EIGHTEENTH CONGRESS OF THE) 
REPUBLIC OF THE PHILIPPINES ) 
Third Regular Session 
)
SENATE
S. No. 2305
Introduced by Senator Ralph G. Recto
AN ACT
PROVIDING FOR A NEW CHARTER OF THE DEVELOPMENT BANK OF THE 
PHILIPPINES, REPEALING FOR THE PURPOSE EXECUTIVE ORDER NO. 81, 
AS AMENDED
EXPLANATORY NOTE
As the country's government-mandated infrastructure bank, the Development 
Bank of the Philippines (DBP) expands its role as a stimulus for development, 
especially as the country continues to march towards progress amidst the COVID-19 
pandemic. As the premiere development and universal government bank, it supports 
the National Government in its shared task of nation-building to achieve its legal 
mandate to power the country towards sustainable economic growth.
For several decades, DBP has been at the forefront of strengthening our 
economic growth through its array of relevant, responsive and purposeful 
development financing programs. Its vital role as a provider of reliable funding for 
essential public infrastructure projects under the government's Build, Build, Build 
Program is also noteworthy.
DBP is not just an ordinary universal bank. More importantly, it is a government 
financial institution and a government-owned and controlled corporation which intends 
to live out its developmental government mandate to the fullest while maintaining 
sound profitability and strong balance sheet required on universal banks under existing 
banking laws and regulations.
There is a need, however, to further amend the Revised DBP Charter (Executive 
Order No. 81, Series of 1986, as amended by Republic Act No. 8523) to improve and 
expand the powers and functions of DBP with a corresponding needed increase in its


capitalization. Consequently, 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 laws 
and regulations.
Among the proposed amendments to the DBF Revised Charter to further 
strengthen the Bank's capability in fulfilling its government mandate within the context 
of a financially viable and stable banking institution, are as follows:
a. Increase in DBF's authorized capital stock in the amount of One Hundred 
Billion Fesos (FhF100,000,000,000.00) and paid-up capital resulting from 
the government's proposed cash infusion by Fifteen Billion Fesos 
(FhF15,000,000,000.00) to comply with the prudential standards of banking 
laws and regulations of BSF, particularly on the capital charge or risk-based 
capital ratio in relation to the risks continually assumed by the Bank, in order 
to fulfill its mandate to lend to the priority developmental projects under its 
Charter;
b. Authorizes DBF to engage in non-traditional banking service, such as 
financial leasing;
c. Allows DBF to act as loan or credit facility program administrator on loans 
granted by the National Government;
d. Strengthens DBF's primary objective of being a premier universal 
government developmental bank by specifying the crucial sectors it will 
service which are vital to the country's economic growth, such as 
Infrastructure, Tourism Development Frojects, Agriculture-based 
Entrepreneurial Ventures, Education, Heaith Care, Socialized Housing, 
Frotection of the Environment and the Fublic Sector;
e. Grants the Bank the authority to exercise all such powers and services of a 
universal bank under the General Banking Law (GBL) of 2000 (Republic Act 
No. 8791), subject to Monetary Board regulations, in order to perform its 
mandate;
f. Expands the authority of the Board of Directors, in order to harmonize the 
DBF Charter with the provisions of R.A. No. 8791, to include the approval 
of other credit accommodations, bank guarantees, other financial activities.


and investment activities, subject to the BSP regulations. Further, it includes 
the express power of the Board to continually reorganize the Bank personnel 
so as to provide DBP with greater operational and organizational flexibility 
to rationalize the organization and structure of DBP in its universal banking 
activities, including developmental banking activities, to promote cost- 
savings and efficiency;
g. Designates the Secretary of Finance as Chairperson of the Board of Directors 
of DBP to safeguard the National Government's interest and direct DBP 
towards priority sectors and initiatives. This is similar to the Charter of the 
Land Bank of the Philippines (LBP) wherein the Secretary of Finance is also 
the Chairperson;
h. Provides for DBP's perpetual corporate existence consistent with the recent 
amendments to the Revised Corporation Code (R. A. No. 11232);
i. 
Harmonizes the Right of Redemption of Mortgagors under the DBP Charter 
with that of the GBL of 2000;
j. Strengthens the provisions on the avoidance of conflict of interest to ensure 
good corporate governance; and
k. Increases the sanctions and penalties for specific violations of the Revised 
Charter to the current values to be at par and consistent with sanctions 
provided by prevailing laws.
With these further Charter amendments, DBP will be able to do more and 
become a more valuable partner for their stakeholders in moving this nation forward 
amidst the pandemic and other pressing challenges. DBP fully shares this vision which 
ignites its passion to stay responsive and relevant as a development and infrastructure 
government bank.
In light of the foregoing, the immediate approval of this bill is earnestly sought.
aim/jiao/ejcv
RALPH/G. RECTO


EIGHTEENTH CONGRESS OF THE) 
REPUBLIC OF THE PHILIPPINES ) 
Third Regular Session 
)
SENATE 
S. No. 2305
T H.lE
Introduced by Senator Ralph G. Recto
AN ACT
PROVIDING FOR A NEW CHARTER OF THE DEVELOPMENT BANK OF THE 
PHILIPPINES, REPEALING FOR THE PURPOSE EXECUTIVE ORDER NO. 81, 
AS AMENDED
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled:
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Section 1. Short Tide. - This Act shall be known as "'The New Development
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Bank of the Philippines (DBP) Act.
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Sec 2. Declaration of Policy. - It is the policy of the State to strengthen the
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powers and functions of the Development Bank of the Philippines, hereinafter referred
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to as the Bank, as a premier government developmental financial institution that
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provides developmental financing and banking services necessary in the achievement
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of sustained economic growth. The State recognizes that the Bank plays an important
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role in the country's aspiration to meet the challenges of globalization and the
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integration of the Association of South East Asian Nations (ASEAN) by assisting
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Philippine industries and other strategic sectors of the economy and enhancing their
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capability to compete in the global market.
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The State shall support the Bank in pursuing corporate citizenship programs
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through initiatives that promote the welfare of the Filipino people, particularly the
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underprivileged. The Bank shall carry out relevant and meaningful programs through
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its flagship initiatives in education, health, environmental preservation and social
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outreach programs.


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Sec. 3. Name and Corporate Existence. - The Bank, shall henceforth operate
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under the provisions of this Act. The Bank shall continue to exist as a body corporate
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and shall have perpetual existence from the date of effectivity of this Act.
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Sec. 4. Primary Objective of the Bank. - As a partner in national development,
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the Bank shall support the programs of the government that enable growth and
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productivity such as infrastructure programs, tourism development projects,
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agriculture-based entrepreneurial ventures, socially-beneficial programs in education,
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health care, and socialized housing, those that support the protection of the
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environment, and other public sector programs: Provided, That this objective shall be
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pursued with utmost consideration of the need and responsibility to preserve and
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protect the financial viability of the Bank while ensuring that it remains globally
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competitive. As a universal bank, it shall at all times safeguard its financial position in
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order that it can effectively participate in the accomplishment of the national goal of
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attaining meaningful and inclusive economic growth.
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Sec. 5. Corporate Powers. — In addition to the general powers of a corporation
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under Republic Act No. 11232 otherwise known as the ''Revised Corporation Code of
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the Philippines", the Bank shall have the power to:
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a) Exercise all such powers and services as may be necessary to carry on
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the business of a universal bank under Republic Act No. 8791 or "The
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General Banking Law of 2000" subject to the existing rules and
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regulations of the Monetary Board in order to perform its mandate under
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this Act;
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b) Accept and manage trust funds and properties and carry on the business
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of a trust corporation;
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c) Act as official government depository with authority to maintain deposits
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and deposit substitutes of the national government, its agencies,
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bureaus and instrumentalities, and government-owned or controlled
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corporations, and local government units, subject to such rules and
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regulations as the Monetary Board may prescribe;
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d) Adopt, amend, or change its by-laws; to adopt, alter and use a seal; to
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lease or own real and personal property and to sell or otherwise dispose
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of the same; to make contracts; to sue and be sued; and to exercise the


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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 and acquired assets. 
To add value to, improve profitability on, and enhance the marketability 
of bank's owned property and acquired assets, 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.
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 its resources are not being


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unduly taken advantage of by its management to favor certain private interests: 
Provided, That, in 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 principal 
office 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. Authorized Capital Stock-Par Value. - 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 (PIOO.OO) per 
share, which shall be fully subscribed by the national government: Provided, That the 
increase in capitalization shall be funded solely from the declared cash dividends of 
the Bank in favor of the National Government. For this purpose, any and all declared 
cash dividends of the Bank in favor of the National Government shall be deposited in 
a special account in the General Fund and earmarked for the payment of the Bank's 
increase in capitalization. Such payment shall be released and disbursed immediately 
and shall continue until the increase in capitalization has been fully paid.
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. Voting of Shares. — 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.
Sec. 9. Loans and Other Investments. — Loans and other investments of the 
Bank shall be subject to the same limits and ceilings imposed on universal banks by 
the Monetary Board.


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Sec. 10. Issuance of Bonds, Eligible Capita! Instruments, and other Securities.
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— The Bank may issue all kinds of bonds, notes, debentures, other evidences of
3 
indebtedness, derivatives, commodities, negotiable instruments, eligible capital
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instruments, and other securities, and the renewal or refunding thereof within or
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outside the Philippines, at such terms, rates, and conditions as the Board may
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determine, subject to compliance with the provisions of applicable laws, and rules and
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regulations promulgated by the Monetary Board.
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The Bank shall provide for appropriate reserves for the redemption or
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retirement of the securities. These securities and other obligations shall be redeemable
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at the option of the Bank at or before maturity and in such manner as may be
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stipulated therein and shall bear such rate of interest as may be fixed by the Bank.
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Such obligations shall be secured by the assets of the Bank, including the
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stocks, bonds, debentures, and other securities purchased or held by it under the
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provisions of this Act. These bonds, debentures and other securities may be long-
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term, medium, or short-term, with fixed interest rate or floating interest rate.
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Sec. 11. Board of Directors, Composition, Tenure and Per Diems. — The affairs
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and business of the Bank shall be directed, and its properties managed and preserved,
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by a Board of Directors consisting of nine (9) members, headed by the Secretary of
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Finance as Chairperson. The other members of the board shall be appointed by the
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President of the Philippines from a shortlist prepared by the Governance Commission
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for Government -Owned and -Controlled Corporations (GCG) subject to prior vetting
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from the BSP and its rules on disqualification, watchlist files and the fit and proper
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rule, in accordance with the procedure laid down in R.A. No. 10149 otherwise known
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as the "GOCC Governance Act of 2011": Provided, however. That, the position of
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Chairperson of the Board and President of the Bank shall not be held by the same
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person.
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The directors must always meet the fit and proper requirements under R.A. No.
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8791 and the guidelines of the BSP and the GCG.
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The Chairperson shall preside over the meetings of the Board.
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The President of the Bank shall be the Vice-Chairperson of the Board. In case
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the Chairperson is absent or incapacitated, the President shall act as Chairperson. In


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case of incapacity or absence of both the Chairperson and the Vice-Chairperson, the 
Board shali designate a temporary chairperson from among its members.
No person shali 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 character 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 (CEO) shall be elected annually by 
the members of the Board in accordance with Section 13 hereof.
The term of office of the President and the members of the Board shall be for 
a period of one (1) year or until such time as their successors are appointed.
The members of the Board, including the President and CEO, 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 and Duties of the Board of Directors. — The Board shall have 
the following duties, powers, and authority:
a) To formulate policies necessary to carry 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;
b) To approve loans, other credit accommodations and guarantees issued 
or obtained by the Bank, and prescribe terms and conditions to govern


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the granting of the foregoing, and engage in such other financiai 
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;
f) 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;


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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 BSP;
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;
j) 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 purpose 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 personnel 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 equivalent to at least two (2) months 
basic salary for every year of service, in addition to those provided under 
existing laws, for those personnel 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


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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. President and Chief Executive Officer. — 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 forty (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;


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c) To report to the Board the main facts concerning the operations of the
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Bank and to recommend changes in policies which one may deem
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advisable;
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d) To submit an annual report to the President of the Philippines on the
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result of the operations of the Bank;
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e) To recommend to the Board the appointment, promotion, or removal of
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all officers of the Bank, with the rank of at least vice-president or its
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equivalent;
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f) To appoint, promote or remove employees and officers below the rank
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of vice-president or its equivalent: Provided, That promotions, transfers,
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assignments or reassignments of officers and personnel of the Bank are
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personnel actions deemed made in the interest of the service and not
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disciplinary, any provision of the Civil Service Law to contrary
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notwithstanding; and
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g) As required by circumstances, to delegate any of the powers, duties or
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functions to any officer or director of the Bank, with the approval of the
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Board.
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Sec. 14. Legal Matters and Cases. — The Bank shall have its own chief legal
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counsel as head of the legal department, who shall be appointed by the Board of the
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Bank upon recommendation of its President. The other members of the legal
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department shall be appointed in accordance with the Bank's policies on hiring and
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promotion.
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In appropriate cases, the Bank may avail also of the legal services of any
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government legal office authorized to render such services to government-owned or
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controlled corporations.
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Notwithstanding Section 10 of Chapter 3, Title III, Book IV of Executive Order
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292, otherwise known as the "Administrative Code of 1987", the Legal Department
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can also act as the principal law office of the Bank duly authorized to appear in its
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behalf in any court or quasi-judicial body. The hiring of any external private counsel
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may be authorized by the Board, upon the recommendation of the chief legal counsel,
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without need of securing the approval of the Office of the Government Corporate
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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. Foreclosure by the Bank. — 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%) 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 from date of the last publication. 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.
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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(f) of this Act.
Sec. 16. Right of Redemption. — 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.
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Sec. 17. Exemption from Attachment — The provisions of any law to the
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contrary notwithstanding, collaterals, securities on loans or other credit
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accommodation and guarantees granted by the Bank or its predecessors-in-interest
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shall not be subject to attachment, execution or any other court process, nor shall
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they be included in the property of insolvent persons or institutions, unless all debts
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and obligations of the debtor to the Bank and its predecessors-in-interest have been
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previously paid, including accrued interest, penalties, collection expenses, and other
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charges.
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No attachment or execution shall be issued against the Bank or its property
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before final judgment in any suit, action or proceeding in any court.
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Sec. 18. Personnel. — The Board shall provide for an organization and staff of
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officers and employees of the Bank and establish a bank personnel management
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system which shall govern the selection, hiring, appointment, transfer, promotion, or
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dismissal of all bank personnel, including the continuous reorganization thereof.
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The appointments in the Bank, except those which are policy-determining,
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primarily confidential or highly technical in nature, shall be made only according to the
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Civil Service Law and regulations: Provided, That no qualification or eligibility
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requirements for positions in the Bank shall be imposed other than those set by the
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Board: Provided, further, That the Monetary Board shall prescribe, pass upon and
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review the qualifications of individuals appointed as officers and disqualify those found
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unfit: Provided, finally. That the Board or the President in accordance with Sections
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12 and 13 of this Act, respectively, may without need of obtaining prior approval from
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any other government agency, appoint its contractual personnel whose services are
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deemed necessary in order not to unduly disrupt the operations of the Bank except in
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the conduct of business involving bank deposits.
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All positions in the bank shall be governed by the compensation and position
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classification system (CPCS) and qualification standards approved by the Board based
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on a comprehensive job analysis of actual duties and responsibilities and the
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compensation plan shall be comparable with the prevailing compensation plans of
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universal banks in the private sector.
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The Board shall fix the total compensation package and other remunerations
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and emoluments of bank personnel, including the President and Chief Executive
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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. 19. Inhibition from Board Meeting of Member with Personai Interest — 
Whenever any member attending a meeting of the Board of Directors, or any of one's 
relatives within the fourth civil degree of 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 purpose, 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.
Sec. 20. Prohibition on Persons with Personai/PecuniaryInterest — No member 
of the Board, officer, attorney, agent, or employee of the Bank shall in any manner.
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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, officer, attorney, agent, or employee 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. — No (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, officer 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 fringe 
benefits granted in accordance with rules 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 of 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 two percent (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.
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Sec. 23. Prohibition on Officers and Empioyees of the .Bank. — Except as 
required by law, or upon 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.
Sec. 24. Exaction of Fee, Commission, Gift or Charge. — 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. Examination of the Bank. — The Bank shall be subject to supervision 
and examination by the appropriate department of the BSP, and audit by the COA.
Sec. 26. Generai Penai Provisions. — 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 for not less than two (2) years nor more than ten (10) years, or both, 
at the discretion of the court.
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Sec. 27. other Liability of Guilty Officer or Employee. — Any member of the 
Board of 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.
Sec. 28. 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. Applicability of Banking Laws. — The provisions of R.A. No. 7653, 
otherwise known as the New Central Bank Act, as amended by R.A. No. 11211, R.A. 
No. 8791, and other applicable banking laws, insofar as they are 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 Sections. 34, 
35, 36 and 37 of R.A. No. 7653, as amended by R.A. No. 11211 shall be applicable to 
directors, officers, employees and borrowers of the Bank.
Sec. 30. Separability Clause. — In the event that any provision of this 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. Repealing Clause. — The provisions of Presidential Decree No. 985, 
Presidential Decree No. 1597, R.A. 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.
Executive Order No. 81, as amended, is hereby repealed.
Sec. 32. Effectivity. — 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,
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