Home of ChanRobles Virtual Law Library

 

Home of Chan Robles Virtual Law Library

www.chanrobles.com

Presidential Decree No. 171

P.D. No. 171 : PHILIPPINE LAWS, STATUTES and CODES : CHAN ROBLES VIRTUAL LAW LIBRARY

PRESIDENTIAL DECREES




MALACAÑANG
M a n i l a

PRESIDENTIAL DECREE No. 171 April 10, 1973

AMENDING PRESIDENTIAL DECREE NO. 64, RELATIVE TO THE CHARTER OF THE PHILIPPINE NATIONAL BANK

WHEREAS, Presidential Decree No. 5 of September 27, 1972 amending the Charter of the Philippine National Bank, adopted and approved into law, House Bill No. 2483, which was pending before Congress at the time of the promulgation of the Proclamation No. 1081 dated September 21, 1972;

WHEREAS, Presidential Decree No. 5 was amended by Presidential Decree No. 64 to incorporate certain changes and modifications, particularly certain proposals recommended in the report of an official banking survey commission;

WHEREAS, the Bank Charter needs further amendment and modification in order that it can carry out its assigned role in the economic development of the country under the program of the New Society;

NOW, THEREFORE, I, FERDINAND E. MARCOS, Commander-in-Chief of all the Armed Forces of the Philippines, pursuant to Proclamation No. 1081, dated September 21, 1972, as amended and in order to effect desired changes and reforms in the social, economic and political structures of our society, do hereby order and decree as follows:

Section 1. Sub-section (h) of Section two of Republic Act Numbered Thirteen Hundred, as amended, is further amended to read as follows:

Sec. 2. Corporate powers and duties. The said National Bank, upon its organization, shall be a body corporate and shall have the power:

xxx xxx xxx

"(h) To invest in stocks, bonds and other secured collaterals having maturities of not more than thirty years: PROVIDED, THAT THE BANK MAY ORGANIZE AND INCORPORATE AN INVESTMENT AND/OR DEVELOPMENT FINANCING SUBSIDIARY, WHOSE CAPITAL STOCK MAY BE SUBSCRIBED IN WHOLE OR IN PART BY THE BANK: PROVIDED, FURTHER, THAT THE CONTROLLING INTEREST OF NOT LESS THAN SIXTY-SIX AND TWO-THIRDS (66-2/3%) PERCENT OF THE AUTHORIZED CAPITAL STOCK OF SUCH SUBSIDIARY SHALL AT ALL TIMES REMAIN WITH THE BANK: AND PROVIDED, FINALLY, THAT THE ORGANIZATION AND INCORPORATION OF SUCH SUBSIDIARY SHALL BE APPROVED BY THE PRESIDENT OF THE REPUBLIC OF THE PHILIPPINES."

Sec. 2. Sub-sections (g) and (h) of Section Five of Republic Act Numbered Thirteen Hundred, as amended, to read as follows:

"Sec. 5. Loans and investments authorized. Total liabilities of a single borrower. Additional liabilities and security required. Said National Bank is hereby authorized:

xxx xxx xxx

(g) To invest in equities of the following allied undertakings: warehousing companies, leasing companies, storage companies, safe deposit box companies, trust companies, companies engaged in the management of mutual funds but not in the mutual funds themselves, banks other than rural banks and such other similar activities as the Monetary Board of the Central Bank of the Philippines may declare as appropriate from time to time: Provided, however, That (a) the total investments in equities on ALLIED UNDERTAKINGS AS HEREIN PROVIDED shall not exceed twenty-five percent (25%) of the net worth of the Bank; (b) the investment in any one enterprise AS AN ALLIED UNDERTAKING shall not exceed ten percent (10%) of the net worth of the Bank; (c) the investment of the Bank in any single enterprise AS AN ALLIED UNDERTAKING SHALL REMAIN A MINORITY HOLDING IN THAT ENTERPRISE except where the enterprise is not a financial intermediary; and (d) the investment in other banks shall be deducted from the Bank's net worth for purposes of computing the prescribed ratio of net worth to risk assets. Equity investments shall not be permitted in non-related activities, NOT OTHERWISE PROVIDED IN THIS ACT.

Where the allied undertaking is a wholly-owned or majority controlled subsidiary of the Bank, it shall be subject to examination by the Central Bank."

(h) To grant loans to cooperatives as well as to individual members of such cooperatives: Provided, That in the grant of said loans the collateral requirements elsewhere required in this Act may be waived in appropriate cases.

The aggregate amount of loan for any single industry shall at no time exceed twenty (20%) per cent of the Bank's lending capacity.

"THE TOTAL LIABILITIES TO THE BANK OF ANY INDIVIDUALS, INCLUDING THE LIABILITIES OF THE INDIVIDUAL'S SPOUSE, OR OF ANY CORPORATION OR FIRM FOR MONEY BORROWED, INCLUDING IN THE LIABILITIES OF THE CORPORATION OR FIRM THE LIABILITIES OF THE SEVERAL MEMBERS THEREOF, SHALL AT NO TIME EXCEED FIFTEEN PER CENTUM (15%) OF THE UNIMPAIRED CAPITAL AND SURPLUS OF THE BANK. 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, AND IN ADDITION TO THE FIFTEEN PER CENTUM (15%) OF THE UNIMPAIRED CAPITAL AND SURPLUS OF THE BANK, HEREINBEFORE PROVIDED FOR, THE TOTAL LIABILITIES OF ANY BORROWER MAY AMOUNT TO A FURTHER FIFTEEN PER CENTUM OF THE UNIMPAIRED CAPITAL AND SURPLUS OF THE BANK PROVIDED SUCH ADDITIONAL LIABILITIES ARE SECURED BY SHIPPING DOCUMENTS, WAREHOUSE RECEIPTS OR OTHER SIMILAR DOCUMENTS TRANSFERRING OR SECURING TITLE COVERING READILY MARKETABLE, NON-PERISHABLE STOCKS, WHEN SUCH STAPLES HAVE A MARKET VALUE EQUAL TO AT LEAST ONE HUNDRED TWENTY-FIVE PER CENTUM (25%) OF SUCH ADDITIONAL LIABILITIES.

"PROVIDED, FURTHER, THAT THE CEILING ON THE TOTAL LIABILITIES OF ANY PERSON, CORPORATION, OR FIRM FOR MONEY BORROWED SHALL EXCLUDE (a) LOANS SECURED BY OBLIGATIONS OF THE CENTRAL BANK OR OF THE PHILIPPINE GOVERNMENT, (b) LOANS TO THE EXTENT COVERED BY HOLDOUT ON, OR ASSIGNMENT OF, DEPOSITS IN THE BANK AND HELD IN THE PHILIPPINES OR ABROAD, (c) LOANS AND ACCEPTANCES UNDER LETTER OF CREDIT TO THE EXTENT COVERED BY MARGIN DEPOSITS, AND (d) OTHER LOANS OR CREDITS WHICH THE MONETARY BOARD MAY FROM TIME TO TIME SPECIFY AS NON-RISK ASSETS.

"The Bank shall not make any loan upon the stock of any other corporation as collateral if the aggregate market value of all such stocks held as collateral exceeds an amount equal to ten (10%) per centum of the unimpaired capital stock and surplus of the Bank.

"The term 'loan' whenever used in this Act shall include overdrafts and the limitations contained in this section shall apply to any loan of any kind whenever secured wholly or partly by real estate mortgage."

Sec. 3. Section Six of Republic Act Numbered Thirteen hundred, as amended, is further amended to read as follows:

"Sec. 6. Board of Directors Composition Per Diems Tenure. The affairs and business of the National Bank shall be directed and its property managed and preserved, unless otherwise provided in the Act, by a Board of Directors consisting of nine members duly elected as hereinafter provided for a TERM OF ONE YEAR or after their successors are duly elected and qualified and who shall be paid a per diem of two hundred fifty pesos for each session of the Board of Directors."

Sec. 4. Section Seven of Republic Act Numbered Thirteen Hundred, as amended, is further amended to read as follows:

"Sec. 7. Election of Board of Directors Election of Chairman and Vice-Chairman of the Board of Directors. Annually on the first Tuesday after 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 stocks, registered in his name on the thirty-first of January last preceding and held by him at the time of the election. Immediately after the election, the directorate shall be organized as such and elect from among themselves a chairman, the President of the Bank shall be ex-officio vice-chairman, who shall assist the chairman and act in his stead in case of absence or incapacity. In case of incapacity or absence of both the chairman and vice-chairman, 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 member of the Board of Directors of the National Bank: Provided, further, That no person shall be elected director of the Bank unless he is a natural born citizen of the Philippines, not less than thirty-five years of age, of good moral character and has attained proficiency, expertise and recognized competence in one or more of the following: banking, finance, economics, law, agriculture, business management, public utility or government administration."

Sec. 5. Section Eight of Republic Act Numbered Thirteen Hundred, as amended, is further amended to read as follows:

"Sec. 8. President and Vice-President Appointment and Removal Salaries. The Chief Executive of the Bank shall be the President, who shall be elected by the Board of Directors from among themselves. No person shall be elected President of the Bank unless he is at least forty years of age, of good moral character and reputation, with at least ten years previous experience in banking, and has a reputed proficiency, expertise and recognized competence in banking and economics, or finance, or management, or government administration, or law, or agriculture, or industry. He shall be assisted by an executive vice-president who shall have the same qualifications as the President who shall have the same qualifications as the President and such number of senior vice-presidents and vice-presidents as may be necessary for the efficient operation of the business of the Bank, and who shall be chosen and may be removed for cause by the Board of Directors. The salaries of the President, Executive Vice-President, the Senior Vice-Presidents and Vice-Presidents shall be fixed by the Board of Directors in line with the policy declared by the President of the Philippines."

Sec. 6. Repealing Clause. All acts, executive orders, administrative orders, proclamations, rules and regulations or parts thereof inconsistent with any of the provisions of this Act are hereby repealed or modified accordingly.

Sec. 7. This Decree shall take effect immediately.

This Decree shall take effect immediately.

Done in the City of Manila, this 10th day of April, in the year of Our Lord, nineteen hundred and seventy-three.





Top of Page