SECTION 1.   Declaration of Policy. — The State shall maintain a central monetary authority
that shall function and operate as an independent and accountable body corporate in the discharge of
its  mandated  responsibilities  concerning  money,  banking  and  credit.  In  line  with  this  policy,  and
considering  its  unique  functions  and  responsibilities,  the  central  monetary  authority  established  under
this Act, while being a government-owned corporation, shall enjoy fiscal and administrative autonomy.  
SECTION 2.   Creation of the Bangko Sentral. — There is hereby established an independent
central monetary authority, which shall be a body corporate known as the Bangko Sentral ng Pilipinas,
hereafter referred to as the Bangko Sentral.  
The  capital  of  the  Bangko  Sentral  shall  be  Fifty  billion  pesos  (P50,000,000,000),  to  be  fully
subscribed  by  the  Government  of  the  Republic,  hereafter  referred  to  as  the  Government,  Ten  billion
pesos (P10,000,000,000) of which shall be fully paid for by the Government upon the effectivity of this
Act and the balance to be paid for within a period of two (2) years from the effectivity of this Act in such
manner  and  form  as  the  Government,  through  the  Secretary  of  Finance  and  the  Secretary  of  Budget
and Management, may thereafter determine.  
SECTION 3.   Responsibility  and  Primary  Objective.  —  The  Bangko  Sentral  shall  provide
policy  directions  in  the  areas  of  money,  banking,  and  credit.  It  shall  have  supervision  over  the
operations  of  banks  and  exercise  such  regulatory  powers  as  provided  in  this  Act  and  other  pertinent
laws  over  the  operations  of  finance  companies  and  non-bank  financial  institutions  performing  quasi-
banking functions, hereafter referred to as quasi-banks, and institutions performing similar functions.  
The  primary  objective  of  the  Bangko  Sentral  is  to  maintain  price  stability  conducive  to  a
balanced and sustainable growth of the economy. It shall also promote and maintain monetary stability
and the convertibility of the peso.  
SECTION 4.   Place  of  Business.  —  The  Bangko  Sentral  shall  have  its  principal  place  of
business  in  Metro  Manila,  but  may  maintain  branches,  agencies  and  correspondents  in  such  other
places as the proper conduct of its business may require.  
SECTION 5.   Corporate Powers. — The Bangko Sentral is hereby authorized to adopt, alter,
and use a corporate seal which shall be judicially noticed; to enter into contracts; to lease or own real
and personal property, and to sell or otherwise dispose of the same; to sue and be sued; and otherwise
to do and perform any and all things that may be necessary or proper to carry out the purposes of this
The Bangko Sentral may acquire and hold such assets and incur such liabilities in connection
with its operations authorized by the provisions of this Act, or as are essential to the proper conduct of
such operations.  
The Bangko Sentral may compromise, condone or release, in whole or in part, any claim of or
settled  liability  to  the  Bangko  Sentral,  regardless  of  the  amount  involved,  under  such  terms  and
conditions as may be prescribed by the Monetary Board to protect the interests of the Bangko Sentral.  
SECTION 6.   Composition  of  the  Monetary  Board.  —  The  powers  and  functions  of  the
Bangko Sentral shall be exercised by the Bangko Sentral Monetary Board, hereafter referred to as the
Monetary Board, composed of seven (7) members appointed by the President of the Philippines for a
term of six (6) years.  
The seven (7) members are:  
(a)    the Governor of the Bangko Sentral, who shall be the Chairman of the Monetary Board. The
Governor of the Bangko Sentral shall be head of a department and his appointment shall be
subject  to  confirmation  by  the  Commission  on  Appointments.    Whenever  the  Governor  is
unable to attend a meeting of the Board, he shall designate a Deputy Governor to act as his
alternate:  Provided,  That  in  such  event,  the  Monetary  Board  shall  designate  one  of  its
members as acting Chairman;  
(b)    a member of the Cabinet to be designated by the President of the Philippines.  Whenever the
designated Cabinet Member is unable to attend a meeting of the Board, he shall designate
an Undersecretary in his Department to attend as his alternate; and  
(c)     five  (5)  members  who  shall come from the private sector, all of whom shall serve full-time:
Provided,  however,  That  of  the  members  first  appointed  under  the  provisions  of  this
subsection, three (3) shall have a term of six (6) years, and the other two (2), three (3) years.  
No member of the Monetary Board may be reappointed more than once.  
SECTION 7.   Vacancies.  —  Any  vacancy  in  the  Monetary  Board  created  by  the  death,
resignation, or removal of any member shall be filled by the appointment of a new member to complete
the unexpired period of the term of the member concerned.  
SECTION 8.   Qualifications.  —  The  members  of  the  Monetary  Board  must  be  natural-born
citizens of the Philippines, at least thirty-five (35) years of age, with the exception of the Governor who
should at least be forty (40) years of age, of good moral character, of unquestionable integrity, of known
probity and patriotism, and with recognized competence in social and economic disciplines.  
SECTION 9.   Disqualifications. — In addition to the disqualifications imposed by Republic Act
No.  6713,  a  member  of  the  Monetary  Board  is  disqualified  from  being  a  director,  officer,  employee,
consultant, lawyer, agent or stockholder of any bank, quasi-bank or any other institution which is subject
to supervision or examination by the Bangko Sentral, in which case such member shall resign from, and
divest himself of any and all interests in such institution before assumption of office as member of the
Monetary Board.  
The  members  of  the  Monetary  Board  coming  from  the  private  sector  shall  not  hold any other
public office or public employment during their tenure.  
No person shall be a member of the Monetary Board if he has been connected directly with any
multilateral  banking  or  financial  institution  or  has  a  substantial  interest  in  any  private  bank  in  the
Philippines,  within  one  (1)  year  prior  to  his  appointment;  likewise,  no  member  of  the  Monetary  Board
shall  be  employed  in  any  such  institution  within  two  (2)  years  after  the  expiration  of  his  term  except
when he serves as an official representative of the Philippine Government to such institution.  
SECTION 10. Removal. — The President may remove any member of the Monetary Board for
any of the following reasons:  
(a)    If the member is subsequently disqualified under the provisions of Section 8 of this Act; or  
(b)    If he is physically or mentally incapacitated that he cannot properly discharge his duties and
responsibilities and such incapacity has lasted for more than six (6) months; or  
(c)     If  the  member  is  guilty  of  acts  or  operations  which  are  of  fraudulent  or  illegal  character  or
which are manifestly opposed to the aims and interests of the Bangko Sentral; or    
(d)    If the member no longer possesses the qualifications specified in Section 8 of this  
SECTION 11. Meetings. — The Monetary Board shall meet at least once a week.  The Board
may be called to a meeting by the Governor of the Bangko Sentral or by two (2) other members of the
The  presence  of  four  (4)  members  shall  constitute  a  quorum:  Provided,  That  in  all  cases  the
Governor or his duly designated alternate shall be among the four (4).  
Unless  otherwise  provided  in  this  Act,  all  decisions  of  the  Monetary  Board  shall  require  the
concurrence of at least four (4) members.  
The  Bangko  Sentral  shall  maintain  and  preserve  a  complete  record  of  the  proceedings  and
deliberations  of  the  Monetary  Board,  including  the  tapes  and  transcripts  of  the  stenographic  notes,
either in their original form or in microfilm.  
SECTION 12. Attendance  of  the  Deputy  Governors.  —  The  Deputy  Governors  may  attend
the meetings of the Monetary Board with the right to be heard.  
SECTION 13. Salary. — The salary of the Governor and the members of the Monetary Board
from the private sector shall be fixed by the President of the Philippines at a sum commensurate to the
importance and responsibility attached to the position.  
SECTION 14. Withdrawal  of  Persons  Having  a  Personal  Interest.  —  In  addition  to  the
requirements of Republic Act No. 6713, any member of the Monetary Board with personal or pecuniary
interest in any matter in the agenda of the Monetary Board shall disclose his interest to the Board and
shall retire from the meeting when the matter is taken up.  The decision taken on the matter shall be
made  public.    The  minutes  shall  reflect  the  disclosure  made  and  the  retirement  of  the  member
concerned from the meeting.    
SECTION 15. Exercise  of  Authority.  —  In  the  exercise  of  its  authority,  the  Monetary  Board
(a)    issue  rules  and  regulations  it  considers  necessary  for  the  effective  discharge  of  the
responsibilities and exercise of the powers vested upon the Monetary Board and the Bangko
Sentral.    The  rules  and  regulations  issued  shall  be  reported  to  the  President  and  the
Congress within fifteen (15) days from the date of their issuance;  
(b)    direct the management, operations, and administration of the Bangko Sentral, reorganize its
personnel, and issue such rules and regulations as it may deem necessary or convenient for
this purpose.  The legal units of the Bangko Sentral shall be under the exclusive supervision
and control of the Monetary Board;  
(c)     establish  a  human  resource  management  system  which  shall  govern  the  selection,  hiring,
appointment,  transfer,  promotion,  or  dismissal  of  all  personnel.    Such  system  shall  aim  to
establish  professionalism  and  excellence  at  all  levels  of  the  Bangko  Sentral  in  accordance
with sound principles of management.  
A  compensation  structure,  based  on  job  evaluation  studies  and  wage  surveys  and
subject  to  the  Board's  approval,  shall  be  instituted  as  an  integral  component  of  the  Bangko
Sentral's  human  resource  development  program:  Provided,  That  the  Monetary  Board  shall
make  its  own  system  conform  as  closely  as  possible  with  the  principles  provided  for  under
Republic  Act  No.  6758:  Provided,  however,  That  compensation  and  wage  structure  of
employees whose positions fall under salary grade 19 and below shall be in accordance with
the rates prescribed under Republic Act No. 6758.   
On  the  recommendation  of  the  Governor,  appoint,  fix  the  remunerations  and  other
emoluments,  and  remove  personnel  of  the  Bangko  Sentral,  subject  to  pertinent  civil  service
laws: Provided, That the Monetary Board shall have exclusive and final authority to promote,
transfer, assign, or reassign personnel of the Bangko Sentral and these personnel actions are
deemed  made  in  the  interest  of  the  service  and  not  disciplinary:  Provided,  further,  That  the
Monetary Board may delegate such authority to the Governor under such guidelines as it may
(d)    adopt an annual budget for and authorize such expenditures by the Bangko Sentral as are in
the interest of the effective administration and operations of  
(e)    the Bangko Sentral in accordance with applicable laws and regulations; and  
(f)     indemnify  its  members and other officials of the Bangko Sentral, including personnel of the
departments   performing  supervision  and  examination  functions  against  all  costs  and
expenses reasonably incurred by such persons in connection with any civil or criminal action,
suit or proceedings to which he may be, or is, made a party by reason of the performance of
his functions or duties, unless he is finally adjudged in such action or proceeding to be liable
for negligence or misconduct.  
In the event of a settlement or compromise, indemnification shall be provided only in
connection  with  such  matters  covered  by  the  settlement  as  to  which  the  Bangko  Sentral  is
advised by external counsel that the person to be indemnified did not commit any negligence
or misconduct.  
The  costs  and  expenses  incurred  in  defending  the  aforementioned  action,  suit  or
proceeding  may  be  paid  by  the  Bangko  Sentral  in  advance  of  the  final  disposition  of  such
action,  suit  or  proceeding  upon  receipt  of  an  undertaking  by  or  on  behalf  of  the  member,
officer, or employee to repay the amount advanced should it ultimately be determined by the
Monetary Board that he is not entitled to be indemnified as provided in this subsection.
SECTION 16. Responsibility.  —  Members  of  the  Monetary  Board,  officials,  examiners,  and
employees of the Bangko Sentral who willfully violate this Act or who are guilty of negligence, abuses or
acts of malfeasance or misfeasance or fail to exercise extraordinary diligence in the performance of his
duties  shall  be  held  liable  for  any  loss  or  injury  suffered  by  the  Bangko  Sentral  or  other  banking
institutions  as  a  result  of  such  violation,  negligence,  abuse,  malfeasance,  misfeasance  or  failure  to
exercise extraordinary diligence.  
Similar responsibility shall apply to members, officers, and employees of the Bangko Sentral for:
(1) the disclosure of any information of a confidential nature, or any information on the discussions or
resolutions  of  the  Monetary  Board,  or  about  the  confidential  operations  of  the Bangko Sentral, unless
the disclosure is in connection with the performance of official functions with the Bangko Sentral, or is
with  prior  authorization  of  the  Monetary  Board  or the Governor; or (2) the use of such information for
personal  gain  or  to  the  detriment  of  the  Government,  the  Bangko  Sentral  or  third  parties:  Provided,
however, That any data or information required to be submitted to the President and/or the Congress, or
to be published under the provisions of this Act shall not be considered confidential.  
SECTION 17. Powers  and  Duties  of  the  Governor.  —  The  Governor  shall  be  the  chief
executive officer of the Bangko Sentral.  His powers and duties shall be to:  
(a)    prepare  the  agenda  for  the  meetings  of  the  Monetary  Board  and  to  submit  for  the
consideration of the Board the policies and measures which he believes to be necessary to
carry out the purposes and provisions of this Act;    
(b)    execute and administer the policies and measures approved by the Monetary Board;  
(c)     direct  and supervise the operations and internal administration of the Bangko Sentral.  The
Governor may delegate certain of his administrative responsibilities to other officers or may
assign  specific  tasks  or  responsibilities  to  any  full-time  member  of  the  Monetary  Board
without  additional  remuneration  or  allowance  whenever  he  may  deem  fit  or  subject  to  such
rules and regulations as the Monetary Board may prescribe;  
(d)    appoint  and  fix  the  remunerations  and  other  emoluments  of  personnel  below  the  rank  of  a
department  head  in  accordance  with  the  position  and  compensation  plans  approved by the
Monetary Board, as well as to impose disciplinary measures upon personnel of the Bangko
Sentral,  subject  to  the  provisions  of  Section  15(c)  of  this  Act:  Provided,  That  removal  of
personnel shall be with the approval of the Monetary Board;  
(e)    render  opinions,  decisions,  or  rulings,  which  shall  be  final  and  executory  until  reversed  or
modified  by  the  Monetary  Board,  on  matters  regarding  application  or  enforcement  of  laws
pertaining  to  institutions  supervised  by  the  Bangko  Sentral  and  laws  pertaining  to  quasi-
banks, as well as regulations, policies or instructions issued by the Monetary Board, and the
implementation thereof; and  
(f)     exercise such other powers as may be vested in him by the Monetary Board.  
SECTION 18. Representation  of  the  Monetary  Board  and  the  Bangko  Sentral.  —  The
Governor of the Bangko Sentral shall be the principal representative of the Monetary Board and of the
Bangko Sentral and, in such capacity and in accordance with the instructions of the Monetary Board, he
shall be empowered to:  
(a)    represent  the  Monetary  Board  and  the  Bangko  Sentral  in  all  dealings  with  other  offices,
agencies and instrumentalities of the Government and all other persons or entities, public or
private, whether domestic, foreign or international;  
(b)    sign contracts entered into by the Bangko Sentral, notes and securities issued by the Bangko
Sentral,  all  reports,  balance  sheets,  profit  and  loss  statements,  correspondence  and  other
documents of the Bangko Sentral.  
The signature of the Governor may be in facsimile whenever appropriate;  
(c)     represent the Bangko Sentral, either personally or through counsel, including private counsel,
as may be authorized by the Monetary Board, in any legal proceedings, action or specialized
legal studies; and  
(d)    delegate his power to represent the Bangko Sentral, as provided in subsections (a), (b) and
(c)  of  this  section,  to  other  officers  upon  his  own  responsibility:  Provided,  however,  That  in
order  to  preserve  the  integrity  and  the  prestige  of  his  office,  the  Governor  of  the  Bangko
Sentral may choose not to participate in preliminary discussions with any multilateral banking
or  financial  institution  on  any  negotiations  for  the  Government  within  or  outside  the
Philippines.  During  the  negotiations,  he  may  instead  be  represented  by  a  permanent
SECTION 19. Authority of the Governor in Emergencies. — In case of emergencies where
time is sufficient to call a meeting of the Monetary Board, the Governor of the Bangko Sentral, with the
concurrence of two (2) other members of the Monetary Board, may decide any matter or take any action
within the authority of the Board.   
The  Governor  shall  submit  a  report  to  the  President  and  Congress  within  seventy-two  (72)
hours after the action has been taken.  
At the soonest possible time, the Governor shall call a meeting of the Monetary Board to submit
his action for ratification.  
SECTION 20. Outside Interests of the Governor and the Full-time Members of the Board.
—  The  Governor  of  the  Bangko  Sentral  and  the  full-time  members  of  the  Board  shall  limit  their
professional   activities   to   those   pertaining   directly   to   their   positions   with   the   Bangko   Sentral.  
Accordingly, they may not accept any other employment, whether public or private, remunerated or ad
honorem,  with  the  exception  of  positions  in  eleemosynary,  civic,  cultural  or  religious  organizations  or
whenever, by designation of the President, the Governor or the full-time member is tasked to represent
the interest of the Government or other government agencies in matters connected with or affecting the
economy or the financial system of the country.  
SECTION 21. Deputy Governors. — The Governor of the Bangko Sentral, with the approval of
the Monetary Board, shall appoint not more than three (3) Deputy Governors who shall perform duties
as may be assigned to them by the Governor and the Board.  
In  the  absence  of  the  Governor,  a  Deputy  Governor  designated  by  the  Governor  shall  act  as
chief  executive  of  the  Bangko  Sentral  and  shall  exercise  the  powers  and  perform  the  duties  of  the
Governor.  Whenever the Government is unable to attend meetings of government boards or councils in
which he is an ex officio member pursuant to provisions of special laws, a Deputy Governor as may be
designated by the Governor shall be vested with authority to participate and exercise the right to vote in
such meetings.  
SECTION 22. Research and Statistics. — The Bangko Sentral shall prepare data and conduct
economic research for the guidance of the Monetary Board in the formulation and implementation of its
policies.    Such  data  shall  include,  among  others,  forecasts  of  the  balance  of  payments  of  the
Philippines,  statistics  on  the  monthly  movement  of  the  monetary  aggregates  and  of  prices  and  other
statistical  series  and  economic  studies  useful  for  the  formulation  and  analysis  of  monetary,  banking,
credit and exchange policies.  
SECTION 23. Authority to Obtain Data and Information. — The Bangko Sentral shall have
the  authority  to  request  from  government  offices  and  instrumentalities,  or  government-owned  or
controlled  corporations,  any  data  which  it  may  require  for  the  proper  discharge  of  its  functions  and
responsibilities.    The  Bangko  Sentral  through  the  Governor  or  in  his  absence,  a  duly  authorized
representative shall have the power to issue a subpoena for the production of the books and records for
the  aforesaid  purpose.    Those  who  refuse  the  subpoena  without  justifiable  cause,  or  who  refuse  to
supply  the  bank  with  data  requested  or  required,  shall  be  subject  to  punishment  for  contempt  in
accordance with the provisions of the Rules of Court.  
Data on individual firms, other than banks, gathered by the Department of Economic Research
and  other  departments  or  units  of  the  Bangko  Sentral  shall  not  be  made  available  to  any  person  or
entity outside of the Bangko Sentral whether public or private except under order of the court or under
such  conditions  as  may  be  prescribed  by  the  Monetary  Board:  Provided,  however,  That the collective
data  on  firms  may  be  released  to  interested  persons  or  entities:  Provided,  finally,  That  in  the  case of
data on banks, the provisions of Section 27 of this Act shall apply.  
SECTION 24. Training  of  Technical  Personnel.  —  The  Bangko  Sentral  shall  promote  and
sponsor  the  training  of  technical  personnel  in  the  field  of  money  and  banking.    Toward  this  end,  the
Bangko  Sentral  is  hereby  authorized  to  defray  the  costs  of  study,  at  home  or  abroad,  of  qualified
employees  of  the  Bangko  Sentral,  of  promising  university  graduates  or  of  any other qualified persons
who shall be determined by proper competitive examinations.  The Monetary Board shall prescribe rules
and regulations to govern the training program of the Bangko Sentral.  
SECTION 25. Supervision  and  Examination.  —  The  Bangko  Sentral  shall  have  supervision
over,  and  conduct  periodic  or  special  examinations  of,  banking institutions and quasi-banks, including
their subsidiaries and affiliates engaged in allied activities.  
For purposes of this section, a subsidiary means a corporation more than fifty percent (50%) of
the  voting  stock  of  which  is  owned  by  a  bank  or  quasi-bank  and  an  affiliate  means  a  corporation  the
voting stock of which, to the extent of fifty percent (50%) or less, is owned by a bank or quasi-bank or
which is related or linked to such institution or intermediary through common stockholders or such other
factors as may be determined by the Monetary Board.    
The department heads and the examiners of the supervising and/or examining departments are
hereby authorized to administer oaths to any director, officer, or employee of any institution under their
respective  supervision  or  subject  to  their  examination  and  to  compel  the  presentation  of  all  books,
documents,  papers  or  records  necessary  in  their  judgment  to  ascertain  the  facts  relative  to  the  true
condition  of  any  institution  as  well  as  the  books  and  records  of  persons  and  entities  relative  to  or  in
connection with the operations, activities or transactions of the institution under examination, subject to
the provision of existing laws protecting or safeguarding the secrecy or confidentiality of bank deposits
as  well  as  investments  of  private  persons,  natural  or  juridical,  in  debt  instruments  issued  by  the
No restraining order or injunction shall be issued by the court enjoining the Bangko Sentral from
examining any institution subject to supervision or examination by the Bangko Sentral, unless there is
convincing proof that the action of the Bangko Sentral is plainly arbitrary and made in bad faith and the
petitioner  or  plaintiff  files  with  the  clerk  or  judge  of  the  court  in  which  the  action  is  pending  a  bond
executed in favor of the Bangko Sentral, in an amount to be fixed by the court.  The provisions of Rule
58 of the New Rules of Court insofar as they are applicable and not inconsistent with the provisions of
this section shall govern the issuance and dissolution of the restraining order or injunction contemplated
in this section.  
SECTION 26. Bank  Deposits  and  Investments.  —  Any  director,  officer  or  stockholder  who,
together with his related interest, contracts a loan or any form of financial accommodation from: (1) his
bank; or (2) from a bank (a) which is a subsidiary of a bank holding company of which both his bank and
the lending bank are subsidiaries or (b) in which a controlling proportion of the shares is owned by the
same interest that owns a controlling proportion of the shares of his bank, in excess of five percent (5%)
of the capital and surplus of the bank, or in the maximum amount permitted by law, whichever is lower,
shall  be  required  by  the  lending  bank  to  waive  the  secrecy  of  his  deposits  of  whatever  nature  in  all
banks  in  the  Philippines.    Any  information  obtained from an examination of his deposits shall be held
strictly  confidential  and  may  be  used  by  the  examiners  only  in  connection  with  their  supervisory  and
examination  responsibility  or  by  the  Bangko  Sentral  in  an  appropriate  legal  action  it  has  initiated
involving the deposit account.  
SECTION 27. Prohibitions. — In addition to the prohibitions found in Republic Act Nos. 3019
and 6713, personnel of the Bangko Sentral are hereby prohibited from:  
(a)    being  an  officer,  director,  lawyer  or  agent,  employee,  consultant  or  stockholder,  directly  or
indirectly,  of  any  institution  subject  to  supervision  or  examination  by  the  Bangko  Sentral,
except  non-stock  savings  and  loan  associations  and  provident  funds  organized  exclusively
for employees of the Bangko Sentral, and except as otherwise provided in this Act;    
(b)    directly or indirectly requesting or receiving any gift, present or pecuniary or material benefit
for  himself  or  another,  from  any  institution  subject  to  supervision  or  examination  by  the
Bangko Sentral;  
(c)     revealing in any manner, except under orders of the court, the Congress or any government
office  or  agency  authorized  by  law,  or  under  such  conditions  as  may  be  prescribed  by  the
Monetary  Board,  information  relating  to  the  condition  or  business  of  any  institution.    This
prohibition shall not be held to apply to the giving of information to the Monetary Board or the
Governor of the Bangko Sentral, or to any person authorized by either of them, in writing, to
receive such information; and  
(d)    borrowing  from  any  institution  subject  to  supervision  or  examination  by  the  Bangko  Sentral
shall  be  prohibited  unless  said  borrowings  are  adequately  secured,  fully  disclosed  to  the
Monetary Board, and shall be subject to such further rules and regulations as the Monetary
Board  may  prescribe:  Provided,  however,  That  personnel  of  the  supervising and examining
departments   are   prohibited   from   borrowing   from   a   bank   under   their   supervision   or
SECTION 28. Examination  and  Fees.  —  The  supervising  and  examining  department  head,
personally or by deputy, shall examine the books of every banking institution once in every twelve (12)
months, and at such other times as the Monetary Board by an affirmative vote of five (5) members, may
deem expedient and to make a report on the same to the Monetary Board: Provided, That there shall be
an interval of at least twelve (12) months between annual examinations.  
The  bank  concerned  shall  afford  to  the  head  of  the  appropriate  supervising  and  examining
departments  and  to  his  authorized  deputies  full  opportunity  to  examine  its  books,  cash  and  available
assets and general condition at any time during  banking hours when requested to do so by the Bangko
Sentral:  Provided,  however,  That  none  of  the  reports  and  other  papers  relative  to  such  examinations
shall be open to inspection by the public except insofar as such publicity is incidental to the proceedings
hereinafter authorized or is necessary for the prosecution of violations in connection with the business
of such institutions.    
Banking and quasi-banking institutions which are subject to examination by the Bangko Sentral
shall pay to the Bangko Sentral, within the first thirty (30) days of each year, an annual fee in an amount
equal to a percentage as may be prescribed by the Monetary Board of its average total assets during
the  preceding  year  as  shown  on  its  end-of-month  balance  sheets,  after  deducting  cash  on  hand  and
amounts due from banks, including the Bangko Sentral and banks abroad.  
SECTION 29. Appointment of Conservator. — Whenever, on the basis of a report submitted
by  the  appropriate  supervising  or  examining  department,  the  Monetary  Board  finds  that  a  bank  or  a
quasi-bank  is  in  a  state  of  continuing  inability  or  unwillingness  to  maintain  a  condition  of  liquidity
deemed adequate to protect the interest of depositors and creditors, the Monetary Board may appoint a
conservator  with  such  powers  as  the  Monetary  Board  shall  deem  necessary  to  take  charge  of  the
assets,  liabilities,  and  the  management  thereof,  reorganize  the  management,  collect  all  monies  and
debts  due  said  institution,  and  exercise  all  powers  necessary  to  restore  its  viability.    The  conservator
shall report and be responsible to the Monetary Board and shall have the power to overrule or revoke
the actions of the previous management and board of directors of the bank or quasi-bank.  
The conservator should be competent and knowledgeable in bank operations and management.  
The conservatorship shall not exceed one (1) year.    
The conservator shall receive remuneration to be fixed by the Monetary Board in an amount not
to  exceed  two-thirds  (2/3)  of  the  salary  of  the  president  of  the  institution  in  one  (1)  year,  payable  in
twelve  (12)  equal  monthly  payments:  Provided,  That,  if  at  any  time  within  one-year  period,  the
conservatorship is terminated on the ground that the institution can operate on its own, the conservator
shall receive the balance of the remuneration which he would have received up to the end of the year;
but if the conservatorship is terminated on other grounds, the conservator shall not be entitled to such
remaining  balance.    The  Monetary  Board  may  appoint  a  conservator  connected  with  the  Bangko
Sentral,  in  which  case  he  shall  not  be  entitled  to  receive  any  remuneration  or  emolument  from  the
Bangko  Sentral  during  the  conservatorship.    The  expenses  attendant  to  the  conservatorship  shall  be
borne by the bank or quasi-bank concerned.  
The Monetary Board shall terminate the conservatorship when it is satisfied that the institution
can   continue   to   operate   on   its   own   and  the  conservatorship  is  no  longer  necessary.    The
conservatorship shall likewise be terminated should the Monetary Board, on the basis of the report of
the conservator or of its own findings, determine that the continuance in business of the institution would
involve  probable  loss  to  its  depositors  or  creditors,  in  which  case  the  provisions  of  Section  30  shall
SECTION 30. Proceedings  in  Receivership  and  Liquidation.  —  Whenever,  upon  report  of
the head of the supervising or examining department, the Monetary Board finds that a bank or quasi-
(a)  is unable to pay its liabilities as they become due in the ordinary course of business: Provided,
That  this  shall  not  include  inability  to  pay  caused  by  extraordinary  demands  induced  by
financial panic in the banking community;  
(b)  by the Bangko Sentral, to meet its liabilities; or  
(c)  cannot continue in business without involving probable losses to its depositors or creditors; or  
(d)  has willfully violated a cease and desist order under Section 37 that has become final, involving
acts  or transactions which amount to fraud or a dissipation of the assets of the institution; in
which cases, the Monetary Board may summarily and without need for prior hearing forbid the
institution  from  doing  business  in  the  Philippines  and  designate  the  Philippine  Deposit
Insurance Corporation as receiver of the banking institution.  
For a quasi-bank, any person of recognized competence in banking or finance may be designed
as receiver.    
The  receiver  shall  immediately  gather  and  take  charge  of  all  the  assets  and  liabilities  of  the
institution,  administer  the  same  for  the  benefit  of  its  creditors,  and  exercise  the  general  powers  of  a
receiver  under  the  Revised  Rules  of  Court  but  shall  not,  with  the  exception  of  administrative
expenditures,  pay  or  commit  any  act  that  will  involve  the  transfer  or  disposition  of  any  asset  of  the
institution:  Provided,  That  the  receiver  may  deposit  or  place  the  funds  of  the  institution  in  non-
speculative  investments.    The  receiver  shall  determine  as  soon  as  possible,  but  not  later  than  ninety
(90)  days  from  take  over,  whether  the  institution  may  be  rehabilitated  or  otherwise  placed  in  such  a
condition so that it may be permitted to resume business with safety to its depositors and creditors and
the  general  public:  Provided,  That  any  determination  for  the  resumption  of  business  of  the  institution
shall be subject to prior approval of the Monetary Board.  
If  the  receiver  determines  that  the  institution  cannot  be  rehabilitated  or  permitted  to  resume
business  in  accordance  with  the  next  preceding  paragraph,  the  Monetary  Board  shall  notify  in  writing
the  board  of  directors  of  its  findings  and  direct  the  receiver  to  proceed  with  the  liquidation  of  the
institution.  The receiver shall:  
1.      file ex parte with the proper regional trial court, and without requirement of prior notice or any
other  action,  a  petition  for  assistance  in  the  liquidation  of  the  institution  pursuant  to  a
liquidation  plan  adopted  by  the  Philippine  Deposit  Insurance  Corporation  for  general
application to all closed banks.  In case of quasi-banks, the liquidation plan shall be adopted
by  the  Monetary  Board.    Upon  acquiring  jurisdiction,  the  court  shall,  upon  motion  by  the
receiver  after  due  notice,  adjudicate  disputed  claims  against  the  institution,  assist  the
enforcement of individual liabilities of the stockholders, directors and officers, and decide on
other issues as may be material to implement the liquidation plan adopted.  The receiver shall
pay the cost of the proceedings from the assets of the institution.  
2.      convert  the  assets  of  the  institutions  to  money,  dispose  of  the  same  to  creditors  and  other
parties, for the purpose of paying the debts of such institution in accordance with the rules on
concurrence and preference of credit under the Civil Code of the Philippines and he may, in
the name of the institution, and with the assistance of counsel as he may retain, institute such
actions as may be necessary to collect and recover accounts and assets of, or defend any
action  against,  the  institution.    The  assets  of  an  institution  under  receivership  or  liquidation
shall be deemed in custodia legis in the hands of the receiver and shall, from the moment the
institution  was  placed  under  such  receivership  or  liquidation,  be  exempt  from  any  order  of
garnishment, levy, attachment, or execution.  
The actions of the Monetary Board taken under this section or under Section 29 of this Act shall
be  final  and  executory,  and  may  not  be  restrained  or  set  aside  by  the  court  except  on  petition  for
certiorari on the ground that the action taken was in excess of jurisdiction or with such grave abuse of
discretion as to amount to lack or excess of jurisdiction.  The petition for certiorari may only be filed by
the stockholders of record representing the majority of the capital stock within ten (10) days from receipt
by   the   board   of   directors   of   the   institution   of   the   order   directing   receivership,   liquidation   or
conservatorship.   The designation of a conservator under Section 29 of this Act or the appointment of a
receiver  under  this  section  shall  be  vested  exclusively  with  the  Monetary  Board.    Furthermore,  the
designation of a conservator is not a precondition to the designation of a receiver.  
SECTION 31. Distribution of Assets. — In case of liquidation of a bank or quasi-bank, after
payment  of  the  cost  of  proceedings,  including  reasonable  expenses  and  fees  of  the  receiver  to  be
allowed  by  the  court,  the  receiver  shall  pay  the  debts  of  such  institution,  under  order  of  the  court,  in
accordance with the rules on concurrence and preference of credit as provided in the Civil Code.  
SECTION 32. Disposition of Revenues and Earnings. — All revenues and earnings realized
by the receiver in winding up the affairs and administering the assets of any bank or quasi-bank within
the purview of this Act shall be used to pay the costs, fees and expenses mentioned in the preceding
section,  salaries  of  such  personnel  whose  employment  is  rendered  necessary  in  the  discharge of the
liquidation  together  with  other  additional  expenses  caused  thereby.    The  balance  of  revenues  and
earnings, after the payment of all said expenses, shall form part of the assets available for payment to
SECTION 33. Disposition  of  Banking  Franchise.  —  The  Bangko  Sentral  may,  if  public
interest so requires, award to an institution, upon such terms and conditions as the Monetary Board may
approve, the banking franchise of a bank under liquidation to operate in the area where said bank or its
branches  were  previously  operating:  Provided,  That  whatever  proceeds  may  be  realized  from  such
award shall be subject to the appropriate exclusive disposition of the Monetary Board.  
SECTION 34. Refusal to Make Reports or Permit Examination. — Any officer, owner, agent,
manager, director or officer-in-charge of any institution subject to the supervision or examination by the
Bangko Sentral within the purview of this Act who, being required in writing by the Monetary Board or by
the  head  of  the  supervising  and  examining  department  willfully  refuses  to  file  the  required  report  or
permit any lawful examination into the affairs of such institution shall be punished by a fine of not less
than  Fifty  thousand  pesos  (P50,000)  nor  more  than  One  hundred  thousand  pesos  (P100,000)  or  by
imprisonment of not less than one (1) year nor more than five (5) years, or both, in the discretion of the
SECTION 35. False Statement. — The willful making of a false or misleading statement on a
material fact to the Monetary Board or to the examiners of the Bangko Sentral shall be punished by a
fine  of  not  less  than  One  hundred  thousand  pesos  (P100,000) nor more than Two hundred thousand
pesos (P200,000), or by imprisonment of not more than (5) years, or both, at the discretion of the court.    
SECTION 36. Proceedings  Upon  Violation  of  This  Act  and  Other  Banking  Laws,  Rules,
Regulations, Orders or Instructions. — Whenever a bank or quasi-bank, or whenever any person or
entity  willfully  violates  this  Act  or  other  pertinent  banking  laws  being  enforced  or  implemented  by  the
Bangko Sentral or any order, instruction, rule or regulation issued by the Monetary Board, the person or
persons responsible for such violation shall unless otherwise provided in this Act be punished by a fine
of  not  less  than  Fifty  thousand  pesos  (P50,000)  nor  more  than  Two  hundred  thousand  pesos
(P200,000) or by imprisonment of not less than two (2) years nor more than ten (10) years, or both, at
the discretion of the court.  
Whenever  a  bank  or  quasi-bank  persists  in  carrying  on  its  business  in  an  unlawful  or  unsafe
manner, the Board may, without prejudice to the penalties provided in the preceding paragraph of this
section and the administrative sanctions provided in Section 37 of this Act, take action under Section 30
of this Act.  
SECTION 37. Administrative Sanctions on Banks and Quasi-banks. — Without prejudice to
the criminal sanctions against the culpable persons provided in Sections 34, 35, and 36 of this Act, the
Monetary  Board  may,  at  its  discretion,  impose  upon  any  bank  or  quasi-bank,  their  directors  and/or
officers,  for  any  willful  violation  of  its  charter  or  by-laws,  willful  delay  in  the  submission  of  reports  or
publications thereof as required by law, rules and regulations; any refusal to permit examination into the
affairs  of  the  institution;  any  willful  making  of  a  false  or  misleading  statement  to  the  Board  or  the
appropriate  supervising  and  examining  department  or  its  examiners;  any  willful  failure  or  refusal  to
comply  with,  or  violation  of,  any  banking  law  or  any  order,  instruction  or  regulation  issued  by  the
Monetary Board, or any order, instruction or ruling by the Governor; or any commission of irregularities,
and/or  conducting  business  in  an  unsafe or unsound manner as may be determined by the Monetary
Board, the following administrative sanctions, whenever applicable:  
(a)  fines  in  amounts  as  may  be  determined  by  the  Monetary  Board  to  be  appropriate,  but  in  no
case  to  exceed  Thirty  thousand  pesos  (P30,000)  a  day  for  each  violation,  taking  into
consideration  the  attendant  circumstances,  such  as  the  nature  and  gravity  of  the  violation  or
irregularity and the size of the bank or quasi-bank;  
(b)  suspension of rediscounting privileges or access to Bangko Sentral credit facilities;
(c)  suspension  of  lending  or  foreign  exchange  operations  or  authority  to  accept  new  deposits  or
make new investments;  
(d)  suspension of interbank clearing privileges; and/or  
(e)  revocation of quasi-banking license.  
Resignation   or   termination   from   office   shall   not   exempt   such   director   or  officer  from
administrative or criminal sanctions.  
The  Monetary  Board  may,  whenever  warranted  by  circumstances,  preventively  suspend  any
director or officer of a bank or quasi-bank pending an investigation: Provided, That should the case be
not  finally  decided  by  the  Bangko  Sentral  within  a  period  of  one  hundred  twenty  (120)  days  after  the
date  of  suspension,  said  director  or  officer  shall  be  reinstated  in  his  position:  Provided,  further,  That
when the delay in the disposition of the case is due to the fault, negligence or petition of the director or
officer, the period of delay shall not be counted in computing the period of suspension herein provided.  
The above administrative sanctions need not be applied in the order of their severity.  
Whether or not there is an administrative proceeding, if the institution and/or the directors and/or
officers  concerned  continue  with  or  otherwise  persist  in  the  commission  of  the  indicated  practice  or
violation,  the  Monetary  Board  may  issue  an  order  requiring  the  institution  and/or  the  directors  and/or
officers  concerned  to  cease  and  desist  from  the indicated practice or violation, and may further order
that immediate action be taken to correct the conditions resulting from such practice or violation.  The
cease and desist order shall be immediately effective upon service on the respondents.  
The respondents shall be afforded an opportunity to defend their action in a hearing before the
Monetary  Board  or  any  committee  chaired  by  any  Monetary  Board  member  created  for  the  purpose,
upon request made by the respondents within five (5) days from their receipt of the order.  If no such
hearing  is  requested  within  said  period,  the  order  shall  be  final.    If  a  hearing  is  conducted,  all  issues
shall be determined on the basis of records, after which the Monetary Board may either reconsider or
make final its order.  
The  Governor  is  hereby  authorized,  at  his  discretion,  to  impose  upon  banking  institutions,  for
any  failure  to  comply  with  the  requirements  of  law,  Monetary  Board  regulations  and  policies,  and/or
instructions  issued  by  the  Monetary  Board  or  by  the  Governor,  fines  not  in  excess  of  Ten  thousand
pesos  (P10,000)  a  day  for  each  violation,  the  imposition  of  which  shall  be  final  and  executory  until
reversed, modified or lifted by the Monetary Board on appeal.  
SECTION 38. Operating Departments of the Bangko Sentral. — The Monetary Board shall,
in accordance with its authority under this Act, determine and provide for such operating departments
and other offices, including a public information office, of the Bangko Sentral as it deems convenient for
the  proper  and  efficient  conduct  of  the  operations  and  the  accomplishment  of  the  objectives  of  the
Bangko  Sentral.    The  functions  and  duties  of  such  operating  departments  and  other  offices  shall  be
determined by the Monetary Board.    
SECTION 39. Reports  and  Publications.  —  The  Bangko  Sentral  shall  publish  a  general
balance sheet showing the volume and composition of its assets and liabilities as of the last working day
of  the  month  within  sixty  (60)  days  after  the  end  of  each  month  except  for  the  month  of  December,
which shall be submitted within ninety (90) days after the end hereof.  
The Monetary Board shall publish and submit the following reports to the President and to the
(a)    not  later  than  ninety  (90)  days  after  the  end  of  each  quarter,  an  analysis  of  economic  and
financial  developments,  including  the  condition  of  net  international  reserves  and  monetary
(b)    within ninety (90) days after the end of the year, the preceding year's budget and profit and
loss statement of the Bangko Sentral showing in reasonable detail the result of its operations;  
(c)     one hundred twenty (120) days after the end of each semester, a review of the state of the
financial system; and  
(d)    as soon as practicable, abnormal movements in monetary aggregates and the general price
level, and, not later than seventy-two (72) hours after they are taken, remedial measures in
response to such abnormal movements.  
SECTION 40. Annual  Report.  —  Before  the  end  of  March  of  each  year,  the  Bangko  Sentral
shall  publish  and  submit  to  the  President  and  the  Congress  an  annual  report  on  the  condition  of  the
Bangko Sentral including a review of the policies and measures adopted by the Monetary Board during
the  past  year  and  an  analysis  of  the  economic  and  financial  circumstances  which  gave  rise  to  said
policies and measures.  
The annual report shall also include a statement of the financial condition of the Bangko Sentral
and a statistical appendix which shall present, as a minimum, the following data:  
(a)    the monthly movement of monetary aggregates and their components;  
(b)    the monthly movement of purchases and sales of foreign exchange and of the international
reserves of the Bangko Sentral;  
(c)     the balance of payments of the Philippines;  
(d)    monthly indices of consumer prices and of import and export prices;  
(e)    the monthly movement, in summary form, of exports and imports, by volume and value;    
(f)     the monthly movement of the accounts of the Bangko Sentral and of other banks;  
(g)    the  principal data on government receipts and expenditures and on the status of the public
debt, both domestic and foreign; and  
(h)    the texts of the major legal and administrative measures adopted by the Government and the
Monetary  Board  during  the  year  which  relate  to  the  functions  or  operations  of  the  Bangko
Sentral or of the financial system.  
The Bangko Sentral shall publish another version of the annual report in terms understandable
to the layman.  
Failure  to  comply  with  the  reportorial  requirements  pursuant  to  this  article  without  justifiable
reason  as may be determined by the Monetary Board shall cause the withholding of the salary of the
personnel concerned until the requirements are complied with.  
SECTION 41. Signatures   on   Statements.   —   The   balance   sheets   and   other   financial
statements of the Bangko Sentral shall be signed by the officers responsible for their preparation, by the
Governor, and by the auditor of the Bangko Sentral.  
SECTION 42. Fiscal Year. — The fiscal year of the Bangko Sentral shall begin on January first
and end on December thirty-first of each year.  
SECTION 43. Computation of Profits and Losses. — Within the first thirty (30) days following
the end of each year, the Bangko Sentral shall determine its net profits or losses.  In the calculation of
net profits, the Bangko Sentral shall make adequate allowance or establish adequate reserves for bad
and doubtful accounts.  
SECTION 44. Distribution of Net Profits. — Within the first sixty (60) days following the end of
each fiscal year, the Monetary Board shall determine and carry out the distribution of the net profits, in
accordance with the following rule:  
Fifty percent (50%) of the net profits shall be carried to surplus and the remaining fifty percent
(50%)  shall  revert  back  to  the  National  Treasury,  except  as  otherwise  provided  in  the  transitory
provisions of this Act.    
SECTION 45. Revaluation   Profits   and   Losses.   —   Profits  or  losses  arising  from  any
revaluation of the Bangko Sentral's net assets or liabilities in gold or foreign currencies with respect to
the  Philippine  peso  shall  not  be  included  in  the  computation  of  the  annual  profits  and  losses  of  the
Bangko Sentral.  Any profits or losses arising in this manner shall be offset by any amounts which, as a
consequence  of  such  revaluations,  are  owed  by  the  Philippines  to  any  international  or  regional
intergovernmental  financial  institution  of  which  the  Philippines  is  a  member  or  are  owed  by  these
institutions to the Philippines.  Any remaining profit or loss shall be carried in a special frozen account
which shall be named "Revaluation of International Reserve" and the net balance of which shall appear
either  among  the  liabilities  or  among  the  assets  of  the  Bangko  Sentral,  depending  on  whether  the
revaluations have produced net profits or net losses.  
The Revaluation of International Reserve account shall be neither credited nor debited for any
purposes other than those specifically authorized in this section.  
SECTION 46. Suspense  Accounts.  —  Sections  43  and  43-A  of  Republic  Act  No.  265,  as
amended, creating the Monetary Adjustment Account (MAA) and the Exchange Stabilization Adjustment
Account (ESAA), respectively, are hereby repealed. Amounts outstanding as of the effective date of this
Act  based  on  these  accounts  shall  continue  to  be  for  the  account  of  the  Central  Bank  and  shall  be
governed by the transitory provisions of this Act.  
The Revaluation of International Reserve (RIR) account as of the effective date of this Act of
the Central Bank shall continue to be for the account of the same entity and shall be governed by the
provisions  of  Section  44  of  Republic  Act  No.  265,  as  amended,  until  otherwise  provided  for  in
accordance with the transitory provisions of this Act.  
SECTION 47. Appointment  and  Personnel.  —  The  Chairman  of  the  Commission  on  Audit
shall act as the ex officio auditor of the Bangko Sentral and, as such, he is empowered and authorized
to appoint a representative who shall be the auditor of the Bangko Sentral and, in accordance with law,
fix his salary, and to appoint and fix salaries and number of personnel to assist said representative in his
work.  The salaries and other emoluments shall be paid by the Commission.  The auditor of the Bangko
Sentral and personnel under him may be removed only by the Chairman of the Commission.  
The  representative  of  the  Chairman  of  the  Commission  must  be  a  certified  public  accountant
with at least ten (10) years experience as such.  No relative of any member of the Monetary Board or
the Chairman of the Commission within the sixth degree of consanguinity or affinity shall be appointed
such representative.   
SECTION 48. The Peso. — The unit of monetary value in the Philippines is the "peso," which is
represented by the sign "P."  
The  peso  is  divided  into  one  hundred  (100)  equal  parts  called  "centavos,"  which  are
represented by the sign "c."  
SECTION 49. Definition of Currency. — The word "currency" is hereby defined, for purposes
of  this  Act,  as  meaning  all  Philippine  notes  and  coins  issued  or  circulating  in  accordance  with  the
provisions of this Act.  
SECTION 50. Exclusive Issue Power. — The Bangko Sentral shall have the sole power and
authority  to  issue  currency,  within  the  territory  of  the  Philippines.    No  other  person  or  entity,  public  or
private, may put into circulation notes, coins or any other object or document which, in the opinion of the
Monetary Board, might circulate as currency, nor reproduce or imitate the facsimiles of Bangko Sentral
notes without prior authority from the Bangko Sentral.  
The Monetary Board may issue such regulations as it may deem advisable in order to prevent
the  circulation  of  foreign  currency  or  of  currency  substitutes  as  well  as  to  prevent  the  reproduction  of
facsimiles of Bangko Sentral notes.  
The Bangko Sentral shall have the authority to investigate, make arrests, conduct searches and
seizures in accordance with law, for the purpose of maintaining the integrity of the currency.  
Violation of this provision or any regulation issued by the Bangko Sentral pursuant thereto shall
constitute an offense punishable by imprisonment of not less than five (5) years but not more than ten
(10) years.  In case the Revised Penal Code provides for a greater penalty, then that penalty shall be
SECTION 51. Liability for Notes and Coins. — Notes and coins issued by the Bangko Sentral
shall be liabilities of the Bangko Sentral and may be issued only against, and in amounts not exceeding,
the assets of the Bangko Sentral.  Said notes and coins shall be a first and paramount lien on all assets
of the Bangko Sentral.  
The Bangko Sentral's holdings of its own notes and coins shall not be considered as part of its
currency issue and, accordingly, shall not form part of the assets or liabilities of the Bangko Sentral.   
SECTION 52. Legal Tender Power. — All notes and coins issued by the Bangko Sentral shall
be fully guaranteed by the Government of the Republic of the Philippines and shall be legal tender in the
Philippines for all debts, both public and private: Provided, however, That, unless otherwise fixed by the
Monetary  Board,  coins  shall  be  legal  tender  in  amounts  not  exceeding  Fifty  pesos  (P50.00)  for
denominations  of  Twenty-five  centavos  and  above,  and  in  amounts  not  exceeding  Twenty  pesos
(P20.00) for denominations of Ten centavos or less.  
SECTION 53. Characteristics of the Currency. — The Monetary Board, with the approval of
the  President  of  the  Philippines,  shall  prescribe  the  denominations,  dimensions,  designs,  inscriptions
and  other  characteristics  of  notes  issued  by  the  Bangko  Sentral:  Provided,  however,  That  said  notes
shall state that they are liabilities of the Bangko Sentral and are fully guaranteed by the Government of
the Republic of the Philippines.  Said notes shall bear the signatures, in facsimile, of the President of the
Philippines and of the Governor of the Bangko Sentral.  
Similarly,  the  Monetary  Board,  with  the  approval  of  the  President  of  the  Philippines,  shall
prescribe the weight, fineness, designs, denominations and other characteristics of the coins issued by
the  Bangko  Sentral.    In  the  minting  of  coins,  the  Monetary  Board  shall  give  full  consideration  to  the
availability of suitable metals and to their relative prices and cost of minting.  
SECTION 54. Printing of Notes and Mining of Coins. — The Monetary Board shall prescribe
the amounts of notes and coins to be printed and minted, respectively, and the conditions to which the
printing of notes and the minting of coins shall be subject.  The Monetary Board shall have the authority
to contract institutions, mints or firms for such operations.  
All expenses incurred in the printing of notes and the minting of coins shall be for the account of
the Bangko Sentral.  
SECTION 55. Interconvertibility  of  Currency.  —  The  Bangko  Sentral  shall  exchange,  on
demand and without charge, Philippine currency of any denomination for Philippine notes and coins of
any  other  denomination  requested.    If  for  any  reason  the  Bangko  Sentral  is  temporarily  unable  to
provide notes or coins of the denominations requested, it shall meet its obligations by delivering notes
and coins of the denominations which most nearly approximate those requested.  
SECTION 56. Replacement  of  Currency  Unfit  for  Circulation.  —  The  Bangko  Sentral  shall
withdraw from circulation and shall demonetize all notes and coins which for any reason whatsoever are
unfit for circulation and shall replace them by adequate notes and coins: Provided, however, That the
Bangko Sentral shall not replace notes and coins the identification of which is impossible, coins which
show signs of filing, clipping or perforation, and notes which have lost more than two-fifths (2/5) of their
surface or all of the signatures inscribed thereon.  Notes and coins in such mutilated conditions shall be
withdrawn from circulation and demonetized without compensation to the bearer.   
SECTION 57. Retirement  of  Old  Notes  and  Coins.  —  The  Bangko  Sentral  may  call  in  for
replacement notes of any series or denomination which are more than five (5) years old and coins which
are more than (10) years old.  
Notes and coins called in for replacement in accordance with this provision shall remain legal
tender for a period of one (1) year from the date of call.  After this period, they shall cease to be legal
tender but during the following year, or for such longer period as the Monetary Board may determine,
they may be exchanged at par and without charge in the Bangko Sentral and by agents duly authorized
by  the  Bangko  Sentral  for  this  purpose.    After  the  expiration  of  this  latter  period,  the  notes and coins
which  have  not  been  exchanged  shall  cease  to  be  a  liability  of  the  Bangko  Sentral  and  shall  be
demonetized.  The Bangko Sentral shall also demonetize all notes and coins which have been called in
and replaced.  
SECTION 58. Definition.  —  For  purposes  of  this  Act,  the  term  "demand  deposits"  means  all
those liabilities of the Bangko Sentral and of other banks which are denominated in Philippine currency
and are subject to payment in legal tender upon demand by the presentation of checks.  
SECTION 59. Issue of Demand Deposits. — Only banks duly authorized to do so may accept
funds  or  create  liabilities  payable  in  pesos  upon  demand  by  the  presentation  of  checks,  and  such
operations shall be subject to the control of the Monetary Board in accordance with the powers granted
it with respect thereto under this Act.  
SECTION 60.  Legal  Character.  —  Checks  representing  demand  deposits  do  not  have  legal
tender power and their acceptance in the payment of debts, both public and private, is at the option of
the creditor: Provided, however, That a check which has been cleared and credited to the account of the
creditor  shall  be  equivalent  to  a  delivery  to  the  creditor  of  cash  in  an  amount  equal  to  the  amount
credited to his account.  
SECTION 61. Guiding  Principle.  —  The  Monetary  Board  shall  endeavor  to  control  any
expansion or contraction in monetary aggregates which is prejudicial to the attainment or maintenance
of price stability.  
SECTION 62. Power  to  Define  Terms.  —  For  purposes  of  this  article  and  of  this  Act,  the
Monetary  Board  shall  formulate  definitions  of  monetary  aggregates,  credit  and  prices  and  shall  make
public such definitions and any changes thereof.  
SECTION 63. Action  When  Abnormal  Movements  Occur  in  the  Monetary  Aggregates,
Credit, or Price Level. — Whenever abnormal movements in the monetary aggregates, in credit, or in
prices endanger the stability of the Philippine economy or important sectors thereof, the Monetary Board
(a)    take  such  remedial  measures  as  are  appropriate  and  within  the  powers  granted  to  the
Monetary Board and the Bangko Sentral under the provisions of this Act; and  
(b)    submit  to  the  President  of  the  Philippines  and  the  Congress,  and  make  public,  a  detailed
report which shall include, as a minimum, a description and analysis of:  
(1)        the causes of the rise or fall of the monetary aggregates, of credit or of prices;    
(2)        the  extent  to  which  the  changes  in  the  monetary  aggregates,  in  credit,  or  in  prices
have been reflected in changes in the level of domestic output, employment, wages
and  economic  activity  in  general,  and  the  nature  and  significance  of  any  such
changes; and  
(3)        the measures which the Monetary Board has taken and the other monetary, fiscal or
administrative measures which it recommends to be adopted.  
Whenever the monetary aggregates, or the level of credit, increases or decreases by more than
fifteen percent (15%), or the cost of living index increases by more than ten percent (10%), in relation to
the level existing at the end of the corresponding month of the preceding year, or even though any of
these  quantitative  guidelines  have  not  been  reached  when  in  its  judgment  the  circumstances  so
warrant, the Monetary Board shall submit the reports mentioned in this section, and shall state therein
whether, in the opinion of the Board, said changes in the monetary aggregates, credit or cost of living
represent a threat to the stability of the Philippine economy or of important sectors thereof.  
The Monetary Board shall continue to submit periodic reports to the President of the Philippines
and to Congress until it considers that the monetary, credit or price disturbances have disappeared or
have been adequately controlled.  
SECTION 64.   International Monetary Stabilization. — The Bangko Sentral shall exercise its
powers  under  this  Act  to  preserve  the  international  value  of the peso and to maintain its convertibility
into  other  freely  convertible  currencies  primarily  for,  although  not  necessarily  limited  to,  current
payments for foreign trade and invisibles.  
SECTION  65.    International  Reserves.  —  In  order  to  maintain  the  international  stability  and
convertibility of the Philippine peso, the Bangko Sentral shall maintain international reserves adequate
to meet any foreseeable net demands on the Bangko Sentral for foreign currencies.  
In  judging  the  adequacy  of  the  international  reserves,  the  Monetary  Board  shall  be  guided  by
the  prospective  receipts  and  payments  of  foreign  exchange  by  the  Philippines.    The  Board  shall  give
special attention to the volume and maturity of the Bangko Sentral's own liabilities in foreign currencies,
to the volume and maturity of the foreign exchange assets and liabilities of other banks operating in the
Philippines and, insofar as they are known or can be estimated, the volume and maturity of the foreign
exchange assets and liabilities of all other persons and entities in the Philippines.    
SECTION 66. Composition  of  the  International  Reserves.  —  The  international  reserves  of
the Bangko Sentral may include but shall not be limited to the following assets:  
(a)     gold; and  
(b)     assets in foreign currencies in the form of: documents and instruments customarily employed
for the international transfer of funds; demand and time deposits in central banks, treasuries
and commercial banks abroad; foreign government securities; and foreign notes and coins.  
The  Monetary  Board  shall  endeavor  to  hold  the  foreign  exchange  resources  of  the  Bangko
Sentral  in  freely  convertible  currencies;  moreover,  the  Board  shall  give  particular  consideration  to  the
prospects of continued strength and convertibility of the currencies in which the reserve is maintained,
as well as to the anticipated demands for such currencies.  The Monetary Board shall issue regulations
determining the other qualifications which foreign exchange assets must meet in order to be included in
the international reserves of the Bangko Sentral.  
The Bangko Sentral shall be free to convert any of the assets in its international reserves into
other assets as described in subsections (a) and (b) of this section.  
SECTION 67. Action  When  the  International  Stability  of  the  Peso  Is  Threatened.  —
Whenever  the  international  reserve  of  the  Bangko  Sentral  falls  to  a  level  which  the  Monetary  Board
considers inadequate to meet prospective net demands on the Bangko Sentral for foreign currencies, or
whenever  the  international  reserve  appears  to  be  in  imminent  danger  of  falling  to  such  a  level,  or
whenever the international reserve is falling as a result of payments or remittances abroad which, in the
opinion of the Monetary Board, are contrary to the national welfare, the Monetary Board shall:  
(a)        take  such  remedial  measures  as  are  appropriate  and  within  the  powers  granted  to  the
Monetary Board and the Bangko Sentral under the provisions of this Act; and  
(b)        submit  to  the  President  of  the  Philippines  and  to  Congress  a  detailed  report  which  shall
include, as a minimum, a description and analysis of:  
(1)        the nature and causes of the existing or imminent decline;  
(2)        the remedial measures already taken or to be taken by the Monetary Board;    
(3)        the monetary, fiscal or administrative measures further proposed; and  
(4)        the character and extent of the cooperation required from other government agencies
for the successful execution of the policies of the Monetary Board.  
If  the  resultant  actions  fail  to  check  the  deterioration  of  the  reserve  position  of  the  Bangko
Sentral, or if the deterioration cannot be checked except by chronic restrictions on exchange and trade
transactions  or  by  sacrifice  of  the  domestic  objectives  of  a  balanced  and  sustainable  growth  of  the
economy, the Monetary Board shall propose to the President, with appropriate notice of the Congress,
such  additional  action  as  it  deems  necessary  to  restore  equilibrium  in  the  international  balance  of
payments of the Philippines.  
The  Monetary  Board  shall  submit  periodic  reports  to  the  President  and  to  Congress  until  the
threat to the international monetary stability of the Philippines has disappeared.  
SECTION 68. Means of Action. — In order to achieve the primary objective of price stability,
the Monetary Board shall rely on its moral influence and the powers granted to it under this Act for the
management of monetary aggregates.  
SECTION 69. Purchases and Sales of Gold. — The Bangko Sentral may buy and sell gold in
any form, subject to such regulations as the Monetary Board may issue.  
The  purchases  and  sales  of  gold  authorized  by  this  section  shall  be  made  in  the  national
currency at the prevailing international market price as determined by the Monetary Board.  
SECTION 70. Purchases and Sales of Foreign Exchange. — The Bangko Sentral may buy
and sell foreign notes and coins, and documents and instruments of types customarily employed for the
international transfer of funds.  The Bangko Sentral may engage in future exchange operations.  
The Bangko Sentral may engage in foreign exchange transactions with the following entities or
persons only:  
(a)    banking institutions operating in the Philippines;  
(b)    the Government, its political subdivisions and instrumentalities;  
(c)     foreign or international financial institutions;  
(d)    foreign governments and their instrumentalities; and  
(e)    other  entities  or  persons  which  the  Monetary  Board  is  hereby  empowered  to  authorize  as
foreign exchange dealers, subject to such rules and regulations as the Monetary Board shall
In order to maintain the convertibility of the peso, the Bangko Sentral may, at the request of any
banking  institution  operating  in  the  Philippines,  buy  any  quantity  of  foreign  exchange  offered,  and  sell
any quantity of foreign exchange demanded, by such institution, provided that the foreign currencies so
offered or demanded are freely convertible into gold or United States dollars.  This requirement shall not
apply to demands for foreign notes and coins.  
The Bangko Sentral shall effect its exchange transactions between foreign currencies and the
Philippine peso at the rates determined in accordance with the provisions of Section 74 of this Act.  
SECTION 71. Foreign  Asset  Position  of  the  Bangko  Sentral.  —  The  Bangko  Sentral  shall
endeavor to maintain at all times a net positive foreign asset position so that its gross foreign exchange
assets will always exceed its gross foreign liabilities.  In the event that the equivalent amount in pesos of
the foreign exchange liabilities of the Bangko Sentral exceed twice the equivalent amount in pesos of
the foreign exchange assets of the bank, the Bangko Sentral shall, within sixty (60) days from the date
the  limit  is  exceeded,  submit  a  report  to  the  Congress  stating  the  origin  of  these  liabilities,  and  the
manner in which they will be paid.  
SECTION 72. Emergency Restrictions on Exchange Operations. — In order to achieve the
primary objective of the Bangko Sentral as set forth in Section 3 of this Act, or protect the international
reserves of the Bangko Sentral in the imminence of, or during an exchange crisis, or in time of national
emergency  and  to  give  the  Monetary  Board  and  the  Government  time  in  which  to  take  constructive
measures to forestall, combat, or overcome such a crisis or emergency, the Monetary Board, with the
concurrence of at least five (5) of its members and with the approval of the President of the Philippines,
may  temporarily  suspend  or  restrict  sales  of  exchange  by  the  Bangko  Sentral,  and  may  subject  all
transactions in gold and foreign exchange to license by the Bangko Sentral, and may require that any
foreign  exchange  thereafter  obtained  by  any  person  residing  or  entity  operating  in  the  Philippines  be
delivered  to  the  Bangko  Sentral  or  to  any  bank  or  agent  designated  by  the  Bangko  Sentral  for  the
purpose,  at  the  effective  exchange  rate  or  rates:  Provided,  however,  That  foreign  currency  deposits
made under Republic Act No. 6426 shall be exempt from these requirements.    
SECTION 73. Acquisition  of  Inconvertible  Currencies.  —  The  Bangko  Sentral  shall  avoid
the  acquisition  and  holding  of  currencies  which  are  not  freely  convertible,  and  may  acquire  such
currencies in an amount exceeding the minimum balance necessary to cover current demands for said
currencies only when, and to the extent that, such acquisition is considered by the Monetary Board to
be in the national interest.  The Monetary Board shall determine the procedures which shall apply to the
acquisition and disposition by the Bangko Sentral of foreign exchange which is not freely utilizable in the
international market.  
SECTION 74. Exchange  Rates.  —  The  Monetary  Board  shall  determine  the  exchange  rate
policy of the country.  
The Monetary Board shall determine the rates at which the Bangko Sentral shall buy and sell
spot exchange, and shall establish deviation limits from the effective exchange rate or rates as it may
deem proper.  The Bangko Sentral shall not collect any additional commissions or charges of any sort,
other than actual telegraphic or cable costs incurred by it.  
The  Monetary  Board  shall  similarly  determine  the  rates  for  other  types  of  foreign  exchange
transactions by the Bangko Sentral, including purchases and sales of foreign notes and coins, but the
margins  between  the  effective  exchange  rates  and  the  rates  thus  established  may  not  exceed  the
corresponding margins for spot exchange transactions by more than the additional costs or expenses
involved in each type of transactions.  
SECTION 75. Operations  with  Foreign  Entities.  —  The  Monetary  Board  may  authorize  the
Bangko Sentral to grant loans to and receive loans from foreign banks and other foreign or international
entities, both public and private, and may engage in such other operations with these entities as are in
the national interest and are appropriate to its character as a central bank.  The Bangko Sentral may
also act as agent or correspondent for such entities.  
Upon authority of the Monetary Board, the Bangko Sentral may pledge any gold or other assets
which it possesses as security against loans which it receives from foreign or international entities.    
SECTION 76. Foreign Exchange Holdings of the Banks. — In order that the Bangko Sentral
may  at  all  times  have  foreign  exchange  resources  sufficient  to  enable  it  to  maintain  the  international
stability and convertibility of the peso, or in order to promote the domestic investment of bank resources,
the Monetary Board may require the banks to sell to the Bangko Sentral or to other banks all or part of
their surplus holdings of foreign exchange.  Such transfers may be required for all foreign currencies or
for only certain of such currencies, according to the decision of the Monetary Board. The transfers shall
be made at the rates established under the provisions of Section 74 of this Act.  
The Monetary Board may, whenever warranted, determine the net assets and net liabilities of
banks  and  shall,  in  making  such  a  determination,  take  into  account  the  bank's  networth,  outstanding
liabilities,  actual  and  contingent,  or  such  other  financial  or  performance  ratios  as  may  be  appropriate
under the circumstances.  Any such determination of net assets and net liabilities shall be applied in all
banks uniformly and without discrimination.  
SECTION 77. Requirement  of  Balanced  Currency  Position.  —  The  Monetary  Board  may
require the banks to maintain a balanced position between their assets and liabilities in Philippine pesos
or in any other currency or currencies in which they operate.  The banks shall be granted a reasonable
period of time in which to adjust their currency positions to any such requirement.  
The  powers  granted  under  this  section  shall  be  exercised  only  when  special  circumstances
make  such  action  necessary,  in  the  opinion  of  the  Monetary  Board,  and  shall  be  applied  to  all  banks
alike and without discrimination.  
SECTION 78. Regulation  of  Non-spot  Exchange  Transactions.  —  In  order  to  restrain  the
banks from taking speculative positions with respect to future fluctuations in foreign exchange rates, the
Monetary Board may issue such regulations governing bank purchases and sales of non-spot exchange
as it may consider necessary for said purpose.  
SECTION 79. Other Exchange Profits and Losses. — The banks shall bear the risks of non-
compliance with the terms of the foreign exchange documents and instruments which they buy and sell,
and  shall  also  bear  any  other  typically  commercial  or  banking  risks,  including  exchange  risks  not
assumed by the Bangko Sentral under the provisions of the preceding section.  
SECTION 80. Information on Exchange Operations. — The banks shall report to the Bangko
Sentral  the  volume  and  composition  of  their  purchases  and  sales  of  gold  and  foreign exchange each
day, and must furnish such additional information as the Bangko Sentral may request with reference to
the movements in their accounts in foreign currencies.  
The  Monetary  Board  may  also  require  other  persons  and  entities  to  report  to  it  currently  all
transactions or operations in gold, in any shape or form, and in foreign exchange whether entered into
or  undertaken  by  them  directly  or  through  agents,  or  to  submit  such  data  as  may  be  required  on
operations  or  activities  giving  rise  to  or  in  connection  with  or  relating  to  a  gold  or  foreign  exchange
transaction.  The Monetary Board shall prescribe the forms on which such declarations must be made.  
The accuracy of the declarations may be verified by the Bangko Sentral by whatever inspection it may
deem necessary.   
SECTION 81. Guiding  Principles.  —  The  rediscounts,  discounts,  loans  and  advances  which
the  Bangko  Sentral  is  authorized  to  extend  to  banking  institutions  under the provisions of the present
article of this Act shall be used to influence the volume of credit consistent with the objective of price
SECTION 82. Authorized  Types  of  Operations.  —  Subject  to  the  principle  stated  in  the
preceding  section  of  this  Act,  the  Bangko  Sentral  may  normally  and  regularly  carry  on  the  following
credit operations with banking institutions operating in the Philippines:  
(a)    Commercial  credits.  —  The  Bangko  Sentral  may  rediscount,  discount,  buy  and  sell  bills,
acceptances, promissory notes and other credit instruments with maturities of not more than
one  hundred  eighty  (180)  days  from  the  date  of  their  rediscount,  discount  or  acquisition  by
the Bangko Sentral and resulting from transactions related to:  
(1)        the importation, exportation, purchase or sale of readily saleable goods and products,
or their transportation within the Philippines; or  
(2)        the  storing  of  non-perishable  goods  and  products  which  are  duly  insured  and
deposited,  under  conditions  assuring  their  preservation,  in  authorized  bonded
warehouses or in other places approved by the Monetary Board.  
(b)    Production  credits.  —  The  Bangko  Sentral  may  rediscount,  discount,  buy  and  sell  bills,
acceptances,  promissory  notes  and  other  credit  instruments  having  maturities  of  not  more
than three hundred sixty (360) days from the date of their rediscount, discount or acquisition
by the Bangko Sentral and resulting from transactions related to the production or processing
of agricultural, animal, mineral, or industrial products.  Documents or instruments acquired in
accordance  with  this  subsection  shall  be  secured  by  a  pledge  of  the  respective  crops  or
products: Provided, however, That the crops or products need not be pledged to secure the
documents if the original loan granted by the Bangko Sentral is secured by a lien or mortgage
on  real  estate  property  seventy  percent  (70%)  of  the  appraised  value  of  which  equals  or
exceeds the amount of the loan granted.    
(c)     Other   credits.   —   Special   credit   instruments   not   otherwise   rediscountable   under   the
immediately   preceding   subsections   (a)   and   (b)   may   be   eligible   for   rediscounting   in
accordance with rules and regulations which the Bangko Sentral shall prescribe.  Whenever
necessary,  the  Bangko  Sentral  shall  provide  funds  from  non-inflationary  sources:  Provided,
however, That the Monetary Board shall prescribe additional safeguards for disbursing these
(d)    Advances.  —  The  Bangko  Sentral  may  grant  advances  against  the  following  kinds  of
collaterals for fixed periods which, with the exception of advances against collateral named in
clause (4) of the present subsection, shall not exceed one hundred eighty (180) days:  
(1)        gold coins or bullion;  
(2)        securities  representing  obligations  of  the  Bangko  Sentral  or  of  other  domestic
institutions of recognized solvency;  
(3)        the credit instruments to which reference is made in subsection (a) of this section;  
(4)        the credit instruments to which reference is made in subsection (b) of this section, for
periods which shall not exceed three hundred sixty (360) days;  
(5)        utilized  portions  of  advances  in  current  amount  covered  by  regular  overdraft
agreements  related  to  operations  included  under  subsections  (a)  and  (b)  of  this
section,  and  certified  as  to  amount  and  liquidity  by  the  institution  soliciting  the
(6)        negotiable  treasury  bills,  certificates  of  indebtedness,  notes  and  other  negotiable
obligations  of  the  Government  maturing  within  three  (3)  years  from  the  date  of  the
advance; and  
(7)        negotiable  bonds  issued  by  the  Government  of  the  Philippines,  by  Philippine
provincial,   city   or   municipal   governments,   or   by   any   Philippine   Government
instrumentality, and having maturities of not more than ten (10) years from the date of
The rediscounts, discounts, loans and advances made in accordance with the provisions of this
section may not be renewed or extended unless extraordinary circumstances fully justify such renewal
or extension.  
Advances  made  against  the  collateral  named  in  clauses  (6)  and  (7)  of  subsection  (d)  of  this
section may not exceed eighty percent (80%) of the current market value of the collateral.  
SECTION 83.    Loans for Liquidity Purposes. — The Bangko Sentral may extend loans and advances
to banking institutions for a period of not more than seven (7) days without any collateral for the purpose
of providing liquidity to the banking system in times of need.  
SECTION 84. Emergency  Loans  and  Advances.  —  In  periods  of  national  and/or  local
emergency  or  of  imminent  financial  panic  which  directly  threaten  monetary  and  banking  stability,  the
Monetary Board may, by a vote of at least five (5) of its members, authorize the Bangko Sentral to grant
extraordinary  loans  or  advances  to  banking  institutions  secured  by  assets  as  defined  hereunder:
Provided,  That  while  such  loans  or  advances  are  outstanding,  the  debtor  institution  shall  not,  except
upon prior authorization by the Monetary Board, expand the total volume of its loans or investments.  
The  Monetary  Board  may,  at  its  discretion,  likewise  authorize  the  Bangko  Sentral  to  grant
emergency  loans  or  advances  to  banking  institutions,  even  during  normal  periods,  for  the  purpose  of
assisting  a  bank  in  a  precarious  financial  condition  or  under  serious  financial  pressures  brought  by
unforeseen  events,  or  events  which,  though  foreseeable,  could  not  be  prevented  by  the  bank
concerned: Provided, however, That the Monetary Board has ascertained that the bank is not insolvent
and has the assets defined hereunder to secure the advances: Provided, further, That a concurrent vote
of at least five (5) members of the Monetary Board is obtained.  
The amount of any emergency loan or advance shall not exceed the sum of fifty percent (50%)
of total deposits and deposit substitutes of the banking institution and shall be disbursed in two (2) or
more tranches.  The amount of the first tranche shall be limited to twenty-five percent (25%) of the total
deposit and deposit substitutes of the institution and shall be secured by government securities to the
extent of their applicable loan values and other unencumbered first class collaterals which the Monetary
Board  may  approve:  Provided,  That  if  as  determined  by  the  Monetary  Board,  the  circumstances
surrounding the emergency warrant a loan or advance greater than the amount provided hereinabove,
the  amount  of  the  first  tranche  may  exceed  twenty-five  percent  (25%)  of  the  bank's  total  deposit  and
deposit  substitutes  if  the  same  is  adequately  secured  by  applicable  loan  values  of  government
securities and unencumbered first class collaterals approved by the Monetary Board, and the principal
stockholders  of  the  institution  furnish  an  acceptable  undertaking to indemnify and hold harmless from
suit a conservator whose appointment the Monetary Board may find necessary at any time.  
Prior to the release of the first tranche, the banking institution shall submit to the Bangko Sentral
a  resolution  of  its  board  of  directors  authorizing  the  Bangko  Sentral  to  evaluate  other  assets  of  the
banking  institution  certified  by  its  external  auditor  to  be  good  and  available  for  collateral  purposes
should the release of the subsequent tranche be thereafter applied for.  
The Monetary Board may, by a vote of at least five (5) of its members, authorize the release of
a subsequent tranche on condition that the principal stockholders of the institution:  
(a)    furnish  an  acceptable  undertaking  to  indemnify  and  hold  harmless  from  suit  a  conservator
whose appointment the Monetary Board may find necessary at any time; and  
(b)    provide  acceptable  security  which,  in  the  judgment  of  the  Monetary  Board,  would  be
adequate to supplement, where necessary, the assets tendered by the banking institution to
collateralize the subsequent tranche.  
In connection with the exercise of these powers, the prohibitions in Section 128 of this Act shall
not  apply  insofar  as  it  refers  to  acceptance  as  collateral  of  shares  and  their acquisition as a result of
foreclosure  proceedings,  including  the  exercise  of  voting  rights  pertaining  to  said  shares:  Provided,
however, That should the Bangko Sentral acquire any of the shares it has accepted as collateral as a
result  of  foreclosure  proceedings,  the  Bangko  Sentral  shall  dispose  of  said  shares  by  public  bidding
within one (1) year from the date of consolidation of title by the Bangko Sentral.  
Whenever a financial institution incurs an overdraft in its account with the Bangko Sentral, the
same shall be eliminated within the period prescribed in Section 102 of this Act.    
SECTION 85. Interest and Rediscount. — The Bangko Sentral shall collect interest and other
appropriate charges on all loans and advances it extends, the closure, receivership or liquidations of the
debtor-institution notwithstanding.  This provision shall apply prospectively.  
The  Monetary  Board  shall  fix  the  interest  and  rediscount  rates  to  be  charged  by  the  Bangko
Sentral on its credit operations in accordance with the character and term of the operation, but after due
consideration has been given to the credit needs of the market, the composition of the Bangko Sentral's
portfolio,  and  the  general  requirements  of  the  national  monetary  policy.    Interest and rediscount rates
shall be applied to all banks of the same category uniformly and without discrimination.  
SECTION 86. Endorsement. — The documents rediscounted, discounted, bought or accepted
as collateral by the Bangko Sentral in the course of the credit operations authorized in this article shall
bear the endorsement of the institution from which they are received.  
SECTION 87. Repayment of Credits. — Documents rediscounted, discounted or accepted as
collateral  by  the  Bangko  Sentral  must  be  withdrawn  by  the  borrowing  institution  on  the  dates  of  their
maturities, or upon liquidation of the obligations which they represent or to which they relate whenever
said obligations have been liquidated prior to their dates of maturity.  
Banks shall have the right at any time to withdraw any documents which they have presented to
the Bangko Sentral as collateral, upon payment in full of the corresponding debt to the Bangko Sentral,
including interest charges.  
SECTION 88. Other requirements. — The Monetary Board may prescribe, within the general
powers  granted  to  it  under  this  Act,  additional  conditions  which  borrowing  institutions  must  satisfy  in
order to have access to the credit of the Bangko Sentral.  These conditions may refer to the rates of
interest charged by the banks, to the purposes for which their loans in general are destined, and to any
other clearly definable aspect of the credit policy of the bank.  
SECTION 89. Provisional  Advances  to  the  National  Government.  —  The  Bangko  Sentral
may  make  direct  provisional  advances  with  or  without  interest  to  the  National  Government  to  finance
expenditures authorized in its annual appropriation: Provided, That said advances shall be repaid before
the end of three (3) months extendible by another three (3) months as the Monetary Board may allow
following the date the National Government received such provisional advances and shall not, in their
aggregate, exceed twenty percent (20%) of the average annual income of the borrower for the last three
(3) preceding fiscal years.    
SECTION 90. Principles  of  Open  Market  Operations.  —  The  open  market  purchases  and
sales  of  securities  by  the  Bangko  Sentral  shall  be  made  exclusively  in  accordance  with  its  primary
objective of achieving price stability.  
SECTION 91. Purchases  and  Sales  of  Government  Securities.  —  In  order  to  achieve  the
objectives  of  the  national  monetary  policy,  the  Bangko  Sentral  may,  in  accordance  with  the  principle
stated  in  Section  90  of  this  Act  and  with  such  rules  and  regulations  as  may  be  prescribed  by  the
Monetary Board, buy and sell in the open market for its own account:  
(a)    evidences  of  indebtedness  issued  directly  by  the  Government  of  the  Philippines  or  by  its
political subdivisions; and  
(b)    evidences  of  indebtedness  issued  by  government  instrumentalities  and  fully  guaranteed  by
the Government.  
The  evidences  of  indebtedness  acquired  under  the  provisions  of  this  section  must  be  freely
negotiable  and  regularly  serviced  and  must  be  available  to  the  general  public  through  banking
institutions and local government treasuries in denominations of a thousand pesos or more.  
SECTION 92. Issue and Negotiation of Bangko Sentral Obligations. — In order to provide
the  Bangko  Sentral  with  effective  instruments  for  open  market  operations,  the  Bangko  Sentral  may,
subject to such rules and regulations as the Monetary Board may prescribe and in accordance with the
principles  stated  in  Section  90  of  this  Act,  issue,  place,  buy  and  sell  freely  negotiable  evidences  of
indebtedness of the Bangko Sentral: Provided, That issuance of such certificates of indebtedness shall
be made only in cases of extraordinary movement in price levels.  Said evidences of indebtedness may
be issued directly against the international reserve of the Bangko Sentral or against the securities which
it  has  acquired  under  the  provisions  of  Section  91  of  this  Act,  or  may  be  issued  without  relation  to
specific types of assets of the Bangko Sentral.  
The  Monetary  Board  shall  determine  the  interest  rates,  maturities  and  other  characteristics of
said obligations of the Bangko Sentral, and may, if it deems it advisable, denominate the obligations in
gold or foreign currencies.  
Subject to the principles stated in Section 90 of this Act, the evidences of indebtedness of the
Bangko  Sentral  to  which  this  section  refers  may  be  acquired  by  the  Bangko  Sentral  before  their
maturity,  either through purchases in the open market or through redemptions at par and by lot if the
Bangko  Sentral  has  reserved  the  right  to  make  such  redemptions.    The  evidences  of  indebtedness
acquired  or  redeemed  by  the  Bangko  Sentral  shall  not  be  included  among  its  assets,  and  shall  be
immediately retired and cancelled.    
SECTION 93. Review  of  the  Bangko  Sentral's  Portfolio.  —  At  least  once  every  month  the
Monetary Board shall review the portfolio of the Bangko Sentral in relation to its future credit policy.  
In  reviewing  the  Bangko  Sentral's  portfolio,  the  Monetary  Board  shall  especially  consider  whether  a
sufficiently large part of the portfolio consists of assets with early maturities, in order that a contraction in
Bangko Sentral credit may be effected promptly whenever the national monetary policy so requires.  
SECTION 94. Reserve Requirements. — In order to control the volume of money created by
the credit operations of the banking system, all banks operating in the Philippines shall be required to
maintain  reserves  against  their  deposit  liabilities:  Provided,  That  the  Monetary  Board  may,  at  its
discretion, also require all banks and/or quasi-banks to maintain reserves against funds held in trust and
liabilities  for  deposit  substitutes  as  defined  in  this  Act.    The  required  reserves  of  each  bank  shall  be
proportional to the volume of its deposit liabilities and shall ordinarily take the form of a deposit in the
Bangko Sentral.  Reserve requirements shall be applied to all banks of the same category uniformly and
without discrimination.  
Reserves against deposit substitutes, if imposed, shall be determined in the same manner as
provided  for  reserve  requirements  against  regular  bank  deposits,  with  respect  to  the  imposition,
increase, and computation of reserves.  
The Monetary Board may exempt from reserve requirements deposits and deposit substitutes
with remaining maturities of two (2) years or more, as well as interbank borrowings.  
Since the requirement to maintain bank reserves is imposed primarily to control the volume of
money, the Bangko Sentral shall not pay interest on the reserves maintained with it unless the Monetary
Board decides otherwise as warranted by circumstances.  
SECTION 95. Definition of Deposit Substitutes. — The term "deposit substitutes" is defined
as  an  alternative  form  of  obtaining  funds  from  the  public,  other  than  deposits,  through  the  issuance,
endorsement,  or  acceptance  of  debt  instruments  for  the  borrower's  own  account,  for  the  purpose  of
relending or purchasing of receivables and other obligations.  These instruments may include, but need
not be limited to, bankers acceptances, promissory notes, participations, certificates of assignment and
similar  instruments  with  recourse,  and  repurchase  agreements.    The  Monetary  Board  shall  determine
what specific instruments shall be considered as deposit substitutes for the purposes of Section 94 of
this  Act:  Provided,  however,  That  deposit  substitutes  of  commercial, industrial and other non-financial
companies for the limited purpose of financing their own needs or the needs of their agents or dealers
shall not be covered by the provisions of Section 94 of this Act.    
SECTION 96. Required  Reserves  Against  Peso  Deposits.  —  The  Monetary  Board  may  fix
and, when it deems necessary, alter the minimum reserve ratios to peso deposits, as well as to deposit
substitutes, which each bank and/or quasi-bank may maintain, and such ratio shall be applied uniformly
to all banks of the same category as well as to quasi-banks.  
SECTION 97. Required  Reserves  Against  Foreign  Currency  Deposits.  —  The  Monetary
Board is similarly authorized to prescribe and modify the minimum reserve ratios applicable to deposits
denominated in foreign currencies.  
SECTION 98. Reserves  Against  Unused  Balances  of  Overdraft  Lines.  —  In  order  to
facilitate  Bangko  Sentral  control  over  the  volume  of  bank  credit,  the  Monetary  Board  may  establish
minimum reserve requirements for unused balances of overdraft lines.  
The  powers  of  the  Monetary  Board  to  prescribe  and  modify  reserve  requirements  against
unused balances of overdraft lines shall be the same as its powers with respect to reserve requirements
against demand deposits.  
SECTION 99. Increase  in  Reserve  Requirements.  —  Whenever  in  the  opinion  of  the
Monetary Board it becomes necessary to increase reserve requirements against existing liabilities, the
increase shall be made in a gradual manner and shall not exceed four percentage points in any thirty-
day period.  Banks and other affected financial institutions shall be notified reasonably in advance of the
date on which such increase is to become effective.  
SECTION  100.    Computation  on  Reserves.  —  The  reserve  position  of  each  bank  or  quasi-
bank shall be calculated daily on the basis of the amount, at the close of business for the day, of the
institution's reserves and the amount of its liability accounts against which reserves are required to be
maintained:  Provided,  That  with  reference  to  holidays  or  non-banking  days,  the  reserve  position  as
calculated at the close of the business day immediately preceding such holidays and non-banking days
shall apply on such days.  
For  the  purpose  of  computing  the  reserve  position  of  each  bank  or  quasi-bank,  its  principal
office  in  the  Philippines  and  all  its  branches  and  agencies  located  therein  shall  be  considered  as  a
single unit.  
SECTION 101.  Reserve Deficiencies. — Whenever the reserve position of any bank or quasi-
bank,  computed  in  the  manner  specified  in  the  preceding  section  of  this  Act,  is  below  the  required
minimum, the bank or quasi-bank shall pay the Bangko Sentral one-tenth of one percent (1/10 of 1%)
per  day  on  the  amount  of  the  deficiency  or  the  prevailing  ninety-one-day  treasury  bill  rate  plus  three
percentage points, whichever is higher: Provided, however, That banks and quasi-banks shall ordinarily
be  permitted  to  offset  any  reserve  deficiency  occurring  on  one  or  more  days  of  the  week  with  any
excess reserves which they may hold on other days of the same week and shall be required to pay the
penalty only on the average daily deficiency during the week.  In cases of abuse, the Monetary Board
may  deny  any  bank  or  quasi-bank  the  privilege  of  offsetting  reserve  deficiencies  in  the  aforesaid
If a bank or quasi-bank chronically has a reserve deficiency, the Monetary Board may limit or
prohibit the making of new loans or investments by the institution and may require that part or all of the
net profits of the institution be assigned to surplus.  
The Monetary Board may modify or set aside the reserve deficiency penalties provided in this
section, for part or the entire period of a strike or lockout affecting a bank or a quasi-bank as defined in
the  Labor  Code,  or  of  a  national  emergency  affecting  operations  of  banks  or  quasi-banks.    The
Monetary Board may also modify or set aside reserved deficiency penalties for rehabilitation program of
a bank.  
SECTION  102.    Interbank  Settlement.  —  The  Bangko  Sentral  shall  establish  facilities  for
interbank  clearing  under  such  rules  and  regulations  as  the  Monetary  Board  may  prescribe:  Provided,
That  the  Bangko  Sentral  may  charge  administrative  and  other  fees  for  the  maintenance  of  such
The  deposit  reserves  maintained  by  the  banks  in  the  Bangko  Sentral  in  accordance  with  the
provisions of Section 94 of this Act shall serve as basis for the clearing of checks and the settlement of
interbank balances, subject to such rules and regulations as the Monetary Board may issue with respect
to such operations: Provided, That any bank which incurs on overdrawing in its deposit account with the
Bangko  Sentral  shall  fully  cover  said  overdraft,  including  interest  thereon  at  a  rate  equivalent  to  one-
tenth of one percent (1/10 of 1%) per day or the prevailing ninety-one-day treasury bill rate plus three
percentage  points,  whichever  is  higher,  not  later  than  the  next  clearing  day:  Provided,  further,  That
settlement of clearing balances shall not be effected for any account which continues to be overdrawn
for  five  (5)  consecutive  banking  days  until  such  time  as  the  overdrawing  is  fully  covered  or otherwise
converted  into  an  emergency  loan  or  advance  pursuant  to  the  provisions  of  Section  84  of  this  Act:
Provided, finally, That the appropriate clearing office shall be officially notified of banks with overdrawn
balances.  Banks with existing overdrafts with the Bangko Sentral as of the effectivity of this Act shall,
within  such  period  as  may  be  prescribed  by  the  Monetary  Board,  either  convert  the  overdraft  into  an
emergency loan or advance with a plan of payment, or settle such overdrafts, and that, upon failure to
so comply herewith, the Bangko Sentral shall take such action against the bank as may be warranted
under this Act.  
SECTION 103.  Exemption from Attachment and Other Purposes. — Deposits maintained
by  banks  with  the  Bangko  Sentral  as  part  of  their  reserve  requirements  shall  be  exempt  from
attachment, garnishments, or any other order or process of any court, government agency or any other
administrative  body  issued  to  satisfy  the  claim  of  a  party  other  than  the  Government,  or  its  political
subdivisions or instrumentalities.  
SECTION 104.  Guiding Principle. — The Monetary Board shall use the powers granted to it
under this Act to ensure that the supply, availability and cost of money are in accord with the needs of
the  Philippine  economy  and  that  bank  credit  is  not  granted  for speculative purposes prejudicial to the
national interests.  Regulations on bank operations shall be applied to all banks of the same category
uniformly and without discrimination.  
SECTION  105.    Margin  Requirements  Against  Letters  of  Credit.  —  The  Monetary  Board
may at any time prescribe minimum cash margins for the opening of letters of credit, and may relate the
size of the required margin to the nature of the transaction to be financed.  
SECTION 106.  Required Security Against Bank Loans. — In order to promote liquidity and
solvency  of  the  banking  system,  the  Monetary  Board  may  issue  such  regulations  as  it  may  deem
necessary with respect to the maximum permissible maturities of the loans and investments which the
banks may make, and the kind and amount of security to be required against the various types of credit
operations of the banks.  
SECTION 107.  Portfolio Ceilings. — Whenever the Monetary Board considers it advisable to
prevent  or  check  an  expansion  of  bank  credit,  the  Board  may  place  an  upper  limit  on  the  amount  of
loans and investments which the banks may hold, or may place a limit on the rate of increase of such
assets  within  specified  periods  of  time.    The  Monetary  Board  may  apply  such  limits  to  the  loans  and
investments of each bank or to specific categories thereof.  
In no case shall the Monetary Board establish limits which are below the value of the loans or
investments of the banks on the date on which they are notified of such restrictions.  The restrictions
shall be applied to all banks uniformly and without discrimination.  
SECTION  108.    Minimum  Capital  Ratios.  —  The  Monetary  Board  may  prescribe  minimum
ratios which the capital and surplus of the banks must bear to the volume of their assets, or to specific
categories thereof, and may alter said ratios whenever it deems necessary.
SECTION 109.   Coordination of Credit Policies. — Government-owned corporations which
perform  banking  or  credit  functions  shall  coordinate  their  general  credit  policies  with  those  of  the
Monetary Board.  
Toward this end, the Monetary Board may, whenever it deems it expedient, make suggestions
or recommendations to such corporations for the more effective coordination of their policies with those
of the Bangko Sentral.  
SECTION  110.    Designation  of  Bangko  Sentral  as  Banker  of  the  Government.  —  The
Bangko Sentral shall act as a banker of the Government, its political subdivisions and instrumentalities.
SECTION  111.    Representation  with  the  International  Monetary  Fund.  —  The  Bangko
Sentral  shall  represent  the  Government  in  all  dealings,  negotiations  and  transactions  with  the
International Monetary Fund and shall carry such accounts as may result from Philippine membership
in, or operations with, said Fund.  
SECTION  112.    Representation  with  Other  Financial  Institutions.  —  The  Bangko  Sentral
may be authorized by the Government to represent it in dealings, negotiations or transactions with the
International Bank for Reconstruction and Development and with other foreign or international financial
institutions or agencies.  The President may, however, designate any of his other financial advisors to
jointly represent the Government in such dealings, negotiations or transactions.  
SECTION 113.  Official Deposits. — The Bangko Sentral shall be the official depository of the
Government,  its  political  subdivisions  and  instrumentalities  as  well  as  of  government-owned  or
controlled  corporations  and,  as  a  general  policy,  their  cash  balances  should  be  deposited  with  the
Bangko Sentral, with only minimum working balances to be held by government-owned banks and such
other banks incorporated in the Philippines as the Monetary Board may designate, subject to such rules
and  regulations  as  the  Board  may  prescribe:  Provided,  That  such  banks  may  hold  deposits  of  the
political subdivisions and instrumentalities of the Government beyond their minimum working balances
whenever such subdivisions or instrumentalities have outstanding loans with said banks.    
The  Bangko  Sentral  may  pay  interest  on  deposits  of  the  Government  or  of  its  political
subdivisions and instrumentalities, as well as on deposits of banks with the Bangko Sentral.  
SECTION 114.  Fiscal Operations. — The Bangko Sentral shall open a general cash account
for the Treasurer of the Philippines, in which the liquid funds of the Government shall be deposited.  
Transfers  of  funds  from  this  account  to  other  accounts  shall  be  made  only  upon  order  of  the
Treasurer of the Philippines.  
SECTION 115.  Other Banks as Agents of the Bangko Sentral. — In the performance of its
functions as fiscal agent, the Bangko Sentral may engage the services of other government-owned and
controlled banks and of other domestic banks for operations in localities at home or abroad in which the
Bangko  Sentral  does  not  have  offices  or  agencies  adequately  equipped  to  perform  said  operations:
Provided, however, That for fiscal operations in foreign countries, the Bangko Sentral may engage the
services of foreign banking and financial institutions.  
SECTION  116.    Remuneration  for  Services.  —  The  Bangko  Sentral  may  charge  equitable
rates, commissions or fees for services which it renders to the Government, its political subdivisions and
SECTION  117.    Issue  of  Government  Obligations.  —  The  issue  of  securities  representing
obligations of the Government, its political subdivisions or instrumentalities, may be made through the
Bangko  Sentral,  which  may act as agent of, and for the account of, the Government or its respective
subdivisions or instrumentality, as the case may be: Provided, however, That the Bangko Sentral shall
not guarantee the placement of said securities, and shall not subscribe to their issue except to replace
its maturing holdings of securities with the same type as the maturing securities.  
SECTION  118.    Methods  of  Placing  Government  Securities.  —  The  Bangko  Sentral  may
place the securities to which the preceding section refers through direct sale to financial institutions and
the public.  
The  Bangko  Sentral  shall  not  be  a  member  of  any  stock  exchange  or  syndicate,  but  may
intervene  therein  for  the  sole  purpose  of  regulating  their  operations  in  the  placing  of  government
The  Government,  or  its  political  subdivisions  or  instrumentalities,  shall  reimburse  the  Bangko
Sentral for the expenses incurred in the placing of the aforesaid securities.  
SECTION  119.    Servicing  and  Redemption  of  the  Public  Debt.  —  The  servicing  and
redemption of the public debt shall also be effected through the Bangko Sentral.  
SECTION  120.      The  Securities  Stabilization  Fund.  —  There  shall  be  established  a
"Securities Stabilization Fund" which shall be administered by the Bangko Sentral for the account of the
The operations of the Securities Stabilization Fund shall consist of purchases and sales, in the
open  market,  of  bonds  and  other  evidences  of  indebtedness  issued  or  fully  guaranteed  by  the
Government.  The purpose of these operations shall be to increase the liquidity and stabilize the value
of said securities in order thereby to promote investment in government obligations.  
The  Monetary  Board  shall  use  the  resources  of  the  Fund  to  prevent,  or  moderate,  sharp
fluctuations in the quotations of said government obligations, but shall not endeavor to alter movements
of the market resulting from basic changes in the pattern or level of interest rates.  
The  Monetary  Board  shall  issue  such  regulations  as  may  be  necessary  to  implement  the
provisions of this section.  
SECTION 121.   Resources of the Securities Stabilization Fund. — Subject to Section 132
of this Act, the resources of the Securities Stabilization Fund shall come from the balance of the fund as
held by the Central Bank under Republic Act No. 265 as of the effective date of this Act.  
SECTION 122.   Profits and Losses of the Fund. — The Securities Stabilization Fund shall
retain  net  profits  which  it  may  make  on  its  operations,  regardless  of  whether  said  profits  arise  from
capital  gains  or  from  interest  earnings.    The  Fund  shall  correspondingly  bear  any  net  losses  which  it
may incur.  
SECTION 123.   Financial Advice on Official Credit Operations. — Before undertaking any
credit operation abroad, the Government, through the Secretary of Finance, shall request the opinion, in
writing, of the Monetary Board on the monetary implications of the contemplated action.  Such opinions
must similarly be requested by all political subdivisions and instrumentalities of the Government before
any credit operation abroad is undertaken by them.    
The opinion of the Monetary Board shall be based on the gold and foreign exchange resources
and obligations of the nation and on the effects of the proposed operation on the balance of payments
and on monetary aggregates.  
Whenever the Government, or any of its political subdivisions or instrumentalities, contemplates
borrowing within the Philippines, the prior opinion of the Monetary Board shall likewise be requested in
order  that  the  Board  may  render  an  opinion  on  the  probable  effects  of  the  proposed  operation  on
monetary aggregates, the price level, and the balance of payments.  
SECTION 124.   Representation on the National Economic and Development Authority. —
In  order  to  assure  effective  coordination  between  the  economic,  financial  and  fiscal  policies  of  the
Government  and  the  monetary,  credit  and  exchange  policies  of  the  Bangko  Sentral,  the  Deputy
Governor  designated  by  the  Governor  of  the  Bangko  Sentral  shall  be  an  ex  officio  member  of  the
National Economic and Development Authority Board.  
SECTION 125.   Tax Exemptions. — The Bangko Sentral shall be exempt for a period of five
(5)  years  from  the  approval  of  this  Act  from  all  national,  provincial,  municipal  and  city  taxes,  fees,
charges and assessments.  
The exemption authorized in the preceding paragraph of this section shall apply to all property
of  the  Bangko  Sentral,  to  the  resources,  receipts,  expenditures,  profits  and  income  of  the  Bangko
Sentral,  as  well  as  to  all  contracts,  deeds,  documents  and  transactions  related  to  the  conduct  of  the
business  of  the  Bangko  Sentral:  Provided,  however,  That  said  exemptions  shall  apply  only  to  such
taxes,  fees,  charges  and  assessments  for  which  the  Bangko  Sentral  itself  would  otherwise  be  liable,
and shall not apply to taxes, fees, charges, or assessments payable by persons or other entities doing
business  with  the  Bangko  Sentral:  Provided,  further,  That  foreign  loans  and  other  obligations  of  the
Bangko Sentral shall be exempt, both as to principal and interest, from any and all taxes if the payment
of such taxes has been assumed by the Bangko Sentral.  
SECTION 126.  Exemption from Customs Duties. — The provision of any general or special
law to the contrary notwithstanding, the importation and exportation by the Bangko Sentral of notes and
coins,  and  of  gold  and  other  metals  to  be  used  for  purposes  authorized  under  this  Act,  and  the
importation of all equipment needed for bank note production, minting of coins, metal refining and other
security printing operations shall be fully exempt from all customs duties and consular fees and from all
other taxes, assessments and charges related to such importation or exportation.    
SECTION  127.    Applicability  of  the  Civil  Service  Law.  —  Appointments  in  the  Bangko
Sentral,  except  as  to  those  which  are  policy-determining,  primarily  confidential  or  highly  technical  in
nature,  shall  be  made  only  according  to  the  Civil  Service  Law  and  regulations:  Provided,  That  no
qualification requirements for positions in the Bangko Sentral shall be imposed other than those set by
the  Monetary  Board:  Provided,  further,  That,  the  Monetary  Board  or  Governor,  in  accordance  with
Sections 15(c) and 17(d) of this Act, respectively, may without need of obtaining prior approval from any
other  government  agency,  appoint  personnel  in  the  Bangko  Sentral  whose  services  are  deemed
necessary in order not to unduly disrupt the operations of the Bangko Sentral.  
Officers  and  employees of the Bangko Sentral, including all members of the Monetary Board,
shall not engage directly or indirectly in partisan activities or take part in any election except to vote.  
SECTION 128.  Prohibitions. — The Bangko Sentral shall not acquire shares of any kind or
accept them as collateral, and shall not participate in the ownership or management of any enterprise,
either directly or indirectly.  
The Bangko Sentral shall not engage in development banking or financing: Provided, however,
That  outstanding  loans  obtained  or  extended  for  development  financing  shall  not  be  affected  by  the
prohibition of this section.  
SECTION 129.  Phase-out of Fiscal Agency Functions. — Unless circumstances warrant
otherwise and approved by the Congress Oversight Committee, the Bangko Sentral shall, within a
period of three (3) years but in no case longer than five (5) years from the approval of this Act, phase
out all fiscal agency functions provided for in Sections 117, 118, 119, and 120 as well as in other
pertinent provisions of this Act and transfer the same to the Department of Finance.  
SECTION 130.  Phase-out of Regulatory Powers Over the Operations of Finance
Corporations and Other Institutions Performing Similar Functions. — The Bangko Sentral shall,
within a period of five (5) years from the effectivity of this Act, phase out its regulatory powers over
finance companies without quasi-banking functions and other institutions performing similar functions as
provided in existing laws, the same to be assumed by the Securities and Exchange Commission.    
SECTION 131.  Implementing Details. — The Bangko Sentral shall be made operational by
the performance of the following acts:  
(a)    the President shall constitute the Monetary Board by appointing the members thereof within
sixty (60) days from the effectivity of this Act; and  
(b)    the transfer of such assets and liabilities from the Central Bank to the Bangko Sentral as
provided in Section 132 shall be completed within ninety (90) days from the constitution of the
Monetary Board.  
All incumbent personnel in the Central Bank as of the date of the approval of this Act shall
continue to exercise their duties and functions as personnel of the Bangko Sentral subject to the
provisions of Section 133: Provided, That such personnel in the Central Bank as may be necessary for
the purpose of implementing Section 132 may be assigned by the Bangko Sentral Monetary Board to
the Central Bank.
SECTION 132.  Transfer of Assets and Liabilities. — Upon the effectivity of this Act, three (3)
members of the Monetary Board, which may include the Governor, in representation of the Bangko
Sentral, the Secretary of Finance and the Secretary of Budget and Management in representation of the
National Government, and the Chairmen of the Committees on Banks of the Senate and the House of
Representatives shall determine the assets and liabilities of the Central Bank which may be transferred
to or assumed by the Bangko Sentral.  The Committee shall complete its work within ninety (90) days
from the constitution of the Monetary Board submitting a comprehensive report with all its findings and
The following guidelines shall be strictly observed in the determination of which assets and
liabilities shall be transferred to the Bangko Sentral:  
(a)    the Monetary Board and the Secretary of Finance shall have primary responsibility for
working out creative monetary and financial solutions to retire the Central Bank liabilities and
losses at the least cost to the Government;  
(b)    the Bangko Sentral shall remit seventy-five percent (75%) of its net profits to a special
deposit account (sinking fund) until such time as the net liabilities of the Central Bank shall
have been liquidated through generally accepted finance mechanisms such as, but not
limited to, write-offs, set-offs, condonation, collections, reappraisal, revaluation and bond
issuance by the National Government, or to the National Government as dividends;  
(c)     the assets and liabilities to be transferred shall be limited to an amount that will enable the
Bangko Sentral to perform its responsibilities adequately and operate on a viable basis:
Provided, That the assets shall exceed the liabilities as certified by the Commission on Audit
(COA), by an initial amount of Ten billion pesos (P10,000,000,000);    
(d)    liabilities to be assumed by the Bangko Sentral shall include liability for notes and coins in
circulation as of the effective date of this Act; and  
(e)    any asset or liability of the Central Bank not transferred to the Bangko Sentral shall be
retained and administered, disposed of and liquidated by the Central Bank itself which shall
continue to exist as the CB Board of Liquidators only for the purposes provided in this
paragraph but not later than twenty-five (25) years or until such time that liabilities have been
liquidated: Provided, That the Bangko Sentral may financially assist the Central Bank of
Liquidators in the liquidation of CB liabilities: Provided, finally, That upon disposition of said
retained assets and liquidation of said retained liabilities, the Central Bank shall be deemed
All actions taken by the Bangko Sentral Monetary Board under this section shall be reported to
Congress and the President within thirty (30) days.  
SECTION 133.   Mandate to Organize. — The Bangko Sentral shall be organized by the
Monetary Board without being subject to the provisions of Republic Act No. 7430, by adopting if it so
desires, an entirely new staffing pattern on organizational structure to suit the operations of the Bangko
Sentral under this Act.  No preferential or priority right shall be given to or enjoyed by any personnel for
appointment to any position in the new staffing pattern, nor shall any personnel be considered as having
prior or vested rights with respect to retention in the Bangko Sentral or in any position which may be
created in the new staffing pattern, even if he should be the incumbent of a similar position prior to
organization.  The formulation of the program of organization shall be completed within six (6) months
after the effectivity of this Act, and shall be fully implemented within a period of six (6) months thereafter.  
Personnel who may not be retained are deemed separated from the service.  
SECTION 134.   Separation Benefits. — Pursuant to Section 15 of this Act, the Monetary
Board is authorized to provide separation incentives, and all those who shall retire or be separated from
the service on account of reorganization under the preceding section shall be entitled to such
incentives, which shall be in addition to all gratuities and benefits to which they may be entitled under
existing laws.  
SECTION 135.   Repealing Clause. — Except as may be provided for in Section 46 and 132 of
this Act, Republic Act No. 265, as amended, the provisions of any other law, special charters, rule or
regulation issued pursuant to said Republic Act No. 265, as amended, or parts thereof, which may be
inconsistent with the provisions of this Act are hereby repealed.  Presidential Decree No. 1792 is
likewise repealed.  
SECTION 136.   Transfer of Powers. — All powers, duties and functions vested by law in the
Central Bank of the Philippines not inconsistent with the provisions of this Act shall be deemed
transferred to the Bangko Sentral ng Pilipinas.  All references to the Central Bank of the Philippines in
any law or special charters shall be deemed to refer to the Bangko Sentral.    
SECTION 137.   Separability Clause. — If any provision or section of this Act or the application
thereof to any person or circumstance is held invalid, the other provisions or sections of this Act, and the
application of such provision or section to other persons or circumstances, shall not be affected thereby.  
SECTION 138.   Effectivity Clause. — This Act shall take effect fifteen (15) days following its
publication in the Official Gazette or in two (2) national newspapers of general circulation.  
(Sgd.)  EDGARDO J. ANGARA          (Sgd.)  JOSE DE VENECIA, JR.
       President of the Senate                         Speaker of the House
                             of Representatives
This Act which is a consolidation of House Bill No. 7037 and Senate Bill No. 1235 was finally
passed by the House of Representatives and the Senate on June 10, 1993.
(Sgd.)  EDGARDO E. TUMANGAN              (Sgd.)  JOSE DE VENECIA, JR.
         Secretary of the Senate                          Secretary General
                                                             House of Representatives
              (Sgd.) FIDEL V. RAMOS
               President of the Philippines