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PRESIDENTIAL DECREE NO. 1937
PRESIDENTIAL DECREE NO. 1937 -
FURTHER AMENDING REPUBLIC ACT NO. 265, AS AMENDED, OTHERWISE KNOWN AS
"THE CENTRAL BANK ACT"
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WHEREAS,
monetary, banking and credit policies should be more responsive and
more attuned to the needs of economic development; chanroblesvirtualawlibrary
WHEREAS, the Central Bank of the Philippines should be given greater
flexibility in administering the monetary, banking and credit system of
the Republic and in providing policy direction in the areas of money,
banking and credit.
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 the amendment of Republic Act No. 265, as amended as
follows:cralaw:red
Section 1. The second paragraph of Section 23 or the
same Act is hereby amended to read as follows:cralaw:red
"Data on individual firms, other than banks, gathered by the Department
of Economic Research and other departments or units of the Central Bank
shall not be made available to any person or entity outside of the
Central Bank whether public or private except under order of the court
or under such conditions as may be prescribed by the Monetary Board:
Provided, however, That the collective data on firms may be released to
interested persons or entities: Provided, finally, That in the case of
data on banks, the provisions of Section 27 of this Act shall apply."
Section 2. The first paragraph of Section 28-A of
the same Act is hereby amended to read as follows:cralaw:red
"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 non-bank
financial intermediary performing quasi-banking functions is in a state
of continuing inability or unwillingness to maintain a condition or
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 monies and debts due 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
Section 3. The fourth paragraph of Section 29 of the
same Act is hereby amended to read as follows:cralaw:red
"The provisions of any law to the contrary notwithstanding, the actions
of the Monetary Board under this Section, Section 28-A, 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: Provided, That
the same is raised in an appropriate pleading filed before the proper
court within a period of ten (10) days from the date of the conservator
or receiver takes charge of the assets and liabilities of the bank or
non-bank financial intermediary performing quasi-banking functions or,
in case of liquidation, within ten (10) days from receipt of notice by
the said bank or non-bank financial intermediary of the order of its
liquidation. 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 clerks 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 de 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."
Section 4. The fifth paragraph of Section 29 of the
same Act is hereby amended to read as follows: chanroblesvirtualawlibrary
"Insolvency, under this Act shall be understood to mean that the
realizable assets of a bank or a non-bank financial intermediary
performing quasi-banking functions as determined by the Central Bank
are insufficient to meet its liabilities."
Section 5. Subparagraph (a) of the first paragraph
of Section 34-A of the same Act is hereby amended to read as follows:cralaw:red
"(a) Fines in amounts as may be determined by the
Monetary Board to be appropriate, but in no case to exceed five
thousand pesos a day for each type of violation, taking into
consideration the attendant circumstances, such as the nature and
gravity of the violation or irregularity and the size of the bank:"
Section 6. Section 34-A of the same Act is hereby
amended by adding the following paragraph after the second paragraph
thereof: chanroblesvirtualawlibrary
"Any director or officer who shall resign from or cease to be connected
with the bank after having been found to have been involved in, and
required to explain; any of the acts hereinabove mentioned and before
formal administrative proceedings are taken against him, or who shall
resign from or cease to be connected with said institution during the
pendency of administrative proceedings, may be declared by the Monetary
Board as disqualified to become a director or officer, or to hold any
position, whether elective, appointive or on consultancy basis, in any
financial institution subject to supervision or regulation by the
Central Bank until such time, after appropriate proceedings, that said
director or officer is declared by the Monetary Board to be qualified
to hold any of said positions."
Section 7. Subparagraph (a) of the first paragraph
or Section 34-B of the same Act is hereby amended to read as follows:cralaw:red
"(a) Fines in amounts as may be determined by the
Monetary Board to be appropriate, but in no case to exceed five
thousand pesos a day for each type of violation, taking into
consideration the attendant circumstances, such as the nature and
gravity of the violation or irregularity and the size of the financial
intermediary."
Section 8. Section 34-B of the same Act is hereby
amended by adding the following paragraph after the second paragraph
thereof:cralaw:red
"Any director or officer who shall resign from or cease to be connected
with the non-bank financial intermediary performing quasi-banking
functions after having been found to have been involved in, and
required to explain, any of the acts hereinabove mentioned and before
formal administrative proceedings are taken against him, or who shall
resign from or cease to be connected with said intermediary during the
pendency of administrative proceedings, may be declared by the Monetary
Board as disqualified to become a director or officer, or to hold any
position, whether elective, appointive, or on consultancy basis, in any
financial institution subject to supervision or regulation by the
Central Bank until such time, after appropriate proceedings, that said
director or officer is declared by the Monetary Board to be qualified
to hold any of said positions." chanroblesvirtualawlibrary
Section 9. Paragraph (c) of Section 41 of the same
Act is hereby amended to read as follows:cralaw:red
"(c) Any net profits remaining after fulfilling the
conditions of subsections (a) and (b) or this section shall be used to
reduce the Account to Secure the Coinage or the Monetary Adjustment
Account or the Exchange Stabilization Adjustment Account until said
accounts shall have been liquidated. The Monetary Board shall determine
the distribution among these three accounts."
Section 10. Section 43 of the same Act is hereby
amended to read as follows:cralaw:red
"Sec. 43. Extraordinary expenses of currency issue
and monetary stabilization. — The Monetary Board may, whenever it deems
it advisable, exclude from the computation of the annual profits and
losses of any given fiscal year all or part of the following
extraordinary expenses incurred during that year:cralaw:red
"(a) Extraordinary costs of printing notes or of
minting coins;chanroblesvirtualawlibrary
"(b) Extraordinary expenditures arising from the
issue and service of the evidence of indebtedness to which reference is
made in Section 98; chanroblesvirtualawlibrary
"(c) Interests paid on bank reserves which exceed
fifty percent (50%) of bank deposits, in conformity with the provisions
of Section 101, last paragraph, of this Act, and interests paid on
deposits maintained with the Central Bank in accordance with the
provisions of the second paragraph of Section 121 of this Act; and
"(d) Other expenses which the Monetary Board may
specify or declare as extraordinary."
"The amounts which are excluded from the computation of profits and
losses in accordance with the provisions of the first paragraph of this
section shall be entered in a suspense account which shall be called
the `Monetary Adjustment Account.'
"The Monetary Board shall in every case amortize such expenses over a
period at a rate which shall be based on the adequacy of the Bank's
profit."
Section 11. The same Act is hereby amended by adding
a new section, after Section 43 thereof to read as follows:cralaw:red
"Sec. 43-A. Exchange Stabilization Adjustment
Account. — There shall be created an Exchange Stabilization Adjustment
Account where the following expenses, incurred or yet to be incurred,
shall be lodged:cralaw:red
"(a) Interest expenses and commitment fees on foreign
loans and other foreign obligations; and
"(b) Documentation and other expenses incurred in
connection with the negotiations, securing and servicing of foreign
obligations.
"The above enumerated expenses are excluded from the computation of the
annual profits and losses of any given fiscal year of the Bank.
"The Monetary Board shall in every case amortize such expenses over a
period at a rate which shall be based on adequacy of the Bank's profit."
Section 12. A new section is hereby added after
Section 73 of the same Act, to be known as Section 73-A, to read as
follows:cralaw:red
"Sec. 73-A. The Central Bank may establish a
wholly-owned corporation for the purpose of providing foreign exchange
cover for foreign or external debt. The corporation shall have the
power to obtain foreign borrowings and such other powers as may be
necessary to accomplish its objective. The establishment of the
corporation shall not preclude the Central Bank from extending foreign
exchange cover directly."
Section 13. Section 83 of the same Act is hereby
amended to read as follows:cralaw:red
"Sec. 83. Revaluation profits and losses on
banks' holdings of gold and foreign exchange. — Consistent with
monetary policy and international agreements, the Monetary Board may at
any time declare what revaluation profits realized or losses suffered
by the banks on their net assets or liabilities in gold or freely
convertible foreign currencies as a result of changes in the par value
of the peso, in the legal parities between the Philippine peso and such
foreign currencies or in the Central Bank's exchange rates for such
currencies or as a result of other causes shall be for the account of
the Central Bank until such time as the Bank gives notice to the
contrary. Said notice shall be communicated to the banks at least eight
days before the date on which the revaluation risks cease to be for the
account of the Central Bank, and shall apply only to acquisitions of
the specified foreign currency subsequent to said date. The Board shall
issue appropriate regulations to restrain the banks from increasing
their holdings of the specified currency during the period from the
date of the notice to the date on which it becomes effective."
"The Monetary Board shall issue rules and regulations as may be
necessary to administer the provisions of this section."
Section 14. The third paragraph of Section 90 of the
same Act is hereby amended to read as follows:cralaw:red
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,
all or majority of the capital stock of which are owned by the
Government or by a government financial institution: Provided, however,
That the loans and advances to such banking institutions shall be
guaranteed by the Government in the case of banking institutions owned
or controlled by the Government, or, by the government financial
institution, in the case of a banking institution owned by such
government financial institution."
and by adding the following paragraph after the last paragraph of the
same Section:cralaw:red
"Whenever a financial institution or the Government incurs an overdraft
in its account with the Central Bank, the same shall be eliminated
within the period prescribed by Central Bank regulations. At the
discretion of the Monetary Board, the overdraft may be converted into
an emergency loan or advance and shall be governed by the provisions of
Section 90 of this Act in the case of banking institutions, or
converted into a provisional advance and shall be governed by the
provisions of Section 95 of this Act in the case of the
Government." chanroblesvirtualawlibrary
Section 15. A new Section is hereby added after
Section 107 of the same Act, to be known as Section 107-A, to read as
follows:cralaw:red
"Sec. 107-A. Deposits maintained by banks with the
Central Bank as part of their reserve requirements shall be exempt from
attachment, garnishment, or any other order or process of any court,
government agency or any other administrative body issued to satisfy
the claim of a party other than the Government, or its political
subdivisions or instrumentalities."
Section 16. The second paragraph of Section 121 of
the same Act is hereby amended to read as follows: chanroblesvirtualawlibrary
"The Bank may pay interest on deposits of the Government or of its
political subdivisions and instrumentalities, as well as on deposits of
banks with the Central Bank."
Section 17. All laws, acts, decrees, orders,
instructions and rules and regulations or parts thereof which are
inconsistent herewith are hereby revoked or modified accordingly.
Section 18. This Decree shall take effect
immediately.
Done in the City of Manila,
this 27th day of June in the year of Our Lord, nineteen hundred and
eighty-four.
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