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AN ACT 
CREATING THIE: PEDLIPFINE TEACHERS BANK, AND FOR O'I1BER PURPOSES 
Be it enacted by ihe Sellate and the House of Representatives of the Phi&ppines in Congress 
assembled: 
SECTION 1. Short Title. - This Act shall be known and cited as the "Phi#ppine Terschers 
Bank Charter of 2004". 
SEC. 2. Declaratfon ofPoZicy. - 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 car= prospects in order that they may compare fkvorably 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 
quaiifications and ability of the teachin$ staffand that education Is an essential €actor in the economic 
growth of the nation as a productive investment of Vital importance, is hereby reiterated. 
SEC. 3. D@ni&a - For the purpose of this Act, the term "teacher" shall refer to all public 
school teachers holding permanent appointments and on fhll-time basis, who are engaged in 
classroom teaching, in any level of instructions, includmg profbssional staff of state colleges and 
universities, guidance counselors, school librarians, industrial arts or vocational instmetors, dl 
persons performing supervisory and/or administrative functions, school nurses, school physicians, 
school dentists, maintenance personnel and such other employees in all schools, colleges and 
universities operated by the Government or its political subdivisions. 
SEC. 4. Cndon; Terms; Euistertce; Domicile attd 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 B period of fifty (SO) 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 arms within the 
country as the Board of Directors may decide. 
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5. Corpurute Pmm. - The Bank shal have the foIiowing powers: 
To prescribe its by-laws; 
To adopt, alter, and use a corporate seal; 
To enter into contracts, to sue and be sued; 
To accept savings and time deposits, and open current/ checking accounts; 
To borrow money; to own real or personal property and to sell, mortgage or 
otherwise dispose of them; 
To carry on a trust business in accordance with the provisions of law governing trust 
corporations; 


(5.7) To issue bonds, debentures, securities, collaterals and/or the renewal and r e h c i n g  of 
the same, with the approval of the Bmgko Sentral ng Pilipinas (BSP); 
(5.8) To grant loans and advances preferably to teachers, their widows, orphans or 
compulsory heirs against security of real estate and/or other acceptable assets; 
(5.9) To grant loans to cooperatives/ associations preferably to those that are owned or 
controlled by the teachers, their widows, orphans, or compulsory heirs against security of real estate 
and/or other acceptable assets; 
(5.10) To exercise the powers granted in this Act and such incidental powers as may 
(5.1 1) To dxercise the general powers mentioned in the Corporation Code and the 
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be necessary to carry on the business of general banking; and 
General Banking Act insofar as they are not inconsistent or incompatible with the provisions ,of this 
Act. 
SEC. 6. Authorized Cdpitat S-k; Par Valw - The authorized capital stock of the Bank 
shall be one billion pesos (Pl,000,000,000.00) 
divided into ten &ion (10,000,000) shares with a par 
value of one hundred pesos fplOO.00) each. The shares shall be divided into the following four 
classes, denominated as Series "A", Series W', Series "Cf', and Series "D", as follows: 
(a) 
Series "A" shall comprise four hundred million pesos (P400,000y000.00) 
equivalent to 
four million (4,000,000) preferred shares to be sub&cribed solely by teachers, such shares to be 
entitled to cumulative dividends of four perceat (4%) per annum and with prefereace 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 "€3" shares of stocks; 
(b) 
Series ''€3'' 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: 
(P60M), equivalent 
equivalent to two hundred thousand ( 200,000) shares; and 
equivalent to two hundred thousand (200,000) shares. 
(b. 1) Chvement Service Insurance System (GSIS) - Sixty Million Pesos 
(b.2)Sacial Security System (SSS) - Twenty Million Pesos (PZOM), 
(b.3) Development Bank of the Philippines @BP) - Twenty Million Pesos (P20M), 
to six hundred thousand ( 600,000) common shares; 
(c) 
Series "C" shall comprise four hundred million (3?400,000,000.00) 
pews equivalent to 
four million (4,000,000) common shares EO 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: 
Providedj That preference in the subsctiption ofthis class of shares shall be given to the PPSTA, the 
teachers, their widows, orphans or compulsory heirs; and 
(d) 
Series "D" 
shqll comprise one hundred million (ptOO,OOO,OOO.OO) pesos equivalent to 
one, million (1,000,000) common shares which shall be available for subscription of foreign 
nationals, their corporation a d o r  associations, 
SEC, 7. Lending L M f s  - 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 i%een 
percent (1 5%) of the unimpaired capital afld surplus of the Bank; and 


(b) No director or officer of the Bank shall, either directly or indirectly, for himself or a6 
the representative or agent of others, b 
deposits or funds of the Bank, 
nor shall he become a guarantor, hdor 
ms fiom the Banks to others, 
or in any manner to be an obligor 
m the Bank or loaned by it, 
exceptwith the written approval of 
of the Bank, exclu&g 
the director concerned. The credit 
irector or officer of the 
Bank which theBowd of Directors may aut 
shall in no 
case 
exceed his 
outstanding deposits or the book 
the Bank. Any such 
approval shall be entered into the 
copy of such entry 
shall be transmitted forthwith to the 
departmat of the 
Bangko Sentral ng Pilipinas. T 
of the Bank who 
violates the provisions of this 
vacant and the 
director or officer shall be subject to 
prosecution and suffer the penalties 
provided by iaw. 
SEC. 8. Board of Directors, Campodtiofi md 
Bank shall be directed and its property managed 2ttid 
by a Board of Directors consisting of nine (9) 
receive, for each session of the Board 
- The &&s 
and business of the 
provided in this Act, 
provided, who shall 
SEC. 9. Etation of Board of Directurn - 
first Monday of March, the 
as the Board of 
Directors may determine. 
stockholders shall meet to elect the members of the Board of Diectors for the current year. Each 
stockholder or proxy shall be entitled to as nwny votes as he may have shares of stock, registered in 
his name at the time of the election. Immediately &er the election, the directorate shall organize as 
such and elect fiom 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 fiom among its members: Provided, further, That no hll-time appointive or elective public 
official shall at the same time serve as officer, director, legal counsel or consultant of the bank except 
in cams where such service is in the exercise of the stockholders rights of 
the Government or is 
incident to financial assistance provided by the Government, its agencies or instrumentalities to the 
Bank. 
SEC. 10. Powers artd Authority of the Bourd of Directom - 
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 ~onfarmity 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 B e  
(c) 
To establish upon previous aupri,ty of the Bangko Sentral ng Pilipinas, branches, 
ppmes, as it may deem advisable, which shall perfbm 
agenicies or ofices in such points within the P 
fbnctions as may be delegated to them by the Board of Directors. 
$" 
SEC. 11. &mutive c?fJicslrs. - The Chi f Executive of the Bank shall be the President, assisted 
by an Executive Vice-president and such num er of Vice-presidents, who shall be elected and may be 
removed by the Board of Directors. The Pr sident and the Executive Vice-president shall possess 
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. 
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practical experience in banking or finance as !I 
executives for five (5) yws. There shall also be a 


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SEC. 12. Duties and Powers of the fiesident. - 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 @nd administration of the Bank. 
Particularly he shall have the power and duty: 
(a) 
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To make loans on commercial paper for such period of time not to exceed four months, 
in sums not exceeding @teen thousand pesos (Pl$,OOO.OO) to anyone person, company, corporations, 
or firm, but he is required to submit a report on such loans to the Board of Directors at its succeedhg 
session: Provi&d That the total amount of such 
loans shall not exceed five (5%) percent of the 
paid-up capital and surplus; 
(b) 
To make, with the advice and consent of the Board of Directors, all contracts on behalf 
of the said Bank and to enter into all necessary obligations that this Act requires or permits-, 
(c) 
To report weekly to the Board of Directors the main faces concerning the operations of 
the Bank during the preceding week and to suggest changes in rates of discount or interest, exchange, 
or policy which to him may seem best; and 
(d) 
To exercise such other powers and perform such other duties as may be directed by the 
Board of Directors &om time to time. 
SEC. 13. Appointment, Removal and Sdmks of the Other Oflcm m d  Bmployetx - All 
other oBcers and employees of the Sa.& shall! be appointed and 
removed by the Board of 
Directors upon recommendation of the President of the Bank: Providd, however, That all other 
cirmstances 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 campensation which shall be fixed by the President with the approval of the Board of 
Directors. 
SEC. 14. Fidelity Bond for Oflcers and Emplgyees. .r The Board of Directors 
may 
require any officer and employee of the Bank and its branches, before entering upon the pefformance 
of their duties, to firmish 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 ody, all officers and employees of 
whom a bond is required shall be deemed public officers and employees, respectively, and the 
provisions of the Public Bonding Law, and related legislations are hereby made applicable to them. 
SEC. 15. AZZocatian of Net &o@ts. - At the close of each calendar year, the Bank 
shall 
determine the net result of its operations, in the calculation of which, adequate allowawe shall be 
made for probable losses, and the net profit afiived thereat shall be distributed as follows: 
(a) Twenty percent (20%) of such not profit shall accrue to the reserve account: Pmvi&d 
I;hat 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 followin8; 
(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 Sec. 6 (b.1 to b.3) hereof shall first be applied in 
payment of their capital stock subscriptions, until saw shares shall have been fblly paid. 
SEC. 16. Government Dqositoy. - The Secretary of Education, Culture and Sports, the 
Secretary of Finawe , the National Treasurer and their authorized representatives, city md municipal 
treasurers, as well as official custodians of public Grids or those belonging to government-owned or 
controlled corporations are hereby 
authorized, if they so desire to make and actually maintain 
deposits of any government corporate funds with the Bank, which is hereby declared to be a 
government depository, 


SEC. 17. Articles oflficorpordoa - 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 Bak, and that, notwithstanding the provisions of any existing law to the contrary, 
said Bank shall be deemed registered and duly authorized to do business and operate as a commercial 
bank as of the date of approval of this Act. 
SEC. 18. By-Lmus; - Within thrw (3) months after the approval of this Act, the bylaws of the 
Bank for its organizational, fimctional and operational government and procedures shall be adopted by 
the affirmative vote of the stockholders representing a majority of all the substxibed capital stock 
entitled to vote, whether paid or unpaid, subject to certification by the Monetary Board pursuant to 
Section ten (10) of Republic Act No. Three Hundred Thirty Seven (337), as amended (General 
Banking Act). 
The by-laws, duly certified by the Monetary Board as aforesaid, shall be signed by the 
stockholders voting for them and shall be kept in the principal office of the Bank, subject to the 
inspection of the stockholders during office hours, and a copy therm< duly certified by a rnajoity of 
the directors and countersigned by the Bank secretary, shall be filed and registered, with the Securities 
and Exchange Commission (SEC). 
SEC. 19. Transi#wy hvisioa - For a period not exceeding two (2) years, fi-om the effdivty 
of this Act, the Secretary of Education in consultation with the Secretary. of Finance and the Philippine 
Public School Teachers Association, shall prescribe the necessary rules and regulations for the Stid 
orgadation and operations of the Bank: provided, That this authority shall immediately cease upon 
formal organization of the Bank and the election ofthe regular members uf the Board of Directors as 
herein provided. 
SEC. 20. RqeaZiHg Clmse, - All laws, presidential decrees, executivB orders, issuances, rules 
and regulations, or any part thereof, contrary to the proVisions of this Act are hereby meodd or 
repealed accordingly. 
SEC. 21. Eflectivity C?mm - This Act shall take effect fifteen (15) days after its publication in 
at least two (2) newspapers of general circulation. 
Approved,