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LETTER OF INSTRUCTIONS
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LETTER OF INSTRUCTIONS NO. 1151 |
The Minister, Ministry of Justice
The Minister, Ministry of Local Government and
Community Development
The Governor, Central Bank of the Philippines
The President, Land Bank of the Philippines
The Chairman, Civil Service Commission
The Chairman, National Police Commission
WHEREAS, under Letter of Instructions No. 490, uncollected Masagana 99 accounts undergoing court action are directed to be excluded from the computation of total past due obligations of rural banks to the Central Bank, so that, in the interim, banks with large amounts of arrearages can avail of CB rediscounting facilities and can, therefore, continue lending to deserving borrowers;
WHEREAS, the liberal credit policy effected through aforesaid exclusion under LOI No. 490 of Masagana 99 loans-in-litigation from the computation of total post due obligations of rural banks to the Central Bank has instead exacerbated the incidences of loan delinquencies, encouraged abuses of the rediscounting privilege, and even unduly subjected agrarian reform farmers visited by natural calamities to unnecessary court action;
WHEREAS, in order to insure the viability and credibility of the Masagana 99 supervised credit program, there is an imperative need to eradicate such irregularities in the operation of rural banks;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution do hereby order the Central Bank to include the uncollected Masagana 99 accounts undergoing court action in the computation of total past due obligations of rural banks to the Central Bank as well as in the computation of past due ratios in the total loan portfolio of rural banks.
The provisions of Letter of Instructions No. 490 inconsistent herewith are hereby repealed or modified accordingly, and the institutions concerned in LOI No. 490 are hereby instructed to adopt such measures as are necessary and appropriate to implement and achieve the objectives of these instructions.
This Letter of Instructions shall take effect immediately.
Done in the City of Manila, this 25th day of June nineteen hundred and eighty-one.
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