SIXTEENTH CONGRESS OF THE) 
REPUBLIC OF THE PHILIPPINES) 
Third Regular Session 
) 
SENATE 
S. B. No. 2976 
fl;, Ail. 
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'1:5 
SEP 30 P 4 :52 
Prepared by the Committee on Banks, Financial Institutions and Currencies with 
Senator Sergio Osmeiia III as author 
AN ACT 
ENHANCING THE RESOLUTION AND LIQUIDATION FRAMEWORK FOR BANKS, 
AMENDING FOR THE PURPOSE REPUBLIC ACT NO. 3591, AS AMENDED, AND 
OTHER RELATED LAWS 
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled: 
1 
SECTION 1. Section 1 of Republic Act No. 3591, as amended, is hereby 
2 
amended to read as follows: 
3 
"THE CREATION OF THE 
4 
PHILIPPINE DEPOSIT INSURANCE CORPORATION 
5 
SECTION 1. -
There is hereby created a Philippine Deposit Insurance 
6 
Corporation hereinafter referred to as the "Corporation" which shall insure 
7 
as herein provided, the deposits of all banks which are entitled to the 
8 
benefits of insurance under this Act, and which shall have the powers 
9 
hereinafter granted. 
10 
The Corporation shall, as a basic policy, promote and safeguard the 
11 
interests of the depositing public by [way of] providing [permanent and 
12 
continuing] insurance coverage on all insured deposits AND HELPING 
1 


I 
MAINTAIN A SOUND AND STABLE BANKING SYSTEM." 
2 
SECTION 2. A new section entitled Section 2 of the same Act shall be inserted 
3 
between Sections 1 and 3 which shall read as follows: 
4 
"STATE POLICY 
5 
SECTION 2. - IT IS HEREBY DECLARED TO BE THE POLICY OF THE 
6 
STATE TO STRENGTHEN THE MANDATORY DEPOSIT INSURANCE 
7 
COVERAGE SYSTEM TO GENERATE, PRESERVE, MAINTAIN FAITH 
8 
AND CONFIDENCE IN THE COUNTRY'S BANKING SYSTEM, AND 
9 
PROTECT IT FROM ILLEGAL SCHEMES AND MACHINATIONS. 
10 
TOWARDS THIS END, THE GOVERNMENT MUST EXTEND ALL 
II 
MEANS AND MECHANISMS NECESSARY FOR THE CORPORATION 
12 
TO EFFECTIVELY FULFILL ITS VITAL TASK OF PROMOTING AND 
13 
SAFEGUARDING THE INTERESTS OF THE DEPOSITING PUBLIC BY 
14 
WAY OF PROVIDING INSURANCE COVERAGE ON BANK DEPOSITS 
IS 
AND IN HELPING DEVELOP A SOUND AND STABLE BANKING 
16 
SYSTEM. 
17 
IN VIEW OF THE CRUCIAL ROLE AND THE NATURE OF ITS 
18 
FUNCTIONS AND RESPONSIBILITIES, THE CORPORATION, WHILE 
19 
BEING A GOVERNMENT INSTRUMENTALITY WITH CORPORATE 
20 
POWERS, 
SHALL 
ENJOY 
FISCAL 
AND 
ADMINISTRATIVE 
21 
AUTONOMY. 
22 
SECTION 3. Section 2 of the same Act is accordingly renumbered as Section 3 
23 
and is hereby amended to read as follows: 
2 


1 
"BOARD OF DIRECTORS: COMPOSITION AND AUTHORITY 
2 
SECTION (2) 3. (A) The powers and functions of the Corporation shall be 
3 
vested in and exercised by a Board of Directors which shall be composed 
4 
of SEVEN (7) [five (5)] members as follows: 
5 
[(a)] 1) The Secretary of Finance who shall be the ex-officio Chairman of 
6 
the Board without compensation. 
7 
[(b)] 2) The Governor of the Bangko Sentra/ ng Pilipinas, who shall be ex-
8 
officio member of the Board without compensation. 
9 
[(c)] 3) The President of the Corporation, who shall be appointed by the 
10 
President of the Philippines FROM A SHORTLIST PREPARED BY 
11 
THE 
GOVERNANCE 
COMMISSION 
FOR 
GOVERNMENT-
12 
OWNED OR CONTROLLED CORPORATIONS PURSUANT TO 
13 
REPUBLIC ACT NO. 10149 [from either the Government or private 
14 
sector] to serve on a full-time basis for a term of six (6) years. The 
15 
President of the Corporation shall also serve as Vice Chairman of 
16 
the Board. 
17 
[(d)] 4) FOUR (4) [Two (2)] members from the private sector, to be 
18 
appointed BY THE PRESIDENT OF THE PHILIPPINES FROM A 
19 
SHORTLIST PREPARED BY THE GOVERNANCE COMMISSION 
20 
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25 
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FOR 
GOVERNMENT -OWNED 
OR 
CONTROLLED 
CORPORATIONS PURSUANT TO REPUBLIC ACT NO. 10149. 
THE APPOINTIVE DIRECTORS SHALL SERVE for a term of six 
(6) years UNLESS SOONER REMOVED FOR CAUSE AND 
SHALL BE SUBJECT TO ONLY ONE [without] reappointment [by 
the President of the Philippines]: Provided, That of those first 
appointed, the first TWO appointeeS shall serve for a period of [two 
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(2)] THREE (3) years]: PROVIDED, HOWEVER, THAT THE 
APPOINTIVE DIRECTOR SHALL CONTINUE TO HOLD OFFICE 
UNTIL THE SUCCESSOR IS APPOINTED. 
AN APPOINTIVE 
DIRECTOR MAY BE NOMINATED BY THE GOVERNANCE 
COMMISSION FOR GOVERNMENT OWNED OR CONTROLLED 
CORPORATIONS FOR REAPPOINTMENT BY THE PRESIDENT 
ONLY IF ONE OBTAINS A PERFORMANCE SCORE OF ABOVE 
AVERAGE 
OR 
ITS 
EQUIVALENT OR 
HIGHER 
IN 
THE 
IMMEDIATELY PRECEDING YEAR OF TENURE AS APPOINTIVE 
DIRECTOR BASED ON THE PERFORMANCE CRITERIA FOR 
APPOINTIVE DIRECTORS FOR THE GOVERNMENT OWNED OR 
CONTROLLED CORPORATIONS. 
APPOINTMENT TO ANY VACANCY SHALL BE ONLY FOR THE 
UNEXPIRED TERM OF THE PREDECESSOR PURSUANT TO 
REPUBLIC ACT NO. 10149. 
No person shall be appointed as member of the Board unless he be 
of good moral character, [and] of unquestionable integrity and 
responsibility, OF KNOWN PROBITY AND PATRIOTISM, and who 
is of recognized competence in economics, banking and finance, 
law, management administration or insurance, and shall be at least 
thirty-five (35) years of age. For the duration of their tenure or term 
in office and for a period of one year thereafter, the appointive 
members of the Board shall be disqualified from holding any office, 
position or employment in any insured bank. 
The Secretary of Finance and the Governor of the Bangko Sentral 
may each designate AN ALTERNATE [a representative, whose 
position shall not be lower than an undersecretary or deputy 
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governor respectively], WHO SHALL BE AN OFFICIAL WITH A 
RANK NOT LOWER THAN DIRECTOR JJ1 OR ITS EQUIVALENT 
WITH WRITTEN AUTHORITY FROM THE SECRETARY OF 
FINANCE OR THE GOVERNOR OF THE BANGKO SENTRAL 
NG PILIPINAS to attend such meetings and to vote on behalf of 
their respective principals. Whenever the Chairman of the Board is 
unable to attend a meeting of the Board, or in the event of a 
vacancy in the office of the Secretary of Finance, AND IN THE 
ABSENCE OF THE VICE CHAIRMAN, the [President of the 
Corporation] MEMBERS OF THE BOARD SHALL DESIGNATE 
FROM AMONG THEMSELVES WHO shall act as Chairman. 
THE PRESIDENT OF THE PHILIPPINES MAY REMOVE ANY 
APPOINTIVE MEMBER OF THE BOARD OF DIRECTORS FOR ANY OF 
THE FOLLOWING REASONS: 
1) 
IF THE MEMBER IS PHYSICALLY OR MENTALLY 
INCAPACITATED 
THAT 
HE 
CANNOT 
PROPERLY 
DISCHARGE 
HIS 
OR 
HER 
DUTIES 
AND 
RESPONSIBILITIES, 
AND 
SUCH 
INCAPACITY 
HAS 
LASTED FOR MORE THAN SIX (6) MONTHS; OR 
2) 
IF THE MEMBER IS GUILTY OF ACTS OR 
OPERATIONS 
WHICH 
ARE 
OF 
FRAUDULENT 
OR 
ILLEGAL CHARACTER OR WHICH ARE MANIFESTLY 
OPPOSED TO THE AIMS AND INTERESTS OF THE 
CORPORATION; OR 
3) 
IF THE MEMBER NO LONGER POSSESSES THE 
QUALIFICATIONS SPECIFIED IN THIS ACT; OR 
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4) 
IF THE MEMBER DOES NOT MEET THE STANDARDS 
FOR PERFORMANCE BASED ON THE EVALUATION BY 
THE GOVERNANCE COMMISSION FOR GOVERNMENT-
OWNED OR CONTROLLED CORPORATIONS UNDER 
REPUBLIC ACT NO. 10149. 
The presence of FOUR (4) [three (3)] members shall constitute a quorum. 
All decisions of the Board of Directors shall require the concurrence of at 
least FOUR (4) [three (3)] members. 
[The Secretary of Finance shall fix the rate of per diem for every Board 
meeting attended by the members of the Board of Directors from the 
private sector.] THE COMPENSATION, PER DIEMS, ALLOWANCES, 
INCENTIVES, AND OTHER BENEFITS FOR BOARD MEMBERS 
SHALL BE DETERMINED BY THE GOVERNANCE COMMISSION FOR 
GOVERNMENT 
OWNED 
OR 
CONTROLLED 
CORPORATIONS 
PURSUANT TO REPUBLIC ACT NO. 10149. [The President of the 
Philippines may fix such emoluments that may be received by the Board 
of Directors comparable to the emoluments of members of the Board of 
Directors of other government financial institutions). 
IN ADDITION TO THE REQUIREMENTS OF REPUBLIC ACT NO. 6713, 
OTHERWISE KNOWN AS THE CODE OF CONDUCT AND ETHICAL 
STANDARDS FOR PUBLIC OFFICIALS AND EMPLOYEES, 
ANY 
MEMBER OF THE BOARD OF DIRECTORS WITH PERSONAL OR 
PECUNIARY INTEREST IN ANY MATTER IN THE AGENDA OF THE 
BOARD OF DIRECTORS SHALL DISCLOSE HIS OR HER INTEREST 
TO THE BOARD AND SHALL RECUSE FROM THE MEETING WHEN 
THE MATTER IS TAKEN UP. THE MINUTES SHALL REFLECT THE 
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DISCLOSURE MADE AND THE RECUSAL OF THE MEMBER 
CONCERNED. 
(B) The Board of Directors shall have the authority: 
1. To APPROVE [prepare] and issue rules and regulations FOR BANKS 
AND THE DEPOSITING PUBLIC as it considers necessary for the 
effective discharge of its responsibilities; 
2. To ACT AS THE POLICY-MAKING BODY OF THE CORPORATION 
AND CONSTITUTE BOARD COMMITTEES TO OVERSEE [direct] the 
management, operations and administration of the Corporation; 
3. To 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 professionalism and 
excellence at all levels of the Corporation in accordance with sound 
principles of management;[.] 
4. TO APPROVE, [A] a compensation structure[.]AS AN INTEGRAL 
COMPONENT OF THE 
CORPORATION'S 
HUMAN 
RESOURCE 
DEVELOPMENT PROGRAM based on job evaluation studies and wage 
surveys, AND REVISE THE SAME FROM TIME TO TIME AS IT MAY 
DEEM NECESSARY [and subject to the Board's approval, shall be, 
instituted as an integral component of the Corporation's human resource 
development program]: Provided, That all positions in the Corporation 
shall be governed by a compensation PACKAGE, position classification 
system and qualification standards approved by the Board based on a 
comprehensive job analysis and audit of actual duties and responsibilities. 
7 


1 
The compensation STRUCTURE [plan] shall be comparable TO THAT 
2 
[with the prevailing compensation plans] of other [government] financial 
3 
institutions BASED ON PREVAILING MARKET STANDARDS, and shall 
4 
[be subject to review by the Board no more than once every two (2) years 
5 
without prejudice to] PROVIDE FOR yearly merit reviews or increases 
6 
based on productivity [and profitability]. The Corporation shall therefore be 
7 
exempt from existing laws, rules and regulations on compensation 
8 
PACKAGE, position classification and qualification standards, SUCH AS, 
9 
BUT 
NOT 
LIMITED 
TO, 
PRESIDENTIAL 
DECREE 
NO. 
985, 
10 
PRESIDENTIAL DECREE NO. 1597, REPUBLIC ACT NO. 6758, AS 
11 
AMENDED, AND JOINT RESOLUTION NO. 4 (2009), AND REPUBLIC 
12 
ACT NO. 10149. It shall however endeavor to make its system conform 
13 
as closely as possible with the principles under Republic Act No. 6758, as 
14 
amended. 
15 
[4.] 5. To appoint, establish the rank, fix the remuneration, BENEFITS, 
16 
INCLUDING HEALTH CARE SERVICES THROUGH A HEALTH 
17 
MAINTENANCE ORGANIZATION (HMO) AND MEDICAL BENEFITS 
18 
OTHER THAN THOSE PROVIDED FOR UNDER REPUBLIC ACT NO. 
19 
7875, AS AMENDED, [approve local and foreign training of,] and remove 
20 
any officer or employee of the Corporation, for cause, subject to pertinent 
21 
civil service laws: Provided, That the Board of Directors may delegate this 
22 
authority to the President subject to specific guidelines; PROVIDED, 
23 
FURTHER, THAT IN NO CASE SHALL THERE BE ANY DIMINUTION 
24 
OF EXISTING SALARIES, BENEFITS AND OTHER EMOLUMENTS; 
25 
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6. 
TO APPROVE POLICY ON LOCAL AND FOREIGN TRAVEL, AND THE 
CORRESPONDING EXPENSES, ALLOWANCES AND PER DIEMS, OF 
OFFICERS, EMPLOYEES, AGENTS OF THE CORPORATION, WHICH 
SHALL BE COMPARABLE WITH THE EXPENSES, ALLOWANCES 
8 


1 
AND 
PER 
DIEMS 
OF 
PERSONNEL 
OF 
OTHER 
FINANCIAL 
2 
INSTITUTIONS BASED ON PREVAILING MARKET STANDARDS, 
3 
NOTWITHSTANDING THE PROVISIONS OF PRESIDENTIAL DECREE 
4 
NO. 1177, EXECUTIVE ORDER NO. 292, EXECUTIVE ORDER NO. 248, 
5 
AS AMENDED, EXECUTIVE ORDER NO. 298, AND SIMILAR LAWS; 
6 
[5] 7. To adopt an annual budget for, and authorize such expenditures 
7 
by the Corporation, as are in the interest of the effective 
8 
administration and operation of the Corporation; 
9 
[6] 8. To approve the TARGET LEVEL OF THE DEPOSIT INSURANCE FUND 
10 
AND THE methodology for determining [the level and amount of] 
11 
RESERVES [provisioning] for insurance and financial assistance losses 
12 
[,which shall establish reasonable levels of deposit insurance reserves.]; 
I 
13 
[7] 9. To review the organizational set-up of the Corporation and adopt a new 
14 
or revised organizational structure as it may deem necessary for the 
15 
Corporation to undertake its mandate and functions;[.] 
16 
10. TO DESIGN, ADOPT AND REVISE, AS IT MAY DEEM NECESSARY, 
17 
AN 
EARLY SEPARATION 
PLAN FOR EMPLOYEES OF THE 
18 
CORPORATION 
TO 
ENSURE 
AVAILABILITY 
OF 
A 
HUMAN 
19 
RESOURCE POOL QUALIFIED AND CAPABLE OF IMPLEMENTING 
20 
THE CORPORATION'S AUTHORITIES UNDER THIS CHARTER IN A 
21 
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MANNER 
RESPONSIVE 
AND 
ATTUNED 
TO 
MARKET 
DEVELOPMENTS, AND TO PROVIDE INCENTIVES FOR ALL THOSE 
WHO SHALL RETIRE OR BE SEPARATED FROM THE SERVICE. 
NOTWITHSTANDING ANY LAW TO THE CONTRARY, 
THESE 
INCENTIVES SHALL BE IN ADDITION TO ALL GRATUITIES AND 
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2 
3 
4 
5 
BENEFITS THE EMPLOYEE IS ENTITLED TO UNDER EXISTING 
LAWS; AND 
11. TO PROMOTE AND SPONSOR THE LOCAL OR FOREIGN 
TRAINING OR STUDY OF PERSONNEL IN THE FIELDS OF 
BANKING, 
FINANCE, 
MANAGEMENT, 
INFORMATION 
6 
TECHNOLOGY 
AND 
LAW. 
TOWARD 
THIS 
END, 
THE 
7 
CORPORATION IS HEREBY AUTHORIZED TO DEFRAY THE 
8 
COSTS OF SUCH TRAINING OR STUDY. THE BOARD SHALL 
9 
PRESCRIBE RULES AND REGULATIONS TO GOVERN THE 
10 
TRAINING OR STUDY PROGRAMS OF THE CORPORATION." 
11 
SECTION 4. Section 3 of the same Act is accordingly renumbered as Section 4. 
12 
SECTION 5. The first paragraph of Section 4 of the same Act, as renumbered, is 
l3 
hereby amended to read as follows: 
14 
"PRESIDENT OF THE CORPORATION 
15 
COMPENSATION, POWERS AND DUTIES 
16 
SECTION [3J 4. The President of the Corporation shall be ITS [theJ Chief 
17 
Executive OFFICER AND THE VICE CHAIRMAN OF ITS BOARD OF 
18 
DIRECTORS [thereof] and his OR HER salary shall be fixed by the 
19 
President of the Philippines UPON THE RECOMMENDATION OF THE 
20 
GOVERNANCE COMMISSION FOR GOVERNMENT OWNED OR 
21 
CONTROLLED CORPORATIONS, at a sum commensurate to the 
22 
importance and responsibility attached to the position. The sum total of 
23 
the salary, ALLOWANCES, BENEFITS [of the President and the 
24 
aliowancesJ and other emoluments OF THE PRESIDENT OF THE 
10 


I 
CORPORATION [which the Board of Directors may grant him] SHALL 
2 
BE HIGHER THAN THE COMPENSATION PACKAGE OF THE NEXT 
3 
HIGHEST RANKING EXECUTIVE OF THE CORPORATION AND shall 
4 
be the ceiling for fixing the salary, allowances and other emoluments of all 
5 
other personnel in the Corporation. 
6 
SECTION 6. Section 4, paragraphs (d), [and] (f) AND (H) of the same Act, as 
7 
renumbered, are hereby amended to read as follows: 
8 
"(d) To represent the Corporation[, upon prior authority of the 
9 
Board,] in all dealings with other offices, agencies and instrumentalities of 
10 
the government and with all other persons or entities, public or private, 
11 
whether domestic, foreign or international; 
12 
(f) To represent the Corporation, either personally or through 
13 
counsel, INCLUDING PRIVATE COUNSEL, AS MAY BE AUTHORIZED 
14 
BY THE PDIC BOARD, in ANY [all] legal proceeding or action;" 
15 
(h) xxx The President shall be assisted by a Vice-President and other 
16 
officials whose appointment and removal for cause shall be approved and whose 
17 
salary shall be fixed by the Board of Directors upon recommendation of the 
18 
President of the Corporation. During the absence or temporary incapacity of the 
19 
President, or in case of vacancy or permanent incapacity and pending 
20 
appointment of a new President of the Corporation by the President of the 
21 
Philippines, the BOARD OF DIRECTORS SHALL DESIGNATE THE OFFICER-
22 
IN·CHARGE OF THE CORPORATION [Vice President shall act as President 
23 
and discharge the duties and responsibilities thereof)." 
11 


1 
SECTION 7. Section 4 of the same Act is accordingly renumbered as Section 5, 
2 
and is hereby amended to read as follows: 
3 
"DEFINITION OF TERMS 
4 
SECTION [4] 5. As used in this Act -
5 
(A) THE TERM "ASSET" REFERS TO MOVABLE, IMMOVABLE, 
6 
TANGIBLE, OR INTANGIBLE RESOURCES OR PROPERTIES 
7 
OVER WHICH A BANK HAS AN ESTABLISHED OR EQUITABLE 
8 
INTEREST, INCLUDING THE PROCEEDS OF THE SALE OF ITS 
9 
BANK AND BRANCH LICENSES SUBJECT TO THE APPROVAL 
10 
OF THE BANGKO SENTRAL. 
11 
(B) THE TERM "ASSET DISTRIBUTION PLAN" REFERS TO THE 
12 
PLAN OF DISTRIBUTION OF THE ASSETS OF A CLOSED BANK 
13 
TO ITS CREDITORS, BASED ON ITS ESTIMATED REALIZABLE 
14 
VALUE AS OF A CERTAIN CUT·OFF DATE, PREPARED IN 
15 
ACCORDANCE WITH THE RULES ON CONCURRENCE AND 
16 
PREFERENCE OF CREDITS UNDER THE CIVIL CODE OR OTHER 
17 
LAWS. 
18 
AN ASSET DISTRIBUTION PLAN MAY BE PARTIAL WHEN IT 
19 
PERTAINS TO THE DISTRIBUTION OF A PORTION OR SOME OF 
20 
THE ASSETS OF THE CLOSED BANK, OR FINAL WHEN IT 
21 
PERTAINS TO THE DISTRIBUTION OF ALL THE ASSETS OF THE 
22 
CLOSED BANK. 
23 
(C) [(a)) The term "Board of Directors" means the Board of Directors of 
24 
the Corporation. 
12 


1 
(D) [(b)) The term "Bank" and "Banking Institution" shall be 
2 
synonymous and interchangeable and shall include banks, commercial 
3 
banks, savings bank, mortgage banks, rural banks, development 
4 
banks, cooperative banks, stock savings and loan associations and 
5 
branches and agencies in the Philippines of foreign banks and all other 
6 
corporations authorized to perform 
banking functions 
in 
the 
7 
Philippines. 
8 
(E) THE TERM "CLOSED BANK" REFERS TO A BANK PLACED 
9 
UNDER LIQUIDATION BY THE MONETARY BOARD. 
10 
(F) THE TERM "CREDITOR" REFERS TO ANY INDIVIDUAL OR 
11 
ENTITY WITH A VALID CLAIM AGAINST THE ASSETS OF THE 
12 
CLOSED BANK. 
13 
[(c) The term "receiver" includes a receiver, commission, person or other 
14 
agency charged by law with the duty to take charge of the assets and 
15 
liabilities of a bank which has been forbidden from doing business in the 
16 
Philippines, as well as the duty to gather, preserve and administer such 
17 
assets and liabilities for the benefit of the depositors and creditors of said 
18 
bank, and to continue into liquidation whenever authorized under this Act 
19 
or other laws, and to dispose of the assets and to wind up the affairs of 
20 
such bank.] 
21 
[(d) The term "insured bank" means any bank the deposits of which are 
22 
insured in accordance with the provisions of this Act.] 
23 
[(e)] The term "non-insured bank" means any bank the deposits of which 
24 
are not insured.] 
13 


I 
[(f)] (G) The term "deposit" means the unpaid balance of money or its 
2 
equivalent received by a bank in the usual course of business and for 
3 
which it has given or is obliged to give credit to a commercial, checking, 
4 
savings, time or thrift account, EVIDENCED BY A PASSBOOK, CHECK 
5 
ANDIOR CERTIFICATE OF DEPOSIT, OR OTHER EVIDENCE OF 
6 
DEPOSIT, or issued 
in accordance with 8angko Sentra/ rules and 
7 
regulations and other applicable laws, together 
with such other 
8 
obligations of a bank, which, consistent with banking usage and practices, 
9 
the Board of Directors shall determine and prescribe by regulations to be 
10 
deposit liabilities of the bank: Provided, That any obligation of a bank 
11 
which is payable at the office of the bank located outside of the 
12 
Philippines shall not be a deposit for any of the purposes of this Act or 
13 
included as part of the total deposits or of insured deposit: Provided, 
14 
furlher, That, subject to the approval of the Board of Directors, any 
IS 
insured bank which is incorporated under the laws of the Philippines 
16 
which maintains a branch outside the Philippines may elect to include for 
17 
insurance its deposit obligations payable only at such branch. 
18 
The Corporation shall not pay deposit insurance[,] for the following 
19 
accounts or transactions [, whether denominated, documented, recorded 
20 
or booked as deposit by the bank]: 
21 
1) Investment products such as bonds and securities, trust accounts, 
22 
and other similar instruments; 
23 
2) Deposit accounts or transactions which are [unfunded, or that are] 
24 
25 
fictitious 
or 
fraudulent 
AS 
DETERMINED 
BY 
THE 
CORPORATION; 
14 


1 
3) Deposit accounts or transactions constituting, and/or emanating 
2 
from, unsafe and unsound banking practice/s, as determined by the 
3 
Corporation, in consultation with the BANGKO SENTRAL [SSP], 
4 
after due notice and hearing, and publication of a DIRECTIVE TO 
5 
cease and desist [order] issued by the Corporation against such 
6 
deposit accounts, transactions OR PRACTICES; and 
7 
4) Deposits that are determined to be the proceeds of an unlawful 
8 
activity as defined under Republic Act 9160, as amended. 
9 
The actions of the Corporation taken under [this] section 5 [(h)] (G) shall 
10 
be final and executory, and may ONLY [not] be restrained or set aside by 
11 
the [court] COURT OF APPEALS, [except] UPON [on] appropriate 
12 
petition for certiorari on the ground that the action was taken in excess of 
13 
jurisdiction or with such grave abuse of discretion as to amount to a lack 
14 
or excess of jurisdiction. The petition for certiorari may only be filed within 
15 
thirty (30) days from notice of denial of claim for deposit insurance. 
16 
(H) THE TERM "DISPUTED CLAIM" REFERS TO A CLAIM OR SUIT 
17 
AGAINST THE ASSETS OF A CLOSED BANK, OR FOR SPECIFIC 
18 
PERFORMANCE, OR BREACH OF CONTRACT, OR DAMAGES, OF 
19 
WHATEVER NATURE OR CHARACTER, WHETHER FOR MONEY OR 
20 
OTHERWISE, 
LIQUIDATED 
OR 
UNLIQUIDATED, 
FIXED 
OR 
21 
CONTINGENT, 
MATURED 
OR 
CURRENT, 
DENIED 
BY 
THE 
22 
RECEIVER. 
23 
(I) THE TERM "INSURED BANK" MEANS ANY BANK THE DEPOSITS 
24 
OF WHICH ARE INSURED IN ACCORDANCE WITH THE PROVISIONS 
25 
OF THIS ACT. 
15 


1 
(J) [(g)]The term "insured deposit" means the amount due to any bona 
2 
fide depositor for legitimate deposits in an insured bank [net of any 
3 
obligation of the depositor to the insured bank] as of the date of closure 
4 
but not to exceed Five Hundred Thousand Pesos (P500,OOO.OO). Such 
5 
[net] amount shall be determined according to such regulations as the 
6 
Board of Directors may prescribe. In determining such amount due to any 
7 
depositor, there shall be added together all deposits in the bank 
8 
maintained in the same right and capacity for his benefit either in his own 
9 
name or in the name of others. A joint account regardless of whether the 
10 
conjunction "and," "or", "and/or" is used, shall be insured separately from 
11 
any individually-owned deposit account: Provided, That (1) If the account 
12 
is held jointly by two or more natural persons, or by two or more juridical 
13 
persons or entities, the maximum insured deposit shall be divided into as 
14 
many equal shares as there are individuals, juridical persons or entities, 
15 
unless a different sharing is stipulated in the document of deposit, and (2) 
16 
if the account is held by a juridical person or entity jointly with one or more 
17 
natural persons, the maximum insured deposit shall be presumed to 
18 
belong entirely to such juridical person or entity: Provided, further, That 
19 
the aggregate of the interest of each co-owner over several joint accounts, 
20 
whether owned by the same or different combinations of individuals, 
21 
juridical persons or entities, shall likewise be subject to the maximum 
22 
insured deposit of Five Hundred Thousand Pesos (P500,OOO.OO): 
23 
Provided, furthermore, That the provisions of any law to the contrary 
24 
notwithstanding, no owner/holder of any PASSBOOK, 
negotiable 
25 
certificate of deposit, OR OTHER EVIDENCE OF DEPOSIT shall be 
26 
recognized as a depositor entitled to the rights provided in this Act unless 
27 
THE PASSBOOK, CERTIFICATE OF DEPOSIT OR OTHER EVIDENCE 
28 
OF DEPOSIT IS DETERMINED BY THE CORPORATION TO BE AN 
16 


1 
AUTHENTIC DOCUMENT OR RECORD of the issuing bank [his name is 
2 
registered as owner/holder thereof in the books}: Provided, finally, That, in 
3 
case of a condition that threatens the monetary and financial stability of 
4 
the banking system that may have systemic consequences, as defined in 
5 
section 22 [17] hereof, as determined by the Monetary Board, the 
6 
maximum deposit insurance cover may be adjusted in such amount, for 
7 
such a period, and/or for such deposit products, as may be determined by 
8 
a unanimous vote of the Board of Directors in a meeting called for the 
9 
purpose and chaired by the Secretary of Finance, subject to the approval 
10 
of the President of the Philippines. 
11 
(K) THE TERM "LIQUIDATION" REFERS TO THE PROCEEDINGS 
12 
UNDER SECTIONS 12 TO 16 OF THIS ACT. 
13 
14 
15 
16 
17 
18 
19 
20 
21 
(L) 
THE TERM "LIQUIDATION COURT" REFERS TO THE 
REGIONAL TRIAL COURT OF GENERAL JURISDICTION 
WHERE 
THE 
PETITION 
FOR 
ASSISTANCE 
IN 
THE 
LIQUIDATION OF A CLOSED BANK IS FILED AND GIVEN 
DUE COURSE. 
(M) THE TERM "PAYOUT" REFERS TO THE PAYMENT OF 
INSURED DEPOSITS. 
(N) THE 
TERM 
"PETITION 
FOR 
ASSISTANCE 
IN 
THE 
LIQUIDATION OF A CLOSED BANK" REFERS TO THE 
17 


1 
PETITION FILED BY THE RECEIVER WITH THE REGIONAL 
2 
TRIAL COURT (RTC) IN ACCORDANCE WITH SECTION 16 
3 
OF THIS ACT. 
4 
(0) THE TERM "PURCHASE OF ASSETS AND ASSUMPTION OF 
5 
LIABILITIES" REFERS TO A TRANSACTION WHERE AN 
6 
INSURED BANK PURCHASES ANY OR ALL ASSETS AND 
7 
ASSUMES ANY OR ALL LIABILITIES OF ANOTHER BANK 
8 
UNDER RESOLUTION OR LIQUIDATION, AS PROVIDED IN 
9 
THIS ACT. 
10 
(P) THE TERM "RECEIVER" REFERS TO THE CORPORATION 
11 
OR ANY OF ITS DULY AUTHORIZED AGENTS ACTING AS 
12 
RECEIVER OF A CLOSED BANK. 
13 
(Q) THE TERM "RECORDS" 
INCLUDES 
ALL DOCUMENTS, 
14 
TITLES, PAPERS AND ELECTRONIC DATA OF THE CLOSED 
15 
BANK, INCLUDING THOSE PERTAINING TO DEPOSIT 
16 
ACCOUNTS OF AND WITH THE CLOSED BANK, ITS 
17 
ASSETS, TRANSACTIONS AND CORPORATE AFFAIRS. 
18 
(R) THE TERM "RESIDUAL ASSETS" REFERS TO ASSETS, IN 
19 
CASH OR IN KIND, TO BE TURNED OVER TO THE CLOSED 
20 
BANK'S STOCKHOLDERS OF RECORD, IN PROPORTION TO 
21 
THEIR INTEREST IN THE CLOSED BANK AS OF DATE OF 
22 
CLOSURE, AFTER PAYMENT IN FULL OF LIQUIDATION 
23 
COSTS, FEES AND EXPENSES, AND THE VALID CLAIMS 
24 
AND SURPLUS DIVIDENDS TO ALL THE CREDITORS. 
18 


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 
(S) THE TERM "RESOLUTION" REFERS TO THE ACTIONS 
UNDERTAKEN BY THE CORPORATION UNDER SECTION 11 
OF THIS ACT TO: 
1) 
PROTECT 
DEPOSITORS, 
CREDITORS 
AND 
THE 
DEPOSIT INSURANCE FUND; 
2) 
SAFEGUARD 
THE 
CONTINUITY 
OF 
ESSENTIAL 
BANKING SERVICES OR MAINTAIN FINANCIAL STABILITY; 
AND 
3) 
PREVENT DETERIORATION OR DISSIPATION OF BANK 
ASSETS. 
(T) THE 
TERM 
"RISK-BASED 
ASSESSMENT 
SYSTEM" 
PERTAINS TO A METHOD FOR CALCULATING AN INSURED 
BANK'S ASSESSMENT ON THE PROBABILITY THAT THE 
DEPOSIT INSURANCE FUND WILL INCUR A LOSS WITH 
RESPECT TO THE BANK, AND THE LIKELY AMOUNT OF 
ANY SUCH LOSS, BASED ON ITS RISK RATING THAT 
TAKES INTO CONSIDERATION THE FOLLOWING: 
1) 
QUALITY AND CONCENTRATION OF ASSETS; 
2) 
CATEGORIES AND CONCENTRATION OF LIABILITIES, 
BOTH INSURED AND UNINSURED, CONTINGENT AND 
NON-CONTINGENT; 
3) 
CAPITAL POSITION; 
4) 
LIQUIDITY POSITION; 
5) 
MANAGEMENT AND GOVERNANCE; AND 
6) 
OTHER FACTORS RELEVANT TO ASSESSING SUCH 
PROBABILITY, AS MAY BE DETERMINED BY THE 
CORPORATION. 
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 
(U)THE TERM "STATEMENT OF AFFAIRS" REFERS TO A 
REPORT OF FINANCIAL CONDITION OF THE CLOSED BANK 
AT 
A 
GIVEN 
DATE, 
SHOWING 
THE: 
1) 
ESTIMATED 
REALIZABLE VALUE OF ASSETS; 2) CLASSIFICATION OF 
CREDITS; AND 3) ESTIMATED LIABILITIES TO BE SETTLED. 
(V)THE TERM 
"SURPLUS DIVIDENDS" 
REFERS 
TO THE 
REMAINING 
ASSETS 
OF THE 
CLOSED 
BANK AFTER 
SATISFACTION IN FULL OF ALL THE LIQUIDATION COSTS, 
FEES AND EXPENSES, AND VALID CLAIMS. THE SURPLUS 
DIVIDENDS SHALL BE COMPUTED AT THE LEGAL RATE OF 
INTEREST FROM THE DATE OF TAKEOVER TO CUT-OFF 
DATE OF THE DISTRIBUTION PLAN, AND SHALL BE PAID, IN 
CASH OR IN KIND, TO CREDITORS OF THE CLOSED BANK IN 
ACCORDANCE WITH THE RULES ON CONCURRENCE AND 
PREFERENCE OF CREDITS UNDER THE CIVIL CODE OR 
OTHER LAWS. 
(W) 
THE TERM "TAKEOVER" REFERS TO THE ACT OF 
PHYSICALLY TAKING POSSESSION AND CONTROL OF THE 
PREMISES, ASSETS AND AFFAIRS OF A CLOSED BANK 
FOR THE PURPOSE OF LIQUIDATING THE BANK. 
(X) [(h)] The term "transfer deposit" means a deposit in an insured 
bank made available to a depositor by the Corporation as 
payment of insured deposit of such depositor in a closed bank 
and assumed by another insured bank. 
20 


1 
(Y) [(i)] The term "trust funds" means funds held by an insured bank in 
2 
a fiduciary capacity and includes without being limited to, funds 
3 
held as trustee, executor, administrator, guardian or agent. 
4 
(Z) THE 
TERM 
"VALID 
CLAIM" 
REFERS TO THE 
CLAIM 
5 
RECOGNIZED BY THE RECEIVER OR ALLOWED BY THE 
6 
LIQUIDATION COURT. 
7 
(AA) THE TERM "WINDING UP PERIOD" REFERS TO THE 
8 
PERIOD PROVIDED IN SECTION 16 OF THIS ACT." 
9 
SECTION 8. Section 5 of the same Act is accordingly renumbered as Section 6, 
10 
and is hereby amended to read as follows: 
11 
"DEPOSIT INSURANCE COVERAGE 
12 
SECTION [5] 6. The deposit liabilities of any bank [or banking institution,] 
13 
which is engaged in the business of receiving deposits as herein defined 
14 
on the effective date of this Act, or which thereafter may engage in the 
15 
business of receiving deposits, shall be insured with the Corporation. 
16 
WHENEVER A BANK IS DETERMINED BY THE BANGKO SENTRAL 
17 
TO 
HAVE 
FAILED 
TO 
MEET 
THE 
MINIMUM 
CAPITAL 
18 
REQUIREMENTS, 
THE 
CORPORATION 
MAY 
CONDUCT 
AN 
19 
INSURANCE RISK EVALUATION ON THE BANK AT ANY TIME TO 
20 
ENABLE IT TO ASSESS THE RISKS TO THE DEPOSIT INSURANCE 
21 
FUND. SUCH EVALUATION MAY INCLUDE THE DETERMINATION OF 
22 
(i) THE FAIR MARKET VALUE OF THE ASSETS AND LIABILITIES OF 
23 
A BANK, OR (ii) THE RISK CLASSIFICATION OF A BANK, OR (iii) 
21 


1 
POSSIBLE RESOLUTION MODES, SUBJECT TO SUCH TERMS AND 
2 
CONDITIONS AS THE PDIC BOARD MAY PRESCRIBE. 
3 
IN THE CONDUCT OF AN INSURANCE RISK EVALUATION, THE 
4 
CORPORATION, 
ITS 
DULY 
AUTHORIZED 
OFFICERS 
OR 
5 
EMPLOYEES, SHALL HAVE THE AUTHORITY TO EXAMINE, INQUIRE 
6 
OR LOOK INTO THE DEPOSIT RECORDS OF A BANK. FOR THIS 
7 
PURPOSE, BANKS, THEIR OFFICERS AND EMPLOYEES ARE 
8 
HEREBY MANDATED TO DISCLOSE AND REPORT TO THE 
9 
CORPORATION 
OR 
ITS 
DULY 
AUTHORIZED 
OFFICERS, 
10 
EMPLOYEES, DEPOSIT ACCOUNT INFORMATION IN SAID BANK. 
11 
THE CORPORATION, ITS DULY AUTHORIZED OFFICERS OR 
12 
EMPLOYEES, ARE PROHIBITED FROM DISCLOSING INFORMATION 
13 
OBTAINED UNDER THIS SECTION TO ANY PERSON, GOVERNMENT 
14 
OFFICIAL, BUREAU OR OFFICE, EXCEPT WHEN THE DISCLOSURE 
15 
OF THE INFORMATION OBTAINED UNDER THIS SECTION IS 
16 
NECESSARY 
FOR 
EXPEDITIOUS 
PAYMENT 
OF 
DEPOSIT 
17 
INSURANCE OR THE PROTECTION OF THE DEPOSIT INSURANCE 
18 
SYSTEM, 
OR 
TO 
CARRY 
OUT 
THE 
MANDATE 
OF 
THE 
19 
CORPORATION AS A RESOLUTION AUTHORITY." 
20 
ANY ACT DONE PURSUANT TO THIS SECTION SHALL NOT BE 
21 
DEEMED TO HAVE VIOLATED REPUBLIC ACT NO. 1405, AS 
22 
AMENDED, REPUBLIC ACT NO. 6426, AS AMENDED, REPUBLIC 
23 
ACT NO. 8791, AND OTHER SIMILAR LAWS PROTECTING OR 
24 
SAFEGUARDING THE SECRECY OR CONFIDENTIALITY OF BANK 
25 
DEPOSITS: PROVIDED, THAT ANY UNAUTHORIZED DISCLOSURE 
26 
OF THE INFORMATION UNDER THIS SECTION SHALL BE SUBJECT 
22 


1 
TO THE SAME 
PENALTY UNDER THE 
FOREGOING 
LAWS 
2 
PROTECTING THE SECRECY OR CONFIDENTIALITY OF BANK 
3 
DEPOSITS." 
4 
SECTION 9. Section 6 of the same Act is accordingly renumbered as Section 7. 
5 
SECTION 10. Section 7 paragraph (a) of the same Act, as renumbered, is 
6 
hereby amended to read as follows: 
7 
"ASSESSMENT OF MEMBER BANKS 
8 
9 
SECTION [6] 7. (a) The assessed rate shall be determined by the Board 
10 
of Directors: Provided, That the assessment rate shall not exceed one-fifth 
11 
(1/5) of one per centum (1%) per annum. The semi-annual assessment 
12 
for each insured bank shall be in the amount of the product of one-half 
13 
(1/2) the assessment rate multiplied by the assessment base but in no 
14 
case shall it be less than Five thousand pesos (P5,OOO.OO). 
The 
15 
assessment base shall be the amount of the liability of the bank for 
16 
deposits as defined under subsection (G) [(f)] of Section 5 [4) without any 
17 
deduction for indebtedness of depositors. 
18 
IN ADDITION, THE BOARD OF DIRECTORS MAY ESTABLISH A 
19 
RISK-BASED ASSESSMENT SYSTEM AND IMPOSE A RISK-BASED 
20 
ASSESSMENT RATE WHICH SHALL NOT EXCEED TWO-FIFTH (2/5) 
21 
OF ONE PER CENTUM (1%) PER ANNUM MULTIPLIED BY THE 
22 
ASSESSMENT BASE. 
23 
The semi-annual assessment base for one semi-annual period shall be 
24 
the average of the assessment base of the bank as of the close of 
23 


1 
business on March thirty-one and June thirty and the semi-annual 
2 
assessment base for the other semi-annual period shall be the average of 
3 
the assessment base of the bank as of the close of business on 
4 
September thirty and December thirty-one: Provided, That when any of 
5 
said days is a non-business day or legal holiday, either national or 
6 
provincial, the preceding business day shall be used. The certified 
7 
statements required to be filed with the Corporation under subsections (b) 
8 
and (c) of this Section shall be in such form and set forth such supporting 
9 
information as the Board of Directors shall prescribe. The assessment 
10 
payments required from the insured banks under subsections (b) and (c) 
11 
of this Section shall be made in such manner and at such time or times as 
12 
the Board of Directors shall prescriber, provided the time or times so 
13 
prescribed shall not be later than sixty (60) days after filing the certified 
14 
statement setting forth the amount of assessment)." 
15 
SECTION 11. Section 7, paragraphs (d) and (h), of the same Act, as renumbered, 
16 
is hereby amended to read as follows: 
17 
"(d) All assessment collections and income from operations after 
18 
expenses and charges shall be added to the Deposit Insurance Fund 
19 
under Section 17 [13] hereof. Such expenses and charges are: (1) the 
20 
operating costs and expenses of the Corporation for the calendar year; (2) 
21 
additions to reserve to provide for insurance and financial assistance 
22 
losses, net of recoverable amounts from applicable assets and collaterals, 
23 
during the calendar year; and (3) the net insurance and financial 
24 
assistance losses sustained in said calendar year. 
25 
(h) [The Corporation shall not terminate the insured status of any bank 
26 
which continues to operate or receive depOSits.] Should any insured bank 
27 
fail or refuse to pay any assessment required to be paid by such bank 
24 


1 
under any provision of this Act, and should the bank not correct such 
2 
failure or refusal within thirty (30) days after written notice has been given 
3 
by the Corporation to an officer of the bank citing this subsection, and 
4 
stating that the bank has failed or refused to pay as required by the law, 
5 
the Corporation may, at its discretion, file a case for collection before the 
6 
appropriate court without prejudice to the imposition of administrative 
7 
sanctions allowed under the provisions of this Law on the bank officials 
8 
responsible for the non-payment of assessment fees." 
9 
SECTION 12. An additional paragraph to Section 7 of the same Act, as 
10 
renumbered, is hereby inserted after paragraph (h) which shall read as follows: 
11 
"(I) THE CORPORATION SHALL HAVE THE AUTHORITY TO 
12 
COLLECT A SPECIAL ASSESSMENT FROM ANY MEMBER BANK 
13 
AND PRESCRIBE THE TERMS AND CONDITIONS THEREOF TO 
14 
MAINTAIN THE TARGET LEVEL OF THE DEPOSIT INSURANCE 
15 
FUND SET BY THE BOARD OF DIRECTORS IN ACCORDANCE WITH 
16 
THIS ACT: PROVIDED, THAT, THE COLLECTION OF A SPECIAL 
17 
ASSESSMENT MAY LIKEWISE BE MADE FOR THE PURPOSE OF 
18 
REIMBURSING THE NATIONAL GOVERNMENT FOR ANY FINANCIAL 
19 
ASSISTANCE 
IT 
MAY 
HAVE 
EXTENDED 
TO 
AFFECTED 
20 
INSTITUTIONS 
OR 
ORGANIZATIONS 
DURING 
A 
SYSTEMIC 
21 
SCENARIO." 
22 
SECTION 13. Section 7 of the same Act is accordingly renumbered as Section 
23 
8, and is hereby amended to read as follows: 
24 
"SANCTIONS AGAINST UNSAFE AND 
25 
UNSOUND BANKING PRACTICES 
25 


1 
SECTION [7] 8. (a) Whenever upon examination by the Corporation into 
2 
the condition of any insured bank, it shall be disclosed that an insured 
3 
bank or its directors or agents have committed, are committing or about to 
4 
commit unsafe or unsound practices in conducting the business of the 
5 
bank, or have violated, are violating or about to violate any provisions of 
6 
any law or regulation to which the insured bank is subject, the Board of 
7 
Directors shall submit the report of the examination to the Monetary Board 
8 
to secure corrective action thereon. If no such corrective action is taken by 
9 
the Monetary Board within forty-five (45) days from the submission of the 
10 
report, the Board of Directors shall, motu proprio, institute corrective 
11 
action which it deems necessary. The Board of Directors may thereafter 
12 
issue a cease and desist order, and require the bank or its directors or 
13 
agents concerned to correct the practices or violations within forty-five 
14 
(45) days. However, if the practice or violation is likely to cause insolvency 
15 
or substantial dissipation of assets or earnings of the bank, or is likely to 
16 
seriously weaken the condition of the bank or otherwise seriously 
17 
prejudice the interests of its depositors and the Corporation, the period to 
18 
take corrective action shall not be more than fifteen (15) days. The order 
19 
may also include the imposition of fines provided in Section 26 (g) [21 (f)] 
20 
hereof. The Board of Directors shall duly inform the Monetary Board of the 
21 
Bangko Sentrai ng Pilipinas of action it has taken under this subsection 
22 
with respect to such practices or violations. 
23 
(b) The actions and proceedings provided in the preceding subsections 
24 
may be undertaken by the Corporation if, in its opinion, an insured bank or 
25 
its directors or agents have violated, are violating or about to violate any 
26 
provision of this Act or any order, rule or instruction issued by the 
27 
Corporation or any written condition imposed by the Corporation in 
28 
connection with any transaction with or grant by the Corporation. 
26 


1 
2 
(c) THE CORPORATION MAY TERMINATE THE INSURED STATUS OF 
3 
ANY BANK THAT FAILS OR REFUSES TO COMPLY, WITHIN THIRTY 
4 
(30) DAYS FROM NOTICE, WITH ANY CEASE-AND-DESIST ORDER 
5 
ISSUED BY THE CORPORATION, OR WITH ANY CORRECTIVE 
6 
ACTION IMPOSED BY THE MONETARY BOARD, UNDER THIS 
7 
SECTION PERTAINING TO A DEPOSIT-RELATED UNSAFE ANDIOR 
8 
UNSOUND BANKING PRACTICE. 
9 
SUCH TERMINATION SHALL BE FINAL AND EXECUTORY, AND 
10 
SHALL BE EFFECTIVE UPON PUBLICATION OF THE NOTICE OF 
11 
TERMINATION IN A NEWSPAPER OF GENERAL CIRCULATION. 
12 
THE DEPOSITS OF EACH DEPOSITOR IN THE BANK ON THE 
13 
EFFECTIVE 
DATE 
OF 
THE 
TERMINATION 
OF 
INSURANCE 
14 
COVERAGE, LESS ALL SUBSEQUENT WITHDRAWALS, SHALL 
15 
CONTINUE TO BE INSURED UP TO THE MAXIMUM DEPOSIT 
16 
INSURANCE COVERAGE FOR A PERIOD OF ONE HUNDRED EIGHTY 
17 
(180) DAYS. ADDITIONS TO, OR RENEWAL OF, EXISTING DEPOSITS 
18 
AND NEW DEPOSITS IN SUCH BANK AFTER THE EFFECTIVE DATE 
19 
OF TERMINATION OF INSURED STATUS OF THE BANK SHALL NOT 
20 
BE INSURED BY THE CORPORATION. 
21 
THE BANK SHALL IMMEDIATELY GIVE WRITTEN NOTICE OF SUCH 
22 
TERMINATION 
AND 
THE 
INTERIM 
DEPOSIT 
INSURANCE 
23 
COVERAGE TO EACH OF ITS DEPOSITORS AT THEIR ADDRESS AS 
24 
RECORDED IN THE BOOKS OF THE BANK. 
25 
THE BANK SHALL NOT ADVERTISE OR REPRESENT THAT 
26 
ADDITIONS TO, OR RENEWAL OF, EXISTING DEPOSITS AND NEW 
27 


1 
DEPOSITS MADE AFTER THE EFFECTIVE DATE OF TERMINATION 
2 
ARE COVERED BY DEPOSIT INSURANCE." 
3 
SECTION 14. Section 8 of the same Act is accordingly renumbered as Section 9. 
4 
SECTION 15. Section 9, paragraph Twelfth of the same Act, as renumbered, is 
5 
hereby amended to read as follows: 
6 
"Twelfth - THE PROVISIONS OF PRESIDENTIAL DECREE NO. 
7 
1445, AS AMENDED, EXECUTIVE ORDER NO. 292, AND OTHER 
8 
SIMILAR LAWS NOTWITHSTANDING, [T] to compromise, condone or 
9 
release, in whole or in part, any claim or settled liability to the Corporation, 
10 
regardless of the amount involved, under such terms and conditions as 
11 
may be imposed by the Board of Directors to protect the interest of the 
12 
Corporation, 
AND 
TO 
WRITE 
OFF 
THE 
CORPORATION'S 
13 
RECEIVABLES 
AND 
ASSETS 
WHICH 
ARE 
NO 
LONGER 
14 
RECOVERABLE OR REALIZABLE;" 
15 
SECTION 16. Section 9 of the same Act, as renumbered, is further amended by 
16 
inserting additional paragraphs after paragraph Twelve, which shall read as follows: 
17 
"THIRTEENTH - TO DETERMINE QUALIFIED INTERESTED 
18 
ACQUIRERS OR INVESTORS FOR ANY OF THE MODES OF 
19 
RESOLUTION OR LIQUIDATION OF BANKS; 
20 
FOURTEENTH 
-
TO 
DETERMINE 
THE 
APPROPRIATE 
21 
RESOLUTION METHOD AND TO IMPLEMENT THE SAME FOR A 
22 
BANK SUBJECT OF RESOLUTION; AND 
28 


1 
FIFTEENTH - TO DETERMINE THE APPROPRIATE MODE OF 
2 
LIQUIDATION OF A CLOSED BANK AND TO IMPLEMENT THE SAME; 
3 
SECTION 17. Section 9 of the same Act is accordingly renumbered as Section 
4 
10. 
5 
SECTION 18. Section 10 paragraph (b-1) of the same Act, as renumbered, is 
6 
hereby amended to read as follows: 
7 
"(b-1) The investigators appointed by the Board of Directors shall have the 
8 
power on behalf of the Corporation to conduct investigations on frauds, 
9 
irregularities and anomalies committed in banks, based on reports of 
10 
examination conducted by the Corporation and Bangko Sentra/ ng 
11 
Pilipinas or complaints from depositors or from other government agency. 
12 
Each such investigator shall have the power to administer oaths, and to 
l3 
examine and take and preserve the testimony of any person relating to 
14 
the subject of investigation. FOR THIS PURPOSE, THE CORPORATION 
15 
MAY APPOINT OR HIRE PERSONS OR ENTITIES OF RECOGNIZED 
16 
COMPETENCE IN FORENSIC AND FRAUD INVESTIGATIONS AS ITS 
17 
AGENTS." 
18 
SECTION 19. Section 10 paragraph (c) of the same Act, as renumbered, is 
19 
hereby amended to read as follows: 
20 
"(c) Each insured bank shall make to the Corporation reports of condition 
21 
in such form and at such times as the Board of Directors may require such 
22 
reports to be published in such manner, not inconsistent with any 
23 
applicable law, as it may direct. Every such bank which fails to make or 
24 
publish any such report within such time, as the Board of Directors may 
29 


1 
require, shall be subject to a penalty of not more than P10,OOO [P100] for 
2 
each day of such failure recoverable by the Corporation for its use." 
3 
SECTION 20. Section 10 paragraph (d-1) of the same Act, as renumbered 
4 
herein, is hereby amended to read as follows: 
5 
"(d-1) Each insured bank shall keep and maintain a true and accurate 
6 
record or statement of its daily deposit transactions consistent with the 
7 
standards set by the 8angko Sentra/ ng Pilipinas and the Corporation. 
8 
Compliance with such standards shall be duly certified by the president of 
9 
the bank [or] 
AND the compliance officer: Provided, That refusal or 
10 
willful failure to issue the required certification shall constitute a violation 
11 
of this Section and shall subject such officers of the bank to the sanctions 
12 
provided for under Section 26 [21] (f) of this Act." 
13 
SECTION 21. Section 10 paragraph (f) of the same Act, as renumbered, is 
14 
hereby amended to read as follows: 
15 
"(f) The Corporation shall underwrite or advance ALL LEGAL [litigation] 
16 
costs and expenses, including legal fees and other expenses of external 
17 
counsel, or provide legal assistance to, directors, officers, employees or 
18 
agents of the Corporation in connection with any civil, criminal, 
19 
administrative or any other action or proceeding, to which such director, 
20 
officer, employee or agent is made a party by reason of, or in connection 
21 
with, the exercise of authority or performance of functions and duties 
22 
under this Act: Provided, That such legal protection shall not apply to any 
23 
civil, criminal, administrative or any action or proceeding that may be 
24 
initiated by the Corporation, in whatever capacity, against such director, 
25 
officer, employee or agent: Provided, Further, That directors, officers, 
30 


1 
employees or agents who shall resign, retire, transfer to another agency 
2 
or be separated from the service, shall continue to be provided with such 
3 
legal protection in connection with any act done or omitted to be done by 
4 
them in good faith during their tenure or employment with the Corporation: 
5 
Provided, finally, That in the event of a settlement or compromise, 
6 
indemnification shall be provided only in connection with such matters 
7 
covered by the settlement as to which the Corporation is advised by 
8 
counsel that the persons to be indemnified did not commit any negligence 
9 
or misconduct." 
10 
SECTION 22. The second paragraph of Section 10 paragraph (i) of the same 
11 
Act, as renumbered, is hereby amended to read as follows: 
12 
13 
"(i) Notwithstanding the provisions of this Section and Section 3 [2], 
14 
members of the Board of Directors and personnel of the Corporation may 
15 
become directors and officers of any bank and banking institution and of 
16 
any entity related to such institution in connection with financial assistance 
17 
extended by the Corporation to such institution and when, in the opinion of 
18 
the Board, it is appropriate to make such designation to protect the 
19 
interest of the Corporation." 
20 
SECTION 23. A new section entitled Section 11 of the same Act is hereby inserted 
21 
between Sections 10 and 12 which shall read as follows: 
22 
"BANK RESOLUTION 
23 
SECTION 11. (A) THE CORPORATION, IN COORDINATION WITH THE 
24 
BANGKO SENTRAL, MAY COMMENCE THE RESOLUTION OF A 
25 
BANK UNDER THIS SECTION UPON: 
31 


1 
1) FAILURE OF PROMPT CORRECTIVE ACTION AS DECLARED 
2 
BY THE MONETARY BOARD; OR 
3 
2) REQUEST BY A BANK TO BE PLACED UNDER RESOLUTION. 
4 
THE CORPORATION SHALL INFORM THE BANK OF ITS ELIGIBILITY 
5 
FOR ENTRY INTO RESOLUTION. 
6 
(B) THE BANGKO SENTRAL SHALL INFORM THE CORPORATION 
7 
OF THE INITIATION OF PROMPT CORRECTIVE ACTION ON ANY 
8 
BANK AND SHALL BE AUTHORIZED TO SHARE WITH THE 
9 
CORPORATION 
ALL 
INFORMATION, 
AGREEMENTS 
OR 
10 
DOCUMENTS, INCLUDING ANY ORDER OF THE MONETARY 
11 
BOARD, 
IN RELATION TO THE PROMPT CORRECTIVE ACTION. 
12 
THE CORPORATION SHALL HAVE THE AUTHORITY TO INQUIRE 
13 
AND MONITOR THE STATUS OF BANKS UNDER PROMPT 
14 
CORRECTIVE ACTION. 
15 
(C) THE STOCKHOLDERS, DIRECTORS, OFFICERS OR EMPLOYEES 
16 
OF THE BANK SHALL HAVE THE FOLLOWING OBLIGATIONS: 
17 
18 
19 
20 
21 
22 
23 
24 
1) ENSURE 
BANK 
COMPLIANCE 
WITH 
TERMS 
AND 
CONDITIONS PRESCRIBED BY THE CORPORATION FOR THE 
RESOLUTION OF THE BANK; 
2) CAUSE THE ENGAGEMENT, WITH THE CONSENT OF THE 
CORPORATION, OF AN INDEPENDENT APPRAISER OR 
AUDITOR FOR THE PURPOSE OF DETERMINING THE 
VALUATION OF THE BANK CONSISTENT WITH GENERALLY 
ACCEPTED VALUATION STANDARDS; 
32 


1 
3) ENSURE PRUDENT MANAGEMENT AND ADMINISTRATION 
2 
OF THE BANK'S ASSETS, LIABILITIES AND RECORDS; 
3 
4) COOPERATE WITH THE CORPORATION IN THE CONDUCT OR 
4 
EXERCISE OF ANY OR ALL OF ITS AUTHORITIES UNDER 
5 
THIS ACT AND HONOR IN GOOD FAITH ITS COMMITMENT OR 
6 
UNDERTAKING 
WITH 
THE 
CORPORATION 
ON 
THE 
7 
RESOLUTION OF THE BANK. 
8 
(d) WITHIN A PERIOD OF ONE HUNDRED EIGHTY (180) DAYS FROM 
9 
A BANK'S ENTRY INTO RESOLUTION, THE CORPORATION, 
10 
THROUGH THE AFFIRMATIVE VOTE OF AT LEAST FIVE (5) 
11 
MEMBERS OF THE PDIC BOARD, SHALL DETERMINE WHETHER 
12 
THE BANK MAY BE RESOLVED THROUGH THE PURCHASE OF ALL 
13 
ITS ASSETS AND ASSUMPTION OF ALL ITS LIABILITIES, OR 
14 
MERGER OR CONSOLIDATION WITH, OR ITS ACQUISITION, BY A 
15 
QUALIFIED INVESTOR. 
16 
FOR THIS PURPOSE, THE CORPORATION MAY: 
17 
1) DETERMINE A RESOLUTION PACKAGE FOR THE BANK; 
18 
2) IDENTIFY AND, WITH THE APPROVAL OF THE MONETARY 
19 
BOARD, 
PRE-QUALIFY 
POSSIBLE 
ACQUIRERS 
OR 
20 
INVESTORS; 
21 
3) AUTHORIZE PRE-QUALIFIED ACQUIRERS OR INVESTORS TO 
22 
CONDUCT DUE DILIGENCE ON THE BANK, FOR PURPOSES 
23 
OF DETERMINING THE VALUATION OF A BANK THROUGH 
24 
AN OBJECTIVE AND THOROUGH REVIEW AND APPRAISAL 
25 
OF ITS ASSETS AND LIABILITIES, AND ASSESSMENT OF 
26 
RISKS OR EVENTS THAT MAY AFFECT ITS VALUATION; 
33 


1 
4) CONDUCT A BIDDING TO DETERMINE THE ACQUIRER OF 
2 
THE BANK. 
3 
(E) IN DETERMINING THE APPROPRIATE RESOLUTION METHOD 
4 
FOR A BANK, THE CORPORATION SHALL CONSIDER THE: 
5 
1) FAIR MARKET VALUE OF THE ASSETS OF THE BANK, ITS 
6 
FRANCHISE, AS WELL AS THE AMOUNT OF ITS LIABILITIES; 
7 
2) AVAILABILITY OF A QUALIFIED INVESTOR; 
8 
3) LEAST COST TO THE DEPOSIT INSURANCE FUND; AND 
9 
4) INTEREST OF THE DEPOSITING PUBLIC. 
10 
(F) THE CORPORATION MAY APPOINT OR HIRE PERSONS OR 
11 
ENTITIES OF RECOGNIZED COMPETENCE IN BANKING, FINANCE, 
12 
ASSET MANAGEMENT OR REMEDIAL MANAGEMENT, AS ITS 
13 
AGENTS, TO PERFORM SUCH POWERS AND FUNCTIONS OF THE 
14 
CORPORATION IN THE RESOLUTION OF A BANK, OR ASSIST IN 
15 
THE PERFORMANCE THEREOF. 
16 
(G) THE PDIC BOARD SHALL PRESCRIBE THE GUIDELINES OR 
17 
CRITERIA FORA BANK TO BE PLACED UNDER RESOLUTION. 
18 
19 
(h) UPON A DETERMINATION BY THE CORPORATION THAT THE 
20 
BANK MAY NOT BE RESOLVED, THE MONETARY BOARD MAY ACT 
21 
IN ACCORDANCE WITH SECTION 30 OF REPUBLIC ACT NO. 7653 
22 
OR THE NEW CENTRAL BANK ACT. 
23 
(i) BANK RESOLUTION INVOLVING THE PURCHASE OF ALL 
24 
ASSETS AND ASSUMPTION OF ALL LIABILITIES OF A BANK SHALL 
34 


1 
BE 
EXEMPT 
FROM 
THE 
PROVISIONS OF 
ACT NO. 
3952, 
2 
OTHERWISE KNOWN AS THE BULK SALES LAW. 
3 
(j) THE PROVISIONS OF THIS SECTION ARE WITHOUT PREJUDICE 
4 
TO ANY ACTION THAT THE MONETARY BOARD MAY TAKE UNDER 
5 
EXISTING LAWS." 
6 
SECTION 24. Sections 10, 11 and 12 of the same Act are hereby deleted. 
7 
SECTION 25. A new section entitled Section 12 of the same Act is hereby 
8 
inserted between Sections 11 and 13 which shall read as follows: 
9 
"LIQUIDATION OF A CLOSED BANK 
10 
SECTION 12. (a) WHENEVER A BANK IS ORDERED CLOSED BY THE 
11 
MONETARY BOARD, THE CORPORATION SHALL BE DESIGNATED 
12 
AS RECEIVER AND IT SHALL PROCEED WITH THE TAKEOVER AND 
13 
LIQUIDATION OF THE CLOSED BANK. FOR THIS PURPOSE, THE 
14 
FOLLOWING CLAUSE IN SECTION 30 OF REPUBLIC ACT NO. 7653, 
15 
AS AMENDED, SHALL NOT BE APPLICABLE TO BANKS: 
16 
"THE RECEIVER SHALL DETERMINE, AS SOON AS 
17 
POSSIBLE, BUT NOT LATER THAN NINETY (90) DAYS 
18 
FROM TAKE-OVER, WHETHER THE INSTITUTION MAY 
19 
BE REHABILITATED OR OTHERWISE PLACED IN SUCH 
20 
A CONDITION SO THAT IT MAY BE PERMITTED TO 
21 
RESUME 
BUSINESS 
WITH 
SAFETY 
TO 
ITS 
22 
DEPOSITORS AND CREDITORS AND THE GENERAL 
23 
PUBLIC: PROVIDED, THAT ANY DETERMINATION FOR 
35 


1 
THE RESUMPTION OF BUSINESS OF THE INSTITUTION 
2 
SHALL BE SUBJECT TO PRIOR APPROVAL OF THE 
3 
MONETARY BOARD." 
4 
SECTION 26. A new section entitled Section 13 of the same Act is hereby 
5 
inserted between Sections 12 and 14 which shall read as follows: 
6 
"AUTHORITIES OF A RECEIVER AND EFFECTS OF PLACEMENT OF 
7 
A BANK UNDER LIQUIDATION 
8 
SECTION 13. (a) THE RECEIVER IS AUTHORIZED TO ADOPT AND 
9 
IMPLEMENT, 
WITHOUT 
NEED 
OF 
CONSENT 
OF 
THE 
10 
STOCKHOLDERS, 
BOARD 
OF 
DIRECTORS, 
CREDITORS 
OR 
11 
DEPOSITORS OF THE CLOSED BANK, ANY OR A COMBINATION OF 
12 
THE FOLLOWING MODES OF LIQUIDATION: 
13 
14 
1) CONVENTIONAL LIQUIDATION; AND 
2) PURCHASE 
OF 
ASSETS 
AND/OR 
ASSUMPTION 
OF 
15 
LIABILITIES 
16 
(b) IN ADDITION TO THE POWERS OF A RECEIVER PROVIDED 
17 
UNDER EXISTING LAWS, THE CORPORATION, AS RECEIVER OF A 
18 
CLOSED BANK, IS EMPOWERED TO: 
19 
1) REPRESENT AND ACT FOR AND IN BEHALF OF THE CLOSED 
20 
BANK; 
21 
2) GATHER AND TAKE CHARGE OF ALL THE ASSETS, 
22 
RECORDS AND AFFAIRS OF THE CLOSED BANK, AND 
36 


1 
ADMINISTER 
THE 
SAME 
FOR THE 
BENEFIT OF 
ITS 
2 
CREDITORS; 
3 
3) CONVERT THE ASSETS OF THE CLOSED BANK TO CASH OR 
4 
OTHER 
FORMS 
OF 
LIQUID 
ASSETS, 
AS 
FAR 
AS 
5 
PRACTICABLE; 
6 
4) BRING SUITS TO ENFORCE LIABILITIES OF THE DIRECTORS, 
7 
OFFICERS, EMPLOYEES, AGENTS OF THE CLOSED BANK 
8 
AND OTHER ENTITIES RELATED OR CONNECTED TO THE 
9 
CLOSED BANK OR TO COLLECT, RECOVER, AND PRESERVE 
10 
ALL ASSETS, INCLUDING ASSETS OVER WHICH THE BANK 
11 
HAS EQUITABLE INTEREST; 
12 
5) APPOINT OR HIRE PERSONS OR ENTITIES OF RECOGNIZED 
13 
COMPETENCE IN BANKING, FINANCE, ASSET MANAGEMENT 
14 
OR 
REMEDIAL 
MANAGEMENT, 
AS 
ITS 
DEPUTIES, 
15 
ASSISTANTS OR AGENTS, TO PERFORM SUCH POWERS 
16 
AND FUNCTIONS OF THE CORPORATION AS RECEIVER OF 
17 
THE CLOSED BANK, OR ASSIST IN THE PERFORMANCE 
18 
THEREOF; 
19 
6) APPOINT OR HIRE PERSONS OR ENTITIES OF RECOGNIZED 
20 
COMPETENCE IN FORENSIC AND FRAUD INVESTIGATIONS; 
21 
7) PAY ACCRUED UTILITIES, RENTALS AND SALARIES OF 
22 
PERSONNEL OF THE CLOSED BANK FOR A PERIOD NOT 
23 
EXCEEDING THREE (3) MONTHS, FROM AVAILABLE FUNDS 
24 
OF THE CLOSED BANK; 
37 


1 
2 
8) COLLECT LOANS AND OTHER CLAIMS OF THE CLOSED 
3 
BANK AND FOR THIS PURPOSE, MODIFY, COMPROMISE OR 
4 
RESTRUCTURE 
THE TERMS AND CONDITIONS OF SUCH 
5 
LOANS OR CLAIMS AS MAY BE DEEMED ADVANTAGEOUS 
6 
TO THE INTERESTS OF THE CREDITORS OF THE CLOSED 
7 
BANK; 
8 
9) HIRE 
OR 
RETAIN 
PRIVATE 
COUNSEL 
AS 
MAY 
BE 
9 
NECESSARY; 
10 
10) BORROW OR OBTAIN A LOAN, OR MORTGAGE, PLEDGE OR 
11 
ENCUMBER ANY ASSET OF THE CLOSED BANK, WHEN 
12 
NECESSARY TO PRESERVE OR PREVENT DISSIPATION OF 
13 
THE ASSETS, OR TO REDEEM FORECLOSED ASSETS OF 
14 
THE CLOSED BANK, OR TO MINIMIZE LOSSES TO ITS 
15 
DEPOSITORS AND CREDITORS; 
16 
11) IF THE STIPULATED INTEREST RATE ON DEPOSITS IS 
17 
18 
19 
20 
21 
22 
23 
24 
25 
UNUSUALLY 
HIGH 
COMPARED 
WITH 
PREVAILING 
APPLICABLE INTEREST RATES, THE CORPORATION AS 
RECEIVER, MAY EXERCISE SUCH POWERS WHICH MAY 
INCLUDE A REDUCTION OF THE INTEREST RATE TO A 
REASONABLE RATE: PROVIDED, THAT ANY MODIFICATIONS 
OR REDUCTIONS SHALL APPLY ONLY TO EARNED AND 
UNPAID INTEREST; 
12) UTILIZE AVAILABLE FUNDS OF THE BANK, INCLUDING 
FUNDS 
GENERATED 
BY 
THE 
RECEIVER 
FROM 
THE 
38 


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 
CONVERSION OF ASSETS TO PAY FOR REASONABLE 
COSTS 
AND 
EXPENSES 
INCURRED 
FOR 
THE 
PRESERVATION OF THE ASSETS, AND LIQUIDATION OF, THE 
CLOSED BANK, WITHOUT NEED FOR APPROVAL OF THE 
LIQUIDATION COURT; 
FOR 
BANKS 
WITH 
INSUFFICIENT 
FUNDS, 
THE 
CORPORATION 
IS 
AUTHORIZED 
TO 
ADVANCE 
THE 
FOREGOING 
COSTS 
AND 
EXPENSES, 
AND 
COLLECT 
PAYMENT, AS AND WHEN FUNDS BECOME AVAILABLE. 
13) CHARGE REASONABLE FEES FOR THE LIQUIDATION OF 
THE BANK FROM THE ASSETS OF THE BANK: PROVIDED 
THAT, PAYMENT OF THESE FEES, INCLUDING ANY UNPAID 
ADVANCES 
UNDER 
THE 
IMMEDIATELY 
PRECEDING 
PARAGRAPH, SHALL BE SUBJECT TO APPROVAL BY THE 
LIQUIDATION COURT; 
14) DISTRIBUTE THE AVAILABLE ASSETS OF THE CLOSED 
BANK, IN CASH OR IN KIND, TO ITS CREDITORS IN 
ACCORDANCE WITH THE RULES ON CONCURRENCE AND 
PREFERENCE OF CREDITS UNDER THE CIVIL CODE OR 
OTHER LAWS; 
15) DISPOSE RECORDS OF THE CLOSED BANK THAT ARE NO 
LONGER NEEDED IN THE LIQUIDATION IN ACCORDANCE 
WITH GUIDELINES SET BY THE PDIC BOARD OF DIRECTORS, 
NOTWITHSTANDING THE LAWS ON ARCHIVAL PERIOD AND 
DISPOSAL OF RECORDS; 
39 


1 
16) EXERCISE SUCH OTHER POWERS AS ARE INHERENT AND 
2 
NECESSARY FOR THE EFFECTIVE DISCHARGE OF THE 
3 
DUTIES OF THE CORPORATION AS RECEIVER. 
4 
THE BOARD OF DIRECTORS SHALL ADOPT SUCH POLICIES AND 
5 
GUIDELINES AS MAY BE NECESSARY FOR THE PERFORMANCE 
6 
OF THE ABOVE POWERS BY PERSONNEL, DEPUTIES, ASSISTANTS 
7 
AND AGENTS OF THE CORPORATION. 
8 
9 
(C) AFTER THE PAYMENT OF ALL LIABILITIES AND CLAIMS AGAINST 
10 
THE CLOSED BANK, THE CORPORATION SHALL PAY SURPLUS, IF ANY, 
11 
DIVIDENDS AT THE LEGAL RATE OF INTEREST FROM DATE OF 
12 
TAKEOVER TO DATE OF DISTRIBUTION TO CREDITORS AND CLAIMANTS 
13 
OF THE CLOSED BANK IN ACCORDANCE WITH THE RULES ON 
14 
CONCURRENCE AND PREFERENCE OF CREDITS UNDER THE CIVIL CODE 
15 
OR OTHER LAWS BEFORE DISTRIBUTION TO THE SHAREHOLDERS OF 
16 
THE CLOSED BANK. 
17 
(d) THE OFFICERS, EMPLOYEES, DEPUTIES, ASSISTANTS AND AGENTS 
18 
OF THE RECEIVER SHALL HAVE NO LIABILITY AND SHALL NOT BE 
19 
SUBJECT TO ANY ACTION, CLAIM OR DEMAND IN CONNECTION WITH 
20 
ANY ACT DONE OR OMITTED TO BE DONE BY THEM IN GOOD FAITH IN 
21 
CONNECTION WITH THE EXERCISE OF THEIR POWERS AND FUNCTIONS 
22 
UNDER THIS ACT AND OTHER APPLICABLE LAWS, OR OTHER ACTIONS 
23 
DULY APPROVED BY THE COURT. 
24 
(e) THE PLACEMENT OF A BANK UNDER LIQUIDATION SHALL HAVE THE 
25 
FOLLOWING EFFECTS: 
40 


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 
1) ON THE CORPORATE FRANCHISE OR EXISTENCE 
UPON PLACEMENT BY THE MONETARY BOARD OF A BANK 
UNDER LIQUIDATION, IT SHALL CONTINUE AS A BODY 
CORPORATE UNTIL THE TERMINATION OF THE WINDING-UP 
PERIOD 
UNDER 
SECTION 16 
OF 
THIS 
ACT. 
SUCH 
CONTINUATION AS A BODY CORPORATE SHALL ONLY BE 
FOR THE PURPOSE OF LIQUIDATING, SETTLING AND 
CLOSING 
ITS 
AFFAIRS 
AND 
FOR 
THE 
DISPOSAL, 
CONVEYANCE OR DISTRIBUTION OF ITS ASSETS PURSUANT 
TO THIS ACT. THE RECEIVER SHALL REPRESENT THE 
CLOSED BANK IN ALL CASES BY OR AGAINST THE CLOSED 
BANK AND PROSECUTE AND DEFEND SUITS BY OR 
AGAINST IT. IN NO CASE SHALL THE BANK BE REOPENED 
AND PERMITTED TO RESUME BANKING BUSINESS AFTER 
BEING PLACED UNDER LIQUIDATION. 
2) ON THE POWERS AND FUNCTIONS OF ITS DIRECTORS, 
OFFICERS AND STOCKHOLDERS 
THE POWERS, VOTING RIGHTS, FUNCTIONS AND DUTIES, 
AS WELL AS THE ALLOWANCES, REMUNERATION AND 
PERQUISITES 
OF 
THE 
DIRECTORS, 
OFFICERS, 
AND 
STOCKHOLDERS OF SUCH BANK ARE TERMINATED UPON 
ITS CLOSURE. ACCORDINGLY, THE DIRECTORS, OFFICERS, 
AND 
STOCKHOLDERS 
SHALL 
BE 
BARRED 
FROM 
INTERFERING IN ANY WAY WITH THE ASSETS, RECORDS, 
AND AFFAIRS OF THE BANK. 
41 


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 
THE 
RECEIVER SHALL EXERCISE ALL AUTHORITIES AS 
MAY BE REQUIRED TO FACILITATE THE LIQUIDATION OF 
THE CLOSED BANK FOR THE BENEFIT OF ALL ITS 
CREDITORS. 
3) ON THE ASSETS 
UPON SERVICE OF NOTICE OF CLOSURE AS PROVIDED IN 
SECTION 14 OF THIS ACT, ALL THE ASSETS OF THE CLOSED 
BANK SHALL BE DEEMED IN CUSTODIA LEGIS IN THE 
HANDS OF THE RECEIVER AND AS SUCH THESE ASSETS 
MAY NOT BE SUBJECT TO ATTACHMENT, GARNISHMENT, 
EXECUTION, LEVY OR ANY OTHER COURT PROCESSES. A 
JUDGE, OFFICER OF THE COURT OR ANY PERSON WHO 
SHALL ISSUE, ORDER, PROCESS OR CAUSE THE ISSUANCE 
OR IMPLEMENTATION OF THE GARNISHMENT ORDER, LEVY, 
ATTACHMENT OR EXECUTION, SHALL BE LIABLE UNDER 
SECTION 27 OF 
THIS ACT: 
PROVIDED, HOWEVER, THAT 
COLLATERALS SECURING THE LOANS AND ADVANCES 
GRANTED BY THE BANGKO SENTRAL NG PlliPINAS SHALL 
NOT BE INCLUDED IN THE ASSETS OF THE CLOSED BANK 
FOR DISTRIBUTION TO OTHER CREDITORS: PROVIDED, 
FURTHER, THAT THE PROCEEDS IN EXCESS OF THE 
AMOUNT SECURED SHALL BE RETURNED BY THE BANGKO 
SENTRAL TO THE RECEIVER. 
ANY PRELIMINARY ATTACHMENT OR GARNISHMENT ON 
ANY OF THE ASSETS OF THE CLOSED BANK EXISTING AT 
42 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
THE TIME OF CLOSURE SHALL NOT GIVE ANY PREFERENCE 
TO THE ATTACHING OR GARNISHING PARTY. 
UPON 
MOTION 
OF 
THE 
RECEIVER, 
THE 
PRELIMINARY 
ATTACHMENT OR GARNISHMENT SHALL BE LIFTED AND/OR 
DISCHARGED. 
4) ON LABOR RELATIONS 
NOTWITHSTANDING THE PROVISIONS OF THE LABOR 
CODE, 
THE 
EMPLOYER-EMPLOYEE 
RELATIONSHIP 
BETWEEN THE CLOSED BANK AND ITS EMPLOYEES SHALL 
BE DEEMED TERMINATED UPON SERVICE OF THE NOTICE 
OF CLOSURE OF THE BANK IN ACCORDANCE WITH THIS 
ACT. 
PAYMENT OF 
SEPARATION 
PAY OR BENEFITS 
PROVIDED FOR BY LAW SHALL BE MADE FROM AVAILABLE 
ASSETS OF THE BANK IN ACCORDANCE WITH THE RULES 
ON CONCURRENCE AND PREFERENCE OF CREDITS UNDER 
THE CIVIL CODE OR OTHER LAWS. 
5) CONTRACTUAL OBLIGATIONS 
THE RECEIVER MAY CANCEL, TERMINATE, RESCIND OR 
REPUDIATE ANY CONTRACT OF THE CLOSED BANK THAT IS 
NOT NECESSARY FOR THE ORDERLY LIQUIDATION OF THE 
BANK, OR IS GROSSLY DISADVANTAGEOUS TO THE 
CLOSED BANK, OR FOR ANY GROUND PROVIDED BY LAW. 
6) ON INTEREST PAYMENTS 
43 


2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
THE LIABILITY OF A BANK TO PAY INTEREST ON DEPOSITS 
AND ALL OTHER OBLIGATIONS AS OF CLOSURE SHALL 
CEASE UPON ITS CLOSURE BY THE MONETARY BOARD 
WITHOUT PREJUDICE TO THE FIRST PARAGRAPH OF 
SECTION 85 OF REPUBLIC ACT NO. 7653 (THE NEW 
CENTRAL BANK ACT): PROVIDED, THAT, THE RECEIVER 
SHALL HAVE THE 
AUTHORITY, WITHOUT NEED 
FOR 
APPROVAL OF THE LIQUIDATION COURT, TO ASSIGN, AS 
PAYMENT TO SECURED CREDITORS, THE BANK ASSETS 
SERVING AS COLLATERALS TO THEIR RESPECTIVE LOANS 
UP TO THE EXTENT OF THE OUTSTANDING OBLIGATIONS, 
INCLUDING INTEREST AS OF DATE OF CLOSURE OF THE 
BANK, AS VALIDATED BY THE RECEIVER. THE VALUATION 
OF THE ASSET SHALL BE BASED ON THE PREVAILING 
MARKET VALUE OF THE COLLATERALS AS APPRAISED BY 
AN INDEPENDENT APPRAISER ON AN "AS IS WHERE IS" 
BASIS. 
7) LIABILITY FOR PENALTIES AND SURCHARGES FOR LATE 
PAYMENT AND NON-PAYMENT OF TAXES 
FROM THE TIME OF CLOSURE, THE CLOSED BANK SHALL 
NOT BE LIABLE FOR THE PAYMENT OF PENALTIES AND 
SURCHARGES ARISING FROM THE LATE PAYMENT OR 
NONPAYMENT OF REAL PROPERTY TAX, CAPITAL GAINS 
TAX, TRANSFER TAX AND SIMILAR CHARGES. 
44 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
8) BANK CHARGES AND FEES ON SERVICES 
THE RECEIVER MAY IMPOSE, ON BEHALF OF THE CLOSED 
BANK, CHARGES AND FEES FOR SERVICES RENDERED 
AFTER BANK CLOSURE, SUCH AS, BUT NOT LIMITED TO, 
THE 
EXECUTION 
OF 
PERTINENT 
DEEDS 
AND 
CERTIFICATIONS. 
9) ACTIONS PENDING FOR OR AGAINST THE CLOSED BANK 
EXCEPT FOR ACTIONS PENDING BEFORE THE SUPREME 
COURT, ACTIONS PENDING FOR OR AGAINST THE CLOSED 
BANK IN ANY COURT OR QUASI-JUDICIAL BODY SHALL, 
UPON MOTION OF THE RECEIVER, BE SUSPENDED FOR A 
PERIOD NOT EXCEEDING ONE HUNDRED EIGHTY (180) DAYS 
AND 
REFERRED 
TO 
MANDATORY 
MEDIATION. 
UPON 
TERMINATION OF THE MEDIATION, THE CASE SHALL BE 
REFERRED BACK TO THE COURT OR QUASI-JUDICIAL BODY 
FOR FURTHER PROCEEDINGS. 
10) FINAL DECISIONS AGAINST THE CLOSED BANK 
THE EXECUTION AND ENFORCEMENT OF A FINAL DECISION 
OF A COURT OTHER THAN THE LIQUIDATION COURT 
AGAINST THE ASSETS OF A CLOSED BANK SHALL BE 
STAYED. THE PREVAILING PARTY SHALL FILE THE FINAL 
DECISION AS A CLAIM WITH THE LIQUIDATION COURT AND 
SETTLED 
IN 
ACCORDANCE 
WITH 
THE 
RULES 
ON 
45 


2 
3 
4 
5 
6 
7 
8 
9 
10 
I 1 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
CONCURRENCE AND PREFERENCE OF CREDITS UNDER 
THE CIVIL CODE OR OTHER LAWS. 
11) DOCKET AND OTHER COURT FEES 
PAYMENT OF DOCKET AND OTHER COURT FEES RELATING 
TO ALL CASES OR ACTIONS FILED BY THE RECEIVER WITH 
ANY JUDICIAL OR QUASI-JUDICIAL BODIES SHALL BE 
DEFERRED UNTIL THE ACTION IS TERMINATED WITH 
FINALITY. ANY SUCH FEES SHALL CONSTITUTE AS A FIRST 
LIEN ON ANY JUDGMENT IN FAVOR OF THE CLOSED BANK 
OR IN CASE OF UNFAVORABLE JUDGMENT, SUCH FEES 
SHALL BE PAID AS LIQUIDATION COSTS AND EXPENSES 
DURING THE DISTRIBUTION OF THE ASSETS OF THE 
CLOSED BANK. 
12) ALL ASSETS, RECORDS, AND DOCUMENTS IN THE 
POSSESSION OF THE CLOSED BANK AT THE TIME OF ITS 
CLOSURE ARE PRESUMED HELD BY THE BANK IN THE 
CONCEPT OF AN OWNER. 
13) THE 
EXERCISE 
OF 
AUTHORITY, 
FUNCTIONS, 
AND 
DUTIES BY THE RECEIVER UNDER THIS ACT SHALL BE 
PRESUMED TO HAVE BEEN PERFORMED IN THE REGULAR 
COURSE OF BUSINESS. 
14)ASSETS AND DOCUMENTS OF THE CLOSED BANK 
SHALL 
RETAIN 
THEIR 
PRIVATE 
NATURE 
EVEN 
IF 
ADMINISTERED BY THE RECEIVER. MATTERS RELATING TO 
46 


THE EXERCISE BY THE RECEIVER OF THE FUNCTIONS 
2 
UNDER THIS ACT SHALL BE SUBJECT TO VISITORIAL AUDIT 
3 
ONLY BY THE COMMISSION ON AUDIT. 
4 
SECTION 27, A new section entitled Section 14 of the same Act is hereby 
5 
inserted between Sections 13 and 15 which shall read as follows: 
6 
"NOTICE OF CLOSURE AND TAKEOVER ACTIVITIES 
7 
SECTION 14. (a) UPON THE DESIGNATION OF THE CORPORATION 
8 
AS RECEIVER OF A CLOSED BANK, IT SHALL SERVE A NOTICE OF 
, 9 
CLOSURE TO THE HIGHEST-RANKING OFFICER OF THE BANK 
10 
PRESENT IN THE BANK PREMISES, OR IN THE ABSENCE OF SUCH 
11 
OFFICER, POST THE NOTICE OF CLOSURE IN 
THE BANK 
12 
PREMISES OR ON ITS MAIN ENTRANCE. THE CLOSURE OF THE 
13 
BANK SHALL BE DEEMED EFFECTIVE UPON THE SERVICE OF THE 
14 
NOTICE OF CLOSURE. 
THEREAFTER, THE RECEIVER SHALL 
15 
TAKEOVER THE BANK AND EXERCISE THE POWERS OF THE 
16 
RECEIVER AS PROVIDED IN THIS ACT. 
17 
(b) 
THE 
RECEIVER 
SHALL 
HAVE 
AUTHORITY 
TO 
USE 
18 
REASONABLE FORCE, INCLUDING THE AUTHORITY TO FORCE 
19 
OPEN THE PREMISES OF THE BANK, AND EXERCISE SUCH ACTS 
20 
NECESSARY TO TAKE ACTUAL PHYSICAL POSSESSION AND 
21 
CUSTODY OF THE BANK AND ALL ITS ASSETS, RECORDS, 
22 
DOCUMENTS, AND TAKE CHARGE OF ITS AFFAIRS UPON THE 
23 
SERVICE OF THE NOTICE OF CLOSURE, 
47 


1 
(e) DIRECTORS, OFFICERS, EMPLOYEES OR AGENTS OF A BANK 
2 
HOLD MONEY AND OTHER ASSETS OF THE BANK IN TRUST OR 
3 
UNDER ADMINISTRATION OR MANAGEMENT BY THEM FOR THE 
4 
BANK IN THEIR FIDUCIARY CAPACITY. UPON SERVICE OF THE 
5 
NOTICE OF CLOSURE TO THE BANK, ALL DIRECTORS, OFFICERS, 
6 
EMPLOYEES OR AGENTS OF THE CLOSED BANK SHALL HAVE 
7 
THE DUTY TO IMMEDIATELY ACCOUNT FOR, SURRENDER AND 
8 
TURN OVER TO THE RECEIVER, AND PROVIDE INFORMATION 
9 
RELATIVE TO, THE ASSETS, RECORDS, AND AFFAIRS OF THE 
10 
CLOSED 
BANK 
IN 
THEIR 
POSSESSION, 
CUSTODY, 
11 
ADMINISTRATION OR MANAGEMENT. 
12 
(d) WHEN THE CIRCUMSTANCES SO WARRANT, THE LOCAL 
13 
GOVERNMENT 
UNIT 
AND 
LAW 
ENFORCEMENT 
AGENCIES 
14 
CONCERNED SHALL, UPON REQUEST, IMMEDIATELY PROVIDE 
15 
ASSISTANCE TO THE RECEIVER DURING THE SERVICE OF NOTICE 
16 
OF CLOSURE AND ACTUAL TAKEOVER OPERATIONS TO ENSURE 
17 
THE ORDERLY CONDUCT THEREOF AND THE SECURITY AND 
18 
SAFETY OF THE PERSONNEL OF THE RECEIVER AND THE 
19 
EMPLOYEES OF THE CLOSED BANK." 
20 
SECTION 28. A new section entitled Section 15 of the same Act is hereby 
21 
inserted between Sections 14 and 16 which shall read as follows: 
22 
"PURCHASE OF ASSETS AND ASSUMPTION OF LIABILITIES 
23 
SECTION 15. (a) THE RECEIVER SHALL HAVE THE AUTHORITY TO 
24 
FACILITATE AND IMPLEMENT THE PURCHASE OF THE ASSETS OF 
25 
THE CLOSED BANK AND THE ASSUMPTION OF ITS LIABILITIES BY 
48 


2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
ANOTHER INSURED BANK, WITHOUT NEED FOR APPROVAL OF 
THE LIQUIDATION COURT. THE EXERCISE OF THIS AUTHORITY 
SHALL BE IN ACCORDANCE WITH THE RULES ON CONCURRENCE 
AND PREFERENCE OF CREDITS UNDER THE CIVIL CODE OR 
OTHER LAWS, SUBJECT TO SUCH TERMS AND CONDITIONS AS 
THE CORPORATION MAY PRESCRIBE. THE DISPOSITION OF THE 
BRANCH LICENSES AND OTHER BANK LICENSES OF THE CLOSED 
BANK SHALL BE SUBJECT TO THE APPROVAL OF THE BANGKO 
SENTRAL NG PILIPINAS. 
(b) SUCH ACTION OF THE RECEIVER TO DETERMINE WHETHER A 
BANK MAY BE THE SUBJECT OF A PURCHASE OF ASSETS AND 
ASSUMPTION OF LIABILITIES TRANSACTION SHALL BE FINAL AND 
EXECUTORY, AND MAY NOT BE SET ASIDE BY ANY COURT." 
SECTION 29. A new section entitled Section [17] 16 of the same Act is hereby 
inserted between Sections [16] 15 and [18] 17 which shall read as follows: 
"CONVENTIONAL LIQUIDATION 
A. ASSET MANAGEMENT AND CONVERSION 
SECTION 16. (A) THE ASSETS GATHERED BY THE RECEIVER 
SHALL BE EVALUATED AND VERIFIED AS TO THEIR EXISTENCE, 
OWNERSHIP, CONDITION, AND OTHER FACTORS TO DETERMINE 
THEIR 
REALIZABLE 
VALUE. 
IN 
THE 
MANAGEMENT, 
PRESERVATION AND DISPOSITION OF ASSETS, THE RECEIVER 
SHALL 
BE 
GUIDED 
BY 
COST-BENEFIT 
CONSIDERATIONS, 
49 


1 
RESOURCES OF THE CLOSED BANK, AND POTENTIAL ASSET 
2 
RECOVERY. 
3 
(B) THE CONVERSION OF THE ASSETS OF THE CLOSED BANK 
4 
SHALL BE CARRIED OUT IN A FAIR AND TRANSPARENT MANNER 
5 
IN ACCORDANCE WITH THE RULES AND PROCEDURES AS MAY 
6 
BE DETERMINED BY THE RECEIVER. 
7 
(C) IN THE MANAGEMENT AND/OR CONVERSION OF THE ASSETS 
8 
OF THE CLOSED BANK, THE RECEIVER SHALL HAVE THE 
9 
AUTHORITY TO: 
10 
1) REPRESENT THE CLOSED BANK BEFORE THE LAND 
11 
REGISTRATION AUTHORITY (LRA), BUREAU OF LANDS, 
12 
REGISTER OF DEEDS, THE LAND TRANSPORTATION OFFICE 
13 
(L TO), THE ASSESSOR'S OFFICE OR OTHER APPROPRIATE 
14 
OFFICE 
OF 
THE 
LOCAL 
GOVERNMENT 
UNIT, 
THE 
15 
SECURITIES AND EXCHANGE COMMISSION (SEC), OR SUCH 
16 
OTHER SIMILAR GOVERNMENT AGENCIES OR PRIVATE 
17 
ENTITIES IN: 
18 
19 
20 
21 
22 
23 
A. VERIFYING 
THE 
AUTHENTICITY 
OF 
OWNERSHIP 
DOCUMENTS; 
B. REGISTERING THE INTEREST OF THE CLOSED BANK ON 
A SPECIFIC PROPERTY; 
C. CONSOLIDATING OWNERSHIP OVER AN ASSET OF THE 
CLOSED BANK; 
50 


2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
D. SECURING CERTIFIED TRUE COPIES OF DOCUMENTS 
HELD BY THE 
FOREGOING AGENCIES/ENTITIES IN 
RELATION TO AN ASSET OF THE CLOSED BANK; 
E. SECURING THE APPROPRIATE CERTIFICATION FROM 
THE FOREGOING AGENCIES/ENTITIES IN RELATION TO 
AN ASSET OF THE CLOSED BANK; AND 
F. 
PERFORMING OTHER RELATED ACTIVITIES; 
2) CONDUCT A PHYSICAL OR OCULAR INSPECTION OF THE 
PROPERTIES OWNED BY, OR MORTGAGED TO, THE CLOSED 
BANK, TO DETERMINE THEIR EXISTENCE AND PRESENT 
CONDITION; 
3) DETERMINE 
THE 
DISPOSAL 
PRICE 
OF 
ASSETS 
IN 
ACCORDANCE WITH GENERALLY ACCEPTED VALUATION 
PRINCIPLES, STANDARDS AND PRACTICES, SUBJECT TO 
SUCH GUIDELINES AS THE RECEIVER MAY DETERMINE; 
4) DISPOSE REAL OR PERSONAL PROPERTIES OF THE 
CLOSED BANK THROUGH BIDDING, NEGOTIATED SALE OR 
ANY OTHER MODE INCLUDING LEASE WITH OPTION TO 
PURCHASE, WHETHER BY PIECE OR BY LOT, AS MAY BE 
REASONABLY DETERMINED BY THE RECEIVER BASED ON 
COST 
BENEFIT 
CONSIDERATIONS 
AND 
TO 
ALLOW 
EFFICIENT DISTRIBUTION OF ASSETS TO CREDITORS; AND 
5) ENGAGE THIRD PARTIES TO ASSIST IN THE LIQUIDATION, 
MANAGE AND/OR DISPOSE THE ASSETS, HANDLE CASES 
51 


FILED AGAINST OR BY THE CLOSED BANK, SUBJECT TO 
2 
SUCH GUIDELINES AS DETERMINED BY THE RECEIVER. 
3 
(D) NOTWITHSTANDING ANY PROVISION OF LAW TO THE 
4 
CONTRARY, THE FOLLOWING RULES SHALL APPLY TO THE 
5 
MANAGEMENT ANDIOR CONVERSION BY THE RECEIVER OF THE 
6 
ASSETS OF THE CLOSED BANK: 
7 
1) UPON NOTIFICATION OF THE CLOSURE OF A BANK, THE 
8 
LAND REGISTRATION AUTHORITY, BUREAU OF LANDS, 
9 
REGISTER OF DEEDS, LAND TRANSPORTATION OFFICE, 
10 
ASSESSOR'S OFFICE OR OTHER APPROPRIATE OFFICE OF 
11 
THE LOCAL GOVERNMENT UNIT, OR SUCH OTHER SIMILAR 
12 
GOVERNMENT 
AGENCIES 
SHALL 
NOT 
ALLOW 
ANY 
13 
TRANSACTION AFFECTING THE ASSETS OF THE CLOSED 
14 
BANK WITHOUT THE CONSENT OF THE RECEIVER. 
15 
2) 
UPON ISSUANCE BY THE MONETARY BOARD OF THE 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
RESOLUTION ORDERING THE CLOSURE OF A BANK, ANY 
PERSON OR ENTITY IN CUSTODY OR POSSESSION OF 
ASSETS OR RECORDS OF THE CLOSED BANK, INCLUDING, 
BUT NOT LIMITED TO, 
THE CLOSED BANK'S DEPOSIT 
ACCOUNTS, TITLES TO REAL PROPERTY, COLLATERALS, 
PROMISSORY NOTES, EVIDENCE OF INDEBTEDNESS OR 
INVESTMENTS SHALL IMMEDIATELY TURN OVER CUSTODY 
OF SAID ASSETS AND RECORDS TO THE RECEIVER. SUCH 
OBLIGATION SHALL NOT COVER EVIDENCES OF DEPOSIT 
SUCH AS PASSBOOKS OR CERTIFICATES OF DEPOSIT 
ISSUED BY THE BANK TO ITS DEPOSITORS. PENDING 
52 


1 
TURNOVER, ALL PERSONS OR ENTITIES IN CUSTODY OR 
2 
POSSESSION OF ANY ASSET OR RECORD OF THE CLOSED 
3 
BANK SHALL HOLD THE SAID ASSETS OR RECORDS IN 
4 
TRUST FOR THE RECEIVER. 
5 
3) THE PERSONS OR ENTITIES IN CUSTODY OR POSSESSION 
6 
OF SUCH ASSET SHALL NOT ALLOW, AUTHORIZE OR 
7 
CAUSE 
THE 
WITHDRAWAL, 
TRANSFER, 
DISPOSITION, 
8 
REMOVAL, 
CONVERSION, 
CONCEALMENT, 
OR 
OTHER 
9 
TRANSACTION INVOLVING OR RELATING TO THE SUBJECT 
10 
ASSET, UNLESS OTHERWISE DIRECTED BY THE RECEIVER. 
11 
(E) THE RECEIVER SHALL HAVE THE AUTHORITY TO INVEST 
12 
FUNDS RECEIVED FROM THE CONVERSION OF THE ASSETS OF 
13 
THE CLOSED BANK IN GOVERNMENT SECURITIES, OTHER 
14 
GOVERNMENT-GUARANTEED 
MARKETABLE 
SECURITIES 
OR 
IS 
INVESTMENT-GRADE DEBT INSTRUMENTS. 
16 
(F) THE PROCEEDS OF THE SALE OF THE BANK AND BRANCH 
17 
LICENSES SHALL BE FOR THE BENEFIT OF THE CREDITORS OF 
18 
THE 
CLOSED 
BANK 
WHICH 
SHALL 
BE 
DISTRIBUTED 
IN 
19 
ACCORDANCE 
WITH 
THIS 
ACT 
AND 
THE 
RULES 
ON 
20 
CONCURRENCE AND PREFERENCE OF CREDITS UNDER THE CIVIL 
21 
CODE OR OTHER LAWS. 
22 
B. PETITION FOR ASSISTANCE 
23 
IN THE LIQUIDATION OF A CLOSED BANK 
53 


1 
(G) A PETITION FOR ASSISTANCE IN THE LIQUIDATION IS A 
2 
SPECIAL PROCEEDING FOR THE LIQUIDATION OF A CLOSED 
3 
BANK, AND INCLUDES THE DECLARATION OF THE CONCOMITANT 
4 
RIGHT OF ITS CREDITORS AND THE ORDER OF PAYMENT OF 
5 
THEIR VALID CLAIMS IN THE DISPOSITION OF ITS ASSETS. 
6 
ANY PROCEEDING INITIATED UNDER THIS SECTION SHALL BE 
7 
CONSIDERED IN REM. 
JURISDICTION OVER ALL PERSONS 
8 
AFFECTED BY THE PROCEEDING SHALL BE CONSIDERED AS 
9 
ACQUIRED UPON PUBLICATION OF THE ORDER SETTING THE 
10 
CASE FOR INITIAL HEARING IN ANY NEWSPAPER OF GENERAL 
11 
CIRCULATION IN THE PHILIPPINES. 
12 
(H) 
THE 
LIQUIDATION 
COURT 
SHALL 
HAVE 
EXCLUSIVE 
13 
JURISDICTION TO ADJUDICATE DISPUTED CLAIMS AGAINST THE 
14 
CLOSED BANKS, ASSIST IN THE ENFORCEMENT OF INDIVIDUAL 
15 
LIABILITIES OF THE STOCKHOLDERS, DIRECTORS AND OFFICERS 
16 
AND DECIDE ON ALL OTHER ISSUES AS MAY BE MATERIAL TO 
17 
IMPLEMENT 
THE 
DISTRIBUTION 
PLAN 
ADOPTED 
BY 
THE 
18 
CORPORATION FOR GENERAL APPLICATION TO ALL CLOSED 
19 
BANKS. 
20 
(I) THE PROVISIONS OF REPUBLIC ACT NO. 8799, OTHERWISE 
21 
KNOWN 
AS 
"THE 
SECURITIES 
REGULATION 
CODE," 
AND 
22 
SUPREME COURT ADMINISTRATIVE MATTER NO. 00-8-10-SC, 
23 
ENTITLED, "THE RULES OF 
PROCEDURE ON 
CORPORATE 
24 
REHABILITATION," SHALL NOT BE APPLICABLE TO THE PETITION 
25 
FOR ASSISTANCE IN THE LIQUIDATION OF THE CLOSED BANK. 
54 


1 
(J) THE PETITION SHALL BE FILED IN THE REGIONAL TRIAL 
2 
COURT WHICH HAS JURISDICTION OVER THE PRINCIPAL OFFICE 
3 
OF THE CLOSED BANK OR THE PRINCIPAL OFFICE OF THE 
4 
RECEIVER, AT THE OPTION OF THE LATTER. 
5 
6 
(K) THE PETITION SHALL BE FILED EX PARTE WITHIN A 
7 
REASONABLE PERIOD FROM RECEIPT OF THE MONETARY BOARD 
8 
RESOLUTION PLACING THE BANK UNDER LIQUIDATION. 
9 
(L) ALL PERSONS OR ENTITIES WITH CLAIMS AGAINST THE 
10 
ASSETS OF THE CLOSED BANK SHALL FILE THEIR CLAIMS WITH 
11 
THE RECEIVER WITHIN SIXTY (60) DAYS FROM 
DATE OF 
12 
PUBLICATION OF THE NOTICE OF CLOSURE. CLAIMS FILED 
13 
OUTSIDE THE FOREGOING PRESCRIBED PERIOD SHALL BE 
14 
DISALLOWED. 
15 
CLAIMS DENIED BY THE RECEIVER SHALL BE FILED WITH THE 
16 
LIQUIDATION COURT WITHIN SIXTY (60) DAYS FROM RECEIPT OF 
17 
THE FINAL NOTICE OF DENIAL OF CLAIM. 
18 
(M) A CLAIM WHOSE VALIDITY HAS NOT YET BEEN DETERMINED 
19 
WITH FINALITY AT THE TIME OF THE SUBMISSION OF THE FINAL 
20 
ASSET DISTRIBUTION PLAN, EITHER BY REASON OF A PENDING 
21 
SUIT OR FOR WHATEVER REASON, SHALL BE CONSIDERED AS 
22 
CONTINGENT CLAIM AND SHALL NOT BE PAID UNDER THE 
23 
PROPOSED FINAL ASSET DISTRIBUTION PLAN. 
24 
(N) UPON FINALITY OF THE ORDER APPROVING THE FINAL ASSET 
25 
DISTRIBUTION PLAN, THE PETITION FOR ASSISTANCE IN THE 
55 


LIQUIDATION OF A CLOSED BANK SHALL HENCEFORTH BE, FOR 
2 
ALL INTENTS AND PURPOSES, CONSIDERED CLOSED AND 
3 
TERMINATED AND THE RECEIVER, ITS OFFICERS, EMPLOYEES OR 
4 
AGENTS, ARE FOREVER DISCHARGED FROM ANY AND ALL 
5 
CLAIMS ANDIOR LIABILITY ARISING FROM OR IN CONNECTION 
6 
WITH THE LIQUIDATION OF THE CLOSED BANK. 
7 
(0) THE RECEIVER SHALL SUBMIT A FINAL REPORT ON THE 
8 
IMPLEMENTATION 
OF 
THE 
APPROVED 
FINAL 
ASSET 
9 
DISTRIBUTION PLAN TO THE MONETARY BOARD AND THE 
10 
SECURITIES AND EXCHANGE COMMISSION (SEC) AFTER THE 
11 
EXPIRATION OF THE WINDING-UP PERIOD PROVIDED IN THIS ACT. 
12 
(P) 
THE 
SUPREME 
COURT 
SHALL 
PROMULGATE 
THE 
13 
APPROPRIATE 
PROCEDURAL 
RULES 
TO 
IMPLEMENT 
THIS 
14 
SECTION. 
15 
C. WINDING-UP 
16 
(Q) THE CREDITORS SHALL HAVE A PERIOD OF SIX (6) MONTHS 
17 
FROM DATE OF PUBLICATION OF NOTICE OF THE APPROVAL BY 
18 
THE COURT OF THE FINAL ASSET DISTRIBUTION PLAN OF THE 
19 
CLOSED BANK WITHIN WHICH TO CLAIM PAYMENT OF THE 
20 
PRINCIPAL OBLIGATIONS AND SURPLUS DIVIDENDS. DURING 
21 
THIS SIX-MONTH PERIOD, THE RECEIVER SHALL HOLD AS 
22 
TRUSTEE THE ASSETS ALLOCATED IN 
THE FINAL ASSET 
23 
DISTRIBUTION PLAN FOR SAID CREDITORS. 
56 


FAILURE 
BY 
THE 
CREDITOR 
TO 
COMPLY 
WITH 
THE 
2 
DOCUMENTARY 
REQUIREMENTS 
WITHIN 
THE 
PRESCRIBED 
3 
PERIOD AND/OR REFUSAL TO ACCEPT THE ASSET AS PAYMENT 
4 
SHALL BE DEEMED AS ABANDONMENT OR WAIVER OF HIS RIGHT 
5 
TO PAYMENT. 
6 
(R) THE INDIVIDUAL STOCKHOLDERS OF RECORD OR THEIR 
7 
DULY-AUTHORIZED 
REPRESENTATIVE 
OR 
THE 
COURT-
8 
APPOINTED STOCKHOLDERS' REPRESENTATIVE SHALL HAVE A 
9 
PERIOD OF SIX (6) MONTHS FROM PUBLICATION OF NOTICE OF 
10 
THE 
APPROVAL 
BY THE 
COURT 
OF 
THE 
FINAL 
ASSET 
II 
DISTRIBUTION PLAN OF THE CLOSED BANK WITHIN WHICH TO 
12 
CLAIM THE RESIDUAL ASSETS. DURING THIS SIX- MONTH PERIOD, 
13 
THE 
RECEIVER 
SHALL 
HOLD 
AS 
TRUSTEE 
THE 
ASSETS 
14 
ALLOCATED IN THE FINAL ASSET DISTRIBUTION PLAN FOR SAID 
IS 
STOCKHOLDERS OF RECORD. 
16 
FAILURE BY THE INDIVIDUAL STOCKHOLDERS OF RECORD OR 
17 
THEIR DULY-AUTHORIZED REPRESENTATIVE OR THE COURT-
18 
APPOINTED STOCKHOLDERS' REPRESENTATIVE TO COMPLY 
19 
WITH 
THE 
DOCUMENTARY 
REQUIREMENTS 
WITHIN 
THE 
20 
PRESCRIBED 
PERIOD 
AND/OR REFUSAL 
TO ACCEPT THE 
21 
RESIDUAL 
ASSETS 
IN 
KIND 
SHALL 
BE 
DEEMED 
AS 
22 
ABANDONMENT OR WAIVER OF 
RIGHT TO RECEIVE 
THE 
23 
RESIDUAL ASSETS. 
24 
(S) AFTER THE LAPSE OF THE SIX-MONTH PERIOD PROVIDED IN 
25 
PARAGRAPHS (Q) AND (R) OF THIS SECTION, ALL ASSETS WHICH 
26 
REMAIN 
UNCLAIMED 
BY 
THE 
CREDITORS 
AND/OR 
57 


I 
STOCKHOLDERS OF RECORD SHALL BE TURNED OVER TO THE 
2 
BUREAU OF TREASURY. 
3 
(T) 
THE RECEIVER SHALL CONTINUE TO KEEP ALL THE 
4 
PERTINENT RECORDS OF THE CLOSED BANK FOR A PERIOD OF 
5 
SIX (6) MONTHS FROM DATE OF PUBLICATION OF THE APPROVAL 
6 
OF THE FINAL ASSET DISTRIBUTION PLAN. AFTER THE LAPSE OF 
7 
THIS PERIOD, THE RECEIVER IS AUTHORIZED TO DISPOSE OF THE 
8 
SAME IN ACCORDANCE RULES AND REGULATIONS TO BE 
9 
PRESCRIBED BY THE RECEIVER." 
10 
SECTION 30. Section 13 of the same Act is hereby renumbered as Section [18] 
II 
17. 
12 
SECTION 31. A new section entitled Section [19]18 of the same Act is hereby 
13 
inserted between Sections [18]17 and [20]19 which shall read as follows: 
14 
"DIVIDEND DECLARATION 
IS 
SECTION 18. CONSISTENT WITH THE POLICY OF THE STATE TO 
16 
GENERATE, PRESERVE, MAINTAIN FAITH AND CONFIDENCE IN 
17 
THE COUNTRY'S BANKING SYSTEM, THE CORPORATION SHALL 
18 
BUILD UP AND MAINTAIN THE DEPOSIT INSURANCE FUND (DIF) AT 
19 
tHE TARGET LEVEL SET BY THE PDIC BOARD OF DIRECTORS. 
20 
SUCH TARGET LEVEL SHALL BE SUBJECT TO PERIODIC REVIEW 
21 
AND MAY BE ADJUSTED AS NECESSARY. 
22 
THE CORPORATION IS EXEMPT FROM REPUBLIC ACT NO. 7656; 
I 
I 
23 
INSTEAD, THE CORPORATION SHALL REMIT DIVIDENDS TO THE 
58 


NATIONAL 
GOVERNMENT ONLY 
IF 
THE 
TARGET 
DEPOSIT 
2 
INSURANCE FUND LEVEL FOR THE APPLICABLE YEAR HAS BEEN 
3 
REACHED. FOR PURPOSES OF COMPUTING THE AMOUNT OF 
4 
DIVIDENDS TO BE DECLARED AND REMITTED TO THE NATIONAL 
5 
GOVERNMENT, ALL ASSESSMENT COLLECTIONS SHALL NOT BE 
6 
CONSIDERED AS INCOME. THE DIVIDEND RATE SHALL BE AT 
7 
LEAST FIFTY PERCENT (50%) OF THE INCOME 
FROM OTHER 
8 
SOURCES ONLY." 
9 
SECTION 32. Section 14 of the same Act is accordingly renumbered as Section 
10 
[20] 19 and is hereby amended to read as follows: 
11 
"PAYMENT OF INSURED DEPOSITS 
12 
SECTION [20] 19. Whenever an insured bank shall have been closed by 
13 
the Monetary Board pursuant to Section 30 of R.A. 7653, OR UPON 
14 
EXPIRATION OR REVOCATION OF A BANK'S CORPORATE TERM, 
15 
payment of the insured deposits on such closed bank shall be made by 
16 
the Corporation as soon as possible either (1) by cash or (2) by making 
17 
available to each depositor a transferred deposit in another insured bank 
18 
in an amount equal to insured deposit of such depositor: Provided, 
19 
however, That the Corporation, in its discretion, may require proof of 
20 
claims to be filed before paying the insured deposits, and that in any case 
21 
where the Corporation is not satisfied as to the [viability] VALIDITY of a 
22 
claim for an insured deposit, it may require final determination of a court of 
23 
competent jurisdiction before paying such claim: Provided, further, That 
24 
failure to settle the claim, within six (6) months from the date of filing of 
25 
claim for insured deposit, where such failure was due to grave abuse of 
26 
discretion, gross negligence, bad faith, or malice, shall, upon conviction, 
59 


subject the directors, officers or employees of the Corporation responsible 
2 
for the delay, to imprisonment from six (6) months to one (1) year: 
3 
Provided, fwthermore, That the period shall not apply if the validity of the 
4 
claim requires the resolution of issues of facts and or law by another 
5 
office, body or agency including the case mentioned in the first proviso or 
6 
by the Corporation together with such other office, body or agency." 
7 
SECTION 33. Section 15 of the same Act is accordingly renumbered as Section 
8 
[21] 20 and is hereby amended to read as follows: 
9 
"SECTION [21] 20. The Corporation, upon payment of any depositor as 
10 
provided for in [subsection (c) of this] Section 19 OF THIS ACT, shall be 
11 
subrogated to all rights of the depositor against the closed bank to the 
12 
extent of such payment. Such subrogation shall include the right on the 
13 
part of the Corporation to receive the same dividends and payments from 
14 
the proceeds of the assets of such closed bank and recoveries on account 
15 
of stockholders' liability as would have been payable to the depositor on a 
16 
claim for the insured deposits: [but,] PROVIDED, THAT such depositor 
17 
shall retain his claim for any uninsured portion of his deposit, WHICH 
18 
LEGAL PREFERENCE SHALL BE THE SAME AS THAT OF THE 
19 
SUBROGATED CLAIM OF THE CORPORATION FOR ITS PAYMENT 
20 
OF INSURED DEPOSITS. All payments by the Corporation of insured 
21 
deposits in closed banks partake of the nature of public funds, and as 
22 
such, must be considered a preferred credit [similar to taxes due to the 
23 
National Government] in the order of preference under Article 2244 (G) of 
24 
the New Civil Code.[: Provided, further, That this preference shall be 
25 
likewise effective upon liquidation proceedings already commenced and 
26 
pending as of the approval of this Act, where no distribution of assets has 
27 
been made.]" 
60 


1 
SECTION 34. Section 16 of the same Act is accordingly renumbered as Section 
2 
(22)21 and paragraph (c) thereof is hereby amended to read as follows: 
3 
"(c) Except as otherwise prescribed by the Board of Directors, neither the 
4 
Corporation nor such other insured bank shall be required to recognize as 
5 
the owner of any portion of a deposit [appearing on the recordsJ 
6 
EVIDENCED BY A PASSBOOK, 
CERTIFICATE OF DEPOSIT OR 
7 
OTHER 
EVIDENCE 
OF 
DEPOSIT 
DETERMINED 
BY 
THE 
8 
CORPORATION TO BE AN AUTHENTIC DOCUMENT OR RECORD of 
9 
the closed bank under a name other than that of the claimant, any person 
10 
whose name or interest as such owner is not disclosed on the 
11 
PASSBOOK, CERTIFICATE OF DEPOSIT OR OTHER EVIDENCE OF 
12 
DEPOSIT [records] of such closed bank as part owner of said deposit, if 
13 
such recognition would increase the aggregate amount of the insured 
14 
deposits in such closed bank." 
15 
SECTION 35. Section 17 of the same Act is accordingly renumbered as Section 
16 
[23) 22. 
17 
SECTION 36. Section [23] 22 paragraph (a) of the same Act, as renumbered, is 
18 
hereby amended to read as follows: 
19 
"CORPORATE FUNDS AND ASSETS 
20 
SECTION [23J 22. (a) SUBJECT TO GUIDELINES AND LIMITS AS 
21 
APPROVED BY THE BOARD OF DIRECTORS, [M]money of the 
22 
Corporation denominated in the local currency, not otherwise employed, 
23 
shall be invested in obligations of the Republic of the Philippines or in 
61 


obligations guaranteed as to principal and interest by the Republic of the 
2 
Philippines. 
3 
THE CORPORATION MAY ALSO INVEST IN DEBT INSTRUMENTS 
4 
DENOMINATED 
IN 
FOREIGN 
CURRENCIES 
ISSUED 
OR 
5 
GUARANTEED BY THE REPUBLIC OF THE PHILIPPINES, OR DEBT 
6 
INSTRUMENTS DENOMINATED IN FREELY CONVERTIBLE FOREIGN 
7 
CURRENCIES ISSUED BY SUPRANATIONALS, MULTILATERAL 
8 
AGENCIES, OR FOREIGN GOVERNMENTS WITH AT LEAST AN 
9 
INVESTMENT GRADE CREDIT RATING. 
10 
THE CORPORATION SHALL LIKEWISE BE AUTHORIZED TO BUY 
II 
ANDIOR SELL DEBT INSTRUMENTS AND FOREIGN CURRENCIES 
12 
FROM ANY GOVERNMENT SECURITIES ELIGIBLE DEALERS OR 
13 
ANY COUNTERPARTIES OR BROKERS, ACCREDITED BY THE PDIC 
14 
BOARD. 
IS 
FOR THIS PURPOSE, THE CORPORATION SHALL BE AUTHORIZED 
16 
TO 
OPEN 
SECURITIES 
CUSTODIANSHIP 
AND 
SETTLEMENT 
17 
ACCOUNTS." 
18 
SECTION 37. Section [23] 22 paragraph (b) of the same Act, as renumbered, is 
19 
hereby amended to read as follows: 
20 
"(b) The banking or checking accounts of the Corporation shall be kept 
21 
with the 8angko Sentral ng Pilipinas, [with the Philippine National Bank,] 
22 
or with any other bank designated as depository or fiscal agent of the 
23 
Philippine government." 
62 


SECTION 38. An additional paragraph to Section [23] 22 of the same Act, as 
2 
renumbered, is hereby inserted after paragraph (c) which shall read as follows: 
3 
"(d) ASSETS OF THE CORPORATION SHALL BE EXEMPT FROM 
4 
ATTACHMENT, 
GARNISHMENT OR ANY OTHER ORDER OR 
5 
PROCESS 
OF 
ANY 
COURT, 
AGENCY 
OR 
ANY 
OTHER 
6 
ADMINISTRATIVE BODY." 
7 
SECTION 39. Section 17 paragraph (d) of the same Act is accordingly 
8 
renumbered as Section [23] 22 paragraph (e) and is hereby amended to read as 
9 
follows: 
10 
"FINANCIAL ASSISTANCE 
11 
[(d)] (E) [When the Corporation has determined that an insured bank is in 
12 
danger of closing, in order to prevent such closing,] IN THE EXERCISE 
13 
OF ITS AUTHORITIES UNDER SECTION 11 OF THIS ACT, the 
14 
Corporation [, in the discretion of its Board of Directors,] is authorized to 
15 
make loans to, or purchase the assets of, or assume liabilities of, or make 
16 
deposits in£, such insured bank,): 
17 
1) A BANK IN DANGER OF CLOSING, UPON ITS ACQUISITION 
18 
BY A QUALIFIED INVESTOR; OR 
19 
2) A QUALIFIED INVESTOR, UPON ITS PURCHASE OF ALL 
20 
ASSETS AND ASSUMPTION OF ALL LIABILITIES OF A BANK 
21 
IN DANGER OF CLOSING; OR 
22 
3) A SURVIVING OR CONSOLIDATED INSTITUTION THAT HAS 
23 
MERGED OR CONSOLIDATED WITH A BANK IN DANGER OF 
24 
CLOSING; 
63 


1 
upon such terms and conditionS as the Board of Directors may prescribe, 
2 
when in the opinion of the Board of Directors, [the continued operation of 
3 
such 
bank] 
SUCH 
ACQUISITION, 
PURCHASE 
OF 
ASSETS, 
4 
ASSUMPTION OF LIABILITIES, MERGER OR CONSOLIDATION, is 
5 
essential to provide adequate banking service in the community or 
6 
maintain financial stability in the economy. 
7 
[The authority of the Corporation under the foregoing paragraph to extend 
8 
financial assistance to, assume liabilities of, purchase the assets of an 
9 
insured bank may also be exercised in the case of a closed insured bank 
10 
if the Corporation finds that the resumption of operations of such bank is 
11 
vital to the interests of the community, or a severe financial climate exists 
12 
which threatens the stability of a number of banks possessing significant 
13 
resources: Provided, That the reopening and resumption of operations of 
14 
the closed bank shall be subject to the prior approval of the Monetary 
15 
Board.] 
16 
[The Corporation may provide any corporation acquiring control of, 
17 
merging or consolidating with or acquiring the assets of an insured bank in 
18 
danger of closing in order to prevent such closing or of a closed insured 
19 
bank in order to restore to normal operations, with such financial 
20 
assistance as it could provide an insured bank under this subsection: 
21 
Provided, That, within sixty (60) days from date of assistance the 
22 
Corporation shall submit a report thereof to the Monetary Board.] 
23 
The Corporation, prior to the exercise of the powers under this Section, 
24 
shall determine that actual payoff and liquidation thereof will be more 
25 
expensive than the exercise of this power: Provided, That when the 
64 


1 
Monetary Board has determined that there are systemic consequences of 
2 
a probable failure or closure of an insured bank, the Corporation may 
3 
grant financial assistance to such insured bank in such amount as may be 
4 
necessary to prevent its failure or closure and/or restore the insured bank 
5 
to viable operations, under such terms and conditions as may be deemed 
6 
necessary by the Board of Directors, subject to concurrence by the 
7 
Monetary Board and without additional cost to the Deposit Insurance 
8 
Fund. 
9 
A systemic risk refers to the possibility that failure of one bank to settle net 
10 
transactions with other banks will trigger a chain reaction, depriving other 
11 
banks of funds leading to a general shutdown of normal clearing and 
12 
settlement activity. Systemic risk also means the likelihood of a sudden, 
13 
unexpected collapse of confidence in a significant portion of the banking 
14 
or financial system with potentially large real economic effects. Finally, the 
15 
Corporation may not use its authority under this subsection to purchase 
16 
the voting or common stock of an insured bank but it can enter into and 
17 
enforce agreements that it determines to be necessary to protect its 
18 
financial interests: Provided, That the financial assistance may take the 
19 
form of equity or quasi-equity of the insured bank as may be deemed 
20 
necessary by the Board of Directors with concurrence by the Monetary 
21 
Board: Provided, further, That the Corporation shall dispose of such equity 
22 
as soon as practicable: 
23 
SECTION 40. Section 18 of the same Act is accordingly renumbered as Section 
24 
[24] 23 and is hereby amended to read as follows: 
65 


I 
"AUTHORITY TO BORROW 
2 
SECTION [24] 23. The Corporation is authorized to borrow from the 
3 
Bangko Sentral ng Pilipinas and the Bangko Sentral is authorized to lend 
4 
TO the Corporation on such terms as may be agreed upon by the 
5 
Corporation and the Bangko Sentral, such funds as in the judgment of the 
6 
Board of Directors of the Corporation are from time to time required for 
7 
insurance purposes and financial assistance provided for in Section [17] 
8 
22 (e) of this Act: Provided, That any such loan as may be granted by the 
9 
Bangko Sentral shall be consistent with monetary policy; Provided, 
10 
further, That the rate of interest thereon shall be fixed by the Monetary 
II 
Board [but shall not exceed the treasury bill rate]. 
12 
When in the judgment of the Board of Directors the funds of the 
13 
Corporation are not sufficient to provide for an emergency or urgent need 
14 
to attain the purposes of this Act, the Corporation is likewise authorized to 
IS 
borrow money, obtain loans or arrange credit lines or other credit 
16 
accommodations from any bank [designated as depository or fiscal agent 
17 
of the Philippine Government]: Provided, That such loan shall be of short-
18 
term duration, PROVIDED, FURTHER, THAT NO PRIOR MONETARY 
19 
BOARD OPINION SHALL BE REQUIRED FOR THE CORPORATION 
20 
AND ITS COUNTERPARTIES ON INDIVIDUAL DRAWDOWNS OR 
21 
BORROWINGS WITHIN AN APPROVED BORROWING PROGRAM 
22 
WHERE PRIOR MONETARY BOARD OPINION HAS ALREADY BEEN 
23 
OBTAINED, PURSUANT TO SECTION 123 OF 
REPUBLIC ACT NO. 
24 
7653." 
25 
SECTION 41. Section 19 of the same Act is accordingly renumbered as Section 
26 
[25] 24 and is hereby amended to read as follows: 
66 


1 
"ISSUANCE OF BONDS, DEBENTURES AND OTHER 
2 
OBLIGATIONS 
3 
SECTION [19] 24. With the approval of the President of the Philippines, 
4 
UPON 
THE 
RECOMMENDATION 
OF 
THE 
DEPARTMENT 
OF 
5 
FINANCE, the Corporation is authorized to issue bonds, debentures, and 
6 
other obligations, both local or foreign, as may be necessary for purposes 
7 
of providing liquidity for settlement of insured deposits in closed banks, 
8 
TO FACILITATE THE IMPLEMENTATION OF BANK RESOLUTION 
9 
UNDER SECTION 11 OF THIS ACT, as well as for financial assistance 
10 
as provided herein, Provided, That the Board of Directors shall determine 
11 
the interest rates, maturity and other requirements of said obligations: 
12 
Provided, further, That the Corporation [shall] MAY provide for appropriate 
13 
reserves for the redemption or retirement of said obligation. 
14 
All notes, debentures, bonds, or such obligations issued by the 
15 
Corporation shall be exempt from taxation both as to principal and 
16 
interest, and shall be fully guaranteed by the Government of the Republic 
17 
of the Philippines. Such guarantee, which in no case shall exceed two 
18 
times the Deposit Insurance Fund as of date of the debt issuance, shall be 
19 
expressed on the face thereof. 
20 
THE CORPORATION MAY ISSUE NOTES, DEBENTURES, BONDS, 
21 
OR OTHER DEBT INSTRUMENTS WITHOUT THE APPROVAL OF THE 
22 
PRESIDENT OF THE PHILIPPINES, AS LONG AS THESE SHALL NOT 
23 
BE GUARANTEED BY THE NATIONAL GOVERNMENT. 
67 


The Board of Directors shall have the power to prescribe THE TERMS 
2 
AND CONDITIONS, rules and regulations for the issuance, reissuance, 
3 
servicing, placement and redemption of the bonds herein authorized to be 
4 
issued as well as the registration of such bonds at the request of the 
5 
holders thereof." 
6 
SECTION 42. Section 20 of the same Act is accordingly renumbered as Section 
7 
[26] 25. 
8 
SECTION 43. Section 21 of the same Act is accordingly renumbered as Section 
9 
[27] 26. 
10 
SECTION 44. Section [27] 26 paragraph (f) of the same Act, as renumbered, is 
II 
hereby amended to read as follows: 
12 
"(f) The penalty of IMPRISONMENT OF NOT LESS THAN SIX YEARS 
13 
BUT NOT MORE THAN TWELVE YEARS [prision mayor] or a fine of not 
14 
less than Fifty thousand pesos (P50,000.00) but not more than TEN [Two] 
IS 
million pesos (P10,000,000.00), [(P2,000,000.00),] or both, at the 
16 
discretion of the court, shall be imposed upon [any director, officer, 
17 
employee or agent of a bank]: 
18 
1) ANY DIRECTOR, OFFICER, EMPLOYEE OR AGENT OF A 
19 
BANK FOR: 
20 
a. [for] any willful refusal to submit reports as required by law, 
21 
rules and regulations; 
68 


2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
b. any unjustified refusal to permit examination and audit of the 
deposit records or the affairs of the institution; 
c. any willful making of a false statement or entry in any bank 
report or document required by the Corporation; 
d. submission of false material information in connection with or in 
relation to any financial assistance of the Corporation extended 
to the bank; 
e. splitting of deposits or creation of fictitious OR FRAUDULENT 
loans or deposit accounts. 
Splitting of deposits occurs whenever a deposit account with an 
outstanding balance of more than the statutory maximum 
amount of insured deposit maintained under the name of 
natural or juridical persons is broken down and transferred into 
two (2) or more accounts in the name/s of natural or juridical 
persons or entities who have no beneficial ownership on 
transferred deposits in their names within one hundred twenty 
(120) days immediately preceding or during a bank-declared 
bank holiday, or immediately preceding a closure order issued 
by the Monetary Board of the Bangko Sentral ng Pilipinas for 
the purpose of availing of the maximum deposit insurance 
coverage; 
f. REFUSAL TO RECEIVE THE NOTICE OF CLOSURE AS 
PROVIDED UNDER SECTION 14 OF THIS ACT; 
69 


2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
g. refusal to allow the Corporation to take over a closed bank 
[placed under its receivership] or obstructing such action of the 
Corporation; 
h. refusal to turn over or destroying or tampering bank records; 
i. 
fraudulent disposal, transfer or concealment of any asset, 
property or liability of the closed bank [under the receivership of 
the Corporation]; 
j. 
violation of, or causing any person to violate, the exemption 
from garnishment, levy, attachment or execution provided under 
this Act and the New Central Bank Act; 
k. any willful failure or refusal to comply with, or violation of any 
provision of this Act, or commission of any other irregularities, 
and/or conducting business in an unsafe or unsound manner as 
may be determined by the Board of Directors[,] IN RELATION 
TO SECTION 56 OF REPUBLIC ACT NO. 8791, OR THE 
GENERAL BANKING LAW OF 2000. 
NOTWITHSTANDING ANY LAW TO THE CONTRARY, THE 
FOREGOING 
ACTS 
OF 
DIRECTORS, 
OFFICERS, 
EMPLOYEES OR AGENTS OF THE BANK SHALL BE 
CONSIDERED 
AS 
ADDITIONAL 
GROUNDS 
FOR 
DISQUALIFICATION UNDER THE FIT AND PROPER RULES 
OF THE BANGKO SENTRAL. 
L. "OTHER ACTS INIMICAL TO THE INTEREST OF THE BANK 
OR THE CORPORATION, SUCH AS, BUT NOT LIMITED TO, 
70 


2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
CONFLICT OF INTEREST, DISLOYAL TV, AUTHORIZING 
RELATED 
PARTY 
TRANSACTIONS 
WITH 
TERMS 
DETRIMENTAL TO THE BANK AND ITS STAKEHOLDERS, 
AND UNAUTHORIZED DISCLOSURE OF CONFIDENTIAL 
INFORMATION, 
AS 
MAY BE DETERMINED 
BY THE 
CORPORATION." 
2) ANY PERSON FOR: 
a. REFUSAL TO DISCLOSE INFORMATION, RECORDS OR 
DATA PERTAINING TO THE BANK ACCOUNTS OF A 
CLOSED BANK TO THE RECEIVER; 
b. REFUSAL TO TURN OVER POSSESSION OR CUSTODY OF 
THE ASSET AND RECORD OF THE CLOSED BANK TO THE 
RECEIVER, NOTWITHSTANDING ANY AGREEMENT TO 
THE CONTRARY; 
c. REFUSAL OR DELAYING THE: 
i. VERIFICATION OF AUTHENTICITY OF THE OWNERSHIP 
DOCUMENTS; 
ii. REGISTRATION OF INTEREST OF THE CLOSED BANK 
ON A SPECIFIC PROPERTY; 
iii. CONSOLIDATION OF OWNERSHIP OVER AN ASSET OF 
THE CLOSED BANK; 
71 


iv. ACT OF SECURING CERTIFIED TRUE COPIES OF 
2 
3 
DOCUMENTS IN RELATION TO AN ASSET OF THE 
CLOSED BANK; 
4 
v. ACT 
OF 
SECURING 
THE 
APPROPRIATE 
5 
CERTIFICATION FROM THE AGENCIES OR ENTITIES 
6 
STATED IN SECTION 16 OF THIS ACT IN RELATION TO 
7 
AN ASSET OF THE CLOSED BANK; 
8 
vi. CONDUCT OF A PHYSICAL OR OCULAR INSPECTION 
9 
OF THE PROPERTIES OWNED BY, OR MORTGAGED 
10 
TO, THE CLOSED BANK, TO DETERMINE THEIR 
11 
EXISTENCE AND PRESENT CONDITION; OR 
12 
vii.OTHER RELATED ACTIVITIES OF THE RECEIVER; OR 
13 
d. ALLOWING THE WITHDRAWAL FROM DEPOSITS OR 
14 
DISPOSITION OF ANY ASSET OF THE CLOSED BANK 
15 
OTHER THAN BY THE RECEIVER; 
16 
e. WILLFULLY VIOLATING ANY PROVISION OF THIS ACT; 
17 
18 
F. CONSPIRING OR WILLFULLY PARTICIPATING IN ANY OF 
19 
THE OFFENSES ENUMERATED IN PARAGRAPH 1 OF THIS 
20 
SECTION; 
21 
3) ANY LAW ENFORCEMENT OFFICER OR LOCAL GOVERNMENT 
22 
OFFICIAL WHO REFUSES OR FAILS TO ASSIST THE RECEIVER 
23 
IN THE SERVICE OF THE NOTICE OF CLOSURE, AS PROVIDED 
24 
UNDER SECTION 14 OF THIS ACT." 
72 


1 
SECTION 45. Additional paragraphs to Section [27] 26 of the same Act, as 
2 
renumbered, are hereby inserted after paragraph (g) which shall read as follows: 
3 
"(h) THE PENALTY OF IMPRISONMENT OF NOT LESS THAN TEN 
4 
(10) YEARS BUT NOT MORE THAN TWELVE (12) YEARS, OR A FINE 
5 
OF 
NOT 
LESS 
THAN 
FIVE 
HUNDRED 
THOUSAND 
PESOS 
6 
(P500,000.00) 
BUT 
NOT MORE THAN 
TEN 
MILLION 
PESOS 
7 
(P10,000,000.00), OR BOTH, AT THE DISCRETION OF THE COURT, 
S 
SHALL BE IMPOSED UPON: 
9 
1) ANY 
DEPOSITOR WHO 
FILES 
A 
FICTITIOUS 
ANDIOR 
10 
FRAUDULENT CLAIM FOR DEPOSIT INSURANCE; AND 
11 
2) ANY BANK OFFICER WHO CERTIFIES TO THE VALIDITY OF 
12 
THE 
DEPOSIT 
LIABILITIES WHICH 
IS 
SUBSEQUENTLY 
13 
VERIFIED TO BE FICTITIOUS ANDIOR FRAUDULENT. 
14 
(i) THE PENALTY OF IMPRISONMENT OF NOT LESS THAN TWELVE 
15 
(12) YEARS BUT NOT MORE THAN FOURTEEN (14) YEARS SHALL 
16 
BE IMPOSED UPON ANY PERSON WHO PARTICIPATES, OR 
17 
ATTEMPTS TO PARTICIPATE, IN A SCHEME TO DEFRAUD A BANK. 
18 
IF THE OFFENSE SHALL HAVE BEEN COMMITTED BY A DIRECTOR 
19 
OR OFFICER OF THE BANK, THE PENALTY OF IMPRISONMENT OF 
20 
NOT LESS THAN FIFTEEN (15) YEARS BUT NOT MORE THAN 
21 
SEVENTEEN (17) YEARS SHALL BE IMPOSED. 
22 
IF 
THE 
OFFENSE 
SHALL 
HAVE 
RESULTED 
IN 
SYSTEMIC 
23 
CONSEQUENCES, AS DETERMINED BY THE BANGKO SENTRAL, 
73 


1 
THE PENALTY OF IMPRISONMENT OF NOT LESS THAN EIGHTEEN 
2 
(18) YEARS BUT NOT MORE THAN TWENTY (20) YEARS SHALL BE 
3 
IMPOSED." 
4 
SECTION 46. Section 22 of the same Act is accordingly renumbered as Section 
5 
[28] 27. 
6 
SECTION 47. Section 23 of the same Act is hereby renumbered as Section [29] 
7 
28 and [reinstated as follows] AMENDED TO READ AS FOLLOWS: 
8 
"SECTION [23] 28. WITHIN SIX (6) MONTHS AFTER EFFECTIVITY OF 
9 
THIS ACT, 
[T]the Corporation may be reorganized by the board of 
10 
directors by adopting if it so desires, an entirely new staffing pattern or 
11 
organizational structure to suit the operations of the corporation under this 
12 
act PURSUANT TO REPUBLIC ACT NO. 10149. No preferential or 
13 
priority right shall be given to or enjoyed by any personnel for appointment 
14 
to any position in the new staffing pattern nor shall any personnel be 
15 
considered as having prior or vested rights with respect to retention in the 
16 
corporation or in any position which may be created in the new staffing 
17 
pattern, even if he should be the incumbent of a similar position prior to 
18 
reorganization. [The reorganization shall be completed within six (6) 
19 
months after the effectivity of this act.] Personnel who are not retained are 
20 
deemed separated from the service." 
21 
SECTION 48. Section 24 of the same Act is accordingly renumbered as Section 
22 
[30] 29. 
74 


SECTION 49. Section 25 of the same Act is accordingly renumbered as Section 
2 
[31] 30. 
3 
SECTION 50. A new section entitled Section [32] 31 of the same Act is hereby 
4 
inserted between Sections [31] 30 and [33] 32 which shall read as follows: 
5 
"SECTION 31. EXEMPTING CLAUSE. - THE CORPORATION SHAll BE 
6 
EXEMPT FROM PRESIDENTIAL DECREE NO. 985, PRESIDENTIAL 
7 
DECREE NO. 1597, REPUBLIC ACT NO. 6758, AS AMENDED, JOINT 
8 
RESOLUTION NO.4 (2009), 
PRESIDENTIAL DECREE NO. 1177, 
9 
EXECUTIVE ORDER NO. 248, AS AMENDED, AND EXECUTIVE 
10 
ORDER NO. 298 AND THE PROVISIONS OF REPUBLIC ACT NO. 10149 
II 
WITH REGARD TO POSITION CLASSIFICATION, QUALIFICATION 
12 
STANDARDS, 
AND 
THE 
COMPENSATION 
PACKAGE OF 
THE 
\3 
EMPLOYEES OF THE CORPORATION, AND THE PER DIEMS, 
14 
EMOLUMENTS, 
AND 
PERFORMANCE 
INCENTIVES 
OF 
THE 
15 
PRESIDENT AND MEMBERS OF THE BOARD: PROVIDED, THAT, 
16 
PDIC SHALL BE SUBJECT TO ALL OTHER POLICIES UNDER R.A. 
17 
NO. 10149, INCLUDING, BUT NOT LIMITED TO, PERFORMANCE 
18 
EVALUATION 
BY 
THE 
GOVERNANCE 
COMMISSION 
FOR 
19 
GOVERNMENT-OWNED 
OR 
CONTROLLED 
CORPORATIONS, 
20 
SELECTION AND NOMINATION OF APPOINTIVE DIRECTORS, AND 
21 
LIMITATIONS ON THE CREATION OF SUBSIDIARIES AND THE 
22 
ACQUISITION 
OF 
AFFILIATES 
EXCEPT 
IN 
THE 
CASE 
OF 
23 
ACQUISITION 
OF 
SHARES 
IN 
THE 
GRANT 
OF 
FINANCIAL 
24 
ASSISTANCE UNDER THIS ACT." 
25 
SECTION 51. A new section entitled Section [33] 32 of the same Act is hereby 
26 
inserted between Sections [32] 31 and [34] 33 which shall read as follows: 
75 


"SECTION 32. TRANSITORY PROVISIONS. -
(a) THE INCUMBENT 
2 
PRESIDENT OF THE CORPORATION AND PRIVATE SECTOR 
3 
MEMBERS OF THE BOARD OF DIRECTORS SHALL CONTINUE TO 
4 
EXERCISE THEIR RESPECTIVE DUTIES AND FUNCTIONS UNTIL 
5 
REPLACED BY THE PRESIDENT OF THE PHILIPPINES: PROVIDED, 
6 
THAT, SUCH NEW APPOINTEES SHALL BE SUBJECT TO THE TERM 
7 
OF OFFICE PROVIDED UNDER SECTION 3 OF THIS ACT, AS 
8 
AMENDED. 
9 
(b) PAYMENT OF SURPLUS DIVIDENDS UNDER SECTION 13(C) OF 
lO 
THIS ACT, AS AMENDED, SHALL BE APPLICABLE TO BANKS 
II 
WITHOUT A COURT-APPROVED FINAL ASSET DISTRIBUTION PLAN 
12 
AT THE TIME OF THE EFFECTIVITY OF THIS ACT. 
13 
(e) THE PREFERENCE INDICATED UNDER SECTION 15 OF THIS 
14 
ACT, AS AMENDED, SHALL BE LIKEWISE EFFECTIVE UPON 
15 
LIQUIDATION 
PROCEEDINGS 
ALREADY 
COMMENCED 
AND 
16 
PENDING AS OF THE EFFECTIVITY OF THIS ACT, WHERE NO 
17 
DISTRIBUTION OF ASSETS HAS BEEN MADE. 
18 
(d) THE PROVISIONS IN SECTION 10 OF THIS ACT, AS AMENDED, 
19 
ON LEGAL ASSISTANCE, PROTECTION AND INDEMNIFICATION 
20 
SHALL APPLY TO ALL CASES PENDING BEFORE THE EFFECTIVITY 
21 
OF THIS ACT." 
22 
SECTION 52. Section 26 of the same Act, Separability Clause is accordingly 
23 
renumbered as Section [34] 33. 
76 


"Separability Clause. - If any provision or section of this Act or the 
2 
application thereof to any person or circumstances is held invalid, the 
3 
other provisions or sections of this Act, in the application of such provision 
4 
or section to other persons or circumstances, shall not be affected 
5 
thereby." 
6 
SECTION 53. Section 27 of the same Act, Repealing Clause is accordingly 
7 
renumbered as Section [35] 34. 
8 
"Repealing Clause. - All acts or parts of acts and executive orders, 
9 
administrative orders, or parts thereof which are inconsistent with the 
10 
provisions of this Act are hereby repealed." 
II 
SECTION 54. Section 28 of the same Act, Effectivity Clause is accordingly 
12 
renumbered as Section [36] 35. 
13 
"Effectivity Clause. - This Act shall take effect fifteen (15) days following 
14 
the completion of its publication in the Official Gazette or in two (2) 
15 
newspapers of general cirCUlation." 
Approved, 
77 


SIXTEENTH CONGRESS OF THE) 
REPUBLIC OF THE PHILIPPINES) 
Third Regular Session 
) 
SENATE 
S. B. No. 2976 
fl;, Ail. 
U'i}!tHf \! :lji ::: nrrbrl,! 
'1:5 
SEP 30 P 4 :52 
Prepared by the Committee on Banks, Financial Institutions and Currencies with 
Senator Sergio Osmeiia III as author 
AN ACT 
ENHANCING THE RESOLUTION AND LIQUIDATION FRAMEWORK FOR BANKS, 
AMENDING FOR THE PURPOSE REPUBLIC ACT NO. 3591, AS AMENDED, AND 
OTHER RELATED LAWS 
Be it enacted by the Senate and House of Representatives of the Philippines in 
Congress assembled: 
1 
SECTION 1. Section 1 of Republic Act No. 3591, as amended, is hereby 
2 
amended to read as follows: 
3 
"THE CREATION OF THE 
4 
PHILIPPINE DEPOSIT INSURANCE CORPORATION 
5 
SECTION 1. -
There is hereby created a Philippine Deposit Insurance 
6 
Corporation hereinafter referred to as the "Corporation" which shall insure 
7 
as herein provided, the deposits of all banks which are entitled to the 
8 
benefits of insurance under this Act, and which shall have the powers 
9 
hereinafter granted. 
10 
The Corporation shall, as a basic policy, promote and safeguard the 
11 
interests of the depositing public by [way of] providing [permanent and 
12 
continuing] insurance coverage on all insured deposits AND HELPING 
1 


I 
MAINTAIN A SOUND AND STABLE BANKING SYSTEM." 
2 
SECTION 2. A new section entitled Section 2 of the same Act shall be inserted 
3 
between Sections 1 and 3 which shall read as follows: 
4 
"STATE POLICY 
5 
SECTION 2. - IT IS HEREBY DECLARED TO BE THE POLICY OF THE 
6 
STATE TO STRENGTHEN THE MANDATORY DEPOSIT INSURANCE 
7 
COVERAGE SYSTEM TO GENERATE, PRESERVE, MAINTAIN FAITH 
8 
AND CONFIDENCE IN THE COUNTRY'S BANKING SYSTEM, AND 
9 
PROTECT IT FROM ILLEGAL SCHEMES AND MACHINATIONS. 
10 
TOWARDS THIS END, THE GOVERNMENT MUST EXTEND ALL 
II 
MEANS AND MECHANISMS NECESSARY FOR THE CORPORATION 
12 
TO EFFECTIVELY FULFILL ITS VITAL TASK OF PROMOTING AND 
13 
SAFEGUARDING THE INTERESTS OF THE DEPOSITING PUBLIC BY 
14 
WAY OF PROVIDING INSURANCE COVERAGE ON BANK DEPOSITS 
IS 
AND IN HELPING DEVELOP A SOUND AND STABLE BANKING 
16 
SYSTEM. 
17 
IN VIEW OF THE CRUCIAL ROLE AND THE NATURE OF ITS 
18 
FUNCTIONS AND RESPONSIBILITIES, THE CORPORATION, WHILE 
19 
BEING A GOVERNMENT INSTRUMENTALITY WITH CORPORATE 
20 
POWERS, 
SHALL 
ENJOY 
FISCAL 
AND 
ADMINISTRATIVE 
21 
AUTONOMY. 
22 
SECTION 3. Section 2 of the same Act is accordingly renumbered as Section 3 
23 
and is hereby amended to read as follows: 
2 


1 
"BOARD OF DIRECTORS: COMPOSITION AND AUTHORITY 
2 
SECTION (2) 3. (A) The powers and functions of the Corporation shall be 
3 
vested in and exercised by a Board of Directors which shall be composed 
4 
of SEVEN (7) [five (5)] members as follows: 
5 
[(a)] 1) The Secretary of Finance who shall be the ex-officio Chairman of 
6 
the Board without compensation. 
7 
[(b)] 2) The Governor of the Bangko Sentra/ ng Pilipinas, who shall be ex-
8 
officio member of the Board without compensation. 
9 
[(c)] 3) The President of the Corporation, who shall be appointed by the 
10 
President of the Philippines FROM A SHORTLIST PREPARED BY 
11 
THE 
GOVERNANCE 
COMMISSION 
FOR 
GOVERNMENT-
12 
OWNED OR CONTROLLED CORPORATIONS PURSUANT TO 
13 
REPUBLIC ACT NO. 10149 [from either the Government or private 
14 
sector] to serve on a full-time basis for a term of six (6) years. The 
15 
President of the Corporation shall also serve as Vice Chairman of 
16 
the Board. 
17 
[(d)] 4) FOUR (4) [Two (2)] members from the private sector, to be 
18 
appointed BY THE PRESIDENT OF THE PHILIPPINES FROM A 
19 
SHORTLIST PREPARED BY THE GOVERNANCE COMMISSION 
20 
21 
22 
23 
24 
25 
26 
FOR 
GOVERNMENT -OWNED 
OR 
CONTROLLED 
CORPORATIONS PURSUANT TO REPUBLIC ACT NO. 10149. 
THE APPOINTIVE DIRECTORS SHALL SERVE for a term of six 
(6) years UNLESS SOONER REMOVED FOR CAUSE AND 
SHALL BE SUBJECT TO ONLY ONE [without] reappointment [by 
the President of the Philippines]: Provided, That of those first 
appointed, the first TWO appointeeS shall serve for a period of [two 
3 


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 
(2)] THREE (3) years]: PROVIDED, HOWEVER, THAT THE 
APPOINTIVE DIRECTOR SHALL CONTINUE TO HOLD OFFICE 
UNTIL THE SUCCESSOR IS APPOINTED. 
AN APPOINTIVE 
DIRECTOR MAY BE NOMINATED BY THE GOVERNANCE 
COMMISSION FOR GOVERNMENT OWNED OR CONTROLLED 
CORPORATIONS FOR REAPPOINTMENT BY THE PRESIDENT 
ONLY IF ONE OBTAINS A PERFORMANCE SCORE OF ABOVE 
AVERAGE 
OR 
ITS 
EQUIVALENT OR 
HIGHER 
IN 
THE 
IMMEDIATELY PRECEDING YEAR OF TENURE AS APPOINTIVE 
DIRECTOR BASED ON THE PERFORMANCE CRITERIA FOR 
APPOINTIVE DIRECTORS FOR THE GOVERNMENT OWNED OR 
CONTROLLED CORPORATIONS. 
APPOINTMENT TO ANY VACANCY SHALL BE ONLY FOR THE 
UNEXPIRED TERM OF THE PREDECESSOR PURSUANT TO 
REPUBLIC ACT NO. 10149. 
No person shall be appointed as member of the Board unless he be 
of good moral character, [and] of unquestionable integrity and 
responsibility, OF KNOWN PROBITY AND PATRIOTISM, and who 
is of recognized competence in economics, banking and finance, 
law, management administration or insurance, and shall be at least 
thirty-five (35) years of age. For the duration of their tenure or term 
in office and for a period of one year thereafter, the appointive 
members of the Board shall be disqualified from holding any office, 
position or employment in any insured bank. 
The Secretary of Finance and the Governor of the Bangko Sentral 
may each designate AN ALTERNATE [a representative, whose 
position shall not be lower than an undersecretary or deputy 
4 


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 
governor respectively], WHO SHALL BE AN OFFICIAL WITH A 
RANK NOT LOWER THAN DIRECTOR JJ1 OR ITS EQUIVALENT 
WITH WRITTEN AUTHORITY FROM THE SECRETARY OF 
FINANCE OR THE GOVERNOR OF THE BANGKO SENTRAL 
NG PILIPINAS to attend such meetings and to vote on behalf of 
their respective principals. Whenever the Chairman of the Board is 
unable to attend a meeting of the Board, or in the event of a 
vacancy in the office of the Secretary of Finance, AND IN THE 
ABSENCE OF THE VICE CHAIRMAN, the [President of the 
Corporation] MEMBERS OF THE BOARD SHALL DESIGNATE 
FROM AMONG THEMSELVES WHO shall act as Chairman. 
THE PRESIDENT OF THE PHILIPPINES MAY REMOVE ANY 
APPOINTIVE MEMBER OF THE BOARD OF DIRECTORS FOR ANY OF 
THE FOLLOWING REASONS: 
1) 
IF THE MEMBER IS PHYSICALLY OR MENTALLY 
INCAPACITATED 
THAT 
HE 
CANNOT 
PROPERLY 
DISCHARGE 
HIS 
OR 
HER 
DUTIES 
AND 
RESPONSIBILITIES, 
AND 
SUCH 
INCAPACITY 
HAS 
LASTED FOR MORE THAN SIX (6) MONTHS; OR 
2) 
IF THE MEMBER IS GUILTY OF ACTS OR 
OPERATIONS 
WHICH 
ARE 
OF 
FRAUDULENT 
OR 
ILLEGAL CHARACTER OR WHICH ARE MANIFESTLY 
OPPOSED TO THE AIMS AND INTERESTS OF THE 
CORPORATION; OR 
3) 
IF THE MEMBER NO LONGER POSSESSES THE 
QUALIFICATIONS SPECIFIED IN THIS ACT; OR 
5 


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 
4) 
IF THE MEMBER DOES NOT MEET THE STANDARDS 
FOR PERFORMANCE BASED ON THE EVALUATION BY 
THE GOVERNANCE COMMISSION FOR GOVERNMENT-
OWNED OR CONTROLLED CORPORATIONS UNDER 
REPUBLIC ACT NO. 10149. 
The presence of FOUR (4) [three (3)] members shall constitute a quorum. 
All decisions of the Board of Directors shall require the concurrence of at 
least FOUR (4) [three (3)] members. 
[The Secretary of Finance shall fix the rate of per diem for every Board 
meeting attended by the members of the Board of Directors from the 
private sector.] THE COMPENSATION, PER DIEMS, ALLOWANCES, 
INCENTIVES, AND OTHER BENEFITS FOR BOARD MEMBERS 
SHALL BE DETERMINED BY THE GOVERNANCE COMMISSION FOR 
GOVERNMENT 
OWNED 
OR 
CONTROLLED 
CORPORATIONS 
PURSUANT TO REPUBLIC ACT NO. 10149. [The President of the 
Philippines may fix such emoluments that may be received by the Board 
of Directors comparable to the emoluments of members of the Board of 
Directors of other government financial institutions). 
IN ADDITION TO THE REQUIREMENTS OF REPUBLIC ACT NO. 6713, 
OTHERWISE KNOWN AS THE CODE OF CONDUCT AND ETHICAL 
STANDARDS FOR PUBLIC OFFICIALS AND EMPLOYEES, 
ANY 
MEMBER OF THE BOARD OF DIRECTORS WITH PERSONAL OR 
PECUNIARY INTEREST IN ANY MATTER IN THE AGENDA OF THE 
BOARD OF DIRECTORS SHALL DISCLOSE HIS OR HER INTEREST 
TO THE BOARD AND SHALL RECUSE FROM THE MEETING WHEN 
THE MATTER IS TAKEN UP. THE MINUTES SHALL REFLECT THE 
6 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
DISCLOSURE MADE AND THE RECUSAL OF THE MEMBER 
CONCERNED. 
(B) The Board of Directors shall have the authority: 
1. To APPROVE [prepare] and issue rules and regulations FOR BANKS 
AND THE DEPOSITING PUBLIC as it considers necessary for the 
effective discharge of its responsibilities; 
2. To ACT AS THE POLICY-MAKING BODY OF THE CORPORATION 
AND CONSTITUTE BOARD COMMITTEES TO OVERSEE [direct] the 
management, operations and administration of the Corporation; 
3. To 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 professionalism and 
excellence at all levels of the Corporation in accordance with sound 
principles of management;[.] 
4. TO APPROVE, [A] a compensation structure[.]AS AN INTEGRAL 
COMPONENT OF THE 
CORPORATION'S 
HUMAN 
RESOURCE 
DEVELOPMENT PROGRAM based on job evaluation studies and wage 
surveys, AND REVISE THE SAME FROM TIME TO TIME AS IT MAY 
DEEM NECESSARY [and subject to the Board's approval, shall be, 
instituted as an integral component of the Corporation's human resource 
development program]: Provided, That all positions in the Corporation 
shall be governed by a compensation PACKAGE, position classification 
system and qualification standards approved by the Board based on a 
comprehensive job analysis and audit of actual duties and responsibilities. 
7 


1 
The compensation STRUCTURE [plan] shall be comparable TO THAT 
2 
[with the prevailing compensation plans] of other [government] financial 
3 
institutions BASED ON PREVAILING MARKET STANDARDS, and shall 
4 
[be subject to review by the Board no more than once every two (2) years 
5 
without prejudice to] PROVIDE FOR yearly merit reviews or increases 
6 
based on productivity [and profitability]. The Corporation shall therefore be 
7 
exempt from existing laws, rules and regulations on compensation 
8 
PACKAGE, position classification and qualification standards, SUCH AS, 
9 
BUT 
NOT 
LIMITED 
TO, 
PRESIDENTIAL 
DECREE 
NO. 
985, 
10 
PRESIDENTIAL DECREE NO. 1597, REPUBLIC ACT NO. 6758, AS 
11 
AMENDED, AND JOINT RESOLUTION NO. 4 (2009), AND REPUBLIC 
12 
ACT NO. 10149. It shall however endeavor to make its system conform 
13 
as closely as possible with the principles under Republic Act No. 6758, as 
14 
amended. 
15 
[4.] 5. To appoint, establish the rank, fix the remuneration, BENEFITS, 
16 
INCLUDING HEALTH CARE SERVICES THROUGH A HEALTH 
17 
MAINTENANCE ORGANIZATION (HMO) AND MEDICAL BENEFITS 
18 
OTHER THAN THOSE PROVIDED FOR UNDER REPUBLIC ACT NO. 
19 
7875, AS AMENDED, [approve local and foreign training of,] and remove 
20 
any officer or employee of the Corporation, for cause, subject to pertinent 
21 
civil service laws: Provided, That the Board of Directors may delegate this 
22 
authority to the President subject to specific guidelines; PROVIDED, 
23 
FURTHER, THAT IN NO CASE SHALL THERE BE ANY DIMINUTION 
24 
OF EXISTING SALARIES, BENEFITS AND OTHER EMOLUMENTS; 
25 
26 
27 
28 
6. 
TO APPROVE POLICY ON LOCAL AND FOREIGN TRAVEL, AND THE 
CORRESPONDING EXPENSES, ALLOWANCES AND PER DIEMS, OF 
OFFICERS, EMPLOYEES, AGENTS OF THE CORPORATION, WHICH 
SHALL BE COMPARABLE WITH THE EXPENSES, ALLOWANCES 
8 


1 
AND 
PER 
DIEMS 
OF 
PERSONNEL 
OF 
OTHER 
FINANCIAL 
2 
INSTITUTIONS BASED ON PREVAILING MARKET STANDARDS, 
3 
NOTWITHSTANDING THE PROVISIONS OF PRESIDENTIAL DECREE 
4 
NO. 1177, EXECUTIVE ORDER NO. 292, EXECUTIVE ORDER NO. 248, 
5 
AS AMENDED, EXECUTIVE ORDER NO. 298, AND SIMILAR LAWS; 
6 
[5] 7. To adopt an annual budget for, and authorize such expenditures 
7 
by the Corporation, as are in the interest of the effective 
8 
administration and operation of the Corporation; 
9 
[6] 8. To approve the TARGET LEVEL OF THE DEPOSIT INSURANCE FUND 
10 
AND THE methodology for determining [the level and amount of] 
11 
RESERVES [provisioning] for insurance and financial assistance losses 
12 
[,which shall establish reasonable levels of deposit insurance reserves.]; 
I 
13 
[7] 9. To review the organizational set-up of the Corporation and adopt a new 
14 
or revised organizational structure as it may deem necessary for the 
15 
Corporation to undertake its mandate and functions;[.] 
16 
10. TO DESIGN, ADOPT AND REVISE, AS IT MAY DEEM NECESSARY, 
17 
AN 
EARLY SEPARATION 
PLAN FOR EMPLOYEES OF THE 
18 
CORPORATION 
TO 
ENSURE 
AVAILABILITY 
OF 
A 
HUMAN 
19 
RESOURCE POOL QUALIFIED AND CAPABLE OF IMPLEMENTING 
20 
THE CORPORATION'S AUTHORITIES UNDER THIS CHARTER IN A 
21 
22 
23 
24 
25 
MANNER 
RESPONSIVE 
AND 
ATTUNED 
TO 
MARKET 
DEVELOPMENTS, AND TO PROVIDE INCENTIVES FOR ALL THOSE 
WHO SHALL RETIRE OR BE SEPARATED FROM THE SERVICE. 
NOTWITHSTANDING ANY LAW TO THE CONTRARY, 
THESE 
INCENTIVES SHALL BE IN ADDITION TO ALL GRATUITIES AND 
9 


1 
2 
3 
4 
5 
BENEFITS THE EMPLOYEE IS ENTITLED TO UNDER EXISTING 
LAWS; AND 
11. TO PROMOTE AND SPONSOR THE LOCAL OR FOREIGN 
TRAINING OR STUDY OF PERSONNEL IN THE FIELDS OF 
BANKING, 
FINANCE, 
MANAGEMENT, 
INFORMATION 
6 
TECHNOLOGY 
AND 
LAW. 
TOWARD 
THIS 
END, 
THE 
7 
CORPORATION IS HEREBY AUTHORIZED TO DEFRAY THE 
8 
COSTS OF SUCH TRAINING OR STUDY. THE BOARD SHALL 
9 
PRESCRIBE RULES AND REGULATIONS TO GOVERN THE 
10 
TRAINING OR STUDY PROGRAMS OF THE CORPORATION." 
11 
SECTION 4. Section 3 of the same Act is accordingly renumbered as Section 4. 
12 
SECTION 5. The first paragraph of Section 4 of the same Act, as renumbered, is 
l3 
hereby amended to read as follows: 
14 
"PRESIDENT OF THE CORPORATION 
15 
COMPENSATION, POWERS AND DUTIES 
16 
SECTION [3J 4. The President of the Corporation shall be ITS [theJ Chief 
17 
Executive OFFICER AND THE VICE CHAIRMAN OF ITS BOARD OF 
18 
DIRECTORS [thereof] and his OR HER salary shall be fixed by the 
19 
President of the Philippines UPON THE RECOMMENDATION OF THE 
20 
GOVERNANCE COMMISSION FOR GOVERNMENT OWNED OR 
21 
CONTROLLED CORPORATIONS, at a sum commensurate to the 
22 
importance and responsibility attached to the position. The sum total of 
23 
the salary, ALLOWANCES, BENEFITS [of the President and the 
24 
aliowancesJ and other emoluments OF THE PRESIDENT OF THE 
10 


I 
CORPORATION [which the Board of Directors may grant him] SHALL 
2 
BE HIGHER THAN THE COMPENSATION PACKAGE OF THE NEXT 
3 
HIGHEST RANKING EXECUTIVE OF THE CORPORATION AND shall 
4 
be the ceiling for fixing the salary, allowances and other emoluments of all 
5 
other personnel in the Corporation. 
6 
SECTION 6. Section 4, paragraphs (d), [and] (f) AND (H) of the same Act, as 
7 
renumbered, are hereby amended to read as follows: 
8 
"(d) To represent the Corporation[, upon prior authority of the 
9 
Board,] in all dealings with other offices, agencies and instrumentalities of 
10 
the government and with all other persons or entities, public or private, 
11 
whether domestic, foreign or international; 
12 
(f) To represent the Corporation, either personally or through 
13 
counsel, INCLUDING PRIVATE COUNSEL, AS MAY BE AUTHORIZED 
14 
BY THE PDIC BOARD, in ANY [all] legal proceeding or action;" 
15 
(h) xxx The President shall be assisted by a Vice-President and other 
16 
officials whose appointment and removal for cause shall be approved and whose 
17 
salary shall be fixed by the Board of Directors upon recommendation of the 
18 
President of the Corporation. During the absence or temporary incapacity of the 
19 
President, or in case of vacancy or permanent incapacity and pending 
20 
appointment of a new President of the Corporation by the President of the 
21 
Philippines, the BOARD OF DIRECTORS SHALL DESIGNATE THE OFFICER-
22 
IN·CHARGE OF THE CORPORATION [Vice President shall act as President 
23 
and discharge the duties and responsibilities thereof)." 
11 


1 
SECTION 7. Section 4 of the same Act is accordingly renumbered as Section 5, 
2 
and is hereby amended to read as follows: 
3 
"DEFINITION OF TERMS 
4 
SECTION [4] 5. As used in this Act -
5 
(A) THE TERM "ASSET" REFERS TO MOVABLE, IMMOVABLE, 
6 
TANGIBLE, OR INTANGIBLE RESOURCES OR PROPERTIES 
7 
OVER WHICH A BANK HAS AN ESTABLISHED OR EQUITABLE 
8 
INTEREST, INCLUDING THE PROCEEDS OF THE SALE OF ITS 
9 
BANK AND BRANCH LICENSES SUBJECT TO THE APPROVAL 
10 
OF THE BANGKO SENTRAL. 
11 
(B) THE TERM "ASSET DISTRIBUTION PLAN" REFERS TO THE 
12 
PLAN OF DISTRIBUTION OF THE ASSETS OF A CLOSED BANK 
13 
TO ITS CREDITORS, BASED ON ITS ESTIMATED REALIZABLE 
14 
VALUE AS OF A CERTAIN CUT·OFF DATE, PREPARED IN 
15 
ACCORDANCE WITH THE RULES ON CONCURRENCE AND 
16 
PREFERENCE OF CREDITS UNDER THE CIVIL CODE OR OTHER 
17 
LAWS. 
18 
AN ASSET DISTRIBUTION PLAN MAY BE PARTIAL WHEN IT 
19 
PERTAINS TO THE DISTRIBUTION OF A PORTION OR SOME OF 
20 
THE ASSETS OF THE CLOSED BANK, OR FINAL WHEN IT 
21 
PERTAINS TO THE DISTRIBUTION OF ALL THE ASSETS OF THE 
22 
CLOSED BANK. 
23 
(C) [(a)) The term "Board of Directors" means the Board of Directors of 
24 
the Corporation. 
12 


1 
(D) [(b)) The term "Bank" and "Banking Institution" shall be 
2 
synonymous and interchangeable and shall include banks, commercial 
3 
banks, savings bank, mortgage banks, rural banks, development 
4 
banks, cooperative banks, stock savings and loan associations and 
5 
branches and agencies in the Philippines of foreign banks and all other 
6 
corporations authorized to perform 
banking functions 
in 
the 
7 
Philippines. 
8 
(E) THE TERM "CLOSED BANK" REFERS TO A BANK PLACED 
9 
UNDER LIQUIDATION BY THE MONETARY BOARD. 
10 
(F) THE TERM "CREDITOR" REFERS TO ANY INDIVIDUAL OR 
11 
ENTITY WITH A VALID CLAIM AGAINST THE ASSETS OF THE 
12 
CLOSED BANK. 
13 
[(c) The term "receiver" includes a receiver, commission, person or other 
14 
agency charged by law with the duty to take charge of the assets and 
15 
liabilities of a bank which has been forbidden from doing business in the 
16 
Philippines, as well as the duty to gather, preserve and administer such 
17 
assets and liabilities for the benefit of the depositors and creditors of said 
18 
bank, and to continue into liquidation whenever authorized under this Act 
19 
or other laws, and to dispose of the assets and to wind up the affairs of 
20 
such bank.] 
21 
[(d) The term "insured bank" means any bank the deposits of which are 
22 
insured in accordance with the provisions of this Act.] 
23 
[(e)] The term "non-insured bank" means any bank the deposits of which 
24 
are not insured.] 
13 


I 
[(f)] (G) The term "deposit" means the unpaid balance of money or its 
2 
equivalent received by a bank in the usual course of business and for 
3 
which it has given or is obliged to give credit to a commercial, checking, 
4 
savings, time or thrift account, EVIDENCED BY A PASSBOOK, CHECK 
5 
ANDIOR CERTIFICATE OF DEPOSIT, OR OTHER EVIDENCE OF 
6 
DEPOSIT, or issued 
in accordance with 8angko Sentra/ rules and 
7 
regulations and other applicable laws, together 
with such other 
8 
obligations of a bank, which, consistent with banking usage and practices, 
9 
the Board of Directors shall determine and prescribe by regulations to be 
10 
deposit liabilities of the bank: Provided, That any obligation of a bank 
11 
which is payable at the office of the bank located outside of the 
12 
Philippines shall not be a deposit for any of the purposes of this Act or 
13 
included as part of the total deposits or of insured deposit: Provided, 
14 
furlher, That, subject to the approval of the Board of Directors, any 
IS 
insured bank which is incorporated under the laws of the Philippines 
16 
which maintains a branch outside the Philippines may elect to include for 
17 
insurance its deposit obligations payable only at such branch. 
18 
The Corporation shall not pay deposit insurance[,] for the following 
19 
accounts or transactions [, whether denominated, documented, recorded 
20 
or booked as deposit by the bank]: 
21 
1) Investment products such as bonds and securities, trust accounts, 
22 
and other similar instruments; 
23 
2) Deposit accounts or transactions which are [unfunded, or that are] 
24 
25 
fictitious 
or 
fraudulent 
AS 
DETERMINED 
BY 
THE 
CORPORATION; 
14 


1 
3) Deposit accounts or transactions constituting, and/or emanating 
2 
from, unsafe and unsound banking practice/s, as determined by the 
3 
Corporation, in consultation with the BANGKO SENTRAL [SSP], 
4 
after due notice and hearing, and publication of a DIRECTIVE TO 
5 
cease and desist [order] issued by the Corporation against such 
6 
deposit accounts, transactions OR PRACTICES; and 
7 
4) Deposits that are determined to be the proceeds of an unlawful 
8 
activity as defined under Republic Act 9160, as amended. 
9 
The actions of the Corporation taken under [this] section 5 [(h)] (G) shall 
10 
be final and executory, and may ONLY [not] be restrained or set aside by 
11 
the [court] COURT OF APPEALS, [except] UPON [on] appropriate 
12 
petition for certiorari on the ground that the action was taken in excess of 
13 
jurisdiction or with such grave abuse of discretion as to amount to a lack 
14 
or excess of jurisdiction. The petition for certiorari may only be filed within 
15 
thirty (30) days from notice of denial of claim for deposit insurance. 
16 
(H) THE TERM "DISPUTED CLAIM" REFERS TO A CLAIM OR SUIT 
17 
AGAINST THE ASSETS OF A CLOSED BANK, OR FOR SPECIFIC 
18 
PERFORMANCE, OR BREACH OF CONTRACT, OR DAMAGES, OF 
19 
WHATEVER NATURE OR CHARACTER, WHETHER FOR MONEY OR 
20 
OTHERWISE, 
LIQUIDATED 
OR 
UNLIQUIDATED, 
FIXED 
OR 
21 
CONTINGENT, 
MATURED 
OR 
CURRENT, 
DENIED 
BY 
THE 
22 
RECEIVER. 
23 
(I) THE TERM "INSURED BANK" MEANS ANY BANK THE DEPOSITS 
24 
OF WHICH ARE INSURED IN ACCORDANCE WITH THE PROVISIONS 
25 
OF THIS ACT. 
15 


1 
(J) [(g)]The term "insured deposit" means the amount due to any bona 
2 
fide depositor for legitimate deposits in an insured bank [net of any 
3 
obligation of the depositor to the insured bank] as of the date of closure 
4 
but not to exceed Five Hundred Thousand Pesos (P500,OOO.OO). Such 
5 
[net] amount shall be determined according to such regulations as the 
6 
Board of Directors may prescribe. In determining such amount due to any 
7 
depositor, there shall be added together all deposits in the bank 
8 
maintained in the same right and capacity for his benefit either in his own 
9 
name or in the name of others. A joint account regardless of whether the 
10 
conjunction "and," "or", "and/or" is used, shall be insured separately from 
11 
any individually-owned deposit account: Provided, That (1) If the account 
12 
is held jointly by two or more natural persons, or by two or more juridical 
13 
persons or entities, the maximum insured deposit shall be divided into as 
14 
many equal shares as there are individuals, juridical persons or entities, 
15 
unless a different sharing is stipulated in the document of deposit, and (2) 
16 
if the account is held by a juridical person or entity jointly with one or more 
17 
natural persons, the maximum insured deposit shall be presumed to 
18 
belong entirely to such juridical person or entity: Provided, further, That 
19 
the aggregate of the interest of each co-owner over several joint accounts, 
20 
whether owned by the same or different combinations of individuals, 
21 
juridical persons or entities, shall likewise be subject to the maximum 
22 
insured deposit of Five Hundred Thousand Pesos (P500,OOO.OO): 
23 
Provided, furthermore, That the provisions of any law to the contrary 
24 
notwithstanding, no owner/holder of any PASSBOOK, 
negotiable 
25 
certificate of deposit, OR OTHER EVIDENCE OF DEPOSIT shall be 
26 
recognized as a depositor entitled to the rights provided in this Act unless 
27 
THE PASSBOOK, CERTIFICATE OF DEPOSIT OR OTHER EVIDENCE 
28 
OF DEPOSIT IS DETERMINED BY THE CORPORATION TO BE AN 
16 


1 
AUTHENTIC DOCUMENT OR RECORD of the issuing bank [his name is 
2 
registered as owner/holder thereof in the books}: Provided, finally, That, in 
3 
case of a condition that threatens the monetary and financial stability of 
4 
the banking system that may have systemic consequences, as defined in 
5 
section 22 [17] hereof, as determined by the Monetary Board, the 
6 
maximum deposit insurance cover may be adjusted in such amount, for 
7 
such a period, and/or for such deposit products, as may be determined by 
8 
a unanimous vote of the Board of Directors in a meeting called for the 
9 
purpose and chaired by the Secretary of Finance, subject to the approval 
10 
of the President of the Philippines. 
11 
(K) THE TERM "LIQUIDATION" REFERS TO THE PROCEEDINGS 
12 
UNDER SECTIONS 12 TO 16 OF THIS ACT. 
13 
14 
15 
16 
17 
18 
19 
20 
21 
(L) 
THE TERM "LIQUIDATION COURT" REFERS TO THE 
REGIONAL TRIAL COURT OF GENERAL JURISDICTION 
WHERE 
THE 
PETITION 
FOR 
ASSISTANCE 
IN 
THE 
LIQUIDATION OF A CLOSED BANK IS FILED AND GIVEN 
DUE COURSE. 
(M) THE TERM "PAYOUT" REFERS TO THE PAYMENT OF 
INSURED DEPOSITS. 
(N) THE 
TERM 
"PETITION 
FOR 
ASSISTANCE 
IN 
THE 
LIQUIDATION OF A CLOSED BANK" REFERS TO THE 
17 


1 
PETITION FILED BY THE RECEIVER WITH THE REGIONAL 
2 
TRIAL COURT (RTC) IN ACCORDANCE WITH SECTION 16 
3 
OF THIS ACT. 
4 
(0) THE TERM "PURCHASE OF ASSETS AND ASSUMPTION OF 
5 
LIABILITIES" REFERS TO A TRANSACTION WHERE AN 
6 
INSURED BANK PURCHASES ANY OR ALL ASSETS AND 
7 
ASSUMES ANY OR ALL LIABILITIES OF ANOTHER BANK 
8 
UNDER RESOLUTION OR LIQUIDATION, AS PROVIDED IN 
9 
THIS ACT. 
10 
(P) THE TERM "RECEIVER" REFERS TO THE CORPORATION 
11 
OR ANY OF ITS DULY AUTHORIZED AGENTS ACTING AS 
12 
RECEIVER OF A CLOSED BANK. 
13 
(Q) THE TERM "RECORDS" 
INCLUDES 
ALL DOCUMENTS, 
14 
TITLES, PAPERS AND ELECTRONIC DATA OF THE CLOSED 
15 
BANK, INCLUDING THOSE PERTAINING TO DEPOSIT 
16 
ACCOUNTS OF AND WITH THE CLOSED BANK, ITS 
17 
ASSETS, TRANSACTIONS AND CORPORATE AFFAIRS. 
18 
(R) THE TERM "RESIDUAL ASSETS" REFERS TO ASSETS, IN 
19 
CASH OR IN KIND, TO BE TURNED OVER TO THE CLOSED 
20 
BANK'S STOCKHOLDERS OF RECORD, IN PROPORTION TO 
21 
THEIR INTEREST IN THE CLOSED BANK AS OF DATE OF 
22 
CLOSURE, AFTER PAYMENT IN FULL OF LIQUIDATION 
23 
COSTS, FEES AND EXPENSES, AND THE VALID CLAIMS 
24 
AND SURPLUS DIVIDENDS TO ALL THE CREDITORS. 
18 


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 
(S) THE TERM "RESOLUTION" REFERS TO THE ACTIONS 
UNDERTAKEN BY THE CORPORATION UNDER SECTION 11 
OF THIS ACT TO: 
1) 
PROTECT 
DEPOSITORS, 
CREDITORS 
AND 
THE 
DEPOSIT INSURANCE FUND; 
2) 
SAFEGUARD 
THE 
CONTINUITY 
OF 
ESSENTIAL 
BANKING SERVICES OR MAINTAIN FINANCIAL STABILITY; 
AND 
3) 
PREVENT DETERIORATION OR DISSIPATION OF BANK 
ASSETS. 
(T) THE 
TERM 
"RISK-BASED 
ASSESSMENT 
SYSTEM" 
PERTAINS TO A METHOD FOR CALCULATING AN INSURED 
BANK'S ASSESSMENT ON THE PROBABILITY THAT THE 
DEPOSIT INSURANCE FUND WILL INCUR A LOSS WITH 
RESPECT TO THE BANK, AND THE LIKELY AMOUNT OF 
ANY SUCH LOSS, BASED ON ITS RISK RATING THAT 
TAKES INTO CONSIDERATION THE FOLLOWING: 
1) 
QUALITY AND CONCENTRATION OF ASSETS; 
2) 
CATEGORIES AND CONCENTRATION OF LIABILITIES, 
BOTH INSURED AND UNINSURED, CONTINGENT AND 
NON-CONTINGENT; 
3) 
CAPITAL POSITION; 
4) 
LIQUIDITY POSITION; 
5) 
MANAGEMENT AND GOVERNANCE; AND 
6) 
OTHER FACTORS RELEVANT TO ASSESSING SUCH 
PROBABILITY, AS MAY BE DETERMINED BY THE 
CORPORATION. 
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 
(U)THE TERM "STATEMENT OF AFFAIRS" REFERS TO A 
REPORT OF FINANCIAL CONDITION OF THE CLOSED BANK 
AT 
A 
GIVEN 
DATE, 
SHOWING 
THE: 
1) 
ESTIMATED 
REALIZABLE VALUE OF ASSETS; 2) CLASSIFICATION OF 
CREDITS; AND 3) ESTIMATED LIABILITIES TO BE SETTLED. 
(V)THE TERM 
"SURPLUS DIVIDENDS" 
REFERS 
TO THE 
REMAINING 
ASSETS 
OF THE 
CLOSED 
BANK AFTER 
SATISFACTION IN FULL OF ALL THE LIQUIDATION COSTS, 
FEES AND EXPENSES, AND VALID CLAIMS. THE SURPLUS 
DIVIDENDS SHALL BE COMPUTED AT THE LEGAL RATE OF 
INTEREST FROM THE DATE OF TAKEOVER TO CUT-OFF 
DATE OF THE DISTRIBUTION PLAN, AND SHALL BE PAID, IN 
CASH OR IN KIND, TO CREDITORS OF THE CLOSED BANK IN 
ACCORDANCE WITH THE RULES ON CONCURRENCE AND 
PREFERENCE OF CREDITS UNDER THE CIVIL CODE OR 
OTHER LAWS. 
(W) 
THE TERM "TAKEOVER" REFERS TO THE ACT OF 
PHYSICALLY TAKING POSSESSION AND CONTROL OF THE 
PREMISES, ASSETS AND AFFAIRS OF A CLOSED BANK 
FOR THE PURPOSE OF LIQUIDATING THE BANK. 
(X) [(h)] The term "transfer deposit" means a deposit in an insured 
bank made available to a depositor by the Corporation as 
payment of insured deposit of such depositor in a closed bank 
and assumed by another insured bank. 
20 


1 
(Y) [(i)] The term "trust funds" means funds held by an insured bank in 
2 
a fiduciary capacity and includes without being limited to, funds 
3 
held as trustee, executor, administrator, guardian or agent. 
4 
(Z) THE 
TERM 
"VALID 
CLAIM" 
REFERS TO THE 
CLAIM 
5 
RECOGNIZED BY THE RECEIVER OR ALLOWED BY THE 
6 
LIQUIDATION COURT. 
7 
(AA) THE TERM "WINDING UP PERIOD" REFERS TO THE 
8 
PERIOD PROVIDED IN SECTION 16 OF THIS ACT." 
9 
SECTION 8. Section 5 of the same Act is accordingly renumbered as Section 6, 
10 
and is hereby amended to read as follows: 
11 
"DEPOSIT INSURANCE COVERAGE 
12 
SECTION [5] 6. The deposit liabilities of any bank [or banking institution,] 
13 
which is engaged in the business of receiving deposits as herein defined 
14 
on the effective date of this Act, or which thereafter may engage in the 
15 
business of receiving deposits, shall be insured with the Corporation. 
16 
WHENEVER A BANK IS DETERMINED BY THE BANGKO SENTRAL 
17 
TO 
HAVE 
FAILED 
TO 
MEET 
THE 
MINIMUM 
CAPITAL 
18 
REQUIREMENTS, 
THE 
CORPORATION 
MAY 
CONDUCT 
AN 
19 
INSURANCE RISK EVALUATION ON THE BANK AT ANY TIME TO 
20 
ENABLE IT TO ASSESS THE RISKS TO THE DEPOSIT INSURANCE 
21 
FUND. SUCH EVALUATION MAY INCLUDE THE DETERMINATION OF 
22 
(i) THE FAIR MARKET VALUE OF THE ASSETS AND LIABILITIES OF 
23 
A BANK, OR (ii) THE RISK CLASSIFICATION OF A BANK, OR (iii) 
21 


1 
POSSIBLE RESOLUTION MODES, SUBJECT TO SUCH TERMS AND 
2 
CONDITIONS AS THE PDIC BOARD MAY PRESCRIBE. 
3 
IN THE CONDUCT OF AN INSURANCE RISK EVALUATION, THE 
4 
CORPORATION, 
ITS 
DULY 
AUTHORIZED 
OFFICERS 
OR 
5 
EMPLOYEES, SHALL HAVE THE AUTHORITY TO EXAMINE, INQUIRE 
6 
OR LOOK INTO THE DEPOSIT RECORDS OF A BANK. FOR THIS 
7 
PURPOSE, BANKS, THEIR OFFICERS AND EMPLOYEES ARE 
8 
HEREBY MANDATED TO DISCLOSE AND REPORT TO THE 
9 
CORPORATION 
OR 
ITS 
DULY 
AUTHORIZED 
OFFICERS, 
10 
EMPLOYEES, DEPOSIT ACCOUNT INFORMATION IN SAID BANK. 
11 
THE CORPORATION, ITS DULY AUTHORIZED OFFICERS OR 
12 
EMPLOYEES, ARE PROHIBITED FROM DISCLOSING INFORMATION 
13 
OBTAINED UNDER THIS SECTION TO ANY PERSON, GOVERNMENT 
14 
OFFICIAL, BUREAU OR OFFICE, EXCEPT WHEN THE DISCLOSURE 
15 
OF THE INFORMATION OBTAINED UNDER THIS SECTION IS 
16 
NECESSARY 
FOR 
EXPEDITIOUS 
PAYMENT 
OF 
DEPOSIT 
17 
INSURANCE OR THE PROTECTION OF THE DEPOSIT INSURANCE 
18 
SYSTEM, 
OR 
TO 
CARRY 
OUT 
THE 
MANDATE 
OF 
THE 
19 
CORPORATION AS A RESOLUTION AUTHORITY." 
20 
ANY ACT DONE PURSUANT TO THIS SECTION SHALL NOT BE 
21 
DEEMED TO HAVE VIOLATED REPUBLIC ACT NO. 1405, AS 
22 
AMENDED, REPUBLIC ACT NO. 6426, AS AMENDED, REPUBLIC 
23 
ACT NO. 8791, AND OTHER SIMILAR LAWS PROTECTING OR 
24 
SAFEGUARDING THE SECRECY OR CONFIDENTIALITY OF BANK 
25 
DEPOSITS: PROVIDED, THAT ANY UNAUTHORIZED DISCLOSURE 
26 
OF THE INFORMATION UNDER THIS SECTION SHALL BE SUBJECT 
22 


1 
TO THE SAME 
PENALTY UNDER THE 
FOREGOING 
LAWS 
2 
PROTECTING THE SECRECY OR CONFIDENTIALITY OF BANK 
3 
DEPOSITS." 
4 
SECTION 9. Section 6 of the same Act is accordingly renumbered as Section 7. 
5 
SECTION 10. Section 7 paragraph (a) of the same Act, as renumbered, is 
6 
hereby amended to read as follows: 
7 
"ASSESSMENT OF MEMBER BANKS 
8 
9 
SECTION [6] 7. (a) The assessed rate shall be determined by the Board 
10 
of Directors: Provided, That the assessment rate shall not exceed one-fifth 
11 
(1/5) of one per centum (1%) per annum. The semi-annual assessment 
12 
for each insured bank shall be in the amount of the product of one-half 
13 
(1/2) the assessment rate multiplied by the assessment base but in no 
14 
case shall it be less than Five thousand pesos (P5,OOO.OO). 
The 
15 
assessment base shall be the amount of the liability of the bank for 
16 
deposits as defined under subsection (G) [(f)] of Section 5 [4) without any 
17 
deduction for indebtedness of depositors. 
18 
IN ADDITION, THE BOARD OF DIRECTORS MAY ESTABLISH A 
19 
RISK-BASED ASSESSMENT SYSTEM AND IMPOSE A RISK-BASED 
20 
ASSESSMENT RATE WHICH SHALL NOT EXCEED TWO-FIFTH (2/5) 
21 
OF ONE PER CENTUM (1%) PER ANNUM MULTIPLIED BY THE 
22 
ASSESSMENT BASE. 
23 
The semi-annual assessment base for one semi-annual period shall be 
24 
the average of the assessment base of the bank as of the close of 
23 


1 
business on March thirty-one and June thirty and the semi-annual 
2 
assessment base for the other semi-annual period shall be the average of 
3 
the assessment base of the bank as of the close of business on 
4 
September thirty and December thirty-one: Provided, That when any of 
5 
said days is a non-business day or legal holiday, either national or 
6 
provincial, the preceding business day shall be used. The certified 
7 
statements required to be filed with the Corporation under subsections (b) 
8 
and (c) of this Section shall be in such form and set forth such supporting 
9 
information as the Board of Directors shall prescribe. The assessment 
10 
payments required from the insured banks under subsections (b) and (c) 
11 
of this Section shall be made in such manner and at such time or times as 
12 
the Board of Directors shall prescriber, provided the time or times so 
13 
prescribed shall not be later than sixty (60) days after filing the certified 
14 
statement setting forth the amount of assessment)." 
15 
SECTION 11. Section 7, paragraphs (d) and (h), of the same Act, as renumbered, 
16 
is hereby amended to read as follows: 
17 
"(d) All assessment collections and income from operations after 
18 
expenses and charges shall be added to the Deposit Insurance Fund 
19 
under Section 17 [13] hereof. Such expenses and charges are: (1) the 
20 
operating costs and expenses of the Corporation for the calendar year; (2) 
21 
additions to reserve to provide for insurance and financial assistance 
22 
losses, net of recoverable amounts from applicable assets and collaterals, 
23 
during the calendar year; and (3) the net insurance and financial 
24 
assistance losses sustained in said calendar year. 
25 
(h) [The Corporation shall not terminate the insured status of any bank 
26 
which continues to operate or receive depOSits.] Should any insured bank 
27 
fail or refuse to pay any assessment required to be paid by such bank 
24 


1 
under any provision of this Act, and should the bank not correct such 
2 
failure or refusal within thirty (30) days after written notice has been given 
3 
by the Corporation to an officer of the bank citing this subsection, and 
4 
stating that the bank has failed or refused to pay as required by the law, 
5 
the Corporation may, at its discretion, file a case for collection before the 
6 
appropriate court without prejudice to the imposition of administrative 
7 
sanctions allowed under the provisions of this Law on the bank officials 
8 
responsible for the non-payment of assessment fees." 
9 
SECTION 12. An additional paragraph to Section 7 of the same Act, as 
10 
renumbered, is hereby inserted after paragraph (h) which shall read as follows: 
11 
"(I) THE CORPORATION SHALL HAVE THE AUTHORITY TO 
12 
COLLECT A SPECIAL ASSESSMENT FROM ANY MEMBER BANK 
13 
AND PRESCRIBE THE TERMS AND CONDITIONS THEREOF TO 
14 
MAINTAIN THE TARGET LEVEL OF THE DEPOSIT INSURANCE 
15 
FUND SET BY THE BOARD OF DIRECTORS IN ACCORDANCE WITH 
16 
THIS ACT: PROVIDED, THAT, THE COLLECTION OF A SPECIAL 
17 
ASSESSMENT MAY LIKEWISE BE MADE FOR THE PURPOSE OF 
18 
REIMBURSING THE NATIONAL GOVERNMENT FOR ANY FINANCIAL 
19 
ASSISTANCE 
IT 
MAY 
HAVE 
EXTENDED 
TO 
AFFECTED 
20 
INSTITUTIONS 
OR 
ORGANIZATIONS 
DURING 
A 
SYSTEMIC 
21 
SCENARIO." 
22 
SECTION 13. Section 7 of the same Act is accordingly renumbered as Section 
23 
8, and is hereby amended to read as follows: 
24 
"SANCTIONS AGAINST UNSAFE AND 
25 
UNSOUND BANKING PRACTICES 
25 


1 
SECTION [7] 8. (a) Whenever upon examination by the Corporation into 
2 
the condition of any insured bank, it shall be disclosed that an insured 
3 
bank or its directors or agents have committed, are committing or about to 
4 
commit unsafe or unsound practices in conducting the business of the 
5 
bank, or have violated, are violating or about to violate any provisions of 
6 
any law or regulation to which the insured bank is subject, the Board of 
7 
Directors shall submit the report of the examination to the Monetary Board 
8 
to secure corrective action thereon. If no such corrective action is taken by 
9 
the Monetary Board within forty-five (45) days from the submission of the 
10 
report, the Board of Directors shall, motu proprio, institute corrective 
11 
action which it deems necessary. The Board of Directors may thereafter 
12 
issue a cease and desist order, and require the bank or its directors or 
13 
agents concerned to correct the practices or violations within forty-five 
14 
(45) days. However, if the practice or violation is likely to cause insolvency 
15 
or substantial dissipation of assets or earnings of the bank, or is likely to 
16 
seriously weaken the condition of the bank or otherwise seriously 
17 
prejudice the interests of its depositors and the Corporation, the period to 
18 
take corrective action shall not be more than fifteen (15) days. The order 
19 
may also include the imposition of fines provided in Section 26 (g) [21 (f)] 
20 
hereof. The Board of Directors shall duly inform the Monetary Board of the 
21 
Bangko Sentrai ng Pilipinas of action it has taken under this subsection 
22 
with respect to such practices or violations. 
23 
(b) The actions and proceedings provided in the preceding subsections 
24 
may be undertaken by the Corporation if, in its opinion, an insured bank or 
25 
its directors or agents have violated, are violating or about to violate any 
26 
provision of this Act or any order, rule or instruction issued by the 
27 
Corporation or any written condition imposed by the Corporation in 
28 
connection with any transaction with or grant by the Corporation. 
26 


1 
2 
(c) THE CORPORATION MAY TERMINATE THE INSURED STATUS OF 
3 
ANY BANK THAT FAILS OR REFUSES TO COMPLY, WITHIN THIRTY 
4 
(30) DAYS FROM NOTICE, WITH ANY CEASE-AND-DESIST ORDER 
5 
ISSUED BY THE CORPORATION, OR WITH ANY CORRECTIVE 
6 
ACTION IMPOSED BY THE MONETARY BOARD, UNDER THIS 
7 
SECTION PERTAINING TO A DEPOSIT-RELATED UNSAFE ANDIOR 
8 
UNSOUND BANKING PRACTICE. 
9 
SUCH TERMINATION SHALL BE FINAL AND EXECUTORY, AND 
10 
SHALL BE EFFECTIVE UPON PUBLICATION OF THE NOTICE OF 
11 
TERMINATION IN A NEWSPAPER OF GENERAL CIRCULATION. 
12 
THE DEPOSITS OF EACH DEPOSITOR IN THE BANK ON THE 
13 
EFFECTIVE 
DATE 
OF 
THE 
TERMINATION 
OF 
INSURANCE 
14 
COVERAGE, LESS ALL SUBSEQUENT WITHDRAWALS, SHALL 
15 
CONTINUE TO BE INSURED UP TO THE MAXIMUM DEPOSIT 
16 
INSURANCE COVERAGE FOR A PERIOD OF ONE HUNDRED EIGHTY 
17 
(180) DAYS. ADDITIONS TO, OR RENEWAL OF, EXISTING DEPOSITS 
18 
AND NEW DEPOSITS IN SUCH BANK AFTER THE EFFECTIVE DATE 
19 
OF TERMINATION OF INSURED STATUS OF THE BANK SHALL NOT 
20 
BE INSURED BY THE CORPORATION. 
21 
THE BANK SHALL IMMEDIATELY GIVE WRITTEN NOTICE OF SUCH 
22 
TERMINATION 
AND 
THE 
INTERIM 
DEPOSIT 
INSURANCE 
23 
COVERAGE TO EACH OF ITS DEPOSITORS AT THEIR ADDRESS AS 
24 
RECORDED IN THE BOOKS OF THE BANK. 
25 
THE BANK SHALL NOT ADVERTISE OR REPRESENT THAT 
26 
ADDITIONS TO, OR RENEWAL OF, EXISTING DEPOSITS AND NEW 
27 


1 
DEPOSITS MADE AFTER THE EFFECTIVE DATE OF TERMINATION 
2 
ARE COVERED BY DEPOSIT INSURANCE." 
3 
SECTION 14. Section 8 of the same Act is accordingly renumbered as Section 9. 
4 
SECTION 15. Section 9, paragraph Twelfth of the same Act, as renumbered, is 
5 
hereby amended to read as follows: 
6 
"Twelfth - THE PROVISIONS OF PRESIDENTIAL DECREE NO. 
7 
1445, AS AMENDED, EXECUTIVE ORDER NO. 292, AND OTHER 
8 
SIMILAR LAWS NOTWITHSTANDING, [T] to compromise, condone or 
9 
release, in whole or in part, any claim or settled liability to the Corporation, 
10 
regardless of the amount involved, under such terms and conditions as 
11 
may be imposed by the Board of Directors to protect the interest of the 
12 
Corporation, 
AND 
TO 
WRITE 
OFF 
THE 
CORPORATION'S 
13 
RECEIVABLES 
AND 
ASSETS 
WHICH 
ARE 
NO 
LONGER 
14 
RECOVERABLE OR REALIZABLE;" 
15 
SECTION 16. Section 9 of the same Act, as renumbered, is further amended by 
16 
inserting additional paragraphs after paragraph Twelve, which shall read as follows: 
17 
"THIRTEENTH - TO DETERMINE QUALIFIED INTERESTED 
18 
ACQUIRERS OR INVESTORS FOR ANY OF THE MODES OF 
19 
RESOLUTION OR LIQUIDATION OF BANKS; 
20 
FOURTEENTH 
-
TO 
DETERMINE 
THE 
APPROPRIATE 
21 
RESOLUTION METHOD AND TO IMPLEMENT THE SAME FOR A 
22 
BANK SUBJECT OF RESOLUTION; AND 
28 


1 
FIFTEENTH - TO DETERMINE THE APPROPRIATE MODE OF 
2 
LIQUIDATION OF A CLOSED BANK AND TO IMPLEMENT THE SAME; 
3 
SECTION 17. Section 9 of the same Act is accordingly renumbered as Section 
4 
10. 
5 
SECTION 18. Section 10 paragraph (b-1) of the same Act, as renumbered, is 
6 
hereby amended to read as follows: 
7 
"(b-1) The investigators appointed by the Board of Directors shall have the 
8 
power on behalf of the Corporation to conduct investigations on frauds, 
9 
irregularities and anomalies committed in banks, based on reports of 
10 
examination conducted by the Corporation and Bangko Sentra/ ng 
11 
Pilipinas or complaints from depositors or from other government agency. 
12 
Each such investigator shall have the power to administer oaths, and to 
l3 
examine and take and preserve the testimony of any person relating to 
14 
the subject of investigation. FOR THIS PURPOSE, THE CORPORATION 
15 
MAY APPOINT OR HIRE PERSONS OR ENTITIES OF RECOGNIZED 
16 
COMPETENCE IN FORENSIC AND FRAUD INVESTIGATIONS AS ITS 
17 
AGENTS." 
18 
SECTION 19. Section 10 paragraph (c) of the same Act, as renumbered, is 
19 
hereby amended to read as follows: 
20 
"(c) Each insured bank shall make to the Corporation reports of condition 
21 
in such form and at such times as the Board of Directors may require such 
22 
reports to be published in such manner, not inconsistent with any 
23 
applicable law, as it may direct. Every such bank which fails to make or 
24 
publish any such report within such time, as the Board of Directors may 
29 


1 
require, shall be subject to a penalty of not more than P10,OOO [P100] for 
2 
each day of such failure recoverable by the Corporation for its use." 
3 
SECTION 20. Section 10 paragraph (d-1) of the same Act, as renumbered 
4 
herein, is hereby amended to read as follows: 
5 
"(d-1) Each insured bank shall keep and maintain a true and accurate 
6 
record or statement of its daily deposit transactions consistent with the 
7 
standards set by the 8angko Sentra/ ng Pilipinas and the Corporation. 
8 
Compliance with such standards shall be duly certified by the president of 
9 
the bank [or] 
AND the compliance officer: Provided, That refusal or 
10 
willful failure to issue the required certification shall constitute a violation 
11 
of this Section and shall subject such officers of the bank to the sanctions 
12 
provided for under Section 26 [21] (f) of this Act." 
13 
SECTION 21. Section 10 paragraph (f) of the same Act, as renumbered, is 
14 
hereby amended to read as follows: 
15 
"(f) The Corporation shall underwrite or advance ALL LEGAL [litigation] 
16 
costs and expenses, including legal fees and other expenses of external 
17 
counsel, or provide legal assistance to, directors, officers, employees or 
18 
agents of the Corporation in connection with any civil, criminal, 
19 
administrative or any other action or proceeding, to which such director, 
20 
officer, employee or agent is made a party by reason of, or in connection 
21 
with, the exercise of authority or performance of functions and duties 
22 
under this Act: Provided, That such legal protection shall not apply to any 
23 
civil, criminal, administrative or any action or proceeding that may be 
24 
initiated by the Corporation, in whatever capacity, against such director, 
25 
officer, employee or agent: Provided, Further, That directors, officers, 
30 


1 
employees or agents who shall resign, retire, transfer to another agency 
2 
or be separated from the service, shall continue to be provided with such 
3 
legal protection in connection with any act done or omitted to be done by 
4 
them in good faith during their tenure or employment with the Corporation: 
5 
Provided, finally, That in the event of a settlement or compromise, 
6 
indemnification shall be provided only in connection with such matters 
7 
covered by the settlement as to which the Corporation is advised by 
8 
counsel that the persons to be indemnified did not commit any negligence 
9 
or misconduct." 
10 
SECTION 22. The second paragraph of Section 10 paragraph (i) of the same 
11 
Act, as renumbered, is hereby amended to read as follows: 
12 
13 
"(i) Notwithstanding the provisions of this Section and Section 3 [2], 
14 
members of the Board of Directors and personnel of the Corporation may 
15 
become directors and officers of any bank and banking institution and of 
16 
any entity related to such institution in connection with financial assistance 
17 
extended by the Corporation to such institution and when, in the opinion of 
18 
the Board, it is appropriate to make such designation to protect the 
19 
interest of the Corporation." 
20 
SECTION 23. A new section entitled Section 11 of the same Act is hereby inserted 
21 
between Sections 10 and 12 which shall read as follows: 
22 
"BANK RESOLUTION 
23 
SECTION 11. (A) THE CORPORATION, IN COORDINATION WITH THE 
24 
BANGKO SENTRAL, MAY COMMENCE THE RESOLUTION OF A 
25 
BANK UNDER THIS SECTION UPON: 
31 


1 
1) FAILURE OF PROMPT CORRECTIVE ACTION AS DECLARED 
2 
BY THE MONETARY BOARD; OR 
3 
2) REQUEST BY A BANK TO BE PLACED UNDER RESOLUTION. 
4 
THE CORPORATION SHALL INFORM THE BANK OF ITS ELIGIBILITY 
5 
FOR ENTRY INTO RESOLUTION. 
6 
(B) THE BANGKO SENTRAL SHALL INFORM THE CORPORATION 
7 
OF THE INITIATION OF PROMPT CORRECTIVE ACTION ON ANY 
8 
BANK AND SHALL BE AUTHORIZED TO SHARE WITH THE 
9 
CORPORATION 
ALL 
INFORMATION, 
AGREEMENTS 
OR 
10 
DOCUMENTS, INCLUDING ANY ORDER OF THE MONETARY 
11 
BOARD, 
IN RELATION TO THE PROMPT CORRECTIVE ACTION. 
12 
THE CORPORATION SHALL HAVE THE AUTHORITY TO INQUIRE 
13 
AND MONITOR THE STATUS OF BANKS UNDER PROMPT 
14 
CORRECTIVE ACTION. 
15 
(C) THE STOCKHOLDERS, DIRECTORS, OFFICERS OR EMPLOYEES 
16 
OF THE BANK SHALL HAVE THE FOLLOWING OBLIGATIONS: 
17 
18 
19 
20 
21 
22 
23 
24 
1) ENSURE 
BANK 
COMPLIANCE 
WITH 
TERMS 
AND 
CONDITIONS PRESCRIBED BY THE CORPORATION FOR THE 
RESOLUTION OF THE BANK; 
2) CAUSE THE ENGAGEMENT, WITH THE CONSENT OF THE 
CORPORATION, OF AN INDEPENDENT APPRAISER OR 
AUDITOR FOR THE PURPOSE OF DETERMINING THE 
VALUATION OF THE BANK CONSISTENT WITH GENERALLY 
ACCEPTED VALUATION STANDARDS; 
32 


1 
3) ENSURE PRUDENT MANAGEMENT AND ADMINISTRATION 
2 
OF THE BANK'S ASSETS, LIABILITIES AND RECORDS; 
3 
4) COOPERATE WITH THE CORPORATION IN THE CONDUCT OR 
4 
EXERCISE OF ANY OR ALL OF ITS AUTHORITIES UNDER 
5 
THIS ACT AND HONOR IN GOOD FAITH ITS COMMITMENT OR 
6 
UNDERTAKING 
WITH 
THE 
CORPORATION 
ON 
THE 
7 
RESOLUTION OF THE BANK. 
8 
(d) WITHIN A PERIOD OF ONE HUNDRED EIGHTY (180) DAYS FROM 
9 
A BANK'S ENTRY INTO RESOLUTION, THE CORPORATION, 
10 
THROUGH THE AFFIRMATIVE VOTE OF AT LEAST FIVE (5) 
11 
MEMBERS OF THE PDIC BOARD, SHALL DETERMINE WHETHER 
12 
THE BANK MAY BE RESOLVED THROUGH THE PURCHASE OF ALL 
13 
ITS ASSETS AND ASSUMPTION OF ALL ITS LIABILITIES, OR 
14 
MERGER OR CONSOLIDATION WITH, OR ITS ACQUISITION, BY A 
15 
QUALIFIED INVESTOR. 
16 
FOR THIS PURPOSE, THE CORPORATION MAY: 
17 
1) DETERMINE A RESOLUTION PACKAGE FOR THE BANK; 
18 
2) IDENTIFY AND, WITH THE APPROVAL OF THE MONETARY 
19 
BOARD, 
PRE-QUALIFY 
POSSIBLE 
ACQUIRERS 
OR 
20 
INVESTORS; 
21 
3) AUTHORIZE PRE-QUALIFIED ACQUIRERS OR INVESTORS TO 
22 
CONDUCT DUE DILIGENCE ON THE BANK, FOR PURPOSES 
23 
OF DETERMINING THE VALUATION OF A BANK THROUGH 
24 
AN OBJECTIVE AND THOROUGH REVIEW AND APPRAISAL 
25 
OF ITS ASSETS AND LIABILITIES, AND ASSESSMENT OF 
26 
RISKS OR EVENTS THAT MAY AFFECT ITS VALUATION; 
33 


1 
4) CONDUCT A BIDDING TO DETERMINE THE ACQUIRER OF 
2 
THE BANK. 
3 
(E) IN DETERMINING THE APPROPRIATE RESOLUTION METHOD 
4 
FOR A BANK, THE CORPORATION SHALL CONSIDER THE: 
5 
1) FAIR MARKET VALUE OF THE ASSETS OF THE BANK, ITS 
6 
FRANCHISE, AS WELL AS THE AMOUNT OF ITS LIABILITIES; 
7 
2) AVAILABILITY OF A QUALIFIED INVESTOR; 
8 
3) LEAST COST TO THE DEPOSIT INSURANCE FUND; AND 
9 
4) INTEREST OF THE DEPOSITING PUBLIC. 
10 
(F) THE CORPORATION MAY APPOINT OR HIRE PERSONS OR 
11 
ENTITIES OF RECOGNIZED COMPETENCE IN BANKING, FINANCE, 
12 
ASSET MANAGEMENT OR REMEDIAL MANAGEMENT, AS ITS 
13 
AGENTS, TO PERFORM SUCH POWERS AND FUNCTIONS OF THE 
14 
CORPORATION IN THE RESOLUTION OF A BANK, OR ASSIST IN 
15 
THE PERFORMANCE THEREOF. 
16 
(G) THE PDIC BOARD SHALL PRESCRIBE THE GUIDELINES OR 
17 
CRITERIA FORA BANK TO BE PLACED UNDER RESOLUTION. 
18 
19 
(h) UPON A DETERMINATION BY THE CORPORATION THAT THE 
20 
BANK MAY NOT BE RESOLVED, THE MONETARY BOARD MAY ACT 
21 
IN ACCORDANCE WITH SECTION 30 OF REPUBLIC ACT NO. 7653 
22 
OR THE NEW CENTRAL BANK ACT. 
23 
(i) BANK RESOLUTION INVOLVING THE PURCHASE OF ALL 
24 
ASSETS AND ASSUMPTION OF ALL LIABILITIES OF A BANK SHALL 
34 


1 
BE 
EXEMPT 
FROM 
THE 
PROVISIONS OF 
ACT NO. 
3952, 
2 
OTHERWISE KNOWN AS THE BULK SALES LAW. 
3 
(j) THE PROVISIONS OF THIS SECTION ARE WITHOUT PREJUDICE 
4 
TO ANY ACTION THAT THE MONETARY BOARD MAY TAKE UNDER 
5 
EXISTING LAWS." 
6 
SECTION 24. Sections 10, 11 and 12 of the same Act are hereby deleted. 
7 
SECTION 25. A new section entitled Section 12 of the same Act is hereby 
8 
inserted between Sections 11 and 13 which shall read as follows: 
9 
"LIQUIDATION OF A CLOSED BANK 
10 
SECTION 12. (a) WHENEVER A BANK IS ORDERED CLOSED BY THE 
11 
MONETARY BOARD, THE CORPORATION SHALL BE DESIGNATED 
12 
AS RECEIVER AND IT SHALL PROCEED WITH THE TAKEOVER AND 
13 
LIQUIDATION OF THE CLOSED BANK. FOR THIS PURPOSE, THE 
14 
FOLLOWING CLAUSE IN SECTION 30 OF REPUBLIC ACT NO. 7653, 
15 
AS AMENDED, SHALL NOT BE APPLICABLE TO BANKS: 
16 
"THE RECEIVER SHALL DETERMINE, AS SOON AS 
17 
POSSIBLE, BUT NOT LATER THAN NINETY (90) DAYS 
18 
FROM TAKE-OVER, WHETHER THE INSTITUTION MAY 
19 
BE REHABILITATED OR OTHERWISE PLACED IN SUCH 
20 
A CONDITION SO THAT IT MAY BE PERMITTED TO 
21 
RESUME 
BUSINESS 
WITH 
SAFETY 
TO 
ITS 
22 
DEPOSITORS AND CREDITORS AND THE GENERAL 
23 
PUBLIC: PROVIDED, THAT ANY DETERMINATION FOR 
35 


1 
THE RESUMPTION OF BUSINESS OF THE INSTITUTION 
2 
SHALL BE SUBJECT TO PRIOR APPROVAL OF THE 
3 
MONETARY BOARD." 
4 
SECTION 26. A new section entitled Section 13 of the same Act is hereby 
5 
inserted between Sections 12 and 14 which shall read as follows: 
6 
"AUTHORITIES OF A RECEIVER AND EFFECTS OF PLACEMENT OF 
7 
A BANK UNDER LIQUIDATION 
8 
SECTION 13. (a) THE RECEIVER IS AUTHORIZED TO ADOPT AND 
9 
IMPLEMENT, 
WITHOUT 
NEED 
OF 
CONSENT 
OF 
THE 
10 
STOCKHOLDERS, 
BOARD 
OF 
DIRECTORS, 
CREDITORS 
OR 
11 
DEPOSITORS OF THE CLOSED BANK, ANY OR A COMBINATION OF 
12 
THE FOLLOWING MODES OF LIQUIDATION: 
13 
14 
1) CONVENTIONAL LIQUIDATION; AND 
2) PURCHASE 
OF 
ASSETS 
AND/OR 
ASSUMPTION 
OF 
15 
LIABILITIES 
16 
(b) IN ADDITION TO THE POWERS OF A RECEIVER PROVIDED 
17 
UNDER EXISTING LAWS, THE CORPORATION, AS RECEIVER OF A 
18 
CLOSED BANK, IS EMPOWERED TO: 
19 
1) REPRESENT AND ACT FOR AND IN BEHALF OF THE CLOSED 
20 
BANK; 
21 
2) GATHER AND TAKE CHARGE OF ALL THE ASSETS, 
22 
RECORDS AND AFFAIRS OF THE CLOSED BANK, AND 
36 


1 
ADMINISTER 
THE 
SAME 
FOR THE 
BENEFIT OF 
ITS 
2 
CREDITORS; 
3 
3) CONVERT THE ASSETS OF THE CLOSED BANK TO CASH OR 
4 
OTHER 
FORMS 
OF 
LIQUID 
ASSETS, 
AS 
FAR 
AS 
5 
PRACTICABLE; 
6 
4) BRING SUITS TO ENFORCE LIABILITIES OF THE DIRECTORS, 
7 
OFFICERS, EMPLOYEES, AGENTS OF THE CLOSED BANK 
8 
AND OTHER ENTITIES RELATED OR CONNECTED TO THE 
9 
CLOSED BANK OR TO COLLECT, RECOVER, AND PRESERVE 
10 
ALL ASSETS, INCLUDING ASSETS OVER WHICH THE BANK 
11 
HAS EQUITABLE INTEREST; 
12 
5) APPOINT OR HIRE PERSONS OR ENTITIES OF RECOGNIZED 
13 
COMPETENCE IN BANKING, FINANCE, ASSET MANAGEMENT 
14 
OR 
REMEDIAL 
MANAGEMENT, 
AS 
ITS 
DEPUTIES, 
15 
ASSISTANTS OR AGENTS, TO PERFORM SUCH POWERS 
16 
AND FUNCTIONS OF THE CORPORATION AS RECEIVER OF 
17 
THE CLOSED BANK, OR ASSIST IN THE PERFORMANCE 
18 
THEREOF; 
19 
6) APPOINT OR HIRE PERSONS OR ENTITIES OF RECOGNIZED 
20 
COMPETENCE IN FORENSIC AND FRAUD INVESTIGATIONS; 
21 
7) PAY ACCRUED UTILITIES, RENTALS AND SALARIES OF 
22 
PERSONNEL OF THE CLOSED BANK FOR A PERIOD NOT 
23 
EXCEEDING THREE (3) MONTHS, FROM AVAILABLE FUNDS 
24 
OF THE CLOSED BANK; 
37 


1 
2 
8) COLLECT LOANS AND OTHER CLAIMS OF THE CLOSED 
3 
BANK AND FOR THIS PURPOSE, MODIFY, COMPROMISE OR 
4 
RESTRUCTURE 
THE TERMS AND CONDITIONS OF SUCH 
5 
LOANS OR CLAIMS AS MAY BE DEEMED ADVANTAGEOUS 
6 
TO THE INTERESTS OF THE CREDITORS OF THE CLOSED 
7 
BANK; 
8 
9) HIRE 
OR 
RETAIN 
PRIVATE 
COUNSEL 
AS 
MAY 
BE 
9 
NECESSARY; 
10 
10) BORROW OR OBTAIN A LOAN, OR MORTGAGE, PLEDGE OR 
11 
ENCUMBER ANY ASSET OF THE CLOSED BANK, WHEN 
12 
NECESSARY TO PRESERVE OR PREVENT DISSIPATION OF 
13 
THE ASSETS, OR TO REDEEM FORECLOSED ASSETS OF 
14 
THE CLOSED BANK, OR TO MINIMIZE LOSSES TO ITS 
15 
DEPOSITORS AND CREDITORS; 
16 
11) IF THE STIPULATED INTEREST RATE ON DEPOSITS IS 
17 
18 
19 
20 
21 
22 
23 
24 
25 
UNUSUALLY 
HIGH 
COMPARED 
WITH 
PREVAILING 
APPLICABLE INTEREST RATES, THE CORPORATION AS 
RECEIVER, MAY EXERCISE SUCH POWERS WHICH MAY 
INCLUDE A REDUCTION OF THE INTEREST RATE TO A 
REASONABLE RATE: PROVIDED, THAT ANY MODIFICATIONS 
OR REDUCTIONS SHALL APPLY ONLY TO EARNED AND 
UNPAID INTEREST; 
12) UTILIZE AVAILABLE FUNDS OF THE BANK, INCLUDING 
FUNDS 
GENERATED 
BY 
THE 
RECEIVER 
FROM 
THE 
38 


1 
2 
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4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
CONVERSION OF ASSETS TO PAY FOR REASONABLE 
COSTS 
AND 
EXPENSES 
INCURRED 
FOR 
THE 
PRESERVATION OF THE ASSETS, AND LIQUIDATION OF, THE 
CLOSED BANK, WITHOUT NEED FOR APPROVAL OF THE 
LIQUIDATION COURT; 
FOR 
BANKS 
WITH 
INSUFFICIENT 
FUNDS, 
THE 
CORPORATION 
IS 
AUTHORIZED 
TO 
ADVANCE 
THE 
FOREGOING 
COSTS 
AND 
EXPENSES, 
AND 
COLLECT 
PAYMENT, AS AND WHEN FUNDS BECOME AVAILABLE. 
13) CHARGE REASONABLE FEES FOR THE LIQUIDATION OF 
THE BANK FROM THE ASSETS OF THE BANK: PROVIDED 
THAT, PAYMENT OF THESE FEES, INCLUDING ANY UNPAID 
ADVANCES 
UNDER 
THE 
IMMEDIATELY 
PRECEDING 
PARAGRAPH, SHALL BE SUBJECT TO APPROVAL BY THE 
LIQUIDATION COURT; 
14) DISTRIBUTE THE AVAILABLE ASSETS OF THE CLOSED 
BANK, IN CASH OR IN KIND, TO ITS CREDITORS IN 
ACCORDANCE WITH THE RULES ON CONCURRENCE AND 
PREFERENCE OF CREDITS UNDER THE CIVIL CODE OR 
OTHER LAWS; 
15) DISPOSE RECORDS OF THE CLOSED BANK THAT ARE NO 
LONGER NEEDED IN THE LIQUIDATION IN ACCORDANCE 
WITH GUIDELINES SET BY THE PDIC BOARD OF DIRECTORS, 
NOTWITHSTANDING THE LAWS ON ARCHIVAL PERIOD AND 
DISPOSAL OF RECORDS; 
39 


1 
16) EXERCISE SUCH OTHER POWERS AS ARE INHERENT AND 
2 
NECESSARY FOR THE EFFECTIVE DISCHARGE OF THE 
3 
DUTIES OF THE CORPORATION AS RECEIVER. 
4 
THE BOARD OF DIRECTORS SHALL ADOPT SUCH POLICIES AND 
5 
GUIDELINES AS MAY BE NECESSARY FOR THE PERFORMANCE 
6 
OF THE ABOVE POWERS BY PERSONNEL, DEPUTIES, ASSISTANTS 
7 
AND AGENTS OF THE CORPORATION. 
8 
9 
(C) AFTER THE PAYMENT OF ALL LIABILITIES AND CLAIMS AGAINST 
10 
THE CLOSED BANK, THE CORPORATION SHALL PAY SURPLUS, IF ANY, 
11 
DIVIDENDS AT THE LEGAL RATE OF INTEREST FROM DATE OF 
12 
TAKEOVER TO DATE OF DISTRIBUTION TO CREDITORS AND CLAIMANTS 
13 
OF THE CLOSED BANK IN ACCORDANCE WITH THE RULES ON 
14 
CONCURRENCE AND PREFERENCE OF CREDITS UNDER THE CIVIL CODE 
15 
OR OTHER LAWS BEFORE DISTRIBUTION TO THE SHAREHOLDERS OF 
16 
THE CLOSED BANK. 
17 
(d) THE OFFICERS, EMPLOYEES, DEPUTIES, ASSISTANTS AND AGENTS 
18 
OF THE RECEIVER SHALL HAVE NO LIABILITY AND SHALL NOT BE 
19 
SUBJECT TO ANY ACTION, CLAIM OR DEMAND IN CONNECTION WITH 
20 
ANY ACT DONE OR OMITTED TO BE DONE BY THEM IN GOOD FAITH IN 
21 
CONNECTION WITH THE EXERCISE OF THEIR POWERS AND FUNCTIONS 
22 
UNDER THIS ACT AND OTHER APPLICABLE LAWS, OR OTHER ACTIONS 
23 
DULY APPROVED BY THE COURT. 
24 
(e) THE PLACEMENT OF A BANK UNDER LIQUIDATION SHALL HAVE THE 
25 
FOLLOWING EFFECTS: 
40 


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2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
1) ON THE CORPORATE FRANCHISE OR EXISTENCE 
UPON PLACEMENT BY THE MONETARY BOARD OF A BANK 
UNDER LIQUIDATION, IT SHALL CONTINUE AS A BODY 
CORPORATE UNTIL THE TERMINATION OF THE WINDING-UP 
PERIOD 
UNDER 
SECTION 16 
OF 
THIS 
ACT. 
SUCH 
CONTINUATION AS A BODY CORPORATE SHALL ONLY BE 
FOR THE PURPOSE OF LIQUIDATING, SETTLING AND 
CLOSING 
ITS 
AFFAIRS 
AND 
FOR 
THE 
DISPOSAL, 
CONVEYANCE OR DISTRIBUTION OF ITS ASSETS PURSUANT 
TO THIS ACT. THE RECEIVER SHALL REPRESENT THE 
CLOSED BANK IN ALL CASES BY OR AGAINST THE CLOSED 
BANK AND PROSECUTE AND DEFEND SUITS BY OR 
AGAINST IT. IN NO CASE SHALL THE BANK BE REOPENED 
AND PERMITTED TO RESUME BANKING BUSINESS AFTER 
BEING PLACED UNDER LIQUIDATION. 
2) ON THE POWERS AND FUNCTIONS OF ITS DIRECTORS, 
OFFICERS AND STOCKHOLDERS 
THE POWERS, VOTING RIGHTS, FUNCTIONS AND DUTIES, 
AS WELL AS THE ALLOWANCES, REMUNERATION AND 
PERQUISITES 
OF 
THE 
DIRECTORS, 
OFFICERS, 
AND 
STOCKHOLDERS OF SUCH BANK ARE TERMINATED UPON 
ITS CLOSURE. ACCORDINGLY, THE DIRECTORS, OFFICERS, 
AND 
STOCKHOLDERS 
SHALL 
BE 
BARRED 
FROM 
INTERFERING IN ANY WAY WITH THE ASSETS, RECORDS, 
AND AFFAIRS OF THE BANK. 
41 


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 
THE 
RECEIVER SHALL EXERCISE ALL AUTHORITIES AS 
MAY BE REQUIRED TO FACILITATE THE LIQUIDATION OF 
THE CLOSED BANK FOR THE BENEFIT OF ALL ITS 
CREDITORS. 
3) ON THE ASSETS 
UPON SERVICE OF NOTICE OF CLOSURE AS PROVIDED IN 
SECTION 14 OF THIS ACT, ALL THE ASSETS OF THE CLOSED 
BANK SHALL BE DEEMED IN CUSTODIA LEGIS IN THE 
HANDS OF THE RECEIVER AND AS SUCH THESE ASSETS 
MAY NOT BE SUBJECT TO ATTACHMENT, GARNISHMENT, 
EXECUTION, LEVY OR ANY OTHER COURT PROCESSES. A 
JUDGE, OFFICER OF THE COURT OR ANY PERSON WHO 
SHALL ISSUE, ORDER, PROCESS OR CAUSE THE ISSUANCE 
OR IMPLEMENTATION OF THE GARNISHMENT ORDER, LEVY, 
ATTACHMENT OR EXECUTION, SHALL BE LIABLE UNDER 
SECTION 27 OF 
THIS ACT: 
PROVIDED, HOWEVER, THAT 
COLLATERALS SECURING THE LOANS AND ADVANCES 
GRANTED BY THE BANGKO SENTRAL NG PlliPINAS SHALL 
NOT BE INCLUDED IN THE ASSETS OF THE CLOSED BANK 
FOR DISTRIBUTION TO OTHER CREDITORS: PROVIDED, 
FURTHER, THAT THE PROCEEDS IN EXCESS OF THE 
AMOUNT SECURED SHALL BE RETURNED BY THE BANGKO 
SENTRAL TO THE RECEIVER. 
ANY PRELIMINARY ATTACHMENT OR GARNISHMENT ON 
ANY OF THE ASSETS OF THE CLOSED BANK EXISTING AT 
42 


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2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
THE TIME OF CLOSURE SHALL NOT GIVE ANY PREFERENCE 
TO THE ATTACHING OR GARNISHING PARTY. 
UPON 
MOTION 
OF 
THE 
RECEIVER, 
THE 
PRELIMINARY 
ATTACHMENT OR GARNISHMENT SHALL BE LIFTED AND/OR 
DISCHARGED. 
4) ON LABOR RELATIONS 
NOTWITHSTANDING THE PROVISIONS OF THE LABOR 
CODE, 
THE 
EMPLOYER-EMPLOYEE 
RELATIONSHIP 
BETWEEN THE CLOSED BANK AND ITS EMPLOYEES SHALL 
BE DEEMED TERMINATED UPON SERVICE OF THE NOTICE 
OF CLOSURE OF THE BANK IN ACCORDANCE WITH THIS 
ACT. 
PAYMENT OF 
SEPARATION 
PAY OR BENEFITS 
PROVIDED FOR BY LAW SHALL BE MADE FROM AVAILABLE 
ASSETS OF THE BANK IN ACCORDANCE WITH THE RULES 
ON CONCURRENCE AND PREFERENCE OF CREDITS UNDER 
THE CIVIL CODE OR OTHER LAWS. 
5) CONTRACTUAL OBLIGATIONS 
THE RECEIVER MAY CANCEL, TERMINATE, RESCIND OR 
REPUDIATE ANY CONTRACT OF THE CLOSED BANK THAT IS 
NOT NECESSARY FOR THE ORDERLY LIQUIDATION OF THE 
BANK, OR IS GROSSLY DISADVANTAGEOUS TO THE 
CLOSED BANK, OR FOR ANY GROUND PROVIDED BY LAW. 
6) ON INTEREST PAYMENTS 
43 


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3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
THE LIABILITY OF A BANK TO PAY INTEREST ON DEPOSITS 
AND ALL OTHER OBLIGATIONS AS OF CLOSURE SHALL 
CEASE UPON ITS CLOSURE BY THE MONETARY BOARD 
WITHOUT PREJUDICE TO THE FIRST PARAGRAPH OF 
SECTION 85 OF REPUBLIC ACT NO. 7653 (THE NEW 
CENTRAL BANK ACT): PROVIDED, THAT, THE RECEIVER 
SHALL HAVE THE 
AUTHORITY, WITHOUT NEED 
FOR 
APPROVAL OF THE LIQUIDATION COURT, TO ASSIGN, AS 
PAYMENT TO SECURED CREDITORS, THE BANK ASSETS 
SERVING AS COLLATERALS TO THEIR RESPECTIVE LOANS 
UP TO THE EXTENT OF THE OUTSTANDING OBLIGATIONS, 
INCLUDING INTEREST AS OF DATE OF CLOSURE OF THE 
BANK, AS VALIDATED BY THE RECEIVER. THE VALUATION 
OF THE ASSET SHALL BE BASED ON THE PREVAILING 
MARKET VALUE OF THE COLLATERALS AS APPRAISED BY 
AN INDEPENDENT APPRAISER ON AN "AS IS WHERE IS" 
BASIS. 
7) LIABILITY FOR PENALTIES AND SURCHARGES FOR LATE 
PAYMENT AND NON-PAYMENT OF TAXES 
FROM THE TIME OF CLOSURE, THE CLOSED BANK SHALL 
NOT BE LIABLE FOR THE PAYMENT OF PENALTIES AND 
SURCHARGES ARISING FROM THE LATE PAYMENT OR 
NONPAYMENT OF REAL PROPERTY TAX, CAPITAL GAINS 
TAX, TRANSFER TAX AND SIMILAR CHARGES. 
44 


1 
2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
8) BANK CHARGES AND FEES ON SERVICES 
THE RECEIVER MAY IMPOSE, ON BEHALF OF THE CLOSED 
BANK, CHARGES AND FEES FOR SERVICES RENDERED 
AFTER BANK CLOSURE, SUCH AS, BUT NOT LIMITED TO, 
THE 
EXECUTION 
OF 
PERTINENT 
DEEDS 
AND 
CERTIFICATIONS. 
9) ACTIONS PENDING FOR OR AGAINST THE CLOSED BANK 
EXCEPT FOR ACTIONS PENDING BEFORE THE SUPREME 
COURT, ACTIONS PENDING FOR OR AGAINST THE CLOSED 
BANK IN ANY COURT OR QUASI-JUDICIAL BODY SHALL, 
UPON MOTION OF THE RECEIVER, BE SUSPENDED FOR A 
PERIOD NOT EXCEEDING ONE HUNDRED EIGHTY (180) DAYS 
AND 
REFERRED 
TO 
MANDATORY 
MEDIATION. 
UPON 
TERMINATION OF THE MEDIATION, THE CASE SHALL BE 
REFERRED BACK TO THE COURT OR QUASI-JUDICIAL BODY 
FOR FURTHER PROCEEDINGS. 
10) FINAL DECISIONS AGAINST THE CLOSED BANK 
THE EXECUTION AND ENFORCEMENT OF A FINAL DECISION 
OF A COURT OTHER THAN THE LIQUIDATION COURT 
AGAINST THE ASSETS OF A CLOSED BANK SHALL BE 
STAYED. THE PREVAILING PARTY SHALL FILE THE FINAL 
DECISION AS A CLAIM WITH THE LIQUIDATION COURT AND 
SETTLED 
IN 
ACCORDANCE 
WITH 
THE 
RULES 
ON 
45 


2 
3 
4 
5 
6 
7 
8 
9 
10 
I 1 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
CONCURRENCE AND PREFERENCE OF CREDITS UNDER 
THE CIVIL CODE OR OTHER LAWS. 
11) DOCKET AND OTHER COURT FEES 
PAYMENT OF DOCKET AND OTHER COURT FEES RELATING 
TO ALL CASES OR ACTIONS FILED BY THE RECEIVER WITH 
ANY JUDICIAL OR QUASI-JUDICIAL BODIES SHALL BE 
DEFERRED UNTIL THE ACTION IS TERMINATED WITH 
FINALITY. ANY SUCH FEES SHALL CONSTITUTE AS A FIRST 
LIEN ON ANY JUDGMENT IN FAVOR OF THE CLOSED BANK 
OR IN CASE OF UNFAVORABLE JUDGMENT, SUCH FEES 
SHALL BE PAID AS LIQUIDATION COSTS AND EXPENSES 
DURING THE DISTRIBUTION OF THE ASSETS OF THE 
CLOSED BANK. 
12) ALL ASSETS, RECORDS, AND DOCUMENTS IN THE 
POSSESSION OF THE CLOSED BANK AT THE TIME OF ITS 
CLOSURE ARE PRESUMED HELD BY THE BANK IN THE 
CONCEPT OF AN OWNER. 
13) THE 
EXERCISE 
OF 
AUTHORITY, 
FUNCTIONS, 
AND 
DUTIES BY THE RECEIVER UNDER THIS ACT SHALL BE 
PRESUMED TO HAVE BEEN PERFORMED IN THE REGULAR 
COURSE OF BUSINESS. 
14)ASSETS AND DOCUMENTS OF THE CLOSED BANK 
SHALL 
RETAIN 
THEIR 
PRIVATE 
NATURE 
EVEN 
IF 
ADMINISTERED BY THE RECEIVER. MATTERS RELATING TO 
46 


THE EXERCISE BY THE RECEIVER OF THE FUNCTIONS 
2 
UNDER THIS ACT SHALL BE SUBJECT TO VISITORIAL AUDIT 
3 
ONLY BY THE COMMISSION ON AUDIT. 
4 
SECTION 27, A new section entitled Section 14 of the same Act is hereby 
5 
inserted between Sections 13 and 15 which shall read as follows: 
6 
"NOTICE OF CLOSURE AND TAKEOVER ACTIVITIES 
7 
SECTION 14. (a) UPON THE DESIGNATION OF THE CORPORATION 
8 
AS RECEIVER OF A CLOSED BANK, IT SHALL SERVE A NOTICE OF 
, 9 
CLOSURE TO THE HIGHEST-RANKING OFFICER OF THE BANK 
10 
PRESENT IN THE BANK PREMISES, OR IN THE ABSENCE OF SUCH 
11 
OFFICER, POST THE NOTICE OF CLOSURE IN 
THE BANK 
12 
PREMISES OR ON ITS MAIN ENTRANCE. THE CLOSURE OF THE 
13 
BANK SHALL BE DEEMED EFFECTIVE UPON THE SERVICE OF THE 
14 
NOTICE OF CLOSURE. 
THEREAFTER, THE RECEIVER SHALL 
15 
TAKEOVER THE BANK AND EXERCISE THE POWERS OF THE 
16 
RECEIVER AS PROVIDED IN THIS ACT. 
17 
(b) 
THE 
RECEIVER 
SHALL 
HAVE 
AUTHORITY 
TO 
USE 
18 
REASONABLE FORCE, INCLUDING THE AUTHORITY TO FORCE 
19 
OPEN THE PREMISES OF THE BANK, AND EXERCISE SUCH ACTS 
20 
NECESSARY TO TAKE ACTUAL PHYSICAL POSSESSION AND 
21 
CUSTODY OF THE BANK AND ALL ITS ASSETS, RECORDS, 
22 
DOCUMENTS, AND TAKE CHARGE OF ITS AFFAIRS UPON THE 
23 
SERVICE OF THE NOTICE OF CLOSURE, 
47 


1 
(e) DIRECTORS, OFFICERS, EMPLOYEES OR AGENTS OF A BANK 
2 
HOLD MONEY AND OTHER ASSETS OF THE BANK IN TRUST OR 
3 
UNDER ADMINISTRATION OR MANAGEMENT BY THEM FOR THE 
4 
BANK IN THEIR FIDUCIARY CAPACITY. UPON SERVICE OF THE 
5 
NOTICE OF CLOSURE TO THE BANK, ALL DIRECTORS, OFFICERS, 
6 
EMPLOYEES OR AGENTS OF THE CLOSED BANK SHALL HAVE 
7 
THE DUTY TO IMMEDIATELY ACCOUNT FOR, SURRENDER AND 
8 
TURN OVER TO THE RECEIVER, AND PROVIDE INFORMATION 
9 
RELATIVE TO, THE ASSETS, RECORDS, AND AFFAIRS OF THE 
10 
CLOSED 
BANK 
IN 
THEIR 
POSSESSION, 
CUSTODY, 
11 
ADMINISTRATION OR MANAGEMENT. 
12 
(d) WHEN THE CIRCUMSTANCES SO WARRANT, THE LOCAL 
13 
GOVERNMENT 
UNIT 
AND 
LAW 
ENFORCEMENT 
AGENCIES 
14 
CONCERNED SHALL, UPON REQUEST, IMMEDIATELY PROVIDE 
15 
ASSISTANCE TO THE RECEIVER DURING THE SERVICE OF NOTICE 
16 
OF CLOSURE AND ACTUAL TAKEOVER OPERATIONS TO ENSURE 
17 
THE ORDERLY CONDUCT THEREOF AND THE SECURITY AND 
18 
SAFETY OF THE PERSONNEL OF THE RECEIVER AND THE 
19 
EMPLOYEES OF THE CLOSED BANK." 
20 
SECTION 28. A new section entitled Section 15 of the same Act is hereby 
21 
inserted between Sections 14 and 16 which shall read as follows: 
22 
"PURCHASE OF ASSETS AND ASSUMPTION OF LIABILITIES 
23 
SECTION 15. (a) THE RECEIVER SHALL HAVE THE AUTHORITY TO 
24 
FACILITATE AND IMPLEMENT THE PURCHASE OF THE ASSETS OF 
25 
THE CLOSED BANK AND THE ASSUMPTION OF ITS LIABILITIES BY 
48 


2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
ANOTHER INSURED BANK, WITHOUT NEED FOR APPROVAL OF 
THE LIQUIDATION COURT. THE EXERCISE OF THIS AUTHORITY 
SHALL BE IN ACCORDANCE WITH THE RULES ON CONCURRENCE 
AND PREFERENCE OF CREDITS UNDER THE CIVIL CODE OR 
OTHER LAWS, SUBJECT TO SUCH TERMS AND CONDITIONS AS 
THE CORPORATION MAY PRESCRIBE. THE DISPOSITION OF THE 
BRANCH LICENSES AND OTHER BANK LICENSES OF THE CLOSED 
BANK SHALL BE SUBJECT TO THE APPROVAL OF THE BANGKO 
SENTRAL NG PILIPINAS. 
(b) SUCH ACTION OF THE RECEIVER TO DETERMINE WHETHER A 
BANK MAY BE THE SUBJECT OF A PURCHASE OF ASSETS AND 
ASSUMPTION OF LIABILITIES TRANSACTION SHALL BE FINAL AND 
EXECUTORY, AND MAY NOT BE SET ASIDE BY ANY COURT." 
SECTION 29. A new section entitled Section [17] 16 of the same Act is hereby 
inserted between Sections [16] 15 and [18] 17 which shall read as follows: 
"CONVENTIONAL LIQUIDATION 
A. ASSET MANAGEMENT AND CONVERSION 
SECTION 16. (A) THE ASSETS GATHERED BY THE RECEIVER 
SHALL BE EVALUATED AND VERIFIED AS TO THEIR EXISTENCE, 
OWNERSHIP, CONDITION, AND OTHER FACTORS TO DETERMINE 
THEIR 
REALIZABLE 
VALUE. 
IN 
THE 
MANAGEMENT, 
PRESERVATION AND DISPOSITION OF ASSETS, THE RECEIVER 
SHALL 
BE 
GUIDED 
BY 
COST-BENEFIT 
CONSIDERATIONS, 
49 


1 
RESOURCES OF THE CLOSED BANK, AND POTENTIAL ASSET 
2 
RECOVERY. 
3 
(B) THE CONVERSION OF THE ASSETS OF THE CLOSED BANK 
4 
SHALL BE CARRIED OUT IN A FAIR AND TRANSPARENT MANNER 
5 
IN ACCORDANCE WITH THE RULES AND PROCEDURES AS MAY 
6 
BE DETERMINED BY THE RECEIVER. 
7 
(C) IN THE MANAGEMENT AND/OR CONVERSION OF THE ASSETS 
8 
OF THE CLOSED BANK, THE RECEIVER SHALL HAVE THE 
9 
AUTHORITY TO: 
10 
1) REPRESENT THE CLOSED BANK BEFORE THE LAND 
11 
REGISTRATION AUTHORITY (LRA), BUREAU OF LANDS, 
12 
REGISTER OF DEEDS, THE LAND TRANSPORTATION OFFICE 
13 
(L TO), THE ASSESSOR'S OFFICE OR OTHER APPROPRIATE 
14 
OFFICE 
OF 
THE 
LOCAL 
GOVERNMENT 
UNIT, 
THE 
15 
SECURITIES AND EXCHANGE COMMISSION (SEC), OR SUCH 
16 
OTHER SIMILAR GOVERNMENT AGENCIES OR PRIVATE 
17 
ENTITIES IN: 
18 
19 
20 
21 
22 
23 
A. VERIFYING 
THE 
AUTHENTICITY 
OF 
OWNERSHIP 
DOCUMENTS; 
B. REGISTERING THE INTEREST OF THE CLOSED BANK ON 
A SPECIFIC PROPERTY; 
C. CONSOLIDATING OWNERSHIP OVER AN ASSET OF THE 
CLOSED BANK; 
50 


2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
D. SECURING CERTIFIED TRUE COPIES OF DOCUMENTS 
HELD BY THE 
FOREGOING AGENCIES/ENTITIES IN 
RELATION TO AN ASSET OF THE CLOSED BANK; 
E. SECURING THE APPROPRIATE CERTIFICATION FROM 
THE FOREGOING AGENCIES/ENTITIES IN RELATION TO 
AN ASSET OF THE CLOSED BANK; AND 
F. 
PERFORMING OTHER RELATED ACTIVITIES; 
2) CONDUCT A PHYSICAL OR OCULAR INSPECTION OF THE 
PROPERTIES OWNED BY, OR MORTGAGED TO, THE CLOSED 
BANK, TO DETERMINE THEIR EXISTENCE AND PRESENT 
CONDITION; 
3) DETERMINE 
THE 
DISPOSAL 
PRICE 
OF 
ASSETS 
IN 
ACCORDANCE WITH GENERALLY ACCEPTED VALUATION 
PRINCIPLES, STANDARDS AND PRACTICES, SUBJECT TO 
SUCH GUIDELINES AS THE RECEIVER MAY DETERMINE; 
4) DISPOSE REAL OR PERSONAL PROPERTIES OF THE 
CLOSED BANK THROUGH BIDDING, NEGOTIATED SALE OR 
ANY OTHER MODE INCLUDING LEASE WITH OPTION TO 
PURCHASE, WHETHER BY PIECE OR BY LOT, AS MAY BE 
REASONABLY DETERMINED BY THE RECEIVER BASED ON 
COST 
BENEFIT 
CONSIDERATIONS 
AND 
TO 
ALLOW 
EFFICIENT DISTRIBUTION OF ASSETS TO CREDITORS; AND 
5) ENGAGE THIRD PARTIES TO ASSIST IN THE LIQUIDATION, 
MANAGE AND/OR DISPOSE THE ASSETS, HANDLE CASES 
51 


FILED AGAINST OR BY THE CLOSED BANK, SUBJECT TO 
2 
SUCH GUIDELINES AS DETERMINED BY THE RECEIVER. 
3 
(D) NOTWITHSTANDING ANY PROVISION OF LAW TO THE 
4 
CONTRARY, THE FOLLOWING RULES SHALL APPLY TO THE 
5 
MANAGEMENT ANDIOR CONVERSION BY THE RECEIVER OF THE 
6 
ASSETS OF THE CLOSED BANK: 
7 
1) UPON NOTIFICATION OF THE CLOSURE OF A BANK, THE 
8 
LAND REGISTRATION AUTHORITY, BUREAU OF LANDS, 
9 
REGISTER OF DEEDS, LAND TRANSPORTATION OFFICE, 
10 
ASSESSOR'S OFFICE OR OTHER APPROPRIATE OFFICE OF 
11 
THE LOCAL GOVERNMENT UNIT, OR SUCH OTHER SIMILAR 
12 
GOVERNMENT 
AGENCIES 
SHALL 
NOT 
ALLOW 
ANY 
13 
TRANSACTION AFFECTING THE ASSETS OF THE CLOSED 
14 
BANK WITHOUT THE CONSENT OF THE RECEIVER. 
15 
2) 
UPON ISSUANCE BY THE MONETARY BOARD OF THE 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
RESOLUTION ORDERING THE CLOSURE OF A BANK, ANY 
PERSON OR ENTITY IN CUSTODY OR POSSESSION OF 
ASSETS OR RECORDS OF THE CLOSED BANK, INCLUDING, 
BUT NOT LIMITED TO, 
THE CLOSED BANK'S DEPOSIT 
ACCOUNTS, TITLES TO REAL PROPERTY, COLLATERALS, 
PROMISSORY NOTES, EVIDENCE OF INDEBTEDNESS OR 
INVESTMENTS SHALL IMMEDIATELY TURN OVER CUSTODY 
OF SAID ASSETS AND RECORDS TO THE RECEIVER. SUCH 
OBLIGATION SHALL NOT COVER EVIDENCES OF DEPOSIT 
SUCH AS PASSBOOKS OR CERTIFICATES OF DEPOSIT 
ISSUED BY THE BANK TO ITS DEPOSITORS. PENDING 
52 


1 
TURNOVER, ALL PERSONS OR ENTITIES IN CUSTODY OR 
2 
POSSESSION OF ANY ASSET OR RECORD OF THE CLOSED 
3 
BANK SHALL HOLD THE SAID ASSETS OR RECORDS IN 
4 
TRUST FOR THE RECEIVER. 
5 
3) THE PERSONS OR ENTITIES IN CUSTODY OR POSSESSION 
6 
OF SUCH ASSET SHALL NOT ALLOW, AUTHORIZE OR 
7 
CAUSE 
THE 
WITHDRAWAL, 
TRANSFER, 
DISPOSITION, 
8 
REMOVAL, 
CONVERSION, 
CONCEALMENT, 
OR 
OTHER 
9 
TRANSACTION INVOLVING OR RELATING TO THE SUBJECT 
10 
ASSET, UNLESS OTHERWISE DIRECTED BY THE RECEIVER. 
11 
(E) THE RECEIVER SHALL HAVE THE AUTHORITY TO INVEST 
12 
FUNDS RECEIVED FROM THE CONVERSION OF THE ASSETS OF 
13 
THE CLOSED BANK IN GOVERNMENT SECURITIES, OTHER 
14 
GOVERNMENT-GUARANTEED 
MARKETABLE 
SECURITIES 
OR 
IS 
INVESTMENT-GRADE DEBT INSTRUMENTS. 
16 
(F) THE PROCEEDS OF THE SALE OF THE BANK AND BRANCH 
17 
LICENSES SHALL BE FOR THE BENEFIT OF THE CREDITORS OF 
18 
THE 
CLOSED 
BANK 
WHICH 
SHALL 
BE 
DISTRIBUTED 
IN 
19 
ACCORDANCE 
WITH 
THIS 
ACT 
AND 
THE 
RULES 
ON 
20 
CONCURRENCE AND PREFERENCE OF CREDITS UNDER THE CIVIL 
21 
CODE OR OTHER LAWS. 
22 
B. PETITION FOR ASSISTANCE 
23 
IN THE LIQUIDATION OF A CLOSED BANK 
53 


1 
(G) A PETITION FOR ASSISTANCE IN THE LIQUIDATION IS A 
2 
SPECIAL PROCEEDING FOR THE LIQUIDATION OF A CLOSED 
3 
BANK, AND INCLUDES THE DECLARATION OF THE CONCOMITANT 
4 
RIGHT OF ITS CREDITORS AND THE ORDER OF PAYMENT OF 
5 
THEIR VALID CLAIMS IN THE DISPOSITION OF ITS ASSETS. 
6 
ANY PROCEEDING INITIATED UNDER THIS SECTION SHALL BE 
7 
CONSIDERED IN REM. 
JURISDICTION OVER ALL PERSONS 
8 
AFFECTED BY THE PROCEEDING SHALL BE CONSIDERED AS 
9 
ACQUIRED UPON PUBLICATION OF THE ORDER SETTING THE 
10 
CASE FOR INITIAL HEARING IN ANY NEWSPAPER OF GENERAL 
11 
CIRCULATION IN THE PHILIPPINES. 
12 
(H) 
THE 
LIQUIDATION 
COURT 
SHALL 
HAVE 
EXCLUSIVE 
13 
JURISDICTION TO ADJUDICATE DISPUTED CLAIMS AGAINST THE 
14 
CLOSED BANKS, ASSIST IN THE ENFORCEMENT OF INDIVIDUAL 
15 
LIABILITIES OF THE STOCKHOLDERS, DIRECTORS AND OFFICERS 
16 
AND DECIDE ON ALL OTHER ISSUES AS MAY BE MATERIAL TO 
17 
IMPLEMENT 
THE 
DISTRIBUTION 
PLAN 
ADOPTED 
BY 
THE 
18 
CORPORATION FOR GENERAL APPLICATION TO ALL CLOSED 
19 
BANKS. 
20 
(I) THE PROVISIONS OF REPUBLIC ACT NO. 8799, OTHERWISE 
21 
KNOWN 
AS 
"THE 
SECURITIES 
REGULATION 
CODE," 
AND 
22 
SUPREME COURT ADMINISTRATIVE MATTER NO. 00-8-10-SC, 
23 
ENTITLED, "THE RULES OF 
PROCEDURE ON 
CORPORATE 
24 
REHABILITATION," SHALL NOT BE APPLICABLE TO THE PETITION 
25 
FOR ASSISTANCE IN THE LIQUIDATION OF THE CLOSED BANK. 
54 


1 
(J) THE PETITION SHALL BE FILED IN THE REGIONAL TRIAL 
2 
COURT WHICH HAS JURISDICTION OVER THE PRINCIPAL OFFICE 
3 
OF THE CLOSED BANK OR THE PRINCIPAL OFFICE OF THE 
4 
RECEIVER, AT THE OPTION OF THE LATTER. 
5 
6 
(K) THE PETITION SHALL BE FILED EX PARTE WITHIN A 
7 
REASONABLE PERIOD FROM RECEIPT OF THE MONETARY BOARD 
8 
RESOLUTION PLACING THE BANK UNDER LIQUIDATION. 
9 
(L) ALL PERSONS OR ENTITIES WITH CLAIMS AGAINST THE 
10 
ASSETS OF THE CLOSED BANK SHALL FILE THEIR CLAIMS WITH 
11 
THE RECEIVER WITHIN SIXTY (60) DAYS FROM 
DATE OF 
12 
PUBLICATION OF THE NOTICE OF CLOSURE. CLAIMS FILED 
13 
OUTSIDE THE FOREGOING PRESCRIBED PERIOD SHALL BE 
14 
DISALLOWED. 
15 
CLAIMS DENIED BY THE RECEIVER SHALL BE FILED WITH THE 
16 
LIQUIDATION COURT WITHIN SIXTY (60) DAYS FROM RECEIPT OF 
17 
THE FINAL NOTICE OF DENIAL OF CLAIM. 
18 
(M) A CLAIM WHOSE VALIDITY HAS NOT YET BEEN DETERMINED 
19 
WITH FINALITY AT THE TIME OF THE SUBMISSION OF THE FINAL 
20 
ASSET DISTRIBUTION PLAN, EITHER BY REASON OF A PENDING 
21 
SUIT OR FOR WHATEVER REASON, SHALL BE CONSIDERED AS 
22 
CONTINGENT CLAIM AND SHALL NOT BE PAID UNDER THE 
23 
PROPOSED FINAL ASSET DISTRIBUTION PLAN. 
24 
(N) UPON FINALITY OF THE ORDER APPROVING THE FINAL ASSET 
25 
DISTRIBUTION PLAN, THE PETITION FOR ASSISTANCE IN THE 
55 


LIQUIDATION OF A CLOSED BANK SHALL HENCEFORTH BE, FOR 
2 
ALL INTENTS AND PURPOSES, CONSIDERED CLOSED AND 
3 
TERMINATED AND THE RECEIVER, ITS OFFICERS, EMPLOYEES OR 
4 
AGENTS, ARE FOREVER DISCHARGED FROM ANY AND ALL 
5 
CLAIMS ANDIOR LIABILITY ARISING FROM OR IN CONNECTION 
6 
WITH THE LIQUIDATION OF THE CLOSED BANK. 
7 
(0) THE RECEIVER SHALL SUBMIT A FINAL REPORT ON THE 
8 
IMPLEMENTATION 
OF 
THE 
APPROVED 
FINAL 
ASSET 
9 
DISTRIBUTION PLAN TO THE MONETARY BOARD AND THE 
10 
SECURITIES AND EXCHANGE COMMISSION (SEC) AFTER THE 
11 
EXPIRATION OF THE WINDING-UP PERIOD PROVIDED IN THIS ACT. 
12 
(P) 
THE 
SUPREME 
COURT 
SHALL 
PROMULGATE 
THE 
13 
APPROPRIATE 
PROCEDURAL 
RULES 
TO 
IMPLEMENT 
THIS 
14 
SECTION. 
15 
C. WINDING-UP 
16 
(Q) THE CREDITORS SHALL HAVE A PERIOD OF SIX (6) MONTHS 
17 
FROM DATE OF PUBLICATION OF NOTICE OF THE APPROVAL BY 
18 
THE COURT OF THE FINAL ASSET DISTRIBUTION PLAN OF THE 
19 
CLOSED BANK WITHIN WHICH TO CLAIM PAYMENT OF THE 
20 
PRINCIPAL OBLIGATIONS AND SURPLUS DIVIDENDS. DURING 
21 
THIS SIX-MONTH PERIOD, THE RECEIVER SHALL HOLD AS 
22 
TRUSTEE THE ASSETS ALLOCATED IN 
THE FINAL ASSET 
23 
DISTRIBUTION PLAN FOR SAID CREDITORS. 
56 


FAILURE 
BY 
THE 
CREDITOR 
TO 
COMPLY 
WITH 
THE 
2 
DOCUMENTARY 
REQUIREMENTS 
WITHIN 
THE 
PRESCRIBED 
3 
PERIOD AND/OR REFUSAL TO ACCEPT THE ASSET AS PAYMENT 
4 
SHALL BE DEEMED AS ABANDONMENT OR WAIVER OF HIS RIGHT 
5 
TO PAYMENT. 
6 
(R) THE INDIVIDUAL STOCKHOLDERS OF RECORD OR THEIR 
7 
DULY-AUTHORIZED 
REPRESENTATIVE 
OR 
THE 
COURT-
8 
APPOINTED STOCKHOLDERS' REPRESENTATIVE SHALL HAVE A 
9 
PERIOD OF SIX (6) MONTHS FROM PUBLICATION OF NOTICE OF 
10 
THE 
APPROVAL 
BY THE 
COURT 
OF 
THE 
FINAL 
ASSET 
II 
DISTRIBUTION PLAN OF THE CLOSED BANK WITHIN WHICH TO 
12 
CLAIM THE RESIDUAL ASSETS. DURING THIS SIX- MONTH PERIOD, 
13 
THE 
RECEIVER 
SHALL 
HOLD 
AS 
TRUSTEE 
THE 
ASSETS 
14 
ALLOCATED IN THE FINAL ASSET DISTRIBUTION PLAN FOR SAID 
IS 
STOCKHOLDERS OF RECORD. 
16 
FAILURE BY THE INDIVIDUAL STOCKHOLDERS OF RECORD OR 
17 
THEIR DULY-AUTHORIZED REPRESENTATIVE OR THE COURT-
18 
APPOINTED STOCKHOLDERS' REPRESENTATIVE TO COMPLY 
19 
WITH 
THE 
DOCUMENTARY 
REQUIREMENTS 
WITHIN 
THE 
20 
PRESCRIBED 
PERIOD 
AND/OR REFUSAL 
TO ACCEPT THE 
21 
RESIDUAL 
ASSETS 
IN 
KIND 
SHALL 
BE 
DEEMED 
AS 
22 
ABANDONMENT OR WAIVER OF 
RIGHT TO RECEIVE 
THE 
23 
RESIDUAL ASSETS. 
24 
(S) AFTER THE LAPSE OF THE SIX-MONTH PERIOD PROVIDED IN 
25 
PARAGRAPHS (Q) AND (R) OF THIS SECTION, ALL ASSETS WHICH 
26 
REMAIN 
UNCLAIMED 
BY 
THE 
CREDITORS 
AND/OR 
57 


I 
STOCKHOLDERS OF RECORD SHALL BE TURNED OVER TO THE 
2 
BUREAU OF TREASURY. 
3 
(T) 
THE RECEIVER SHALL CONTINUE TO KEEP ALL THE 
4 
PERTINENT RECORDS OF THE CLOSED BANK FOR A PERIOD OF 
5 
SIX (6) MONTHS FROM DATE OF PUBLICATION OF THE APPROVAL 
6 
OF THE FINAL ASSET DISTRIBUTION PLAN. AFTER THE LAPSE OF 
7 
THIS PERIOD, THE RECEIVER IS AUTHORIZED TO DISPOSE OF THE 
8 
SAME IN ACCORDANCE RULES AND REGULATIONS TO BE 
9 
PRESCRIBED BY THE RECEIVER." 
10 
SECTION 30. Section 13 of the same Act is hereby renumbered as Section [18] 
II 
17. 
12 
SECTION 31. A new section entitled Section [19]18 of the same Act is hereby 
13 
inserted between Sections [18]17 and [20]19 which shall read as follows: 
14 
"DIVIDEND DECLARATION 
IS 
SECTION 18. CONSISTENT WITH THE POLICY OF THE STATE TO 
16 
GENERATE, PRESERVE, MAINTAIN FAITH AND CONFIDENCE IN 
17 
THE COUNTRY'S BANKING SYSTEM, THE CORPORATION SHALL 
18 
BUILD UP AND MAINTAIN THE DEPOSIT INSURANCE FUND (DIF) AT 
19 
tHE TARGET LEVEL SET BY THE PDIC BOARD OF DIRECTORS. 
20 
SUCH TARGET LEVEL SHALL BE SUBJECT TO PERIODIC REVIEW 
21 
AND MAY BE ADJUSTED AS NECESSARY. 
22 
THE CORPORATION IS EXEMPT FROM REPUBLIC ACT NO. 7656; 
I 
I 
23 
INSTEAD, THE CORPORATION SHALL REMIT DIVIDENDS TO THE 
58 


NATIONAL 
GOVERNMENT ONLY 
IF 
THE 
TARGET 
DEPOSIT 
2 
INSURANCE FUND LEVEL FOR THE APPLICABLE YEAR HAS BEEN 
3 
REACHED. FOR PURPOSES OF COMPUTING THE AMOUNT OF 
4 
DIVIDENDS TO BE DECLARED AND REMITTED TO THE NATIONAL 
5 
GOVERNMENT, ALL ASSESSMENT COLLECTIONS SHALL NOT BE 
6 
CONSIDERED AS INCOME. THE DIVIDEND RATE SHALL BE AT 
7 
LEAST FIFTY PERCENT (50%) OF THE INCOME 
FROM OTHER 
8 
SOURCES ONLY." 
9 
SECTION 32. Section 14 of the same Act is accordingly renumbered as Section 
10 
[20] 19 and is hereby amended to read as follows: 
11 
"PAYMENT OF INSURED DEPOSITS 
12 
SECTION [20] 19. Whenever an insured bank shall have been closed by 
13 
the Monetary Board pursuant to Section 30 of R.A. 7653, OR UPON 
14 
EXPIRATION OR REVOCATION OF A BANK'S CORPORATE TERM, 
15 
payment of the insured deposits on such closed bank shall be made by 
16 
the Corporation as soon as possible either (1) by cash or (2) by making 
17 
available to each depositor a transferred deposit in another insured bank 
18 
in an amount equal to insured deposit of such depositor: Provided, 
19 
however, That the Corporation, in its discretion, may require proof of 
20 
claims to be filed before paying the insured deposits, and that in any case 
21 
where the Corporation is not satisfied as to the [viability] VALIDITY of a 
22 
claim for an insured deposit, it may require final determination of a court of 
23 
competent jurisdiction before paying such claim: Provided, further, That 
24 
failure to settle the claim, within six (6) months from the date of filing of 
25 
claim for insured deposit, where such failure was due to grave abuse of 
26 
discretion, gross negligence, bad faith, or malice, shall, upon conviction, 
59 


subject the directors, officers or employees of the Corporation responsible 
2 
for the delay, to imprisonment from six (6) months to one (1) year: 
3 
Provided, fwthermore, That the period shall not apply if the validity of the 
4 
claim requires the resolution of issues of facts and or law by another 
5 
office, body or agency including the case mentioned in the first proviso or 
6 
by the Corporation together with such other office, body or agency." 
7 
SECTION 33. Section 15 of the same Act is accordingly renumbered as Section 
8 
[21] 20 and is hereby amended to read as follows: 
9 
"SECTION [21] 20. The Corporation, upon payment of any depositor as 
10 
provided for in [subsection (c) of this] Section 19 OF THIS ACT, shall be 
11 
subrogated to all rights of the depositor against the closed bank to the 
12 
extent of such payment. Such subrogation shall include the right on the 
13 
part of the Corporation to receive the same dividends and payments from 
14 
the proceeds of the assets of such closed bank and recoveries on account 
15 
of stockholders' liability as would have been payable to the depositor on a 
16 
claim for the insured deposits: [but,] PROVIDED, THAT such depositor 
17 
shall retain his claim for any uninsured portion of his deposit, WHICH 
18 
LEGAL PREFERENCE SHALL BE THE SAME AS THAT OF THE 
19 
SUBROGATED CLAIM OF THE CORPORATION FOR ITS PAYMENT 
20 
OF INSURED DEPOSITS. All payments by the Corporation of insured 
21 
deposits in closed banks partake of the nature of public funds, and as 
22 
such, must be considered a preferred credit [similar to taxes due to the 
23 
National Government] in the order of preference under Article 2244 (G) of 
24 
the New Civil Code.[: Provided, further, That this preference shall be 
25 
likewise effective upon liquidation proceedings already commenced and 
26 
pending as of the approval of this Act, where no distribution of assets has 
27 
been made.]" 
60 


1 
SECTION 34. Section 16 of the same Act is accordingly renumbered as Section 
2 
(22)21 and paragraph (c) thereof is hereby amended to read as follows: 
3 
"(c) Except as otherwise prescribed by the Board of Directors, neither the 
4 
Corporation nor such other insured bank shall be required to recognize as 
5 
the owner of any portion of a deposit [appearing on the recordsJ 
6 
EVIDENCED BY A PASSBOOK, 
CERTIFICATE OF DEPOSIT OR 
7 
OTHER 
EVIDENCE 
OF 
DEPOSIT 
DETERMINED 
BY 
THE 
8 
CORPORATION TO BE AN AUTHENTIC DOCUMENT OR RECORD of 
9 
the closed bank under a name other than that of the claimant, any person 
10 
whose name or interest as such owner is not disclosed on the 
11 
PASSBOOK, CERTIFICATE OF DEPOSIT OR OTHER EVIDENCE OF 
12 
DEPOSIT [records] of such closed bank as part owner of said deposit, if 
13 
such recognition would increase the aggregate amount of the insured 
14 
deposits in such closed bank." 
15 
SECTION 35. Section 17 of the same Act is accordingly renumbered as Section 
16 
[23) 22. 
17 
SECTION 36. Section [23] 22 paragraph (a) of the same Act, as renumbered, is 
18 
hereby amended to read as follows: 
19 
"CORPORATE FUNDS AND ASSETS 
20 
SECTION [23J 22. (a) SUBJECT TO GUIDELINES AND LIMITS AS 
21 
APPROVED BY THE BOARD OF DIRECTORS, [M]money of the 
22 
Corporation denominated in the local currency, not otherwise employed, 
23 
shall be invested in obligations of the Republic of the Philippines or in 
61 


obligations guaranteed as to principal and interest by the Republic of the 
2 
Philippines. 
3 
THE CORPORATION MAY ALSO INVEST IN DEBT INSTRUMENTS 
4 
DENOMINATED 
IN 
FOREIGN 
CURRENCIES 
ISSUED 
OR 
5 
GUARANTEED BY THE REPUBLIC OF THE PHILIPPINES, OR DEBT 
6 
INSTRUMENTS DENOMINATED IN FREELY CONVERTIBLE FOREIGN 
7 
CURRENCIES ISSUED BY SUPRANATIONALS, MULTILATERAL 
8 
AGENCIES, OR FOREIGN GOVERNMENTS WITH AT LEAST AN 
9 
INVESTMENT GRADE CREDIT RATING. 
10 
THE CORPORATION SHALL LIKEWISE BE AUTHORIZED TO BUY 
II 
ANDIOR SELL DEBT INSTRUMENTS AND FOREIGN CURRENCIES 
12 
FROM ANY GOVERNMENT SECURITIES ELIGIBLE DEALERS OR 
13 
ANY COUNTERPARTIES OR BROKERS, ACCREDITED BY THE PDIC 
14 
BOARD. 
IS 
FOR THIS PURPOSE, THE CORPORATION SHALL BE AUTHORIZED 
16 
TO 
OPEN 
SECURITIES 
CUSTODIANSHIP 
AND 
SETTLEMENT 
17 
ACCOUNTS." 
18 
SECTION 37. Section [23] 22 paragraph (b) of the same Act, as renumbered, is 
19 
hereby amended to read as follows: 
20 
"(b) The banking or checking accounts of the Corporation shall be kept 
21 
with the 8angko Sentral ng Pilipinas, [with the Philippine National Bank,] 
22 
or with any other bank designated as depository or fiscal agent of the 
23 
Philippine government." 
62 


SECTION 38. An additional paragraph to Section [23] 22 of the same Act, as 
2 
renumbered, is hereby inserted after paragraph (c) which shall read as follows: 
3 
"(d) ASSETS OF THE CORPORATION SHALL BE EXEMPT FROM 
4 
ATTACHMENT, 
GARNISHMENT OR ANY OTHER ORDER OR 
5 
PROCESS 
OF 
ANY 
COURT, 
AGENCY 
OR 
ANY 
OTHER 
6 
ADMINISTRATIVE BODY." 
7 
SECTION 39. Section 17 paragraph (d) of the same Act is accordingly 
8 
renumbered as Section [23] 22 paragraph (e) and is hereby amended to read as 
9 
follows: 
10 
"FINANCIAL ASSISTANCE 
11 
[(d)] (E) [When the Corporation has determined that an insured bank is in 
12 
danger of closing, in order to prevent such closing,] IN THE EXERCISE 
13 
OF ITS AUTHORITIES UNDER SECTION 11 OF THIS ACT, the 
14 
Corporation [, in the discretion of its Board of Directors,] is authorized to 
15 
make loans to, or purchase the assets of, or assume liabilities of, or make 
16 
deposits in£, such insured bank,): 
17 
1) A BANK IN DANGER OF CLOSING, UPON ITS ACQUISITION 
18 
BY A QUALIFIED INVESTOR; OR 
19 
2) A QUALIFIED INVESTOR, UPON ITS PURCHASE OF ALL 
20 
ASSETS AND ASSUMPTION OF ALL LIABILITIES OF A BANK 
21 
IN DANGER OF CLOSING; OR 
22 
3) A SURVIVING OR CONSOLIDATED INSTITUTION THAT HAS 
23 
MERGED OR CONSOLIDATED WITH A BANK IN DANGER OF 
24 
CLOSING; 
63 


1 
upon such terms and conditionS as the Board of Directors may prescribe, 
2 
when in the opinion of the Board of Directors, [the continued operation of 
3 
such 
bank] 
SUCH 
ACQUISITION, 
PURCHASE 
OF 
ASSETS, 
4 
ASSUMPTION OF LIABILITIES, MERGER OR CONSOLIDATION, is 
5 
essential to provide adequate banking service in the community or 
6 
maintain financial stability in the economy. 
7 
[The authority of the Corporation under the foregoing paragraph to extend 
8 
financial assistance to, assume liabilities of, purchase the assets of an 
9 
insured bank may also be exercised in the case of a closed insured bank 
10 
if the Corporation finds that the resumption of operations of such bank is 
11 
vital to the interests of the community, or a severe financial climate exists 
12 
which threatens the stability of a number of banks possessing significant 
13 
resources: Provided, That the reopening and resumption of operations of 
14 
the closed bank shall be subject to the prior approval of the Monetary 
15 
Board.] 
16 
[The Corporation may provide any corporation acquiring control of, 
17 
merging or consolidating with or acquiring the assets of an insured bank in 
18 
danger of closing in order to prevent such closing or of a closed insured 
19 
bank in order to restore to normal operations, with such financial 
20 
assistance as it could provide an insured bank under this subsection: 
21 
Provided, That, within sixty (60) days from date of assistance the 
22 
Corporation shall submit a report thereof to the Monetary Board.] 
23 
The Corporation, prior to the exercise of the powers under this Section, 
24 
shall determine that actual payoff and liquidation thereof will be more 
25 
expensive than the exercise of this power: Provided, That when the 
64 


1 
Monetary Board has determined that there are systemic consequences of 
2 
a probable failure or closure of an insured bank, the Corporation may 
3 
grant financial assistance to such insured bank in such amount as may be 
4 
necessary to prevent its failure or closure and/or restore the insured bank 
5 
to viable operations, under such terms and conditions as may be deemed 
6 
necessary by the Board of Directors, subject to concurrence by the 
7 
Monetary Board and without additional cost to the Deposit Insurance 
8 
Fund. 
9 
A systemic risk refers to the possibility that failure of one bank to settle net 
10 
transactions with other banks will trigger a chain reaction, depriving other 
11 
banks of funds leading to a general shutdown of normal clearing and 
12 
settlement activity. Systemic risk also means the likelihood of a sudden, 
13 
unexpected collapse of confidence in a significant portion of the banking 
14 
or financial system with potentially large real economic effects. Finally, the 
15 
Corporation may not use its authority under this subsection to purchase 
16 
the voting or common stock of an insured bank but it can enter into and 
17 
enforce agreements that it determines to be necessary to protect its 
18 
financial interests: Provided, That the financial assistance may take the 
19 
form of equity or quasi-equity of the insured bank as may be deemed 
20 
necessary by the Board of Directors with concurrence by the Monetary 
21 
Board: Provided, further, That the Corporation shall dispose of such equity 
22 
as soon as practicable: 
23 
SECTION 40. Section 18 of the same Act is accordingly renumbered as Section 
24 
[24] 23 and is hereby amended to read as follows: 
65 


I 
"AUTHORITY TO BORROW 
2 
SECTION [24] 23. The Corporation is authorized to borrow from the 
3 
Bangko Sentral ng Pilipinas and the Bangko Sentral is authorized to lend 
4 
TO the Corporation on such terms as may be agreed upon by the 
5 
Corporation and the Bangko Sentral, such funds as in the judgment of the 
6 
Board of Directors of the Corporation are from time to time required for 
7 
insurance purposes and financial assistance provided for in Section [17] 
8 
22 (e) of this Act: Provided, That any such loan as may be granted by the 
9 
Bangko Sentral shall be consistent with monetary policy; Provided, 
10 
further, That the rate of interest thereon shall be fixed by the Monetary 
II 
Board [but shall not exceed the treasury bill rate]. 
12 
When in the judgment of the Board of Directors the funds of the 
13 
Corporation are not sufficient to provide for an emergency or urgent need 
14 
to attain the purposes of this Act, the Corporation is likewise authorized to 
IS 
borrow money, obtain loans or arrange credit lines or other credit 
16 
accommodations from any bank [designated as depository or fiscal agent 
17 
of the Philippine Government]: Provided, That such loan shall be of short-
18 
term duration, PROVIDED, FURTHER, THAT NO PRIOR MONETARY 
19 
BOARD OPINION SHALL BE REQUIRED FOR THE CORPORATION 
20 
AND ITS COUNTERPARTIES ON INDIVIDUAL DRAWDOWNS OR 
21 
BORROWINGS WITHIN AN APPROVED BORROWING PROGRAM 
22 
WHERE PRIOR MONETARY BOARD OPINION HAS ALREADY BEEN 
23 
OBTAINED, PURSUANT TO SECTION 123 OF 
REPUBLIC ACT NO. 
24 
7653." 
25 
SECTION 41. Section 19 of the same Act is accordingly renumbered as Section 
26 
[25] 24 and is hereby amended to read as follows: 
66 


1 
"ISSUANCE OF BONDS, DEBENTURES AND OTHER 
2 
OBLIGATIONS 
3 
SECTION [19] 24. With the approval of the President of the Philippines, 
4 
UPON 
THE 
RECOMMENDATION 
OF 
THE 
DEPARTMENT 
OF 
5 
FINANCE, the Corporation is authorized to issue bonds, debentures, and 
6 
other obligations, both local or foreign, as may be necessary for purposes 
7 
of providing liquidity for settlement of insured deposits in closed banks, 
8 
TO FACILITATE THE IMPLEMENTATION OF BANK RESOLUTION 
9 
UNDER SECTION 11 OF THIS ACT, as well as for financial assistance 
10 
as provided herein, Provided, That the Board of Directors shall determine 
11 
the interest rates, maturity and other requirements of said obligations: 
12 
Provided, further, That the Corporation [shall] MAY provide for appropriate 
13 
reserves for the redemption or retirement of said obligation. 
14 
All notes, debentures, bonds, or such obligations issued by the 
15 
Corporation shall be exempt from taxation both as to principal and 
16 
interest, and shall be fully guaranteed by the Government of the Republic 
17 
of the Philippines. Such guarantee, which in no case shall exceed two 
18 
times the Deposit Insurance Fund as of date of the debt issuance, shall be 
19 
expressed on the face thereof. 
20 
THE CORPORATION MAY ISSUE NOTES, DEBENTURES, BONDS, 
21 
OR OTHER DEBT INSTRUMENTS WITHOUT THE APPROVAL OF THE 
22 
PRESIDENT OF THE PHILIPPINES, AS LONG AS THESE SHALL NOT 
23 
BE GUARANTEED BY THE NATIONAL GOVERNMENT. 
67 


The Board of Directors shall have the power to prescribe THE TERMS 
2 
AND CONDITIONS, rules and regulations for the issuance, reissuance, 
3 
servicing, placement and redemption of the bonds herein authorized to be 
4 
issued as well as the registration of such bonds at the request of the 
5 
holders thereof." 
6 
SECTION 42. Section 20 of the same Act is accordingly renumbered as Section 
7 
[26] 25. 
8 
SECTION 43. Section 21 of the same Act is accordingly renumbered as Section 
9 
[27] 26. 
10 
SECTION 44. Section [27] 26 paragraph (f) of the same Act, as renumbered, is 
II 
hereby amended to read as follows: 
12 
"(f) The penalty of IMPRISONMENT OF NOT LESS THAN SIX YEARS 
13 
BUT NOT MORE THAN TWELVE YEARS [prision mayor] or a fine of not 
14 
less than Fifty thousand pesos (P50,000.00) but not more than TEN [Two] 
IS 
million pesos (P10,000,000.00), [(P2,000,000.00),] or both, at the 
16 
discretion of the court, shall be imposed upon [any director, officer, 
17 
employee or agent of a bank]: 
18 
1) ANY DIRECTOR, OFFICER, EMPLOYEE OR AGENT OF A 
19 
BANK FOR: 
20 
a. [for] any willful refusal to submit reports as required by law, 
21 
rules and regulations; 
68 


2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
b. any unjustified refusal to permit examination and audit of the 
deposit records or the affairs of the institution; 
c. any willful making of a false statement or entry in any bank 
report or document required by the Corporation; 
d. submission of false material information in connection with or in 
relation to any financial assistance of the Corporation extended 
to the bank; 
e. splitting of deposits or creation of fictitious OR FRAUDULENT 
loans or deposit accounts. 
Splitting of deposits occurs whenever a deposit account with an 
outstanding balance of more than the statutory maximum 
amount of insured deposit maintained under the name of 
natural or juridical persons is broken down and transferred into 
two (2) or more accounts in the name/s of natural or juridical 
persons or entities who have no beneficial ownership on 
transferred deposits in their names within one hundred twenty 
(120) days immediately preceding or during a bank-declared 
bank holiday, or immediately preceding a closure order issued 
by the Monetary Board of the Bangko Sentral ng Pilipinas for 
the purpose of availing of the maximum deposit insurance 
coverage; 
f. REFUSAL TO RECEIVE THE NOTICE OF CLOSURE AS 
PROVIDED UNDER SECTION 14 OF THIS ACT; 
69 


2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
g. refusal to allow the Corporation to take over a closed bank 
[placed under its receivership] or obstructing such action of the 
Corporation; 
h. refusal to turn over or destroying or tampering bank records; 
i. 
fraudulent disposal, transfer or concealment of any asset, 
property or liability of the closed bank [under the receivership of 
the Corporation]; 
j. 
violation of, or causing any person to violate, the exemption 
from garnishment, levy, attachment or execution provided under 
this Act and the New Central Bank Act; 
k. any willful failure or refusal to comply with, or violation of any 
provision of this Act, or commission of any other irregularities, 
and/or conducting business in an unsafe or unsound manner as 
may be determined by the Board of Directors[,] IN RELATION 
TO SECTION 56 OF REPUBLIC ACT NO. 8791, OR THE 
GENERAL BANKING LAW OF 2000. 
NOTWITHSTANDING ANY LAW TO THE CONTRARY, THE 
FOREGOING 
ACTS 
OF 
DIRECTORS, 
OFFICERS, 
EMPLOYEES OR AGENTS OF THE BANK SHALL BE 
CONSIDERED 
AS 
ADDITIONAL 
GROUNDS 
FOR 
DISQUALIFICATION UNDER THE FIT AND PROPER RULES 
OF THE BANGKO SENTRAL. 
L. "OTHER ACTS INIMICAL TO THE INTEREST OF THE BANK 
OR THE CORPORATION, SUCH AS, BUT NOT LIMITED TO, 
70 


2 
3 
4 
5 
6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
CONFLICT OF INTEREST, DISLOYAL TV, AUTHORIZING 
RELATED 
PARTY 
TRANSACTIONS 
WITH 
TERMS 
DETRIMENTAL TO THE BANK AND ITS STAKEHOLDERS, 
AND UNAUTHORIZED DISCLOSURE OF CONFIDENTIAL 
INFORMATION, 
AS 
MAY BE DETERMINED 
BY THE 
CORPORATION." 
2) ANY PERSON FOR: 
a. REFUSAL TO DISCLOSE INFORMATION, RECORDS OR 
DATA PERTAINING TO THE BANK ACCOUNTS OF A 
CLOSED BANK TO THE RECEIVER; 
b. REFUSAL TO TURN OVER POSSESSION OR CUSTODY OF 
THE ASSET AND RECORD OF THE CLOSED BANK TO THE 
RECEIVER, NOTWITHSTANDING ANY AGREEMENT TO 
THE CONTRARY; 
c. REFUSAL OR DELAYING THE: 
i. VERIFICATION OF AUTHENTICITY OF THE OWNERSHIP 
DOCUMENTS; 
ii. REGISTRATION OF INTEREST OF THE CLOSED BANK 
ON A SPECIFIC PROPERTY; 
iii. CONSOLIDATION OF OWNERSHIP OVER AN ASSET OF 
THE CLOSED BANK; 
71 


iv. ACT OF SECURING CERTIFIED TRUE COPIES OF 
2 
3 
DOCUMENTS IN RELATION TO AN ASSET OF THE 
CLOSED BANK; 
4 
v. ACT 
OF 
SECURING 
THE 
APPROPRIATE 
5 
CERTIFICATION FROM THE AGENCIES OR ENTITIES 
6 
STATED IN SECTION 16 OF THIS ACT IN RELATION TO 
7 
AN ASSET OF THE CLOSED BANK; 
8 
vi. CONDUCT OF A PHYSICAL OR OCULAR INSPECTION 
9 
OF THE PROPERTIES OWNED BY, OR MORTGAGED 
10 
TO, THE CLOSED BANK, TO DETERMINE THEIR 
11 
EXISTENCE AND PRESENT CONDITION; OR 
12 
vii.OTHER RELATED ACTIVITIES OF THE RECEIVER; OR 
13 
d. ALLOWING THE WITHDRAWAL FROM DEPOSITS OR 
14 
DISPOSITION OF ANY ASSET OF THE CLOSED BANK 
15 
OTHER THAN BY THE RECEIVER; 
16 
e. WILLFULLY VIOLATING ANY PROVISION OF THIS ACT; 
17 
18 
F. CONSPIRING OR WILLFULLY PARTICIPATING IN ANY OF 
19 
THE OFFENSES ENUMERATED IN PARAGRAPH 1 OF THIS 
20 
SECTION; 
21 
3) ANY LAW ENFORCEMENT OFFICER OR LOCAL GOVERNMENT 
22 
OFFICIAL WHO REFUSES OR FAILS TO ASSIST THE RECEIVER 
23 
IN THE SERVICE OF THE NOTICE OF CLOSURE, AS PROVIDED 
24 
UNDER SECTION 14 OF THIS ACT." 
72 


1 
SECTION 45. Additional paragraphs to Section [27] 26 of the same Act, as 
2 
renumbered, are hereby inserted after paragraph (g) which shall read as follows: 
3 
"(h) THE PENALTY OF IMPRISONMENT OF NOT LESS THAN TEN 
4 
(10) YEARS BUT NOT MORE THAN TWELVE (12) YEARS, OR A FINE 
5 
OF 
NOT 
LESS 
THAN 
FIVE 
HUNDRED 
THOUSAND 
PESOS 
6 
(P500,000.00) 
BUT 
NOT MORE THAN 
TEN 
MILLION 
PESOS 
7 
(P10,000,000.00), OR BOTH, AT THE DISCRETION OF THE COURT, 
S 
SHALL BE IMPOSED UPON: 
9 
1) ANY 
DEPOSITOR WHO 
FILES 
A 
FICTITIOUS 
ANDIOR 
10 
FRAUDULENT CLAIM FOR DEPOSIT INSURANCE; AND 
11 
2) ANY BANK OFFICER WHO CERTIFIES TO THE VALIDITY OF 
12 
THE 
DEPOSIT 
LIABILITIES WHICH 
IS 
SUBSEQUENTLY 
13 
VERIFIED TO BE FICTITIOUS ANDIOR FRAUDULENT. 
14 
(i) THE PENALTY OF IMPRISONMENT OF NOT LESS THAN TWELVE 
15 
(12) YEARS BUT NOT MORE THAN FOURTEEN (14) YEARS SHALL 
16 
BE IMPOSED UPON ANY PERSON WHO PARTICIPATES, OR 
17 
ATTEMPTS TO PARTICIPATE, IN A SCHEME TO DEFRAUD A BANK. 
18 
IF THE OFFENSE SHALL HAVE BEEN COMMITTED BY A DIRECTOR 
19 
OR OFFICER OF THE BANK, THE PENALTY OF IMPRISONMENT OF 
20 
NOT LESS THAN FIFTEEN (15) YEARS BUT NOT MORE THAN 
21 
SEVENTEEN (17) YEARS SHALL BE IMPOSED. 
22 
IF 
THE 
OFFENSE 
SHALL 
HAVE 
RESULTED 
IN 
SYSTEMIC 
23 
CONSEQUENCES, AS DETERMINED BY THE BANGKO SENTRAL, 
73 


1 
THE PENALTY OF IMPRISONMENT OF NOT LESS THAN EIGHTEEN 
2 
(18) YEARS BUT NOT MORE THAN TWENTY (20) YEARS SHALL BE 
3 
IMPOSED." 
4 
SECTION 46. Section 22 of the same Act is accordingly renumbered as Section 
5 
[28] 27. 
6 
SECTION 47. Section 23 of the same Act is hereby renumbered as Section [29] 
7 
28 and [reinstated as follows] AMENDED TO READ AS FOLLOWS: 
8 
"SECTION [23] 28. WITHIN SIX (6) MONTHS AFTER EFFECTIVITY OF 
9 
THIS ACT, 
[T]the Corporation may be reorganized by the board of 
10 
directors by adopting if it so desires, an entirely new staffing pattern or 
11 
organizational structure to suit the operations of the corporation under this 
12 
act PURSUANT TO REPUBLIC ACT NO. 10149. No preferential or 
13 
priority right shall be given to or enjoyed by any personnel for appointment 
14 
to any position in the new staffing pattern nor shall any personnel be 
15 
considered as having prior or vested rights with respect to retention in the 
16 
corporation or in any position which may be created in the new staffing 
17 
pattern, even if he should be the incumbent of a similar position prior to 
18 
reorganization. [The reorganization shall be completed within six (6) 
19 
months after the effectivity of this act.] Personnel who are not retained are 
20 
deemed separated from the service." 
21 
SECTION 48. Section 24 of the same Act is accordingly renumbered as Section 
22 
[30] 29. 
74 


SECTION 49. Section 25 of the same Act is accordingly renumbered as Section 
2 
[31] 30. 
3 
SECTION 50. A new section entitled Section [32] 31 of the same Act is hereby 
4 
inserted between Sections [31] 30 and [33] 32 which shall read as follows: 
5 
"SECTION 31. EXEMPTING CLAUSE. - THE CORPORATION SHAll BE 
6 
EXEMPT FROM PRESIDENTIAL DECREE NO. 985, PRESIDENTIAL 
7 
DECREE NO. 1597, REPUBLIC ACT NO. 6758, AS AMENDED, JOINT 
8 
RESOLUTION NO.4 (2009), 
PRESIDENTIAL DECREE NO. 1177, 
9 
EXECUTIVE ORDER NO. 248, AS AMENDED, AND EXECUTIVE 
10 
ORDER NO. 298 AND THE PROVISIONS OF REPUBLIC ACT NO. 10149 
II 
WITH REGARD TO POSITION CLASSIFICATION, QUALIFICATION 
12 
STANDARDS, 
AND 
THE 
COMPENSATION 
PACKAGE OF 
THE 
\3 
EMPLOYEES OF THE CORPORATION, AND THE PER DIEMS, 
14 
EMOLUMENTS, 
AND 
PERFORMANCE 
INCENTIVES 
OF 
THE 
15 
PRESIDENT AND MEMBERS OF THE BOARD: PROVIDED, THAT, 
16 
PDIC SHALL BE SUBJECT TO ALL OTHER POLICIES UNDER R.A. 
17 
NO. 10149, INCLUDING, BUT NOT LIMITED TO, PERFORMANCE 
18 
EVALUATION 
BY 
THE 
GOVERNANCE 
COMMISSION 
FOR 
19 
GOVERNMENT-OWNED 
OR 
CONTROLLED 
CORPORATIONS, 
20 
SELECTION AND NOMINATION OF APPOINTIVE DIRECTORS, AND 
21 
LIMITATIONS ON THE CREATION OF SUBSIDIARIES AND THE 
22 
ACQUISITION 
OF 
AFFILIATES 
EXCEPT 
IN 
THE 
CASE 
OF 
23 
ACQUISITION 
OF 
SHARES 
IN 
THE 
GRANT 
OF 
FINANCIAL 
24 
ASSISTANCE UNDER THIS ACT." 
25 
SECTION 51. A new section entitled Section [33] 32 of the same Act is hereby 
26 
inserted between Sections [32] 31 and [34] 33 which shall read as follows: 
75 


"SECTION 32. TRANSITORY PROVISIONS. -
(a) THE INCUMBENT 
2 
PRESIDENT OF THE CORPORATION AND PRIVATE SECTOR 
3 
MEMBERS OF THE BOARD OF DIRECTORS SHALL CONTINUE TO 
4 
EXERCISE THEIR RESPECTIVE DUTIES AND FUNCTIONS UNTIL 
5 
REPLACED BY THE PRESIDENT OF THE PHILIPPINES: PROVIDED, 
6 
THAT, SUCH NEW APPOINTEES SHALL BE SUBJECT TO THE TERM 
7 
OF OFFICE PROVIDED UNDER SECTION 3 OF THIS ACT, AS 
8 
AMENDED. 
9 
(b) PAYMENT OF SURPLUS DIVIDENDS UNDER SECTION 13(C) OF 
lO 
THIS ACT, AS AMENDED, SHALL BE APPLICABLE TO BANKS 
II 
WITHOUT A COURT-APPROVED FINAL ASSET DISTRIBUTION PLAN 
12 
AT THE TIME OF THE EFFECTIVITY OF THIS ACT. 
13 
(e) THE PREFERENCE INDICATED UNDER SECTION 15 OF THIS 
14 
ACT, AS AMENDED, SHALL BE LIKEWISE EFFECTIVE UPON 
15 
LIQUIDATION 
PROCEEDINGS 
ALREADY 
COMMENCED 
AND 
16 
PENDING AS OF THE EFFECTIVITY OF THIS ACT, WHERE NO 
17 
DISTRIBUTION OF ASSETS HAS BEEN MADE. 
18 
(d) THE PROVISIONS IN SECTION 10 OF THIS ACT, AS AMENDED, 
19 
ON LEGAL ASSISTANCE, PROTECTION AND INDEMNIFICATION 
20 
SHALL APPLY TO ALL CASES PENDING BEFORE THE EFFECTIVITY 
21 
OF THIS ACT." 
22 
SECTION 52. Section 26 of the same Act, Separability Clause is accordingly 
23 
renumbered as Section [34] 33. 
76 


"Separability Clause. - If any provision or section of this Act or the 
2 
application thereof to any person or circumstances is held invalid, the 
3 
other provisions or sections of this Act, in the application of such provision 
4 
or section to other persons or circumstances, shall not be affected 
5 
thereby." 
6 
SECTION 53. Section 27 of the same Act, Repealing Clause is accordingly 
7 
renumbered as Section [35] 34. 
8 
"Repealing Clause. - All acts or parts of acts and executive orders, 
9 
administrative orders, or parts thereof which are inconsistent with the 
10 
provisions of this Act are hereby repealed." 
II 
SECTION 54. Section 28 of the same Act, Effectivity Clause is accordingly 
12 
renumbered as Section [36] 35. 
13 
"Effectivity Clause. - This Act shall take effect fifteen (15) days following 
14 
the completion of its publication in the Official Gazette or in two (2) 
15 
newspapers of general cirCUlation." 
Approved, 
77