A
collection of Philippine laws, statutes and codes
not
included or cited in the main
indices
of
the
Chan Robles Virtual Law Library
PRESIDENTIAL DECREE NO. 1035
PRESIDENTIAL DECREE NO. 1035
- EXPANDING THE AUTHORITY OF CERTAIN DEPOSITORY BANKS UNDER R.A. NO.
6426 AND FOR OTHER PURPOSES
|
chanroblesvirtualawlibrary
WHEREAS,
the establishment of an offshore banking system in the Philippine has
been authorized under a separate decree;chanroblesvirtualawlibrary
WHEREAS, a number of local commercial banks, as depository banks under
the Foreign Currency Deposit Act (R.A. No. 6426), have the resources
and managerial competence to more actively engage in foreign exchange
transactions and participate in the grant of foreign currency loans to
resident corporations and firms;chanroblesvirtualawlibrary
WHEREAS, it is timely to expand the foreign currency lending authority
of the said depository banks under R.A. 6426 and apply to their
transactions the same taxes as would be applicable to transaction of
the proposed offshore banking units:cralaw:red
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines,
by virtue of the powers in me vested by the Constitution, do hereby
decree and make the following part of the law of the land:cralaw:red
Section 1. A second paragraph is hereby added to
Section 4 of Republic Act No. 6426 which shall read as follows:cralaw:red
"DEPOSITORY BANKS WHICH, ON ACCOUNT OF NETWORTH, RESOURCES, PAST
PERFORMANCE, OR OTHER PERTINENT CRITERIA, HAVE BEEN QUALIFIED BY THE
MONETARY BOARD TO FUNCTION UNDER AN EXPANDED FOREIGN CURRENCY DEPOSIT
SYSTEM SHALL BE EXEMPT FROM THE REQUIREMENT IN THE PRECEDING PARAGRAPH
OF MAINTAINING FIFTEEN PER CENT (15%) OF THE COVER IN THE FORM OF
FOREIGN CURRENCY DEPOSIT WITH THE CENTRAL BANK. SUBJECT TO PRIOR
CENTRAL BANK APPROVAL WHEN REQUIRED BY CENTRAL BANK REGULATIONS, SAID
DEPOSITORY BANKS MAY EXTEND FOREIGN CURRENCY LOANS TO ANY DOMESTIC
ENTERPRISE, WITHOUT THE LIMITATIONS PRESCRIBED IN THE PRECEDING
PARAGRAPH REGARDING MATURITY AND MARKETABILITY, AND SUCH LOANS SHALL BE
ELIGIBLE FOR PURPOSES OF THE 100% FOREIGN CURRENCY COVER PRESCRIBED IN
THE PRECEDING PARAGRAPH."
Section 2. Subject to such regulations as may be
promulgated by the Central Bank, depository banks qualified by the
Monetary Board to function under an expanded foreign currency deposit
system may obtain foreign currency loan from, and may conduct foreign
currency transactions with, non-residents, offshore banking units in
the Philippines and other depository banks under said expanded system.
The net income from such foreign currency transactions shall be subject
to a five percent (5%) tax which shall be in lieu of all taxes on said
transactions, except net income from such transactions as may be
specified by the Secretary of Finance, upon recommendation of the
Monetary Board, to be subject to the usual income tax payable by banks.
Interest income from foreign currency loans granted by such depository
bank under said expanded system to residents (other than offshore
banking units in the Philippines or other depository banks under the
expanded system) shall be subject to a ten per cent (10%) withholding
tax as a final tax. chanroblesvirtualawlibrary
Income of non-residents not engaged in trade or business in the
Philippines from foreign currency loans to depository banks under the
expanded system shall be exempt from income tax.
Section 3. Section 8 of the same Act is hereby
amended to read as follows:cralaw:red
"Sec. 8. Secrecy of deposits(.); NON-APPLICABILITY OF
THE LAWS ON USURY AND UNIFORM CURRENCY— The secrecy of deposits
under this Act shall be governed in accordance with the provisions of
Republic Act Numbered One Thousand Four Hundred Five. THE PROVISIONS OF
REPUBLIC ACT NUMBERED TWO THOUSAND FIVE HUNDRED SIXTY-SIX (USURY LAW),
AS AMENDED, AND REPUBLIC ACT NUMBERED FIVE HUNDRED TWENTY-NINE (UNIFORM
CURRENCY LAW), AS AMENDED, SHALL NOT APPLY TO DEPOSITORY BANKS IN
RESPECT TO THEIR FOREIGN CURRENCY TRANSACTIONS AUTHORIZED UNDER THIS
ACT."
Section 4. The Monetary Board of the Central Bank of
the Philippines shall promulgate the necessary regulations for the
implementation of this Decree.
Section 5. This Decree shall take effect upon
approval.
DONE in the City of Manila,
this 30th day of September, in the year of Our Lord, nineteen hundred
and seventy-six.
|
Back
to Home
- Back
to Main
chanroblesvirtuallawlibrary
Since 19.07.98
|