FACILITATING BANK MERGERS OR CONSOLIDATIONS

WHEREAS, the Government is currently engaged in instituting
vital reforms in the banking system to enable it to play a more
effective role in the socio-economic development of the country;

WHEREAS, as a means of further promoting the financial
stability and capacity of the different banking units, it is imperative
that incentives be provided to encourage bank mergers or consolidations;

WHEREAS, to encourage bank mergers or consolidations,
Presidential Decree No. 71, dated November 29, 1972, in amending certain
provisions of the General Banking Act, exempts merged or consolidated
banks from the application of Section 28 of the Corporation Law (Act No.
1459, as amended), which limits the number of directors in a
corporation; and

WHEREAS, other provisions of the Corporation Law tend to
restrict or impede bank mergers or consolidations;

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 the Armed Forces of the Philippines, and pursuant
to Proclamation No. 1081, dated September 21, 1972, Proclamation No.
1104, dated January 17, 1973, and General Order No. 1, dated September
22, 1972, as amended, in order to facilitate bank mergers or
consolidations, do hereby order that this Decree be adopted as part of
the law of the land.

SECTION 1. For the sole purpose of facilitating bank mergers
or consolidations duly approved by the Monetary Board of the Central
Bank of the Philippines, any bank may merge or consolidate with another
bank and the capital stock of a bank may be increased to the extent
necessary to effect such merger or consolidation by the affirmative vote
of the stockholders representing at least a majority of the subscribed
capital stock in a stockholders’ meeting called for that purpose,
notwithstanding the provisions of Sections 281/2 and 17 of the
Corporation Law (Act No. 1459, as amended).

SEC. 2. This Decree shall take effect immediately and shall
remain in force for a period of three (3) years from date hereof.

Done in the City of Manila, this 29th day of January, in the
year of Our Lord, nineteen hundred and seventy-three.