• 
SENATE OF THE PHILIPPINES 
SIXTEENTH CONGRESS 
First Regular Session 
) 
) 
) 
SENATE 
Senate Bill No. _---..11 ...... 8....,5 
......... 2 
,~prlll! " 
, (~H,;r uf ttl,:;m,joru 
'13 
OCT 16 All:O 3 
Introduced by SENATOR JOSEPH VICTOR G. EJERCITO 
EXPLANATORY NOTE 
Since Republic Act No. 7653, otherwise known as the New Central Bank 
Act, was enacted in 1993, there have been dramatic developments in the banking 
environment brought about by automation, technology, globalization and the 
influence of best practices, on one hand, and by some structural weaknesses on 
the other hand, which may have abetted or tolerated instances of unsafe and 
unsound practices, poor governance, or even fraud. 
The amendments 
hereby being proposed 
seeks 
to 
enhance 
the 
administration of the monetary, credit and banking system of the Republic by, 
among other things, affirming the authority of the Bangko Sentral to administer 
the payments and settlement systems. This will promote the safe, reliable ar;td 
final settlement of financial transactions thereby contributing to good economic 
order. 
This measure will be complemented by the proposed supervisory powers of 
the Bangko Sentral which will oblige transparency in the disclosure of bank 
ownerships; subject the bank owners to the fit and proper test, and compel 
restructuring and rehabilitation of distressed banks. To address early the 
commission of frauds and regularities, it is also proposed that the authority of 
the examiners to access deposit accounts, which was granted before and was 
exercised without abuse, be restored. 
The Bangko Sentral should also be able to function as a more responsive 
organization. Towards this end, its officials and personnel should be granted the 
same legal protection given to the PDIC under Republic Act No. 9576. It should 
be able to access data from any person or entity in the Philippines, similar to 
what was enjoyed before by the defunct Central Bank of the Philippines, for 
completion of information and efficiency in the formulation of monetary policy. As 
an institution performing governmental functions, the Bangko Sentral should 
also be exempted from taxation. 
~ 
Approval of this bill is therefore earnestly sou~ 
JOSEPH VICTOR G. EJERCITO 
\ 
\ 
\ \ 


SENATE OF THE PHILIPPINES 
SIXTEENTH CONGRESS 
First Regular Session 
) 
) 
) 
SENATE 
Senate Bill No. 
1852 
'13 
OCT 16 All :03 
Introduced by SENATOR JOSEPH VICTOR G. EJERCITO 
AN ACT 
'STRENGTHENING FURTHER THE REGULATORY POWERS OF THE BANGKO 
SENTRAL NG PILIPINAS, AMENDING FOR THE PURPOSE REPUBLIC ACT NO. 
7653, ENTITLED "THE NEW CENTRAL BANK ACT," AND FOR OTHER 
PURPOSES 
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled: 
SECTION 1. Section 3 of Republic Act No. 7653 is hereby amended to read 
as follows: 
"SEC. 3. Responsibility and Primary Objective. - The Bangko 
Sentral shall provide policy directions in the areas of money, banking, and credit. 
It shall have supervision over the operations of banks and exercise such 
regulatory powers as provided in this Act and other pertinent laws over the 
operations of finance companies and non-bank financial institutions performing 
quasi-banking functions, hereafter referred to as quasi-banks and institutions 
performing similar functions. 
The primary objective of the Bangko Sentral is to maintain price stability 
conducive to a balanced and sustainable growth of the economy. It shall also 
promote 
and maintain monetary stability and the convertibility of the peso. 
IT SHALL LIKEWISE PROMOTE, OVERSEE, AND MAINTAIN THE STABILITY 
OF THE 
FINANCIAL AND PAYMENTS SYSTEMS OF THE COUNTRY IN 
ACCORDANCE WITH INTERNATIONALLY ACCEPTED PRINCIPLES. TOWARDS 
THIS 
END, 
THE 
BANGKO 
SENTRAL SHALL 
ISSUE 
AND 
ENFORCE 
APPROPRIATE REGULATIONS." 
SEC. 2. 
follows: 
Section 11 of the same Act IS hereby amended to read as 
"SEC. 11. 
Meetings. - The Monetary Board shall meet at least once 
a week. 
The Board may be called to a meeting by the Governor of the Bangko 
Sentral or by two (2) other members of the Board. 


The presence of four (4) members shall constitute a quorum: 
Provided, That in all cases the Governor or his duly designated alternate shall be 
among the four (4). 
Unless otherwise provided in this Act, all decisions of the Monetary 
Board shall require the concurrence of at least four (4) members. THE MEETING 
OF THE MONETARY BOARD MAY BE CONDUCTED THROUGH THE USE OF 
MODERN 
TECHNOLOGY 
INCLUDING, 
BUT 
NOT 
LIMITED 
TO, 
TELECONFERENCING OR VIDEO CONFERENCING. 
The Bangko Sentral shall maintain and preserve a complete record of the 
proceedings and deliberations of the Monetary Board, including the tapes and 
transcripts of the stenographic notes, either in their original form or in 
microfilm. " 
SEC. 3. 
Section 15, paragraphs (b) and (e) of the same Act is hereby 
amended to read as follows: 
"SEC. 15. Exercise of Authority. - In the exercise of its authority, the 
Monetary 
Board shall: 
Bangko 
a) 
XXX 
b) 
direct the management, operations, and administration of the 
Sentral, reorganize its personnel, PROVIDE SEPARATION BENEFITS 
WHENEVER NECESSARY, and issue such rules and regulations as it may 
deem necessary or convenient for this purpose. The legal units of Bangko Sentral 
shall be 
under the exclusive supervision and control of the Monetary Board; 
c) 
XXX 
XXX 
XXX 
d) 
XXX 
XXX 
XXX 
e) 
indemnify its members and other [officials] PERSONNEL of the 
Bangko Sentral, [including personnel of the departments performing supervision 
and examination functions] against all costs and expenses reasonably incurred 
by such 
persons in connection with any civil or criminal action, suit or 
proceedings to 
which he may be, or is, made a party by reason of the 
performance of his functions or 
duties, unless he is finally adjudged in such 
action or proceeding to be liable for BAD FAITH, MALICE, GROSS negligence or 
GROSS misconduct. 
In the event of a settlement or compromise, indemnification shall be 
provided 
only in connection with such matters covered by the settlement as to 
which the Bangko Sentral is advised by external counsel that the person to be 
indemnified [did not commit any] HAD NOT ACTED WITH BAD FAITH, MALICE, 
GROSS 
negligence or GROSS misconduct. 
The costs and expenses incurred in defending the aforementioned action, 
suit or proceeding may be paid by the Bangko Sentral in advance of the final 
disposition of such action, suit or proceeding upon receipt of an undertaking by 
or on behalf of 
the member, [officer, or employee] AND OTHER PERSONNEL 
.to repay the amount 
advanced should it ultimately be determined by the 
Monetary Board that he is not entitled to be indemnified as provided in this 


subsection ON ACCOUNT OF BAD FAITH, MALICE, GROSS NEGLIGENCE OR 
GROSS MISCONDUCT." 
SEC. 4. 
follows: 
Section 16 of the same Act is hereby amended to read as 
"SEC. 16. Responsibility. - THE GENERAL RULE AND THE 
EXCEPTION THEREFROM ON THE LIABILITY OF PUBLIC OFFICERS AS 
PROVIDED IN SECTIONS 38 
AND 39 OF CHAPTER 9, BOOK 1 OF THE 
REVISED ADMINISrrRATIVE CODE OF 1987 SHALL APPLY TO members of the 
Monetary Board 
[, 
officials, 
examiners, 
and 
employees] 
AND 
OTHER 
PERSONNEL of the Bangko Sentral [who willfully violate this Act or who are guilty 
of negligence, abuses or acts of malfeasance or misfeasance or fail to exercise 
extraordinary diligence in the performance of his duties shall be held liable for 
any loss or injury suffered by the Bangko Sentral or other banking institutions 
as a result of such violation, negligence, abuse, malfeasance, misfeasance or 
failure to exercise extraordinary diligence]. 
Similar responsibility shall apply to members, officers, and employees 
of the Bangko Sentral for: (1) the disclosure of any information of a confidential 
nature, or any information on the discussions or resolutions of the Monetary 
Board, or about the confidential operations of the Bangko Sentral, unless the 
disclosure is in connection with the performance of official functions with the 
Bangko Sentral, or is with prior authorization of the Monetary Board or the 
Governor; or (2) the use of such information for personal gain or to the detriment 
of the Government, the Bangko Sentral or third parties: Provided, however, That 
any data or information required to be submitted to the President and/or the 
Congress, or to be published under the provisions of this Act shall not be 
considered confidential." 
"THE FOREGOING NOTWITHSTANDING, UNLESS THE ACTION OF 
THE BANGKO SENTRAL OR ANY OF ITS OFFICIALS AND EMPLOYEES ARE 
FOUND TO BE 'IN WILLFUL VIOLATION OF THIS ACT OR PERFORMED IN 
BAD FAITH, WITH MALICE AND/OR GROSS NEGLIGENCE, THE BANGKO 
SENTRAL, ITS OFFICIALS, EMPLOYEES AND AGENTS ARE HELD FREE AND 
HARMLESS TO THE FULL EXTENT PERMITTED BY LAW FROM ANY 
LIABILITY AND SHALL BE INDEMNIFIED FOR ANY AND ALL LIABILITIES, 
CLAIMS DEMANDS, DAMAGES, DEFICIENCIES, COSTS AND 
EXPENSES OF 
~::~~~~6~~~~~ ~~T~'ii~~~~~:~::'; ARISE IN CONNECTION WI~H 
SEC. 5. 
follows: 
Section 21 of the same Act is hereby amended to read as 
"SEC. 21. Deputy Governors. - The Governor of the Bangko Sentral, 
with the 
approval of the Monetary Board, shall appoint not more than [three 
(3)] FIVE (5) Deputy Governors who shall perform duties as may be assigned to 
them by the Governor and the Board. 
In the absence of the Governor, a Deputy Governor designated by the 
Governor shall act as chief executive of the Bangko Sentral and shall exercise the 
powers and perform the duties of the Governor. Whenever the Government is 
unable to attend meetings of government boards or councils in which he is an ex 
officio member pursuant to provisions of special laws, a Deputy Governor as may 


be 
designated by the Governor shall be vested with authority to participate 
and exercise 
the right to vote in such meetings." 
SEC. 6. 
follows: 
Section 23 of the same Act is hereby amended to read as 
"SEC. 23. Authority to Obtain Data and Information. - The 
Bangko Sentral 
shall have the authority to [request] REQUIRE from ANY 
PERSON OR ENTITY, INCLUDING government offices and instrumentalities, or 
government-owned or 
controlled corporations, any data [which it may require 
for the proper discharge of 
its] 
PERTAINING 
TO 
THE 
functions 
and 
responsibilities OF THE BANGKO 
SENTRAL. The Bangko Sentral through the 
Governor or in his absence, a duly authorized representative shall have the 
power to issue a subpoena for the production 
of the books and records for the 
aforesaid purpose. Those who refuse the subpoena 
without justifiable cause, 
or who refuse to supply the bank with data [requested or] 
required, 
shall 
be 
subject to punishment for contempt in accordance with the provisions 
of 
the 
Rules of Court. 
. 
Data on individual firms, other than banks, gathered by the 
Department of 
Economic Research and other departments or units of the 
Bangko Sentral shall not be 
made available to any person or entity outside of 
the Bangko Sentral whether public or private except under order of the court or 
under such conditions as may be prescribed by the Monetary Board: Provided, 
however, That the collective data on firms may be released to interested persons 
or entities: Provided, finally, That in the case of data on banks, the provisions of 
Section 27 of this Act shall apply." 
SEC. 7. 
follows: 
Section 25 of the same Act is hereby amended to read as 
"SEC. 25. Supervision and Examination. - The Bangko Sentral 
shall have supervision over, and conduct periodic or special examinationss of 
banking institutions and quasi-banks, including their subsidiaries and affiliates 
engaged in allied activities. IN ADDITION TO SUCH OTHER AUTHORITY 
GRANTED BY LAW, PRIOR APPROVAL BY THE BANGKO SENTRAL SHALL BE 
REQUIRED FOR TRANSFERS OR ACQUISITIONS OF SHARES OF STOCK IN 
BANKS OR QUASI-BANKS WHERE ANY SUCH TRANSFER OR ACQUISITION 
OR SERIES OF TRANSFERS OR ACQUISITIONSWOULD BE SUFFICIENT TO 
ELECT AT LEAST ONE SEAT IN THE BOARD OF DIRECTORS OR WOULD 
EFFECT A CHANGE IN THE MAJORITY OWNERSHIP OR CONTROL OF THE 
VOTING STOCK IN ANY OF THESE INSTITUTIONS. SUCH TRANSFER OR 
ACQUISITION SHALL BE SUBMITTED TO THE BANGKO SENTRAL FOR 
APPROVAL BY THE SELLING OR CONVEYING STOCKHOLDER WITHIN SUCH 
PERIOD AS MAY BE PRESCRIBED BY THE MONETARY BOARD BY 
REGULATION. PRIOR TO SUCH APPROVAL, NO SUCH TRANSFER OR 
ACQUISITION SHALL HAVE LEGAL EFFECT NOR SHALL THE SAME BE 
RECOGNIZED 
IN THE BOOKS OF THE INSTITUTION NOR BY ANY 
GOVERNMENT AGENCY AND THE TRANSFEROR-STOCKHOLDERS, IN 
CASES INVOLVING TRANSFERS, SHALL REMAIN ACCOUNTABLE AND 
RESPONSIBLE 
THEREFOR. 
IN 
APPROVING 
SAID 
TRANSFERS 
OR 
ACQUISITIONS, REGARD SHALL BE GIVEN BY THE BANGKO SENTRAL TO 
THE FITNESS OF THE INCOMING STOCKHOLDERS AS MAY BE INDICATED 
IN THEIR INTEGRITY AND FINANCIAL CAPACITY. 


For purposes of this section, a subsidiary means a corporation more than 
fifty 
percent (50%) of the voting stock of which is owned DIRECTLY OR 
INDIRECTLY 
by a bank or quasi-bank and an affiliate means a corporation 
the voting stock of 
which, to the extent of fifty percent (50%) or less, is 
owned by a bank or quasi-bank 
or which is related or linked to such 
institution or intermediary through common 
stockholders 
or 
such 
other 
factors as may be determined by the Monetary Board. 
CONTROL EXISTS WHEN THE PARENT INSTITUTION OWNS DIRECTLY 
OR INDIRECTLY MORE THAN ONE HALF OF THE VOTING 
STOCK OF AN 
ENTERPRISE. CONTROL MAY ALSO EXIST EVEN WHEN THE 
PARENT 
INSTITUTION OWNS ONE HALF OR LESS OF THE VOTING 
STOCK OF AN 
ENTERPRISE WHEN THERE IS: 
A) 
POWER OVER MORE THAN ONE HALF OF THE VOTING RIGHTS 
BY VIRTUE OF AN AGREEMENT WITH OTHER INVESTORS; OR 
B) 
POWER 
TO 
GOVERN 
THE 
FINANCIAL 
AND 
OPERATING 
POLICIES 
OF 
THE 
ENTERPRISE 
UNDER 
A 
STATUE 
OR 
AN 
AGREEMENT; OR 
C) 
POWER TO APPOINT OR REMOVE THE MAJORITY OF THE 
MEMBERS OF THE BOARD OF DIRECTORS; OR 
D) 
POWER TO CAST THE MAJORITY OF VOTES AT MEETINGS OF 
THE BOARD OF DIRECTORS; OR 
E) 
OTHER ARRANGEMENTS SIMILAR TO ANY OF THE ABOVE. 
The department heads and the examiners of the supervising and/or 
.examining departments are hereby authorized to administer oaths to any 
director, officer, or 
employee of any institution under their respective 
supervision or subject to their 
examination and to compel the presentation 
of all books, documents, papers or records necessary in their judgment to 
ascertain the facts relative to the true condition of any institution as well as the 
books and records of persons and entities relative to or in connection with the 
operations, activities or transactions of the institution 
under 
examination, 
[subject to the provision of] INCLUDING, ONLY FOR EXAMINATION 
PURPOSES, DEPOSIT AND INVESTMENT ACCOUNTS, NOTWITHSTANDING 
.existing laws protecting or safeguarding the secrecy or confidentiality of bank 
deposits as well as investments of private persons, natural or juridical, in debt 
instruments issued by the Government. 
No restraining order or injunction shall be issued by the court enjoining the 
Bangko Sentral from examining any institution subject to supervision or 
examination by the Bangko Sentral, unless there is convincing proof that the 
action of the Bangko 
Sentral is plainly arbitrary and made in bad faith and the 
petitioner or plaintiff files with the clerk or judge of the court in which the action 
is pending a bond executed in favor of the Bangko Sentral, in an amount to be 
fixed by the court. The provisions of Rules 58 of the New Rules of Court insofar as 
they are applicable and not inconsistent with the provisions of this section shall 
govern the issuance and dissolution of the restraining order or injunction 
contemplated in this section." 
SEC. 8. 
follows: 
Section 30 of the same Act is hereby amended to read as 


"SEC. 30. Proceedings in Receivership (lnd Uquidation. -
Whenever, upon report of the head of the supervising or examining department, 
the Monetary Board 
finds that a bank or quasi-bank: 
a) 
is unable to pay its liabilities as they become due in the 
ordinary course 
of business: Provided, That this shall not include inability to 
pay caused by 
extraordinary demands induced by financial panic in the 
banking community; 
b) 
has insufficient realizable assets, as determined by the Bangko 
Sentral, 
to meet its liabilities; or 
c) 
cannot continue in business without involving probable losses 
to its depositors or creditors; or 
d) 
has willfully violated a cease and desist order under Section 37 
that has 
become final, involving acts or transactions which amount to fraud or 
Ii dissipation of 
the assets of the institution; in which cases, the Monetary 
Board may summarily and 
without need for prior hearing forbid the institution 
from doing business in the 
Philippines and designate the Philippine Deposit 
~nsurance Corporation as receiver of the banl!:ing institution. 
For a quasi-bank, any person of recognized competence III banking or 
finance may be designed as receiver. 
The receiver shall immediately gather and take charge of all the assets and 
liabilities of the institution, administer the same for the benefit of its creditors, 
and exercise the general powers of a receiver under the Revised Rules of Court 
but shall not, with the exception of administrative expenditures, payor commit 
any act that will involve the transfer or disposition of any asset of the institution: 
Povided, That the receiver may deposit or place the funds of the institution in 
non-speculative investments. The receiver shall determine as soon as possible, 
but not later than ninety (90) days from take over, whether the institution may be 
rehabilitated or otherwise placed in such a condition so that it may be permitted 
to resume business with safety to its depositors and creditors and the general 
public: Provided, That any determination for the resumption of business of the 
institution shall be subject to prior approval of the Monetary Board. 
IN ORDER TO REHABILITATE THE CLOSED INSTITUTION OR TO 
RESTORE 
ITS 
OPERATIONS 
WITH 
SAFETY 
TO 
ITS 
DEPOSITORS, 
CREDITORS AND THE GENERAL PUBLIC, OR TO MERGE OR CONSOLIDATE 
THE CLOSED INSTITUTION WITH ANOTHER QUALIFIED INSTITUTION, THE 
RECEIVER MAY IMMEDIATELY TRANSFER OR DISPOSE OF ANY OR ALL OF 
THE ASSETS OF THE CLOSED INSTITUTION AND PERFORM SUCH OTHER 
ACTS AS MAY BE AUTHORIZED BY LAW. 
If the receiver determines that the institution cannot be rehabilitated or 
permitted to resume business in accordance with the next preceding paragraph 
OF 
THE SECTION, the Monetary Board shall notify in writing the board of 
directors of its findings and direct the receiver to proceed with the liquidation of 
the institution. 
The receiver shall: 
, 
1) 
file ex parte with the proper regional trial court, and without 
requirement of prior notice or any other action, a petition for assistance in the 
liquidation of the institution pursuant to a liquidation plan adopted by the 


Philippine Deposit Insurance Corporation for general application to all closed 
banks. In case of quasi-banks, the liquidation plan shall be adopted by the 
Monetary Board. Upon acquiring jurisdiction, the court shall, upon motion by 
the receiver after due notice, adjudicate disputed claims against the institution, 
assist the enforcement of individual liabilities of the stockholders, directors and 
officers, and decide on other issues as may be material to implement the 
liquidation plan adopted. The receiver shall pay the cost of the proceedings from 
the assets of the institution. 
2) 
convert the assets of the institutions to money, dispose of the same to 
creditors and other parties, for the purpose of paying the debts of such institution 
in accordance with the rules on concurrence and preference of credit under the 
Civil Code of the Philippines and he may, in the name of the institution, and 
with the assistance of counsel as he may retain, institute such actions as may be 
necessary to collect and recover accounts and assets of, or defend any action 
against, the institution. The assets of an institution under receivership or 
liquidation shall be deemed in custodia legis in the hands of the receiver and 
shall, from the moment the institution was placed under such receivership or 
liquidation, be exempt from any order of garnishment, levy attachment, or 
execution. 
The actions of the Monetary Board taken under this section or under 
Section 29 of this Act shall be final and executory, and may not be restrained or 
set aside by the court except on petition for certiorari on the ground AND UPON A 
FINDING AFTER DUE HEARING that the action taken was in excess of 
jurisdiction or with such grave abuse of discretion as to amount to lack or excess 
of jurisdiction: PROVIDED, HOWEVER, THAT ANY ORDER RESTRAININ~, 
ENJOINING OR SETTING ASIDE THE ACTION COMPLAINED OF IN THE 
PETITION FOR CERTIORARI, MAY ONLY BE ISSUED BY THE COURT OF 
APPEALS, BUT 
MAY BE DISSOLVED OR STAYED UPON BY THE BANGKO 
SENTRAL FILING 
A WRITTEN UNDERTAKING THAT IT WILL PAY ALL 
DAMAGES WHICH THE PETITIONERR MAY SUFFER FROM THE DENIAL, 
DISSOLUTION OR STAY OF THE INJUNCTION SHOULD IT BE DECIDED 
IN 
A FINAL JUDGMENT THAT THE PETITIONER IS ENTITLED TO HAVE THE 
ACTS COMPLAINED OF PERMANENTLY ENJOINED. The petition for certiorari 
may only be filed by the stockholders of record representing the majority of the 
capital stock within ten (10) days from receipt by the board of directors of the 
institution of the order directing receivership, liquidation or conservatorship. THE 
PROVISIONS OF RULE 58 OF THE 1997 RULES ON CIVIL PROCEDURE IN SO 
FAR AS THEY ARE APPLICABLE AND NOT INCONSISTENT WITH THE 
PROVISIONS OF THIS SECTION SHALL GOVERN THE ISSUANCE AND 
DISSOLUTION 
OF 
THE 
RESTRAINING 
ORDER 
OR 
INJUNCTION 
CONTEMPLATED IN THIS SECTION. 
The designation of a conservator under Section 29 of this Act or the 
appointment of a receiver under this section shall be vested exclusively with the 
Monetary Board. Furthermore, the designation of a conservator is not a 
precondition to the designation of a receiver. 
THE AUTHORITY OF THE MONETARY BOARD TO PLACE A BANK OR 
QUASI-BANK UNDER RECEIVERSHIP AS PROVIDED ABOVE MAY ALSO BE 
EXERCISED OVER NON-STOCK SAVINGS AND LOAN ASSOCIATIONS, BASED 


ON THE SAME APPLICABLE GROUNDS, FOR THIS PURPOSE, ANY PERSON 
OF RECOGNIZED COMPE'r)<~NCE IN BANKING, 
CR.EDI~t AND 
F'INANCE 
MAY BE DESIGNATED AS RECEIVER." 
SEC. 9. 
A new section designated as Section 30-A is hereby inserted 
between Section 30 and Section 31 of the same Act to read as follows: 
' 
"SEC. 30-A. 
WHENEVER UPON THE REPORT OF THE HEAD OF 
THE SUPERVISING AND EXAMINING DEPARTMENT, THE MONETARY 
BOARD FINDS THAT THE ADJUSTED CAPITAL ACCOUNTS OF A BANK OR 
QUASI-
BANK IS LOWER THAN THE MINIMUM CAPITAL REQUIRED 
UNDER EXISTING RULES AND REGULATIONS, OR IT HAS A CAPITAL 
ADEQUACY RATIO LOWER THAN THE MINIMUM RATIO PRESCRIBED 
UNDER EXISTING REGULATIONS, THE MONETARY BOARD SHALL HAVE 
THE AUTHORITY TO DIRECT THE EXISTING STOCKHOLDERS OF SAID 
BANK OR QUASI-BANK TO INFUSE CAPITAL WITHIN A PERIOD NOT 
EXCEEDING NINETY (90) DAYS FROM THE DATE OF THE DIRECTIVE IN 
SUCH AMOUNT AS MAY BE NECESSARY TO RESTORE THE ENTITY'S 
CAPITAL TO THE MINIMUM REQUIRED AMOUNT OR RATIO IN CASE OF 
INABILITY OR UNWILLINGNESS OF THE STOCKHOLDERS TO INFUSE THE 
REQUIRED AMOUNT OF ADDITIONAL CAPITAL WITHIN THE PRESCRIBED 
PERIOD, THE MONETARY BOARD MAY DIRECT SAID BANK 
OR 
QUASI-
BANK TO ACCEPT INVESTMENTS FROM QUALIFIED THIRD PARTIES OR TO 
MERGE OR CONSOLIDATE WITH A QUALIFIED FINANCIAL INSTITUTION. 
THE MONETARY BOARD MAY ALSO AUTHORIZE OR ORDER THE 
EXISTING STOCKHOLDERS OF THE CONCERNED ENTITY TO EFFECT A 
QUASI-REORGANIZATION OF SAID ENTITY TO REFLECT THE FAIR VALUE 
OF ITS CAPITAL." 
SEC. 10. Section 36 and Section 37 of the same Act are hereby amended to 
read as follows: 
"SEC .• 36. Proceedings Upon Violation of This Act and Other Banking 
Laws, Rules, Regulations,Orders or Instructions. - Whenever a bank, [or] 
quasi-bank, OR OTHER FINANCIAL INSTITUTION WHICH UNDER THIS ACT 
OR SPECIAL LAWS IS SUBJECT TO BANGKO SENTRAL SUPERVISION or 
whenever any person or entity willfully violates this Act or other pertinent 
banking laws being enforced or implemented by the Bangko Sentral or any order, 
instruction, rule or regulation issued by the Monetary Board, the person or 
persons responsible for such violation shall unless otherwise provided in this Act 
be punished by a fine of not less 
than Fifty thousand pesos (P 50,000) nor 
more than [Two hundred thousand pesos (P 
200,000)] TWO MILLION PESOS 
(P 2,000,000.00) or by imprisonment of not less 
than two 
(2) 
years 
nbr 
more than ten (10) years, or both, at the discretion of the 
court. 
Whenever AN ENTITY UNDER BANGKO SENTRAL SUPERVISION [a bank 
or quasi-bank] persists in carrying on its business in an unlawful or unsafe 
·manner, the Board may, without prejudice to the penalties provided in the 
preceding 
paragraph of this section and the administrative sanctions provided 
in Section 37 of this Act, take action under Section 30 of this Act." 


"SEC. 37. Administrative Sanctions [on Banks and Quasi-banks. -
Without prejudice to the criminal sanctions against the culpable persons 
provided in Section 34, 35, and 36 of this Act, the Monetary Board may, at its 
discretion, impose upon any bank or quasi-bank, 
INCLUDING THEIR 
SUBSIDIARIES AND AFFILIATES ENGAGED IN ALLIED ACTIVITIES, 
OR 
OTHER INSTITUTIONS WHICH UNDER SPECIAL LAWS ARE SUBJECT TO 
THE BANGKO SENTRAL SUPERVISION, their directors and/or officers, for any 
willful violation of its charter or by-laws, willful delay in the submission of reports 
or publications thereof as required by law, rules and regulations; any refusal to 
permit examination into the affairs of the institution; any willful making of a false 
or misleading statement to the Board or the appropriate supervising and 
examining department or its examiners; any willful failure or refusal to comply 
with , or violation of, anybanking law or any order, instruction or regulation 
issued by the Monetary Board, or 
any order, instruction or ruling by the 
Governor; or any commission of irregularities, 
and/or conducting business in 
an unsafe or unsound manner as may be determined by the Monetary Board, the 
following administrative sanctions, whenever applicable: 
a) fines in amounts as may be PRESCRIBED AND determined by the 
Monetary Board to be appropriate. [but in no case to exceed Thirty thousand 
pesos (P 
30,000) a day for each violation, taking into consideration the 
attendant circumstances, such as the nature and gravity of the violation or 
irregularity and the 
size of the bank or quasi-bank;] THE MONETARY 
BOARD SHALL, BY 
REGULATION, DEFINE SERIOUS OR GRAVE, LESS 
SERIOUS OR 
LESS 
GRAVE, 
AND 
MINOR 
OFFENSES 'fAKING 
INTO 
CONSIDERATION THE ATTENDANT CIRCUMSTANCES, 
SUCH AS THE 
NATURE AND GRAVITY OF THE VIOLATION OR IRREGULARITY AND THE 
SIZE OF THE 
INSTITUTION AND PRESCRIBE THE FINES THEREFOR 
THAT MAY BE 
IMPOSED FOR EACH DAY OF VIOLATION OR ON A PER 
TRANSACTION 
BASIS; 
PROVIDED, 
THAT 
WILLFUL 
VIOLATIONS 
AND 
IRREGULARITIES 
MAY 
BE 
AUTOMATICALLY 
CONSIDERED 
BY 
THE 
MONETARY BOARD AS SERIOUS OR GRAVE REGARDLESS OF THEIR 
EFFECT TO THE FINANCIAL CONDITION OF THE INSTITUTION: PROVIDED, 
FURTHER, 
THAT 
WITHOUT 
PREJUDICE 
TO 
THE 
IMPOSITION 
OF 
APPLICABLE SANCTION TO THE INSTITUTION THAT COMMITTED A 
SPECIFIC VIOLATION OR IRREGULARITY, THE MONETARY BOARD MAY 
ALSO IMPOSE SANCTIONS TO ITS PARENT UNIVERSAL OR COMMERCIAL 
BANKS IF THERE IS 
EVIDENCE 
THAT 
SAID 
PARENT 
INSTITUTION 
ABETTED THE 
COMMISSION OF THE VIOLATION OR IRREGULARITY OR 
DID NOT 
EXERCISE REASONABLE MEANS TO PREVENT THE SAME. 
b) 
suspension of rediscounting privileges or access to Bangko Sentral 
credit facilities; 
c) 
suspension of lending or foreign exchange operations or authority to 
accept new deposits or make new investments; 
d) 
suspension of interbank clearing privileges; [and/or] 
e) 
revocation of quasi-banking license[.]; 
f) 
REVOCATION OF TRUST LICENSE; 
g) 
PROHIBITION FROM DECLARING CASH DIVIDENDS; 
h) 
CONFISCATION BY AND FORFEITURE IN FAVOR OF THE 
BANGKO SENTRAL OF ANY AND 
ALL 
PROFITS, 
AS MAY 
BE 


DETERMINED 
BY THE MONETARY BOARD, ARISING FROM THE OFFENSE 
OR 
VIOLATION OF BANKING LAWS, RULBS AND REGULATIONS; AND 
il 
OTHER SANCTIONS AS THE MONETARY BOARD MAY DEEM 
APPROPRIATE UNDER THE CIRCUMSTANCES. 
THE DIRECTOR OR OFFICER RESPONSIBLE FOR THE VIOLATION 
MAY, AFTER DUE PROCESS, BE SUSPENDED, REMOVED OR DISQUALIFIED 
FROM HOLDING OFFICE, OR ANY POSITION, IN AN INSTITUTION UNDER 
THE SUPERVISION OF THE BANGKO SENTRAL, FOR A PERIOD TO BE 
DETERMINED BY THE MONETARY BOARD, TAKING INTO CONSIDERATION 
THE ATTENDANT CIRCUMSTANCES, SUCH AS THE NATURE AND GRAVITY 
OF THE ACT OR OMISSION AND THE SIZE OF THE INSTITUTION. 
Resignation or termination from office shall not exempt such director or 
officer from administrative or criminal sanctions. 
The Monetary Board may, whenever warranted by circumstances, 
preventively suspend any director or officer of [a bank or quasi-bank] THE 
INSTITUTION pending an investigation: Provided, That should the case be not 
finally decided by the Bangko Sentral within a period of one hundred twenty (120) 
days after the date of suspension, said director or officer shall be reinstated in his 
position: Provided, further, That when the delay in the disposition of the case is 
due 
to the fault, negligence or petition of the director or officer, the period of 
delay shall not be counted in computing the period of suspension herein 
provided. 
The above administrative sanctions need not be applied in the order of their 
severity. 
Whether or not there is an administrative proceeding, if the institution 
and/ or the directors and/ or officers concerned continue with or otherwise persist 
in the commission of the indicated practice or violation, the Monetary Board may 
issue an order requiring the institution and/ or the directors and/ or officers 
concerned to cease and desist from the indicated practice or violation, and may 
further order that immediate action be taken to correct the conditions resulting 
from such practice or violation. The cease and desist order shall be immediately 
effective upon service on the respondents. 
The respondents shall be afforded an opportunity to defend their action in a 
hearing before the Monetary Board or any committee chaired by any Monetary 
Board member created for the purpose, upon request made by the respondents 
within five (5) days from their receipt of the order. If no such hearing is 
requested within said period, the order shall be final. If a hearing is conducted, 
all issues shall be determined on the basis of records, after which the Monetary 
Board may either reconsider or make final its order. 
The Governor is hereby authorized, at his discretion, to impose upon 
[banking institutions,] 
BANKS 
AND 
QUASI-BANKS, 
INCLUDING 
THEIR 
. SUBSIDIARIES AND AFFILIATES ENGAGED IN ALLIED ACTIVITIES, AND 
OTHER FINANCIAL INSTITUTIONS WHICH UNDER SPECIAL LAWS ARE 
SUBJECT TO BANGKO SENrRAL SUPERVISION for any failure to comply with 


the requirements of law, Monetary Board regulations and policies, and/or 
instructions issued by the Monetary Board or by the Governor, fines not in excess 
of [Ten Thousand pesos (P 10,000) a] ONE HUNDRED THOUSAND PESOS (P 
100,000.00) PER BANKING day for each violation, the imposition of which shall 
be final and executory until reversed, modified or lifted by the Monetary Board on 
appeal." 
SEC. 11. 
follows: 
Section 63 of the same Act IS hereby amended to read as 
"SEC. 63. Action When 
Abnonnal Movements Occur in the Monetary 
Aggregates, Credit, or Price 
Level. - Whenever abnormal movements in the 
monetary aggregates, in credit, or in prices endanger the stability of the 
Philippine economy or important sectors thereof, the Monetary Board shall: 
a) 
take such remedial measures as are appropriate and within the 
powers 
granted to the Monetary Board and the Bangko Sentral under the 
provisions of this Act; and 
b) 
submit to the President of the Philippines and the Congress, and 
make 
public, a detailed report which shall include, as a minimum, a 
description and 
analysis of: 
1) 
the causes of the rise or fall of the monetary aggregates, of credit or 
of prices; 
2) 
the extent to which the changes in the monetary aggregates, in credit, 
or in prices have been reflected in changes in the level of domestic output, 
employment, wages and economic activity in general, and the nature and 
significance of any such changes; and 
3) 
the measures which the Monetary Board has taken and the other 
monetary, fiscal or administrative measures which it recommends to be adopted. 
[Whenever the monetary aggregates, or the level of credit, increases or 
decreases by more than fifteen percent (15%), or the cost of living index increases 
by more than ten percent (10%), in relation to the level existing at the end of the 
corresponding month of the preceding year, or even though any of these 
quantitative guidelines have not been reached when in its judgment the 
circumstances so warrant, the Monetary Board shall submit the reports 
. mentioned in this section, and shall state therein whether, in the opinion of the 
Board, said changes in the monetary aggregates, credit or cost of living represent 
a threat to the stability of the Philippine 
economy 
or 
of important 
sectors 
thereof.] 
The Monetary Board shall continue to submit periodic reports to the 
President 
of the Philippines and to Congress until it considers that the 
monetary, credit or price 
disturbances have disappeared or have been 
adequately controlled." 
SEC. 12. 
follows: 
Section 83 of the same Act is hereby amended to read as 
"SEC. 83. Loans for Liquidity Purposes. - The 
Bangko Sentral may 
extend loans and advances to banking AND QUASI-BANKING institutions for a 


period of 
not more than seven (7) days without any collateral for the purpose 
of providing 
liquidity to the banking system in times of need." 
SEC. 13. 
A new section designated as Section 88-A is hereby inserted 
between Section 88 and Section 89 of the same Act to read as follows: 
"SEC. 88-A. 
EXEMPTION FROM ATTACHMENT. - THE PROVISIONS 
OF ANY LAW TO THE CONTRARY NOTWITHSTANDING AND SECTION 31 OF 
THIS ACT, COLLATERALS ON LOANS AND ADVANCES GRANTED BY THE 
BANGKO SENTRAL TO BANKING INSTITUTIONS SHALL NOT BE SUBJECT TO 
ATTACHMENT, EXECUTION OR ANY OTHER COURT PROCESS, NOR SHALL 
THEY BE INCLUDED IN THE PROPERTY OF INSOLVENT PERSONS OR 
INSTITUTIONS, UNLESS ALL DEBTS AND OBLIGATIONS OF THE BANKING 
INSTITUTIONS TO THE 
BANGKO SENTRAL, WHETHER REGISTERED OR 
NOT, HAVE BEEN PAID, INCLUDING ACCRUED INTEREST, PENALTIES, 
COLLECTION EXPENSES, AND OTHER CHARGES." 
SEC. 14. 
A new section designated as Section 89-A is hereby inserted 
between Section 89 and Section 90 of the same Act to read as follows: 
"SEC. 89-A. CREDIT FACILITIES FOR ISLAMIC BANKS. - THE BANGKO 
SENTRAL 
MAY, 
TAKING 
INTO 
CONSIDERATION 
THE 
PECULIAR 
CHARACTERISTICS OF ISLAMIC 
BANKING, 
FORMULATE RULES AND 
REGULATIONS FOR THE EXTENSION OF REDISCOUNTING OR OTHER 
SIMILAR FACILITIES TO ISLAMIC BANKS." 
SEC. 15. 
Section 92 of the same Act is hereby amended to read as 
follows: 
"SEC. 92. Issue and Negotiation of Bangko Sentral Obligations. - In 
order to provide the Bangko Sentral with effective instruments for open market 
operations, the Bangko Sentral may, subject to such rules and regulations as the 
Monetary Board may prescribe and in accordance with the principles stated 'in 
Section 90 of this Act, 
issue, place, buy and sell freely negotiable evidences of 
indebtedness of the Bangko Sentral[: Provided, That issuance of such certificates 
of indebtedness shall be made only in cases of extraordinary movement in price 
level[s]. Said evidences of indebtedness may be issued directly against the 
international reserve of the Bangko Sentral or against the securities which it has 
acquired under the provisions of Section 91 of this Act, or may be issued 
without relation to specific types of assets ofthe Bangko Sentral. 
The Monetary Board shall determine the interest rates, maturities and 
other characteristics of said obligations of the Bangko Sentral, and may, if it 
deems it 
advisable, denominate the obligations in gold or foreign currencies. 
Subject to the principles stated in Section 90 of this Act, the evidences of 
indebtedness of the Bangko Sentral to which this section refers may be acquired 
by 
the Bangko Sentral before their maturity, either through purchases in the 
open market or through redemptions at par and by lot if the Bangko Sentral has 
reserved the right to make such redemptions. The evidences of indebtedness 
acquired or redeemed by the Bangko Sentral shall not be included among its 
assets, and shall be immediately retired and cancelled." 


SEC. 16. 
follows: 
Section 95 of the same Act IS hereby amended to read as 
"SEC. 95. Definition of Deposit Substitutes. - The term "deposit 
substitutes" is 
defined as an alternative form of obtaining funds from the 
public, other than deposits, 
through the issuance, endorsement, or acceptance 
of debt instruments for the 
borrower's own account, 
for the purpose of 
re1ending or purchasing of receivables 
and 
other 
obligations. 
These 
instruments may include, but need not be limited to, bankers, 
acceptances, 
promissory notes, participations, certificates of assignment and 
similar 
instruments with recourse, and repurchase agreements. The Monetary Board 
shall determine what specific instruments shall be considered as deposit 
substitutes for the purposes of Section 94 of this Act[:]. THE MONETARY BOARD 
MAY ALSO EXCLUDE FUNDS OBTAINED OR BORROWED FROM CERTAIN 
INSTITUTIONAL LENDERS UNDER THIS SECTION: Provided, however, That 
deposit substitutes of commercial, industrial and other non-financial companies 
for 
the limited purpose of financing their own needs or the needs of their 
agents or 
dealers shall not be covered by. the provisions of section 94 of this 
Act." 
SEC. 17. 
follows: 
Section 108 of the same Act IS hereby amended to read as 
"SEC. 108. Minimum Capital Ratios. - The Monetary Board may prescribe 
mllllmUm 
RISK-BASED 
CAPITAL 
ADEQUACY 
ratios 
BASED 
ON 
INTERNATIONALLY ACCEPTED STANDARDS [which the capital and surplus of 
the banks must bear the volume of their assets, or to specific categories thereof,] 
and may alter said ratios whenever it deems necessary. IN THE EXERCISE OF 
ITS 
AUTHORITY UNDER THIS SECTION, THE MONETARY BOARD MAY 
PRESCRIBE A 
HIGHER MINIMUM 
CAPITAL 
ADEQUACY 
RATIO 
FOR 
INDIVIDUAL BANKS WHICH ARE EXPOSED TO MORE THAN NORMAL 
RISKS." 
SEC. 18. 
Section 125 and Section 126 of the same Act are hereby 
amended to read as follows: 
"SEC. 125. Tax Exemptions. - THE PROVISIONS OF ANY GENERAL OR 
SPECIAL LAW TO THE CONTRARY NOTWITHSTANDING, the Bangko Sentral 
shall be exempt [for a period of five (5) years from the approval of this Act] from 
all 
national, 
provincial, 
municipal and 
city taxes, 
fees, 
charges and 
assessments[.] 
[The exemption authorized in the preceding paragraph of this section shall 
apply to all property of the Bangko Sentral, to the resources, receipts, 
expenditures, profits and income of the Bangko Sentral, as well as to all 
contracts, deeds, documents and transactions related to the conduct of the 
business of the Bangko Sentral: Provided, however, That said exemptions shall 
apply only to such taxes, fees, charges and assessments for which the Bangko 
Sentral itself would otherwise be liable, and shall not apply to taxes, feeS, 
charges, or assessments payable by persons 
or other entities doing business 
with the Bangko Sentral: Provided, further, That foreign 
loans 
and 
other 
obligations of the Bangko Sentral shall be exempt, both as to principal and 


interest, from any and all taxes if the payment of such taxes has been 
assumed 
by the Bangko Sentral .] 
"SEC. 126. Exemption from Customs Duties. - The provIsIon of any 
general or special law to the contrary notwithstanding, the importation and 
exportation by the 
Bangko Sentral of notes and coins, and of gold and other 
metals to be used for 
purposes authorized under this Act, and the importation 
of all equipment AND 
SUPPLIES needed [for] IN THE BANGKO SENTRAL 
OPERATIONS SUCH AS bank note production, minting of coins, metal refining, 
[and other] security printing operations AND TRANSPORT OF CURRENCY 
shall be fully exempt from all customs duties and consular fees and from all 
other taxes, assessments and charges related to such importation or 
exportation. " 
SEC. 19. 
Section 128 of the same Act is hereby amended to read as 
follows: 
"SEC. 128. Prohibitions. - The Bangko Sentral shall not acquire shares of 
any kind or accept them as collateral, and shall not participate in the 
ownership or management of any enterprise, either directly or indirectly[.] 
PROVIDED, THAT 
THIS PROHIBITON SHALL NOT APPLY WHENEVER 
SUCH OWNERSHIP OR MANAGEMENT IS EXPRESSLY AUTHORIZED BY LAW, 
OR THE MONETARY BOARD, BY A VOTE OF AT LEAST 
FIVE (5) OF ITS 
MEMBERS, DEEMS AN ACQUISITION OR INVESTMENT TO BE NECESSARY 
TO THE PERFORMANCE BY BANGKO SENTRAL OF ITS MANDATES UNDER 
THIS ACT OR TO QUALIFY OR AS REQUIRED FOR MEMBERSHIP IN 
INTERNATIONAL AND REGIONAL ORGANIZATIONS. 
The Bangko Sentral shall not engage in development banking or financing: 
Provided, 
howwever, That outstanding loans obtained or extended for 
development financing shall not be affected by the prohibition of this section." 
SEC. 20. 
This Act shall take effect fifteen (15) days following its 
publication in at least two (2) national newspapers of general circulation. 
Approved,