Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
Second Regular Session

HOUSE BILL NO. 6599

Introduced by Representative Michael L. Romero

EXPLANATORY NOTE

The Republic of the Philippines shall maintain a central monetary authority
that shall function and operate as an independent and accountable body
corporate in the discharge of its mandated responsibilities concerning
money, banking and credit. In line with this policy, and considering its unique
functions and responsibilities, the central monetary authority established
under this Act, shall enjoy fiscal and administrative autonomy.

There is hereby established an independent central monetary authority,
which shall be a body corporate known as the Bangko Sentral ng Pilipinas,
hereafter referred to as the Bangko Sentral.

This House Bill seeks to provide stiffer policy directions in the areas of money,
banking, and credit. To foster supervision over the operations of banks and
exercise such regulatory powers as provided and other pertinent laws over
the operations of finance companies and non-bank financial institutions
performing quasi-banking functions, hereafter referred to as quasi-banks, and
institutions performing similar functions.

Thus, the ey ssage Of this bill is earnestly requested.

MICHAEW/L. ROMERO Ph.D.


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
Second Regular Session

6599

HOUSE BILL NO.~ ©

Introduced by Representative Michael L. Romero

AN ACT

AMENDING REPUBLIC ACT NO.7653, OTHERWISE KNOWN AS “THE
NEW CENTRAL BANK ACT”, TO FOSTER THE PRIMARY
OBJECTIVE OF THE BANGKO SENTRAL TO MAINTAIN PRICE
STABILITY CONDUCIVE TO A BALANCED AND SUSTAINABLE
GROWTH OF THE ECONOMY, TO PROMOTE AND MAINTAIN
MONETARY STABILITY AND THE CONVERTIBILITY OF THE PESO,
AND FOR OTHER PURPOSES

Be it enacted by the Senate and House of Representatives of the Philippines
in Congress assembled:

SECTION 1.
Section 34 of article IV of Republic Act No. 7653 is hereby amended to read

as follows:

Section 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 willfully 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 One
hundred thousand pesos (P100,000.00) nor more than Two
hundred thousand pesos (P200,000.00) or by imprisonment of not
less than two (2) years nor more than six (6) years, or both, in the
discretion of the court.

SECTION 2.
Section 35 of article IV of Republic Act No. 7653 is hereby amended to read
as follows:

Section 35. False Statement - The willful making of a false or
misleading 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 Two hundred thousand pesos (200,000.00)
nor more than Four hundred thousand pesos (400,000.00), or by
imprisonment of not less than (5) years, or both, at the discretion
of the court.

SECTION 3.

Section 36 of article IV of Republic Act No. 7653 is hereby amended to read

as follows:

Section 36. Proceedings Upon Violation of This Act and Other
Banking Laws, Rules, Regulations, Orders or Instructions -
Whenever a bank or quasi-bank, or whenever any person or
entity willfully violates this Act or other pertinent banking laws
being enforced or implemented by the Bangko Sentral or any
order, instruction, rule or regulation issued by the Monetary


Board, the person or persons responsible for such violation shall
unless otherwise provided in this Act be punished by a fine of not
less than One hundred thousand pesos (P100,000.00) nor more
than Four hundred thousand pesos (P400,000.00) or by
imprisonment of not less than three (3) years nor more than ten
(10) years, or both, at the discretion of the court.

Whenever a bank or quasi-bank persists in carrying on its
business in an unlawful or unsafe manner, the Board may,
without prejudice to the penalties provided in the preceding
paragraph of this section and the administrative sanctions
provided in Section 37 of this Act, take action under Section 30 of
this Act.

SECTION 4.

Section 37 of article IV of Republic Act No. 7653 is hereby amended to read

as follows:

Section 37. Administrative Sanctions on Banks and Quasi-banks -
Without prejudice to the criminal sanctions against the culpable
persons provided in Sections 34, 35, and 36 of this Act, the
Monetary Board may, at its discretion, impose upon any bank or
quasi-bank, their directors and/or officers, for any willful violation
of its charter or by-laws, willful delay in the submission of reports
or publications thereof as required by law, rules and regulations;
any refusal to permit examination into the affairs of the institution;

any willful making of a false or misleading statement to the Board

or the appropriate supervising and examining department or its
examiners; any willful failure or refusal to comply with, or violation

law or any order, instruction or regulation issued


by the Monetary Board, or any order, instruction or ruling by the
Governor: or any commission of irregularities, and/or conducting
business in an unsafe or unsound manner as may be determined
by the Monetary Board, the following administrative sanctions,
whenever applicable:

(a) fines in amounts as may be determined by the
Monetary Board to be appropriate, but in no case to
exceed Fifty thousand pesos (P50,000.00) a day for each
violation, taking into consideration the attendant
circumstances, such as the nature and gravity of the
violation or irregularity and the size of the bank or quasi-
bank;

(b) suspension of rediscounting privileges or access to
Bangko Sentral credit facilities;

(c) suspension of lending or foreign exchange operations
or authority to accept new deposits or make new
investments;

(d) suspension of interbank clearing privileges; and/or
(e) revocation of quasi-banking license.

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
bank or quasi-bank pending an investigation:

Provided, That should the case be not finally decided by the
Bangko Sentral within a period of Ninety (90) days after the date


of suspension, said director or officer shall be reinstated in his
position:

Provided, further, That when the delay in the disposition of the
case is due to the fault, negligence or petition of the director or
officer, the period of delay shall not be counted in computing
the period of suspension herein provided.

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 concerned
continue with or otherwise persist in the commission of the
indicated practice or violation, the Monetary Board may issue an
order requiring the institution and/or the directors and/or officers
concemed to cease and desist from the indicated practice or
violation, and may further order that immediate action be taken
to correct the conditions resulting from such practice or violation.
The cease and desist order shall be immediately effective upon
service on the respondents.

The respondents shall be afforded an opportunity to
defend their action in a hearing before the Monetary Board or
any committee chaired by any Monetary Board member
created for the purpose, upon request made by the respondents
within five (5) days from their receipt of the order. If no such
hearing is requested within said period, the order shall be final. If
a hearing is conducted, all issues shall be determined on the
basis of records, after which the Monetary Board may either

reconsider or make final its order.


The Governor is hereby authorized, at his discretion, to
impose upon banking institutions, for any failure to comply with
the requirements of law, Monetary Board regulations and
policies, and/or instructions issued by the Monetary Board or by
the Governor, fines not in excess of Thirty thousand pesos
(P30,000.00) a day for each violation, the imposition of which
shall be final and executory until reversed, modified or lifted by
the Monetary Board on appeal.

SECTION 5. TRANSITORY PROVISION — Existing industries, businesses and
offices affected by the implementation of this Act shall be given six (6)
months transitory period from the effectivity of the IRR or such other
period as may be determined, to comply with the requirements of this
Act.

SECTION 6. IMPLEMENTING RULES AND REGULATIONS. - The departments
and agencies charged with carrying out the provisions of this Act shall,
within sixty (60) days after the effectivity of this Act, formulate the
necessary rules and regulations for its effective implementation.

SECTION 7. REPEALING CLAUSE. - All laws, decrees, executive orders,
rules and regulations, or parts thereof inconsistent with the provisions of
this Act are hereby repealed or modified accordingly.

SECTION 8. SEPARABILITY CLAUSE. - If, for any reason, any section or
provision of this Act is held unconstitutional or invalid, the other sections
‘or provisions hereof shall not be affected thereby.

SECTION 9. EFFECTIVITY CLAUSE. - This Act shall take effect after fifteen
(15) days from its publication in the Official Gazette or in at least two
(2) national newspapers of general circulation whichever comes

earlier.

Approved,