FOURTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
INTRODUCED BY SEN. MANNY VILLAR 
EXPLANATORY NOTE 
Republic Act No. 4670, otherwise known as the "Magna Carta for Public 
School Teachers", declares as a policy of the State, the promotion and 
improvement of the social and economic status of public school teachers. The 
law defines their living and working conditions, their terms of employment and 
career prospects in order that they may compare favorably with existing 
opportunities. 
In support of said State policy, this bill seeks the creation and organization 
of a Philippine Teachers Bank that shall operate as a commercial bank available 
to the general public, but primarily to meet the financial and banking needs of all 
public school teachers. With a bank of their own, it is envisioned that said 
teachers shall have something to rely on their hour of financial difficulties. 
The establishment of a Teachers Bank is conceived in the light of four (4) 
1. 
To encourage members to save whatever extra earnings they have 
in a bank of their own. 
2. 
To extend to its members credit facilities with nominal rate of 
interest to save them from the abuses of loan sharks. 
3. 
To provide them with additional income in the form of dividends and 
similar monetary reward which the bank may declare from time to 
time. 
To have an official depository of the Funds of the Philippine Public 
School Teachers Association (PPSTA) so that such deposits can 
be used to help members and further strengthen the financial 
conditions of the association and its members without additional 
levy on their part. 
significant objectives: 
4. 
Immediate approval of the bill is earnestly sought. 


FOURTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
S E N A T E  
Senate Bill No. f993 
INTRODUCED BY SEN. MANNY VILLAR 
AN ACT 
CREATING THE PHILIPPINE TEACHERS BANK 
AND FOR OTHER PURPOSES 
Be it enacted by the Senate and the House of Representatives of the 
Philippines in Congress assembled: 
SECTION 1. Short Title. - This Act shall be known and cited as the 
"Philippine Teachers Bank Charter of 2007". 
SEC. 2. Declaration of Policy. - The declared policy of the State to 
promote and improve the social and economic status of public school teachers, 
their living and working conditions, their terms of employment and career 
prospects in order that they may compare favorably with existing opportunities in 
other walks of life, attract and retain in the teaching profession more people with 
the proper qualifications, it being recognized that advancement in education 
depends on the qualifications and ability of the teaching staff and that education 
is an essential factor in the economic growth of the nation as a productive 
investment of vital importance, is hereby reiterated. 
SEC. 3. Definition. - For the purpose of this Act, the term "teacher" shall 
refer to all public school teachers holding permanent appointments and on full- 
time basis, who are engaged in classroom teaching, in any level of instructions, 
including professional staff of state colleges and universities, guidance 
counselors, school librarians, industrial arts or vocational instructors, all persons 
performing supervisory and/or administrative functions, school nurses, school 
physicians, school dentists, maintenance personnel and such other employees in 
all schools, colleges and universities operated by the Government or its political 
subdivisions. 
SEC. 4. Creation; Terms; Existence; Domicile and Place of Business - 
There is hereby created a body corporate to be known as the "Philippine 
Teachers Bank", hereinafter referred to as the "Bank", which shall have legal 
existence for a period of fifty (50) years from and after the date of the approval of 
this Act. The principal domicile and place of business shall be in Quezon City, 
Metropolitan Manila, but branches or agencies may be established in such other 
areas within the country as the Board of Directors may decide. 
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SEC. 5. Corporate Powers. -The Bank shall have the following powers: 
(5.1) To prescribe its by-laws; 
(5.2) To adopt, alter, and use a corporate seal; 
(5.3) To enter into contracts, to sue and be sued; 
(5.4) To accept savings and time deposits, and open currentkhecking 
accounts; 
(5.5) To borrow money; to own real or personal property and to sell, 
mortgage or otherwise dispose of them; 
(5.6) To carry on a trust business in accordance with the provisions of law 
governing trust corporations; 
(5.7) To issue bonds, debentures, securities, collaterals and/or the 
renewal and refinancing of the same, with the approval of the 
Bangko Sentral ng Pilipinas (BSP); 
(5.8) To grant loans and advances preferably to teachers, their widows, 
orphans or compulsory heirs against security of real estate andlor 
other acceptable assets; 
(5.9) To grant loans to cooperatives/associations preferably to those that 
are owned or controlled by the teachers, their widows, orphans, or 
compulsory heirs against security of real estate andlor other 
acceptable assets; 
(5.10) To exercise the powers granted in this Act and such incidental 
powers as may be necessary to carry on the business of general 
banking; and 
(5.1 1) To exercise the general powers mentioned in the Corporation Code 
and the General Banking Act insofar as they are not inconsistent or 
incompatible with the provisions of this Act. 
SEC. 6. Authorized Capital Stock; Par Value. - The authorized capital 
stock of the Bank shall be one billion pesos (~l,OOO,OOO,OOO.OO) 
divided into ten 
million (10,000,000) shares with a par value of one hundred pesos (P100.00) 
each. The shares shall be divided into the following four classes, denominated as 
Series "A", Series "B", Series "C", and Series "D', as follows: 
(a) 
Series 
"A' 
shall 
comprise 
four 
hundred 
million 
pesos 
(~00,000,000.00) equivalent to four million (4,000,000) preferred shares to be 
subscribed solely by teachers, such shares to be entitled to cumulative dividends 
of four percent (4%) per annum and with preference as against common 
stockholders in the distribution of assets in the event of liquidation: Provided, 
That the Board of Directors shall provide a mechanism whereby all teachers shall 
be given an opportunity to subscribe to at least one Series " B  
shares of stocks; 
(b) Series "B" shall comprise one hundred million (P100,000,000.00) 
pesos equivalent to one million (1,000,000) common shares to be subscribed by 
the following government corporations and financial institutions: 
(b.1) Government Service Insurance System (GSIS) - Sixty Million 
Pesos (P60M), equivalent to six hundred thousand (600,000) 
common shares; 
(b.2) Social Security System (SSS) - Twenty Million Pesos (@20M), 
equivalent to two hundred thousand (200,000) shares; and 
(b.3) Development Bank of the Philippines (DBP) - Twenty Million 
Pesos (P20M), equivalent to two hundred thousand (200,000) 
shares. 
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(c) Series "C" shall comprise four hundred million (@400,000,000.00) 
pesos equivalent to four million (4,000,000) common shares to be subscribed 
solely by citizens of the Philippines and domestic corporations or entities, 
particularly the Philippine Public School Teachers Association (PPSTA), seventy 
percent (70%) of the equity of which is owned by the citizens of the Philippines: 
Provided, That preference in the subscription of this class of shares shall be 
given to the PPSTA, the teachers, their widows, orphans or compulsory heirs; 
and 
(d) Series "D" shall comprise one hundred million (PI 00,000,000.00) 
pesos equivalent to one million (1,000,000) common shares which shall be 
available for subscription of foreign nationals, their corporation and/or 
associations. 
SEC. 7. Lending Limits - The Bank shall observe the following limits in its 
lending Operations: 
(a) The total Liabilities of any person, company, corporation or firm, 
excluding loans or credits prescribed by law or by the Monetary Board as non- 
risk assets, shall at no time exceed fifteen percent (15%) of the unimpaired 
capital and surplus of the Bank; and 
(b) No director or officer of the Bank shall, either directly or indirectly, for 
himself or as the representative or agent of others, borrow any of the deposits or 
funds of the Bank, nor shall he become a guarantor, indorser, or surety for loans 
from the Banks to others, or in any manner to be an obligor in money borrowed 
from the Bank or loaned by it, except with the written approval of the majority of 
the directors of the Bank, excluding the director concerned. The credit 
accommodation to such director or officer of the Bank which the Board of 
Directors may authorize shall in no case exceed his outstanding deposits or the 
book value of his paid-in capital in the Bank. Any such approval shall be entered 
into the records of the Bank and a copy of such entry shall be transmitted 
forthwith to the appropriate supervising department of the Bangko Sentral ng 
Pilipinas. The office of any director or officer of the Bank who violates the 
provisions of this Section shall immediately become vacant and the director or 
officer shall be subject to criminal prosecution and suffer the penalties provided 
by law. 
SEC. 8. Board of Directors, Composition and Organization. - The 
affairs and business of the Bank shall be directed and its property managed and 
preserved, unless otherwise provided in this Act, by a Board of Directors 
consisting of nine (9) members duly elected as hereinafter provided, who shall 
receive, for each session of the Board attended by them, a per them in such 
amount as the Board of Directors may determine. 
SEC. 9. Nection of Board of Directors. - Annually on the first Monday 
of March, the stockholders shall meet to elect the members of the Board of 
Directors for the current year. Each stockholder or proxy shall be entitled to as 
many votes as he may have shares of stock, registered in his name at the time of 
the election. Immediately after the election, the directorate shall organize as such 
and elect from among themselves a chairman, a vice-chairman who shall assist 
the chairman and act in his stead in case of absence or incapacity of the latter. In 
case of incapacity or absence of both the other members of the Board of 
Directors constituting a quorum shall designate a temporary chairman from 
among its members: Provided, further, That no full-time appointive or elective 
public official shall at the same time serve as officer, director, legal counsel or 
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consultant of the bank except in cases where such service is in the exercise of 
the stockholders rights of the Government or is incident to financial assistance 
provided by the Government, its agencies or instrumentalities to the Bank. 
SEC. I O .  Powers and Authority of the Board of Directors - 
The powers and authority of the Board of Directors shall be as follows: 
(a) Formulate policies necessary to carry out effectively the provisions of 
this Act and adopt such by-laws, rules and regulations for the effective operation 
of the Bank, in conformity with this Act and existing laws; 
(b) Determine the organizational set-up of the Bank by creating the 
necessary departments or offices as are essential for the efficient operation of 
the Bank; 
(c) To establish upon previous authority of the Bangko Sentral ng 
Pilipinas, branches, agencies or offices in such points within the Philippines, as it 
may deem advisable, which shall perform functions as may be delegated to them 
by the Board of Directors. 
SEC. 11. Executive Officers. - The Chief Executive of the Bank shall be 
the President, assisted by an Executive Vice-president and such number of Vice- 
presidents, who shall be elected and may be removed by the Board of Directors. 
The President and the Executive Vice-president shall possess practical 
experience in banking or finance as executives for five (5) years. There shall 
also be a secretary, a treasurer, an auditor and a legal counsel who shall be 
chosen by the Board of Directors. Their terms of office and compensation shall 
be determined by the Board of Directors. 
SEC. 12. Duties and Powers of the President. - The President of the 
Bank shall among others, execute and administer the policies, measures, orders 
and resolutions approved by the Board of Directors, and direct and supervise the 
operation and administration of the Bank. 
Particularly he shall have the power and duty: 
(a) To make loans on commercial paper for such period of time not to 
exceed four months, in sums not exceeding fifteen thousand pesos 
(Pl5,OOO.OO) 
to anyone person, company, corporations, or firm, but 
he is required to submit a report on such loans to the Board of 
Directors at its succeeding session: Provided, That the total amount 
of such loans shall not exceed five (5%) percent of the paid-up 
capital and surplus; 
(b) To make, with the advice and consent of the Board of Directors, all 
contracts on behalf of the said Bank and to enter into all necessary 
obligations that this Act requires or permits; 
(c) To report weekly to the Board of Directors the main faces concerning 
the operations of the Bank during the preceding week and to suggest 
changes in rates of discount or interest, exchange, or policy which to 
him may seem best; and 
(d) To exercise such other powers and perform such other duties as may 
be directed by the Board of Directors from time to time. 


SEC. 13. Appoinfmenf, Removal and Salaries of fhe Ofher Officers 
and Employees. - All other officers and employees of the Bank shall be 
appointed and removed by the Board of Directors upon recommendation of the 
President of the Bank: Provided, however, That all other circumstances being 
equal, preference shall be given to the spouses of teachers, or their widows, 
orphans or compulsory heirs in the appointment of said personnel. Said officers 
and employees shall have duties and compensation which shall be fixed by the 
President with the approval of the Board of Directors. 
SEC. 14. Fidelity Bond for Officers and Employees. - The Board of 
Directors may require any officer and employee of the Bank and its branches, 
before entering upon the performance of their duties, to furnish a fidelity bond for 
the benefit of the Bank in the form and amount prescribed by the Board of 
Directors. For this purpose, and for this purpose only, all officers and employees 
of whom a bond is required shall be deemed public officers and employees, 
respectively, and the provisions of the Public Bonding Law, and related 
legislations are hereby made applicable to them. 
SEC. 15. Allocation of Net Profits. - At the close of each calendar year, 
the Bank shall determine the net result of its operations, in the calculation of 
which, adequate allowance shall be made for probable losses, and the net profit 
arrived thereat shall be distributed as follows: 
(a) Twenty percent (20%) of such not profit shall accrue to the reserve 
account: Provided, That should the accumulated reserves equal to or in excess 
of the authorized capital of the Bank the twenty (20%) percent herein authorized 
to be accumulated shall be distributed under the subsection immediately 
following; 
(b) From the remaining eighty percent (SOYO) of the net profit shall be 
deducted the guaranteed earnings of the preferred shares of stock owned by 
individual teachers, their widows, orphans or compulsory heirs: Provided, That 
the share in the net profits corresponding to the government corporations and 
financial institutions mentioned in Sec. 6 (b.1 to b.3) hereof shall first be applied 
in payment of their capital stock subscriptions, until saw shares shall have been 
fully paid. 
SEC. 16. Government Depository. - The Secretary of Education, the 
Secretary of 
Finance, the 
National Treasurer and 
their 
authorized 
representatives, city and municipal treasurers, as well as official custodians of 
public funds or those belonging to government-owned or controlled corporations 
are hereby authorized, if they so desire to make and actually maintain deposits of 
any government corporate funds with the Bank, which is hereby declared to be a 
government depository, 
SEC. 17. Articles of Incorporation. - This Act, upon its approval, shall be 
deemed and accepted to all legal intents and purposes as the statutory articles of 
incorporation or Charter of the Philippine Teachers Bank; and that, 
notwithstanding the provisions of any existing law to the contrary, said Bank shall 
be deemed registered and duly authorized to do business and operate as a 
commercial bank as of the date of approval of this Act. 
SEC. 18. By-Laws. - Within three (3) months after the approval of this Act, 
the by-laws of the Bank for its organizational, functional and operational 
government and procedures shall be adopted by the affirmative vote of the 
stockholders representing a majority of all the subscribed capital stock entitled to 


vote, whether paid or unpaid, subject to certification by the Monetary Board 
pursuant to Section ten (IO) of Republic Act No. Three Hundred Thirty Seven 
(337), as amended (General Banking Act). 
The by-laws, duly certified by the Monetary Board as aforesaid, shall be 
signed by the stockholders voting for them and shall be kept in the principal office 
of the Bank, subject to the inspection of the stockholders during office hours, and 
a copy thereof, duly certified by a majority of the directors and countersigned by 
the Bank secretary, shall be filed and registered, with the Securities and 
Exchange Commission (SEC). 
SEC. 79. Transitory Provision. - For a period not exceeding two (2) 
years, from the effectivity of this Act, the Secretary of Education in consultation 
with the Secretary of Finance and the Philippine Public School Teachers 
Association, shall prescribe the necessary rules and regulations for the initial 
organization and operations of the Bank: Provided, That this authority shall 
immediately cease upon formal organization of the Bank and the election of the 
regular members of the Board of Directors as herein provided. 
SEC. 20. Repealing Clause. - A// laws, presidential decrees, executive 
orders, issuances, rules and regulations, or any part thereof, contrary to the 
provisions of this Act are hereby amended or repealed accordingly. 
SEC. 21. fffecfiviiy Clause. - This Act shall take effect fifteen (15) days 
after its publication in at least two (2) newspapers of general circulation. 
Approved, 
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