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PRESIDENTIAL DECREE NO. 1771
PRESIDENTIAL DECREE NO. 1771
- AMENDING FURTHER REPUBLIC ACT NO. 265, AS AMENDED, OTHERWISE KNOWN AS
"THE CENTRAL BANK ACT"
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chanroblesvirtualawlibrary
WHEREAS,
supervisory and regulatory authorities should have the means to achieve
their objectives and accomplish their responsibilities; chanroblesvirtualawlibrary
WHEREAS, the Central bank should be able to enforce banking laws and
rules and regulations in order promote and maintain a safe and sound
banking system;chanroblesvirtualawlibrary
WHEREAS, it is necessary to afford the Central Bank greater flexibility
in the use of its credit facilities meet the demands of economic
development;chanroblesvirtualawlibrary
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, follows:cralaw:red
Section 1. Section 1 of Republic Act No. 265 as
amended, is hereby amended to read as follows:cralaw:red
"Sec. 1. Creation of the Central Bank. — There is
hereby created a body corporate to be known as the Central Bank of the
Philippines which shall be governed by the provisions of this Act.
"The capital of the Central Bank shall be ten billion
(P10,000,000,000.00) pesos, the initial subscription which shall be
appropriated from the assets of the Exchange Standard Fund, as provided
in section 134 of this Act."
Section 2. Section 3 of the same Act is hereby
amended to read as follows:cralaw:red
"Sec. 3. Place of business. — The Central Bank shall
have its principal place of business in Metropolitan Manila, but may
have such branches, agencies and correspondents in other places as are
necessary for the proper conduct of its business."
Section 3. Section 5 of the same Act is hereby
amended to read as follows:cralaw:red
"Sec. 5. Composition of the Monetary Board. — The
powers and functions of the Central Bank shall be exercised by a
Monetary Board, which shall be composed of seven members, as
follows: chanroblesvirtualawlibrary
"(a) The Governor, who shall be the Chairman of the
Monetary Board. The Governor shall be appointed for a term of six years
by the President of the Philippines. Whenever the Governor is unable to
attend a meeting of the Board, a Senior Deputy Governor shall act as
Chairman. chanroblesvirtualawlibrary
"(b) The Minister of Finance. Whenever the Minister
of Finance is unable to attend a meeting of the Board, he shall
designate a deputy minister to attend as his alternate;chanroblesvirtualawlibrary
"(c) The Director General of the National Economic
and Development Authority. Whenever the Director General is unable to
attend a meeting of the Board, he shall designate a deputy
director-general of the Authority to attend as his alternate;chanroblesvirtualawlibrary
"(d) The Chairman of the Board of Investments.
Whenever the Chairman of the Board of Investments is unable to attend a
meeting of the Board, he shall designate a governor of the Board of
Investments to attend as his alternate;chanroblesvirtualawlibrary
"(e) In lieu of any of the officials named in
subsection (c) or (d) above, such head of any other financial or
economic agency or department of the Government as the President of the
Philippines may determine; chanroblesvirtualawlibrary
"(f) Three part-time members from the private sector,
to be appointed for terms of six years by the President: Provided,
however, that the first members appointed under the provisions of this
subsection shall have terms of office of two, four and six years,
respectively. chanroblesvirtualawlibrary
"In making appointments to the Monetary Board, the President of the
Philippines shall base his selection on the integrity, experience and
expertise of the appointee."
Section 4. The first paragraph of Section 10 of the
same Act is hereby amended to read as follows:cralaw:red
"Sec. 10. Meetings. — The Monetary Board shall
convene as frequently as is necessary to discharge its responsibilities
properly, but shall meet at least once every two weeks. The Board may
be convoked either by the Minister of Finance or by the Governor of the
Central Bank."
Section 5. Subsections (b) and (c) of Section 14 of
the same Act is hereby amended to read as follows:cralaw:red
"(b) Direct the management, operations, and
administration of the Central Bank, reorganize its personnel, and issue
such rules and regulations as it may deem necessary or convenient for
his purpose. The legal units of the Central Bank shall be under the
exclusive supervision and control of the Monetary Board, the provision
of any law to the contrary notwithstanding.
"(c) On the recommendation of the Governor, appoint,
fix the remunerations and other emoluments, and remove personnel of the
Central Bank, with the exceptions of the Governor, subject to pertinent
civil service and compensation laws: Provided, That the Monetary Board
shall have exclusive and final authority to promote, transfer, assign,
or reassign personnel of the Central Bank and these personnel actions
are deemed made in the interest of the service and not disciplinary,
any provisions of existing law to the contrary notwithstanding:
Provided, further, That the Monetary Board may delegate such authority
to the Governor under such guidelines as it may determine."
Section 6. Subsection (b) of Section 17 of the same
Act is hereby amended to read as follows:cralaw:red
"(b) To authorize, with his signature, contracts
entered into by the Central Bank, notes and securities issued by the
Bank, and the annual reports, balance sheets, profit and loss
statements, correspondence and other documents of the Bank without the
approval of the concurrence of any other agency of the Government. The
signature of the Governor may be in facsimile wherever appropriate,"
Section 7. The first paragraph of Section 18 of the
same Act is hereby amended to read as follows:cralaw:red
"Sec. 18. Authority of the Governor in emergencies. —
In the event of war or other emergencies which require immediate action
and in which there is insufficient time to call a meeting of the
Monetary Board, the Governor of the Central Bank, with the concurrence
of the Minister of Finance or, in his absence, with the concurrence of
any two other members of the Monetary Board, may decide any matter or
take any action within the authority of the Board itself and may
suspend any resolution or decision of the Board." chanroblesvirtualawlibrary
Section 8. Section 19 of the same Act is hereby
amended to read as follows: chanroblesvirtualawlibrary
"Sec. 19. Outside interests of the Governor. — The
Governor of the Central Bank shall be required to limit his
professional activities to those pertaining directly to his position
with the Central Bank; accordingly, the Governor of the Bank may not
accept any other employment, whether public or private, remunerated or
ad honorem, with exception of academic positions and of public
commissions and positions held in representation of the interests of
the Government or government agencies and which are related to the
formation, direction or implementation of monetary banking or general
economic policies which concern the national interest of the
Philippines."
Section 9. The first two paragraphs of Section 21 of
the same Act is hereby amended to read as follows:cralaw:red
"Sec. 21. Deputy-Governor. — The Governor of the
Central Bank, with the approval of the Monetary Board, shall appoint
one or more senior deputy governors and deputy-governors, in a maximum
number as may be approved by the President of the Philippines. They
shall perform duties as may be assigned to them by the Governor and the
Board."
"In the absence of the Governor of the Central Bank, a Senior Deputy
Governor designated by the Governor shall act as chief executive of the
Central Bank and shall exercise the powers and perform the duties of
the Governor. Whenever the Governor or Senior Deputy Governor, as the
case may be, is unable to attend meetings of a government boards or
councils in which he is an ex-officio member pursuant to provisions of
special laws, a Senior Deputy Governor or Deputy Governors as may be
designated by the Governor, shall be vested with authority to
participate and exercise the right to vote in such meetings. They shall
have such line or staff authority as may be delegated by the Governor
and the Monetary Board." chanroblesvirtualawlibrary
Section 10. The second paragraph of Section 23 of
Republic Act No. 265, as amended, is hereby amended to read as
follows: chanroblesvirtualawlibrary
"Data on individual firms, other than banks, gathered for statistical
purposes 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
where specifically authorized 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 11. 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 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 financing 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% of the voting stock of which is owned by a
banking institution or non-bank financial intermediary, and an
affiliate means a corporation 10% to 50% of the voting stock of which
is owned by such institution or intermediary. 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."
Section 12. A new section is hereby added after
Section 25 of the same Act to read as follows:cralaw:red
"Sec. 25-A. The department heads and the examiners of
the supervising and examining departments, in the conduct of the
periodic or special examination of banking institutions may be
specifically authorized by the Monetary Board to examine, inquire or
look into all deposits of whatever nature with banking institutions in
the Philippines including investments in debt instrument issued by the
Government of the Philippines, it political subdivisions and its
instrumentalities, after being satisfied that there is reasonable
ground to believe that a bank fraud or serious irregularity has been or
is being committed and that it is necessary to look into the deposit to
establish such fraud or irregularity."
Section 13. The first paragraph of 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: chanroblesvirtualawlibrary
"(a) Being an officer, director, employee, or
stockholder, directly of 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 of the Governor of the
Central Bank, or to any person authorized by either of them, in
writing, to receive such information."
Section 14. Section 29 of the same Act is hereby
amended to read as follows:cralaw:red
"Sec. 29. Proceeding upon insolvency. — Whenever,
upon examination by the head of the appropriate supervising and
examining department or his examiners or agents into the condition of
any banking institution, 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 person or recognized competence in
banking, 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 banking institution. chanroblesvirtualawlibrary
"The Monetary Board shall thereupon 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 resumption 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 institution 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 banking institution is insolvent or can not resume
business with safety to its depositors, creditors, and the general
public, it shall, if the public interest requires, orders 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 the banking institution. The court shall have
jurisdiction in the same proceedings to adjudicate disputed claims
against the bank and enforce individual liabilities of the stockholders
and do all that is necessary to preserve the assets of the banking
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, 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 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 bank and he may, in the name of the banking institution, institute
such actions as may be necessary in the appropriate court to collect
and recover accounts and assets of the banking 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.
"Insolvency, under this Act, shall be understood to mean the inability
of a banking institution 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 caused by extraordinary demands induced by financial panic
commonly evidenced by a run on the banks in the banking 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."
Done in the City of Manila this
14th day of January, in the year of Our Lord, nineteen hundred and
eighty-one.
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