AUTHORIZING THE INCREASE IN AUTHORIZED CAPITAL STOCK AND APPROPRIATING FUNDS FOR PAID-UP CAPITAL OF THE DEVELOPMENT BANK OF THE PHILIPPINES

WHEREAS, in line with the objectives of rapid economic
growth, it is necessary for the Government to provide massive credit
financing for the development and expansion of industry and agriculture;

WHEREAS, the Development Bank of the Philippines is one of
the primary agencies of the Government which provides credit facilities
for economic development;

WHEREAS, under its Charter (Republic Act No. 2081, as
amended) the Development Bank of the Philippines has an authorized
capital of P2 billion fully subscribed by the Government of which only
P408.7 million has been paid; and

WHEREAS, in accordance with the findings of the Performance
Evaluation Team which conducted an audit of the financial affairs and
operations of the Development Bank of the Philippines pursuant to
Presidential Memorandum Order No. 247, Series of 1971, it is desirable
to increase the capital stock and paid-up capital of the said Bank to
enable it to sustain the credit requirements of a rapidly expanding
economy;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the
Philippines, by virtue of the powers in me vested by the Constitution as
Commander-in-Chief of all the Armed Forces of the Philippines, and
pursuant to Proclamation No. 1081, dated September 21, 1972, and General
Order No. 1, dated September 22, 1972, as amended, and in order to
effect the desired changes and reforms in the social, economic, and
political structures of our society, do hereby order and decree the
amendment of Republic Act No. 2081, as amended, as follows:

SECTION 1. Section Three of R.A. No. 2081, as amended, is
hereby amended to read as follows:

“SEC. 3. Capital Stock. — The capital stock of the
Bank shall be three billion pesos divided into three 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 and payment of the said subscription shall be as follows:

“(a) 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 profits shall be
utilized for such purposes as may be authorized by the Board of
Governors.
“(b) The provisions of Section three of Republic Act Numbered Seventeen
hundred eighty-nine to the contrary notwithstanding, an amount
equivalent to fifty percent 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.
“(c) The portion of the stabilization tax allocated for deposit to a
Special Account with the Development Bank of the Philippines, pursuant
to Section 4 (c) of Republic Act Numbered Six Thousand One Hundred
Twenty Five, as amended, otherwise known as the Stabilization Tax Law,
shall be automatically applied to the payment of the Government’s
subscription to the Capital Stock of the Bank effective as of the date
of receipt thereof.
“(d) The obligations of the Development Bank of the Philippines as of
April 30, 1973 ‘represented by bonds issued by said Bank and held by the
Central Bank of the Philippines including interest thereon, rounded to
the nearest thousand, and loans or advances made under R.A. No. 265 and
R.A. No. 2081, together with interest thereon, rounded to the nearest
thousand, shall be converted into paid-in capital by the Government
which shall assume said obligations; and for this purpose, the President
of the Philippines, upon recommendation of the Secretary of Finance,
shall issue in favor of the Central Bank of the Philippines treasury
bonds, notes or securities, in such amounts as may be necessary for the
settlement of said obligations and under such terms and conditions as
shall be recommended by the Secretary of Finance in consultation with
the Monetary Board.”

SEC. 2. This Decree shall take effect immediately.

Done in the City of Manila, this 9th day of May, in the year
of Our Lord, nineteen hundred and seventy-three.