TWENTIETH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
)
'c.:' r of
25 JUL14 P4:12
S. No.
SENATE
585
RKEi'
Introduced by SENATOR MARK A. VILLAR
AN ACT
PROVIDING FOR A NEW CHARTER OF THE LAND BANK OF THE 
PHILIPPINES, REPEALING FOR THE PURPOSE SECTIONS 74 TO 100 OF 
REPUBLIC ACT NO. 3844 OR THE "AGRICULTURAL LAND REFORM CODE", 
AS AMENDED
EXPLANATORY NOTE
In 1963, Republic Act No. 3844 created the Land Bank of the Philippines (LBP) 
to play a crucial part in the shift in agrarian reform policies. Since then, its role has 
evolved to include commercial banking functions, direct credit support for agrarian 
reform beneficiaries, and more recently, economic recovery efforts from the COVID- 
19 pandemic. These reforms were brought about by numerous laws and issuances, 
including, among others. Presidential Decree No. 251, Executive Order Nos. 816, 
series of 1982 and 405, series of 1990, and Republic Act Nos. 6657, 7907, and 11494.
LBP has consistently promoted countryside development while maintaining 
financial viability as one of the leading government financial institutions. In the first 
quarter of 2024, it generated twelve billion pesos (12 billion pesos) in revenue, 
surpassing its eleven point three billion pesos (11.3 billion pesos) net income target, 
with assets increasing by five percent (5%) to three point three trillion pesos (3.3 
trillion pesos) and deposits growing by four percent (4%) to two point nine trillion 
pesos (2.9 trillion pesos). By August 2024, LBP dedicated fifty-nine point seventy-nine 
percent (59.79%) of its total loan portfolio, or seven hundred twenty-seven point 
eighty-seven billion pesos (727.87 billion pesos), to agriculture, fisheries, and rural 
development.
1


Recognizing LBP's significant and expanding role in the economy, it is essential 
for it to adopt a stand-alone charter that realigns its mandate with its current functions 
that extends beyond agrarian reform. Particularly, the bill increases its authorized 
capital stock, streamlines the process of its bond issuances, and allows the possibility 
of an Initial Public Offering (IPO) of its shares, in order to enhance its access to capital. 
The bill also aims to diversify its Board by designating the Secretary of the Department 
of Economy, Planning, and Development (DEPDev) as an ex-officio member and 
adding three (3) independent directors, broadening its decision-making capabilities to 
better address challenges and opportunities in the banking industry.
Ultimately, this bill seeks to enhance its financial stability, operational agility, 
and market competitiveness. This ensures that it continues to be a catalyst of 
sustainable development and meets the financing requirements of small farmers, 
fishers, and crucial sectors that create employment and propel robust economic 
growth.
In view of the foregoing, the approval of this bill is earnestly sought.
MARKA. VILLAR flJDO


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-- ‘ “•
TWENTIETH CONGRESS OF THE ) 
REPUBLIC OF THE PHILIPPINES ) 
First Regular Session 
)
25 JULU P4--13
SENATE 
s. No. 5ob
RECEIVlj.:
Introduced by Senator MARK A. VILLAR
AN ACT
PROVIDING FOR A NEW CHARTER OF THE LAND BANK OF THE 
PHILIPPINES, REPEALING FOR THE PURPOSE SECTIONS 74 TO 100 OF 
REPUBLIC ACT NO, 3844 OR THE "AGRICULTURAL LAND REFORM CODE", 
AS AMENDED
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assem bled:
Section 1. Short Title. - This Act shall be known as the "New Land Bank of the 
Philippines Act".
Sec. 2. Declaration of Policy. - It is the policy of the State to support agriculture 
by providing adequate financial, production, marketing, and other support services, to 
promote countryside and countrywide development, and to strengthen the powers 
and functions of its premier government financial institution (GFI) that deliver essential 
funding and financial services for sustained economic growth.
The State recognizes the role of GFIs in advancing meaningful and 
comprehensive agrarian reform and stimulating economic development by servicing 
small farmers and fisherfolk, local government units (LGUs), micro, small, and medium 
enterprises (MSMEs), and other sectors that generate employment and drive economic 
progress.
Sec. 3. Name and Corporate Existence. - The Land Bank of the Philippines, 
hereinafter referred to as the "Bank", created under Republic Act No. 3844 or the 
"Agricultural Land Reform Code," as amended, shall operate under the provisions of 
this Act. The Bank shall continue to exist as a body corporate and shall have perpetual


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existence. The Governance Commission for Government-Owned or -Controlled
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Corporations (GCG) shall not be precluded from evaluating the performance and
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determining the relevance of the Bank as a government-owned or -controlled
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corporation (GOCC) consistent with the principles and policies of Republic Act No.
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10149 or the "GOCC Governance Act of 2011".
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Sec. 4. Primary Objective of the Bank. - As a GFI, the Bank shall pursue its
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social mission of spurring countryside and countrywide development and shall be
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responsible for broad-based agricultural, rural, and industrial development while
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promoting financial inclusion by providing banking services to rural financial
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institutions, small farmers and fisherfolk, agrarian reform beneficiaries, agricultural
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and industrial enterprises, and MSMEs, and by granting loans to finance agrarian
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reform and agriculture-related undertakings, infrastructure and sustainable national
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government development projects: Provided, That these objectives shall be pursued
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with the utmost consideration for its financial viability, operational agility, and market
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competitiveness to effectively participate in national development and the attainment
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of meaningful and inclusive economic growth. The Bank shall also adopt policies on
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digitalization to improve operational efficiency and governance while promoting
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financial inclusion.
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Sec. 5. Principal Office, Branches, and Other Offices. - The Bank shall have its
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principal office and place of business in Metro Manila. The Bank may open and
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maintain branches and agencies in accordance with applicable regulations of the
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Bangko Sentral ng Pilipinas (BSP).
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Sec. 6. Corporate Powers. - In addition to the general powers of a corporation
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under Republic Act No. 11232, or the "Revised Corporation Code of the Philippines",
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the Bank shall have the power to:
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(a) Adopt, amend, or change its by-laws; to adopt, alter, and use a seal; to
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lease or own real and personal property and to sell or otherwise dispose of the
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same; to enter into contracts; to sue and be sued; and exercise the general
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powers of a corporation mentioned in Republic Act No. 11232, including the
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power to acquire or establish subsidiaries registered with the Securities and
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Exchange Commission with the right to receive dividends from such
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subsidiaries in accordance with Section 28 hereof;


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(b) Hold, purchase, acquire and own real and personal property; introduce 
necessary improvements thereon to enhance and develop their social and 
economic value; and sell, mortgage, or otherwise dispose of the same;
(c) Make contracts, negotiate and secure loans from both local and foreign 
sources: Provided, That before undertaking such credit operations, the Bank, 
through the Secretary of Finance, shall request the opinion of the Monetary 
Board of the BSP on the monetary implications of the contemplated action. All 
loans from foreign sources shall be subject to approval by the President of the 
Philippines and shall be fully guaranteed by the Philippine Government;
(d) Grant short-, medium-, and long-term loans and advances against the 
security of real estate or other acceptable assets for the establishment, 
development or expansion of agricultural, agrarian reform, industrial, home 
building or home financing projects, and other productive enterprises;
(e) Grant loans to farmers' cooperatives and associations to facilitate farm 
production, marketing of crops, and acquisition of essential commodities;
(f) Establish a Directors' and Officers' Liability Fund, or obtain Directors' and 
Officers' Liability Insurance from the Government Service Insurance System or 
other reputable insurance companies duly accredited by the appropriate 
regulatory body, without prejudice to the right of the Bank to put up its own 
legal insurance fund, as may be determined by its Board of Directors;
(g) Borrow from, or rediscount notes, bills of exchange and other credit 
instruments with the BSP subject to the provisions of Republic Act No. 7653 or 
"The New Central Bank Act", as amended, and relevant BSP rules and 
regulations;
(h) Accept and manage trust funds and properties and carry on the business of 
a trust corporation;
(i) Provide continuing assistance through credit and capacity building to farmers 
and fishers cooperatives, associations, and organizations nationwide;
G) Act as official government depository bank with authority to maintain 
deposits and deposit substitutes of the National Government, its agencies, 
bureaus, instrumentalities, GOCCs, LGUs, and autonomous regions, as well as


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other territorial and political subdivisions, subject to such rules and regulations
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as the Monetary Board of the BSP may prescribe;
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(k) Engage in financial leasing of movable and immovable properties in
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connection with government projects;
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(I) Dispose of its acquired assets;
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(m) Offer and issue common and preferred shares of stocks in such manner
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and in such quantities as approved by the Secretary of Finance, upon the
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recommendation of the Board and in accordance with applicable laws, rules,
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and regulations. The preferred shares shall be non-voting. Other features of
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preferred shares shall be determined by the Board in accordance with
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applicable laws and regulations;
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(n) Engage internationally recognized auditing firms as the Bank's external
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auditor to audit its financial statements, in case the Bank issues shares to the
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public; and
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(o) Exercise all such powers and services as may be necessary to carry out the
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business of a bank under Republic Act No. 8791 or "The General Banking Law
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of 2000," subject to the existing rules and regulations of the Monetary Board
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of the BSP, in order to perform its mandate under this Act.
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Unless otherwise provided for in this Act, the exercise of the above-mentioned
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powers shall be subject to applicable laws, rules and regulations and regulations
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promulgated by the BSP.
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Sec. 7. Authorized Capital Stock; Par Value. - The capital stock of the Bank
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shall be One trillion pesos (Phpl,000,000,000,000.00) with a par value of One hundred
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pesos (PhplOO.OO) per share. The Board shall determine the classification of shares,
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their corresponding rights, privileges, or restrictions, if any: Provided, That the
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National Government shall own, at all times, at least seventy percent (70%) of the
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total outstanding capital stock of the Bank.
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Two hundred billion pesos (Php200,000,000,000.00) or twenty percent (20%)
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of the authorized shares of the Bank shall be subscribed and One hundred sixty-three
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billion seven hundred eighty-seven million seven hundred eleven thousand three
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hundred eight pesos (Phpl63,787,711,308.00) or at least eighty-one and 89/100
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percent (81.89%) of the total subscription shall be paid up by the National


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Government; Provided, further, That the Bank may allocate part or all of its
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unrestricted retained earnings toward paying for the capitalization of the Bank.
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When dividends are declared for stockholders, the dividend due to the National
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Government shall at all times be in proportion to its ownership of the Bank.
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Sec. 8. Investment by Government-Owned or Controlled Corporations. - Unless
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otherwise provided in their respective charters, GOCCs, including GFIs, are authorized
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to invest in shares of stock of the Bank. These investments shall form part of the
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National Government's ownership in the Bank.
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Sec. 9. Voting of Shares. - The voting power of all the common shares of stock
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of the Bank owned and controlled by the government shall be vested in the President
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of the Philippines or in any ex-officio member of the Board.
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Sec. 10. Issuance by the Bank of Bonds, Eligible Capital Instruments, and other
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Securities. - The Bank may issue all kinds of bonds, notes, debentures, other evidence
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of indebtedness, derivatives, commodities, negotiable instruments, eligible capital
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instruments, and other securities, and the renewal or refunding thereof within and/or
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outside the Philippines, at such terms, rates, and conditions as the Board of Directors
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may determine. Such issuance shall be subject to compliance with the provisions of
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applicable laws, and rules and regulations promulgated by the Monetary Board of the
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BSP.
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The Bank shall acquire, assign, or otherwise dispose of marketable securities
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and other debt instruments that are essential to the effective conduct of its general
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banking activities.
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The Bank shall provide for appropriate reserves, as necessary, for the
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redemption or retirement of the foregoing. These bonds and other obligations shall be
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redeemable at the option of the Bank at or before maturity and in such manner as
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may be stipulated therein, and shall bear such rate of interest as may be fixed by the
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Bank.
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Such obligations shall be secured by the assets of the Bank, including stocks,
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bonds, debentures, and other securities purchased or held by it under the provisions
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of this Act, as necessary to ensure the successful issuance of such obligations. These
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bonds and other obligations may be long-, medium-, or short-term, with a fixed or
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floating interest rate.


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Sec. 11. Applicability of the New Government Procurement Reform Act. - All
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procurement activities of the Bank shall adhere to the provisions of Republic Act No.
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9184 or the "Government Procurement Reform Act" as amended by Republic Act No.
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12009, their implementing rules and regulations, and any amendments thereto,
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whichever may be applicable, except for the engagement of professional or technical
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services necessary for issuance of securities, including debt instruments, and selecting
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investments. These services include issue and deal management, fund management,
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investment analysis, advisory, arrangement, underwriting, securities brokerage and
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dealership, and capital market and equity research analysis: Provided, That the
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selection process for engaging these professional and technical services shall be open,
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competitive, and approved by the Board.
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Sec. 12. Board of Directors, Composition, Tenure, and Per Diems. - The powers
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and functions of the Bank shall be vested in and exercised by a Board of Directors,
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which shall be composed of nine (9) members as follows:
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(a) The Secretary of Finance as the ex-officio Chairperson of the Board;
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(b) The President of the Bank as Vice Chairperson;
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(c) The Secretary of Agriculture as an ex-officio member;
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(d) The Secretary of Agrarian Reform as an ex-officio member;
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(e) The Secretary of Labor and Employment as ex-officio member;
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(f) The Secretary of the Economy, Planning, and Development as an ex-officio
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member; and
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(g) Three (3) independent directors to be appointed by the President of the
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Philippines in accordance with the appointment process and the Fit and Proper
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Rule under Republic Act No. 10149, wherein one (1) shall represent the
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agricultural sector and two (2) shall represent the private sector, preferably
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with expertise in finance, economics, and banking.
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In the event that private persons acquire shares of stock of the Bank, there
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shall be two (2) additional members of the Board of Directors who shall be qualified
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and elected in accordance with Republic Act No. 11232 and the rules and guidelines
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to be issued under Section 34 of this Act.
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The ex-officio members of the Board may each designate an alternate, who
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shall be an official with a rank not lower than Assistant Secretary.


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The Chairperson shall preside over the meetings of the Board. In case the 
Chairperson is absent or incapacitated, the Vice Chairperson shall preside over 
meetings of the Board. In case of incapacity or absence of both the Chairperson and 
the Vice Chairperson, the Board shall designate a temporary chairperson from among 
its members.
No person shall be elected or appointed as director of the Bank unless such 
person is a Filipino citizen, of good moral character, and has attained proficiency, 
expertise and recognized competence in one (1) or more of the following: banking, 
finance, economics, law, agriculture, agrarian reform, business management, 
governance, sustainability, digital transformation, rural economy, cooperation, small- 
scale industry, information technology, and information security.
Except for the President, no incumbent officer or employee of the Bank may be 
appointed as a member of the Board; nor shall any incumbent officer of any other 
bank be eligible as a member of the Board.
The term of office for the independent directors shall be for a period of one (1) 
year or until such time that their successors are appointed and have qualified. 
Appointment to any vacancy shall be only for the unexpired term of the predecessor, 
pursuant to Republic Act No. 10149.
The compensation, per diems, allowances, incentives, and other benefits, for 
the members of the Board shall be consistent with the principles and policies of 
Republic Act No. 10149.
Sec. 13. Powers and Duties of the Board of Directors. - The Board shall have 
the following duties, powers, and authority:
(a) Formulate policies necessary to carry out the provisions of this Act and to 
prescribe, amend, and repeal by-laws, rules, and regulations for the effective 
operation of the Bank, the conduct of its general business and the exercise of 
powers granted to it by law;
(b) Decide on matters concerning loans, other credit accommodations, 
guarantees issued or obtained by the Bank, prescribe the terms and conditions 
to govern the grant of the foregoing, and engage in such other financial 
activities under such terms and conditions consistent with the provisions of this 
Act, banking laws, and regulations promulgated by the Monetary Board of the


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BSP, as it may deem necessary: Provided, That the Board may delegate the 
authority to approve loans, other credit accommodations, and guarantees to 
such officers as it may deem necessary;
(c) Upon the recommendation of the President, adopt an annual budget for the 
effective operation and administration of the Bank;
(d) Compromise or release, in whole or in part, any claim or settled liability to 
the Bank regardless of the amount involved, under such terms and conditions 
as it may impose to protect the interests of the Bank. The authority to 
compromise shall extend to claims against the Bank: Provided, That the Board 
may delegate the authority to compromise or release any claim or settled 
liability to the President or such other officers of the Bank as it may deem 
necessary;
(e) Establish such branches, agencies and other offices deemed necessary and 
convenient in accordance with applicable rules and regulations of the BSP;
(f) Notwithstanding any law to the contrary, adopt an organizational structure, 
staffing pattern and personnel qualification standards for the Bank and 
reorganize, rationalize and restructure the same, or realign the various 
functions in the Bank to ensure effective accomplishment of its mandates and 
strategic goals, align its organizational structure and staffing pattern with 
industry standards, and guarantee its responsiveness to regulatory 
requirements, consistent with the principles and policies of Republic Act No. 
10149, to meet the demands, maintain service quality, and support the 
expansion of the developmental mandate of the Bank;
(g) Design, adopt, and revise, as it may deem necessary, an early separation 
plan for employees of the Bank to ensure the availability of a qualified human 
resource pool capable of implementing the Bank's authorities under this Charter 
in a manner responsive and attuned to market developments, and provide 
incentives for those who shall be separated from the service, consistent with 
the principles and policies of Republic Act No. 10149;
(h) Maintain, manage, and operate the existing "Provident Fund" of the Bank, 
which shall consist of contributions made both by the Bank and its officers or 
employees as a common fund for the payment of benefits to such officers and
8


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employees, or their heirs, under such terms and conditions consistent with the
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principles and policies of Republic Act No. 10149; and
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(i) Perform other functions, duties and responsibilities necessary, related, and
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incidental to the above-mentioned powers and functions.
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The Board shall exercise its powers in a manner consistent with the principles
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of transparency, fairness, and accountability: Provided, That the Board may delegate
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its powers to the President as it may deem necessary.
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Sec. 14. President and Chief Executive Officer. - The President of the Bank shall
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be the Chief Executive Officer (CEO) who shall be elected annually by the members of
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the Board from among its ranks. The President and CEO shall be subject to the
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disciplinary powers of the Board. No person shall be appointed President of the Bank
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unless the person is of good moral character and reputation, with at least ten (10)
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years of previous experience in banking, and has a reputed proficiency, expertise, and
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recognized competence in banking or financial management.
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The President shall carry out and administer the policies, measures, orders, and
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resolutions approved by the Board; direct and supervise the operation and
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administration of the Bank; and exercise such other powers and perform such other
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functions or duties as may be directed or assigned by law, regulations, and executive
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issuances.
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The President shall be assisted by Vice Presidents and other officials. The salary
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of the President, Vice President, and other officials shall be consistent with the policies
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and principles of Republic Act No. 10149. During the absence or temporary incapacity
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of the President, or in case of vacancy or permanent incapacity and pending
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appointment of a new President of the Bank, the Board shall designate the Officer-in-
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Charge of the Bank.
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The President shall have the following powers and duties:
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(a) Sign and execute all contracts concluded by the Bank; enter into all
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necessary obligations required or permitted by this Act; and sign all notes,
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securities certificates, and other major documents of the Bank;
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(b) Exercise, as CEO of the Bank, the powers of control and supervision over
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the decisions and actions of subordinate officers, and all other powers that may
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be granted by the Board;


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(c) Report to the Board the main facts concerning the operations of the Bank
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and to recommend changes in policies that are deemed advisable;
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(d) Appoint, promote, or remove employees and officers of the Bank: Provided,
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That promotions, transfers, assignments, or reassignments of officers and
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personnel of the Bank are personnel actions deemed made in the interest of
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the service, any provision of civil service laws to the contrary notwithstanding;
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(e) Determine the rates of allowances, honoraria, and such other additional
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compensation of the Bank's technical staff and consultants, consistent with the
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principles and policies of Republic Act No. 10149 and other relevant laws;
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(f) Submit an annual report to the President of the Philippines and Congress on
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the result of the operations of the Bank; and
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(g) As required by circumstances, delegate any of the powers, duties or
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functions to any officer or director of the Bank.
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Sec. 15. Qualifications of Executive Officers. - No person shall be appointed to
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any executive position in the Bank mentioned in the preceding section unless qualified
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by the Fit and Proper Rule, in accordance with Republic Act No. 10149, civil service
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laws, rules, and regulations: Provided, That in determining whether a person is fit and
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proper for a particular position, the following shall be considered: integrity or probity,
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physical and mental fitness, relevant education, training, and competencies for the
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job, such as knowledge and expertise, skills, and diligence to fully carry out
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responsibilities.
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Sec. 16. Legal Department - Any provision of law to the 
contrary
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notwithstanding, the Bank shall have its own Legal Department which shall have the
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power to represent the Bank in cases filed before courts, tribunals, and quasi-judicial
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bodies; render opinions; and prepare and review contracts and agreements. The Head
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of the Legal Department shall be appointed by the President.
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In appropriate cases, the Bank may also avail of the legal services of external
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counsel, subject to the approval of the Board and the Office of the Government
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Corporate Counsel (OGCC). The present Legal Services Group of the Bank shall serve
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as its in-house legal counsel and principal law office under the control and supervision
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of the OGCC.
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Sec. 17. Foreclosure of Collaterals and Disposal of Bank Acquired Properties. -
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The foreclosure of collaterals and disposal of bank acquired properties shall be
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governed by the following:
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(a) Foreclosure of Mortgage Collaterals - The foreclosure of mortgage
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collaterals for loans may be made either judicially or extrajudicially;
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(b) Deputization of Legal Staff - In case of an extrajudicial foreclosure of
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mortgage in connection with loans and advances, the Bank may, upon the
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recommendation of its Legal Department, designate any member of its legal
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staff to conduct the public auction pursuant to Act No. 3135 or "An Act to
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Regulate the Sale of Property under Special Powers Inserting In or Annexed to
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Real Estate Mortgage," as amended.
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In case of a judicial foreclosure in connection with loans and advances under
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this Section, the Bank may, with the approval of the court, deputize any of its
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legal staff to act as special sheriff in the sale of the debtor's properties and in
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the enforcement of court writs and related processes.
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After an action is taken, the special sheriff of the Bank shall make a report to
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the proper court, which shall treat such action as if it were an act of its own
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sheriffs in all respects.
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The sale of mortgaged properties under existing laws or this Act shall be
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conducted under the direction of the sheriff of the province or any special
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sheriff of the Bank, or of a municipal judge or notary public of the city or
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municipality where the sale is to be made, who shall be entitled to collect fees
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provided for in the Rules of Court with respect to the sale of properties under
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execution;
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(c) Disposal of Rea! Estate and Other Properties in the Collection of Debt- Real
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estate and other properties acquired by the Bank in the collection of debts or
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investment by way of foreclosure or other means shall be sold or disposed of
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in accordance with law within five (5) years after their respective dates of
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acquisition. For this purpose, the Board of Directors shall be the appropriate
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regulatory authority to promulgate the necessary implementing rules and
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regulations;
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(d) Exemption from Attachment - The provisions of any law to the contrary
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notwithstanding, collaterals, securities on loans, or other credit
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accommodations and guarantees granted by the Bank or its predecessors-in-
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interest shall not be subject to attachment, execution, stay order, or any other
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court process, nor shall they be included in the property of insolvent persons
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or institutions unless all debts and obligations of the debtors to the Bank and
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its predecessors-in-interest have been paid, including accrued interest,
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penalties, collection expenses, and other charges; and
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(e) Right of Redemption of Foreclosed Property, Right of Possession During
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Redemption Period- Any individual or juridical mortgagor of the Bank whose
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real property has been judicially sold at public auction, or any individual
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mortgagor of the Bank whose real property has been extrajudicially sold at
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public auction shall, within one (1) year counted from the date of registration
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of the Certificate of Foreclosure Sale with the applicable Register of Deeds,
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have the right to redeem the real property by paying to the Bank all of the
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latter's claims as determined by the Bank.
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Notwithstanding the provisions of Act No. 3135, as amended, juridical
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mortgagors whose real property have been extrajudicially sold at public auction
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shall have the right to redeem the property until, but not after, the registration
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of the Certificate of Foreclosure Sale with the applicable Register of Deeds,
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which registration shall in no case be more than three (3) months from the date
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of foreclosure, whichever is earlier.
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The Bank may take possession of the foreclosed property during the
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redemption period and during such period, it shall be entitled to the fruits of
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the property with no obligation to account for them, the same being considered
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compensation for the interest that would otherwise accrue on the account.
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Neither shall the Bank be obliged to post a bond for the purpose of such
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possession.
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Sec. 18. Human Resource. - The Board, upon the recommendation of the
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President and CEO, shall provide for an organizational structure and staffing pattern
31 
of officers and employees of the Bank.
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All positions in the Bank shall be consistent with the principles and policies of
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Republic Act No. 10149: Provided, That the Board shall determine the positions that
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are considered highly-technical, including their compensation and other emoluments:
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Provided, further. That such compensation and emoluments shall be comparable with
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the prevailing rates in the private sector.
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The Bank officers and employees, including all members of the Board, shall not
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engage directly or indirectly in partisan political activities or take part in any election
8 
activity except to vote.
9 
No officer or employee of the Bank shall be dismissed except as provided by
10 
law.
11 
Sec. 19. Environmentai, Social, and Governance Principles. - As an integral part
12 
of the National Government, the Bank is inherently mandated to be socially responsible
13 
and to act and operate as a good corporate citizen. The Governing Board of the Bank
14 
shall recognize and perform the obligations that the Bank has towards the National
15 
Government—its majority stockholder, as well as the minority stockholders when
16 
existing, together with the employees, suppliers, customers, and other stakeholders,
17 
and the communities in which it operates.
18 
Sec. 20. Disclosure and Inhibition from Board Meeting of Member with Persona!
19 
or Pecuniary Interest - Whenever any member attending a Board meeting or any of
20 
such member's relative within the second civil degree of consanguinity or affinity, has
21 
a personal or pecuniary interest, directly or indirectly, in any matter in the agenda or
22 
in its discussion or resolution, the said member shall disclose said interest to the Board
23 
and shall inhibit oneself in the discussion or resolution of the matter and must retire
24 
from the meeting during the deliberation thereon. The Board members present in the
25 
meeting shall still constitute a quorum despite the inhibition of the subject member in
26 
any matter, discussion or resolution in the same meeting
27 
The minutes of the meeting, which shall note the subject matter, the fact that
28 
a member had a personal interest in it, and the withdrawal of the member concerned,
29 
may be made available to the public.
30 
For this purpose, the members of the Board shall, at the beginning of their
31 
respective terms, disclose to the Board any and all interests they may have in any
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corporation, partnership, or association and shall disclose to the Board, any change
2 
thereto.
3 
Sec. 21. Prohibition on Persons with Persona! or Pecuniary Interest - No
4 
member of the Board, officer, attorney, agent, or employee of the Bank shall in any
5 
manner, directly or indirectly participate in the deliberation upon determination of any
6 
question affecting their direct personal interest or that of relatives within the second
7 
civil degree of consanguinity or affinity, or of any corporation, partnership, or
8 
association in which the member, officer, attorney, agent, or employee has a direct
9 
interest. Any person violating the provision of this section shall be removed from office
10 
and shall upon conviction be penalized with a fine of not less than Fifty thousand pesos
11 
(Php50,000.00) but not more than Two million pesos (Php2,000,000.00), or
12 
imprisonment of not less than two (2) years but not more than ten (10) years, or both,
13 
at the discretion of the court.
14 
Sec. 22. Prohibition on Owning Stock in or Incurring Indebtedness to the Bank.
15 
- The Governor of the BSP, all other members of the Monetary Board, and the head
16 
of the auditing department of the Bank are prohibited from owning stock in the Bank,
17 
or from becoming indebted to the Bank, directly or indirectly.
18 
Sec. 23. Borrowing by Directors, Officers and Employees; Restrictions and
19 
Limitations. - No (1) director, officer, or employee of the Bank; or (2) any corporation,
20 
partnership, or company wherein any member of the Bank's Board, officer or
21 
employee, or their relatives within the first civil degree of consanguinity or affinity is
22 
a director, officer or controlling shareholder either directly or indirectly, for one's self
23 
or a representative or agent of others, shall borrow any of the deposits of funds from
24 
the Bank, become a guarantor, or in any manner be an obligor for money borrowed
25 
from the Bank or loaned by it: Provided, That this prohibition on loans to directors,
26 
officers and employees shall not include loans allowed in the form of fringe benefits
27 
granted in accordance with rules and regulations as may be prescribed by the
28 
Monetary Board: Provided, further. That this prohibition shall not apply to loans to
29 
corporations wherein the director, officer or employee of the Bank sits on the board
30 
of the borrower corporation to represent the interest of the Bank.
31 
Sec. 24. Rules and Regulations on Conflict of Interest - The Board is hereby
32 
authorized to issue rules and regulations to determine and resolve conflict of interest
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questions, which shall, in particular, include the requirement for all officers and
2 
employees of the Bank to disclose any shareholdings they, or their relatives within the
3 
second civil degree of consanguinity or affinity, may have in any corporation,
4 
partnership, or company in excess of two percent (2%) of the equity of said
5 
corporation, partnership, or company or in any related party transactions defined by
6 
the Monetary Board of the BSP and the Board of the Bank.
7 
Sec. 25. Prohibition on Officers and Empioyees of the Bank to Disdose Ciient
8 
Account Records. - Except as required by law, or upon order of a court of competent
9 
jurisdiction, or the express order of the President of the Philippines, or written
10 
permission of the client, no officer or employee of the Bank shall reveal or allow to be
11 
examined, inquired about, or looked into by any third person, government official,
12 
bureau, or office any information relative to details of individual accounts or specific
13 
banking transactions, condition, or businesses of any of its clients, or funds or
14 
properties in the custody of the Bank belonging to private individuals: Provided, That
15 
with respect to deposits or whatever nature, the provisions of existing law shall apply.
16 
This prohibition shall not apply to the exchange of confidential credit
17 
information among GFIs or banks, in accordance with established banking practices
18 
or as may be allowed by law.
19 
Sec. 26. Exaction of Fee, Commission, Gift or Charge. - No unauthorized fee,
20 
commission, gift, or charge of any kind shall be exacted, demanded, or paid, for
21 
obtaining loans from the Bank. An officer, employee, or agent of the Bank found guilty
22 
shall be penalized by a fine of not less than Fifty thousand pesos (Php50,000.00) but
23 
not more than Two million pesos (Php2,000,000.00), imprisonment of not less than
24 
six (6) years and one (1) month but not more than fifteen (15) years, perpetual
25 
disqualification from public office, and confiscation or forfeiture in favor of the
26 
government of any prohibited interest and unexplained wealth.
27 
Sec. 27. Examination of the Bank by the Bangko Sentrai ng Piiipinas (BSP). -
28 
The Bank shall be subject to supervision and examination by the appropriate
29 
department of the BSP: Provided, That in conducting the said examination, the BSP
30 
shall duly consider the Bank's risk-taking activities in furtherance of its mandate.
31 
Sec. 28. Controi Over Subsidiaries and Dividends from Subsidiaries. - The Bank,
32 
through its President and CEO, may temporarily appoint directors in cases where
15


1 
urgent action is needed from the subsidiaries, but the present number of directors
2 
does not constitute a quorum.
3 
Sec. 29. General Pena! Provisions. - Any director, officer or employee of the
4 
Bank who violates, or permits any of its officers, employees or agents or any other
5 
person to violate, any of the provision of this Act not specifically punished in the
6 
preceding sections and any person violating or aiding and abetting the violation of this
7 
Act shall be penalized with a fine not less than Fifty thousand pesos (Php50,000.00)
8 
but not more than Two million pesos (Php2,000,000.00), or imprisonment for a period
9 
of not less than two (2) years but not more than ten (10) years, or both, at the
10 
discretion of the court.
11 
Sec. 30. Other Liability of Guilty Board Member, Officer, or Employee. - A
12 
member of the Board, officer or employee of the Bank who willfully violates any of the
13 
provisions of this Act shall, in addition to the criminal and administrative liability
14 
resulting from such act, be held liable for any loss or injury suffered by the Bank as a
15 
result of such violation.
16 
Sec. 31. Liability of Directors, Officers, or Partners of the Offending Corporation
17 
or Partnership. - If the violation of the provisions of this Act is committed by a
18 
corporation or partnership, its directors, officers, or partners who participated in the
19 
violation shall be criminally liable.
20 
Sec. 32. Applicability of Banking Laws. - The provisions of Republic Act No.
21 
7653, as amended. Republic Act No. 8791, and other applicable banking laws, insofar
22 
as they are not in conflict with any provision of this Act, shall apply to the Bank.
23 
The penal provisions of Section 66 of Republic Act No. 8791, in relation to
24 
Sections 34, 35, 36 and 37 of Republic Act No. 7653, as amended, shall be applicable
25 
to directors, officers, employees and borrowers of the Bank.
26 
Sec. 33. Interpretation. - Nothing in this Act shall operate to abolish the Bank
27 
and affect the validity or legality of any right, duty, or obligation created by or in
28 
respect of the Bank prior to the effectivity this Act.
29 
Sec. 34. Implementing Rules and Regulations. - The Bank, upon consuitation
30 
with and approval of the Department of Finance, shall formulate and prepare the
31 
necessary rules and regulations to implement the provisions of this Act within ninety
32 
(90) days from its effectivity.
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Sec. 35. Transitory Provision. - Within one hundred eighty (180) days after the 
effectivity of this Act, the Bank is authorized to reorganize and/or rationalize the Bank's 
organizational structure to attract fresh and critical talents to join the Bank's workforce 
in response to dynamic industry trends, incentivize early separation of tenured 
employees and those with medical conditions who will be considered for retirement 
before the optional retirement age of sixty (60) years old, and improve headcount 
management and succession planning, consistent with the principles and policies of 
Republic Act No. 10149.
Employees who shall retire from the service or are separated therefrom on 
account of the reorganization of the Bank under the provisions of this Charter shall be 
entitled to all gratuities and benefits provided for under existing laws and/or 
supplementary retirement plans adopted by and effective in the Bank, consistent with 
the principles and policies of Republic Act No. 10149.
Sec. 36. Separabiiity Clause. - If any provision of this Act is declared 
unconstitutional, the remainder thereof not otherwise affected shall remain in full force 
and effect.
Sec. 37. Repealing Clause. - Sections 74 to 100 of Republic Act No. 3844 or 
the "Agricultural Land Reform Code", as amended, are hereby repealed. All other laws, 
presidential decrees, executive orders, letters of construction, proclamations or 
administrative regulations that are inconsistent with any provision hereof are hereby 
repealed, amended or modified accordingly.
Sec. 38. Effectivity. - This Act shall take effect after fifteen days (15) following 
its publication in the Official Gazette or in a newspaper of general circulation.
Approved,
17