A collection of Philippine laws, statutes and codes not included or cited in the main indices of the Chan Robles Virtual Law Library.
Republic Acts :
REPUBLIC ACT NO. 7721 - AN ACT LIBERALIZING THE ENTRY AND SCOPE OF OPERATIONS OF FOREIGN BANKS IN THE PHILIPPINES AND FOR OTHER PURPOSES
Section 1. Declaration of Policy. — The State shall develop a
self-reliant and independent national economy effectively controlled by
Filipinos and encourage, promote, and maintain a stable, competitive,
efficient, and dynamic banking and financial system that will stimulate
economic growth, attract foreign investments, provide a wider variety
of financial services to Philippine enterprises, households and
individuals, strengthen linkages with global financial centers, enhance
the country's competitiveness in the international market and serve as
a channel for the flow of funds and investments into the economy to
Sec. 2. Modes of Entry. — The Monetary Board may authorize foreign banks to operate in the Philippine banking system through any of the following modes of entry: (i) by acquiring, purchasing or owning up to sixty percent (60%) of the voting stock of an existing bank; (ii) by investing in up to sixty percent (60%) of the voting stock of a new banking subsidiary incorporated under the laws of the Philippines; or (iii) by establishing branches with full banking authority: provided, that a foreign bank may avail itself of only one (1) mode of entry: provided, further, that a foreign bank or a Philippine corporation may own up to a sixty percent (60%) of the voting stock of only one (1) domestic bank or new banking subsidiary.
Sec. 3. Guidelines for Approval. — In approving
entry applications of foreign banks, the Monetary Board shall: (i)
ensure geographic representation and complementation; (ii) consider
strategic trade and investment relationships between the Philippines
and the country of incorporation of the foreign bank; (iii) study the
demonstrated capacity, global reputation for financial innovations and
stability in a competitive environment of the applicant; (iv) see to it
that reciprocity rights are enjoyed by Philippine banks in the
applicant's country; and (v) consider willingness to fully share their
Sec. 4. Capital Requirements. — (i) For Locally
Incorporated Subsidiaries. — The minimum capital required for locally
incorporated subsidiaries of foreign banks shall be equal to that
prescribed by the Monetary Board for domestic banks of the same
Sec. 5. Head Office Guarantee. — The head office of foreign bank branches shall guarantee prompt payment of all liabilities of its Philippine branches.
Sec. 6. Entrants under Sec. 2(iii). — Foreign banks shall be allowed entry under Sec. 2 (iii) within five (5) years from the effectivity of this Act. During this period, six (6) new foreign banks shall be allowed entry under Sec. 2(iii) upon the approval of the Monetary Board. An additional four (4) foreign banks may be allowed entry on recommendation of the Monetary Board, subject to compliance with Section s 2, 3, 4, and 5 of this Act, upon approval of the President as the national interest may require.
Sec. 7. Board of Directors. — Non-Filipino citizens may become members of the Board of Directors of a bank to the extent of the foreign participation in the equity of said bank.
Sec. 8. Equal Treatment. — Foreign banks
authorized to operate under Sec. 2 of this Act, shall perform the
same functions, enjoy the same privileges, and be subject to the same
limitations imposed upon a Philippine bank of the same category.
These limits include, among others, the single borrower's limit and
capital to risk asset ratio as well as the capitalization required for
expanded commercial banking activities under the General Banking Act
and other related laws of the Philippines.
Sec. 9. Development Loans Incentives. — Loans
extended by a foreign bank's majority-owned subsidiary incorporated
under the laws of the Philippines and/or a Philippine bank sixty
percent (60%) of the voting stock of which is held by a foreign bank,
to finance educational institutions, cooperatives, hospitals and other
medical services, socialized or low-cost housing, and to local
government units without national government guarantee, shall be
included for purposes of determining compliance with the provisions of
Presidential Decree No. 717, as amended.
Approved: May 18, 1994