REPUBLIC ACT NO. 3517 - AN ACT TO
AMEND SECTIONS TWO (c) AND (g), THREE AND FOURTEEN OF REPUBLIC ACT
NUMBERED EIGHTY-FIVE, AS AMENDED
Section 1. Section two (c) and (g) of Republic Act Numbered
Eighty-five, as amended, is hereby further amended to read as
follows:
"Sec. 2. Corporate Powers. — The Development Bank of
the Philippines shall have the power:
"(c) To grant loans to provincial, city and municipal
government for the rehabilitation, construction, or reconstruction of
public markets, irrigation, waterworks, toll bridges, slaughterhouse,
for cadastral surveys and other self-liquidating or income producing
services, or the purchase and acquisition and machineries and to
agencies and corporations owned or controlled by the Government of the
Republic of the Philippines for the production and distribution of
electrical power, for the purchase and subdivision of rural and urban
estates, for housing projects, for irrigation and waterworks system,
and for other essential industrial and agricultural enterprises;
"(g) To issue bonds, debentures, securities,
collaterals, and other obligations and/or the renewal or the refunding
of the same upon recommendation of the Secretary of Finance and with
the approval of the President, but in no case to exceed at any one time
an aggregate amount equivalent to ten times of its paid-in capital and
surplus. These bonds and other obligations shall be redeemable at the
option of the Bank at or before maturity and in such manner as may be
stipulated therein and shall bear such rate of interest as may be fixed
by the Bank. Such obligations shall be secured by the assets of the
Bank including the stocks, bonds, debentures, and other securities
underwritten, purchased or held by it under the provisions of this Act.
The Bank shall provide for appropriate reserves for the redemption or
retirement of said obligations. Such obligations may be issued and
offered for sale at such price or prices as the Bank may determine, and
shall be exempt from taxation both as to principal and interest. The
said obligations shall be and are hereby fully and unconditionally
guaranteed both as to principal and interest by the Government of the
Republic of the Philippines and such guaranty shall be expressed on the
face thereof;
"In the event that the Bank shall be unable to pay debentures, bonds,
collaterals, notes or other such obligations issued by it, the
Secretary of Finance shall pay the amount thereof, which is hereby
appropriated out of any moneys in the National Treasury not otherwise
appropriated, and thereupon, to the extent of the amounts so paid, the
Government of the Republic of the Philippines shall succeed to all the
rights of the holders of such bonds, notes, debentures, collaterals, or
other obligations.
"Subject to the above provisions, the Bank is also authorized to issue
"Rehabilitation and development bonds" in denominations of not less
that fifty pesos nor more than one thousand pesos redeemable by the
Bank on demand at the option of the holder of said bonds, which may be
of the following types: (1) rehabilitation and development bonds at
progressive staggered interest with cumulative face value; and (2)
rehabilitation and development bonds bearing interests as may be
determined by the Board of Governors with the advise and consent of the
Secretary of Finance and upon approval by the Monetary Bond, said
interest to become due and payable semi-annually and payment thereof to
be annotated on the back of each bond certificate. Maturity of both
types of bonds shall be fixed by the Board of Governors but in no case
to exceed ten years.
"The Board of Governors shall have the power to prescribe rules and
regulations for the issuance, reissuance, servicing, placement and
redemption of the bonds herein authorized to be issued by the Bank as
well as the registration of such bonds at the request of the holders
thereof, with the approval of the Monetary Board of the Philippines."
Sec. 2. A new paragraph is hereby inserted after
paragraph (k) of Section two of the same Act, which shall read as
follows:
(1) The provision of any law to the contrary
notwithstanding, the total liabilities of any person, company,
corporation or firm, or political subdivision of the Government, with
the exception of money borrowed against obligations of the Central Bank
or of the Philippine Government, or borrowed with the full guarantee by
the Government of payment of principal and interest, shall, exclusive
of guarantees under paragraph (k), of Sec. 2 hereof, at no time
exceed thirty (30%) per cent of the paid-in capital and surplus of the
Bank.
Sec. 3. Section three of the same Act is hereby
amended to read as follows:
"Sec. 3. Capital Stock. — The capital stock of the
Bank shall be two billion pesos divided into two million shares having
a par value of one thousand pesos each. The said capital stock shall be
fully subscribed by the Government of the Republic of the Philippines.
"At least fifty per centum (50%) of the surplus account of the Bank as
of June 30, 1962 and at least twenty per centum (20%) of the net
profits that may hereafter be realized as well as profits that may be
assigned as dividends to the shares of the Government shall be
automatically applied to the payment of the subscribed capital stock of
the Government until the said capital stock shall have been fully paid
for, in which case the said profit shall be utilized for such purposes
as may be authorized by the Board of Governors.
"The provisions of Section three of Republic Act Numbered Seventeen
hundred eighty-nine to the contrary notwithstanding, an amount
equivalent to fifty per cent of the proceeds from the sale of
reparations goods and services for fifteen years following the approval
of this Act, is hereby appropriated to cover the payment of the unpaid
subscription of the government to the capital stock of the Bank:
Provided, That seventy-five million pesos of such amount shall be set
aside as a trust fund for the purpose of aiding the establishment of
private provincial and city development banks as provided in this Act."
Sec. 4. Section fourteen of the same Act is hereby
amended to read as follows:
"Sec. 14. Board of Governors. — The affairs and
business of the corporation shall be directed, its powers exercised,
and its property managed and preserved by a Board of Governors
consisting of the chairman and eight other members to be appointed by
the President of the Philippines with the consent of the Commission on
Appointments. The chairman and four other members of the Board to be
designated by the President shall render full-time service to the
Corporation. The term of office of the chairman and other members of
the Board shall be seven years, except that of the first members which
shall be one, two, three, four, five, six, and seven years and which
shall be specified in their respective appointments. The compensation
of the chairman and other members of the Board of Governors shall be
fixed by the President of the Philippines, who may remove any of them
for cause."
"No person shall be appointed chairman or member of the Board of
Governors unless he be of good moral character and unquestionable
integrity and be of recognized competence in economics, agriculture,
industry, finance and/or banking."
Sec. 5. This Act shall take effect upon its approval.
Approved: June 14, 1963
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