, . ” 
THIRTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
SENATE 
S. No. 
572 
INTRODUCED BY HON. MANUEL B. VILLAR, JR. 
EXPLANATORY NOTE 
A s  a policy, the State is mandated to ensure that the teaching profession 
will attract and retain its rightful share of the best available talents through 
adequate remuneration and other means of job satisfaction and fulfillment. 
In support of the said State policy, this bill seeks the creation and 
organization of a Philippine Teachers’ Bank that shall operate as a commercial 
bank, primarily to meet the 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 during their financial difficulties. 
The creation of the Teachers’ Bank aims to encourage members to save 
whatever extra earnings they have, to extend to members credit facilities at 
nominal rate of interest to save them from the clutches of loan sharks, to 
provide them with additional income in the form of dividends, and to have an 
official depository of the Funds of the Philippine Public School Teachers 
Association so that such can be used to help members and further strengthen 
the financial conditions of the association. 
In view of the foregoing, approval of this bill is earnestly sought. 
n 
MANUEL B. VI LAR, JR. 
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THIRTEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session 
SENATE 
A
.
 
S. NO. 
572 
.&.b 
OWE 
~~ 
INTRODUCED BY HON. MANUEL B. VILLAR. JR. 
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 "Charter of 
the Philippine Teachers Bank." 
SECTION 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. 
SECTION 3. Definition. - For the purpsse 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. 
SECTION 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. 


2 
SECTION 5. Corporate Powers. - The Bank shall have the following powers: 
a. 
To prescribe its by-laws; 
b. 
C. 
d. 
To accept savings and time deposits, and open current/checking 
To adopt, alter, and use a corporate seal; 
To enter into contracts, to sue and be sued; 
accounts; 
To borrow money; to own real or personal property and to sell, mortgage 
or otherwise dispose them; 
To carry on a trust business in accordance with the provisions of the law 
governing trust corporations; 
To issue bonds, debentures, securities, collaterals and/or the renewal 
and refinancing of the sarne, with the approval of the Bangko Sentral ng 
Pilipinas (BSP); 
e. 
f. 
g. 
h. 
To grant loans and advances preferably to teachers, their widows, 
orphans or compulsory heirs against security of real estate and/or other 
accept able assets ; 
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 re4 estate and/or other acceptable 
assets; 
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 
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. 
i. 
j. 
k. 
SECTION 6. Authorized Capital Stock; Par Value. - The authorized capital stock 
of the Bank shall be one billion pesos (P1,000,000,000.00) 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", viz: 
a. 
Series "AI shall comprise four hundred million pesos (P400,000,000.00) 
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; 


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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: 
1. 
Government Service Insurance System (GSIS) - Sixty Million Pesos 
(P60M), equivalent to six hundred thousand ( 600,000) common 
shares; 
2. 
Social Security System (SSS) - Twenty Million Pesos (P20M), 
equivalent to two hundred thousahd ( 200,000) shares; and 
Development Bank of the Philippines (DBP) - Twenty Million Pesos 
(P20M), equivalent to two hundred thousand (200,000) shares. 
Series "C" shall comprise four hundred million (P400,000,000.00) 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 
Series "D" shall comprise one hundred million (P100,000,000.00) pesos 
equivalent to one, million (1,000,000) common shares which shall be 
available for subscription of foreign nationals, their corporation and/ or 
3. 
c. 
d. 
associations. 
SECTION 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 
No director or officer of the Bank shall, either directly or indirectly, for 
himself or as a 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 
b. 


4 
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. 
SECTION 8. Board of Directors, Composition and Organization. - The affairs and 
business of the Bank shall be directed and its property managed and presenred, 
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 diem in such amount as the Board of Directors 
may determine. 
SECTION 9. Election 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 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. 
SECTION 10. Powers and Authority of the Board 0fDirectors.- 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; 
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. 
c. 


5 
SECTION 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 
SECTION 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 grant loans on commercial paper for such period of time not to exceed 
four months, in sums not exceeding fifteen thousand pesos (P15,OOO.OO) 
to anyone person, company, corporations, or firm. Provided, That he 
shall submit a report on such loans to the Board of Directors at its 
succeeding session: Provided, Further that the total amount of such 
loans shall not exceed five (5%) percent of the paid-up capital and 
surplus; 
To enter into, 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; 
To report weekly to the Board of Directors the progress of the operations 
of the Bank during the preceding week and to propose changes in rates of 
discount or interest, exchange, or policy; and 
To exercise such other powers and perform such other duties as may be 
directed by the Board of Directors from time to time. 
b. 
c. 
d. 
SECTION 13. Appointment, Removal and Salaries of the Other Officers and 
Employees. -All other officers and employees of the Bank shall be appointed and 
removed by the Board of Directory 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. 
SECTION 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 


6 
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. 
SECTION 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 net 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 (80%) 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 
SECTION 6b( 1-3) hereof shall first be applied in payment of their capital 
stock subscriptions, until said sharers shall have been fully paid. 
SECTION 16. Government Depository. - The Secretary of Education, Culture and 
Sports, 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. 
SECTION 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 effectivity of this Act. 
SECTION 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 


7 
representing a majority of all the subscribed capital stock entitled to vote, whether 
paid or unpaid, subject to certification by the Monetary Board. 
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), 
SECTION 19. Transitory Provision. - For a period not exceeding two (2) years, 
from the effectivity of this Act, the Secretary of Education, Culture and Sports, 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. 
SECTION 20. Repealing Clause. - All 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. 
SECTION 2 1. Effectivity Clause. - This Act shall take effect fifteen (1 5) days after 
its publication in at least two (2) newspapers of general circulation. 
Approved,