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PRESIDENTIAL DECREE NO. 1688
PRESIDENTIAL DECREE NO. 1688 -
AUTHORIZING BANKS TO INVEST IN THE EQUITY OF VENTURE CAPITAL
CORPORATIONS ORGANIZED TO ASSIST SMALL AND MEDIUM-SCALE ENTERPRISES
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WHEREAS, it
is the declared policy of the State to encourage the growth and
development of small and medium-scale enterprises vital to the economic
stability of the country; chanroblesvirtualawlibrary
WHEREAS, it is necessary to make available capital funds to such small
and medium-scale enterprises, which funds may be extended by banks;chanroblesvirtualawlibrary
WHEREAS, it is indispensable to provide and grant banks greater
flexibility in assisting enterprises organized to cater to small and
medium-scale enterprises.
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines,
by virtue of the powers vested in me by the Constitution, do hereby
order and decree:cralaw:red
Section 1. With the prior approval of the Monetary
Board and subject to existing banking laws, banks may acquire a
majority of the equity of a venture capital corporation organized to
assist small and medium-scale enterprises primarily in the form of
equity financing: Provided, That (a) the equity investment of a bank or
two or more banks shall not exceed sixty per cent (60%) of the total
equity of the voting stock in that corporation; (b) the initial paid-up
capital of the venture capital corporation shall not exceed five
million pesos (P5,000,000.00); (c) any increases in paid-up capital of
the venture capital corporation shall be subject to prior Monetary
Board approval; and (d) a bank shall not invest in more than one (1)
venture capital corporation.
Small and medium-scale enterprises shall refer to enterprises with
total assets not exceeding four million pesos or such amount as the
Monetary Board may prescribe as may be warranted by prevailing economic
conditions.
Section 2. Existing provisions of law governing
equity investments of banks, insofar as they are not inconsistent with
the provisions of this Decree, shall likewise apply to equity
investments of a bank in a venture capital corporation. Provided that
the venture capital corporation may invest in any small and
medium-scale enterprise up to 100% of the equity of the latter.
Section 3. The Monetary Board shall issue such rules
and regulations as may be necessary to implement this Decree.
Section 4. This Decree shall take effect immediately.
DONE in the City of Manila,
this 3rd day of April, in the year of Our Lord, nineteen hundred and
eighty.
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