AMENDING FURTHER REPUBLIC ACT NO. 265, AS AMENDED, OTHERWISE KNOWN AS “THE CENTRAL BANK ACT”

WHEREAS, supervisory and regulatory authorities should have
the means to achieve their objectives and accomplish their responsibilities;

WHEREAS, the Central Bank should be able to enforce banking
laws and rules and regulations in order to promote and maintain a safe and sound
banking system 5

WHEREAS, it is necessary to afford the Central Brink
greater-flexibility in the use of its credit facilities to meet the demands of
economic development;

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, as follows:

SECTION 1. Section 1 of Republic Act No. 265, as amended, is
hereby amended to read as follows:

“SECTION l. 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)
pesos, the initial subscription for which shall be appropriated from the assets
of the Exchange Standard Fund, as provided in Section 134 of this
Act.”

SEC. 2. Section 3 of the same Act is hereby amended to read
as follows:

“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.”

SEC. 3. Section 5 of the same Act is hereby amended to read
as follows:

“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:

“(a) The Governor, who shall be the Chairman of tilt 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.

“(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 ;

“(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;

“(d) The Chairman of the Board of Investments„ 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;

“(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;

“(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.

“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.”

SEC. 4. The first paragraph of Section 10 of the same act
hereby amended to read as follows:

“SEC. 10. Meetings. — The Monetary Board shall 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. “

SEC. 5. Subsections (b) and (c) of Section 14 of the same
Act is hereby amended to read as follows:

“(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 this 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
exception 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.”

SEC. 6. Subsection (b) of Suction 17 of the same Act is
hereby amended to read as follows:

“(b) To authorize, with his signature, contracts entered into by the Central
Bank, notes and securities issuer by the Bank, and the annual reports, balance
sheets, profit and loss statements, correspondence and other documents of the
Bank without the approval or the concurrence of any other agency of the
Government. The signature of the Governor may be in facsimile wherever
appropriate;”

SEC. 7. The first paragraph of Section I8 of the same Act
hereby amended to read as follows:

“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.”

SEC. 8. Section 19 of the same Act is hereby amended to read
as follows:

“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 the 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.”

SEC. 9.The first two paragraphs of Section 21 of the same is
hereby amended to read as follows:

“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 nay 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.”

SEC. 10. The second paragraph of Section 23 of Republic No.
265, as amended, is hereby amended to read as follows:

“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 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.”

SEC. 11. Section 25 of the same Act is hereby amended to
read as follows:

“SEC. 11. 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 financial
intermediaries performing quasi-banking functions: Provided, That
affiliates of banking institutions, non-bank financial intermediaries, and
subsidiaries and affiliates of non-bank financial intermediaries functions may
be subject to special examination if the circumstances so warrant as determined
by the Monetary Board: Provided, further, That a subsidiary moans a
corporation sore 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 me/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,
of 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.”

SEC. 12. A new section is hereby added after Section 25 the
same Act to read as follows:

“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 instruments issued by the Government of the Philippines, its 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.”

SEC. 13. The first paragraph of Section 27 of the same Act
is hereby amended to read as follows:

‘SEC. 27.Prohibitions. — Personnel of the Central
Bank are hereby prohibited from:

“(a) Being an officer, director, employee, or stock-holder, directly or
indirectly, of any institution subject to supervision or examination by the
Central Banks, 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;

“(b) Receiving any gift or thing of value from any officer director, or
employee thereof;

“(c) Revealing in any manner, except under order of the court, or under such
conditions as Bay 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 or the Governor
of the Central Bank, or to any person authorized by either of them, in writing,
to receive such information”

SEC. 14. Section 29 of the same Act is hereby amended to
read as follows:

” SEC. 29. Proceedings 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 Philippine 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, hut not limited to, bringing suits and foreclosing
mortgages in the name of the banking institution.

“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, order 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 snail take over the functions of the receiver previously
appointed by the Monetary Board under this Section, The liquidator snail, 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.

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 snail fee 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, m 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, snail 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, of the year of Our
Lord, nineteen hundred and eighty-one.

			(Sgd.) FERDINAND E. MARCOS President of the Philippines
	By the President:
	(Sgd.) JUAN C. TUVERA
		Presidential Executive Assistant

Vol. 25, Vital Documents, Presidential Decree 1980-1981