RepubHc of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila
NINETEENTH CONGRESS
Second Regular Session
HouseBiuNo.8615
Introduced by Representative Midy N. Cua
Lone District, Quirino
AN ACT
PROVIDING FOR A NEW CIIARTER 0F THE
DEVELOPRENT BANK 0F THE PIHLIPPINES,
REPEALING FOR TIIE puRrosE EXEcuTlvE ORDER NO. 81, As ARENDED
EXPLANATORY NOTE
As   the   country   works   towards   post-pandemic   recovery   while   striving   for   economic
development,   the  Development   Bank  of  the   Philippines   (DBP),   as  the   govemment's   premier
development banlc plays an important role as a stimulus for development.  The DBP is mandated to
help the country achieve sustainable economic growth.
During and after the pandemic, the DBP has fulfilled its mandate through different relevant,
responsive, and purposeful development financing programs. As of February 2023, DBP is the eighth
largest bank in the country in terms of assets, providing credit support to four strategic sectors of the
economy:   infrastructure   and   logistics;   micro,   small,   and   medium   enterprises   (MSMEs);   the
environment; and sceial services and community development. In 2022, DBP reached a full-year net
income of P5.61  billiont. During the pandemic, DBP ramped up its Rehabilitation Support Program
on Severe Events (DBP RESPONSE) to extend financing support for rehabilitation efforts of public
and private institutions adversely affeeted by the pandemic,  extending loan payment moratorium to
726 borrower-accounts.
In  its  establishment  after  World  War  11,  the  DBP  was  tasked  to  provide  an  impetus  for
`'t,. ``       ::Lit:::[e:ethoa:I:i:ii°Thte° print;gi:aopnr°wgrh:ci;i: :Xa:acusi°tned°.fihhee:t`;°£ke£Cn°gn:Fa.eTb°at±]Scgn¥iftDu:e:
the major part of the rehabilitation and reconstruction of a post-war Philippines before and now in a
post-pandemic  setting  -  to  ascertain  and  fulfill  the  financial  needs  of  a  recovering  and  again
expanding eeonomy.
Considering DBP's evolving role, there is a need to introduce amendments that will improve
and   expand  the  powers   and  functions   of  DBP   with  a   corresponding  needed  increase   in   its
capitalization. This will enhance the Bank's capability to ensure continuity of developmental service
to the nation in the delivery of better products and more effectively serve its clients while complying
with the risk-based banking law and regulations.  Thus, the following proposed amendments include
1  DBP data


an increase in authorized capital stock to comply with the risk-based capital ratio and other capital-
related BSP regulations in relation to the risks (e.g. risk-weighted assets) continually assumed by the
Bank in its developmental mandate and the grant of perpetual corporate existence in the light of the
amendments to the Revised Corporation Code (Republic Act No.  I 1232); among others.
As a pioneer development banking institution at the forefront of national development, DBP
needs further amendments to its Charter so it can continue to push forward with a revitalized resolve
to cany out its mandate to fuel the growth of the  Philippine economy. After all, the essence of the
existence of DBP is to be the vehicle for the nation's progress, canying with it the collective hope of
the Filipino people for a brighter future.
In view of the foregoing, approval of this measure is earnestly sought.
A
uirino
2


```@
RepubHc of the Philippines
HOUSE 0F REPRESENTATIVES
Quezon City, Metro Manila
NINETEENTH CONGRESS
Second Regular Session
HouseBinNo.8615
Introduced by Representative Midy N. Cua
Lone District, Quirino
AN ACT
PROVIDING FOR A NEW CIIARTER 0F THE
DEVELOPRENT BANK 0F TIRE PHILIPPINES,
REPEALING FOR TIRE PURPOSE EXECUTIVE ORDER NO. 81, AS AMENDED
Be it enacted by the Senate and House Of Representatives Of the Philippines in Congress assembled:
I        SECTION 1. rz.ZJe. -This Act shall be known as "The New Development Bank of the philippines
2       (DBP)Act„.
3
4       SEC. 2. Dcc/am/f.oH a/Po/I-ey ~ Declaration of policy. It is the policy of the state to strengthen the
5       powers and functions of the Development Bank of the philippines, hereinafter referred to as the Bank,
6       as  a premier  government  developmental financial  institution that provides  developmental  financing
7       and  banking  services  necessary  in  the  achievement  Of  sustained  economic  growth,   The   State
8       reeognizes that the Bank plays an important role in the country's aspiration to meet the challenges of
9       91obalization and the integration of the Asscoiation of south East Asian Nations (ASEAN) by assisting
10       Philippine  industries  and  other  strategic  sectors  of the  economy  and  enhancing  their  capability  to
11        compete intheglobal market.
12
13                      The state shall support the Bank in pursuing corporate citizenship programs through initiatives
14       that promote the welfare of the Filipino people, particularly the underprivileged. The Bank shall carry
15       out   relevant   and   meaningful   programs   through   its   flagship   initiatives   in   education,   health,
16       environmental preservation and social outreach programs.
17
18       SEC. 3. IVc}me and corporflfe jin.sJe#ce. -The Bank, shall henceforth operate under the provisions
19       of this Act.  The Bank shall continue to exist as a body corporate and shall have perpetual existence
20       from the date ofeffectivity of this Act.
21
22       SEC.  4.  Pri.7"crry  OZ7yiecti.ve  a/ ffoc B¢#fe  -As  a  partner  in national  development,  the  Bank  shall
23       support the programs of the government that enable growth and productivity such as  infrastructure
24       programs,   tourism   development   projects,   agriculture-based   entrepreneurial   ventures,    sceially-
25       beneficial programs in education, health care, and socialized housing, those that support the protection
26       of the environment,  and other public sector programs: Provided, That this objective shall be pursued
27       with utmost consideration of the need and responsibility to preserve and protect the financial viability
28       of the Bank while ensuring that  it remains globally competitive.  As  a  universal banlq  it shall at all
3


times safeguard its financial position in order that it can effectively participate in the accomplishment
of the national goal of attaining meaningful and inclusive economic growth.
SEC.  5.  Corpora/e Powers,  -In addition to the general powers  of a corporation under RA  11232
otherwise known as the "Revised Coaporation Code of the Philippines", the Bank shall have the power
to:
(a)  Exercise all  such powers and services as may be necessary to  carry on the business of a
universal bank under R.A.  8791  or "The  General Banking Law of 2000"  subject to the
existing rules and regulations of the Monetary Board in order to perfom its mandate under
this Act;
(b)  Accept  and  manage  trust  funds  and  properties  and  carry  on  the  business  of  a  trust
corporation;
(c)  Act  as  official  government  depository  with  authority  to  maintain  deposits  and  deposit
substitutes  of the  national  government,  its  agencies,  bureaus  and  instrumentalities,  and
government-owned or controlled corporations, and local government units, subject to such
rules and regulations as the Monetary Board may prescribe;
(d)  Adopt,  amend,  or change its by-laws; to  adopt,  alter and use a seal;  to lease or own real
and personal property and to sell or otherwise dispose of the same; to make contracts; to
sue  and be  sued;  and to  exercise the  general  powers  of a corporation mentioned  in  the
Revised Corporation Code of the Philippines, including the power to acquire or establish
subsidiaries registered with the Securities and Exchange Commission (SEC) and enter into
joint venture agreements for purposes of developing or disposing acquired assets and Bank
properties, insofar as such powers are not inconsistent or incompatible with the provisions
of this Act and banking laws, rules and regulations;
(e)  Obtain   from   the   Government   Service   Insurance   System   (GSIS)   or  other  reputable
insurance   companies   duly   accredited   by   the   appropriate   regulatory   body,   directors,
officers and liability insurance coverage, without prejudice to the right of the bank, as may
be determined by its board of directors, to put up its own legal insurance fund;
(f)   Act as loan or credit facility programs administrator with respect to the loans granted by
the national government;
(g)  Develop and dispose the Bank's owned properties.  To add value to, improve profitability
on, and enhance the marketability of bank's owned property, the bank may further develop
or renovate the  same  either with its  own  capital  or through  a joint venture arrangement
with private companies or individuals, without need of approval by the National Economic
Development Authority (NEDA);
(h)  Dispose of its acquired assets which shall  not be  subject to  any injunction or restraining
order issued by any court, commission, tribunal or office which shall bar, impede or delay
the  sale and disposition thereof except on questions of ownership  and national  or public
interest; and
(i)   Engage  in  financial  leasing  of movable  and  immovable  properties  in  connection  with
government projects.
4


Unless otherwise provided for in this Act, the exercise of the above-mentioned powers shall be
subject  to  applicable  laws,  as  well  as  regulations  promulgated  by  the  Bangko  Sentral  ng  Pilipinas
(BSP)  and  other  applicable  prevailing  laws,  rules  and  regulations.  The  Bank  shall  observe  utmost
transparency  in  dispensing  loans  and  selling  of government  assets.  The  Bank  must  ensure  that  ils
resources are not being unduly taken advantage of by its management to favor certain private interests:
Provided,  That,  jn any case:  (a) no  grant of loan or disposition  of asset shall be implemented by the
Bank unless it undergoes the requisite evaluation and approval process;  and (b) the file pertaining to
the  transaction  contains  a  full  disclosure  of:  (i)  how  the  account  originated  and  endorsed  to  the
approving  bodies;  and  (ii)  the  deliberation  made  by  the  approving  bodies  on  the  transaction  is
faithfully recorded and the record of such deliberation and pertinent account files are kept and made
available for audit in the future by authorized officials, subject to prevailing laws, rules and regulations
on retention and management of public records.
SEC. 6.  Principal  Office,  Branches,  and other Offices.  - The Bank`s pincipal  oREice  and place of
business shall be in Metro Manila. It may open and maintain branches and agencies in accordance with
existing regulations of the BSP.
SEC.  7. f4wffoor!.zed Capi.ZczJ S/ocfr-Pczi.  Vcr/zte.- The  capital  stock  of the  Bank  shall  be  One  hundred
billion  pesos  (P100,000,000,000.00)  to  be  divided  into  one  billion  (1,000,000,000)  common  shares
with  par  value  of One  hundred  pesos  (Ploo.00)  per  share,  which  shall  be  fully  subscribed  by  the
national government.
The President of the Philippines, may approve the increase of the capitalization of the Bank to
be  fully  subscribed  by  the  national  government,  upon  the  recommendation  of the  Board  and  the
concurrence  of the  Secretary  of Finance,  up  to  such  an  amount  as  may  be  necessary  to  attain  the
objectives of this Act.
SEC. 8.  yo/I.73g a/SfeczreL§. - The voting power of all the common shares of stock of the Bank shall be
vested in the President of the Philippines or to the delegated or authorized representative,  subject to
prevailing laws, rules and regulations.
SHC. 9. £oo#s ¢#d Offeer J#ves/7"e#ts. -Loans and other investments of the Bank shall be subject to
the same limits and ceilings imposed on universal banks by the Monetary Board.
SE:C.10.  Issuance  Of Bonds,  Eligible  Capital  Instruments,  and other  Securities.  ~ Trie Balk may
issue all kinds of bonds, notes, debentures, other evidences of indebtedness, derivatives, commodities,
negotiable instruments, eligible capital instruments, and other securities, and the renewal or refunding
thereof within  or  outside  the  Philippines,  at  such  terms,  rates,  and  conditions  as  the  Board  may
determine,  subject  to  compliance  with  the  provisions  of applicable  laws,  and rules  and  regulations
promulgated by the Monetary Board.
The Bank shall provide for appropriate reserves for the redemption or retirement of the bonds.
These bonds and other obligations shall be redeemable at the option of the Bank at or before maturity
and in such manner as may be stipulated therein and shall bear such rate of interest as may be fixed by
the Bank.
Such  obligations  shall  be  secured  by  the  assets  of the  Bank,  including  the  stocks,  bonds,
debentures, and other securities purchased or held by it under the provisions of this Act. These bonds
and debentures may be long-term, medium, or short-term, with fixed interest rate or floating interest
rate.
5


SEC.  11. Board Of Directors,  Composition;  Tenure;  Per Diems.  -The a,ffairs and business of the
Bank shall be directed, and its properties managed and preserved, by a Board of Directors consisting
of nine (9) members, headed by the  Secretary of Finance as Chairperson.  The other members of the
board  shall  be  appointed  by  the  President  of  the  Philippines  from  a  shortlist  prepared  by  the
Governance Commission for Government cowned and lontrolled Coaporations (GCG) subject to
prior vetting from the BSP and its rules on disqualification, watchlist files and the fit and proper mle,
in  accordance  with  the  procedure  laid  down  in  R.A.  No.   10149  otherwise  known  as  the  "GOCC
Governance  Act  of 2011":  Provided,  however,  That,  the  position  of Chairperson  of the  Board  and
President of the Bank shall not be held by the same person.
The directors must always meet the fit and proper requirements under R.A. No.  8791  and the
guidelines of the BSP and the GCG.
The Chairperson shall preside over the meetings of the Board.
The President of the Bank shall be the Vice-Chairperson of the Board. In case the Chairperson
is absent or incapacitated, the President shall  act as Chairperson.  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 appointed director of the Bank unless that person is a natural-born citizen
of the Philippines, not less than thirty-five (35) years of age, of good moral cbaracter and has attained
proficiency, expertise and recognized competence in one or more of the following: banking, finance,
accounting,   information   technology,   information   security,   economics,   law,   agriculture,   business
management, public utility or government administration.
At least four (4) of the members of the Board shall come from the private sector. Except for
the Chairperson and the President, no incumbent officer or employee of the Bank may be appointed as
a member of the Board; nor shall any incumbent director, officer, or employee of any other bank be
eligible as a member of the Board.
The President and Chief Executive Officer (CEQ) shall be elected annually by the members of
the Board in accordance with Section 13 hereof.
The temi of office of the President and the members of the Board shall be for a period of one
(i) year or until such time as their successors are appointed.
The members of the Board, including the President and CEQ, shall receive per diems for every
meeting  actually attended,  and receive  such other allowances,  incentives  and emoluments,  including
reasonable    transportation    and    representation    allowances    and    performance-based    incentives,
comparable  to  those  received by  directors  in private banks  of the universal bank category,  subject,
however, to existing laws and regulations.
SEC.12. Powers a#d D#fz.es a//fie Boczrd a/Dz.rectors. -The Board shall have the following duties,
powers, and authority:
(a)  To formulate policies necessary to cany out effectively the provisions of this Act and to
prescribe, amend, and repeal by-laws, rules and regulations for the effective operation of
the Bank, and the manner in which the general business of the Bank may be conducted
and the powers granted by law to the Bank are exercised;
6


(b)  To approve loans, other credit accommodations and guarantees issued or obtained by the
Bank,  and prescribe  terms  and  conditions  to  govern the  granting  of the  foregoing,  and
engage  in  such  other  financial  activities  under  such  terms  and  conditions  as  it  may  be
deemed necessary, consistent with the provisions of this Act and the existing banking laws
and  regulations  promulgated  by  the  Monetary  Board:  Provided,  That,  the  Board  may
delegate the authority to approve loans to such officers or committees as may be deemed
necessary;
(c)  To  approve  investment  activities  with  terms  and  conditions  beneficial  to  the  Bank  and
subject to the regulations promulgated by the Monetary Board;
(d)  To adopt an annual budget for the effective operation and administration of the Bank;
(e)  To create and establish a "Provident Fund" which shall consist of contributions, made both
by the Bank and its officers or employees, to a common fund for the payment of benefits
to such officers or employees, or their heirs, under such terms and conditions as the Board
may fix;
(I)   To 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  it  may  impose  to
protect  the  interests  of the  Bank.  This  authority  to  compromise  shall  extend  to  claims
against the Bank;
(g)  To appoint, promote or remove officers from the rank of Vice President or its equivalent,
and   other   more   senior   officer   positions,   excluding   the   Chairperson   and   the   Vice
Chairperson: Provided, That no person shall be appointed to any executive position in the
Bank  mentioned  in  the  preceding  section  unless  one  is  of  good  moral  character,  of
unquestionable integrity and responsibility, who is of recognized competence in the field
of one or more of the following: economics, agriculture, industry, law, banking or finance,
accounting,  information  technology,  information  security,  and  possesses  demonstrated
administrative skill and ability;
(h)  To establish such branches, agencies and other offices which the Board shall determine to
be necessary and convenient in accordance with existing rules and regulations of the ESP;
(i)   To  establish  a  human  resource  management  system  which  shall  govern  the  selection,
hiring, appointment, transfer, promotion or dismissal of all personnel, and determination
of compensation and benefits  of all  employees,  subject to  existing laws  and regulations
such   as   R.   A.   No.   10149.   Such   system   shall   aim  to   establish  professionalism   and
excellence at all levels of the Bank in accordance with sound principles of management;
¢)   To reorganize the bank personnel as the Board may deem necessary; and to rationalize the
organization and structure of the Bank to promote cost-savings and efficiency. The Board
is authorized to design and adopt an early retirement or separation incentive plan for the
puxpose  of providing a financial  package  of benefits,  apart  from  that  granted under the
GSIS  law,  due  to  retrenchment,  reorganization,  streamlining  of its  organization,  merger
with another bank or a similar occurrence to enable its persormel who may or may not yet
be qualified for optional retirement under existing retirement laws to retire or be separated
from  the  service  with  additional  financial  benefits:  Provided,  That the  provisions  of the
Civil  Service  Law  and  its  implementing rules  shall,  at  all  times,  be  observed:  Provided,
further,  That  any  separation  benefit  and  incentive  which  may  be  granted  by  the  Bank
7


equivalent to at least two months basic salary for every year of service, in addition to those
provided  under  existing  laws,  for  those  persormel  referred  to  in  this  section  shall  be
sourced from the corporate funds of the Bank. This provision shall be subject to applicable
existing laws, rules and regulations;
(k)  To promote and sponsor the local or foreign training or study of officers and employees in
the  related  fields  such  as  banking,  finance,  treasury,  money  market,  risk  management,
information technology  and  law.  Toward this  end,  the Bank  is  authorized to defray the
costs of such training or study. The Board shall provide rules and regulations to govern the
training  or  study  programs  of the  Bank,  subject  to  applicable  existing  regulations  on
training and study, as well as accounting and auditing rules; and
(I)   To  obtain  from  GSIS  or  other  reputable  insurance  companies,  duly  accredited  by  the
appropriate regulatory body,  directors,  officers  and liability insurance  coverage, without
prejudice to the right of the Bank, as may be determined by the Board, to put up its own
legal insurance fund, subject to the regulations issued by the GCG.
The Board shall exercise its powers in a manner consistent with the principles of transparency,
fairness and accountability.
SEC.13.  Presz.dejtf  cnd  Cfoz.€/`Exec#Jj.ve  OJ7}ccr.  -The  President  of the  Bank  shall  be  the  Chief
Executive Officer who shall be elected by the Board from among themselves with the written advice
and consent of the President of the Philippines. No person shall be appointed President of the Bank
unless one is at least fortyr (40) years of age, of good moral character and reputation, with at least ten
(10)  year previous  experience  in  banking,  and  has  a  reputed  proficiency,  expertise  and  recognized
competence in banking or financial management.
The  President  shall,  among  other powers  and  duties,  execute,  carry  out  and  administer the
policies, measures,  orders and resolutions approved by the Board;  direct and  supervise the operation
and  administration of the Bank;  and exercise such other powers and perform such other function or
duty as may be directed or assigned by law, regulations, executive issuances or by the Board from time
to time.
The President shall have the following powers and duties:
(a)  To  sign  and  execute  all  contracts  concluded  by  the  Bank  and  enter  into  all  necessary
obligations required or permitted by this Act, upon proper authorization by the Board; and
sign all notes, securities certificates, and other major documents of the Bank;
(b)  To exercise, as Chief Executive Officer of the Bank, the powers of control and supervision
over decisions and actions of subordinate officers and all other powers that may be granted
by the Board;
(c)  To  report  to  the  Board  the  main  facts  concerning  the  operations  of the  Bank  and  to
recommend changes in policies which one may deem advisable;
(d)  To  submit  an  annual  report  to  the  President  of  the  Philippines  on  the  result  of  the
operations of the Bank;
(e)  To recommend to the Board the appointment, promotion, or removal of all officers of the
Bank, with the rank of at least vice-president or its equivalent;
8


(0   To appoint, promote or remove employees and officers below the rank of vice-president or
its  equivalent:  Provided,  That  promotions,  transfers,  assignments  or  reassignments  of
officers and personnel of the Bank are personnel actions deemed made in the interest of
the  service  and  not  disciplinary,  any  provision  of the  Civil  Service  Law  to  contrary
notwithstanding; and
(g)  As required by circumstances,  to delegate  any of the powers,  duties or functions to any
officer or director of the Bank, with the approval of the Board.
SEC. 14. I,eg¢/ jl4lcI/fers a#d Cas'es. - The Bank shall have its own chief legal counsel as head of the
legal  department,  who  shall  be  appointed  by  the  Board  of the  Bank  upon  recommendation  of its
President. The other members of the legal department shall be appointed in accordance with the Bank's
policies on hiring and promotion.
In appropriate cases, the Bank may avail  also of the legal services of any government legal
office authorized to render such services to government-owned or controlled corporations.
Notwithstanding  Section   10  of  Chapter  3,  Title  Ill,  Book  IV  of  Executive  Order  292,
otherwise  known  as  the  "Administrative  Code  of 1987",  the  Legal  Department  can  also  act  as  the
principal law office of the Bank duly authorized to appear in its behalf in any court or quasi-judicial
body.   The  hiring  of  any  extemal  private  counsel  may  be  authorized  by  the  Board,  upon  the
recommendation of the chief legal counsel, without need of securing the approval of the Office of the
Government Coxporate  Counsel  (OGCC)  and the  Commission  on  Audit  (COA),  any provision of a
general or special law to the contrary notwithstanding.
The Bank may, upon the recommendation of its chief legal counsel, deputize any member of
its  legal  staff to  act as  special  sheriff in foreclosure cases,  in the  sale  or attachment of the  debtor's
properties and in the enforcement of court writs and processes in cases involving the Bank. The special
sheriff of the Bank shall make a report to the proper court after any action taken which shall treat such
action as if it were an act of its own sheriffs in all respects.
The sale of mortgaged properties under the provisions of existing laws or of this Act shall be
conducted under the direction of the sheriff of the province or any special sheriff of the Bank, or of a
municipal judge or notary public of the city or municipality where the sale is to be made, who shall be
entitled to collect the fees provided for in the  Rules of Court with respect to sale of properties under
execution.
SEC.  15. Forec/oswre by frfee Bcz77fr. ~ Unless warranted by the circumstances as may be determined
by the Board or otherwise directed by the President of the Bank or his duly authorized representative
for justifiable reasons, the Bank, after the lapse of sixty (60) days from the date the account became
past  due  as  defined  under  the  rules  and  regulations  of the  BSP,  shall  immediately  foreclose  the
collaterals  and/or  securities  for  any  loan,  credit,  accommodation,  and/or  guarantees  granted  by  the
Bank whenever the arrearages on such account, including accrued interest and other charges, amount
to  at  least  twenty  percent  (20°/o)  of the  total  outstanding  obligations,  including  interest  and  other
charges, as appearing in the books of account and/or related records of the Bank.
Upon application of foreclosure of the collateral of delinquent borrowers, whether judicially or
extra-judicially,  by  the  Bank,  the  court  and/or  officials  concerned  shall  immediately  act  and  give
priority  to  the  same  and  schedule  the  publication  thereof within  five  (5)  days  from  receipt  of the
application, the auction sale to be held not later than ten (10) days  {rom date of the last publication.
9


The  certificate  of sale  must be  issued  on  the  date  of sale  and the  same  must be registered by  the
Register of Deeds concerned not later than five (5) days after submission of the certificate of sale.
As a result of foreclosure or any other legal proceedings wherein the properties of the debtor
which are foreclosed, attached, or levied upon in satisfaction of a judgment are sold to the Bank, the
said properties  shall  be placed  in the possession  and control of the  Bank,  with  the  assistance  of the
Philippine National Police whenever necessary. The petition for writ of possession shall be acted upon
by the court within fifteen (15) days from the date of filing.
The Bank is hereby directed to report to the Office of the President of the Philippines any
official who delays the proceedings as provided herein or who violates any of the provisions of this
section.
This provision is without prejudice to the right of the Bank to enter into a compromise
agreement pursuant to Section 12(I) of this Act.
SEC. 16. jtz.gfef o/Rede77Ip/i.o#. -Any individual or juridical mortgagor of the Bank whose real
property has been judicially sold at public auction, or any individual mortgagor of the Bank whose real
property has been  extra-judicially  sold  at public  auction shall,  within one  (1)  year counted  from  the
date of registration of the certificate of foreclosure sale with the applicable Register of Deeds, has the
right to redeem the real property by paying to the Bank all of the latter's claims as determined by the
Bank.
Notwithstanding  the  provisions  of Act  No.  3135  entitled  "An  Act  to  Regulate  the  Sale  of
Property  Under  Special  Powers  Inserting  In  or  Annexed  to  Real  Estate  Mortgage",  as  amended,
juridical mortgagors whose real property has been extra-judicially sold at public auction shall have the
right to redeem the property until,  but not after the registration of the certificate of foreclosure  sale
with  the  applicable  Register  of Deeds,  which  registration  shall  in  no  case  be  more  than  three  (3)
months from the date of foreclosure, whichever is earlier.
The Bank may take possession of the foreclosed property during the redemption period. When
the Bank takes possession during such period, it shall be entitled to the fruits of the property with no
obligation  to  account  for them,  the  same being  considered compensation  for the  interest that  would
otherwise accrue on the account. Neither shall the Bank be obliged to post a bond for the purpose of
such possession.
SEC.17. Erempfz.o#/7-arm ,4f/#crfeme#f. -The provisions of any law to the contrary
notwithstanding, collaterals, securities on loans or other credit accommodation and guarantees granted
by the Bank or its predecessors-in-interest shall not be  subject to attachment,  execution or any other
cout process, nor shall they be included in the property of insolvent persons or institutions, unless all
debts and obligations  of the debtor to the  Bank and its predecessors-in-interest have been previously
paid, including accrued interest, penalties, collection expenses, and other charges.
No attachment or execution shall be issued against the Bank or its property before final
judgment in any suit, action or proceeding in any court.
SEC.   18.  Perso7c72e/.  -  The  Board  shall  provide  for  an  organization  and  staff  of  officers  and
employees  of the Bank  and  establish  a bank personnel management  system which shall  govern the
selection,  hiring,  appointment,  transfer, promotion,  or dismissal  of all bank personnel,  including the
continuous reorganization thereof.
10


The   appointments   in   the   Bank,   except   those   which   are   policyrdetermining,   primarily
confidential or highly technical  in nature, shall be made only according to the Civil Service Law and
regulations:  Provided, That no qualification or eligibility requirements for positions in the Bank shall
be  imposed  other  than  those  set  by  the  Board:  Provided,  further,  That  the  Monetary  Board  shall
prescribe, pass upon and review the qualifications of individuals appointed as officers and disqualify
those  found unf]t:  Provided,  finally,  That the Board or the President in  accordance  with  Sections  12
and   13  of  this  Act,  respectively,  may  without  need  of obtaining  prior  approval  from  any  other
government  agency,  appoint its  contractual  persormel  whose  services  are  deemed necessary in order
not to  unduly  disrupt the  operations  of the  Bank  except  in  the  conduct  of business  involving bank
deposits.
All  positions  in the  bank  shall  be  governed by the  compensation  and position  classification
system (CPCS) and qualification standards subject to the approval of the President of the Philippines
based on a comprehensive job analysis of actual duties and responsibilities and the compensation plan
shall be comparable with the prevailing compensation plans of universal banks in the private sector.
The Board shall fix the total compensation package and other remunerations and emolulnents
of  bank  personnel,  including  the  President  and  Chief  Executive  Officer.  The  total  compensation
package  shall   include  reasonable  allowances,   incentives,  bonuses,  privileges   and  other  benefits,
comparable to those  given  in private banks of the universal bank category,  as may be necessary or
proper for the effective management, operation and administration of the Bank.
The Bank's CPCS shall be subject to periodic review by the Board once every two (2) years,
without prejudice to yearly merit or increases based on the bank's productivity and profitability.  The
Bank  shall  be  exempt  from  all   existing  laws,   rules,   and  regulations  on  compensation,  position
classification and qualification standards.
The foregoing actions of the Board in the immediately preceding three (3) paragraphs of this
section shall be subject to existing laws and regulations, such as R. A. No.10149.
No officer or employee of the Bank subject to the Civil Service Law shall be dismissed except
for cause as provided by law.
SEC. T9. Inhibition f.rom Board Meeting Of. Member with Personal Interest. -V\lheTuever aLny montoer
attending a meeting of the Board of Directors, or any of one's relatives within the fourth civil degree
or consanguinity or affinity has a personal or pecuniary interest, directly or indirectly, in any matter in
the agenda of the board meeting or in the discussion or resolution of any given matter, said member
shall disclose said interest to the Board and shall not participate in the discussion or resolution of the
matter and must retire from the meeting during the deliberation thereon. The members of the Board of
Directors present in the meeting should still constitute a quorum despite the inhibition of the member
with personal or pecuniary interest in any matter, discussion or resolution in the same meeting.
The minutes of the meeting, which shall note the subject matter, the fact that a member had a
personal  interest in it,  and the withdrawal  of the member concerned,  may be made  available  to the
public.
For this pu]pose,  the member of the Board shall,  at the beginning of their respective terms,
disclose to the Board any and all interests they may have in any corporation, partnership or association
and shall, thereafter, disclose to the Board, any change thereto.
11


SEC.  20.  Prohibition  on  Persons  with  Personal/Pecuniary  Interest.  ~ No  rmembe[  of the BoaLrd,
officer,  attorney,  agent,  or  employee  of the  Bank  shall  in  any  manner,  directly  participate  in  the
deliberation upon or the determination of any question affecting one's direct personal  interest or the
personal  interests  of relatives  within the  fourth  civil  degree  of consanguinity  or affinity,  or  of any
corporation, partnership, or association in which the member has a direct interest. Any person violating
the provisions of this section shall be removed from office and shall upon conviction be punished with
a fine of not less than Fifty thousand pesos (P50,000) nor more than Two million pesos (P2,000,000)
or by imprisonment of not less than two (2) years nor more than ten (10) years, or by both fine and
imprisonment at the discretion of the court.
SEC. 21.  Borrowing by  Directors,  Officers  and  Employees;  Restriction  and  Limitation.  -INo  (1)
director, officer or employee of the Bank; or (2) any corporation, partnership, or company wherein any
member of the Bank's Board of Directors, officer or employee, or their relatives within the first civil
degree  of consanguinity or affinity is a director,  offlcer or controlling shareholder either directly or
indirectly, for one's  self or as representative or agent of others, borrow any of the deposits of funds
from the Bank,  nor shall become a guarantor,  or in any manner be  an obligor for money borrowed
from  the  Bank  or  loaned  by  it:  Provided,  That  this  prohibition  on  loans  to  directors,  officers  and
employees  shall  not include  loans  allowed in  the  form of funge benefits  granted in accordance with
mles  and  regulations  as  may  be  prescribed  by  the  Monetary  Board:  Provided,  further,  That  this
prohibition shall not apply to  loans to corporations wherein the director,  officer or employee of the
Bank sits on the board of the borrower corporation to represent the interest of the Bank.
SEC.  22.  Rules  and  Regulations  on  Conflict  Of Interest.  -  The  Board  o£  Directors  is  hereby
authorized  to  issue  rules  and  regulations  for the  purposes  of determining  and  resolving  conflict  of
interest  questions,   which   rules   shall,   in  particular,   include  the  requirement  on   all  officers   and
employees  of the  Bank  to  disclose  any  shareholdings  they,  or their relatives  within  the  fourth  civil
degree of consanguinity or affinity, may have in any corporation, partnership, or company in excess of
2%  of the  equity  of said  corporation,  partnership,  or  company  or  in  any  related party  transactions
defined by the Monetary Board of the BSP and the Board of Directors of the Bank.
SEic. Z3. Prohibition on Officers and Employees Of the Bank` -Except as required by La;w, or apon
order of a court of competent jurisdiction, or the express order of the President of the Philippines or
written  permission  of the  client,  no  officer  or employee  of the  Bank  shall  reveal  nor  allow  to  be
examined,  inquired  or  looked  into,  by  any  third  person,  government  official,  bureau  or office  any
information  relative  to  details  of individual  accounts  or  specific  banking  transactions,  condition  or
business of any of its clients, or funds or properties in the custody of the Bank belonging to private
individuals:  Provided,  That  in  respect to  deposits  or whatever nature,  the provisions  of existing  law
shall apply-
This  prohibition  shall  not  apply  to  the  exchange  of confidential  credit  information  among
government financial institutions or among banks, in accordance with established banking practices or
as may be allowed by law.
12


SEC. 24. Ex¢c/I.o# a/Fee,  Coj»mz.ssz.o#,  Gz7} o7. C7!flrge. - No unauthorized fee, commission, gift, or
charge of any kind shall be exacted,  demanded, or paid, for obtaining loans from the Bank, and any
officer,  employee,  or agent  of the Bank found  guilty  of exacting,  demanding,  or receiving  any  fee
services in obtaining any service or transaction from the Bank, shall be punished by a fine of not less
than Fifty thousand pesos (P50,000) nor more than Two million pesos (P2,000,000), imprisonment for
not  less  than  six  (6)  years  and  one  (1)  month  nor  more  than  fifteen  (15)  years,  and  perpetual
disqualification  from public  office  and confiscation  or forfeiture  in  favor of the government  of any
prohibited interest and unexplained wealth.
SEC. 25. E]fam!.#¢fz.o% a/ffe€ BczHfr. -The Bank shall be subject to supervision and examination
by the appropriate department of the BSP, and audit by the COA.
SEC. 26. Gc#era/ Pe#a/ P7~ovz.sz.o#s'. -Any director, officer or employee of the Bank who violates, or
permits any of the officers, employees or agents of said Bank or any other person to violate, any of the
provisions of this Act not specifically punished in the preceding sections and any person violating any
provision of this Act or aiding and abetting the violation thereof, shall be punished with a fine not less
than   Fifty   thousand   pesos   (P50,000)   nor   more   than   Two   million   pesos   (P2,000,000)   or   by
imprisonment not less than two (2) years nor more than ten (10) years, or both, at the discretion of the
court.
SEC. 2]. Other Liability Of Guilty Officer or Employee. -Any member of the Board o£ Directors or
officer or  employee  of the  Bank  who  willfully  violates  any  of the  provisions  of this  Act  shall,  in
addition to the criminal and administrative liability resulting from such act, be held liable for any loss
or injury suffered by the Bank as a result of such violation.
SjEjc. T8. Liability Of Directors, Officers or Partners Of Offending Corporation or Partnership. -If
the violation of the provisions of this Act is committed by a corporation or partnership, the directors,
officers  or  partners  hereof who  participated  in  the  violation  shall  be  criminally  liable  for  such
violation.
SEC.  29. 4pp/I.cobz./i.fy  a/ Bo7!4I."g £¢ws.  - The  provisions  of Republic  Act No.  7653,  otherwise
known as the New Central Bank Act, as amended by R.A.11211, Republic Act No.  8791, and other
applicable banking laws, insofar as not in conflict with any provision of this Act,  shall  apply to the
Bank.
The penal provisions of Section 66  R.A.  No.  8791,  in relation to  secs.  34,  35,  36 and 37  of
R.A.  No.  7653,  as  amended by R.A.  11211  shall be  applicable to directors,  officers,  employees  and
borrowers of the Bank.
SEC. 30. Sepc!rczbz./].ty C/czwsc. -In the event that any provision of tbis Act or the applicability of such
provisions  to  any  person  or  circumstances  is  declared  invalid,  the  remainder  of the  Act  or  the
application  of  said  provision  to  other  persons  or  circumstances   shall  not  be  affected  by  such
declaration.
SEC.  31.  jtepefl/I.jog C/awse.  -The  provisions  of Presidential Decree No.  985,  Presidential  Decree
No.  1597,  Republic Act No.  6758,  as amended,  Joint Resolution No.  4,  the provisions of any other
law,  special  charters,  executive  orders,  administrative  orders,  proclamations,  rules  and  regulations
issued pursuant to Executive Order No. 81, as amended, or parts thereof, or any other laws, rules and
regulations  which may be  inconsistent with  any  of the provisions  of this  Act,  are  hereby amended
accordingly.
13


Executive Order No. 81, as amended, is hereby repealed.
SEC. 32. EJrecf!.vz.ty. -This Act shall take effect fifteen ( 15) days after its publication in the
Official Gazette or in a newspaper of general circulation in the Philippines.
Approved'
14