AN ACT CREATING A PHILIPPINE AMANAH BANK.

WHEREAS, it is a declared policy of the Government to
promote and accelerate the socio-economic growth and development of Mindanao,
particularly, the economically depressed provinces of Cotabato, Lanao del Sur,
Lanao del Norte, Zamboanga del Sur, Zamboanga del Norte and Sulu;

WHEREAS, surveys, and studies indicate a pressing need to
expand the banking and credit system in the region to make it more responsive to
the investments and credit requirements of this development program; and

WHEREAS, it is further recognized that, ultimately sustained
economic development will rely heavily on the capabilities of the people in the
region to generate investments through institutional savings;

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, pursuant to
Proclamation No. 1081, dated 21 September 1972, as amended by Proclamation No.
1104, dated 17 January 1973 and General Order No. 1, dated 22 September 1972, as
amended, and in order to effect the desired changes and reforms in the social,
economic and political structure of our society, do hereby order and decree the
creation of a Philippine Amanah Bank.

ESTABLISHMENT AND FUNCTION

SECTION 1. Purposes, Name and Domicile. — To
provide credit, commercial, development and savings banking facilities at
reasonable terms to the people of the primarily Muslim provinces of Mindanao,
principally, the provinces of Cotabato, South Cotabato, Lanao del Sur, Lanao del
Norte, Sulu, Basilan, Zamboanga del Norte, Zamboanga del Sur and Palawan for the
establishment, acquisition, development and expansion of agricultural,
commercial and industrial enterprises, there is hereby created a body corporate
to be known as the Philippine Anlanah Bank, which shall have its principal place
of business at Marawi City and shall exist for fifty years.

SEC. 2. Corporate Power. — The Philippine Amanah
Bank shall have the power:

a) to prescribe its by-laws;
b) to adopt, alter, and use a corporate
seal;
c) to make contracts, to sue and be sued;
d) to accept savings and
time deposits, and open current or checking accounts;
e) to borrow money; to
own real or personal property and to sell, mortgage or otherwise dispose of the
same;
f) to employ such officers and personnel, preferably from the Muslim
population in Mindanao and Palawan as may be necessary to carry on its
business;
g) to establish such branches and agencies in the dominantly Muslim
provinces in Mindanao and Palawan and such correspondent Offices in other areas
as may be necessary for the proper conduct of its business;
h) to grant loans
for the establishment, acquisition, development and expansion of agricultural,
commercial and/or industrial enterprise, including public utilities, mining
livestock and poultry and fishing, whether offshore or inland;
i) to invest
equities of allied undertakings as pertinent laws and the Central Bank shall
authorize;
j) to carry on trust business in accordance with the provisions of
law governing trust corporations;
k) to issue bonds, debentures, securities,
collaterals and/or the renewal or refinancing of the same with the approval of
the Central Bank, to be used by the Bank in its lending operations for
industrial and agricultural projects that will promote the economic development
of the region;
l) to exercise powers granted under this Charter and such
incidental powers as may be necessary to carry on its business, and to exercise
further the general powers mentioned in the Corporation Law and the General
Banking Act, as amended, far as they are not inconsistent or incompatible with
the provisions of this Charter.

SEC. 3. Authorized Capital Stock — Par
Value. — The authorized capital stock of the Amanah Bank shall be one
hundred million pesos divided into one million par value shares of one hundred
pesos each. The shares shall be divided into four classes, denominated as Series
“A,” Series “B,” Series “C,” and Series “D.”

a) Series “A” shall comprise thirty million pesos equivalent to three hundred
thousand common shares to be subscribed by the Government of the Republic of the
Philippines;

b) Series “B” shall comprise twenty million pesos equivalent
to two hundred thousand preferred shares which shall be subscribed by the
Government of the Republic of the Philippines, its agencies or
instrumentalities, such shares to be entitled to cumulative dividends of three
percent (3%) per annum and with preference as against common stockholders in the
distribution of assets in the event of liquidation;

c) Series “C” shall
comprise thirty million pesos equivalent to three hundred thousand common shares
to be subscribed solely by the citizens of the Philippines and domestic
corporations and entities, seventy percent (70%) of the equity of which is owned
by Citizens of the Philippines. Preference in the subscription of this class of
shares shall be given to residents of the provinces and cities served or to be
served by the Bank;

d) Series “D” shall comprise twenty million pesos
equivalent to two hundred thousand common shares which shall be available for
subscription of foreign nationals, their corporations and/or
associations.

SEC. 4. Loans and investments authorized. — Said
Amanah Bank is hereby authorized:

1. to purchase or discount promissory notes, drafts and bills of exchange
   issued or drawn for agricultural, commercial or industrial purposes, with
   securities required by the Bank, or the proceeds of which have been used or are
   to be used for such purpose;
2. to grant loans on or to discount notes secured by harvested and stored
   crops: Provided, That no loan on the security of such harvested and
   stored crops shall exceed eighty percent (80%) of the market value thereof on
   the date of the loan: Provided, further, That the crops so mortgaged
   shall be insured by the mortgagor for the benefit of the Amanah Bank for their
   entire market value: And provided, finally, That if, owing to
   circumstance whatever, the value of the crops given as security shall diminish,
   the mortgagor shall obligate himself to furnish further security or refund such
   part of the loan as the Bank may deem necessary. Such loans shall be granted for
   a period of not to exceed one year, subject to extension in the discretion of
   the Bank;
3. to grant loans to agriculturists, on installments, for standing crops
   considered natural products of the Philippines such as rice, copra, sugar,
   tobacco, corn, etc., not exceeding seventy percent (70%) of the estimated value
   of such crops; Provided, however, That before granting such loans, the
   Amanah Bank may impose as a condition that cultivation be under supervision
   and/or require additional security in the nature of mortgages on real estate
   duly registered in the name of the debtor, or chattel mortgage, including those
   upon livestock, machinery and agricultural implements, or personal bonds with
   sufficient surety or sureties, satisfactory to the Bank;
4. to grant loans to the several provincial, city and municipal governments and
   to any other branch or subdivision of the Republic of the Philippines on
   promissory notes guaranteed by the National Government, as shown by the
   endorsement thereon of the Secretary of Finance, approved by the President of
   the Philippines or to purchase bonds lawfully issued by such provincial, city
   and municipal governments and any other branches or subdivision of the
   Government of the Philippines;
5. to grant loans to cooperative associations against the security of
   acceptable assets of the cooperative association and/or the individual members
   thereof;
6. to grant loans to small farmers, merchants and traders against the security
   of lands without Torrens title, where the owner of private property can show
   five years or more of peaceful, continuous and uninterrupted possession in the
   concept of the owner; or of portions of friar land estates or other lands
   administered by the Bureau of Lands that are covered by sales contracts and the
   purchasers have paid at least five years installment thereon, without the
   necessity of prior approval and consent of the Land Authority or corresponding
   governmental agency; or of homesteads of free patent lands pending the issuance
   of titles but already approved, the provisions of any law or regulations to the
   contrary notwithstanding: Provided, That when the corresponding titles
   are issued the same shall be delivered to the register of deeds of the province
   where such lands are situated for the annotation of the encumbrance:
   Provided, further, That in the case of lands pending homestead or free
   patent titles, copies of notices for the presentation of the final proof shall
   also be furnished the Bank and, if the borrower applicants fail to present the
   final proof within thirty days from the date of notice, the Bank may do so for
   them at their expense: Provided, finally, That the applicant for
   homestead or free patent has already made improvements on the land and the loan
   applied for is to be used for further development of the same or for other
   productive economic activities;
7. to grant loans to employees in the government service or in private industry
   to acquire stocks in corporations or industries in an amount not exceeding one
   month’s salary for every year of service, against the security of the
   undertaking of the employee with notice upon the employer for the repayment
   thereof by monthly payroll deductions within a period of five years;
8. to augment and supplement the capital of the Amanah Bank, the Development
   Bank of the Philippines, the Philippine National Bank and other government
   financial institutions shall be permitted to extend loans to the Bank from time
   to time repayable in an amortization period and at interest rates that may be
   agreed upon against security which may be offered by the Amanah Bank or any
   stockholders of the Bank that:

   1) the said government financial institutions are convinced that the
   resources of the Amanah Bank are inadequate to meet the legitimate credit
   requirements of the locality wherein the Bank is established;

   2) there is dearth of private capital in the said locality; and

   3) it is not possible for the private stockholders to increase the paid-up
   capital thereof;

9. the Bank with the approval of the Monetary Board may rediscount paper with
   the Central Bank, the Philippine National Bank or other banks and their branches
   or agencies. The Central Bank shall specify the nature of papers deemed
   acceptable for rediscounting and the rate to be charged by any such
   institutions;
10. generally, to make advances or discount paper for agricultural,
    manufacturing, industrial, or commercial purposes: Provided, That
    seventy-five percent (75%) of the loanable funds of the Bank shall be invested
    in medium and long-term loans for economic development purposes and in no case
    shall the Bank invest more than twenty five percent (25%) of its loanable funds
    in short term loans for miscellaneous purposes: Provided, however, That
    twenty five (25%) percent of the loanable funds for short term loans may be
    loaned on securities other than real estate mortgage.

SEC. 5. Lending Limits. — Said Amanah Bank shall
observe the following limits in its lending operations:

1. the total liabilities of any person, company, corporation or firm, excluding
   loans or credits prescribed by law or by the Monetary Board as non-risk assets,
   shall at no time exceed fifteen percent (15%) of the unimpaired capital and
   surplus of the Bank.

   The total liabilities of any borrower may amount to a further fifteen percent
   (15%) of the unimpaired capital and surplus of the Bank provided that
   the additional liabilities are adequately secured by shipping documents,
   warehouse receipts or other similar documents transferring or securing title
   covering readily marketable, non-perishable staples which staples must be fully
   covered by insurance, and must have a market value equal to at least one hundred
   and twenty-five percent (125%) of” such additional liabilities.

   The term liabilities as used herein shall mean the direct liability of the
   maker or the acceptor of paper discounted with or sold to the Bank and the
   liability of the indorser, drawer or guarantor who obtains a loan from or
   discounts paper with or sells papers under the guaranty to the Bank and shall
   include in the case of the liabilities of a co-partnership or association the
   liabilities of the several members thereof and shall include in the case of the
   liabilities of a corporation all liabilities of all subsidiaries thereof in
   which such corporation owns or controls a majority interest. But the discount of
   bills of exchange drawn in good faith against actually existing values, and the
   discount of commercial or business paper actually owned by the person
   negotiating the same, shall not be considered as money borrowed, for the purpose
   of this Section.

   Loan accommodations granted by the Amanah Bank to any other bank licensed to
   do business in the Philippines, shall be subject to the loan limit to any single
   borrower as herein prescribed.

2. no director or officer of the Bank shall, either directly or indirectly, for
   himself or as the representative or agent of others, borrow any of the deposits
   or funds of the Bank, nor shall he become a guarantor, indorser, or surety for
   loans from the Bank to others, or in any manner to be an obligor for money
   borrowed from the Bank or loaned by it, except with the written approval of the
   majority of the directors of the Bank, excluding the director concerned. The
   credit accommodation to such director or officer of this Bank which the Board of
   Directors may authorize shall in no case exceed his outstanding deposits or the
   book value of his paid-in capital in the Bank. Any such approval shall be
   entered upon the records of the Bank and a copy of such entry shall be
   transmitted forthwith to the appropriate supervising department of the Central
   Bank of the Philippines. The office of any director or officer of the Bank who
   violates the provisions of this Section shall immediately become vacant and the
   director or officer shall be subject to criminal prosecution and suffer the
   penalties provided by law;
3. the outstanding credit accommodation which the Bank may extend to
   stockholders, other than the Government of the Republic of the Philippines, its
   agencies and instrumentalities, owning more than two percent (2%) or more of the
   subscribed capital stock of the Bank, shall be limited to an amount equivalent
   to their outstanding deposits and book value of their paid-in capital
   contribution in the Bank.

OFFICERS AND EMPLOYEES

SEC. 6. Board of Directors. — The affairs and
business of the Amanah Bank shall be directed and its property managed and
preserved unless otherwise provided in this Act, by a Board of
Directors consisting of nine (9) members duly elected as hereinafter
provided, who shall for each session of the Board attended by them, be
paid a per diem in such amount as the Board of Directors may fix.

SEC. 7. Election of Board of Directors. — Annually
on the first Monday in March, the stockholders shall meet to elect the members
of the Board of Directors for the current year, each stockholder or proxy to be
entitled to as many votes as he may have shares of stock, registered in his name
on the fifteenth of February last preceding and held by him at the time of the
election. Immediately after the election, the directorate shall organize as such
and elect from amongst themselves a chairman, a vice-chairman who shall assist
the chairman and act in his stead in case of absence or incapacity of the
chairman. In case of incapacity or absence of both, the chairman and/or
vice-chairman of the Board of Directors shall designate a temporary chairman
from among its members, Provided, That no director, shareholder or
employee of any other bank shall be eligible as members of the Board of
Directors: Provided, further, That no full-time appointive or elective
public official shall at the same time serve as officer, director, legal counsel
or consultant of the Bank except in cases where such service is in the exercise
of the stockholders right of the Government or is incident to financial
assistance provided by the Government, its agencies or
instrumentalities to the Bank.

SEC. 8. The Board of Directors shall, among other duties,
powers, and authority:

1. formulate policies necessary to carry out effectively the provisions of this
   Charter and adopt such by-laws, rules and regulations for the effective
   operation of the Bank, in conformity with this Act and existing laws; and
2. establish, upon previous authority of the Central Bank, branches, agencies
   or offices in other countries and at such points within the Philippines, as it
   may deem advisable, which shall perform functions as may be delegated to them by
   the Board of Directors.

SEC. 9. The Amanah Bank shall have the following officers: a
president, one or more vice-presidents, a secretary, a treasurer, an auditor and
a legal counsel who shall be chosen by the Board of Directors, their tenure of
office and compensation shall be determined by the Board of Directors. In making
these appointments, preference shall be given to members of the cultural
minorities.

SEC. 10. Duties and Powers of the President. — The
President of the Bank shall, among others, execute and administer the policies,
measures, orders and resolutions approved by the Board of Directors and direct
and supervise the operation and administration of the Bank.

Particularly, he shall have the power and duty:

1. to make loans on commercial paper for periods of time not to exceed four
   months in sums not exceeding fifty thousand pesos to any one person, company,
   corporation or firm, but he is required to submit a report on each such loan to
   the Board of Directors at its next succeeding session;
2. to make, with the advice and consent of the Board of Directors, all
   contracts on behalf of the said Bank and to enter into all necessary obligations
   by this Charter required or permitted;
3. to report weekly to the Board of Directors and main facts concerning the
   operations of the Bank during the preceding week and to suggest changes in the
   rates of discount, exchange, or of policy which may to him seem best.

SEC. 11. Other Officers and Employees. — All other
officers and employees of the Bank shall be appointed and removed by the Board
of Directors, on recommendation of the President. In making appointments,
members of the cultural minorities shall be given preference. Said officers and
employees shall not be subject to the Civil Service Law, and their duties and
compensation shall be fixed by the President with the approval of the Board of
Directors.

SEC. 12. Fidelity Bond for Officers and Employees.
— The Board of Directors may require the officers and employees of the Bank and
its branches, before entering upon the performance of their duties, to furnish a
fidelity bond for the benefit of the Bank, in the form and amount prescribed by
the said Board of Directors.

SEC. 13. Project Development Office. — The Amanah
Bank shall have a Project Development Office which shall be responsible for the
following:

1. conduct periodic economic surveys and studies of the investment climate and
   opportunities in the Bank’s sphere of operations and identify the viable
   projects which may be sponsored by the people in the region;
2. offer technical consultancy services in the preparation of project studies
   and in meeting other technical credit requirements of the Bank, including the
   provision of management consultants at rates to be determined by the Board of
   Directors to projects financially assisted by the Bank;
3. evaluate each project proposal for possible financing by the Bank.

SEC. 14. Auditing Office. — The Auditing Office of
the Bank shall be headed by a representative of the Auditor General. All the
other employees of the Office shall be appointed by the Directors of the Bank.
The operating expenses, salaries and travel expenses of the employees of the
Office shall be payable by the Bank, and the Board of Directors shall make the
necessary appropriations therefor. The representative of the Auditor General
shall make a quarterly report on the condition of the Bank to the President of
the Philippines through the Secretary of Finance, to the Auditor General and to
the Board of Directors of the Bank. The report shall contain among others a
statement of the resources and liabilities, including earnings and expenses, the
amount of capital stock, dividends paid, surplus reserve, and undivided profits,
as well as the losses, bad debts and suspended and overdue paper carried in the
Bank’s assets as of the day in which the statements are complied.

MISCELLANEOUS PROVISIONS

SEC. 15. Government Shares.—The voting power of all
stocks of the Amanah Bank owned and controlled by the Republic of the
Philippines shall be vested in the President of the Philippines, or in such
person or persons as he may from time to time duly designate.

The stockholdings of the Government in common or preferred shares with the
Amanah Bank, or any part thereof, may be sold at par value at any time to
citizens of the Philippines who are registered stockholders of the Amanah Bank
in proportion to their respective holdings. They shall have a period of one year
from the date of the offer to sell by the Government within which to exercise
this right. In the absence of such buyers, preference shall be given to
Philippine citizens who are residents of the provinces served by the Bank before
the shares of stock may be publicly offered by listing in the stocks at any
stock exchange.

All profits assigned as dividends to the shares of the Government shall first
be applied in payment to the unpaid subscriptions of the Government. Upon full
payment of such subscriptions, the dividends shall thereafter be paid into the
Treasury of the Philippines for the general funds thereof.

SEC. 16. Government Assistance on Documentation and
Registration. — Any city or municipal judge in his capacity as notary
public ex officio shall administer oath to or act upon the instruments of the
Amanah Bank, its borrowers or mortgagors, free from all charges, fees, and
documentary stamp tax, collectible under existing laws, relative to any loan or
transaction not exceeding five thousand pesos.

Any Register of Deeds shall accept from the Amanah Bank and its borrowers or
mortgagors for registration free from all charges, fees, and documentary stamp
collectible under existing laws, any instrument, whether voluntary or
involuntary, relating to loans or transactions extended by the Bank in an amount
not exceeding five thousand pesos : Provided, however, That charges, if
any, shall only be collectible on the amount in excess of five thousand pesos;
and that in instruments related to assignments of several mortgages consolidated
in a single deed, charges or fees, if any, shall be levied only on the amount in
excess of five thousand pesos of the consideration in the assignment of each
mortgage.

SEC. 17. Prohibition. — No member of the Board of
Directors, officer, attorney, agent or employee of the Bank shall in any manner,
directly or indirectly, participate in the deliberations upon the determination
of any question affecting his personal interest, or the interests of any
corporation, partnership, or association in which he is directly or indirectly
interested. Any person violating the provisions of this Section shall be
summarily removed from office.

No fee, commission, gilt or charge of any kind shall be exacted, demanded or
paid to any director, employee or agent of the Bank for obtaining loans from the
Bank, and any director, officer, employee or agent of the Bank exacting,
demanding or receiving any fee for services in obtaining a loan shall be
summarily removed from office.

SEC. 18. Supervision by the Central Bank. — The
Amanah Bank shall be subject to examination and supervision of the Central Bank
pursuant to applicable laws, and shall contribute to the Central Bank an annual
fee to help defray the cost of maintaining the appropriate supervising
department within the Central Bank in an amount to be determined by the Monetary
Board but in no case to exceed one twentieth of one percent (1/20 of 1%) of its
total assets during the preceding year, as shown on its end-of-month balance
sheets, after deducting its cash on hand and amounts due banks, including the
Central Bank.

SEC. 19. Confidential Information. — The Governor,
Central Bank, officers of the Central Bank and other officials as may be
designated by law or regulations of the Monetary Board to examine the books for
the Amanah Bank shall not reveal the results of any examination conducted by
them to any person, government official, bureau or office other than the
Monetary Board and the Board of Directors of the Amanah Bank. The reports and
other papers relative to such examination shall not be opened to the public
except only insofar as such publicity is necessary for the prosecution of
violation in connection with the business of the Amanah Bank or is incidental to
proceedings upon insolvency or persistent violation of law and regulations.

SEC. 20. Secrecy of Deposits. — All deposits of
whatever nature with the Amanah Bank, including investments in bonds issued by
the Government of the Philippines, its political subdivisions and its
instrumentalities, are hereby considered as of an absolutely confidential nature
and may not be examined, inquired or looked into by any person, government
official, bureau or office except upon written permission of the depositor, or
in case of impeachment, or upon order of a competent court in cases where the
money
deposited or invested is the subject matter of the litigation.

It shall be unlawful for any official or employee of the Amanah Bank to
disclose to any person other than those mentioned above any information
concerning said deposits.

SEC. 21. Repealing Clause. — Any law or part of law
inconsistent with the provisions of this Charter is hereby repealed.

SEC. 22. This Decree shall take effect immediately.

Done in the City of Manila, this 2nd day of August, in the year of Our Lord,
nineteen hundred and seventy-three.

			(Sgd.) FERDINAND E. MARCOS President Republic of the Philippines
	By the President:
	(Sgd.) ROBERTO V. REYES
		Assistant Executive Secretary