Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City, Metro Manila 
EIGHTEENTH CONGRESS 
Third Regular Session 
House Bill No. ________ 
Introduced by Representative Junie E. Cua 
Lone District, Quirino 
AN ACT  
REORGANIZING THE LAND BANK OF THE PHILIPPINES 
AND FOR OTHER PURPOSES 
EXPLANATORY NOTE 
The Land Bank of the Philippines (LANDBANK) is a government financial institution 
which was created by virtue of Republic Act (R.A.) No. 3844 also known as the Agricultural 
Land Reform Code on 8 August 1963 to finance primarily the acquisition and distribution of 
agricultural estates for division and resale to small landholders as well as the purchase of the 
landholdings by agricultural lessees. On 21 July 1973, Presidential Decree (PD) No. 251 
expanded LANDBANK’s functions, and it became the first universal bank in Philippine 
banking history. The broadened commercial banking powers include lending to agricultural, 
industrial, home financing projects, and other productive enterprises, along with the social 
mission of spurring countryside development. The more recent laws, R.A. No. 6657 
(Comprehensive Agrarian Reform Law), as amended by R.A. No. 9700 (CARPER) identifies 
LANDBANK as a financial intermediary of the National Government (NG) for the 
Comprehensive Agrarian Reform Program.  
Over the years, LANDBANK grew as an institution from being the financing arm of 
the agrarian reform program to become the second-largest full service-commercial bank in the 
country in terms of assets. It has also transformed further into a policy-oriented financial entity 
supporting the NG’s socio-economic development agenda as embodied in the Philippine 
Development Plan 2017-2022. In the banking industry, LANDBANK has the most extensive 
reach being the only bank with presence in all of the country's 81 provinces through its vast 
network composed of 479 branches and branch-lite units along with its various local partners 
as of 30 September 2021. In support of the NG’s financial inclusion initiatives, the Bank has 
likewise accelerated its digital transformation to bring more unbanked Filipinos into the formal 
banking system taking into account the continuous surge in the use of electronic banking 
channels amid the crisis. Given these, the Bank pivots accordingly to respond to the developing 
requirements not only of the small farmers and fishers but also the micro, small and medium 
enterprises (MSMEs), countryside financial institutions (CFIs), local government units 
November 3, 2021
6:51 pm
10440


(LGUs), and government agencies that propel robust, sustainable, and more inclusive economic 
growth. To date, LANDBANK plays a crucial role in economic recovery efforts from COVID-
19 pandemic through various policy interventions such as Bayanihan I (R.A. No. 11469) and 
II (R.A. No. 11494) laws.  
While the Bank seizes broader and enumerable opportunities to contribute to the 
structural makeup of the country’s economy, it remains on course in the original intent for 
which it was created as reflected by its continued and intensified efforts in responding to the 
emerging needs and banking requirements of Filipino farmers, fishers, and other players in the 
agribusiness value chain. Relatedly, LANDBANK has consistently complied with the Agri-
Agra Law, which requires all banking institutions to allot 15% of their total lending portfolio 
for agriculture loans and 10% for agrarian reform credit. As of December 2020, 
LANDBANK’s compliance reached 76.95% and 11.52% for agricultural and agrarian reform 
loans, respectively. The Bank’s agriculture lending has also been consistently growing from 
P222.05 billion in 2018, to P236.31 billion in 2019, and P237.62 billion in 2020.  
Against this backdrop, the constantly evolving Philippine financial landscape, coupled 
with the Bank’s redefined roles in supporting the NG’s sustainable development agenda, 
necessitates to institute a standalone legal and operational framework for LANDBANK. Hence, 
this policy initiative seeks to amend the LANDBANK Charter that will place the Bank in a 
stronger position to pursue further the policy thrusts of the NG especially on countryside 
development, while sustaining its institutional viability amid a highly competitive banking 
industry. This policy reform will also bolster its existing corporate and risk governance 
mechanisms that will drive greater operational efficiencies and enhance the Bank’s 
organizational agility to elevate its financial inclusion initiatives in the best interest of the 
banking public that embody LANDBANK’s commitment in serving the nation.  In the exercise 
of the LANDBANK’s mandates, certain powers and functions shall be modified that would 
allow the Bank to boost its capital-raising capabilities, sustain and foster a competitive 
manpower pool, and streamline its banking processes to keep pace with the developments in 
the market.  This initiative will also address the change in the Bank’s role in the country’s 
agrarian reform program. 
The proposed amendments are imperative to reinforce not only the benefits of all 
agricultural stakeholders across the entire agribusiness value chain and all other economic 
segments, but also the advantages at the national level to help promote fiscal sustainability and 
reinvigorate the country’s financial system.  
In view of the foregoing, the immediate approval of this legislative measure is earnestly 
sought. 
________________________ 
JUNIE E. CUA Landbank 11/03/21 


Page 1 of 9 
Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City, Metro Manila 
EIGHTEENTH CONGRESS 
Third Regular Session 
House Bill No. ________ 
Introduced by Representative Junie E. Cua 
Lone District, Quirino 
AN ACT  
REORGANIZING THE LAND BANK OF THE PHILIPPINES 
AND FOR OTHER PURPOSES 
Be it enacted by the Senate and the House of Representatives of the Philippines in 
Congress assembled:  
SECTION. 1. This Act shall be known as “An Act Reorganizing the Land Bank of the 
1 
Philippines”, hereinafter referred to as the ‘Bank’. 
2 
3 
SEC. 2. Name, Purpose and Domicile. – The Bank, operating under the provisions of 
4 
Republic Act No. 3844, as amended, shall henceforth operate under the provisions of this Act 
5 
to be a government financial institution for agricultural development. The Bank shall remain 
6 
to be a body corporate and shall have a perpetual existence. 
7 
8 
The Bank’s principal office and place of business shall be in the National Capital Region, also 
9 
known as Metro Manila. It may, however, open and maintain branches, agencies or other 
10 
offices at such places in the Philippines as its Board of Directors may deem advisable, with the 
11 
prior approval of the Monetary Board of the Bangko Sentral ng Pilipinas. 
12 
13 
The Bank shall allocate five percent (5%) of its regular loan portfolio (net of loans to the 
14 
Bangko Sentral ng Pilipinas, interbank loans and availments from domestic bills purchase line), 
15 
for socialized credit to qualified small farmers, fisherfolk and agrarian reform beneficiaries 
16 
(ARBs). This facility shall solely finance agricultural projects pursuant to the provisions of 
17 
Section 4 of Republic Act No. 10000, otherwise known as ‘The Agri-Agra Reform Credit Act 
18 
of 2009’. 
19 
20 
Credits extended to the beneficiaries named therein under this facility shall be based on the 
21 
feasibility of the project and their paying capacity, their estimated production, and/or securities 
22 
they can provide as well as assets as may be acquired by them from the proceeds of the loan. 
23 
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Page 2 of 9 
 
 
1 
This facility will be funded through the operations of the Bank itself and will not require 
2 
additional government funding. 
3 
 
4 
All loans extended through this special socialized credit facility shall qualify as part of the 
5 
Bank’s compliance with the Agri-Agra Law. 
6 
 
7 
Credit under this special socialized credit facility shall be extended through the following 
8 
conduits: 
9 
 
10 
(a) 
Farmers’ and fisherfolk’s cooperatives; 
11 
(b) 
Farmers’ and fisherfolk’s organizations or associations; 
12 
(c) 
Nonagricultural cooperatives (credit and multipurpose); 
13 
(d) 
Cooperative banks; 
14 
(e) 
Rural banks; 
15 
(f) 
Thrift banks; 
16 
(g)      Agri-business firms or anchor firms providing credit support to ARBs, and small farmers 
17 
and fisherfolk; and 
18 
(h) 
Duly accredited microfinance nongovernment organizations by the Microfinance NGO 
19 
Regulatory Council. 
20 
 
21 
Loans under this special socialized credit facility shall have an interest rate equivalent to not 
22 
more than seventy-five percent (75%) of the Bank’s prevailing rates for loans to cooperatives: 
23 
Provided, That these conduits shall have an interest spread of not more than five (5) percentage 
24 
points. The interest spread shall exclude crop insurance premiums and guarantee fees: 
25 
Provided, further, That a conduit cannot lend to another conduit. 
26 
 
27 
Criteria for eligibility under this special socialized credit facility shall be determined by the 
28 
Bank and shall be reflected in the implementing rules and regulations. 
29 
 
30 
SEC. 3. Powers in General. The Bank shall have the power: 
31 
1. To prescribe, repeal and alter its own by-laws, to determine its operating policies, and 
32 
to issue such rules and regulations as may be necessary; 
33 
 
34 
2. To adopt, alter and use a corporate seal; 
35 
 
36 
3. To hold, purchase, acquire and own real and personal property, introduce necessary 
37 
improvements thereon to enhance and develop their social and economic value, and to 
38 
sell, mortgagor otherwise dispose of the same; 
39 
 
40 
4. To sue and be sued, make contracts, negotiate and secure loans from both local and 
41 
foreign sources. Before undertaking any such credit operation, the Bank through the 
42 
Secretary of Finance, shall request the opinion, in writing, of the Monetary Board on 
43 
the monetary implications of the contemplated action. All loans from foreign sources 
44 
shall be subject to approval by the President of the Philippines and shall be fully 
45 
guaranteed by the Philippine Government; 
46 
 
47 
5. To grant short-, medium- and long-term loans and advances against security of real 
48 
estate and/or other acceptable assets for the establishment, development or expansion 
49 


Page 3 of 9 
 
of agricultural, industrial, home building or home financing projects and other 
1 
productive enterprises; 
2 
 
3 
6. To grant loans to farmers’ cooperatives/associations to facilitate production, marketing 
4 
of crops and acquisition of essential commodities; 
5 
 
6 
7. To underwrite, hold, own, purchase, acquire, sell, mortgage, dispose or otherwise invest 
7 
or reinvest in stocks, bonds, debentures, securities and other evidences of indebtedness 
8 
of other corporations and of the government or its instrumentalities which are issued 
9 
for or in connection with any project or enterprise; 
10 
 
11 
8. The provision of any law to the contrary notwithstanding, to guarantee acceptance(s), 
12 
credits, loans, transactions or obligations of any person, co-partnership, association or 
13 
corporation in favor of any financing or banking institution, whether foreign or 
14 
domestic; Provided, That the proceeds of such acceptances, credits, loans, transactions 
15 
or obligations are utilized or earmarked for the development and/or expansion of 
16 
agriculture and industry; 
17 
 
18 
9. To borrow from, or rediscount notes, bills of exchange and other commercial papers 
19 
with the Bangko Sentral ng Pilipinas. The rate of interest to be charged and the 
20 
conditions on such obligations or borrowing shall be subject to the rules and regulations 
21 
of the Monetary Board; 
22 
 
23 
10. To act as a trustee, or administer any trust or hold property in trust in accordance with 
24 
the provisions of law governing trust corporations; 
25 
 
26 
11. To act as an official government depository with full authority to maintain deposits of 
27 
the government, its branches, subdivisions and instrumentalities, and of government-
28 
owned or controlled corporations which deposits shall be subject to liquidity floor 
29 
and/or reserve requirements as may be imposed by the Monetary Board upon other 
30 
commercial banks; 
31 
 
32 
12. For the strengthening of the capital base of the bank, to establish a national marketing 
33 
umbrella for farmers and fisheries cooperatives to attract massive capital formation 
34 
from savings deposits of the cooperative members nationwide; 
35 
 
36 
13. To offer and issue common and preferred shares of stocks in such manner and in such 
37 
quantities as approved by the Secretary of Finance upon the recommendation of the 
38 
Board of Directors and in accordance with applicable laws, rules and regulations: 
39 
Provided, However, That the National Government shall maintain, at all times, at least 
40 
two-thirds (2⁄3) ownership of the total outstanding common voting shares of the Bank. 
41 
 
42 
Except the National Government, no individual or group shall vote more than five 
43 
percent (5%) of the total outstanding capital stock. 
44 
 
45 
Preferred shares of stock shall be non-voting. Other features of preferred shares shall 
46 
be determined by the Board of Directors in accordance with applicable laws and 
47 
regulations. 
48 
 
49 


Page 4 of 9 
 
14. To exercise the general powers as mentioned in Republic Act No. 11232, or the Revised 
1 
Corporation Code and the universal banking powers under Republic Act No. 8791, as 
2 
amended, or the General Banking Law of 2000, insofar as they are not inconsistent or 
3 
incompatible with this Charter. 
4 
SEC. 4. Issuance of Bonds. The Bank, shall, upon the approval of the Secretary of Finance, 
5 
issue all kinds of bonds, debentures, securities, collaterals and other evidences of indebtedness 
6 
and/or the renewal or refunding thereof; at such terms, rates and conditions as the Bank may 
7 
determine, up to an aggregate amount not exceeding, at any one time, ten times its paid-in 
8 
capital and surplus, subject to compliance with the provisions of applicable law, and rules and 
9 
regulations promulgated by the Monetary Board. 
10 
These bonds and other obligations shall be redeemable at the option of the Bank at or before 
11 
maturity and in such manner as may be stipulated therein and shall bear such rate of interest as 
12 
may be fixed by the Bank. Such obligations shall be secured by the assets of the Bank including 
13 
the stocks, bonds, debentures, and other securities underwritten, purchased or held by it under 
14 
the provisions of this Charter. Such obligations may be issued in payment and/or replacement 
15 
of certain assets transferred to the Bank and/or offered for sale at such price or prices as the 
16 
Bank may determine, and shall be exempt from taxation both as to principal and interest, and 
17 
shall be fully guaranteed by the Government of the Republic of the Philippines, and such 
18 
guarantee shall be expressed on the face thereof. 
19 
These instruments of indebtedness shall be negotiable and may be mortgaged in accordance 
20 
with established banking procedures and practices with government institutions, their existing 
21 
charters and/or laws to the contrary notwithstanding, to enable the holders of such bonds to 
22 
make use of them in investments in productive enterprises. The Board of Directors shall have 
23 
the power to prescribe rules and regulations for the issuance, reissuance, servicing, placement 
24 
and redemption of the bonds herein authorized to be issued as well as the registration of such 
25 
bonds at the request of the holders thereof. 
26 
SEC. 5. Investment by Government-Owned or Controlled Corporations. The provisions 
27 
of their respective charters to the contrary notwithstanding, all government-owned or 
28 
controlled corporations, including government financial institutions, are authorized to invest in 
29 
preferred shares of the Bank and/or accept those shares in exchange for any of their assets or 
30 
properties under such terms and conditions as shall be agreed upon between the corporations 
31 
or institutions concerned and the Bank. 
32 
SEC. 6. Capital. Upon the effectivity of this Act, the authorized capital stock of the Bank shall 
33 
be Two hundred billion pesos (P200,000,000,000.00), divided into two billion (2,000,000,000) 
34 
common shares with a par value of one hundred pesos (P100.00) per share, which shall be fully 
35 
subscribed by the National Government. The Board, upon the recommendation of the Secretary 
36 
of Finance and with the approval of the President of the Philippines, may increase the 
37 
capitalization of the Bank up to such an amount as may be necessary to attain the objectives of 
38 
this Charter. 
39 
SEC. 7. Preferred Shares. All preferred shares of stock issued under this Charter shall be 
40 
entitled to the income earned by the Bank on its investment and other operations; Provided, 
41 
That the holders of such preferred shares of stock shall not bring derivative suits against the 
42 
Bank. 
43 
SEC. 8. Voting of Shares. The voting power of all the common shares of stock of the Bank 
44 
owned and controlled by the Government shall be vested in the President of the Philippines or 
45 


Page 5 of 9 
 
in any ex-officio member of the Board of Directors of the Bank or their respective alternates, 
1 
as may be designated by the ex-officio member. 
2 
SEC. 9. The Board of Directors; Membership; Per Diem. The affairs and business of the 
3 
Bank shall be directed and its property managed and preserved by a Board of Directors 
4 
consisting of eleven (11) members to be composed of the Secretary of Finance as Chairperson, 
5 
the President of the Bank as Vice-Chairperson, the Secretary of Agrarian Reform, the Secretary 
6 
of Labor, the Secretary of the National Economic and Development Authority and the 
7 
Secretary of Agriculture as ex-officio members; The President of the Philippines shall appoint 
8 
two (2) members of the Board who shall represent the agrarian reform beneficiaries and three 
9 
(3) members who shall represent the private sector. 
10 
Annually, on the first Tuesday after the first Monday in December, the stockholders meeting 
11 
shall be held. 
12 
The appointive members of the Board shall hold a term of office for one (1) year and shall 
13 
continue to hold office until their successor shall have been appointed and qualified. The Board 
14 
shall convene as often as necessary to discharge its responsibilities properly, but shall meet at 
15 
least once every two (2) weeks. The Board may be convoked either by the Chairman or in his 
16 
absence, the Vice-Chairman. 
17 
The majority of the board members shall constitute a quorum. All decisions of the Board shall 
18 
require the concurrence of at least a majority. 
19 
No person shall be elected or appointed director of the Bank unless that person is a natural born 
20 
citizen of the Philippines, not less than thirty-five (35) years of age, of good moral character, 
21 
and has attained proficiency, expertise and recognized competence in one or more of the 
22 
following: banking, finance, economics, law, agriculture, agrarian reform, business 
23 
management: Provided, further, That no director, shareholder or employee of any other bank 
24 
shall be eligible for election or appointment as member of the Board of Directors of the Bank. 
25 
SEC. 10. Powers and Responsibilities of the Board. The Board of Directors shall have, 
26 
among others, the following specific powers and responsibilities; 
27 
1. Formulate policies, rules and regulations for the effective operation of the Bank and 
28 
issue such rules and regulations as it may deem necessary to effectively implement the 
29 
provisions of this Charter; 
30 
 
31 
2. Take decisions, concerning loans, as well as fix the rates of interest thereon, guarantees, 
32 
investments, borrowings by the Bank, furnishing of technical assistance and other 
33 
operations of the Bank; 
34 
 
35 
3. Establish such branches and agencies as may be deemed necessary and convenient; 
36 
 
37 
4. Provide for the appointment and removal and fix the reasonable compensation of such 
38 
personnel as may be necessary for the expeditious conduct of the business of the Bank; 
39 
 
40 
5. Notwithstanding any law to the contrary, to adopt and review the organizational 
41 
structure and staffing pattern of the Bank as well as qualification standards  and/or to 
42 
reorganize, rationalize, restructure the same or realign the various functions in the Bank 
43 
to ensure effective accomplishment of its mandates and strategic goals, alignment of its 
44 
organizational structure and staffing pattern with industry standards and its 
45 
responsiveness to regulatory requirements. 
46 


Page 6 of 9 
 
 
1 
6. To design, adopt and revise, as it may deem necessary, an early separation plan for 
2 
employees of the Bank to ensure availability of a human resource pool qualified and 
3 
capable of implementing the Bank’s authorities under this Charter in a manner 
4 
responsive and attuned to market developments, and to provide incentives for those 
5 
who shall be separated from the service. Notwithstanding any law to the contrary, these 
6 
incentives shall be in addition to all gratuities and benefits the employee is entitled 
7 
under existing laws. 
8 
 
9 
7. Approve the Budget of the Bank for its administration, support, and operations. 
10 
 
11 
8. To compromise or release in whole or in part, any claim or liability whatsoever for or 
12 
against the Bank, including interest, penalties, fees and/or other charges, under such 
13 
terms and conditions as the board may find acceptable and practicable subject to their 
14 
best business judgment and to the best interest of the corporation in accord with 
15 
standard banking practices. 
16 
SEC. 11. Corporate Social Responsibility Principles. As an integral part of the National 
17 
Government, the Bank is inherently mandated to be socially responsible, to act and operate as 
18 
good corporate citizens. The Governing Board of the Bank shall recognize and perform 
19 
obligations that the Bank has towards the National Government, its majority stockholder, as 
20 
well as the minority stockholders when existing, together with the employees, suppliers, 
21 
customers and other stakeholders, and the communities in which it operates. 
22 
SEC. 12 Foreclosure of Collaterals and Disposal of Bank Acquired Properties. 
23 
1. Foreclosure of Mortgage Collaterals – Foreclosure of mortgage collaterals to loan may 
24 
be made either judicially or extrajudicially, Provided, that movable collaterals may be 
25 
foreclosed in its present condition or following any commercially reasonable 
26 
preparation in accordance with Republic Act No. 11057, other known as the “Personal 
27 
Property Security Act”. 
28 
 
29 
2. Deputization of Legal Staff – The Bank may, with the approval of the court, deputize 
30 
any member of its legal staff to act as special sheriff in foreclosure cases, in the sale or 
31 
attachment of debtor’s properties and in the enforcement of court writs and processes 
32 
in cases involving the Bank. The Special Sheriff of the Bank shall make a report to the 
33 
proper court after any action has been taken by said Special Sheriff, which court shall 
34 
treat such actions as if it were an act of its own sheriffs in all respect. 
35 
 
36 
3. Disposal of Real Estate and Other Properties in the Collection of Debt – Real Estate 
37 
and other properties acquired by the Bank in the collection of debts or investment by 
38 
way of foreclosure or other means shall be sold or disposed of in accordance with law, 
39 
within five (5) years after date of acquisition.  
40 
 
41 
The Bank is also authorized to sell its acquired real estate and other properties to a 
42 
Financial Institutions Strategic Transfer Corporation (FISTC), in accordance with the 
43 
provisions of Republic Act No. 11523 or the “Financial Institutions Strategic Transfer 
44 
(FIST) Act”.  
45 
 
46 
For this purpose, the Board of Directors shall be the appropriate regulatory authority 
47 
and promulgate the necessary implementing rules and regulations.  
48 


Page 7 of 9 
 
 
1 
4. Exemption from Attachment – The provisions of any law to the contrary 
2 
notwithstanding, securities on loans and/or other credit accommodations granted by the 
3 
bank shall not be subject to attachment, execution to any other court process, nor shall 
4 
they be included in the property of insolvent persons or institutions, unless all debts and 
5 
obligations of the debtors to the bank have been paid, including accrued interest, 
6 
penalties, collection expenses, and other charges. 
7 
 
8 
5. Right of Redemption of Foreclosed Property, Right of Possession during Redemption 
9 
Period – Within the redemption period provided in Sec. 47 of the General Banking Law 
10 
of 2000, the mortgagor shall have the right to redeem the property by paying all claims 
11 
of the Bank against the mortgagor on the date of the sale including all the cost and other 
12 
expenses incurred by reason of the foreclosure sale and custody of the property, as well 
13 
as charges and accrued interest. The Bank may take possession of the foreclosed 
14 
property during the redemption period. When the Bank takes possession during such 
15 
period, it shall be entitled to the fruits of the property with no obligation to account for 
16 
them, the same being considered compensation for the interest that would otherwise 
17 
accrue on the account. Neither shall the Bank be obliged to post a bond for the purpose 
18 
of such possession. 
19 
SEC. 13. Executive Officers: Compensation. The President of the Bank shall be its Chief 
20 
Executive Officer whose salary shall be based on the Compensation and Position Classification 
21 
System developed by the Governance Commission for Government-Owned or –Controlled 
22 
Corporations (GCG) and as approved by the President of the Philippines upon recommendation 
23 
by the Secretary of Finance. The sum total of the salary allowances, benefits and other 
24 
emoluments of the President of the Bank shall be higher than the compensation package of the 
25 
next highest ranking executive of the Bank.  
26 
The President shall be assisted by Vice Presidents and other officials whose appointment and 
27 
removal for cause shall be approved by the Board of Directors upon recommendation of the 
28 
President of the Bank. The salary of the Vice President and other officials shall be based on the 
29 
Compensation and Classification System established by the GCG and as approved by the 
30 
President of the Philippines upon recommendation by the Secretary of Finance. During the 
31 
absence or temporary incapacity of the President, or in case of vacancy or permanent incapacity 
32 
and pending appointment of a new President of the Bank by the President of the Philippines, 
33 
the Board of Directors shall designate the officer-in-charge of the Bank. 
34 
SEC. 14. Duties and Powers of the President. The President of the Bank shall, among others, 
35 
execute the policies, measures, orders and resolutions promulgated by the Board of Directors 
36 
and supervise and administer the operations of the Bank. The President shall be the legal 
37 
representative of the Bank and shall make all contracts, enter into all necessary obligations on 
38 
behalf of the Bank required or permitted by this Charter. The President shall report periodically 
39 
to the Board of Directors the main facts concerning the operations of the Bank, and 
40 
recommended changes of policies which may seem best. The President shall furnish, upon the 
41 
request of the President of the Philippines, any information regarding the operations of the 
42 
Bank. 
43 
SEC. 15. Qualifications of Executive Officers. No person shall be appointed to any executive 
44 
position in the Bank mentioned in the preceding section unless that person is of good moral 
45 
character and of unquestionable integrity and responsibility, and who is of recognized 
46 
competence in the field of economics, agriculture, industry, law, banking and/or finance, and 
47 
possessed of demonstrated administrative skill and ability. 
48 


Page 8 of 9 
 
SEC. 16. Withdrawal of Persons having Personal Interest. In addition to the requirements 
1 
of Republic Act No. 6713, otherwise known as the Code of Conduct and Ethical Standards for 
2 
Public Officials and Employees, whenever any member attending a meeting of the Board has 
3 
a personal interest of any sort in the discussion or resolution of any given matter, or any of his 
4 
relatives within the fourth degree of consanguinity or a second degree of affinity has such 
5 
interest, said member shall disclose his or her interest to the Board and shall not participate in 
6 
the discussion or resolution of the matter and must retire from the meeting during the 
7 
deliberations thereon. The subject matter, when resolved, and the fact that a member had a 
8 
personal interest in it, shall be made available to the public. The minutes of the meeting shall 
9 
reflect the disclosure made and the recusal of the member concerned. 
10 
SEC. 17. Personnel. The Board of Directors shall provide for an organization and staff of 
11 
officers and employees of the Bank and upon recommendation of the President of the Bank, 
12 
appoint and remove such officers and employees; Provided, That the Board shall have 
13 
exclusive and final authority to promote, transfer, assign or reassign personnel of the Bank, any 
14 
provisions of existing law the contrary notwithstanding. 
15 
All positions in the Bank shall be governed by Compensation and Classification System 
16 
established by the GCG and as approved by the President of the Philippines upon 
17 
recommendation by the Secretary of Finance. 
18 
The Bank officers and employees, including all members of the Board, shall not engage directly 
19 
or indirectly in partisan activities or take part in any election except to vote. 
20 
No officer or employee of the Bank subject to the Civil Service Law and Regulations shall be 
21 
removed or suspended except for cause as provided by law. 
22 
SEC. 18. Legal Counsel. Any provision of existing law or executive order to the contrary 
23 
notwithstanding, the Bank shall have its own Legal Department which shall have the power to 
24 
represent the Bank in cases filed before courts, tribunals, and/or quasi-judicial bodies, render 
25 
opinions, prepare and review contracts/agreements, among others. The Head and members of 
26 
the Legal Department shall be appointed by the Board of Directors. 
27 
In appropriate cases, the Bank may also avail of the legal services of the Office of the 
28 
Government Corporate Counsel: Provided, however, that the present Legal Services Group in 
29 
the Bank shall serve as its in-house legal counsel. 
30 
SEC. 19. Tax Exemptions. The Bank shall be exempt from all national, provincial, municipal 
31 
and city taxes and assessments now enforced or hereinafter established. 
32 
The exemption authorized in the preceding paragraph of this section shall apply to all property 
33 
of the Bank, to the resources, receipts, expenditures, profits and income of the Bank, as well as 
34 
to all contracts, deeds, documents and transactions related to the loan facility in Section 2 
35 
hereof and agricultural credit; Provided, however, That said exemption shall apply only to such 
36 
taxes and assessments for which the Bank itself would otherwise be liable and shall not apply 
37 
to taxes or assessments payable by persons or other entities doing business with the Bank. 
38 
 
39 
TRANSITORY PROVISIONS 
40 
 
41 
SEC.  20. Reorganization of the Bank. – Within one hundred eighty (180) days from the 
42 
effectivity of this act, and whenever necessary thereafter, the Bank is hereby authorized to 
43 


Page 9 of 9 
 
reorganize and/or rationalize the Bank’s organizational structure to attract fresh and critical 
1 
talents to join the Bank’s workforce in response to dynamic industry trends, incentivize early 
2 
separation of tenured employees and those with medical conditions who will be considered for 
3 
retirement before the compulsory retirement age of sixty-five (65) years old, and improve 
4 
headcount management and succession planning. 
5 
All those who shall retire from the service or are separated therefrom on account of the 
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reorganization of the Bank under the provisions of this Charter shall be entitled to all gratuities 
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and benefits provided for under existing laws and/or supplementary retirement plans adopted 
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by and effective in the Bank. 
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SEC. 21. Penalty for Violation of the Provisions of this Charter. Any director, officer, 
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employee or agent of the Bank who violates or permits the violation of any of the provisions 
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of this Charter or any person aiding or abetting the violation of any of the provisions of this 
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Charter, shall be punished by a fine of not to exceed Five hundred thousand pesos or by 
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imprisonment of not more than five years, or both, such fine and imprisonment at the discretion 
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of the Court. 
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SEC. 22. Separability Clause. If any provision of this Act is subsequently declare invalid or 
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unconstitutional, the other provisions hereof which are not affected thereby shall remain in full 
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force and effect. 
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SEC. 23. Repealing Clause. All laws, executive orders, rules and regulations, or parts thereof 
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inconsistent with any provisions hereof are hereby repealed or modified accordingly. 
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SEC. 24. Effectivity. This Act shall take effect fifteen (15) days after its publication in the 
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Official Gazette or in a newspaper of general circulation. 
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