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PRESIDENTIAL DECREE NO. 120
PRESIDENTIAL DECREE NO. 120 -
AMENDING REPUBLIC ACT NUMBERED THREE THOUSAND FIVE HUNDRED NINETY-ONE,
AS AMENDED, ENTITLED "AN ACT ESTABLISHING THE PHILIPPINE DEPOSIT
INSURANCE CORPORATION, DEFINING ITS POWERS AND DUTIES AND FOR OTHER
PURPOSES"
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WHEREAS, there were pending before Congress
prior to the promulgation of Proclamation No. 1081, dated September 21,
1972, certain urgent measures proposing amendments to Republic Act No.
3591, as amended;chanroblesvirtualawlibrary
WHEREAS, the deposit insurance scheme has been adopted to generate more
faith and confidence in the banking system and the Philippine Deposit
Insurance Corporation, as an insurer of bank depositors, is entrusted
not only with the vital role of protecting depositors from loss
resulting from bank closures but also in helping develop a sound and
stable banking system; chanroblesvirtualawlibrary
WHEREAS, the recommendations contained in the report on the Philippine
financial system which have been accepted, with certain modifications
by the monetary authorities, included among others, certain proposals
geared toward ensuring the effectiveness of the Corporation in
performing its assigned tasks;chanroblesvirtualawlibrary
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines,
by virtue of the powers vested in me by the Constitution as
Commander-in-Chief of all the Armed Forces of the Philippines, and
pursuant to Proclamation No. 1081, dated September 21, 1972, and
General Order No. 1, dated September 22, 1972, as amended, and in order
to effect the desired changes and reforms in the social, economic, and
political structure of our society, do hereby order and decree the
amendment of Republic Act No. 3591, as amended, as follows:cralaw:red
Section 1. Section two of Republic Act Numbered Three
thousand five hundred ninety-one, as amended, is hereby amended to read
as follows:cralaw:red
"Sec. 2. The powers and functions of the Corporation
shall be vested in a Board of Directors consisting of three (3) members
one of whom shall be the Governor of the Central Bank of the
Philippines and two of whom shall be citizens of the Republic of the
Philippines to be appointed by the President of the Philippines with
the consent of the Commission on Appointments. One of the appointive
members shall be the Chairman of the Board of Directors of the
Corporation who shall be appointed on a full time basis for a term of
six (6) years at an annual compensation which shall be fixed by the
President of the Philippines. The other appointive member, who shall be
appointed for a term of four (4) years and the Governor of the Central
Bank shall each receive a per diem of not exceeding fifty pesos
(P50.00) for each day of meeting actually attended by them but in no
case shall each of them receive more than five hundred pesos (P500.00)
a month. In the event of vacancy in the office of the Governor of the
Central Bank of the Philippines, and pending the appointment of his
successor or during the absence of the Governor the Acting Governor of
the Central Bank of the Philippines shall act as member of the Board of
Directors. In the event of a vacancy in the Office of the Chairman of
the Board of Directors and pending the appointment of his successor,
the Governor of the Central Bank of the Philippines shall act as
Chairman. The members of the Board of Directors shall be ineligible
during the time they are in office and for a period of two years
thereafter to hold office, position or employment in any insured bank,
except that this restriction shall not apply to any member who has
served the full term for which he was appointed. No member of the Board
of Directors shall be an officer or director of any insured bank; and
before entering upon his duties as member of the Board of Directors, he
shall certify under oath that he has complied with this requirement and
such certification shall be filed with the Secretary of the Board of
Directors. Any vacancy in the Board created by the death, resignation,
or removal of an appointive member shall be filled by the appointment
of a new member to complete the unexpired period of the term of the
member concerned.
"The Board of Directors shall have the authority: chanroblesvirtualawlibrary
"1. To prepare and issue rules and regulations as it
considers necessary for the effective discharge of its responsibilities;chanroblesvirtualawlibrary
"2. To direct the management, operations and
administration of the Corporation;chanroblesvirtualawlibrary
"3. To appoint, fix the remuneration and remove any
officer or employee of the Corporation for cause: Provided, however,
That officers exercising discretionary powers shall not be subject to
the Civil Service Law; and
"4. To authorize such expenditures by the Corporation
as are in the interest of the effective administration and operation of
the Corporation: Provided, however, That not later than one year after
the appropriation and release of the additional fifteen million pesos
for the permanent insurance fund as provided in Section ten (a-1) of
this Act, the annual operating expenses of the Corporation may amount
to not more than the equivalent of the annual gross income from the
investment of the permanent insurance fund and not more than fifteen
per cent of the first ten million pesos of all other income, such as
assessments and earnings from the investment of funds of the
Corporation other than the permanent insurance fund: Provided, further,
That if all other income exceeds ten million pesos, the prescribed
ceiling for the annual operating expenses may be increased by not more
than ten per cent of the excess: Provided, finally, That in the
computation of income, recoveries and accrued income shall be excluded."
Section 2. Section ten (a) of the same Act is hereby
amended by adding another paragraph after section ten (a) which reads
as follows:cralaw:red
"Sec. 10(a-1). The permanent insurance fund
hereinabove created is hereby increased to twenty million pesos for
this purpose, the amount of fifteen million pesos is hereby
appropriated from the General Fund."
Section 3. Section twelve, subsection (c) of the same
Act is hereby amended to read as follows:cralaw:red
"Sec. 12(c). When the Corporation has determined that
an insured bank is in danger of closing, in order to prevent such
closing, the Corporation, in the discretion of its Board of Directors,
is authorized to make loans to, or purchase the assets of, or make
deposits in, such insured bank, upon such terms and conditions as the
Board of Directors may prescribe, when in the opinion of the Board of
Directors, the continued operation of such bank is essential to provide
adequate banking service in the community: Provided, however, That
funds available for this purpose shall be limited only to the permanent
insurance fund referred to in Section ten (a) of this Act, additional
appropriations thereto, and money borrowed from the Central Bank in
accordance with the provisions of Section thirteen of this Act:
Provided, further, That funds of the Corporation accumulated from
assessments paid by insured banks shall not be available for this
purpose nor for the repayment of loans obtained from the Central Bank
for the funding of assistance to insured banks as provided in this
section. Such loans and deposits may be in subordination to the rights
of depositors and other creditors."
Section 4. This Decree shall take effect immediately.
Done in the City of Manila,
this 29th day of January, in the year of Our Lord, nineteen hundred and
seventy-three.
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Since 19.07.98
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