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Chan Robles Virtual Law Library
PRESIDENTIAL DECREE NO. 1827
PRESIDENTIAL DECREE NO. 1827 -
FURTHER AMENDING REPUBLIC ACT NUMBERED TWO HUNDRED SIXTY-FIVE, AS
AMENDED, OTHERWISE KNOWN AS "THE CENTRAL BANK ACT"
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chanroblesvirtualawlibrary
WHEREAS, it
is the responsibility of the Central Bank of the Philippines to
administer the monetary, banking and credit system of the Republic, and
as the central monetary authority, to provide policy direction in the
areas of money, banking and credit; chanroblesvirtualawlibrary
WHEREAS, monetary, banking and credit policies should be more
responsive to the requirements of economic development;chanroblesvirtualawlibrary
WHEREAS, the Central Bank should be given greater flexibility in the
use of its credit facilities to meet the demands of economic
development.
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 amendment of Republic Act No. 265, as amended as follows:cralaw:red
Section 1. A new paragraph is hereby added after the
second paragraph of Section 4 of Republic Act No. 265, as amended, to
read as follows: chanroblesvirtualawlibrary
The Central Bank may compromise, condone or release, in whole or in
part, any claim of or settled liability to the Bank, regardless of the
amount involved, under such terms and conditions as may be imposed by
the Monetary Board to protect the interests of the Bank.
Section 2. Section 13 of the same Act is hereby
amended to read as follows:cralaw:red
"Sec. 13. Withdrawal of persons having a personal
interest. — Whenever any member attending a meeting of the Monetary
Board has a material personal interest, directly or indirectly, in the
discussion or resolution of any given matter, said member shall not
participate in the discussion or resolution of the matter and must
retire from the meeting during the deliberations thereon. The subject
matter, when resolved, and the fact that a member had a personal
interest in it, shall be made available to the public. The minutes of
the meting shall note the withdrawal of the member concerned.
Section 3. Section 25 of the same Act is hereby
amended to read as follows:cralaw:red
"Sec. 25. Creation of the appropriate departments. —
In order to assure the observance of this Act and of the other
pertinent laws, and of the rules and regulations of the Monetary Board,
the Central Bank shall have appropriate supervising and examining
departments which shall be charged with the supervision and periodic or
special examinations of banking institutions operating in the
Philippines, including all Government credit institutions including
their subsidiaries and affiliates, non-bank financial intermediaries,
and subsidiaries and affiliates of non-bank financial intermediaries
performing quasi-banking functions: Provided, That affiliates of
banking institutions, non-bank financial intermediaries, and
subsidiaries and affiliates of non-bank financial intermediaries
performing quasi-banking functions may be subject to special
examination if the circumstances so warrant as determined by the
Monetary Board: Provided, further, That a subsidiary means a
corporation more than 50% or the voting stock of which is owned by a
banking institution or non-bank financial intermediary and an affiliate
means a corporation which is related or linked to such institution or
intermediary through common stockholders or such other factors as may
be determined by the Monetary Board. The supervising and/or examining
departments shall discharge their responsibilities in accordance with
the instructions of the Monetary Board.
The department heads and the examiners of the supervising and/or
examining departments are hereby authorized to administer oaths to any
director, officer, or employee of any institution under their
respective supervision or subject to their examination and to compel
the presentation of all books, documents, papers or records necessary
in their judgment to ascertain the facts relative to the true condition
of any institution as well as the books and records of persons and
entities relative to or in connection with the operations, activities
or transactions of the institution under examination. chanroblesvirtualawlibrary
No restraining order or injunction shall be issued by the court
enjoining the Central Bank from examining any institution subject to
supervision or examination by the Central Bank, unless there is
convincing proof that the action of the Central Bank is plainly
arbitrary and made in bad faith and the petitioner or plaintiff files
with the clerk or judge of the court in which the action is pending a
bond executed in favor of the Central Bank, in an amount to be fixed by
the court. The restraining order or injunction shall be refused or, if
granted, shall be dissolved upon filing by the Central Bank of a bond,
which shall be in the form of cash or Central Bank cashier's check, in
an amount twice the amount of the bond of the petitioner or plaintiff
conditioned that it will pay the damages which the petitioner or
plaintiff may suffer by the refusal or the dissolution of the
injunction. The provisions of Rule 58 of the New Rules of Court insofar
as they are applicable and not inconsistent with the provisions of this
Section shall govern the issuance and dissolution of the restraining
order or injunction contemplated in this Section. chanroblesvirtualawlibrary
Section 4. Section 27 of the same Act is hereby
amended to read as follows:cralaw:red
"Sec. 27. Prohibitions. — Personnel of the Central
Bank are hereby prohibited from:cralaw:red
(a) Being an officer, director employee, or
stockholder, directly or indirectly, of any institution subject to
supervision or examination by the Central Bank, except non-stock
savings and loan associations and provident funds organized exclusively
for employees of the Central Bank, and except as otherwise provided in
this Act;chanroblesvirtualawlibrary
(b) Receiving any gift or thing of value from any
officer, director, or employee thereof;chanroblesvirtualawlibrary
(c) Revealing in any manner, except under order of
the court, or under such conditions as may be prescribed by the
Monetary Board, information relating to the condition or business of
any such institution. This prohibition shall not be held to apply to
the giving of information to the Monetary Board or the Governor of the
Central Bank, or to any person authorized by either of them, in
writing, to receive such information.
"Notwithstanding the provisions of this Section and Section 8, members
of the Monetary Board and deputy-governors and other personnel of the
Central Bank may become directors of any institution subject to
supervision or examination by the Central Bank and of any entity
related to such institution in connection with financial assistance
extended by the Central Bank to such institution and when in the
opinion of the Monetary Board it is appropriate to make such
designation to protect the interest of the Central Bank. chanroblesvirtualawlibrary
"Borrowing from any institution subject to supervision or examination
by the Central Bank by examiners and other personnel of the supervising
and examining departments of the Central Bank shall be prohibited only
with respect to the particular institution in which they are assigned,
or are conducting an examination: Provided, however, That any credit
union or cooperative composed of personnel of the supervising and
examining departments of the Central Bank may borrow any time from such
institutions, subject to Monetary Board approval and provided that the
loan is fully secured. Personnel of other departments, offices, or
units of the Central Bank shall likewise be prohibited from borrowing
from any financial institution during the period of time that an
application with the Central Bank of such institution is being
evaluated, processed, or acted upon by such personnel: Provided,
however, That the Monetary Board may, at its discretion, indicate the
position levels or functional groups to which the prohibition is
applicable. chanroblesvirtualawlibrary
Borrowing by all full-time Central Bank personnel from any institution
subject to supervision or examination by the Central Bank shall be
fully secured, fully disclosed to the Monetary Board, and shall be
subject to such further rules and regulations as the Monetary Board may
prescribed.
Section 5. Section 28-A. — of the same Act is hereby
amended to read as follows: chanroblesvirtualawlibrary
"Sec. 28-A. Appointment of conservator. — Whenever,
on the basis of a report submitted by the appropriate supervising or
examining department, the Monetary Board finds that a bank or a
non-bank financial intermediary performing quasi-banking functions is
in a state of continuing inability or unwillingness to maintain a
condition of solvency and liquidity deemed adequate to protect the
interest of depositors and creditors, the Monetary Board may appoint a
conservator to take charge of the assets, liabilities, and the
management of that institution, collect all moneys and debts said
institution and exercise all powers necessary to preserve the assets of
the institution, reorganize the management thereof, and restore its
viability. He shall have the power to overrule or revoke the actions of
the previous management and board of directors of the bank or non-bank
financial intermediary performing quasi-banking functions, any
provision of law to the contrary notwithstanding, and such other powers
as the Monetary Board shall deem necessary. chanroblesvirtualawlibrary
As much as practicable, the conservator should not be connected with
the Central Bank but should be competent and knowledgeable in bank
operations and management. The remuneration of the conservator and
other expenses attendant to the conservatorship shall be borne by the
bank or non-bank financial intermediary performing quasi-banking
functions concerned. He shall report and be responsible to the Monetary
Board until such time as the Monetary Board is satisfied that the
institution can continue to operate on its own and the conservatorship
is no longer necessary. The conservatorship shall likewise be
terminated should the Monetary Board, on the basis of the report of the
conservator or of its own findings, determine that the continuance in
business of the institution would involve probable loss to its
depositors or creditors, in which case the provision of Section 29
shall apply.
Section 6. Section 29 of the same Act is hereby
amended to read as follows:cralaw:red
"Sec. 29. Proceedings upon insolvency. — Whenever,
upon examination by the head of the appropriate supervising or
examining department or his examiners or agents into the condition of
any bank or non-bank financial intermediary performing quasi-banking
functions, it shall be disclosed that the condition of the same is one
of insolvency, or that its continuance in business would involve
probable loss to its depositors or creditors, it shall be the duty of
the department head concerned forthwith, in writing to inform the
Monetary Board of the facts, and the Board may, upon finding the
statements of the department head to be true, forbid the institution to
do business in the Philippines and shall designate an official of the
Central Bank or a persons of recognized competence in banking or
finance, as receiver to immediately take charge of its assets and
liabilities, as expeditiously as possible collect and gather all the
assets and administer the same for the benefit of its creditors,
exercising all the powers necessary for these purposes including, but
not limited to, bringing suits and foreclosing mortgages in the name of
the bank or non-bank financial intermediary performing quasi-banking
functions.
"The Monetary Board shall determine within sixty days whether the
institution may be reorganized or otherwise placed in such a condition
so that it may be permitted to resume business with safety to its
depositors and creditors and the general public and shall prescribe the
conditions under which such presumption of business shall take place as
well as the time for fulfillment of such conditions. In such case, the
expenses and fees in the collection and administration of the assets of
the institutions shall be determined by the Board and shall be paid to
the Central Bank out of the assets of such banking institution.
"If the Monetary Board shall determine and confirm within the said
period that the bank or non-bank financial intermediary performing
quasi-banking functions is insolvent or cannot resume business with
safety to its depositors, creditors and the general public, it shall,
if the public interest requires, order its liquidation, indicate the
manner of its liquidation and approve a liquidation plan. The Central
Bank shall, by the Solicitor General, file a petition in the Court of
First Instance reciting the proceedings which have been taken and
praying the assistance of the court in the liquidation of such
institution. The court shall have jurisdiction in the same proceedings
to adjudicate disputed claims against the bank or non-bank financial
intermediary performing quasi-banking functions and enforce individual
liabilities of the stockholders and do all that is necessary to
preserve the assets of such institution and to implement the
liquidation plan approved by the Monetary Board. The Monetary Board
shall designate an official of the Central Bank, or a person of
recognized competence in banking or finance, as liquidator who shall
take over the functions of the receiver previously appointed by the
Monetary Board under this Section. The liquidator shall, with all
convenient speed, convert the assets of the banking institution or
non-bank financial intermediary performing quasi-banking functions to
money or sell, assign or otherwise dispose of the same to creditors and
other parties for the purpose of paying the debts of such institution
and he may, in the name of the bank or non-bank financial intermediary
performing quasi-banking functions, institute such actions as may be
necessary in the appropriate court to collect and recover accounts and
assets of such institution. chanroblesvirtualawlibrary
"The provisions of any law to the contrary notwithstanding the actions
of the Monetary Board under this Section and the second paragraph of
Section 34 of this Act shall be final and executory, and can be set
aside by the court only if there is convincing proof that the action is
plainly arbitrary and made in bad faith. No restraining order or
injunction shall be issued by the court enjoining the Central Bank from
implementing its actions under this Section and the second paragraph of
Section 34 of this Act, unless there is convincing proof that the
action of the Monetary Board is plainly arbitrary and made in bad faith
and the petitioner or plaintiff files with the clerk or judge of the
court in which the action is pending a bond executed in favor of the
Central Bank, in an amount to be fixed by the court. The restraining
order or injunction shall be refused or, if granted, shall be dissolved
upon filing by the Central Bank of a bond, which shall be in the form
of cash or Central Bank cashier's check, in an amount twice the amount
of the bond of the petitioner or plaintiff conditioned that it will pay
the damages which the petitioner or plaintiff may suffer by the refusal
or the dissolution of the injunction. The provisions of Rule 58 of the
New Rules of Court insofar as they are applicable and not inconsistent
with the provisions of this Section shall govern the issuance and
dissolution of the restraining order or injunction contemplated in this
Section. chanroblesvirtualawlibrary
"Insolvency, under this Act, shall be understood to mean the inability
of a bank or non-bank financial intermediary performing quasi-banking
functions to pay its liabilities as they fall due in the usual and
ordinary course of business: Provided, however, That this shall not
include the inability to pay of an otherwise non-insolvent bank or
non-bank financial intermediary performing quasi-banking functions
caused by extraordinary demands induced by financial panic commonly
evidenced by a run on the bank or non-bank financial intermediary
performing quasi-banking functions in the banking or financial
community.
"The appointment of a conservator under Section 28-A of this Act or the
appointment of a receiver under this Section shall be vested
exclusively with the Monetary Board, the provision of any law, general
or special, to the contrary notwithstanding."
*Section 6. Section 30 of the same Act is hereby
amended to read as follows:cralaw:red
"Sec. 30. Distribution of assets. — In case of
liquidation of a bank or non-bank financial intermediary performing
quasi-banking functions, after payment of the costs of the proceedings,
including reasonable expenses and fees of the Central Bank to be
allowed by the court, the Central Bank shall pay the debts of such
institution, under order of the Court in accordance with their legal
priority."
Section 7. Section 31 of the same Act is hereby
amended to read as follows:cralaw:red
"Sec. 31. Disposition of fees and commission. — All
costs and fees earned by the Central Bank in winding up the affairs and
administering the assets of any bank or non-bank financial intermediary
performing quasi-banking functions within the purview of this Act shall
be used to pay the salaries of the clerks and other employees whose
employment is rendered necessary in the discharge of the trust,
together with other additional expenses caused thereby. The balance of
fees and costs earned, after the payment of all expenses, shall be for
the account of the Central Bank."
Section 8. Section 32 of the same Act is hereby
amended to read as follows:cralaw:red
"Sec. 32. Refusal to make reports or permit
examination. — Any owner, agent, manager, or other officer-in-charge of
any institution subject to the supervision or examination by the
Central Bank within the purview of this Act who, being thereunto
required in writing by the Monetary Board or by the head of the
appropriate supervising and examining department shall willfully refuse
to file the required report or permit any lawful examination into the
affairs of such institution shall be punished by a fine of not more
than ten thousand pesos or by imprisonment for not more than one year,
or both, in the discretion of the court."
Section 9. The second paragraph of Section 34 of the
same Act is hereby amended to read as follows:cralaw:red
"Whenever a bank or non-bank financial intermediary performing
quasi-banking functions persists in violating its charter or by-laws or
any law, or orders, instructions, rules or regulations issued by the
Monetary Board, or whenever a bank or non-bank financial intermediary
performing quasi- banking functions persists in carrying on its
business in an unlawful or unsafe manner, the Board may without
prejudice to the penalties provided in the preceding paragraph of this
section and the administrative sanctions provided in Section 34-A of
this Act take action under Section 29 of this Act."
Section 10. The first paragraph of Section 34-A of
the same Act is hereby amended to read as follows:cralaw:red
"Sec. 34-A. Administrative sanctions on banks. — The
Monetary Board is hereby authorized at its discretion, to impose upon
banking institutions, their directors and/or officers, for any willful
delay in the submission of reports or publications thereof as required
by law, rules and regulations; any refusal to permit examination into
the affairs of the institution; any willful making of a false statement
to the Board or the appropriate supervising and examining department or
its examiners; any willful failure or refusal to comply with, or
violation of, any banking law or any order, instruction or regulation
issued by the Monetary Board, or any order; instruction or ruling by
the Governor; or any commission of irregularities, and/or conducting
business in an unsafe or unsound manner as may be determined by the
Monetary Board, the following administrative sanctions:cralaw:red
(a) Fines not in excess of five hundred pesos a day
for each type of violation;chanroblesvirtualawlibrary
(b) Suspension, or removal of directors and/or
officers;chanroblesvirtualawlibrary
(c) Suspension of rediscounting privileges;chanroblesvirtualawlibrary
(d) Suspension of lending or foreign exchange
operations or authority to accept new deposits or make new investments;chanroblesvirtualawlibrary
(e) Suspension of interbank clearing privileges;
and/or
(f) Suspension of authority to operate.
The Monetary Board may preventively suspend any bank director or
officer pending an investigation whenever warranted by the
circumstances as determined by the Monetary Board. When the case
against the director or officer under preventive suspension is not
finally decided by the Central Bank within a period of ninety (90) days
after the date of suspension, said director or officer shall be
reinstated in his position. Provided, That when the delay in the
disposition of the case is due to the fault, negligence or petition of
the director or officer, the period of delay shall not be counted in
computing the period of suspension herein provided."
Section 11. The first paragraph of Section 34-B of
the same Act is hereby amended to read as follows: chanroblesvirtualawlibrary
"Sec. 34-B. Administrative sanctions on non-bank
financial intermediaries performing quasi-banking functions. — The
Monetary Board is hereby authorized, at its discretion, to impose upon
non-bank financial intermediaries performing quasi-banking functions,
their directors and/or officers, for any willful delay in the
submission of reports or publications thereof as required by law, rules
and regulations; any refusal to permit examination into the affairs of
the institution; any willful making of a false statement to the Board
or to the appropriate supervising or examining department or its
examiners; any willful failure or refusal to comply with, or violation
of, any law pertaining to non-bank financial intermediaries performing
quasi-banking functions or any order, institution or regulation issued
by the Monetary Board, or any order, instruction or ruling by the
Governor; or any commission of irregularities, the following
administrative sanctions:cralaw:red
(a) Fines not in excess of five hundred pesos a day
for each type of violation;chanroblesvirtualawlibrary
(b) Suspension or, removal of directors and/or
officers;chanroblesvirtualawlibrary
(c) Suspension of access to Central Bank credit
facilities; and/or
(d) Suspension or, after due hearing, revocation of
quasi-banking license. chanroblesvirtualawlibrary
The Monetary Board may preventively suspend any director or officer of
a non-bank financial intermediary performing quasi-banking functions
pending an investigation whenever warranted by the circumstances as
determined by the Monetary Board. When the case against the director or
officer under preventive suspension is not finally decided by the
Central Bank within a period of ninety (90) days after the date of
suspension, said director or officer shall be reinstated: Provided,
That when the delay in the disposition of the case is due to the fault,
negligence or petition of the director of officer, the period of delay
shall not be counted in computing the period of suspension herein
provided."
Section 12. The third paragraph of Section 49 of the
same Act is hereby deleted and the second paragraph of the same Section
is hereby amended to read as follows:cralaw:red
Any modification in the gold or dollar value of the peso must be in
conformity with the provisions of all executive and international
agreements subscribed to and ratified by the Republic of the
Philippines, and such modification shall be made only by the President
of the Republic upon the proposal of the Monetary Board. The proposal
of the Monetary Board shall require the concurrence of at least five of
the members of the Board."
Section 13. The second paragraph of Section 85 of the
same Act is hereby amended to read as follows:cralaw:red
"The Monetary Board may also require other persons and entities to
report to it currently all transactions or operations in gold, in any
shape or form, and in foreign exchange whether entered into or
undertaken by them directly or through agents, or to submit such data
as may be required on operations or activities giving rise to or in
connection with or relating to a gold or foreign exchange transaction.
The Monetary Board shall prescribe the forms on which such declarations
must be made. The accuracy of the declarations may be verified by the
Central Bank by whatever inspection it may deem necessary."
Section 14. Subsections A and B of Section 88 of the
same Act is hereby amended to read as follows:cralaw:red
"A. Under special circumstances in which the Monetary
Board considers it advisable to promote or facilitate the lending
operations, or certain classes thereof, of banking institutions engaged
in long-term financing, the Central Bank may grant loans or advances to
said institutions against pledge or assignment of payments,
installments, or amortizations of their borrowers. The Monetary Board
shall prescribe the loan value on applications for loans or advances
based on the payments, installments or amortizations pledged or
assigned: Provided, however, That the Central Bank shall finance said
loans from non-inflationary sources and shall establish additional
safeguards as it deems proper Provided, further, That such loans and
advances may be secured by other assets which are defined as acceptable
security by a concurrent vote of at least five members of the Monetary
Board.
"In granting loans and advances under this subsection, the Central Bank
shall first ascertain that the payments, installments and amortizations
to be pledged or assigned to it are in no case currently in arrears and
that said payments, installments and amortizations are related to
credit operations which in every case are adequately secured by
mortgages. Said mortgages shall be assigned to the Central
Bank." chanroblesvirtualawlibrary
"B. Under special circumstances, such as the
encouragement of bank mergers and consolidations or the rehabilitation
of industries, in which the Monetary Board considers it advisable to
properly and effectively achieve the objectives mentioned in Section 2
of this Act and to discharge its responsibility of administering the
banking system, the Central Bank may grant loans or advances to the
Development Bank of the Philippines or to any appropriate Government
financial institution under such terms and conditions as may be
prescribed by the Monetary Board which loans or advances shall be used
by the Development Bank of the Philippines or such Government financial
institution to purchase shares of stock of a banking institution or a
distressed industrial establishment in the Philippines for resale to
the general public: Provided, however, That the amounts of such loans
and advances which may be released at any given period of time shall be
compatible with the requirements of stability: Provided, further, That
such loans and advances are secured by assets which are defined as
acceptable security by a concurrent vote of at least five members of
the Monetary Board.
"For the purpose of this subsection, the Development Bank of the
Philippines shall be authorized to underwrite, purchase, sell pledge,
mortgage or otherwise dispose of shares of stock of a banking
institution or an industrial establishment in the Philippines."
Section 15. The same Act is hereby amended by adding
a new section after Section 88 thereof to read as follows:cralaw:red
"Sec. 88-A. The Central Bank may extend loans and
advances to banking institutions for a period of not more than seven
(7) days without any collateral for the purpose of providing the
banking system with liquid funds in times of need and influencing
interest rate levels."
Section 16. A new paragraph is hereby added after the
second paragraph of Section 90 of the same Act and the last paragraph
of the same Section is hereby amended, to read as follows: chanroblesvirtualawlibrary
"The Monetary Board may, with the concurrent vote of at least five of
its members, waive the collateral requirement under this Section and
subsections A and B of Section 88 for loans to banking institutions,
majority of the capital stock of which is owned by a Government
financial institution: Provided, however, That loans and advances to
banking institutions controlled by a Government financial institution
shall be secured by a guarantee of such Government financial
institution.
"In connection with the exercise of these powers, the prohibitions in
Section 133 of this Act shall not apply insofar as it refers to
acceptance as collateral of shares and their acquisition as a result of
foreclosure proceedings, including the exercise of voting rights
pertaining to said shares: Provided, however, That should the Central
Bank acquire any of these shares it has accepted as collateral as a
result of foreclosure proceedings, the Central Bank shall dispose of
said shares to the public within one year from the date of
consolidation of title by the Central Bank."
Section 17. The last paragraph of Section 100 of the
same Act is hereby amended to read as follows:cralaw:red
"The Monetary Board may exempt from reserve requirements deposits and
deposit substitutes with remaining maturities of two years or more, as
well as inter-bank borrowings."
Section 18. Section 104 of the same Act is hereby
amended to read as follows:cralaw:red
"Sec. 104. Increase in reserve requirements. —
Whenever it becomes necessary, in the opinion of the Monetary Board, to
increase reserve requirements against existing liabilities, the
increase shall be made in a gradual manner and shall not exceed four
percentage points in any thirty-day period. Banks and other affected
financial institutions shall be notified reasonably in advance of the
date on which such increase is to become effective." chanroblesvirtualawlibrary
Section 19. Section 105 of the same Act is hereby
amended to read as follows:cralaw:red
"Sec. 105. Computation on reserves. — The reserve
position of each bank or non-bank financial intermediary with
quasi-banking functions shall be calculated daily on the basis of the
amount, at the close of business for the day, of the institutions
reserves and the amount of its liability accounts against which
reserves are required to be maintained.
"For the purpose of computing the reserve position of each bank or
non-bank financial intermediary with quasi-banking functions, its
principal office in the Philippines and all its branches and agencies
located therein shall be considered as a single unit."
Section 20. Section 106 of the same Act is hereby
amended to read as follows:cralaw:red
"Sec. 106. Reserve deficiencies. — Whenever the
reserve position of any bank or non-bank financial intermediary
performing quasi-banking functions, computed in the manner specified in
the preceding section of this Act, is below the required minimum, the
bank of non-bank financial intermediary performing quasi-banking
functions shall pay the Central Bank one-tenth of per cent (1/10 of 1%)
per day on the amount of the deficiency: Provided, however, That banks
and non-bank financial intermediaries performing quasi-banking
functions shall ordinarily be permitted to offset any reserve
deficiency occurring on one or more days of the week with any excess
reserves which they may hold on other days of the same week and shall
be required to pay the penalty only on the average daily deficiency
during the week. In cases of abuse, the Monetary Board may deny any
bank or non-bank financial intermediary performing quasi-banking
functions the privilege of offsetting reserve deficiencies in the
aforesaid manner.
"If a bank or non-bank financial intermediary performing quasi-banking
functions chronically has a reserve deficiency, the Monetary Board may
limit or prohibit the making of new loans or investments by the
institution and may require that part or all of the net profits of the
institutions be assigned to surplus.
"The Monetary Board may modify or set aside the reserve deficiency
penalties provided in this section, for a part or the entire period of
a strike or lockout affecting a bank or a non-bank financial
intermediary performing quasi-banking functions as defined in the Labor
Code, or of a national emergency affecting operations of banks or
non-banks financial intermediaries performing quasi-banking
functions." chanroblesvirtualawlibrary
Section 21. Section 122 of the same Act is hereby
amended to read as follows:cralaw:red
"Sec. 122. Issue of Government Obligations. — The
issue of securities representing obligations of the Government, its
political subdivisions or instrumentalities, shall be made through the
Central Bank, which shall act as agent of, and for the account of, the
Government or its respective subdivisions or instrumentality, as the
case may be: Provided, however, That the Bank shall not guarantee the
placement of said securities and shall not subscribe to their issue
except to replace its maturing holdings of securities with the same
type as the maturing securities."
Section 22. Section 130 of the same Act is hereby
amended to read as follows:cralaw:red
"Sec. 130. Tax exemptions. — The provisions of any
general or special law to the contrary notwithstanding, the Central
Bank of the Philippines be exempt from all national, provincial,
municipal, and city taxes, charges, and assessments now in force or
hereafter established.
"The exemptions authorized in the preceding paragraph of this section
shall apply to all property of the Central Bank, to the resources,
receipts, expenditures, profits and income of the Bank, as well as to
all contracts, deeds, documents and transactions related to the conduct
of the business of the Bank: Provided, however, That said exemptions
shall apply only to such taxes, fees, charges and assessments for which
the Central Bank itself would otherwise be liable, and shall not apply
to taxes, fees, charges, or assessments payable by persons or other
entities doing business with the Central: Provided, finally, That
foreign loans and other obligations of the Central Bank shall be exempt
both as to principal and interest, from any and all taxes if the
payment of such taxes has been assumed by the Bank." chanroblesvirtualawlibrary
Section 23. Section 131 of the same Act is hereby
amended to read as follows:cralaw:red
"Sec. 131. Exemption from customs duties. — The
provision of any general or special law to the contrary
notwithstanding, the importation and exportation by the Central Bank of
notes and coins, and of gold and other metals to be used for purposes
authorized under this Act, and the importation of all equipment needed
for furnishing, equipping and operating the offices of the Bank, shall
be fully exempt from all customs duties and consular fees and from all
other taxes, assessments and charges related to such importation or
exportation."
Section 24. All laws, acts, decrees, orders,
instructions and rules and regulations or parts thereof which are
inconsistent herewith are hereby revoked or modified
accordingly. chanroblesvirtualawlibrary
Section 25. This Decree shall take effect immediately.
Done in the City of Manila,
this 6th day of January, in the year of Our Lord, nineteen hundred and
eighty-one.
* Copied verbatim from documents obtained directly
from Central Book Supply, Inc. (duplicity of Section 6)
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