REPUBLIC ACT NO.

8791 AN ACT PROVIDING FOR THE REGULATION OF THE ORGANIZATION AND OPERATIONS OF BANKS, QUASI- BANKS, TRUST ENTITIES AND FOR OTHER PURPOSES

CHAPTER I TITLE AND CLASSIFICATION OF BANKS Sec !"# 1. T! $e. The short title of this Act shall be The General Banking Law of 2000." (1a) Sec. %. Dec$&'& !"# O( P"$!c). - The tate recogni!es the "ital role of banks #ro"i$ing an en"iron%ent con$&ci"e to the s&staine$ $e"elo#%ent of the national econo%' an$ the fi$&ciar' nat&re of banking that re(&ires high stan$ar$s of integrit' an$ #erfor%ance. )n f&rtherance thereof* the tate shall #ro%ote an$ %aintain a stable an$ efficient banking an$ financial s'ste% that is globall' co%#etiti"e* $'na%ic an$ res#onsi"e to the $e%an$s of a $e"elo#ing econo%'. Sec. *. De(!#! !"# &#+ C$&,,!(!c& !"# "( B&#-,. +.1. "Banks" shall refer to entities engage$ in the len$ing of f&n$s obtaine$ in the for% of $e#osits. +.2. Banks shall be classifie$ into, (a) -ni"ersal banks. (b) /o%%ercial banks. (c) Thrift banks* co%#ose$ of, (i) a"ings an$ %ortgage banks. (ii) tock sa"ings an$ loan associations. an$ (iii) 0ri"ate $e"elo#%ent banks* as $efine$ in the 1e#&blic Act 2o. 3405 (hereafter the Thrift Banks Act6). ($) 1&ral banks* as $efine$ in 1e#&blic Act 2o. 3+ + (hereafter the "1&ral Banks Act"). (e) /oo#erati"e banks* as $efine$ in 1e#&blic Act 2o 54+7 (hereafter the "/oo#erati"e /o$e").

(f) )sla%ic banks as $efine$ in 1e#&blic Act 2o. 5787* otherwise known as the /harter of Al A%anah )sla%ic )n"est%ent Bank of the 0hili##ines6. an$ (g) 9ther classifications of banks as $eter%ine$ b' the :onetar' Boar$ of the Bangko entral ng 0ili#inas. CHAPTER II AUTHORIT. OF THE BANGKO SENTRAL Sec. /. S01e'2!,"') P"3e',. The o#erations an$ acti"ities of banks shall be s&b;ect to s&#er"ision of the Bangko entral. &#er"ision6 shall incl&$e the following, 8.1. The iss&ance of r&les of* con$&ct or the establish%ent stan$ar$s of o#eration for &nifor% a##lication to all instit&tions or f&nctions co"ere$* taking into consi$eration the $istincti"e character of the o#erations of instit&tions an$ the s&bstanti"e si%ilarities of s#ecific f&nctions to which s&ch r&les* %o$es or stan$ar$s are to be a##lie$.

8.2.The con$&ct of e<a%ination to $eter%ine co%#liance with laws an$ reg&lations if the circ&%stances so warrant as $eter%ine$ b' the :onetar' Boar$. 8.+. 9"erseeing to ascertain that laws an$ reg&lations are co%#lie$ with. 8.8. 1eg&lar in"estigation which shall not be oftener than once a 'ear fro% the last $ate of e<a%ination to $eter%ine whether an instit&tion is con$&cting its b&siness on a safe or so&n$ basis, 0ro"i$e$* That the $eficiencies=irreg&larities fo&n$ b' or $isco"ere$ b' an a&$it shall be i%%e$iatel' a$$resse$. 8.>. )n(&iring into the sol"enc' an$ li(&i$it' of the instit&tion. or 8.5. ?nforcing #ro%#t correcti"e action. The Bangko entral shall also ha"e s&#er"ision o"er the o#erations of an$ e<ercise reg&lator' #owers o"er (&asi-banks* tr&st entities an$ other financial instit&tions which &n$er s#ecial laws are s&b;ect to Bangko entral s&#er"ision. . @or the #&r#oses of this Act* (&asi-banks6 shall refer to entities engage$ in the borrowing of f&n$s thro&gh the iss&ance* en$orse%ent or assign%ent with reco&rse or acce#tance of $e#osit s&bstit&tes as $efine$ in ection 4> of 1e#&blic Act 2o. 35>+ (hereafter the 2ew /entral Bank Act6) for #&r#oses of re-len$ing or #&rchasing of recei"ables an$ other obligations. Sec.4. P"$!c) D!'ec !"#5 R& !",, Ce!$!#6, &#+ L!7! & !"#,. A The Bangko entral shall #ro"i$e #olic' $irection in the areas of %one'* banking an$ cre$it. @or this #&r#ose* the :onetar' Boar$ %a' #rescribe ratios* ceilings* li%itations* or other for%s of reg&lation on the $ifferent t'#es of acco&nts an$ #ractices of banks an$ (&asi-banks which shall* to the e<tent feasible* confor% to internationall' acce#te$ stan$ar$s* incl&$ing of the Bank for )nternational ettle%ents (B) ). The :onetar' Boar$ %a' e<e%#t #artic&lar categories of transactions fro% s&ch ratios* ceilings* an$ li%itations* b&t not li%ite$ to e<ce#tional cases or to enable a bank or (&asi-bank &n$er rehabilitation or $&ring a %erger or consoli$ation to contin&e in b&siness* with safet' to its cre$itors* $e#ositors an$ the general #&blic. Sec. 8. A0 9"'! ) " E#6&6e !# B&#-!#6 &#+ Q0&,!-B&#-!#6 F0#c !"#,. - 2o #erson or entit' shall engage in banking o#erations or (&asi-banking f&nctions witho&t a&thorit' fro% the Bangko entral, 0ro"i$e$* howe"er* That an entit' a&thori!e$ b' the Bangko entral to #erfor% &ni"ersal or co%%ercial banking f&nctions shall likewise ha"e the a&thorit' to engage in (&asi-banking f&nctions. The $eter%ination of whether a #erson or entit' is #erfor%ing banking or (&asi-banking f&nctions witho&t Bangko entral a&thorit' shall be $eci$e$ b' the :onetar' Boar$. To resol"e s&ch iss&e* the :onetar' Boar$ %a'. thro&gh the a##ro#riate s&#er"ising an$ e<a%ining $e#art%ent of the Bangko entral* e<a%ine* ins#ect or in"estigate the books an$ recor$s of s&ch #erson or entit'. -#on iss&ance of this a&thorit'* s&ch #erson or entit' %a' co%%ence to engage in banking o#erations or (&asi-banking f&nction an$ shall contin&e to $o so &nless s&ch a&thorit' is sooner s&rren$ere$* re"oke$* s&s#en$e$ or ann&lle$ b' the Bangko entral in accor$ance with this Act or other s#ecial laws. The $e#art%ent hea$ an$ the e<a%iners of the a##ro#riate s&#er"ising an$ e<a%ining $e#art%ent are hereb' a&thori!e$ to a$%inister oaths to an' s&ch #erson* e%#lo'ee* officer* or $irector of an' s&ch entit' an$ to co%#el the #resentation or #ro$&ction of s&ch books* $oc&%ents* #a#ers or recor$s that are reasonabl' necessar' to ascertain the facts relati"e to the tr&e f&nctions an$ o#erations of s&ch #erson or entit'. @ail&re or ref&sal to co%#l' with the re(&ire$ #resentation or #ro$&ction of s&ch books* $oc&%ents* #a#ers or recor$s within a reasonable ti%e shall s&b;ect the #ersons res#onsible therefore to the #enal sanctions #ro"i$e$ &n$er the 2ew /entral Bank Act. 0ersons or entities fo&n$ to be #erfor%ing banking or (&asi-banking f&nctions witho&t a&thorit' fro% the Bangko entral shall be s&b;ect to a##ro#riate sanctions &n$er the 2ew /entral Bank Act an$ other a##licable laws. Sec.7. E:&7!#& !"# ;) 9e B&#6-" Se# '&$. A The Bangko entral shall* when e<a%ining a bank* ha"e the a&thorit' to e<a%ine an enter#rise which is wholl' or %a;orit'-owne$ or controlle$ b' the bank. CHAPTER III ORGANIZATION, <ANAGE<ENT AND AD<INISTRATION OF BANKS, QUASI-BANKS AND TRUST ENTITIES

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Sec.8. O'6&#!=& !"#. A The :onetar' Boar$ %a' a&thori!e the organi!ation of a bank or (&asi-bank s&b;ect to the following con$itions, 7.1 That the entit' is a stock cor#oration. 7.2 That its f&n$s are obtaine$ fro% the #&blic* which shall %ean twent' (20) or %ore #ersons. an$ 7.+ That the %ini%&% ca#ital re(&ire%ents #rescribe$ b' the :onetar' Boar$ for each categor' of banks are satisfie$. 2o new co%%ercial bank shall be establishe$ within three (+) 'ears fro% the effecti"it' of this Act. )n the e<ercise of the a&thorit' grante$ herein* the :onetar' Boar$ shall take into consi$eration their ca#abilit' in ter%s of their financial reso&rces an$ technical e<#ertise an$ integrit'. The bank licensing #rocess shall incor#orate an assess%ent of the bankBs ownershi# str&ct&re* $irectors an$ senior %anage%ent* its o#erating #lan an$ internal controls as well as its #ro;ecte$ financial con$ition an$ ca#ital base. Sec.9. I,,0&#ce "( S "c-,. A The :onetar' Boar$ %a' #rescribe r&les an$ reg&lations on the t'#es of stock a bank %a' iss&e* incl&$ing the ter%s thereof an$ rights a##&rtenant thereto to $eter%ine co%#liance with laws an$ reg&lations go"erning ca#ital an$ e(&it' str&ct&re of banks. 0ro"i$e$* That banks shall iss&e #ar "al&e stocks onl'. Sec.1>. T'e&,0') S "c-,. A 2o bank shall #&rchase or ac(&ire shares of its own ca#ital stock or acce#t its own shares as a sec&rit' for a loan* e<ce#t when a&thori!e$ b' the :onetar' Boar$, 0ro"i$e$* That in e"er' case the stock so #&rchase$ or ac(&ire$ shall* within si< (5) %onths fro% the ti%e of its #&rchase or ac(&isition* be sol$ or $is#ose$ of at a #&blic or #ri"ate sale. Sec.11. F"'e!6# S "c-9"$+!#6, A @oreign in$i"i$&als an$ non-bank cor#orations %a' own or control &# to fort' #ercent (80C) of the "oting stock of a $o%estic bank. This r&le shall a##l' to @ili#inos an$ $o%estic non-bank cor#orations. The #ercentage of foreign-owne$ "oting stocks in a bank shall be $eter%ine$ b' the citi!enshi# of the in$i"i$&al stockhol$ers in that bank. The citi!enshi# of the cor#oration which is a stockhol$er in a bank shall follow the citi!enshi# of the controlling stockhol$ers of the cor#oration* irres#ecti"e of the #lace of incor#oration. Sec.1%. S "c-9"$+!#6, "( F&7!$) G'"01, "( Re$& e+ I# e'e, ,. A tockhol$ings of in$i"i$&als relate$ to each other within the fo&rth $egree of consang&init' or affinit'* legiti%ate or co%%on-law* shall be consi$ere$ fa%il' gro&#s or relate$ interests an$ %&st be f&ll' $isclose$ in all transactions b' s&ch cor#orations or relate$ gro&#s of #ersons with the bank. Sec. 1*. C"'1"'& e S "c-9"$+!#6,. - Two or %ore cor#orations owne$ or controlle$ b' the sa%e fa%il' gro&# or sa%e gro&# of #ersons shall be consi$ere$ relate$ interests an$ %&st be f&ll' $isclose$ in all transactions b' s&ch cor#orations or relate$ gro&# of #ersons with the bank. Sec.1/. Ce' !(!c& e "( A0 9"'! ) " Re6!, e'. A The ec&rities an$ ?<change /o%%ission shall no register the articles of incor#oration of an' bank* or an' a%en$%ent thereto* &nless acco%#anie$ b' a certificate of a&thorit' iss&e$ b' the :onetar' Boar$* &n$er its seal. &ch certificate shall not be iss&e$ &nless the :onetar' Boar$ is satisfie$ fro% the e"i$ence s&b%itte$ to it, 18.1. That all re(&ire%ents of e<isting laws an$ reg&lations to engage in the b&siness for which the a##licant is #ro#ose$ to be incor#orate$ ha"e been co%#lie$ with. 18.2. That the #&blic interest an$ econo%ic con$itions* both general an$ local* ;&stif' the a&thori!ation. an$ 18.+. That the a%o&nt of ca#ital* the financing* organi!ation* $irection an$ a$%inistration* as well as the integrit' an$ res#onsibilit' of the organi!ers an$ a$%inistrators reasonabl' ass&re the safet' of $e#osits an$ the #&blic interest. The ec&rities an$ ?<change /o%%ission shall not register the b'-laws of an' bank* or an' a%en$%ent thereto* &nless acco%#anie$ b' a certificate of a&thorit' fro% the Bangko entral. Sec. 14. B"&'+ "( D!'ec "',. - The #ro"isions of the /or#oration /o$e to the contrar' notwithstan$ing* there shall be at least fi"e (>)* an$ a %a<i%&% of fifteen (1>) %e%bers of the boar$ or $irectors of a bank* two (2) of who% shall be in$e#en$ent

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$irectors. An "in$e#en$ent $irector" shall %ean a #erson other than an officer or e%#lo'ee of the bank* its s&bsi$iaries or affiliates or relate$ interests. . 2on-@ili#ino citi!ens %a' beco%e %e%bers of the boar$ of $irectors of a bank to the e<tent of the foreign #artici#ation in the e(&it' of sai$ bank. The %eetings of the boar$ of $irectors %a' be con$&cte$ thro&gh %o$ern technologies s&ch as* b&t not li%ite$ to* teleconferencing an$ "i$eo-conferencing. Sec. 18. F! &#+ P'"1e' R0$e. - To %aintain the (&alit' of bank %anage%ent an$ affor$ better #rotection to $e#ositors an$ the #&blic in general the :onetar' Boar$ shall #rescribe* #ass &#on an$ re"iew the (&alifications an$ $is(&alifications of in$i"i$&als electe$ or a##ointe$ bank $irectors or officers an$ $is(&alif' those fo&n$ &nfit. After $&e notice to the boar$ of $irectors of the bank* the :onetar' Boar$ %a' $is(&alif'* s&s#en$ or re%o"e an' bank $irector or officer who co%%its or o%its an act which ren$er hi% &nfit for the #osition. )n $eter%ining whether an in$i"i$&al is fit an$ #ro#er to hol$ the #osition of a $irector or officer of a bank* regar$ shall be gi"en to his integrit'* e<#erience* e$&cation* training* an$ co%#etence. Sec. 17. D!'ec "', "( <e'6e+ "' C"#,"$!+& e+ B&#-,. - )n the case of a bank %erger or consoli$ation* the n&%ber of $irectors shall not e<cee$ twent'-one (21). . Sec. 18. C"71e#,& !"# &#+ O 9e' Be#e(! , "( D!'ec "', &#+ O((!ce',. To #rotect the fin$s of $e#ositors an$ cre$itors the :onetar' Boar$ %a' reg&late the #a'%ent b' the bark to its $irectors an$ officers of co%#ensation* allowance* fees* bon&ses* stock o#tions* #rofit sharing an$ fringe benefits onl' in e<ce#tional cases an$ when the circ&%stances warrant* s&ch as b&t not li%ite$ to the following, 17.1. Dhen a bank is &n$er co%#trollershi# or conser"atorshi#. or 17.2. Dhen a bank is fo&n$ b' the :onetar' Boar$ to be con$&cting b&siness in an &nsafe or &nso&n$ %anner. or 17.+. Dhen a bank is fo&n$ b' the :onetar' Boar$ to be in an &nsatisfactor' financial con$ition. Sec. 19. P'"9!;! !"# "# P0;$!c O((!c!&$,. - ?<ce#t as otherwise #ro"i$e$ in the 1&ral Banks Act* no a##ointi"e or electi"e #&blic official whether f&ll-ti%e or #art-ti%e shall at the sa%e ti%e ser"e as officer of an' #ri"ate bank* sa"e in cases where s&ch ser"ice is inci$ent to financial assistance #ro"i$e$ b' the go"ern%ent or a go"ern%ent owne$ or controlle$ cor#oration to the bank or &nless otherwise #ro"i$e$ &n$er e<isting laws. Sec. %>. B&#- B'&#c9e,. - -ni"ersal or co%%ercial banks %a' o#en branches or other offices within or o&tsi$e the 0hili##ines &#on #rior a##ro"al of the Bangko entral. Branching b' all other banks shall be go"erne$ b' #ertinent laws. A bank %a'* s&b;ect to #rior a##ro"al of the :onetar' Boar$* &se an' or all of its branches as o&tlets for the #resentation an$=or sale of the financial #ro$&cts of its allie$ &n$ertaking or of its in"est%ent ho&se &nits. A bank a&thori!e$ to establish branches or other offices shall be res#onsible for all b&siness con$&cte$ in s&ch branches an$ offices to the sa%e e<tent an$ in the sa%e %anner as tho&gh s&ch b&siness ha$ all been con$&cte$ in the hea$ office. A bank an$ its branches an$ offices shall be treate$ as one &nit. . Sec. %1. B&#-!#6 D&), &#+ H"0',. A -nless otherwise a&thori!e$ b' the Bangko entral in the interest of the banking #&blic* all banks incl&$ing their branches an$ offices shall transact b&siness on all working $a's for at least si< (5) ho&rs a $a'. )n a$$ition* banks or an' of their branches or offices %a' o#en for b&siness on at&r$a's* &n$a's or holi$a's for at least three (+) ho&rs a $a', 0ro"i$e$* That banks which o#t to o#en on $a's other than working $a's shall re#ort to the Bangko entral the a$$itional $a's $&ring which the' or their branches or offices shall transact b&siness. @or #&r#oses of this ection* working $a's shall %ean :on$a's to @ri$a's* e<ce#t if s&ch $a's are holi$a's.

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Sec. %%. S '!-e, &#+ L"c-"0 ,. - The banking in$&str' is hereb' $eclare$ as in$is#ensable to the national interest an$* notwithstan$ing the #ro"isions of an' law to the contrar'* an' strike or locko&t in"ol"ing banks* if &nsettle$ after se"en (3) calen$ar $a's shall be re#orte$ b' the Bangko entral to the ecretar' of Labor who %a' ass&%e ;&ris$iction o"er the $is#&te or $eci$e it or certif' the sa%e to the 2ational Labor 1elations /o%%ission for co%#&lsor' arbitration. Eowe"er* the 0resi$ent of the 0hili##ines %a' at an' ti%e inter"ene an$ ass&%e ;&ris$iction o"er s&ch labor $is#&te in or$er to settle or ter%inate the sa%e. CHAPTER IV DEPOSITS. LOANS AND OTHER OPERATIONS A' !c$e I. O1e'& !"#, O( U#!2e',&$ B&#-, Sec. %*. P"3e', "( & U#!2e',&$ B&#- - A &ni"ersal bank shall ha"e the a&thorit' to e<ercise* in a$$ition to the #owers a&thori!e$ for a co%%ercial bank in ection 24* the #owers of an in"est%ent ho&se as #ro"i$e$ in e<isting laws an$ the #ower to in"est in non-allie$ enter#rises as #ro"i$e$ in this Act. Sec. %/. E?0! ) I#2e, 7e# , "( & U#!2e',&$ B&#-. A A &ni"ersal bank %a'* s&b;ect to the con$itions state$ in the s&ccee$ing #aragra#h* in"est in the e(&ities of allie$ an$ non-allie$ enter#rises as %a' be $eter%ine$ b' the :onetar' Boar$. Allie$ enter#rises %a' either be financial or non-financial. ?<ce#t as the :onetar' Boar$ %a' otherwise #rescribe, 28.1. The total in"est%ent in e(&ities of allie$ an$ non-allie$ enter#rises shall not e<cee$ fift' #ercent (>0C) of the net worth of the bank. an$ 28.2. The e(&it' in"est%ent in an' one enter#rise* whether allie$ or non-allie$* shall not e<cee$ twent'-fi"e #ercent (2>C) of the net worth of the bank. As &se$ in this Act* net worth6 shall %ean the total of the &ni%#aire$ #ai$-in ca#ital incl&$ing #ai$-in s&r#l&s* retaine$ earnings an$ &n$i"i$e$ #rofit* net of "al&ation reser"es an$ other a$;&st%ents as %a' be re(&ire$ b' the Bangko entral. The ac(&isition of s&ch e(&it' or e(&ities is s&b;ect to the #rior a##ro"al of the :onetar' Boar$ which shall #ro%&lgate a##ro#riate g&i$elines to go"ern s&ch in"est%ents. . Sec. %4. E?0! ) I#2e, 7e# , "( & U#!2e',&$ B&#- !# F!#&#c!&$ A$$!e+ E# e'1'!,e,. - A &ni"ersal bank can own &# to one h&n$re$ #ercent (100C) of the e(&it' in a thrift bank* a r&ral bank or a financial allie$ enter#rise. A #&blicl'-liste$ &ni"ersal or co%%ercial bank %a' own &# to one h&n$re$ #ercent (100C) of the "oting stock of onl' one other &ni"ersal or co%%ercial bank. Sec. %8. E?0! ) I#2e, 7e# , "( & U#!2e',&$ B&#- !# N"#-F!#&#c!&$ A$$!e+ E# e'1'!,e,. A A &ni"ersal bank %a' own &# to one h&n$re$ #ercent (100C) of the e(&it' in a non-financial allie$ enter#rise. Sec. %7. E?0! ) I#2e, 7e# , "( & U#!2e',&$ B&#- !# N"#-A$$!e+ E# e'1'!,e,. - The e(&it' in"est%ent of a &ni"ersal bank* or of its wholl' or %a;orit'-owne$ s&bsi$iaries* in a single non-allie$ enter#rise shall not e<cee$ thirt'-fi"e #ercent (+>C) of the total e(&it' in that enter#rise nor shall it e<cee$ thirt'-fi"e #ercent (+>C) of the "oting stock in that enter#rise. Sec. %8. E?0! ) I#2e, 7e# , !# Q0&,!-B&#-,. A To #ro%ote co%#etiti"e con$itions in financial %arkets* the :onetar' Boar$ %a' f&rther li%it to fort' #ercent (80C) e(&it' in"est%ents of &ni"ersal banks in (&asi-banks. This r&le shall also a##l' in the case of co%%ercial banks. A' !c$e II. O1e'& !"#, O( C"77e'c!&$ B&#-, Sec. %9. P"3e', "( & C"77e'c!&$ B&#-. - A co%%ercial bank shall ha"e* in a$$ition to the general #owers inci$ent to cor#orations* all s&ch #owers as %a' be necessar' to carr' on the b&siness of co%%ercial banking s&ch as acce#ting $rafts an$ iss&ing letters of cre$it. $isco&nting an$ negotiating #ro%issor' notes* $rafts* bills of e<change* an$ other e"i$ences of

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$ebt. acce#ting or creating $e%an$ $e#osits. recei"ing other t'#es of $e#osits an$ $e#osit s&bstit&tes. b&'ing an$ selling foreign e<change an$ gol$ or sil"er b&llion. ac(&iring %arketable bon$s an$ other $ebt sec&rities. an$ e<ten$ing cre$it* s&b;ect to s&ch r&les as the :onetar' Boar$ %a' #ro%&lgate. These r&les %a' incl&$e the $eter%ination of bon$s an$ other $ebt sec&rities eligible for in"est%ent* the %at&rities an$ aggregate a%o&nt of s&ch in"est%ent. Sec. *>. E?0! ) I#2e, 7e# , "( & C"77e'c!&$ B&#-. - A co%%ercial bank %a'* s&b;ect to the con$itions state$ in the s&ccee$ing #aragra#hs* in"est onl' in the e(&ities of allie$ enter#rises as %a' be $eter%ine$ b' the :onetar' Boar$. Allie$ enter#rises %a' either be financial or non-financial. . ?<ce#t as the :onetar' Boar$ %a' otherwise #rescribe, +0.1. The total in"est%ent in e(&ities of allie$ enter#rises shall not e<cee$ thirt'-fi"e #ercent (+>C) of the net worth of the bank. an$ +0.2. The e(&it' in"est%ent in an' one enter#rise shall not e<cee$ twent'-fi"e #ercent (2>C) of tile net worth of the bank. The ac(&isition of s&ch e(&it' or e(&ities is s&b;ect to the #rior a##ro"al of the :onetar' Boar$ which shall #ro%&lgate a##ro#riate g&i$elines to go"ern s&ch in"est%ent. Sec. *1. E?0! ) I#2e, 7e# , "( & C"77e'c!&$ B&#- !# F!#&#c!&$ A$$!e+ E# e'1'!,e,. - A co%%ercial bank %a' own &# to one h&n$re$ #ercent (100C) of the e(&it' of a thrift bank or a r&ral bank. Dhere the e(&it' in"est%ent of a co%%ercial bank is in other financial allie$ enter#rises* incl&$ing another co%%ercial bank* s&ch in"est%ent shall re%ain a %inorit' hol$ing in that enter#rise. Sec. *%. E?0! ) I#2e, 7e# , "( & C"77e'c!&$ B&#- !# N"#-F!#&#c!&$ A$$!e+ E# e'1'!,e,. - A co%%ercial bank %a' own &# to one h&n$re$ #ercent (100C) of the e(&it' in a non-financial allie$ enter#rise. A' !c$e III. P'"2!,!"#, A11$!c&;$e T" A$$ B&#-,, Q0&,!-B&#-,, A#+ T'0, E# ! !e, Sec. **. Acce1 &#ce "( De7&#+ De1",! ,. - A bank other than a &ni"ersal or co%%ercial bank cannot acce#t or create $e%an$ $e#osits e<ce#t &#on #rior a##ro"al of* an$ s&b;ect to s&ch con$itions an$ r&les as %a' be #rescribe$ b' the :onetar' Boar$. Sec. */. R!,--B&,e+ C&1! &$. - The :onetar' Boar$ shall #rescribe the %ini%&% ratio which the net worth of a bank %&st bear to its total risk assets which %a' incl&$e contingent acco&nts. @or #&r#oses of this ection* the :onetar' Boar$ %a' re(&ire s&ch ratio be $eter%ine$ on the basis of the net worth an$ risk assets of a bank an$ its s&bsi$iaries* financial or otherwise* as well as #rescribe the co%#osition an$ the %anner of $eter%ining the net worth an$ total risk assets of banks an$ their s&bsi$iaries, 0ro"i$e$* That in the e<ercise of this a&thorit'* the :onetar' Boar$ shall* to the e<tent feasible confor% to internationall' acce#te$ stan$ar$s* incl&$ing those of the Bank for )nternational ettle%ents (B) )* relating to risk-base$ ca#ital re(&ire%ents, 0ro"i$e$ f&rther* That it %a' alter or s&s#en$ co%#liance with s&ch ratio whene"er necessar' for a %a<i%&% #erio$ of one (1) 'ear, 0ro"i$e$* finall'* That s&ch ratio shall be a##lie$ &nifor%l' to banks of the sa%e categor'. )n case a bank $oes not co%#l' with the #rescribe$ %ini%&% ratio* the :onetar' Boar$ %a' li%it or #rohibit the $istrib&tion of net #rofits b' s&ch bank an$ %a' re(&ire that #art or all of the net #rofits be &se$ to increase the ca#ital acco&nts of the bank &ntil the %ini%&% re(&ire%ent has been %et The :onetar' Boar$ %a'* f&rther%ore* restrict or #rohibit the ac(&isition of %a;or assets an$ the %aking of new in"est%ents b' the bank* with the e<ce#tion of #&rchases of rea$il' %arketable e"i$ences of in$ebte$ness of the 1e#&blic of the 0hili##ines an$ of the Bangko entral an$ an' other e"i$ences of in$ebte$ness or obligations the ser"icing an$ re#a'%ent of which are f&ll' g&arantee$ b' the 1e#&blic of the 0hili##ines* &ntil the %ini%&% re(&ire$ ca#ital ratio has been restore$. )n case of a bank %erger or consoli$ation* or when a bank is &n$er rehabilitation &n$er a #rogra% a##ro"e$ b' the Bangko entral* :onetar' Boar$ %a' te%#oraril' relie"e the s&r"i"ing bank* consoli$ate$ bank* or constit&ent bank or cor#orations &n$er rehabilitation fro% f&ll co%#liance with the re(&ire$ ca#ital ratio &n$er s&ch con$itions as it %a' #rescribe.

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Before the effecti"it' of r&les which the :onetar' Boar$ is a&thori!e$ to #rescribe &n$er this #ro"ision* ection 22 of the General Banking Act* as a%en$e$* ection 4 of the Thrift Banks Act* an$ all #ertinent r&les iss&e$ #&rs&ant thereto* shall contin&e to be in force. . Sec. *4. L!7! "# L"&#,, C'e+! Acc"77"+& !"#, &#+ G0&'&# ee,. +>.1. ?<ce#t as the :onetar' Boar$ %a' otherwise #rescribe for reasons of national interest* the total a%o&nt of loans* cre$it acco%%o$ations an$ g&arantees as %a' be $efine$ b' the :onetar' Boar$ that %a' be e<ten$e$ b' a bank to an' #erson* #artnershi#* association* cor#oration or other entit' shall at no ti%e e<cee$ twent' #ercent (20C) of the net worth of s&ch bank. The basis for $eter%ining co%#liance with single borrower li%it is the total cre$it co%%it%ent of the bank to the borrower. +>.2. -nless the :onetar' Boar$ #rescribes otherwise* the total a%o&nt of loans* cre$it acco%%o$ations an$ g&arantees #rescribe$ in the #rece$ing #aragra#h %a' be increase$ b' an a$$itional ten #ercent (10C) of the net worth of s&ch bank #ro"i$e$ the a$$itional liabilities of an' borrower are a$e(&atel' sec&re$ b' tr&st recei#ts* shi##ing $oc&%ents* wareho&se recei#ts or other si%ilar $oc&%ents transferring or sec&ring title co"ering rea$il' %arketable* non-#erishable goo$s which %&st be f&ll' co"ere$ b' ins&rance. +>.+. The abo"e #rescribe$ ceilings shall incl&$e, (a) the $irect liabilit' of the %aker or acce#tor of #a#er $isco&nte$ with or sol$ to s&ch bank an$ the liabilit' of a general en$orser* $rawer or g&arantor who obtains a loan or other cre$it acco%%o$ation fro% or $isco&nts #a#er with or sells #a#ers to s&ch bank. (b) in the case of an in$i"i$&al who owns or controls a %a;orit' interest in a cor#oration* #artnershi#* association or an' other entit'* the liabilities of sai$ entities to s&ch bank. (c) in the case of a cor#oration* all liabilities to s&ch bank of all s&bsi$iaries in which s&ch cor#oration owns or controls a %a;orit' interest. an$ ($) in the case of a #artnershi#* association or other entit'* the liabilities of the %e%bers thereof to s&ch bank. +>.8. ?"en if a #arent cor#oration* #artnershi#* association* entit' or an in$i"i$&al who owns or controls a %a;orit' interest in s&ch entities has no liabilit' to the bank* the :onetar' Boar$ %a' #rescribe the co%bination of the liabilities of s&bsi$iar' cor#orations or %e%bers of the #artnershi#* association* entit' or s&ch in$i"i$&al &n$er certain circ&%stances* incl&$ing b&t not li%ite$ to* an' of the following sit&ations, . (a) the #arent cor#oration* #artnershi#* association* entit' or in$i"i$&al g&arantees the re#a'%ent of the liabilities. (b) the liabilities were inc&rre$ for the acco%%o$ation of the #arent cor#oration or another s&bsi$iar' or of the #artnershi# or association or entit' or s&ch in$i"i$&al. or (c) the s&bsi$iaries tho&gh se#arate entities o#erate %erel' as $e#art%ents or $i"isions of a single entit'. +>.>. @or #&r#oses of this ection* loans* other cre$it acco%%o$ations an$ g&arantees shall e<cl&$e, (a) loans an$ other cre$it acco%%o$ations sec&re$ b' obligations of the Bangko entral or of the 0hili##ine Go"ern%ent. (b) loans an$ other cre$it acco%%o$ations f&ll' g&arantee$ b' the go"ern%ent as to the #a'%ent of #rinci#al an$ interest. (c) loans an$ other cre$it acco%%o$ations co"ere$ b' assign%ent of $e#osits %aintaine$ in the len$ing bank an$ hel$ in the 0hili##ines. ($) loans* cre$it acco%%o$ations an$ acce#tances &n$er letters of cre$it to the e<tent co"ere$ b' %argin $e#osits. an$ (e) other loans or cre$it acco%%o$ations which the :onetar' Boar$ %a' fro% ti%e to ti%e* s#ecif' as non-risk ite%s.

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+>.5. Loans an$ other cre$it acco%%o$ations* $e#osits %aintaine$ with* an$ &s&al g&arantees b' a bank to an' other bank or non-bank entit'* whether locall' or abroa$* shall be s&b;ect to the li%its as herein #rescribe$. +>.3. /ertain t'#es of contingent acco&nts of borrowers %a' be incl&$e$ a%ong those s&b;ect to these #rescribe$ li%its as %a' be $eter%ine$ b' the :onetar' Boar$. Sec. *8. Re, '!c !"# "# B&#- E:1",0'e " D!'ec "',, O((!ce',, S "c-9"$+e', &#+ T9e!' Re$& e+ I# e'e, ,. - 2o $irector or officer of an' bank shall* $irectl' or in$irectl'* for hi%self or as the re#resentati"e or agent of others* borrow fro% s&ch bank nor shall he beco%e a g&arantor* en$orser or s&ret' for loans fro% s&ch bank to others* or in an' %anner be an obligor or inc&r an' contract&al liabilit' to the bank e<ce#t with the written a##ro"al of the %a;orit' of all the $irectors of the bank* e<cl&$ing the $irector concerne$, 0ro"i$e$* That s&ch written a##ro"al shall not be re(&ire$ for loans* other cre$it acco%%o$ations an$ a$"ances grante$ to officers &n$er a fringe benefit #lan a##ro"e$ b' the Bangko entral. The re(&ire$ a##ro"al shall be entere$ &#on the recor$s of the bank an$ a co#' of s&ch entr' shall be trans%itte$ forthwith to the a##ro#riate s&#er"ising an$ e<a%ining $e#art%ent of the Bangko entral. Fealings of a bank with an' of its $irectors* officers or stockhol$ers an$ their relate$ interests shall be &#on ter%s not less fa"orable to the bank than those offere$ to others. After $&e notice to the boar$ of $irectors of the bank* the office of an' bank $irector or officer who "iolates the #ro"isions of this ection %a' be $eclare$ "acant an$ the $irector or officer shall be s&b;ect to the #enal #ro"isions of the 2ew /entral Bank Act. The :onetar' Boar$ %a' reg&late the a%o&nt of loans* cre$it acco%%o$ations an$ g&arantees that %a' be e<ten$e$* $irectl' or in$irectl'* b' a bank to its $irectors* officers* stockhol$ers an$ their relate$ interests* as well as in"est%ents of s&ch bank in enter#rises owne$ or controlle$ b' sai$ $irectors* officers* stockhol$ers an$ their relate$ interests. Eowe"er* the o&tstan$ing loans* cre$it acco%%o$ations an$ g&arantees which a bank %a' e<ten$ to each of its stockhol$ers* $irectors* or officers an$ their relate$ interests* shall be li%ite$ to an a%o&nt e(&i"alent to their res#ecti"e &nenc&%bere$ $e#osits an$ book "al&e of their #ai$-in ca#ital contrib&tion in the bank, 0ro"i$e$* howe"er* That loans* cre$it acco%%o$ations an$ g&arantees sec&re$ b' assets consi$ere$ as non-risk b' the :onetar' Boar$ shall be e<cl&$e$ fro% s&ch li%it, 0ro"i$e$* f&rther* That loans* cre$it acco%%o$ations an$ a$"ances to officers in the for% of fringe benefits grante$ in accor$ance with r&les as %a' be #rescribe$ b' the :onetar' Boar$ shall not be s&b;ect to the in$i"i$&al li%it. The :onetar' Boar$ shall $efine the ter% relate$ interests.6 The li%it on loans* cre$it acco%%o$ations an$ g&arantees #rescribe$ herein shall not a##l' to loans* cre$it acco%%o$ations an$ g&arantees e<ten$e$ b' a coo#erati"e bank to its coo#erati"e sharehol$ers. Sec. *7. L"&#, &#+ O 9e' C'e+! Acc"77"+& !"#, A6&!#, Re&$ E, & e. A ?<ce#t as the :onetar' Boar$ %a' otherwise #rescribe* loans an$ other cre$it acco%%o$ations against real estate shall not e<cee$ se"ent'-fi"e #ercent (3>C) of the a##raise$ "al&e of the res#ecti"e real estate sec&rit'* #l&s si<t' #ercent (50C) of the a##raise$ "al&e of the ins&re$ i%#ro"e%ents* an$ s&ch loans %a' be %a$e to the owner of the real estate or to his assignees. Sec. *8. L"&#, A#+ O 9e' C'e+! Acc"77"+& !"#, "# Sec0'! ) "( C9& e$, &#+ I# &#6!;$e P'"1e' !e,. - ?<ce#t as the :onetar' Boar$ %a' otherwise #rescribe* loans an$ other cre$it acco%%o$ations on sec&rit' of chattels an$ intangible #ro#erties s&ch as* b&t not li%ite$ to* #atents* tra$e%arks* tra$e na%es* an$ co#'rights shall not e<cee$ se"ent'-fi"e #ercent (3>C) of the a##raise$ "al&e of the sec&rit'* an s&ch loans an$ other cre$it acco%%o$ation %a' be %a$e to the title-hol$er of the chattels an$ intangible #ro#erties or his assignees. Sec. *9. G'&# &#+ P0'1",e "( L"&#, &#+ O 9e' C'e+! Acc"77"+& !"#,. - A bank shall grant loans an$ other cre$it acco%%o$ations onl' in a%o&nts an$ for the #erio$s of ti%e essential for the effecti"e co%#letion of the o#erations to be finance$. &ch grant of loans an$ other cre$it acco%%o$ations shall be consistent with safe an$ so&n$ banking #ractices. The #&r#ose of all loans an$ other cre$it acco%%o$ations shall be state$ in the a##lication an$ in the contract between the bank an$ the borrower. )f the bank fin$s that the #rocee$s of the loan or other cre$it acco%%o$ation ha"e been e%#lo'e$* witho&t its a##ro"al* for #&r#oses other than those agree$ &#on with the bank* it shall ha"e the right to ter%inate the loan or other cre$it acco%%o$ation an$ $e%an$ i%%e$iate re#a'%ent of the obligation. Sec. />. Re?0!'e7e# ("' G'&# O( L"&#, "' > 9e' C'e+! Acc"77"+& !"#,. - Before granting a loan or other cre$it acco%%o$ation* a bank %&st ascertain that the $ebtor is ca#able of f&lfilling his co%%it%ents to the bank.

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Towar$ this en$* a bank %a' $e%an$ fro% its cre$it a##licants a state%ent of their assets an$ liabilities an$ of their inco%e an$ e<#en$it&res an$ s&ch infor%ation as %a' be #rescribe$ b' law or b' r&les an$ reg&lations of the :onetar' Boar$ to enable the bank to #ro#erl' e"al&ate the cre$it a##lication which incl&$es the corres#on$ing financial state%ents s&b%itte$ for ta<ation #&r#oses to the B&rea& of )nternal 1e"en&e. ho&l$ s&ch state%ents #ro"e to be false or incorrect in an' %aterial $etail* the bank %a' ter%inate an' loan or other cre$it acco%%o$ation grante$ on the basis of sai$ state%ents an$ shall ha"e the right to $e%an$ i%%e$iate re#a'%ent or li(&i$ation of the obligation. )n for%&lating r&les an$ reg&lations &n$er this ection* the :onetar' Boar$ shall recogni!e the #ec&liar characteristics of %icro financing* s&ch as cash flow-base$ len$ing to the basic sectors that are not co"ere$ b' tra$itional collateral. Sec. /1. U#,ec0'e+ L"&#, "' O 9e' C'e+! Acc"77"+& !"#,. A The :onetar' Boar$ is hereb' a&thori!e$ to iss&e s&ch reg&lations as it %a' $ee% necessar' with res#ect to &nsec&re$ loans or other cre$it acco%%o$ations that %a' be grante$ b' banks. Sec. /%. O 9e' Sec0'! ) Re?0!'e7e# , ("' B&#- C'e+! ,. - The :onetar' Boar$ %a'* b' reg&lation* #rescribe f&rther sec&rit' re(&ire%ents to which the "ario&s t'#es of bank cre$its shall be s&b;ect* an$* in accor$ance with the a&thorit' grante$ to it in ection 105 of the 2ew /entral Bank Act* the Boar$ %a' b' reg&lation* re$&ce the %a<i%&% ratios establishe$ in ections +5 an$ +3 of this Act* or* in s#ecial cases* increase the %a<i%&% ratios establishe$ therein. Sec. /*. A0 9"'! ) " P'e,c'!;e Te'7, &#+ C"#+! !"#, "( L"&#, &#+ O 9e' C'e+! Acc"77"+& !"#,. - The :onetar' Boar$* %a'* si%ilarl' in accor$ance with the a&thorit' grante$ to it in ection 105 of the 2ew /entral Bank Act* an$ taking into acco&nt the re(&ire%ents of the econo%' for the effecti"e &tili!ation of long-ter% f&n$s* #rescribe the %at&rities* as well as relate$ ter%s an$ con$itions for "ario&s t'#es of bank loans an$ other cre$it acco%%o$ations. An' change b' the Boar$ in the %a<i%&% %at&rities* as well as relate$ ter%s an$ con$itions for "ario&s t'#es of bank loans an$ other cre$it acco%%o$ations. An' change b' the Boar$ in the %a<i%&% %at&rities shall a##l' onl' to loans an$ other cre$it acco%%o$ations %a$e after the $ate of s&ch action. The :onetar' Boar$ shall reg&late the interest i%#ose$ on %icro finance borrowers b' len$ing in"estors an$ si%ilar len$ers s&ch as* b&t not li%ite$ to* the &nconscionable rates of interest collecte$ on salar' loans an$ si%ilar cre$it acco%%o$ations. Sec. //. A7"' !=& !"# "# L"&#, &#+ O 9e' C'e+! Acc"77"+& !"#,. - The a%orti!ation sche$&le of bank loans an$ other cre$it acco%%o$ations shall be a$a#te$ to the nat&re of the o#erations to be finance$. )n case of loans an$ other cre$it acco%%o$ations with %at&rities of %ore than fi"e (>) 'ears* #ro"isions %&st be %a$e for #erio$ic a%orti!ation #a'%ents* b&t s&ch #a'%ents %&st be %a$e at least ann&all', 0ro"i$e$* howe"er* That when the borrowe$ f&n$s are to be &se$ for #&r#oses which $o not initiall' #ro$&ce re"en&es a$e(&ate for reg&lar a%orti!ation #a'%ents therefro%* the bank %a' #er%it the initial a%orti!ation #a'%ent to be $eferre$ &ntil s&ch ti%e as sai$ re"en&es are s&fficient for s&ch #&r#ose* b&t in no case shall the initial a%orti!ation $ate be later than fi"e (>) 'ears fro% the $ate on which the loan or other cre$it acco%%o$ation is grante$. )n case of loans an$ other cre$it acco%%o$ations to %icro finance sectors* the sche$&le of loan a%orti!ation shall take into consi$eration the #ro;ecte$ cash flow of the borrower an$ a$o#t this into the ter%s an$ con$itions for%&late$ b' banks. Sec. /4. P'e1&)7e# "( L"&#, &#+ O 9e' C'e+! Acc"77"+& !"#,. A A borrower %a' at an' ti%e #rior to the agree$ %at&rit' $ate #re#a'* in whole or in #art* the &n#ai$ balance of an' bank loan an$ other cre$it acco%%o$ation* s&b;ect to s&ch reasonable ter%s an$ con$itions as %a' be agree$ &#on between the bank an$ its borrower. Sec. /8. De2e$"17e# A,,!, &#ce I#ce# !2e,. - The Bangko entral shall #ro"i$e incenti"es to banks which* witho&t go"ern%ent g&arantee* e<ten$ loans to finance e$&cational instit&tions coo#erati"es* hos#itals an$ other %e$ical ser"ices* sociali!e$ or low-cost ho&sing* local go"ern%ent &nits an$ other acti"ities with social content. Sec. /7. F"'ec$",0'e "( Re&$ E, & e <"' 6&6e. - )n the e"ent of foreclos&re* whether ;&$iciall' or e<tra-;&$iciall'* of an' %ortgage on real estate which is sec&rit' for an' loan or other cre$it acco%%o$ation grante$* the %ortgagor or $ebtor whose real #ro#ert' has been sol$ for the f&ll or #artial #a'%ent of his obligation shall ha"e the right within one 'ear after the sale of the real estate* to re$ee% the #ro#ert' b' #a'ing the a%o&nt $&e &n$er the %ortgage $ee$* with interest thereon at rate s#ecifie$ in the %ortgage* an$ all the costs an$ e<#enses inc&rre$ b' the bank or instit&tion fro% the sale an$ c&sto$' of sai$ #ro#ert' less the inco%e $eri"e$ therefro%. Eowe"er* the #&rchaser at the a&ction sale concerne$ whether in a ;&$icial or e<tra-;&$icial foreclos&re shall ha"e the right to enter &#on an$ take #ossession of s&ch #ro#ert' i%%e$iatel' after the $ate of

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the confir%ation of the a&ction sale an$ a$%inister the sa%e in accor$ance with law. An' #etition in co&rt to en;oin or restrain the con$&ct of foreclos&re #rocee$ings instit&te$ #&rs&ant to this #ro"ision shall be gi"en $&e co&rse onl' &#on the filing b' the #etitioner of a bon$ in an a%o&nt fi<e$ b' the co&rt con$itione$ that he will #a' all the $a%ages which the bank %a' s&ffer b' the en;oining or the restraint of the foreclos&re #rocee$ing. 2otwithstan$ing Act +1+>* ;&ri$ical #ersons whose #ro#ert' is being sol$ #&rs&ant to an e<tra;&$icial foreclos&re* shall ha"e the right to re$ee% the #ro#ert' in accor$ance with this #ro"ision &ntil* b&t not after* the registration of the certificate of foreclos&re sale with the a##licable 1egister of Fee$s which in no case shall be %ore than three (+) %onths after foreclos&re* whiche"er is earlier. 9wners of #ro#ert' that has been sol$ in a foreclos&re sale #rior to the effecti"it' of this Act shall retain their re$e%#tion rights &ntil their e<#iration. Sec. /8. Re#e3&$ "' E: e#,!"# "( L"&#, &#+ O 9e' C'e+! Acc"77"+& !"#, . A The :onetar' Boar$ %a'* b' reg&lation* #rescribe the con$itions an$ li%itations &n$er which a bank %a' grant e<tensions or renewals of its loans an$ other cre$it acco%%o$ations. Sec. /9. P'"2!,!"#, ("' L",,e, &#+ @'! e-O((,. - All $ebts $&e to an' bank on which interest is #ast $&e an$ &n#ai$ for s&ch #erio$ as %a' be $eter%ine$ b' the :onetar' Boar$* &nless the sa%e are welt-sec&re$ an$ in the #rocess of collection shall be consi$ere$ ba$ $ebts within the %eaning of this ection. The :onetar' Boar$ %a' fi<* b' reg&lation or b' or$er in a s#ecific case* the a%o&nt of reser"es for ba$ $ebts or $o&btf&l acco&nts or other contingencies. Driting off of loans* other cre$it acco%%o$ations* a$"ances an$ other assets shall be s&b;ect to reg&lations iss&e$ b' the :onetar' Boar$. Sec. 4>. <&A"' I#2e, 7e# ,. - @or the #&r#ose or enhancing bank s&#er"ision* the :onetar' Boar$ shall establish criteria for re"iewing %a;or ac(&isitions of in"est%ents b' a bank incl&$ing cor#orate affiliations or str&ct&res that %a' e<#ose the bank to &n$&e risks or in an' wa' hin$er effecti"e s&#er"ision. Sec. 41. Ce!$!#6 "# I#2e, 7e# , !# Ce' &!# A,,e ,. A An' bank %a' ac(&ire real estate as shall be necessar' for its own &se in the con$&ct of its b&siness, 0ro"i$e$* howe"er* That the total in"est%ent in s&ch real estate an$ i%#ro"e%ents thereof incl&$ing bank e(&i#%ent* shall not e<cee$ fift' #ercent (>0C) of co%bine$ ca#ital acco&nts, 0ro"i$e$* f&rther* That the e(&it' in"est%ent of a bank in another cor#oration engage$ #ri%aril' in real estate shall be consi$ere$ as #art of the bankBs total in"est%ent in real estate* &nless otherwise #ro"i$e$ b' the :onetar' Boar$. Sec. 4%. Ac?0!,! !"# "( Re&$ E, & e ;) @&) "( S& !,(&c !"# "( C$&!7,. A 2otwithstan$ing the li%itations of the #rece$ing ection* a bank %a' ac(&ire* hol$ or con"e' real #ro#ert' &n$er the following circ&%stances, >2.1. &ch as shall be %ortgage$ to it in goo$ faith b' wa' of sec&rit' for $ebts. >2.2. &ch as shall be con"e'e$ to it in satisfaction of $ebts #re"io&sl' contracte$ in the co&rse of its $ealings. or >2.+. &ch as it shall #&rchase at sales &n$er ;&$g%ents* $ecrees* %ortgages* or tr&st $ee$s hel$ b' it an$ s&ch as it shall #&rchase to sec&re $ebts $&e it. An' real #ro#ert' ac(&ire$ or hel$ &n$er the circ&%stances en&%erate$ in the abo"e #aragra#h shall be $is#ose$ of b' the bank within a #erio$ of fi"e (>) 'ears or as %a' be #rescribe$ b' the :onetar' Boar$, 0ro"i$e$* howe"er* That the bank %a'* after sai$ #erio$* contin&e to hol$ the #ro#ert' for its own &se* s&b;ect to the li%itations of the #rece$ing ection. Sec. 4*. O 9e' B&#-!#6 Se'2!ce,. A )n a$$ition to the o#erations s#ecificall' a&thori!e$ in this Act* a bank %a' #erfor% the following ser"ices, >+.1. 1ecei"e in c&sto$' f&n$s* $oc&%ents an$ "al&able ob;ects. >+.2. Act as financial agent an$ b&' an$ sell* b' or$er of an$ for the acco&nt of their c&sto%ers* shares* e"i$ences of in$ebte$ness an$ all t'#es of sec&rities.

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>+.+. :ake collections an$ #a'%ents for the acco&nt of others an$ #erfor% s&ch other ser"ices for their c&sto%ers as are not inco%#atible with banking b&siness. >+.8 -#on #rior a##ro"al of the :onetar' Boar$* act as %anaging agent* a$"iser* cons&ltant or a$%inistrator of in"est%ent %anage%ent=a$"isor'=cons&ltanc' acco&nts. an$ >+.>. 1ent o&t safet' $e#osit bo<es. The bank shall #erfor% the ser"ices #er%itte$ &n$er &bsections >+.1.* >+.2.* >+.+. an$ >+.8. as $e#ositar' or as an agent. Accor$ingl'* it shall kee# the f&n$s* sec&rities an$ other effects which it recei"es $&l' se#arate fro% the bankGs own assets an$ liabilities, The :onetar' Boar$ %a' reg&late the o#erations a&thori!e$ b' this ection in or$er to ens&re that s&ch o#erations $o not en$anger the interests of the $e#ositors an$ other cre$itors of the bank. )n case a bank or (&asi-bank notifies the Bangko entral or #&blicl' anno&nces a bank holi$a'* or in an' %anner s&s#en$s the #a'%ent of its $e#osit liabilities contin&o&sl' for %ore than thirt' (+0) $a's* the :onetar' Boar$ %a' s&%%aril' an$ witho&t nee$ for #rior hearing close s&ch banking instit&tion an$ #lace it &n$er recei"ershi# of the 0hili##ine Fe#osit )ns&rance /or#oration. Sec. 4/. P'"9!;! !"# " Ac &, I#,0'e'. - A bank shall not $irectl' engage in ins&rance b&siness as the ins&rer. Sec. 44. P'"9!;! e+ T'&#,&c !"#,. >>.1. 2o $irector* officer* e%#lo'ee* or agent of an' bank shall A (a) :ake false entries in an' bank re#ort or state%ent or #artici#ate in an' fra&$&lent transaction* thereb' affecting the financial interest of* or ca&sing $a%age to* the bank or an' #erson. (b) Ditho&t or$er of a co&rt of co%#etent ;&ris$iction* $isclose to an' &na&thori!e$ #erson an' infor%ation relati"e to the f&n$s or #ro#erties in the c&sto$' of the bank belonging to #ri"ate in$i"i$&als* cor#orations* or an' other entit', 0ro"i$e$* That with res#ect to bank $e#osits* the #ro"isions of e<isting laws shall #re"ail. (c) Acce#t gifts* fees* or co%%issions or an' other for% of re%&neration in connection with the a##ro"al of a loan or other cre$it acco%%o$ation fro% sai$ bank. ($) 9"er"al&e or ai$ in o"er"al&ing an' sec&rit' for the #&r#ose of infl&encing in an' wa' the actions of the bank or an' bank. or (e) 9&tso&rce inherent banking f&nctions. >>.2. 2o borrower of a bank shall (a) @ra&$&lentl' o"er"al&e #ro#ert' offere$ as sec&rit' for a loan or other cre$it acco%%o$ation fro% the bank. (b) @&rnish false or %ake %isre#resentation or s&##ression of %aterial facts for the #&r#ose of obtaining* renewing* or increasing a loan or other cre$it acco%%o$ation or e<ten$ing the #erio$ thereof. (c) Atte%#t to $efra&$ the sai$ bank in the e"ent of a co&rt action to reco"er a loan or other cre$it acco%%o$ation. or ($) 9ffer an' $irector* officer* e%#lo'ee or agent of a bank an' gift* fee* co%%ission* or an' other for% of co%#ensation in or$er to infl&ence s&ch #ersons into a##ro"ing a loan or other cre$it acco%%o$ation a##lication. >>.+. 2o e<a%iner* officer or e%#lo'ee of the Bangko entral or of an' $e#art%ent* b&rea&* office* branch or agenc' of the Go"ern%ent that is assigne$ to s&#er"ise* e<a%ine* assist or ren$er technical assistance to an' bank shall co%%it an' of the acts en&%erate$ in this ection or ai$ in the co%%ission of the sa%e. The %aking of false re#orts or %isre#resentation or s&##ression of %aterial facts b' #ersonnel of the Bangko ental ng 0ili#inas shall be s&b;ect to the a$%inistrati"e an$ cri%inal sanctions #ro"i$e$ &n$er the 2ew /entral Bank Act.

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>>.8. /onsistent with the #ro"isions of 1e#&blic Act 2o. 180>* otherwise known as the Banks ecrec' Law* no bank shall e%#lo' cas&al or non reg&lar #ersonnel or too length' #robationar' #ersonnel in the con$&ct of its b&siness in"ol"ing bank $e#osits. Sec. 48. C"#+0c !#6 B0,!#e,, !# &# U#,&(e "' U#,"0#+ <&##e' - )n $eter%ining whether a #artic&lar act or o%ission* which is not otherwise #rohibite$ b' an' law* r&le or reg&lation affecting banks* (&asi-banks or tr&st entities* %a' be $ee%e$ as con$&cting b&siness in an &nsafe or &nso&n$ %anner for #&r#oses of this ection* the :onetar' Boar$ shall consi$er an' of the following circ&%stances, >5.1. The act or o%ission has res&lte$ or %a' res&lt in %aterial loss or $a%age* or abnor%al risk or $anger to the safet'* stabilit'* li(&i$it' or sol"enc' of the instit&tion. . >5.2. The act or o%ission has res&lte$ or %a' res&lt in %aterial loss or $a%age or abnor%al risk to the instit&tionGs $e#ositors* cre$itors* in"estors* stockhol$ers or to the Bangko entral or to the #&blic in general. >5.+. The act or o%ission has ca&se$ an' &n$&e in;&r'* or has gi"en an' &nwarrante$ benefits* a$"antage or #reference to the bank or an' #art' in the $ischarge b' the $irector or officer of his $&ties an$ res#onsibilities thro&gh %anifest #artialit'* e"i$ent ba$ faith or gross ine<c&sable negligence. or >5.8. The act or o%ission in"ol"es entering into an' contract or transaction %anifestl' an$ grossl' $isa$"antageo&s to the bank* (&asi-bank or tr&st entit'* whether or not the $irector or officer #rofite$ or will #rofit thereb'. Dhene"er a bank* (&asi-bank or tr&st entit' #ersists in con$&cting its b&siness in an &nsafe or &nso&n$ %anner* the :onetar' Boar$ %a'* witho&t #re;&$ice to the a$%inistrati"e sanctions #ro"i$e$ in ection +3 of the 2ew /entral Bank Act* take action &n$er ection +0 of the sa%e Act an$=or i%%e$iatel' e<cl&$e the erring bank fro% clearing* the #ro"isions of law to the contrar' notwithstan$ing. Sec. 47. P'"9!;! !"# "# D!2!+e#+ Dec$&'& !"#. A 2o bank or (&asi-bank shall $eclare $i"i$en$s* if at the ti%e of $eclaration, >3.1. )ts clearing acco&nt with the Bangko entral is o"er$rawn. or >3.2. )t is $eficient in the re(&ire$ li(&i$it' floor for go"ern%ent $e#osits for fi"e (>) or %ore consec&ti"e $a's* or . >3.+. )t $oes not co%#l' with the li(&i$it' stan$ar$s=ratios #rescribe$ b' the Bangko entral for #&r#oses of $eter%ining f&n$s a"ailable for $i"i$en$ $eclaration. or >3.8. )t has co%%itte$ a %a;or "iolation as %a' be $eter%ine$ b' the Bangko entral. Sec. 48. I#+e1e#+e# A0+! "'. - The :onetar' Boar$ %a' re(&ire a bank* (&asi-bank or tr&st entit' to engage the ser"ices of an in$e#en$ent a&$itor to be chosen b' the bank* (&asi-bank or tr&st entit' concerne$ fro% a list of certifie$ #&blic acco&ntants acce#table to the :onetar' Boar$. The ter% of the engage%ent shall be as #rescribe$ b' the :onetar' Boar$ which %a' either be on a contin&ing basis where the a&$itor shall act as resi$ent e<a%iner* or on the basis of s#ecial engage%ents. b&t in an' case* the in$e#en$ent a&$itor shall be res#onsible to the bankBs* (&asi-bankBs or tr&st entit'Bs boar$ of $irectors. A co#' of the re#ort shall be f&rnishe$ to the :onetar' Boar$. The :onetar' Boar$ %a' also $irect the boar$ of $irectors of a bank* (&asi-bank* tr&st' entit' an$=or the in$i"i$&al %e%bers thereof. to con$&ct* either #ersonall' or b' a co%%ittee create$ b' the boar$* an ann&al balance sheet a&$it of the bank* (&asi-bank or tr&st entit' to re"iew the internal a&$it an$ control s'ste% of the bank* (&asi-bank or tr&st entit' an$ to s&b%it a re#ort of s&ch a&$it. Sec. 49. A0 9"'! ) " Re60$& e E$ec '"#!c T'&#,&c !"#,. - The Bangko entral shall ha"e f&ll a&thorit' to reg&late the &se of electronic $e"ices* s&ch as co%#&ters* an$ #rocesses for recor$ing* storing an$ trans%itting infor%ation or $ata in connection with the o#erations of a bank. (&asi-bank or tr&st entit'* incl&$ing the $eli"er' of ser"ices an$ #ro$&cts to c&sto%ers b' s&ch entit'. Sec. 8>. F!#&#c!&$ S & e7e# ,. A ?"er' bank* (&asi-bank or tr&st entit' shall s&b%it to the a##ro#riate s&#er"ising an$ e<a%ining $e#art%ent of the Bangko entral financial state%ents in s&ch for% an$ fre(&enc' as %a' be #rescribe$ b' the Bangko entral. &ch state%ents* which shall be as of a s#ecific $ate $esignate$ b' the Bangko entral* shall show thee act&al financial con$ition of the instit&tion s&b%itting the state%ent* an$ of its branches* offices* s&bsi$iaries an$ affiliates* incl&$ing the res&lts of its o#erations* an$ shall contain s&ch infor%ation as %a' be re(&ire$ in Bangko entral reg&lations. .

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SEC 81. P0;$!c& !"# "( F!#&#c!&$ S & e7e# ,. - ?"er' bank* (&asi-bank or tr&st entit'* shall #&blish a state%ent of its financial con$ition* incl&$ing those of its s&bsi$iaries an$ affiliates* in s&ch ter%s &n$erstan$able to the la'%an an$ in s&ch fre(&enc' as %a' be #rescribe$ Bangko entral* in ?nglish or @ili#ino* at least once e"er' (&arter in a news#a#er of general circ&lation in the cit' or #ro"ince where the #rinci#al office* in the case of a $o%estic instit&tion or the #rinci#al branch or office in the case of a foreign bank* is locate$* b&t if no news#a#er is #&blishe$ in the sa%e #ro"ince* then in a news#a#er #&blishe$ in :etro :anila or in the nearest cit' or #ro"ince. The Bangko entral %a' b' reg&lation #rescribe the news#a#er where the state%ents #rescribe$ herein shall be #&blishe$. The :onetar' Boar$ %a' allow the #osting of the financial state%ents of a bank* (&asi-bank or tr&st entit' in #&blic #laces it %a' $eter%ine* lie& of the #&blication re(&ire$ in the #rece$ing #aragra#h* when warrante$ b' the circ&%stances. A$$itionall'* banks shall %ake a"ailable to the #&blic in s&ch for% an$ %anner as the Bangko entral %a' #rescribe the co%#lete set of its a&$ite$ financial state%ents as well as s&ch other rele"ant infor%ation incl&$ing those on enter#rises %a;orit'-owne$ or controlle$ b' the bank* that will infor% the #&blic of the tr&e financial con$ition of a bank as of an' gi"en ti%e. )n #erio$s of national an$=or local e%ergenc' or of i%%inent #anic which $irectl' threaten %onetar' an$ banking stabilit'* the :onetar' Boar$* b' a "ote of at least fi"e (>) of its %e%bers* in s#ecial cases an$ &#on a##lication of the bank* (&asi-bank or tr&st entit'* %a' allow s&ch bank* (&asi-bank or tr&st entit' to $efer for a state$ #erio$ of ti%e the #&blication of the state%ent of financial con$ition re(&ire$ herein. Sec. 8%. P0;$!c& !"# "( C&1! &$ S "c-. A A bank* (&asi-bank or tr&st entit' incor#orate$ &n$er the laws of the 0hili##ines shall not #&blish the a%o&nt of its a&thori!e$ or s&bscribe$ ca#ital stock witho&t in$icating at the sa%e ti%e an$ with e(&al #ro%inence* the a%o&nt of its ca#ital act&all' #ai$ &#. 2o branch of an' foreign bank $oing b&siness in the 0hili##ines shall in an' wa' anno&nce the a%o&nt of the ca#ital an$ s&r#l&s of its hea$ office* or of the bank in its entiret' witho&t in$icating at the sa%e ti%e an$ with e(&al #ro%inence the a%o&nt of the ca#ital* if an'* $efinitel' assigne$ to s&ch branch* s&ch fact shall be state$ in* an$ shall for% #art of the #&blication. Sec. 8*. Se $e7e# "( D!,10 e,. A The #ro"isions of an' law to the contrar' notwithstan$ing* the Bangko entral shall be cons&lte$ b' other go"ern%ent agencies or instr&%entalities in actions or #rocee$ings initiate$ b' or bro&ght before the% in"ol"ing contro"ersies in banks* (&asi-banks or tr&st entities arising o&t of an$ in"ol"ing relations between an$ a%ong their $irectors* officers or stockhol$ers* as well as $is#&tes between an' or all of the% an$ the bank* (&asi-bank or tr&st entit' of which the' are $irectors* officers or stockhol$ers. . Sec. 8/. U#&0 9"'!=e+ A+2e' !,e7e# "' B0,!#e,, Re1'e,e# & !"#. A 2o #erson* association* or cor#oration &nless $&l' a&thori!e$ to engage in the b&siness of a bank* (&asi-bank* tr&st entit'* or sa"ings an$ loan association as $efine$ in this Act* or other banking laws* shall a$"ertise or hol$ itself o&t as being engage$ in the b&siness of s&ch bank* (&asi-bank* tr&st entit'* or association* or &se in connection with its b&siness title* the wor$ or wor$s bank*6 banking*6 banker*6 (&asi-bank*6 (&asibanking*6 (&asi-banker*6 sa"ings an$ loan association*6 tr&st cor#oration*6 tr&st co%#an'6 or wor$s of si%ilar i%#ort or transact in an' %anner the b&siness of an' s&ch bank* cor#oration or association. Sec. 84. Se'2!ce Fee,. A The Bangko entral %a' charge e(&itable rates* co%%issions or fees* as %a' be #rescribe$ b' the :onetar' Boar$ for s&#er"ision* e<a%ination an$ other ser"ices which it ren$ers &n$er this Act. Sec. 88. Pe#&$ ) ("' V!"$& !"# "( 9!, Ac . A -nless otherwise herein #ro"i$e$* the "iolation of an' of the #ro"isions of this Act shall be s&b;ect to ections +8* +>* +5 an$ +3 of the 2ew /entral Bank Act. )f the offen$er is a $irector or officer of a bank* (&asi-bank or tr&st entit'* the :onetar' Boar$ %a' also s&s#en$ or re%o"e s&ch $irector or officer. )f the "iolation is co%%itte$ b' a cor#oration* s&ch cor#oration %a' be $issol"e$ b' (&o warranto #rocee$ings instit&te$ b' the olicitor General. PLACE<ENT UNDER CONSERVATORSHIP

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Sec. 87. C"#,e'2& "',9!1. A The gro&n$s an$ #roce$&res for #lacing a bank &n$er conser"atorshi#* as well as* the #owers an$ $&ties of the conser"ator a##ointe$ for the bank shall be go"erne$ b' the #ro"isions of ection 24 an$ the last two #aragra#hs of ection +0 of the 2ew /entral Bank Act, 0ro"i$e$* That this ection shall also a##l' to conser"atorshi# #rocee$ings of (&asi-banks.. CHAPTER VI CESSATION OF BANKING BUSINESS Sec. 88. V"$0# &') L!?0!+& !"#. A )n case of "ol&ntar' li(&i$ation of an' bank organi!e$ &n$er the laws of the 0hili##ines* or of an' branch or office in the 0hili##ines of a foreign bank* written notice of s&ch li(&i$ation shall be sent to the :onetar' Boar$ before s&ch li(&i$ation shall be sent to the :onetar' Boar$ before s&ch li(&i$ation is &n$ertaken* an$ the :onetar' Boar$ shall ha"e the right to inter"ene an$ take s&ch ste#s as %a' be necessar' to #rotect the interests of cre$itors. Sec. 89. Rece!2e',9!1 &#+ I#2"$0# &') L!?0!+& !"#. A The gro&n$s an$ #roce$&res for #lacing a bank &n$er recei"ershi# or li(&i$ation* as well as the #owers an$ $&ties of the recei"er or li(&i$ator a##ointe$ for the bank shall be go"erne$ b' the #ro"isions of ections +0* +1* +2* an$ ++ of the 2ew /entral Bank Act, 0ro"i$e$* That the #etitioner or #laintiff files with the clerk or ;&$ge of the co&rt in which the action is #en$ing a bon$* e<ec&te$ in fa"or of the Bangko entral* in an a%o&nt to be fi<e$ b' the co&rt. This ection shall also a##l' to the e<tent #ossible to the recei"ershi# an$ li(&i$ation #rocee$ings of (&asibanks. Sec. 7>. Pe#&$ ) ("' T'&#,&c !"#, A( e' & B&#- Bec"7e, I#,"$2e# . A An' $irector or officer of an' bank $eclare$ insol"ent or #lace$ &n$er recei"ershi# b' the :onetar' Boar$ who ref&ses to t&rn o"er the bankBs recor$s an$ assets to the $esignate$ recei"ers* or who ta%#ers with banks recor$s* or who a##ro#riates for hi%self for another #art' or $estro's or ca&ses the %isa##ro#riation an$ $estr&ction of the bankBs assets* or who recei"es or #er%its or ca&ses to be recei"e$ in sai$ bank an' $e#osit* collection of loans an$=or recei"ables* or who #a's o&t or #er%its or ca&ses to be transferre$ an' sec&rities or #ro#ert' of sai$ bank shall be s&b;ect to the #enal #ro"isions of the 2ew /entral Bank Act. CHAPTER VII LA@S GOVERNING OTHER T.PES OF BANKS Sec. 71. O 9e' B&#-!#6 L&3,. A The organi!ation* the ownershi# an$ ca#ital re(&ire%ents* #owers* s&#er"ision an$ general con$&ct of b&siness of thrift banks* r&ral banks an$ coo#erati"e banks shall be go"erne$ b' the #ro"isions of the Thrift Banks Act* the 1&ral Banks Act* an$ the /oo#erati"e /o$e* res#ecti"el'. The organi!ation* ownershi# an$ ca#ital re(&ire%ents* #owers* s&#er"ision an$ general con$&ct of b&siness of )sla%ic banks shall be go"erne$ b' s#ecial laws. The #ro"isions of this Act* howe"er* insofar as the' are not in conflict with the #ro"isions of the Thrift Banks Act* the 1&ral Banks Act* an$ the /oo#erati"e /o$e shall likewise a##l' to thrift banks* r&ral banks* an$ coo#erati"e banks* res#ecti"el'. Eowe"er* for #&r#oses of #rescribing the %ini%&% ratio which the net worth of a thrift bank %&st bear to its total risk assets* the #ro"isions of ection ++ of this Act shall go"ern. CHAPTER VIII FOREIGN BANKS Sec. 7%. T'&#,&c !#6 B0,!#e,, !# 9e P9!$!11!#e,. A The entr' of foreign banks in the 0hili##ines thro&gh the establish%ent of branches shall be go"erne$ b' the #ro"isions of the @oreign Banks Liberali!ation Act. The con$&ct of offshore banking b&siness in the 0hili##ines shall be go"erne$ b' the #ro"isions of the 0resi$ential Fecree 2o. 10+8* otherwise known as the 9ffshore Banking 'ste% Fecree.6 Sec. 7*. Ac?0!,! !"# "( V" !#6 S "c- !# & D"7e, !c B&#-. A Dithin se"en (3) 'ears fro% the effecti"it' of this act an$ s&b;ect to g&i$elines iss&e$ #&rs&ant to the @oreign Banks Liberali!ation Act* the :onetar' Boar$ %a' a&thori!e a foreign bank to ac(&ire &# to one h&n$re$ #ercent (100C) of the "oting stock of onl' one (1) bank organi!e$ &n$er the laws of the 1e#&blic of the 0hili##ines.

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Dithin the sa%e #erio$* the :onetar' Boar$ %a' a&thori!e an' foreign bank* which #rior to the effecti"it' of this Act a"aile$ itself of the #ri"ilege to ac(&ire &# to si<t' #ercent (50C) of the "oting stock of a bank &n$er the @oreign Banks Liberali!ation Act an$ the Thrift Banks Act* to f&rther ac(&ire "oting shares s&ch bank to the e<tent necessar' for it to own one h&n$re$ #ercent (100C) of the "oting stock thereof. )n the e<ercise of the a&thorit'* the :onetar' Boar$ shall a$o#t %eas&res as %a' be necessar' to ens&re that at all ti%es the control of se"ent' #ercent (30C) of the reso&rces or assets of the entire banking s'ste% is hel$ b' banks which are at least %a;orit'-owne$ b' @ili#inos. An' right* #ri"ilege or incenti"e grante$ to a foreign bank &n$er this ection shall be e(&all' en;o'e$ b' an$ e<ten$e$ &n$er the sa%e con$itions to banks organi!e$ &n$er the laws of the 1e#&blic of the 0hili##ines. Sec. 7/. L"c&$ B'&#c9e, "( F"'e!6# B&#-,. A )n the case of a foreign bank which has %ore than one (1) branch in the 0hili##ines* all s&ch branches shall be treate$ as one (1) &nit for the #&r#ose of this Act* an$ all references to the 0hili##ine branches of foreign banks shall be hel$ to refer to s&ch &nits. Sec. 74. He&+ O((!ce G0&'&# ee . A )n or$er to #ro"i$e effecti"e #rotection of the interests of the $e#ositors an$ other cre$itors of 0hili##ine branches of a foreign bank* the hea$ office of s&ch branches shall f&ll' g&arantee the #ro%#t #a'%ent of all liabilities of its 0hili##ine branch. 1esi$ents an$ citi!ens of the 0hili##ines who are cre$itors of a branch in the 0hili##ines of a foreign bank shall ha"e #referential rights to the assets of s&ch branch in accor$ance with the e<isting laws. Sec. 78. S077"#, &#+ Le6&$ P'"ce,,. A &%%ons an$ legal #rocess ser"e$ &#on the 0hili##ine agent or hea$ of an' foreign bank $esignate$ to acce#t ser"ice thereof shall gi"e ;&ris$iction to the co&rts o"er s&ch bank* an$ ser"ice of notices on s&ch agent or hea$ shall be as bin$ing &#on the bank which he re#resents as if %a$e &#on the bank itself. ho&l$ the a&thorit' of s&ch agent or hea$ to acce#t ser"ice of s&%%ons an$ legal #rocesses for the bank or notice to it be re"oke$* or sho&l$ s&ch agent or hea$ beco%e %entall' inco%#etent or otherwise &nable to acce#t ser"ice while e<ercising s&ch a&thorit'* it shall be the $&t' of the bank to na%e an$ $esignate #ro%#tl' another agent or hea$ &#on who% ser"ice of s&%%ons an$ #rocesses in legal #rocee$ings against the bank an$ of notices affecting the bank %a' be %a$e* an$ to file with the ec&rities an$ ?<change /o%%ission a $&l' a&thenticate$ no%ination of s&ch agent. )n the absence of the agent or hea$ or sho&l$ there be no #erson a&thori!e$ b' the bank &#on who% ser"ice of s&%%ons* #rocesses an$ all legal notices %a' be %a$e* ser"ice of s&%%ons* #rocesses an$ legal notices %a' be %a$e &#on the Bangko entral Fe#&t' Go"ernor )n-/harge of the s&#er"ising an$ e<a%ining $e#art%ents an$ s&ch ser"ice shall be as effecti"e as if %a$e &#on the bank or its $&l' a&thori!e$ agent or hea$. )n case of ser"ice for the bank &#on the Bangko entral Fe#&t' Go"ernor )n-charge of the s&#er"ising an$ e<a%ining $e#art%ents* the sai$ $e#&t' Go"ernor shill register an$ trans%it b' %ail to the #resi$ent or the secretar' of the bank at its hea$ or #rinci#al office a co#'* $&l' certifie$ b' hi%* of the s&%%ons* #rocess* or notice. The sen$ing of s&ch co#' of the s&%%ons* #rocess* or notice shall be a necessar' #art of the ser"ices an$ shall co%#lete the ser"ice. The registr' recei#t of %ailing shall be #ri%a facie e"i$ence of the trans%ission of the s&%%ons* #rocess or notice. All costs necessaril' inc&rre$ b' the sai$ Fe#&t' Go"ernor for the %aking an$ %ailing an$ sen$ing of a co#' of the s&%%ons* #rocess* or notice to the #resi$ent or the secretar' of the bank at its hea$ or #rinci#al office shall be #ai$ in a$"ance b' the #art' at whose instance the ser"ice is %a$e.. Sec. 77. L&3, A11$!c&;$e. - )n all %atters not s#ecificall' co"ere$ b' s#ecial #ro"isions a##licable onl' to a foreign bank or its branches an$ other offices in the 0hili##ines an' foreign bank license$ to $o b&siness in the 0hili##ines shall be bo&n$ b' the #ro"isions of this Act* all other laws* r&les an$ reg&lations a##licable to banks organi!e$ &n$er the laws of the 0hili##ines of the sa%e class* e<ce#t those that #ro"i$e for the creation* for%ation* organi!ation or $issol&tion of cor#orations or for the fi<ing of the relations* liabilities* res#onsibilities* or $&ties of stockhol$ers* %e%bers* $irectors or officers of cor#orations to each other or to the cor#oration. Sec. 78. Re2"c& !"# "( L!ce#,e "( & F"'e!6# B&#- A The :onetar' Boar$ %a' re"oke the license to transact b&siness in the 0hili##ines of* an' foreign bank* if it fin$s that the foreign bank is insol"ent or in i%%inent $anger thereof or that its contin&ance in b&siness will in"ol"e #robable loss to those transacting b&siness with it. After the re"ocation of its license* it shall be

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&nlawf&l for an' s&ch foreign banks to transact b&siness in the 0hili##ines &nless its license is renewe$ or reiss&e$. After the re"ocation of s&ch license* the Bangko entral shall take the necessar' action to #rotect the cre$itors of s&ch foreign bank an$ the #&blic. The #ro"isions of the 2ew /entral Bank Act on sanctions an$ #enalties shall likewise be a##licable. CHAPTER IBTRUST OPERATIONS Sec. 79. A0 9"'! ) " E#6&6e !# T'0, B0,!#e,,. A 9nl' a stock cor#oration or a #erson $&l' a&thori!e$ b' the :onetar' Boar$ to engage in tr&st b&siness shall act as a tr&stee or a$%inister an' tr&st or hol$ #ro#ert' in tr&st or on $e#osit for the &se* benefit* or behoof of others. @or #&r#oses of this Act* s&ch a cor#oration shall be referre$ to as a tr&st entit'. . Sec. 8>. C"#+0c "( T'0, B0,!#e,,. A A tr&st entit' shall a$%inister the f&n$s or #ro#ert' &n$er its c&sto$' with the $iligence that a #r&$ent %an wo&l$ e<ercise in the con$&ct of an enter#rise of a like character an$ with si%ilar ai%s. 2o tr&st entit' shall* for the acco&nt of the tr&stor or the beneficiar' of the tr&st* #&rchase or ac(&ire #ro#ert' fro%* or sell* transfer* assign* or len$ %one' or #ro#ert' to* or #&rchase $ebt instr&%ents of* an' of the $e#art%ents* $irectors* officers* stockhol$ers* or e%#lo'ees of the tr&st entit'* relati"es within the first $egree of consang&init' or affinit'* or the relate$ interests* of s&ch $irectors* officers an$ stockhol$ers* &nless the transaction is s#ecificall' a&thori!e$ b' the tr&stor an$ the relationshi# of the tr&stee an$ the other #art' in"ol"e$ in the transaction is f&ll' $isclose$ to the tr&stor of beneficiar' of the tr&st #rior to the transaction. The :onetar' Boar$ shall #ro%&lgate s&ch r&les an$ reg&lations as %a' be necessar' to #re"ent circ&%"ention of this #rohibition or the e"asion of the res#onsibilit' herein i%#ose$ on a tr&st entit'. Sec. 81. Re6!, '& !"# "( A' !c$e, "( I#c"'1"'& !"# &#+ B)-L&3, "( & T'0, E# ! ). A The ec&rities an$ ?<change /o%%ission shall not register the articles of incor#oration an$ b'-laws or an' a%en$%ent thereto* of an' tr&st entit'* &nless acco%#anie$ b' a certificate of a&thorit' iss&e$ b' the Bangko entral. Sec. 8%. <!#!707 C&1! &$!=& !"#. A A tr&st entit'* before it can engage in tr&st or other fi$&ciar' b&siness* shall co%#l' with the %ini%&% #ai$-in ca#ital re(&ire%ent which will be $eter%ine$ b' the :onetar' Boar$.. Sec. 8*. P"3e', "( & T'0, E# ! ). A A tr&st entit'* in a$$ition to the general #owers inci$ent to cor#orations* shall ha"e the #ower to, 7+.1. Act as tr&stee on an' %ortgage or bon$ iss&e$ b' an' %&nici#alit'* cor#oration* or an' bo$' #olitic an$ to acce#t an$ e<ec&te an' tr&st consistent with law. 7+.2. Act &n$er the or$er or a##oint%ent of an' co&rt as g&ar$ian* recei"er* tr&stee* or $e#ositar' of the estate of an' %inor or other inco%#etent #erson* an$ as recei"er an$ $e#ositar' of an' %one's #ai$ into co&rt b' #arties to an' legal #rocee$ings an$ of #ro#ert' of an' kin$ which %a' be bro&ght &n$er the ;&ris$iction of the co&rt. 7+.+. Act as the e<ec&tor of an' will when it is na%e$ the e<ec&tor thereof. 7+.8. Act as a$%inistrator of the estate of an' $ecease$ #erson* with the will anne<e$* or as a$%inistrator of the estate of an' $ecease$ #erson when there is no will. 7+.>. Acce#t an$ e<ec&te an' tr&st for the hol$ing* %anage%ent* an$ a$%inistration of an' estate* real or #ersonal* an$ the rents* iss&es an$ #rofits thereof. an$ 7+.5. ?stablish an$ %anage co%%on tr&st f&n$s* s&b;ect to s&ch r&les an$ reg&lations as %a' be #rescribe$ b' the :onetar' Boar$. Sec. 8/. De1",! ("' 9e F&! 9(0$ Pe'("'7&#ce "( T'0, D0 !e,. A Before transacting tr&st b&siness* e"er' tr&st entit' shall $e#osit with the Bangko entral* as sec&rit' for the faithf&l #erfor%ance of its tr&st $&ties* cash or sec&rities a##ro"e$ b' the :onetar' Boar$ in an a%o&nt e(&al to or not less than @i"e h&n$re$ tho&san$ #esos (0>00*000.00) or s&ch higher a%o&nt as %a' fi<e$ b' the :onetar' Boar$, 0ro"i$e$* howe"er* That the :onetar' Boar$ shall re(&ire e"er' tr&st entit' to increase the a%o&nt of its cash or sec&rities on $e#osit with the Bangko entral in accor$ance with the #ro"isions of this #aragra#h. ho&l$

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the ca#ital an$ s&r#l&s fall below sai$ a%o&nt* the :onetar' Boar$ shall ha"e the sa%e a&thorit' as that grante$ to it &n$er the #ro"isions of the fifth #aragra#h of ection +8 of this Act. A tr&st entit' so long as it shall contin&e to be sol"ent an$ co%#l' with laws or reg&lations shall ha"e the right to collect the interest earne$ on s&ch sec&rities $e#osite$ with the Bangko entral an$* fro% ti%e to ti%e* with the a##ro"al of the Bangko entral* to e<change the sec&rities for others. )f the tr&st entit' fails to co%#l' with an' law or reg&lation* the Bangko entral shall retain s&ch interest on the sec&rities $e#osite$ with it for the benefit of rightf&l clai%ants. Al clai%s rising o&t of the tr&st b&siness of a tr&st entit' shall ha"e #riorit' o"er all other clai%s as regar$s the cash or sec&rities $e#osite$ as abo"e #ro"i$e$. The :onetar' Boar$ %a' not #er%it the cash or sec&rities $e#osite$ in accor$ance with the #ro"isions of this ection to be re$&ce$ below the #rescribe$ %ini%&% a%o&nt &ntil the $e#ositing entit' shall $iscontin&e its tr&st b&siness an$ shall satisf' the :onetar' Boar$ that it has co%#lie$ with all its obligations in connection with s&ch b&siness. Sec. 84. B"#+ "( Ce' &!# Pe',"#, ("' 9e F&! 9(0$ Pe'("'7&#ce "( D0 !e,. A Before an e<ec&tor* a$%inistrator* g&ar$ian* tr&stee* recei"er or $e#ositar' a##ointe$ b' the co&rt enters &#on the e<ec&tion of his $&ties* he shall* &#on or$er of the co&rt* file a bon$ in s&ch s&% as the co&rt %a' $irect. -#on the a##lication of an' e<ec&tor* a$%inistrator* g&ar$ian* tr&stee* recei"er* $e#ositar' or an' other #erson in interest* the co&rt %a'* after notice an$ hearing* or$er that the s&b;ect %atter of the tr&st or an' #art* thereof be $e#osite$ with a tr&st entit'. -#on #resentation of #roof to the co&rt that the s&b;ect %atter of the tr&st has been $e#osite$ with a tr&st entit'. -#on #resentation of #roof to the co&rt that the s&b;ect %atter of the tr&st has been $e#osite$ with a tr&st entit'* the co&rt %a' or$er that the bon$ gi"en b' s&ch #ersons for the faithf&l #erfor%ance of their $&ties be re$&ce$ to s&ch s&%s as it %a' $ee% #ro#er, 0ro"i$e$* howe"er* That the re$&ce$ bon$ shall be s&fficient to sec&re a$e(&atel' the #ro#er a$%inistration an$ care of an' #ro#ert' re%aining &n$er the control of s&ch #ersons an$ the #ro#er acco&nting for s&ch #ro#ert'. . 0ro#ert' $e#osite$ with an' tr&st entit' in confor%it' with this ection shall be hel$ b' s&ch entit' &n$er the or$ers an$ $irection of the co&rt. Sec. 88. E:e71 !"# "( T'0, E# ! ) ('"7 B"#+ Re?0!'e7e# . A 2o bon$ or other sec&rit' shall be re(&ire$ b' the co&rt fro% a tr&st entr' for the faithf&l #erfor%ance of its $&ties as co&rt-a##ointe$ tr&stee* e<ec&tor* a$%inistrator* g&ar$ian* recei"er* or $e#ositar'. Eowe"er* the co&rt %a'* &#on #ro#er a##lication with it showing s#ecial ca&se therefore* re(&ire the tr&st entit' to #ost a bon$ or other sec&rit' for the #rotection of f&n$s or #ro#ert' confi$e$ to s&ch entit'. Sec. 87. Se1&'& !"# "( T'0, B0,!#e,, ('"7 Ge#e'&$ B0,!#e,,. A The tr&st b&siness an$ all f&n$s* #ro#erties or sec&rities recei"e$ b' an' tr&st entit' as e<ec&tor* a$%inistrator* g&ar$ian* tr&stee* recei"er* or $e#ositar' shall be ke#t se#arate an$ $istinct fro% the general b&siness incl&$ing all other f&n$s* #ro#erties* an$ assets of s&ch tr&st entit'. The acco&nts of all s&ch f&n$s* #ro#erties* or sec&rities shall likewise be ke#t se#arate an$ $istinct fro% the acco&nts of the general b&siness of the tr&st entit'. Sec. 88. I#2e, 7e# L!7! & !"#, "( & T'0, E# ! ). A -nless otherwise $irecte$ b' the instr&%ent creating the tr&st* the len$ing an$ in"est%ent of f&n$s an$ other assets ac(&ire$ b' a tr&st entit' as e<ec&tor* a$%inistrator* g&ar$ian* tr&stee* recei"er or $e#ositar' of the estate of an' %inor or other inco%#etent #erson shall be li%ite$ to loans or in"est%ents as %a' be #rescribe$ b' law* the :onetar' Boar$ or an' co&rt of co%#etent ;&ris$iction. . Sec. 89. Re&$ E, & e Ac?0!'e+ ;) & T'0, E# ! ). A -nless otherwise s#ecificall' $irecte$ b' the tr&stor or the nat&re of the tr&st* real estate ac(&ire$ b' a tr&st entit' in whate"er %anner an$ for whate"er #&r#oses* shall likewise be go"erne$ b' the rele"ant #ro"isions of ection >2 of this Act. Sec. 9>. I#2e, 7e# "( N"#-T'0, F0#+,. A The in"est%ent of f&n$s other than tr&st f&n$s of a tr&st entit' which is a bank* financing co%#an' or an in"est%ent ho&se shall be go"erne$ b' the rele"ant #ro"isions of this Act an$ other a##licable laws. Sec. 91. S&#c !"#, &#+ Pe#&$ !e,. - A tr&st entit' or an' of its officers an$ $irectors fo&n$ to ha"e willf&ll' "iolate$ an' #ertinent #ro"isions of this Act* shall be s&b;ect to the sanctions an$ #enalties #ro"i$e$ tin$er ection 55 of this Act as well as ections +5 an$ +3 of the 2ew /entral Bank Act. Sec. 9%. E:e71 !"# "( T'0, A,,e , ('"7 C$&!7,. - 2o assets hel$ b' a tr&st entit' in its ca#acit' as tr&stee shall be s&b;ect to an' clai%s other than those of the #arties intereste$ in the s#ecific tr&sts.

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Sec. 9*. E, &;$!,97e# "( B'&#c9e, "( & T'0, E# ! ). A The or$inar' b&siness of a tr&st entit' shall be transacte$ at the #lace of b&siness s#ecifie$ in its articles of incor#oration. &ch tr&st entit' %a'* with #rior a##ro"al of the :onetar' Boar$* establish branches in the 0hili##ines an$ the sai$ entit' shall be res#onsible for all b&siness con$&cte$ in s&ch branches to the sa%e e<tent an$ in the sa%e %anner as tho&gh s&ch b&siness ha$ all been con$&cte$ in the hea$ office. @or the #&r#ose of this Act* the tr&st entit' an$ its branches shall be treate$ as one &nit. CHAPTER B FINAL PROVISIONS Sec. 9/. P9&,e O0 "( B&#6-" Se# '&$ P"3e', O2e' B0!$+!#6 &#+ L"&# A,,"c!& !"#,. - Dithin a #erio$ of three (+) 'ears fro% the effecti"it' of this Act* the Bangko entral shall #hase o&t an$ transfer its s&#er"ising an$ reg&lator' #owers o"er b&il$ing an$ loan associations to the Eo%e )ns&rance an$ G&arant' /or#oration which shall ass&%e the sa%e. -ntil otherwise #ro"i$e$ b' law* b&il$ing an$ loan associations shall contin&e to be go"erne$ b' ections +4 to >>* /ha#ter H) of the General Banking Act* as a%en$e$* incl&$ing s&ch r&les an$ reg&lations iss&e$ #&rs&ant thereto. -#on ass&%#tion b' the Eo%e )ns&rance an$ G&arant' /or#oration of s&#er"ising an$ reg&lator' #owers o"er b&il$ing an$ loan associations* a references in ections +4 to >> of the General Banking Act* as a%en$e$* to the Bangko entral an$ the :onetar' Boar$ shall be $ee%e$ to refer to the Eo%e )ns&rance an$ G&arant' /or#oration an$ its boar$ of $irectors* res#ecti"el'. . Sec. 94. Re1e&$!#6 C$&0,e. - ?<ce#t as %a' be #ro"i$e$ for in ections +8 an$ 48 of this Act* the General Banking Act* as a%en$e$* an$ the #ro"isions of an' other law* s#ecial charters* r&le or reg&lation iss&e$ #&rs&ant to sai$ General Banking Act* as a%en$e$* or #arts thereof* which %a' be inconsistent with the #ro"isions of this Act are hereb' re#eale$. The #ro"isions of #aragra#h 7* ection 7* 1e#&blic Act 2o. +>41* as a%en$e$ b' 1e#&blic Act 2o. 3800* are likewise re#eale$. Sec. 98. Se1&'&;!$! ) C$&0,e. - )f an' #ro"ision or section of this Act or the a##lication thereof to an' #erson or circ&%stance is hel$ in"ali$* the other #ro"isions or sections of this Act* an$ the a##lication of s&ch #ro"ision or section to other #ersons or circ&%stances shall not be affecte$ thereb'. . Sec. 97. E((ec !2! ) C$&0,e - This Act shall take effect fifteen (1>) $a's following its #&blication in the 9fficial Ga!ette or in two (2) national news#a#ers of general circ&lation. A##ro"e$, :A2-?L B. H)LLA1* I1. #eaker of the Eo&se of 1e#resentati"es @1A2JL)2 :. F1)L92 0resi$ent of the enate This Act* which is a consoli$ation of enate Bill 2o. 1>14 an$ Eo&se Bill 2o. 5718* was finall' #asse$ b' the enate an$ the Eo&se of 1e#resentati"es on A#ril 12* 2000. 19B?1T9 0. 2AKA1?29 ecretar' General Eo&se of 1e#resentati"es 9 /A1 G. LAB? ecretar' of the enate A##ro"e$, I9 ?0E ?I?1/)T9 ? T1AFA 0resi$ent of the 0hili##ines

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