discretion of the court," 
SEC. 15. Section 36 of the same Act is hereby amended to read as follows: 
"SECTION 36. Proceedings Upon Violation of This Act and Other 
Banking Laws, Rules, Regulations, Orders or Instrllctiolls.- Whenever a bank, 
lor] quasi-bank, OR OTHER FINANCIAL INSTITUTION 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 


24 
issued by the Monetary Board, the 
person or persons responsible for such 
2 
violation shall unless otherwise provided in this Act be punished by a fine of not 
3 
less than Fifty thousand pesos (P50,000) nor more than TWO MILLION 
4 
.PESOS (P2,OOO,OOO) [Two 
hundred 
thousand 
pesos (P200,000)] or by 
5 
imprisonment of not less than two (2) years nor more than ten (10) years, or both, 
6 
at the discretion of the court. 
7 
8 
Whenever 
AN 
ENTITY 
UNDER 
BANGKO 
SENTRAL 
9 
SUPERVISION [a bank or quasi-bank] persists in carrying on its business in an 
10 
unlawful or unsafe manner, the Board may, without prejudice to the penalties 
I I 
provided in the preceding paragraph of this section and the administrative 
12 
sanctions provided in Section 37 of this Act, take action under Section 30 of this 
13 
Act." 
14 
15 
SEC. 16. Section 37 of the same Act is hereby amended to read as follows: 
16 
17 
"SECTION 37. Administrative Sanctions [on Banks and Quasi-Banks]. 
18 
- Without prejudice to 
the criminal sanctions against the culpable persons 
19 
provided in 
Sections 34, 
35, 
and 36 of this Act, the Monetary Board 
20 
may, at its discretion, impose ADMINISTRATIVE SANCTIONS upon any 
21 
bank 
or 
quasi-bank, 
INCLUDING 
THEIR 
SUBSIDIARIES 
AND 
22 
AFFILIATES ENGAGED IN ALLIED 
ACTIVITIES, 
OR OTHER 
, 
23 
INSTITUTIONS WHICH UNDER THIS ACT OR SPECIAL LAWS ARE 
24 
SUBJECT 
TO THE BANGKO SENTRAL SUPERVISION, AND/OR 
25 
their 
directors, EMPLOYEES, STOCKHOLDERS AND/OR MEMBERS 
26 
[and/or officers], for any willful violation of its charter or by-laws, willful delay 
27 
in the submission of reports or publications thereof as required by law, 
rules 
28 
and regulations; any refusal to permit examination into the affairs of the 
29 
ll1stitution; any willful making of a false or misleading statement to the 


25 
MONET ARY Board or the appropriate supervising and examining department 
2 
or its examiners; any willful failure or refusal to comply with, or violation of, any 
3 
banking law or any order, instruction or regulation issued by the Monetary Board, 
4 
or any order, instruction or ruling by the Govemor; or any commission of 
5 
irregularities, and/or conducting business in an unsafe or unsound manner as may 
6 
be determined by the 
Monetary Board. [,] 
T[t]he following administrative 
7 
sanctions MAY BE IMPOSED [whenever applicable]: 
8 
9 
(a) fines in amounts as may be determined by the Monetary Board to be 
10 
appropriate, 
[but 
in no case to exceed Thirty thousand pesos (P30,000) a 
11 
dal for each violation, taking into consideration the attendant circumstances, 
12 
slich as the nature and gravity of the violation or irregularity and the size of the 
13 
bank or quasi-bank;] IN ACCORDANCE WITH THE IMPLEMENTING 
14 
REGULATIONS, BASED ON THE NATURE AND GRAVITY OF THE 
15 
OFFENSE AS WELL AS THE RELATIVE ASSET SIZE OF THE 
16 
INSTITUTION. THE MONETARY BOARD SHALL, BY REGULATION, 
17 
DEFINE SERIOUS OR GRAVE, LESS SERIOUS OR LESS GRAVE, AND 
18 
MINOR 
OFFENSES 
TAKING 
INTO 
CONSIDERATION 
THE 
19 
ATTENDANT AGGRAVATING AND MITIGATING CIRCUMSTANCES: 
20 
PROVIDED, THAT WITHOUT PREJUDICE TO THE IMPOSITION OF 
21 
APPLICABLE SANCTION TO THE INSTITUTION THAT COMMITTED 
22 
A SPECIFIC VIOLATION OR IRREGULARITY, THE MONETARY 
23 
BOARD MAY ALSO IMPOSE SANCTIONS ON ITS PARENT COMPANY 
24 
IF THERE IS EVIDENCE THAT SAID PARENT COMPANY ABETTED 
25 
THE COMMISSION OF THE VIOLATION OR IRREGULARITY OR DID 
26 
NOT EXERCISE REASONABLE MEANS TO PREVENT THE SAME 
27 
28 
(b) suspensIOn of rediscounting privileges or access to Bangko Sentral 
29 
credit facilities; 


26 
2 
(c) suspension of lending or foreign exchange operations or authority to 
3 
accept new deposits or make new investments; 
4 
5 
(d) suspension of interbank clearing privileges; [and/or) 
6 
7 
8 
9 
10 
I 1 
12 
(e) SUSPENSION OR revocation of quasi-banking license; 
(F) SUSPENSION OR REVOCATION OF TRUST LICENSE; 
(G) PROHIBITION FROM DECLARING CASH DIVIDENDS; 
13 
(H) CONFISCATION BY AND FORFEITURE IN FAVOR OF THE 
14 
BANGKO SENTRAL OF ANY AND 
ALL 
PROFITS, AS MAY BE 
15 
DETERMINED BY THE MONETARY BOARD, ARISING FROM THE 
16 
OFFENSE OR VIOLATION OF BANKING LAWS, RULES AND 
17 
REGULATIONS; AND/OR 
18 
19 
(I) 
OTHER SANCTIONS AS THE MONETARY BOARD MAY 
20 
DEEM APPROPRIATE UNDER THE CIRCUMSTANCES. 
21 
22 
THE DIRECTOR OR OFFICER RESPONSIBLE FOR THE 
23 
VIOLATION MAY, AFTER DUE 
PROCESS, 
BE 
SUSPENDED, 
24 
REMOVED OR DISQUALIFIED FROM HOLDING OFFICE, OR ANY 
25 
POSITION, IN AN INSTITUTION UNDER THE SUPERVISION OF THE 
26 
BANGKO SENTRAL, 
FOR A PERIOD TO BE DETERMINED BY 
27 
THE MONETARY BOARD, TAKING INTO CONSIDERATION 
THE 
28 
ATTENDANT CIRCUMSTANCES, 
SUCH 
AS 
THE NATURE AND 
29 
GRAVITY OF THE ACT OR OMISSION. 


2 
3 
4 
5 
6 
7 
8 
9 
10 
1 1 
12 
13 
14 
15 
16 
17 
18 
19 
27 
Resignation or termination from office shall not exempt such director or 
officer from administrative or criminal sanctions. 
The Monetary Board may, whenever warranted by circumstances, 
preventively suspend any director or officer of [a hank or quasi-bank] THE 
INSTITUTION pending an investigation: Provided, That should the case be 
not finally decided by the Bangko Sentral within a period of one hundred twenty 
()'20) days after the date of suspension, said director or officer shall be reinstated 
in hiS position: Provided fitrther, That when the delay in the disposition of the 
case is due to the fault, negligence or petition of the director or officer, the 
period of delay shall not be counted in computing the period of suspension herein 
provided. 
The above administrative sanctions need not be applied in the order of 
their severity. 
Whether or not there is an administrative proceeding, if the institution 
and/or 
the 
directors 
and/or 
officers, 
EMPLOYEES 
AND/OR 
20 
STOCKHOLDERS/MEMBERS concerned continue with or otherwise persist 
21 
in the commission of the indicated practice or violation, the Monetary Board 
22 
may issue an order requiring the institution and/or the directors, EMPLOYEES 
23 
. AND/OR STOCKHOLDERS/MEMBERS [and/or officers] concerned to cease 
24 
and desist from the indicated practice or violation, and may further order that 
25 
immediate action be taken to correct the conditions resulting from sLlch practice 
26 
or violation. The cease and desist order shall be immediately effective upon 
27 
service on the respondents. 
28 


28 
The respondents shall be afforded an opportunity to defend their action in 
2 
a hearing 
before 
the Monetary Board or any committee chaired by any 
3 
Monetary Board member created for the purpose, upon request made by the 
4 
respondents within five (5) days from their receipt of the order. If no such 
5 
hearing is requested within said period, 
the order shall be final. If a hearing is 
6 
conducted, all issues shall be determined on the basis of records, after which the 
7 
Monetary Board may either reconsider or make final its order. 
8 
9 
The Governor IS hereby authorized, at his discretion, to impose upon 
10 
[banking institutions,] BANKS AND QUASI-BANKS, INCLUDING THEIR 
II 
SUBSIDIARIES 
AND 
AFFILIATES 
ENGAGED 
IN 
ALLIED 
12 
ACTIVITIES, AND OTHER FINANCIAL 
INSTITUTIONS 
WHICH 
13 
UNDER SPECIAL LAWS 
ARE SUBJECT TO BANGKO SENTRAL 
14 
SUPERVISION for any failure to comply with the requirements of law, 
15 
Monetary 
Board regulations and policies, and/or instructions issued by the 
16 
Monetary Board or by the Governor, fines not in excess of ONE HUNDRED 
, 
17 
THOUSAND PESOS (PI 00,000) PER BANKING [Ten thousand pesos 
18 
. (P I 0,000) a] day for each violation, the imposition of which shall be final and 
19 
executory until reversed, modified or lifted by the Monetary Board on appeal." 
20 
21 
SEC. 16. A new section entitled Section 38-A of the same Act shall be inserted between 
22 
~ections 38 and 39 which shall be read as follows: 
23 
24 
"SECTION 38-A. ISSUANCE OF PROVISIONAL REMEDIES 
25 
AGAINST BANGKO SENTRAL ACTIONS. -
NO COURT OF LOWER 
26 
LEVEL THAN THE COURT OF APPEALS SHALL ISSUE ANY 
27 
TEMPORARY RESTRAINING ORDER, PRELIMINARY INJUNCTION 
28 
OR PRELIMINIARY MANDATORY INJUNCTION AGAINST THE 
29 
BANGKO SENTRAL FOR ANY ACTION UNDER THIS ACT. 


29 
2 
SUCH TEMPORARY RESTRAINING ORDER, PRELIMINARY 
3 
INJUCTION OR PRELIMINARY MANDATORY INJUNCTION MAY BE 
4 
DISSOLVED 
OR 
STAYED 
UPON 
FILING 
OF 
A 
WRITTEN 
5 
UNDERTAKING BY THE BANGKO SENTRAL THAT IT WILL PAY 
, 
6 
ALL DAMAGES WHICH THE PETITTIONER MAY SUFFER FROM 
7 
'THE STAY OF THE INJUNCTION SHOULD IT BE DECIDED IN A 
8 
FINAL JUDGMENT THAT THE PETITIONER IS ENTITLED TO HAVE 
9 
ACTS COMPLAINED 01<' PERMANENTLY ENJOINED. 
10 
11 
ANY RESTRAINING ORDER OR INJUNCTION ISSUED IN 
12 
VIOLATION OF THIS SECTION IS VOID AND OF NO FORCE AND 
13 
EFFECT. 
14 
15 
THE PROVISIONS OF RULE 58 OF THE 1997 RULES ON CIVIL 
16 
PROCEDURES IN SO FAR AS THEY ARE APPLICABLE AND NOT 
17 
INCONSISTENT WITH THE PROVISIONS OF THIS ACT SHALL 
18 
GOVERN THE ISSUANCE AND DISSOLUTION OF THE RESTRAINING 
19 
ORDER OR INJUNCTION AGAINST THE BANGKO SENTRAL." 
20 
21 
SEC. 17. Section 43 of the same Act is hereby amended to read as follows: 
22 
23 
"SECTION 43. Computation of Profits and Losses. -
Within the firs! 
24 
thiliy (30) days following the end of each year, the Bangko Sentral shall 
25 
d~termine its net profits or losses. In the calculation of net profits, the Bangko 
26 
. Sentral shall make adequate allowance or establish adequate reserves for bad and 
27 
doubtful accounts AND OTHER ACCOUNTS AS DETERMINED BY THE 
28 
MONETARY BOARD TO BE NECESSARY FOR THE PRESERVATION 
29 
OF THE FINANCIAL SOUNDNESS OF THE BANGKO SENTRAL." 


30 
SEC. 18. Section 61 ofthe same Act is hereby amended to read as follows: 
2 
3 
"SECTION 61. GUIDING PRINCIPLE. -
The Monetary Board shall 
4 
[endeavor to control any expansion or contraction in monetary aggregates which 
5 
is prejudicial] ASSESS PRICE DEVELOPMENTS AND OUTLOOK AND 
6 
ACCORDINGLY USE ITS POLICY INSTRUMENTS to [the] attain[ment or 
7 
mamtenance of] price stability." 
8 
9 
SEC. 19. Section 63 of the same Act is hereby amended to read as follows: 
10 
11 
"SECTION 63. ACTION WHEN ABNORMAL MOVEMENTS 
12 
OCCUR IN PRICE LEVEL. -
Whenever abnormal movements in prices 
13 
endanger the stability of the Philippine economy or important sectors thereof, the 
14 
M~netary Board shall: 
IS 
16 
(a) take such remedial measures as are appropriate and within the powers 
17 
granted to the Monetary Board and the Bangko Sentral under the provisions of 
18 
this Act; and 
19 
20 
(b) submit to the President of the Philippines and the Congress, and make 
21 
public, a detailed report which shall include, as a minimum, a description and 
22 
analysis of: 
23 
24 
(l) the causes of the rise or fall of [the monetary aggregates, of 
25 
credit or of] prices; 
26 
27 
28 
(2) the extent to which the changes in [the monetary aggregates, in 
credit, or in] prices have been reflected in changes in the level of domestic 


2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
31 
output, employment, wages and economic activity in general, and the 
nature and significance of any such changes; and 
(3) the measures which the Monetary Board has taken and the 
other monetary, fiscal or administrative meaSl)fes which it recommends to 
be adopted. 
Whenever the cost of living index increases by more than ten percent 
(10%). 111 relation to the level existing at the end of the corresponding month of 
the preceding year, or even though THIS quantitative guideline HAS not been 
reached when in its judgment the circumstances so warrant, the Monetary Board 
shall submit the repOIts mentioned in this Section, and shall state therein whether, 
in the opinion of the Board, said changes in the cost of living represent a threat to 
the stability of the Philippine economy or of important sectors thereof. 
The Monetary Board shall continue to submit periodic reports to the 
President of the Philippines and to Congress until it considers that the pnce 
disturbances have disappeared or have been adequately controlled." 
SEC. 20. Section 77 of the same Act is hereby amended to read as follows: 
"SECTION 77. 
Requirement of Balanced Currency Position.- The 
Monetary Board 
may 
requll'e 
[the] 
banks AND 
QUASI-BANKS, 
INCLUDING THEIR SUBSIDIARIES AND AFFILIATES ENGAGED IN 
ALLIED ACTIVITIES, to maintain a balanced position between their assets 
and liabilities in Philippine pesos or in any other currency or currencies in 
which they operate. THEY [The Banks] shall be granted a reasonable period of 
time in which to adjust their currency positions to any such requirement. 


2 
3 
4 
5 
6 
32 
The powers granted under this section shall be exercised only when 
special 
circumstances make such action necessary, in 
the 
opinion of the 
Monetary 
Board, 
and shall be applied to all banks AND QUASI-BANKS, 
INCLUDING THEIR SUBSIDIARIES AND AFFILIATES ENGAGED IN 
ALLIED ACTIVITIES, alike and without discrimination." 
7 
SEC. 21. Section 81 of the same Act is hereby amended to read as follows: 
8 
9 
"SECTION 81. GUIDING PRINCIPLES. -
The rediscounts, discounts, 
10 
loans and advances which the Bangko Sentral is authorized to extend to banking 
11 
in"titutions AND OTHER SUPERVISED FINANCIAL INSTITUTIONS 
12 
Linder the provisions of the present article of this Act shall be used to influence the 
13 
volume of credit consistent with the objective of price stability AS WELL AS 
14 
FINANCIAL STABILITY." 
15 
16 
SEC. 22. Section 83 of the same Act is hereby amended to read as follows: 
17 
18 
"SECTION 83. Loans for Liquidity Purposes. -
The Bangko Sentral, 
19 
BY A VOTE OF AT LEAST FIVE (5) MEMBERS OF THE MONETARY 
20 
BOARD, may extend loans and advances to banking AND OTHER 
21 
SYSTEMICALLY CRITICAL BSP-SUPERVISED institutions for a period of 
22 
not more than THIRTY (30) [seven (7)] days without any collateral for the 
23 
purpose of providing liquidity to the banking system in times of need, SUBJECT 
24 
TO SUCH TERMS AND CONDITIONS AS THE MONETARY BOARD 
25 
MAY PRESCRIBE TO MINIMIZE POSSIBLE LOSSES TO THE 
26 
BANGKO SENTRAL." 
27 
28 
SEC. 23. Section 84 of the same Act is hereby amended to read as follows: 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
33 
"SECTION 84. EMERGENCY LOANS AND ADVANCES. -
In 
periods of national and/or local emergency or of imminent financial panic which 
directly threaten monetary and FINANCIAL [banking) stability, the Monetary 
Board may, by a vote of at least five (5) of its members, authorize the Bangko 
Sentral to grant extraordinary loans or advances to banking AND OTHER 
SYSTEMICALLY CRITICAL BSP-SUPERVISED 
institutions secured by 
assets as defined hereunder: Provided, That while such loans or advances are 
outstanding, the debtor institution shall not, except upon prior authorization by the 
Monetary Board, expand the total volume of its loans or investments. 
The Monetary Board may, at its discretion, likewise authorize the Bangko 
Sentral to grant emergency loans or advances to banking institutions, even during 
nOlmal periods, for the purpose of assisting a bank in a precarious financial 
condition or under serious financial pressures brought by unforeseen events, or 
events which, though foreseeable, could not be prevented by the bank concemcd: 
Provided, however, That the Monetary Board has ascertained that the bank is not 
insolvent and has the assets defined hereunder to secure the advances: Provided, 
fill·ther. That a concurrent vote of at least five (5) members of the Monetary Board 
is obtained. 
The amount of any emergency loan or advance shall not exceed the sum of 
fifty percent (50%) of total BORROWINGS [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 limi.ted to twenty-five percent (25%) of the 
BORROWINGS [lotal deposit and deposit substitutes] of the institution and shall 
be secured by govemment securities to the extent of their applicable loan values 
and 
other unencumbered 
first 
class 
collaterals 
AND 
ACCEPT ABLE 
GUARANTEES BACKED UP BY THE NATIONAL GOVERNMENT OR 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
34 
ITS SECURITIES which the Monetary Board may approve: Provided, That if as 
determined by the Monetary Board, the circumstances surrounding the emergency 
warrant a loan or advance greater than the amount provided hereinabove, the 
amount of the first tranche may exceed twenty-five percent (25%) of the 
INSTITUTION'S 
[bank's] 
total BORROWINGS 
[deposit and 
deposit 
subsitutes] if the same is adequately secured by applicable loan values of 
government 
securities 
and 
unencumbered 
first 
class 
collatera1s 
OR 
ACCEPTABLE GUARANTEES BACKED UP BY THE NATIONAL 
GOVERNMENT OR ITS SECURITIES approved by the Monetary Board, and 
the principal stockholders of the institution furnish an acceptable undertaking to 
indemnify and hold harmless from suit a conservator whose appointment the 
Monetary Board may find necessary at any time, 
Prior to the release of the first tranche, the institution shall submit to the 
Bangko Sentral a resolution of its board of directors authorizing the Bangko 
Sentral to evaluate other assets of the institution certified by its extemal auditor to 
be good and available for collateral purposes should the release of the subsequent 
tranche be thereafter applied fo[' 
The Monetary Board may, by a vote of at least five (5) of its members, 
authorize the release of a subsequent tranche on condition that the principal 
stockholders of the institution: 
(a) fumish an acceptable undertaking to indemnify and hold harmless from 
suit a conservator whose appointment the Monetary Board may find necessary at 
any time; and 


2 
3 
4 
5 
6 
7 
8 
9 
10 
1 1 
12 
13 
14 
15 
16 
17 
35 
(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. 
In connection with the exercise of these powers, the prohibitions Jl1 
Section 128 of this Act shall not apply insofar as it refers to acceptance as 
collateral of shares and their acquisition as a result of foreclosure proceedings, 
including the exercise of voting rights pertaining to said shares: Provuied, 
however, That should the Bangko Sentral acquire any of the shares it has accepted 
as collateral as a result of foreclosure proceedings, the Bangko Sentral shall 
dispose of said shares by public bidding within one (I) year from the date of 
consolidation of title by the Bangko Sentral. 
Whenever a financial institution incurs an overdraft in its account with the 
Bangko Sentral, the same shall be eliminated within the period prescribed in 
Section 102 of this Act." 
18 
. SEC. 24, Section 85 ofthe same Act is hereby amended to read as follows: 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
"SECTION 85. INTEREST AND OTHER CHARGES ON BSP 
CREDIT FACILITIES. -
The Bangko Sentral shall collect interest and other 
appropriate charges on all loans and advances it extends, the closure, receivership 
or liquidations of the debtor-institution notwithstanding. 
The Monetary Board shall fix the interest and OTHER CHARGES 
[rediscount rates] to be IMPOSED [charged] by the Bangko Sentral on its credit 
operations UNDER THIS ACT in accordance with the character and term of the 
operation [, but after due consideration of the Bangko Sentral's portfolio, and the 
general requirements of the national monetary policy]. Interest and OTHER 


36 
CHARGES [rediscount rates] shall be applied CONSISTENTLY to all 
2 
INSTITUTIONS AS MAY BE DEFINED BY THE MONETARY BOARD 
3 
[banks of the same category uniformly and without discrimination]." 
4 
5 
SEC. 25. A new section entitled Section 88-A of the same Act shall be inserted between 
6 
Sections 88 and 89 which shall read as follows: 
7 
8 
"SECTION 88-A. 
EXEMPTION FROM ATTACHMENT. THE 
9 
PROVISIONS 
OF 
ANY 
LAW 
TO 
THE 
CONTRARY 
10 
NOTWITHSTANDING 
AND 
SECTION 
31 
OF 
THIS 
ACT, 
II 
COLLA TERALS ON LOANS AND ADVANCES GRANTED BY THE 
12 
BANGKO SENTRAL TO BANKING INSTITUTIONS SHALL NOT BE 
13 
SUBJECT TO ATTACHMENT, EXECUTION OR ANY OTHER COURT 
14 
PROCESS, NOR SHALL THEY BE INCLUDED IN THE PROPERTY 
15 
OF INSOLVENT PERSONS OR INSTITUTIONS, UNLESS ALL DEBTS 
16 
AND OBLIGATIONS OF THE BANKING INSTITUTIONS TO THE 
17 
BANGKO SENTRAL, WHETHER REGISTERED OR NOT, HAVE BEEN 
18 
PAID, 
INCLUDING 
ACCRUED 
INTEREST, 
PENALTIES, 
19 
. COLLECTION EXPENSES, AND OTHER CHARGES." 
20 
21 
SEC. 26. A new section entitled Section 88-B of the same Act shalI be inserted after 
22 
Section 88-A which shaIl be read as follows: 
23 
24 
"SECTION 88-B. DEPUTIZATION OF LEGAL STAFF. - IN CASE 
25 
OF AN EXTRAJUDICIAL FORECLOSURE OF MORTGAGE, THE 
26 
.BANGKO SENTRAL MAY 
DEPUTIZE ANY OF ITS LAWYERS TO 
27 
CONDUCT THE PUBLIC AUCTION PURSUANT TO ACT NO. 3135, AS 
28 
AMENDED. IN CASE OF A JUDICIAL FORECLOSURE, THE BANGKO 
29 
SENTRAL MAY WITH THE APPROVAL OF THE COURT, LIKEWISE 


37 
DEPUTIZE ANY OF ITS LAWYERS TO ACT AS SPECIAL SHERIFF IN 
2 
THE SALE OF THE DEBTOR'S PROPERTIES AND 
IN 
THE 
3 
ENFORCEMENT OF COURT WRITS AND PROCESSSES RELATED 
4 
THERETO. 
THE SPECIAL SHERIFF OF THE BANGKO SENTRAL 
5 
SHALL MAKE A REPORT TO THE PROPER COURT AFTER ANY 
6 
ACTION HAS BEEN TAKEN BY HIM, WHICH COURT SHALL TREAT 
7 
SUCH ACTION AS IF IT WERE AN ACT OF ITS OWN SHERIFF IN ALL 
8 
RESPECTS. 
9 
10 
NO RESTRAINING ORDER OR INJUNCTION SHALL BE 
II 
-ISSUED BY THE COURT ENJOINING THE BANGKO SENTRAL FROM 
12 
PROCEEDING WITH THE FORECLOSURE OF THE MORTGAGE 
13 
UNLESS A BOND IS POSTED IN FAVOR OF THE BANGKO SENTRAL 
14 
IN AN AMOUNT EQUIVALENT TO THE TOTAL CLAIM OF THE 
15 
. BANGKO SENTRAL. THE RESTRAINING ORDER OR INJUNCTION 
16 
SHALL BE REFUSED OR, IF GRANTED, SHALL BE DISSOLVED UPON 
17 
FILING BY THE BANGKO SENTRAL OF A BOND, WHICH SHALL BE 
18 
IN THE FORM OF A BANGKO SENTRAL CHECK, IN AN AMOUNT 
19 
TWICE THE 
AMOUNT 
OF THE 
ORIGINAL 
BOND 
POSTED 
20 
CONDITIONED THAT THE BANGKO SENTRAL WILL PAY THE 
21 
DAMAGES WHICH THE PARTY MAY SUFFER BY THE REFUSAL OR 
22 
DISSOLUTION OF THE INJUNCTION. THE PROVISIONS OF RULE 58 
23 
OF THE NEW RULES OF COURT INSOFAR AS THEY ARE 
24 
APPLICABLE AND NOT INCONSISTENT WITH THE PROVISIONS OF 
25 
THIS SECTION SHALL GOVERN THE ISSUANCE AND DISSOLUTION 
26 
OF THE RESTRAINING ORDER OR INJUNCTION CONTEMPLATED 
27 
IN THIS SECTION." 
28 


38 
SEC. 27. A new section entitled Section 88-C of the same Act shall be inserted after 
2 
Section 88-B which shall be read as follows: 
3 
4 
"SECTION 88-C. RIGHT OF REDEMPTION OF FORECLOSED 
5 
REAL PROPERTY; RIGHT OF POSSESSION DURING REDEMPTION 
6 
PERIOD -
THE MORTGAGOR SHALL HAVE THE RIGHT TO 
7 
REDEEM THE PROPERTY WITHIN ONE YEAR FROM THE DATE OF 
8 
FORECLOSURE SALE OF THE REAL ESTATE, IN CASE THE 
9 
MORTGAGOR IS A NATURAL PERSON, AND WITHIN NINETY (90) 
10 
DA YS BUT NOT LATER THAN THE DATE OF REGISTRATION OF 
II 
THE CERTIFICATE OF FORECLOSURE SALE, IN CASE THE 
12 
MORTGAGOR IS A JURIDICAL PERSON. REDEMPTION SHALL BE 
13 
EFFECTED BY PAYING THE PRINCIPAL, INTERESTS, CHARGES, 
14 
COMMISSIONS AND ALL CLAIMS OF WHATEVER NATURE OF THE 
IS 
BANGKO SENTRAL OUTSTANDING AND DUE AS OF THE DATE OF 
16 
FORECLOSURE SALE, INCLUDING ALL COSTS AND 
OTHER 
17 
EXPENSES INCURRED BY REASON OF THE FORECLOSURE SALE 
18 
AND CUSTODY OF THE PROPERTY. 
19 
20 
THE 
BANGKO 
SENTRAL, 
AS 
PURCHASER 
IN 
THE 
21 
FORECLOSURE SALE AND WITHOUT NEED OF POSTING A BOND, 
, 
22 
MAY TAKE POSSESSION OF THE FORECLOSED PROPERTY 
23 
. DURING THE REDEMPTION PERIOD. 
THE BANGKO SENTRAL 
24 
SHALL BE ENTITLED TO THE FRUITS OF THE PROPERTY, THE 
25 
SAME TO BE APPLIED AGAINST THE REDEMPTION PRICE. 
26 
27 
SEC. 28. A new section entitled Section 89-A of the same Act shall be inserted between 
28 
Sections 89 which shall read as follows: 


39 
2 
"SECTION 89-A. CREDIT FACILITIES FOR ISLAMIC BANKS. 
3 
THE BANGKO SENTRAL MAY, TAKING INTO CONSIDERATION THE 
4 
PECULIAR 
CHARACTERISTICS 
OF 
ISLAMIC 
BANKING, 
5 
FORMULATE RULES AND REGULATIONS FOR THE EXTENSION OF 
6 
REDISCOUNTING OR OTHER SIMILAR FACILITIES TO ISLAMIC 
7 
BANKS." 
8 
9 
SEC. 29. Section 92 of the same Act is hereby amended to read as follows: 
10 
I I 
"SECTION 
92. 
ISSUE AND NEGOTIATION 
OF BANGKO 
12 
SENTRAL OBLIGATIONS. -
In order to provide the Bangko Sentral with 
13 
effective instmments for open market operations, the Bangko Sentral may, subject 
14 
to such rules and regulations as the Monetary Board may prescribe and in 
15 
accordance with the principles stated in Section 90 of this Act, issue, place, buy 
16 
. and sell freely negotiable evidences of indebtedness of the Bangko Sentral: 
J 7 
Pml'lI!ed, That issuance of such certificates of indebtedness shall be SUB.JECT 
18 
TO PRIOR APPROVAL BY THE MONETARY BOARD [made only in cases 
19 
of extraordinary movement in price levels]. Said evidences of indebtedness may 
20 
be issued directly against the international reserve of the Bangko Sentral or 
21 
against the securities which it has acquired under the provisions of Section 91 of 
22 
this Act, or may be issued without relation to specific types of assets of the 
23 
Bangko Sentral." 
24 
25 
SEC. 30. Section 95 of the same Act is hereby amended to read as follows: 
26 
27 
"SECTION 95. Definition of Deposit Substitutes. - The term "deposit 
28 
substitutes" is defined as an alternative form of obtaining funds from the public, 
29 
other than deposits, through the issuance, endorsement, or acceptance of 


40 
debt instruments for the borrower's own account, for the purpose of re-lending 
2 
or purchasing of receivables and other obligations. These instruments may 
3 
include, but need not be limited to, bankers, acceptances, promissory notes, 
4 
participatIOns, certificates of assignment and similar instruments with recourse, 
5 
and repurchase agreements. 
The Monetary Board 
shall 
determine what 
6 
specific instruments shall be considered as deposit substitutes for the purposes 
7 
of Section 94 of this Act!:]. The Monetary Board MAY ALSO EXCLUDE 
8 
FUNDS 
OBTAINED 
OR 
BORROWED 
FROM 
CERTAIN 
9 
INSTITUTIONAL 
LENDERS 
FROM THIS SECTION [shall detennine 
10 
what specific instruments shall be considered as deposit substitutes for the 
11 
purposes of Section 94 of this Act]: Provided. however, That deposit substitutes 
12 
of commercial, industrial and other non-financial companies issued for the 
13 
limited purpose of financing their own needs or the needs of their agents or 
14 
dealers shall not be covered by the provisions of Section 94 of this Act." 
15 
16 
SEC. 31. Section 99 of the same Act is hereby amended to read as follows: 
17 
18 
"SECTION 99. Adjustment in Reserve ReqUirements. -
Whenever in 
19 
the opinion of the Monetary Board it becomes necessary to ADJUST [increase] 
, 
20 
reserve requirements against existing liabilities, the CHANGE [increase] shall be 
21 
made in a [gradual] manner CONSISTENT WITH THE MONETARY 
22 
POLICY DETERMINED BY THE MONETARY BOARD [and shall not 
23 
exceed four percentage points in any thirty day period]. Banks and other affected 
24 
IInancial Il1stitutions shall be notified reasonably in advance of the date on which 
25 
sllch CHANGE [increase] is to become effective." 
26 
27 
SEC. 32. Section 104 of the same Act is hereby amended to read as follows: 


41 
"SECTION 104. Guiding Prillciple. -
The Monetary Board shall use 
2 
the powers granted to it under this Act to ensure that the supply, availability and 
3 
cost of money are in accord with the needs of the Philippine economy and that 
4 
bank credit is not granted for speculative purposes prejudicial to the national 
5 
interests, Regulations on bank operations shall be applied to all banks of the same 
6 
category AS MAY BE DEFINED BY THE MONETARY BOARD uniformly 
7 
and WIthout discrimination," 
8 
9 
SEc. 33. Section 108 of the same Act is hereby amended to read as follows: 
10 
II 
"SECTION 108. Millimum Capital Ratios. - The Monetary Board may 
12 
prescribe 
mll1lmUm 
RISK-BASED 
CAPITAL 
ADEQUACY 
ratios 
13 
BASED 
ON INTERNATIONALLY 
ACCEPTED STANDARDS [which 
14 
the capital and surplus of the banks must bear to the volume of their assets, or to 
15 
specific categories thereof,] and 
may alter said ratios whenever it deems 
16 
necessary, IN THE EXERCISE OF ITS AUTHORITY UNDER THIS 
17 
SECTION, THE MONETARY BOARD MAY PRESCRIBE A HIGHER 
18 
MINIMUM CAPITAL ADEQUACY RATIO FOR INDIVIDUAL BANKS 
19 
WHICH ARE EXPOSED TO MORE THAN NORMAL RISKS." 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
SEC. 34. Section 113 of the same Act is hereby amended to read as follows: 
"SECTION 113. Official Deposits. -
The Bangko Sentral shall be the 
official 
depository of the 
Government, 
its 
political 
subdivisions 
and 
instrumentalities as well as of government-owned or controlled corporations and, 
as a general policy, their cash balances should be deposited with the Bangko 
Sentral, with only minimum working balances to be held by government-owned 
, 
banks and such other banks incorporated in the Philippines as the Monetary Board 
. may designate, subject to such rules and regulations as the Board may prescribe: 


42 
PropiLied, That such banks may hold deposits of the political subdivisions and 
2 
instrumentalities of the Government beyond their minimum working balances 
3 
\Vhenever such subdivisions or instnnnentalities have outstanding loans with said 
4 
banks. 
5 
6 
The Bangko Sentral may pay interest on deposits of the Government or of 
7 
Its political subdivisions and instrumentalities, as well as on deposits AND 
8 
OTHER SIMILAR PLACEMENTS of banks [with the Bangko Sentral] AND 
9 
OTHER BANGKO SENTRAL-SUPERVISED INSTITUTIONS." 
10 
II 
SEC. 35. Section 125 ofthe same Act is hereby amended to read as follows: 
12 
13 
"SECTlON 125. Tax Exemptio/1s.- THE PROVISIONS OF ANY 
14 
GENERAL 
OR 
SPECIAL 
LAW 
TO 
THE 
CONTRARY 
15 
NOTWITHSTANDING, 
ALL 
INTERNAL 
REVENUE 
TAX 
16 
OBLIGATIONS OF THE BANGKO SENTRAL. ARISING FROM 
17 
REVENUES AND RECEIPTS WITH RESPECT TO THE EXERCISE OF 
18 
ITS ESSENTIAL GOVERNMENTAL FUNCTION SHALL, FOR A 
19 
PERIOD OF FIVE (5) YEARS RECKONED FROM THE DATE OF 
20 
EFFECTIVITY OF THIS ACT, BE CHARGEABLE TO THE TAX 
21 
EXPENDITURE 
FUND 
(TEF) 
IN 
THE 
ANNUAL 
GENERAL 
22 
APPROPRIATIONS ACT PURSUANT TO THE PROVISIONS OF 
23 
EXECUTIVE ORDER NO. 93, SERIES OF 1986: PROVIDED THAT, ON 
24 
THE 6TH YEAR AND THEREAFTER, THE BANGKO SENTRAL SHALL 
25 
BE EXEMPT FROM ALL NATIONAL TAXES RESULTING FROM THE 
26 
EXERCISE OF ITS ESSENTIAL GOVERNMENTAL FUNCTION: 
27 
PROVIDED HOWEVER, THAT THE BANGKO SENTRAL SHALL BE 
28 
SUBJECT TO NATIONAL TAXES SUCH AS, BUT NOT LIMITED TO, 
29 
THE INCOME TAX AND BUSINESS TAXES RESULTING FROM THE 


2 
3 
4 
5 
6 
7 
8 
9 
10 
II 
12 
13 
14 
15 
16 
17 
18 
19 
20 
43 
EXERCISE OF PURELY PROPRIETARY FUNCTIONS: PROVIDED, 
FINALLY, THAT THE BUREAU OF INTERNAL REVENUE SHALL 
ISSUE THE NECESSARY REVENUE REGULATIONS TO IMPLEMENT 
THE PROVISIONS OF THIS SECTION [The Bangko Sentral shall be exempt, 
for a period of five (5) years from the approval of this Act from all national, 
provincial, municipal and city taxes, fees, charges and assessments.] 
The exemptions authorized in the preceding paragraph of this section 
shall apply to all property of the Bangko Sentral, to the resources, receipts, 
expenditures, profits and income of the Bangko Sentral, as 
well as to all 
contracts, deeds, documents and transactions related to the conduct of the 
business of the Bangko Sentral: Provided, however, That said exemptions shall 
app lyon ly such taxes, fees, charges, and assessments for which the Bangko 
Sentral 
itself would otherwise be liable, and shall not apply to taxes, fees, 
charges, or assessments payable by persons or other entities doing business with 
the 
Bangko 
Sentral: Provided, further, 
That 
foreign 
loans 
and other 
obligations of the Bangko Sentral shall be exempt, both as to principal and 
interest, from any and all other taxes if the payment of such taxes has been 
assumed by the Bangko Sentral." 
21 
SEC, 36, The first paragraph of Section 126 of the same Act is hereby amended to read 
22 
as follows: 
23 
24 
"SECTION 126. Exemption from Customs Duties. -
The provision of 
25 
any general or special law to the contrary notwithstanding, the importation and 
26 
. exp011ation by the Bangko Sentral of notes and coins, and of gold and other 
27 
metals to be used for purposes authorized under this Act, and the importation of 
28 
all equipment AND SUPPLIES needed [for purposes authorized under this Act, 
29 
and the importation of all equipment needed for] IN THE BANGKO SENTRAL 


44 
1 
OPERATIONS SPECIFICALLY RELATED TO bank note production, 
2 
minting of coins, metal refining, [and other] security printing operations AND 
3 
TRANSPORT OF CURRENCY shall be fully exempt from all customs 
4 
duties and consular fees and from all other taxes, assessments and charges 
5 
related to such importation or exportation: PROVIDED, THAT THE BUREAU 
6 
OF CUSTOMS SHALL ISSUE THE NECESSARY GUIDELINES TO 
7 
IMPLEMENT THE PROVISIONS OF THIS SECTION" 
8 
9 
SEC. 37. The first paragraph of Section 128 of the same Act is hereby amended to read 
10 
as follows: 
II 
12 
"SECTION 128. Prohibitions.-
The Bangko Sentral shall not acquire 
13 
shares of any kind or accept them as collateral, and shall not participate in the 
14 
, 
ownership or management of any enterprise, either directly or 
indirectly [.]: 
15 
. PROVIDED, 
THAT 
THIS 
PROHIBITION 
SHALL NOT APPLY 
16 
\VHENEVER 
SUCH 
OWNERSHIP AND/OR MANAGEMENT IS 
17 
EXPRESSLY AUTHORIZED BY LAW, OR THE MONETARY BOARD 
18 
BY A VOTE OF AT LEAST FIVE (5) OF ITS MEMBERS DEEMS AN 
19 
ACQUISITION OR INVESTMENT TO BE NECESSARY TO THE 
20 
PERFORMANCE BY BANGKO SENTRAL OF ITS MANDATES UNDER 
21 
THIS ACT OR TO QUALIFY OR AS REQUIRED FOR MEMBERSHIP IN 
22 
INTERNATIONAL AND REGIONAL ORGANIZATIONS." 
23 
24 
SEC. 38. Repealing Clause. 
All prOVISIOns of existing laws, orders, rules and 
25 
regulations, or parts thereof, in conflict or inconsistent with the provisions of this Act are hereby 
26 
repca led. 
27 
28 
SEC. 39. Separability Clause. If any provision or section of this Act or the application 
29 
there()fto any person or circumstance is held to be invalid, the other provisions or sections of this 


45 
Act, and the application of such provision or section to other persons or circumstances, shall not 
2 
be affected thereby. 
3 
4 
SEC. 40. Effectivity. This Act shall take effect after fifteen (15) days following its 
5 
publication either in the Official Gazette or in a newspaper of general circulation in the 
6 
Phil'pplIles. 
7 
Approved,