' 
THlRTEENTH CONGRESS OF THE REPUBLIC) 
, 
OF THE PHILIPPINES 
) 
First Regular Session 
1 
Introduced by Senator Miriam Defensor Santiayo 
- 
.- 
EXPLANATORY NOTE 
Republic Act No. 7353, Section 8 aims to provide ailing rural banks supplemental 
capital until they have accumulated enough capital of their own or have stimulated enough 
private investinenis. This section inandate that the Land Bank of the Philippines, the 
Development Bank of the Philippines or any government-owned or controlled bank or' 
financial institution, shall subscribe to the capital stock of any rural bank from time to 
time. 
to 
or 
The second paragraph of Section 8 hrther provides the graduated dividend rates. 
be paid to the Land Bank of the Philippines, the Development Bank of the Philippines 
any government-owned or controlled bank or financial institution for their respective 
equity investments. These prescribed rates, however, have proven to be too onerous for 
the banks. There is a need for a more reasonable dividend rate to provide for and to help 
rehabilitate ailing rural banks. 


' 
THlRTEENTH CONGRESS OF TKE REPUBLIC) 
Fii-st Regular Session 
OF THE PHILIPPn\lES 
) 
S E N A T E  
S .  B. No. 
. 12 543 
'04 
liiL -1 
P 1 :02 
RN ACT 
AMENDING 
SECTI@N 8 OF REFUBLIC ACT NO. 7553, ALSO KNOWN AS 
THE RURAL BANKS ACT OF 15'92 
Re it enacted by t J %  
Senate and H w ~ s a  &f Representatives 
of 
the P h i l i p p i n e s  i n  Cc-ngress assembJed: 
1 
SECTION 
1. 
Republic 
A c t  No. 
7355, 
Section 
8 ,  
2 
7 
3 
4 
8 
4 
10 
e 
, 11 
12 
13 
, 14 
15 
16 
17 
18 
19 
20 
21 
22 
Paragraph 2 1s hereby amended t u  read as follows: 
"Stocks 
held 
hy 
.the Land 
Bank 
05 
t h e  
P h i l i p p i n e s ,  
t h e  
Development 
Rank 
of 
t h e  
P h i l i p p i n e s  
OF by 
any 
government-owned 
or' 
control.led 
bank or f i n a n c i a l  
i n s t i t u t i o n ,  
under 
t h e  terms of t h i s  Section, 5hall be made pref-erred 
only a5 to assets upon l i q u i d a t i o n  and without t h e  
power 
t o  vrjte and 
s h a l l  
s h a r e  i n  
d i v i d e n d  
d i s t r i b u t i o n s  from the d a t e  of i s s u a n c e  
i n  
t h e  
amount. of 
( f o u r  
percent 14%) on 
t h e  
T i r s t  and 
second Years, s i x  p e r c e n t  (6%) 
on t h e  t h i r d  
and 
f o u r t h  years, eight p e r c e n t  I8%) on t h e  f i f t h  and 
s i x t h  years, ten p e r c e n t  (1OY.) on t h e  s e v e n t h  and 
e i g h t h  y e a r s  and twelve percent: (12x) cm t h e  n i n t h  
to t h e  f i f t e e n t h  years w i t h o u t  
preference;) 
SIX 
PERCENT 
<A%) 
FRUM 
THE FIRST YEAR 
UP TO THE 
FIFTEENTH 
(15TH) 
YEARB 
WITHOUT 
PREFERENCE: 
Previded.. however.. That i f  s u c h  stock of t h e  
Land 
Rank 
nf t h e  Phiiippines, the Development Bank 
of 
the 
P h i l i p p i n e s  
c~r any 
gcrvernment-awty?d 
at- 
tantr-alfed bank O r  financial i n s t i t u t i o n  i5 sold 


S .  No.. 2027 
1 
2 
3 
4 
5 
b 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
27 
.. 
la 
W 
l? 
20 
21 
22 
23 
24 
29 
26 
~ 
~~ 
- 2 -  
to private shareholders, the same may be converted 
into common stock of the Cla55 provided for in 
Section 
10 hereof: 
Fravided, 
fur-thi.r, 
That 
pending 
the 
amendment of 
the 
Articles 
of 
Incorporation of the rural bank, if necessary, for 
the purpose of reflecting the conversion into 
common stock of preferred stack sold to private 
shareholders, the transfer shall be recorded by 
the rural bank in the stock and transfer book and 
such 
shareholders shall thereafter enjoy all the 
r i g h t s  and privileges of cammon stockholders. The 
preferred 
stocks 
so 
transferred 
shall 
be 
surrendered and cancelled and the corresponding 
common stocks shall bti i s m e d . "  
SEC. 2. 
&oarability 
C J ~ U S P ,  - If any provision, or 
part hereof is held invalid ar unconstitutianal, 
the 
remainder of the l a w  or the provision not otherwise affected 
shall remain valid and subsisting. 
T 
S C .  
3. 
Repealing Clause. - Any 
law, presidential 
decree or issuance, i.xecutiue order, letter of 
instruction, 
administrative orderl t-ule or regulation contrary to or 
inconsistent with, the p~ovisions of this Art 15 hereby 
repealed, modified or amended accordingly. 
SEC. 
4. 
E f f e c t i v i t y  Clause. - This Act shall take 
effect fifteen (151 days after it5 publication in at least 
tw (2) n e ~ s p a ~ ~ c r s  
of general circulation. 
Approved, 
/ ag Z /CDB