THIRTEENTH CONGRESS OF THE REPUBLIC 
) 
OF THE PHILIPPINE 
1 
First Regular Session 
1 
S E N A T E  
Introduced by Senator S. R. Osmeiia Ill 
EXPLANATORY NOTE 
In June 1993, Republic Act No. 7653 entitled, "The New Central Bank 
Act," creating the Bangko Sentral ng Pilipinas (6SP) was signed into law. The Act 
established the Bangko Senfral as an independent central monetary authority 
with broader supervisory and regulatory powers over the operations of banks and 
quasi-banks and a bigger capital to make the bank more effective in conducting 
monetary policy. 
The primary objective of the BSP is to maintain price stability conducive to 
a balanced and sustainable growth of the economy. 
It shall also promote 
monetary stability and the convertibility of the peso. It shall supervise banks and 
provide policy directions in the areas of money, banking and credit. 
It has been noted, however, that several provisions of the law have to be 
modified so that the Bangko Senfral may effectively discharge its supervisory 
powers over banks and quasi-banks and for it to attain optimum operational 
efficiency within the organization. Moreover, amendments to the said law are 
needed to complement the provisions of the revised General Banking Act. 
In view of the important role that the Bangko Senfral plays in maintaining a 
stable and sound financial system, approval of this bill is earnestly sought. 
SERGIO OSMENA 111 
Senator 


THIRTEENTH CONGRESS OF THE REPUBLI 
) 
OF THE PHILIPPINES 
1 
First Regular Session 
1 
S E N A T E  
Introduced by Senator S. R. OsmeAa 111 
AN ACT 
AMENDING REPUBLIC ACT NUMBERED SEVENTY-SIX HUNDRED AND 
FIFTY-THREE ENTITLED "THE NEW CENTRAL BANK ACT" AND FOR 
OTHER PURPOSES 
Be it enacted by the Senate and.the House of Representatives of the Republic of 
the Philippines in Congress assembled: 
1 
Section I. 
The first paragraph of Section 3, Republic Act Numbered 7653 
2 
is hereby amended to read as follows: 
3 
"SECTION 3. Responsibility and Primary Objective. - The 
4 
Bangko Sentral shall provide directions in the areas of money, banking 
5 
and credit. It shall have supervision over the operations of banks, QUASI- 
G 
BANKS, TRUST ENTITIES AND OTHER FINANCIAL INSTITUTIONS 
7 
WHICH UNDER THIS ACT OR SPECIAL LAWS ARE SUBJECT TO 
8 
BANGKO SENTRAL SUPERVISION and exercise such regulatory powers 
9 
as provided in this Act and other pertinent laws over the operations of 
I O  
[finance 
companies 
and] 
OTHER 
non-bank financial 
institutions 
1 1  
[performing quasi-banking functions, hereafter referred to as quasi-banks, 
12 
and institutions performing similar f u n ctio n SI. 
13 
SEC. 2. Section I 1  of the same Act is hereby amended by inserting a new 
14 
paragraph after the third paragraph and the present fourth paragraph shall be on 
15 
the fifth paragraph. The new fourth paragraph shall read as follows: 
I 


1 
“AS MAY BE WARRANTED BY COMPELLING REASONS OR 
2 
CIRCUMSTANCES, 
A 
MEETING 
OF 
THE 
BOARD 
MAY 
BE 
3 
CONDUCTED THROUGH THE USE OF MODERN TECHNOLOGY 
4 
INCLUDING BUT NOT LIMITED TO TELEPHONE 
OR VIDEO 
5 
CONFERENCING: PROVIDED, THAT IN ALL CASES, A QUORUM 
6 
SHALL BE PHYSICALLY PRESENT.” 
7 
8 
9 
I O  
1 1  
12 
13 
principles of management. 
14 
A compensation structure, based on job evaluation studies and 
I5 
wage surveys and subject to the Board’s approval, shall be instituted as 
IG 
an integral component of the Bangko Sentral’s human resource 
17 
development program. [frovvided, That the Monetary Board shall make its 
SEC. 3. Section 15, paragraphs (c) and (e) of the same Act are hereby 
amended to read as follows: 
“( c) establish a human resource management system which shall 
govern the selection, hiring, appointment, transfer, promotion, or dismissal 
of all personnel. Such system shall aim to establish professional and 
excellence at all levels of the Bangko Senfral in accordance with sound 
18 
19 
20 
21 
22 
23 
24 
25 
26 
21 
own system conform as closely as possible with the principles provided for 
under Republic Act No. 6758: Provided, however, That compensation and 
wage structure of employees whose positions fall under salary grade 19 
and below shall be in accordance with the rates prescribed under Republic 
Act 
No. 6758.3 PROVIDED, 
THAT 
CONSISTENT 
WITH 
THE 
PROVISIONS OF ARTICLE XII, SEC. 20 OF THE CONSTITUTION OF 
THE 
REPUBLIC 
OF 
THE 
PHILIPPINES 
MANDATING 
THE 
ESTABLISHMENT OF AN INDEPENDENT CENTRAL MONETARY 
AUTHORITY, ALL POSITIONS IN THE BANGKO SENTRAL NG 
PILIPINAS SHALL BE GOVERNED BY A COMPENSATION, POSITION 
28 
CLASS1 FICATI ON 
SYSTEM 
AND 
QUAL1 FICATION 
STANDARDS 
29 
APPROVED 
BY 
THE 
MONETARY 
BOARD 
BASED 
ON 
2 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
I I  
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
2s 
COMPREHENSIVE JOB ANALYSIS AND AUDIT OF ACTUAL DUTIES 
AND 
RESPONSIBILITIES. THE BANGKO SENTRAL SHALL BE 
EXEMPT FROM THE OPERATION OF EXISTING LAWS, RULES AND 
REG U LATlO N S 0 N CO M PEN SAT1 ON, POS IT1 0 N CLASS I F I CAT1 0 N 
AND 
QUALIFICATION 
STANDARDS. 
IT 
SHALL, 
HOWEVER, 
ENDEAVOR TO MAKE ITS SYSTEM CONFORM AS CLOSELY AS 
POSSIBLE TO THE PRINCIPLES UNDER REPUBLIC ACT NO. 6758, AS 
AMENDED. 
On the recommendation of the Governor, appoint, fix the 
remunerations and other emoluments, and remove personnel of the 
Bangko Sentral, subject to pertinent civil service laws: Provided, That the 
Monetary Board shall have exclusive and final authority to promote, 
transfer, assign, or reassign personnel of the Bangko Sentral and these 
personnel actions are deemed made in the interest of the service and not 
disciplinary: Provided, further, That the Monetary Board may delegate 
such authority to the Governor OR TO ANY OF THE DEPUTY 
GOVERNORS, 
OR 
IN CASE OF REASSIGNMENT WITHIN A 
DEPARTMENT, TO THE HEAD OF THE DEPARTMENT CONCERNED, 
under such guidelines as [its] THE BOARD may determine.” 
xxxxxxxxxxxx 
“(e) 
indemnify 
its members and 
[other officials] 
OTHER 
PERSONNEL of the Bangko Sentral L 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 
GROSS negligence or misconduct. 
3 


1 
2 
3 
4 
5 
misconduct. 
6 
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 GROSS negligence or 
The costs and expenses incurred in defending the aforementioned 
7 
action, suit or proceeding may be paid by the Bangko Sentral in advance 
8 
of the final disposition of such action, suit or proceeding upon receipt of an 
9 
undertaking by or on behalf of the member, officer, or employee to repay 
I O  
the amount advanced should it ultimately be determined by the Monetary 
1 1  
Board that he is not entitled to be indemnified as provided in this 
12 
subsection: PROVIDED, 
HOWEVER, THAT SUCH COSTS AND 
13 
EXPENSES 
SHALL 
INCLUDE 
THOSE 
INCURRED 
IN 
FILING 
14 
COUNTERCHARGES 
NECESSARY 
FOR 
THE 
DISPOSAL 
OF 
15 
UNSETTLED 
ISSUES 
RELATED 
TO 
THE 
ACTIONS 
HEREIN 
16 
MENTIONED, 
INCLUDING 
THOSE 
FILED 
FOR 
CLAIMS 
FOR 
17 
COMPENSATORY DAmAGES.” 
18 
19 
20 
“Section 16. Responsibility. - THE GENERAL RULE AND THE 
21 
EXCEPTION THEREFROM ON THE LIABILITY OF PUBLIC OFFICERS 
22 
AS PROVIDED IN SECTIONS 38 AND 39 OF CHAPTER 9, BOOK 1 OF 
23 
THE REVISED ADMINISTRATIVE CODE OF 1987 SHALL APPLY TO 
24 
members of the Monetary Board, officials, examiners, and OTHER 
25 
employees of the Bangko Sentral who SHALL NOT BE CIVILLY LIABLE 
76 
FOR ACTS DONE IN THE PERFORMANCE OF THEIR OFFICIAL 
27 
DUTIES, UNLESS THERE IS A CLEAR SHOWING OF WILLFUL 
28 
VIOLATION OF THIS STATUTE, BAD FAITH, MALICE OR GROSS 
29 
NEGLIGENCE RESULTING IN [willfully violate this Act or who are guilty 
SEC. 4. The first paragraph of Section 16 of the same Act is hereby 
amended to read as follows: 
4 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
I 1  
12 
13 
14 
15 
IG 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
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] TO the Bangko Senfral or 
other institutions. [as a result of such violation, negligence, abuse, 
malfeasance, misfeasance or failure to exercise extraordinary diligence,] 
ONLY THE BANGKO SENTRAL AND/OR THE INSTITUTION 
WHICH DIRECTLY SUSTAINED THE LOSS OR INJURY FROM ANY OF 
THE FOREGOING ACTS OR OMISSIONS OF BANGKO SENTRAL 
PERSONNEL SHALL HAVE THE RIGHT TO FILE AN ACTION FOR 
DAMAGES AGAINST THE LATTER.” 
SEC. 5. Section 25 of the same Act is hereby amended to read as follows: 
“SECTION 25. Supervision and Examination. - The Bangko 
Sentral shall have supervision over, and shall conduct periodic or special 
examination of [banking institutions, and] BANKS, quasi-banks, AND 
TRUST ENTITIES, including their subsidiaries and affiliates engaged in 
allied activities, AND OTHER FINANCIAL INSTITUTIONS WHICH, 
UNDER SPECIAL LAWS, ARE SUBJECT TO BANGKO SENTRAL 
SUPERVISION. PURSUANT TO THE AUTHORITY OF THE BANGKO 
SENTRAL 
SHALL 
BE 
REQUIRED 
FOR 
TRANSFERS 
OR 
ACQUISITIONS OR SERIES OF TRANSFERS OR ACQUISITIONS 
WOULD 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 NOR BY ANY GOVERNMENT AGENCY 
AND THE TRANSFEROR-STOCKHOLDERS, IN CASES INVOLVING 
TRANSFERES, SHALL REMAIN ACCOUNTABLE AND RESPONSIBLE 
THEREFOR. IN APPROVING SAID 1RANSFERS OR ACQUISITIONS, 
REGARD SHALL BE GIVEN BY THE BANGKO SENTRAL TO THE 
FITNESS OF THE INCOMING STOCKHOLDERS AS 
MAY BE 
5 


I 
1 
2 
3 
4 
5 
6 
7 
8 
9 
I O  
I I  
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
2s 
29 
INDICATED BY THEIR INTEGRITY, FINANCIAL CAPACITY AND 
STANDING IN THE COMMUNITY. 
For purposes of, this section, a subsidiary means a corporation 
more than fifty percent (50%) of the voting stock of which is owned by a 
bank or quasi-bank and an affiliate means a corporation the voting stock 
of which, to the extent of TWENTY-FIVE PERCENT (25%) TO 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. 
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 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 
6 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
1 1  
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
provisions of Rule 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 of injunction 
contemplated in this section. 
NO ACTION, SUIT OR PROCEEDING SHALL LIE AGAINST 
OFFICIALS 
AND 
PERSONNEL 
OF 
THE 
SUPERVISION 
AND 
EXAMINATION SECTOR IN CONNECTION WITH ANY ACT DONE IN 
GOOD FAITH, OR OMISSION, IN THE EXERCISE OF THEIR 
FUNCTIONS UNDER THIS SECTION.’’ 
SEC. 6. Section 26 of the same Act is hereby amended to read as follows: 
“SECTION 26. Bank Deposits and Investments. - Any director, 
officer or stockholder who, together with his related interest, contracts a 
loan or any form of financial accommodation from: (1) his bank; or (2) from 
a bank (a) which is a subsidiary of a bank holding company of which both 
his bank and the lending bank are subsidiaries or (b) in which a controlling 
proportion of the shares is owned by the same interest that owns a 
controlling proportion of the shares of his bank, [in excess of five percent 
(5%) of the capital and surplus of the bank, or in the maximum amount 
permitted by law, whichever is lower,] REGARDLESS OF THE AMOUNT 
OF THE LOAN OR CREDIT ACCOMMODATION, shall be required by the 
lending bank to waive the RIGHT TO secrecy of his deposits of whatever 
nature in all banks in the Philippines. Any information obtained from an 
examination of his deposits shall be held strictly confidential and may be 
used by the examiners only in connection with their supervisory and 
examination responsibility or by the Bangko SentraI in an appropriate legal 
action it has initiated involving the deposit account.” 
Sec. 7. Section 28 of the same Act is hereby amended to read as follows: 
“SECTION 28. Examination and Fees. - The supervising and 
examining department head, personally or by deputy, shall examine 
7 


1 
2 
3 
4 
5 
G 
7 
8 
9 
10 
1 1  
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
2s 
29 
REGULARLY the books of every [banking institution once in every twelve 
(12) months] BANK, QUASI-BANK AND TRUST ENTITY, INCLUDING 
ITS 
SUBSIDIARIES 
AND 
AFFILIATES 
ENGAGED 
IN 
ALLIED 
ACTIVITIES AND OTHER FINANCIAL INSTITUTIONS WHICH UNDER 
SPECIAL 
LAWS 
ARE 
SUBJECT 
TO 
BANGKO 
SENTRAL 
SUPERVISION, IN ACCORDANCE WITH THE GUIDELINES SET BY 
THE MONETARY BOARD, and at such other times as the Monetary 
Board by an affirmative vote of five (5) members, may deem expedient 
and to make a report on the same to the Monetary Board [:Provided, That 
there shall be an interval of at least twelve (12) months between annual 
examinations]. 
INSPECTION 
OF 
CERTAIN 
RECORDS 
FOR 
VERIFICATION 
PURPOSES 
SHALL 
NOT 
BE 
DEEMED 
AN 
EXAMINATION FOR PURPOSES OF THIS PROVISION. 
The [bank] INSTITUTION concerned shall afford to the head of the 
appropriate supervising and examining departments and to his authorized 
deputies full opportunity to examine its books, cash and available assets 
and general condition at any time during [banking] BUSINESS hours when 
requested to do so by the Bangko Sentral : Provided, however, that none 
of the reports and other papers relative to such examinations shall be 
open to inspection by the public except insofar as such publicity is 
incidental to the proceedings hereinafter authorized or is necessary for the 
prosecution of violations in connection with the business of such 
institutions. 
[Banking] BANKS, [and quasi-banking institutions] QUASI-BANKS 
AND TRUST ENTITIES AND OTHER FINANCIAL INSTITUTIONS 
WHICH UNDER SPECIAL LAWS, [which] are subject to examination by 
the Bangko Senfral, shall pay to the Bangko Sentral, within the first thirty 
(30) days of each year, .an annual fee in an amount equal to a percentage 
as may be prescribed by the Monetary Board [ofl BASED ON its average 
8 


I 
2 
3 
4 
5 
G 
7 
8 
9 
I O  
1 1  
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
33 
24 
25 
26 
27 
28 
39 
total assets during the preceding year [as shown on its end-of-month 
balance sheets, after deducting cash or hand and amounts due from 
banks, 
including 
the 
Bangko 
Sentral and 
banks 
abroad]. 
IN 
CONSOLIDATED EXAMINATION OF RESOURCES, THE FEES FOR 
THE EXAMINATION OF SUBSIDIARIES AND AFFILIATES SHALL BE 
CHARGED 
AGAINST 
THEIR 
PRINCIPAL 
INSTITUTION 
UNDER 
EXAMINATION. 
THE MONETARY BOARD MAY LIKEWISE IMPOSE SIMILAR 
FEES ON OTHER FINANCIAL INSTITUTIONS UDNER BANGKO 
SEN TRA L S U P E RVI S ION .’I 
Sec. 8. Section 30 of the same Act is hereby amended to read as follows: 
“SECTION 30. Proceedings in Receivership and Liquidation. - 
Whenever, upon report of the head of the supervising or examining 
department, the Monetary Board finds that a bank, [or] quasi-bank OR A 
TRUST ENTITY: 
[(a)] (A) HAS NOTIFIED THE BANGKO SENTRAL OR PUBLICLY 
ANNOUNCED A UNILATERAL CLOSURE, OR IN ANY MANNER HAS 
SUSPENDED 
THE 
PAYMENT OF 
ITS 
DEPOSIT / 
DEPOSIT 
SUBSTITUTES LIABILITIES, OR in 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 OR FINANCIAL community; OR 
(b) has insufficient realizable assets, as determined by the Bangko 
Senfral to meet its liabilities; or 
(c ) cannot continue in business without involving probable losses 
to its depositors or creditors; or 
(U) HAS A CAPITAL ADEQUACY RATIO OF LESS THAN TWO 
PERCENT (2%) CONTINUOUSLY FOR MORE THAN THIRTY (30) 
DAYS; OR 
9 


3 
4 
5 
6 
7 
8 
9 
I O  
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
Section 
amount 
cases, 
hearing 
CASE 
Corporation 
[:d)] (E) has willfully violated a cease and desist order under 
37 that has become final, involving acts or transactions which 
to fraud or a dissipation of the assets of the institution; in which 
the Monetary Board may summarily and without need for prior 
forbid the institution from doing business in the Philippines and IN 
IT IS A BANK, designate the Philippine Deposit Insurance 
as receiver of the banking institution. 


1 
2 
3 
4 
5 
6 
7 
8 
9 
I O  
I 1  
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
CLOSED INSTITUTION AND PERFORMS 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] THIS SECTION, the Monetary Board shall notify in writing the 
board of directors to proceed with the liquidation of the institutions. The 
receiver shall: 
(I) file ex parfe 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 OR TRUST ENTITIES, 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 institution 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 custodial legis in the hands of the receiver and shall, from the moment 


I 
2 
3 
4 
5 
G 
7 
8 
9 
10 
I 1  
12 
13 
14 
15 
IG 
17 
18 
19 
20 
21 
22 
21 
24 
25 
26 
27 
28 
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 RESTRAINING, ENJOINING OR SETTING ASIDE 
THE ACTION COMPLAINED OF IN THE PETITION FOR CERTIORARI, 
UNLESS SUCH ORDER IS ISSUED BY THE SUPREME COURT, MAY 
BE DISSOLVED OR STAYED UPON BANGKO SENTRAL FILING A 
WRITTEN UNDERTAKING THAT IT WILL PAY ALL DAMAGES WHICH 
THE PETITIONER MAY SUFFER FROM THE DENIAL, DISSOLUTION 
OR STAY OF THE INJUNCTION SHOULD IT BE DECIDED IN A FINAL 
JUDGEMENT THAT THE PETITIONER IS ENTITLED TO HAVE THE 
ACTS COMPLAINED OF PERMANENTLY ENJOINED. The petition for 
cerliorari may only be filed by the stockholders of record representing the 
majority of the capital stock within ten (IO) 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 IN 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 


I 
2 
3 
4 
5 
6 
7 
8 
9 
I O  
I I  
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
with the Monetary Board, Furthermore, the designation of a conservator is 
not a precondition to the designation of receiver.” 
SEC. 9. Section 36 of the same Act is hereby amended to read as follows: 
“SECTION 
36. Proceedings Upon Violation of This Act and 
Other Banking Laws, Rules, Regulations, 
Whenever a bank, [or] quasi-bank, TRUST ENTITY 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, rules 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 
(P50,OOO) nor more than [Two hundred thousand pesos (P200,000)] TWO 
MILLION PESOS (P2,OOO.OOO) or by imprisonment of not less than two (2) 
years nor more than ten (IO) years, or both, at the discretion of the court. 
THE ACCESORY PENALTY OF CONFISCATION OR FORFEITURE OF 
INSTRUMENTS AND PROCEEDS OF THE OFFENSE SHALL IN ALL 
SUCH CASES BE IMPOSED UPON CONVICTION OF THE ACCUSED. 
UPON PROBABLE CASUE BEING ESTABLISHED THAT AN 
OFFENSE 
PENALIZED 
UNDER 
THIS 
SECTION 
HAS 
BEEN 
COMMITTED OR IS BEING COMMITTED AND THAT A BANK DEPOSIT 
OR SIMILAR ACCOUNT APPEARS TO HAVE BEEN USED, OR IS 
BEING USED AS A MEANS TO COMMIT THE OFFENSE, OR TO 
CONCEAL ITS COMMISSION OR ITS PROCEEDS, ANY COMPETENT 
COURT MAY ORDER THE EXAMINATION OF THE ACCOUNT AND 
THEIR 
BALANCES 
SEQUESTERED, 
NOTWITHSTANDING 
THE 
PROVISIONS OF REPUBLIC ACT NO. 1405, REPUBLIC ACT NO. 6426, 
REPUBLIC ACT NO. 8791, A.ND OTHER LAWS. THE ORDER OF 
13 


1 
EXAMINATION 
AND 
SEQUESTRATION 
SHALL 
ISSUE 
UPON 
2 
APPLICATION AND COMPLIANCE WITH THE FORMAL AND LEGAL 
3 
REQUISITES PRESCRIBED IN RULE 126 OF THE RULES OF COURT 
4 
FOR THE ISSUANCE OF A SEARCH WARRANT. BANK DEPOSITS 
5 
MAY LIKEWISE BE EXAMINED BY THE ANTI-MONEY LAUNDERING 
G 
COUNCIL PURSUANT TO SECTION 11, REPUBLIC ACT NO. 9160. 
7 
Whenever 
ANY 
ENTITY 
UNDER 
BANGKO 
SENTRAL 
8 
SUPERVISION [a bank or quasi-bank] persists in carrying on its business 
9 
in an unlawful or unsafe manner, the Board may, without prejudice to the 
I O  
penalties provided in the preceding paragraph of this section and the 
1 1  
administrative sanctions provided in Section 37 of this Act, take action 
12 
under Section 30 of this Act.” 
13 
SEC. 10. Section 37 of the same Act is hereby amended to read as 
14 
follows: 
15 
“SECTION 37. Adminisfrafive Sancfions [ on Banks and Quasi- 
16 
Banks]. -Without prejudice to the criminal sanctions against the culpable 
17 
persons provided in Sections 34, 35, and 36 of this Act, the Monetary 
18 
Board, may, at its discretion, impose upon any bank, [or] quasi-bank OR 
19 
TRUST ENTITY, their directors and/or officers, for any willful violation of 
20 
its charter or bylaws, willful delay in the submission of reports or 
21 
publications thereof as required by law, rules and regulations; any refusal 
22 
to permit examination into the affairs of the institution; any willful making of 
23 
a false or misleading statement to the Board or the appropriate 
24 
supervising and examining department or its examiners; any willful failure 
25 
or refusal to comply with, or violation of, any banking law or any order, 
26 
instruction or regulation issued by the Monetary Board, or any order, 
27 
28 
instruction or ruling by the Governor; or any commission of irregularities, 
and/or conducting business in an unsafe or unsound manner as may be 
14 


1 
2 
3 
4 
5 
G 
7 
8 
9 
I O  
1 1  
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
determined by the Monetary Board, the following administrative sanctions, 
whenever applicable: 
(a) fines in amounts as may be determined by the Monetary Board 
to be appropriate, but in no cases to exceed [Thirty thousand pesos 
(P30,OOO) a] THREE HUNDRED THOUSAND PESOS (P300,OOO) PER 
BANKING 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] INSTITUTION; 
(b) suspension of rediscounting privileges or access to Bangko 
Senfral 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 
5ANGKO SENTRAL OF ANY AND ALL PROFITS, AS MAY BE 
DETERMINED BY THE MONETARY BOARD, ARISING FROM THE 
OFFENSE OR VIOLATION OF BANKING LAWS AND REGULATIONS, 
OR ACT OR OMISSION CONSTITUTING AN UNSAFE OR UNSOUND 
PRACTICE; AND/OR 
( I )  
OTHER SANCTIONS AS THE MONETARY BOARD MAY 
DEEM APPROPRIATE UNDER THE CIRCUMSTANCES. 
THE DIRECTOR OR OFFICER RESPONSIBLE FOR THE 
VIOLATION MAY, AFTER DUE HEARING, BE SUSPENDED, REMOVED 
OR DISQUALIFIED FROM HOLDING OFFICE, OF ANY POSITION, IN 
AN INSTITUTION UNDER THE SUPERVISION OF THE BANGKO 
SENTRAL, FOR A PERIOD TO BE DETERMINED BY THE MONETARY 
15 


I 
2 
3 
4 
5 
6 
7 
8 
9 
I O  
I I  
12 
13 
14 
15 
16 
17 
IS 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
BOARD WHICH SHALL IN NO CASE EXCEED A PERIOD OF FIVE (5) 
YEARS, 
TAKING 
INTO 
CONSIDERATION 
THA 
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 Bangku Sentral within a period of one 
hundred twenty (420) 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 
respondent. 
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 
16 


1 
2 
3 
4 
5 
final its order. 
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 
G 
7 
8 
9 
10 
I 1  
12 
13 
14 
The Governor is hereby authorized, at his discretion, to impose 
upon [banking institutions,] BANKS, QUASI-BANKS, AND TRUST 
ENTITIES, 
INCLUDING THEIR 
PARENTS, 
SUBSIDIARIES AND 
AFFILIATES 
ENGAGED 
IN 
ALLIED 
ACTIVITIES, 
ANDOTHER 
FINANCIAL INSTITUTIONS WHICH UNDER SPECIAL LAWS ARE 
SUBJECT TO BANGKO SENTRAL SUPERVISION for any failure to 
comply with the requirements of law, Monetary Board regulations and 
policies, and/or instructions issued by the Monetary Baord or by the 
Governor, fines not in excess of Ten thousand pesos (P10,OOO) a day for 
15 
I G  
17 
I S  
follows: 
19 
“SECTION 77. Requirement of Balance Currency Position. - 
20 
The Monetary Board may require [the] banks, QUASI-BANKS, THEIR 
21 
SUBSIDIARIES AND AFFILIATES to maintain a balanced position 
22 
between their assets and liabilities in Philippine pesos or in any other 
23 
currency or currencies in which they operate. [The Banks] THEY shall be 
24 
granted a reasonable period of time in which to adjust their currency 
25 
positions to any such requirement. 
26 
27 
28 
each violation, the imposition of which shall be final and executory until 
reversed, modified or lifted by the Monetary Board on appeal.” 
SEC. 11. Section 77 of the same Act is hereby amended to read as 
The powers granted under this section shall be exercised only 
when special circumstances make such action necessary, in the opinion of 
the Monetary Board, and shall be applied to all banks, QUASI-BANKS, 
17 


I 
2 
3 
4 
5 
6 
7 
8 
9 
I O  
1 1  
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
THEIR 
SUBSIDIARIES 
AND 
AFFILIATES 
alike 
and 
without 
d isc r i m i nation . 
’I 
SEC. 42. The last paragraph of Section 84 of the same Act is hereby 
amended to read as follows: 
“Whenever a [financial] BANK [institution] incurs an overdraft in its 
account with the Bangko Senfral , the same shall be eliminated within the 
period prescribed in Section 102 of this Act. THE OVERDRAFT MAY BE 
CONVERTED INTO AN EMERGENCY LOAN OR ADVANCE, AND 
SHALL BE GOVERNED BY THE PROVISIONS OF THIS SECTION. 
PROVIDED, HOWEVER, THAT THE CEILING PRESCRIBED HEREIN 
ON THE AMOUNT OF ANY EMERGENCY LOAN OR ADVANCE THAT 
MAY BE GRANTED TO A BANK SHALL NOT APPLY TO THE 
CONVERSION OF THEIR OVERDRAFT INTO AN EMERGENCY LOAN 
OR ADVANCE.” 
SEC. 13. Section 102 of the same Act is hereby amended to read as 
follows: 
“SECTION 102. interbank Sefflemenf. - The Bangko Senfral shall 
establish facilities for interbank clearing under such rules and regulations 
as the Monetary Board may prescribe: Provided, That the Bangko Senfral 
may charge administrative and other fees for the maintenance of such 
facilities. 
The deposit reserves maintained by the banks in the Bangko 
Senfral in accordance with the provisions of Section 94 of this Act shall 
serve as basis for the clearing of checks and the settlement of interbank 
25 
26 
balances, subject to such rules and regulations as the Monetary Board 
may issue with respect to such operations: Provided, That any bank which 
27 
28 
29 
incurs an overdrawing in its deposit account with Bangko Sentral shall fully 
cover said overdraft, including interest thereon at a rate equivalent to one- 
tenth of one percent (111 0 or 1 %) per day or the prevailing ninety-one-day 
I8 


I 
2 
3 
4 
5 
6 
7 
8 
9 
10 
I I  
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
Treasury bill rate plus three percentage points, whichever is higher, not 
later than the next clearing day: Provided, HOWEVER, [further] , That 
settlement of clearing balances shall not be effected for any account which 
IS [continues to be] overdrawn for A PERIOD AS MAY BE DECIDED BY 
THE MONETARY 
BOARD WHENEVER WARRANTED 
BY THE 
CIRCUMSTANCES: PROVIDED, THAT SUCH PERIOD SHALL IN NO 
CASE EXCEED five (5) consecutive banking days until such time as the 
overdrawing is fully covered or otherwise converted into an emergency 
loan or advance pursuant to the provisions of Section 84 of this Act: 
Provided, finally, That the appropriate clearing office shall be officially 
notified of banks with overdrawn balances. Banks with existing overdrafts 
with the Bangko Sentral as of the effectivity of this Act shall, within such 
period as may be prescribed by the Monetary Board, either convert the 
overdraft into an emergency loan or advance with a plan of payment, or 
settle such overdrafts, and that, upon failure to so comply herewith, the 
Bangko Senfral shall take such action against the bank as may be 
warranted under this Act.” 
SEC. 14. Section 108 of the same Act is hereby amended to read as 
follows: 
“SECTION 108. Minimum Capital Ratios. - The Monetary Board 
may prescribe minimum RISK-BASED CAPITAL ADEQUACY ratios 
BASED ON INTERNATIONALLY ACCEPTED STANDARDS INCLUDING 
THOUSE PRESCRIBED BY THE SAME COMMITTEE [which the capital 
and surplus of the banks must bear to 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 BANKS WHICH ARE 
EXPOSED TO MORE THAN NORMAL RISKS.” 
19 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
SEC. 15. Section 116 of the same Act is hereby amended to read as 
follows: 
“SECTION I 
16. Rernunerafion for 
ewices. - The Bangko 
Sentral may charge equitable rates, commissions or fees for services 
which it renders to the Government, its political subdivisions and 
instrumentalities 6.1 AS WELL AS TO FINANCIAL INSTITUTIONS: 
PROVIDED, THAT IN THE CASE OF BANKS AND QUASI-BANKS, 
SUCH CHARGES FOR SERVICES SHALL BE IN ADDITION TO THE 
SUPERVISION FEES AUTHORIZED UNDER SECTION 28 OF THIS 
ACT: 
PROVIDED, 
FURTHER, THAT 
BANGKO 
SENTRAL MAY 
OUTSOURCE ANY SUCH SERVICES WHEN THE COST AND 
APPROPRIATE CONTROLS JUSTIFY IT.” 
SEC. 16. Section 125 of the same Act is hereby amended to read as 
follows: 
“SECTION 125. Tax Exempfions. - 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 [.] NOW IN 
FORCE OR HEREAFTER ESTABLISHED. 
The exemptions 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 such taxes, fees, charges, and 
assessments for which the Bangko SentraI itself would otherwise be [,I 
liable, and shall not apply to taxes, fees, charges, or assessments payable 
by persons or other entities doing business with the Bangko Sentral: 
20 


I 
2 
3 
4 
Bangko Sentral. ” 
5 
Provided, furfher, That foreign loans and other obligations of the Bangko 
Sentral shall be exempt, both as to principal and interest, from any and all 
other taxes if the payment of such taxes has been assumed by the 
SEC. 17. Section 126 of the same Act is hereby amended to read as 
6 
7 
S 
9 
I O  
1 1  
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
follows: 
“SECTION 126. Exemption from Cusfoms 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. I S .  Section 128 of the same Act is hereby amended to read as 
follows: 
“SECTION 128. Prohibifions. - 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 PROHIBITION SHALL 
23 
24 
25 
26 
27 
2s 
The Bangko Sentral shal! not engage in development banking or 
29 
financing: PROVIDED, however, That outstanding loans obtained or 
NOT APPLY WHENEVER SUCH OWNERSHIP AND/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 TO BE NECESSARY TO THE EXECUTION BY BANGKO 
SENTRAL OF ITS MANDATES UNDER THIS ACT.” 
21 


1 
2 
3 
4 
5 
6 
7 
8 
9 
IO 
I I  
12 
13 
14 
15 
16 
17 
18 
19 
20 
extended for development financing shall not be affected by the prohibition 
of this section.” 
SEC. 19. Subparagraph (b) of Section 132 of the same Act is hereby 
amended to read as follows: 
“(b) the Bangko Sentral shall remit [seventy-five percent (75%)] 
NINETY PERCENT (90%) of its net profits to a special deposit account 
(sinking fund) until such time as the net liabilities of the Central Bank shall 
have been liquidated through generally accepted finance mechanism such 
as, but not limited to, write-offs, set-offs, condonation, collections, 
reappraisal, revaluation and bond issuance by the National Government, 
or to the National Government as dividends;” 
SEC. 20. Separability Clause. If any provision of this Act is held invalid 
for any reason, the remainder of this Act shall not be affected thereby. 
SEC. 21. Repealing Clause.- All Jaws, decrees, orders, letters of 
instruction, letters of implementation, rules and regulations, or parts thereof 
inconsistent with any provision of this Act are hereby amended, modified, 
repealed insofar as they are inconsistent with the provisions of this Act. 
SEC. 22. Effectivity.” This Act shall take effect fifteen (15) days from the 
date of its publication in at least two (2) national newspapers of general 
circulation. 
Approved , 
22