CONSTITUTION

Art XII. Section 20. The Congress shall establish an independent central monetary
authority, the members of whose governing board must be natural born Filipino
citizens, of known probity, integrity and patriotism, the majority of whom shall dome
from the private sector. They shall also be subject to such other qualifications and
disabilities as may be prescribed by law. (1)The authority shall provide policy
direction in the areas of money, banking and credit.(2) It shall have supervision
over the operation of banks and (3) exercise such regulatory powers as may be
provided by law over the operations of finance companies and other institutions
performing similar functions.
Until the Congress otherwise provides, the Central Bank of the Philippines, operating
under existing laws, shall function as the central monetary authority.
THE NEW CENTRAL BANK ACT

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.
General Banking Law
SECTION 3. Definition and Classification of Banks.
3.1. "Banks" shall refer to entities engaged in the lending of funds
obtained in the form of deposits. (2a)
3.2. Banks shall be classified into:
(a) Universal banks;
(b) C ommercial banks;
(c) Thrift banks, composed of: (i) Savings and mortgage banks,
(ii) Stock savings and loan associations, and (iii) Private
development banks, as defined in Republic Act No. 7906 (hereafter the "Thrift
Banks Act");
(d) R ural banks, as defined in Republic Act No. 7353 (hereafter
the "Rural Banks Act");
(e) Cooperative banks, as defined in Republic Act No. 6938
(hereafter the "Cooperative Code");
(f) Islamic banks as defined in Republic Act No. 6848,
otherwise known as the "Charter of Al Amanah Islamic
Investment Bank of the Philippines"; and
(g) O ther classifications of banks as determined by the
Monetary Board of the Bangko Sentral ng Pilipinas. (6-Aa)

SECTION 4. Supervisory Powers. The operations and activities of

banks shall be subject to supervision of the Bangko Sentral. "Supervision" shall
include the following:
4.1. The issuance of rules of conduct or the establishment of standards of
operation for uniform application to all institutions or functions covered, taking
into consideration the distinctive character of the operations of institutions and
the substantive similarities of specific functions to which such rules, modes or
standards are to be applied;
4.2. The conduct of examination to determine compliance with laws
and regulations if the circumstances so warrant as determined by
the Monetary Board;
4.3. Overseeing to ascertain that laws and regulations are complied
with;
4.4. Regular investigation which shall not be oftener than once a year
from the last date of examination to determine whether an institution is
conducting its business on a safe or sound basis:Provided, That the
deficiencies/irregularities found by or discovered by an audit shall be
immediately addressed;
4.5. Inquiring into the solvency and liquidity of the institution (2-D); or
4.6. Enforcing prompt corrective action. (n)
The Bangko Sentral shall also have supervision over the operations of and
exercise regulatory powers over quasi-banks, trust entities and other financial
institutions which under special laws are subject to Bangko Sentral supervision.
(2-Ca)
For the purposes of this Act, "quasi-banks" shall refer to entities engaged in the
borrowing of funds through the issuance, endorsement or assignment with
recourse or acceptance of deposit substitutes as defined in Section 95 of
Republic Act No. 7653 (hereafter the "New Central Bank Act") for purposes of
relending or purchasing of receivables and other obligations. (2-Da)
SECTION 5. Policy Direction; Ratios, Ceilings and Limitations. The
Bangko Sentral shall provide policy direction in the areas of money, banking
and credit. (n)
For this purpose, the Monetary Board may prescribe ratios, ceilings,
limitations, or other forms of regulation on the different types of accounts and
practices of banks and quasi-banks which shall, to the extent feasible, conform
to internationally accepted standards, including those of the Bank for
International Settlements (BIS). The Monetary Board may exempt particular
categories of transactions from such ratios, ceilings and limitations, but not
limited to exceptional cases or to enable a bank or quasi-bank under

rehabilitation or during a merger or consolidation to continue in business with

safety to its creditors, depositors and the general public. (2-Ca)
SECTION 6. Authority to Engage in Banking and Quasi-Banking
Functions. No person or entity shall engage in banking operations or
quasi-banking functions without authority from the Bangko Sentral: Provided,
however, That an entity authorized by the Bangko Sentral to perform universal
or commercial banking functions shall likewise have the authority to engage in
quasi-banking functions.
The determination of whether a person or entity is performing banking or
quasi-banking functions without Bangko Sentral authority shall be decided by
the Monetary Board. To resolve such issue, the Monetary Board may, through
the appropriate supervising and examining department of the Bangko Sentral,
examine, inspect or investigate the books and records of such person or entity.
Upon issuance of this authority, such person or entity may commence to
engage in banking operations or quasi-banking functions and shall continue to
do so unless such authority is sooner surrendered, revoked, suspended or
annulled by the Bangko Sentral in accordance with this Act or other special
laws.
The department head and the examiners of the appropriate supervising and
examining department are hereby authorized to administer oaths to any such
person, employee, officer, or director of any such entity and to compel the
presentation or production of such books, documents, papers or records that are
reasonably necessary to ascertain the facts relative to the true functions and
operations of such person or entity. Failure or refusal to comply with the
required presentation or production of such books, documents, papers or
records within a reasonable time shall subject the persons responsible therefor
to the penal sanctions provided under the New Central Bank Act.
Persons or entities found to be performing banking or quasi-banking functions
without authority from the Bangko Sentral shall be subject to appropriate
sanctions under the New Central Bank Act and other applicable laws. (4a)
SECTION 7. Examination by the Bangko Sentral. The Bangko Sentral
shall, when examining a bank, have the authority to examine an enterprise
which is wholly or majority-owned or controlled by the bank.
SECTION 23. Powers of a Universal Bank. A universal bank shall have
the authority to exercise, in addition to the powers authorized for a commercial
bank in Section 29, the powers of an investment house as provided in existing
laws and the power to invest in non-allied enterprises as provided in this Act.
(21-B)
SECTION 29. Powers of a Commercial Bank. A commercial bank shall
have, in addition to the general powers incident to corporations, all such
powers as may be necessary to carry on the business of commercial banking,

such as accepting drafts and issuing letters of credit; discounting and

negotiating promissory notes, drafts, bills of exchange, and other evidences of
debt; accepting or creating demand deposits; receiving other types of deposits
and deposit substitutes; buying and selling foreign exchange and gold or silver
bullion; acquiring marketable bonds and other debt securities; and extending
credit, subject to such rules as the Monetary Board may promulgate. These
rules may include the determination of bonds and other debt securities eligible
for investment, the maturities and aggregate amount of such investment. (21a)
Investment Houses law

SECTION 2. Scope. Any enterprise which engages in the underwriting

of securities of other corporations shall be considered an "Investment House"
and shall be subject to the provisions of this Decree and of other pertinent laws.
Nothing in this Decree shall be understood to preclude other enterprises from
engaging in the mere buying and selling of short-term securities of other
persons or enterprises.
SECTION 3. Definitions. For the purpose of this Decree, unless the
context otherwise indicates, the following definition of terms are hereby
adopted:
(a) "Underwriting" is the act or process of guaranteeing the distribution and
sale of securities of any kind issued by another corporation.
(b) " Securities" are written evidences of ownership, interest, or participation,
in an enterprise, or written evidences of indebtedness of a person or enterprise.
It includes, but is not limited to the instruments enumerated in Section 2 of the
Securities Act (Commonwealth Act No. 83, as amended).
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SECTION 6. Prohibitions. Except as may be authorized by the Monetary

Board, no director or officer of an Investment House shall concurrently be a
director or officer of a bank, as defined in Section 2 of the Republic Act No.
337, as amended: Provided, however, That in no event can a person be
authorized to be concurrently an officer of an Investment House and of a bank
except where the majority or all of the equity of the Investment House is
owned by the bank.
No Investment House shall engage in banking operations as defined in Section
2 of Republic Act No. 337, as amended.
SECTION 7. Powers. In addition to the powers granted to corporations
in general, an Investment House is authorized to do the following:
(1) Arrange to distribute on a guaranteed basis securities of other
corporations and of the Government or its instrumentalities;
(2) Participate in a syndicate undertaking to purchase and sell,
distribute or arrange to distribute on a guaranteed basis securities
of other corporations and of the Government or its
instrumentalities;
(3) Arrange to distribute or participate in a syndicate undertaking to
purchase and sell on a best-efforts basis securities of other
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corporations and of the Government or its instrumentalities;

(4) Participate as soliciting dealer or selling group member in tender
offers, block sales, or exchange offering of securities; deal in
options, rights or warrants relating to securities and such other
powers which a dealer may exercise under the Securities Act
(Commonwealth Act No. 83, as amended);
(5) Promote, sponsor, or otherwise assist and implement ventures,
projects and programs that contribute to the economy's
development;
(6) Act as financial consultant, investment adviser, or broker;
(7) Act as portfolio manager, and/or financial agent;
(8) Encourage companies to go public, and initiate and/or promote,
whenever warranted, the formation, merger, consolidation,
reorganization, expansion or recapitalization of productive enterprises,
by providing assistance or participate in the form of debt or equity
financing or through the extension of financial or technical advice or
service;
(9) Undertake or contract for researches, studies and surveys on such
matters as business and economic conditions of various countries, the
structure of financial markets, the institutional arrangements for
mobilizing investments;
(10) Acquire, own, hold, lease or obtain an interest in real and/or
personal property as may be necessary or appropriate to carry on its
objectives and purposes;
(11) Design pension, profit-sharing and other employee benefits plans;
(12) Such other activities or business ventures as are directly or
indirectly related to the dealing in securities and other commercial
papers, unless otherwise governed or prohibited by special laws, in
which case the special law shall apply;
(13) Subject to prior approval by the Monetary Board, the
provisions of Chapter IV of the Central Bank Charter, and such
rules and regulations as may be issued by the Monetary Board,
engage in foreign exchange operations which the Monetary Board
identified as directly related to an supportive of the activities
specified under Subsection 8 of this section; and
(14) Act as trustee of a trust fund or trust property, subject to the
provisions of Chapter VII of the General Banking Act.
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Nothing in this section shall preclude other enterprises not covered

by this Decree from engaging in the activities listed under
subsection (3) to (11) of this section, except as may otherwise be
governed by special laws.
FINANCING COMPANY ACT

SECTION 3. Section 3 of the same Act is hereby amended to read as

follows:
"Sec. 3. Definition of Terms. As used in this Act, the term:
"(a) 'Financing companies' hereinafter called companies, are corporations, except
banks, investments houses, savings and loan associations, insurance companies,
cooperatives, and other financial institutions organized or operating under other
special laws, which are primarily organized for the purpose of extending credit
facilities to consumers and to industrial, commercial, or agricultural enterprises,
by direct lending or by discounting or factoring commercial papers or accounts
receivable, or by buying and selling contracts, leases, chattel mortgages, or other
evidences of indebtedness, or by financial leasing of movable as well as
immovable property;
"(b) 'Securities and Exchange Commission' shall mean the office of the Securities and
Exchange Commission of the Philippines;
"(c) 'Credit' shall mean any loan, mortgage, financial lease, deed of trust, advance or
discount, any conditional sales contract, contract to sell, or sale or contract of sale of
property or service, either for present or future delivery, under which, part of all or the
price is payable subsequent to the making of such sale or contract; any contract, any
option, demand, lien or pledge, or to the other claims against, or for the delivery of,
property or money, any purchase, or other acquisition of or any credit upon the
security of, any obligation or claim arising out of the foregoing, and any transaction or
series of transactions having similar purpose or effect; and
"(d) 'Financial leasing' is a mode of extending credit through a non-cancelable lease
contract under which the lessor purchases or acquires, at the instance of the lessee,
machinery, equipment, motor vehicles, appliances, business and office machines, and
other movable or immovable property in consideration of the periodic payment by the
lessee of a fixed amount of money sufficient to amortize at least seventy (70%) of the
purchase price or acquisition cost, including any incidental expenses and a margin of
profit over an obligatory period of not less than two (2) years during which the lessee
has the right to hold and use the leased property with the right to expense the lease
rentals paid to the lessor and bears the cost of repairs, maintenance, insurance and
preservation thereof, but with no obligation or option on his part to purchase the
leased property from the owner-lessor at the end of the lease contract.
"(e) 'Purchase discount' is the difference between the value of the receivable
purchased or credit assigned, and the net amount paid by the finance company for
such purchases or assignment, exclusive of fees, services, charges, interest and other
charges incident to the extension of credit.
"(f) 'Lease rentals' shall refer to the periodic payments made by the lessee to the lessor
under Section 3(d), above."

SECTION 10. There is hereby inserted after Section 8 as renumbered, new

Sections 9, 10, 11, 12 and 13 to read as follows:
SEC. 9. Rights and Powers. Financing companies shall have the
following powers, in addition to those granted by this Act and by other
laws:
"(a) Engage in quasi-banking and money market operations with the
prior approval of the Bangko Sentral ng Pilipinas;
"(b) Engage in trust operations subject to the provisions of the
General Banking Act upon prior approval by the Bangko Sentral ng
Pilipinas;

"(c) Issue bonds and other capital instruments subject to pertinent rules
and regulations of the Bangko Sentral ng Pilipinas;
"(d) Rediscount their paper with government financial institutions subject
to relevant laws, rules and regulations;
"(e) Participate in special loan or credit programs sponsored by or
made available through government financial institutions; and
"(f) Provide foreign currency loans and leases to enterprises who earn
foreign currency by exports or other means, subject to existing laws and
rules and regulations promulgated by the Bangko Sentral ng Pilipinas.
"Nothing in this section shall be construed as precluding a financing
company from performing such services or exercising such powers as
may be granted by the Bangko Sentral ng Pilipinas or the Securities and
Exchange Commission or as may be incidental to its activities as a
corporation.
Investment Company Act, sec 4

SECTION 4. Definition of investment company. (a) when used in this Act

"investment company" means any issuer which is or holds itself out as being
engaged primarily, or proposes to engage primarily, in the business of
investing, reinvesting, or trading in securities;
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(b) Notwithstanding subsection (a), none of the following persons is an

investment company within the meaning of this Act;
(1) Any issuer primarily engaged, directly or through a wholly-owned
subsidiary or subsidiaries, in a business or businesses other than that
of investing, reinvesting, or trading in securities.
(2) Any issuer which the Commission, upon application by such
issuer, finds and by order declares to be primarily engaged in a
business or businesses other than that of investing, reinvesting, or
trading in securities either directly or (A) through majority-owned
subsidiaries or (B) through controlled companies conducting similar
types of business. The filing of an application under this paragraph by
an issuer other than a registered investment company shall exempt the
applicant for a period of sixty days from all provisions of this Act
applicable to investment companies as such.
For cause shown, the Commission by order may extend such period of
exemption for an additional period or periods. Whenever the
commission, upon its own motion or upon application, finds that the
circumstances which gave rise to the issuance of an order granting an
application under this paragraph no longer exist, the Commission shall
by order revoke such order.
(3) Any issuer all the outstanding securities of which (other than shortterm paper and directors' qualifying shares) are directly or indirectly
owned by a company excepted from the definition of investment
company.
(c) Notwithstanding subsection (a), and (b), none of the following
persons is an investment company within the meaning of this Act:

(1) Any issuer whose outstanding securities (other than short-term

paper) are beneficially owned by not more than twenty-five persons
and which is not making and does not presently propose to make a
public offering of its securities. For the purpose of this paragraph,
beneficial ownership by a company shall be deemed to be beneficial
ownership by one person; except that, if such company owns ten per
centum or more of the outstanding voting securities of the issuer, the
beneficial ownership shall be deemed to be that of the holders of such
company's outstanding securities (other than short-term paper).
(2) Any person primarily engaged in the business of underwriting and
distributing securities issued by other persons, selling securities to
customers, and acting as broker, or any one or more of such activities,
whose gross income normally is derived principally from such
business and related activities.
(3) Any bank or insurance company; any savings and loan association,
building and loan association, cooperative bank, homestead
association, or similar institution, or any receiver, conservator,
liquidator, liquidating agent, or similar official or person thereof or
therefor; any common trust fund or similar fund maintained by a bank
exclusively for the collective investment and reinvestment of moneys
contributed thereto by the bank in its capacity as a trustee, executor,
administrator, or guardian.
(4) Any person substantially all of whose business is confined to
industrial banking or similar business.
(5) Any person who is primarily engaged in one or more of the
following business: (A) Purchasing or otherwise acquiring notes,
drafts, acceptances, open accounts receivable, and other obligations
representing part or all of the sales price of merchandise, insurance,
and services; (B) making loans to manufacturers, wholesalers, and
retailers of, and to prospective purchasers of, specified merchandise,
insurance, and service; and (C) purchasing or otherwise acquiring
mortgages and other liens on and interests in real estate.
(6) Any company primarily engaged, directly or through majorityowned subsidiaries, in one or more of the businesses described in
paragraphs (3), (4) and (5), or in one or more of such businesses (from
which not less than forty per centum of such company's gross income
during its last fiscal year was derived) together with an additional
business or businesses other than investing, reinvesting, owning,
holding or trading in securities.
(7) Any company ninety per centum or more of the value of whose
investment securities are represented by securities of a single issuer
included within a class of persons enumerated in paragraphs (4),
(5), or (6).
(8) Any person substantially all of whose business consist of owning
or holding oil, gas, or other mineral royalties or leases, or fractional
interests therein, or certificates of interest or participation in or

investment contracts relative to such royalties, leases, or fractional

interests.
(9) Any company organized and operated exclusively for religious,
educational, benevolent, fraternal, charitable, or reformatory purposes,
no part of the net earnings of which inures to the benefit of any private
shareholders or individual.
(10) Any employees' stock bonus, pension, or profit- sharing trust.
(11) Any voting trust the assets of which consist exclusively of
securities of a single issuer which is not an investment company.
(12) Any security holders' protective committee or similar issuer
having outstanding and issuing no securities other than certificates of
deposit and short-term paper.
SECTION 3. Definition of Terms. For purposes of implementing this
Act, the following definitions shall apply:
(a) "Thrift banks" shall include savings and mortgage banks, private
development banks, and stock savings and loans associations organized under
existing laws, and any banking corporation that may be organized for the
following purposes:
(1) Accumulating the savings of depositors and investing them,
together with capital loans secured by bonds, mortgages in real estate
and insured improvements thereon, chattel mortgage, bonds and other
forms of security or in loans for personal or household finance, whether
secured or unsecured, or in financing for home building and home
development; in readily marketable and debt securities; in commercial
papers and accounts receivables, drafts, bills of exchange, acceptances
or notes arising out of commercial transactions; and in such other
investments and loans which the Monetary Board may determine as
necessary in the furtherance of national economic objectives;
(2)providing short-term working capital, medium-and long-term
financing, to businesses engaged in agriculture, services, industry and
housing; and
(3) Providing diversified financial and allied services for its chosen
market and constituencies specially for small and medium enterprises
and individuals.
(b) " Monetary Board" shall mean the Monetary Board of the Bangko
Sentral ng Pilipinas.
(c) "Bangko Sentral" shall refer to the Bangko Sentral ng Pilipinas created
under Republic Act No. 7653.
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SECTION 10. Powers of Thrift Banks. In addition to powers granted it by

this Act and existing laws, any thrift bank may:
(a) Accept savings and time deposits;
(b) Open current or checking accounts: Provided, That the thrift bank
has net assets of at least Twenty million pesos (P20,000,000) subject to
such guidelines as may be established by the Monetary Board; and shall

be allowed to directly clear its demand deposit operations with the

Bangko Sentral and the Philippine Clearing House Corporation;
(c) Act as correspondent for other financial institutions;
(d) A ct as collection agent for government entities, including but not
limited to, the Bureau of Internal Revenue, Social Security System, and
the Bureau of Customs;
(e) Act as official depository of national agencies and of municipal, city
or provincial funds in the municipality, city or province where the thrift
bank is located, subject to such guidelines as may be established by the
Monetary Board;
(f) Rediscount paper with the Philippine National Bank, the Land Bank
of the Philippines, the Development Bank of the Philippines, and other
government-owned or -controlled corporations. Said institutions shall
specify the nature of paper deemed acceptable for rediscount, as well as
rediscounting rate to be charged by any of these institutions; and
(g) Issue mortgage and chattel mortgage certificates, buy and sell them
for its own account or for the account of others, or accept and receive
them in payment or as amortization of its loan.
Such mortgage and chattel mortgage certificates shall be issued
exclusively in national currency and exclusively for the financing of
equipment loans, mortgage loans for the acquisition of machinery and
other fixed installations, conservation, enlargement or improvement of
productive properties and real estate mortgage loans for: (1) the
construction, acquisition, expansion or
improvement of rural and urban properties; (2) the refinancing of
similar loans and mortgages; and (3) such other purposes as may be
authorized by the Monetary Board.
A thrift bank shall coordinate the amounts and maturities of its
certificates with those of its loans, so as to ensure adequate cash receipts
for the payment of principal and interest at the time they become due.
The bank shall accept its own certificates at least at the actual price of
issue, in any prepayment of loans which mortgage or chattel mortgage
debtors may wish to make: Provided,
That the date of maturity of the certificates is not later than the date on
which the payment would otherwise become due, in the absence of the
aforesaid prepayment;
(h) P urchase, hold and convey real estate under the same conditions as
those governing commercial banks as specified under Section 25 of
Republic Act No. 337;
(i) Engage in quasi-banking and money market operations;
(j) Open domestic letters of credit;
(k) Extend credit facilities to private and government employees:
Provided, That in the case of a borrower who is a permanent employee
or wage earner, the treasurer, cashier or paymaster of the office
employing him is authorized, notwithstanding the provisions of any
existing law, rules and regulations to the contrary, to make deductions
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from his salary, wage or income pursuant to the terms of his loan, to
remit deductions to the thrift bank concerned, and
collect such reasonable fee for his services;
(l) Extend credit against the security of jewelry, precious stones and
articles of similar nature, subject to such rules and regulations as the
Monetary Board may prescribe; and
(m) Offer other banking services as provided in Section 72 of Republic
Act No. 337 and Republic Act No. 6426, as amended.
Thrift banks
may perform the services under subsections (b), (d), (e), (g) and (i) only
upon prior approval of the Monetary Board.
Nothing in this Section shall be construed as precluding a thrift bank
from
performing, with prior approval of the Monetary Board, commercial
banking services, or from operating under an expanded banking
authority, nor from exercising, whenever applicable and not inconsistent
with the provisions of this Act and Bangko Sentral regulations, and such
other powers incident to a corporation.
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Rural Bank Act

SECTION 2. The State hereby recognizes the need to promote comprehensive
rural development with the end in view of attaining a more equitable
distribution of opportunities, income and wealth; a sustained increase in the
amount of goods and services produced by the nation for the benefit of the
people; and in expanding productivity as a key to raising the quality of life for
all, especially the underprivileged.
Towards these ends, the State hereby encourages and assists in the
establishment of a rural banking system designed to make needed credit
available and readily accessible in the rural areas on reasonable terms.
SECTION 3. In furtherance of this policy, the Monetary Board of the Central
Bank of the Philippines shall formulate the necessary rules and regulations
governing the establishment and operation of rural banks for the purpose of
providing adequate credit facilities to farmers and merchants, or to
cooperatives of such farmers and merchants and, in general, to the people of
the rural communities, and to supervise the operation of such banks.
Cooperative Code of the Philippines
"ART. 6. Purposes of Cooperatives. A cooperative may be organized and
registered for any or all of the following purposes:
"(1) To encourage thrift and savings mobilization among the members;
"(2) To generate funds and extend credit to the members for productive and provident
purposes;
"(3) To encourage among members systematic production and marketing;
"(4) To provide goods and services and other requirements to the members;
"(5) To develop expertise and skills among its members;
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"(6) To acquire lands and provide housing benefits for the members;
"(7) To insure against losses of the members;
"(8) To promote and advance the economic, social and educational status of the
members;
"(9) To establish, own, lease or operate cooperative banks, cooperative wholesale and
retail complexes, insurance and agricultural/industrial processing enterprises, and
public markets;
"(10) To coordinate and facilitate the activities of cooperatives;
"(11) To advocate for the cause of the cooperative movement;
"(12) To ensure the viability of cooperatives through the utilization of new
technologies;
"(13) To encourage and promote self-help or self-employment as an engine for
economic growth and poverty alleviation; and
"(14) To undertake any and all other activities for the effective and efficient
implementation of the provisions of this
Code.
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"ART. 7. Objectives and Goals of a Cooperative. The primary objective of every

cooperative is to help improve the quality of life of its members. Towards this end,
the cooperative shall aim to:
"(a) Provide goods and services to its members to enable them to attain
increased income, savings, investments, productivity, and purchasing power,
and promote among themselves equitable distribution of net surplus through
maximum utilization of economies of scale, cost-sharing and risk-sharing;
"(b) Provide optimum social and economic benefits to its members;
"(c) Teach them efficient ways of doing things in a cooperative manner;
"(d) Propagate cooperative practices and new ideas in business and
management;
"(e) Allow the lower income and less privileged groups to increase their
ownership in the wealth of the nation; and
"(f) Cooperate with the government, other cooperatives and people-oriented
organizations to further the attainment of any of the foregoing objectives.
ART. 100. Powers, Functions and Allied Undertakings of Cooperative Banks. A
cooperative bank shall primarily provide financial, banking and credit services to
cooperative organizations and their members. However, the BSP may prescribe
appropriate guidelines, ceilings and conditions on borrowings of a cooperative
organization from a cooperative bank.
"The powers and functions of a cooperative bank shall be subject to such rules and
regulations as may be promulgated by the BSP.
"In addition to the powers granted by this Code and other existing laws, any
cooperative bank may perform any or all of the banking services offered by other
types of banks subject to the prior approval of the BSP.
REVISED CHARTER OF THE DEVELOPMENT BANK OF THE
PHILIPPINES

SECTION 2. Name, Purpose and Domicile. The Development Bank of the

Philippines, hereinafter called the Bank, operating under the provisions of
Republic Act No. 85, as amended, shall henceforth operate under the

provisions of this 1986 Revised Charter. The Bank shall be a body corporate
and shall exist for a period of fifty years.
The primary purposes of the Bank shall be to provide banking services
principally to service the medium and long term needs of agricultural and
industrial enterprises, particularly in the countryside and preferably for small
and medium scale enterprises; Provided, however, that the pursuit of these
objectives shall be undertake within the context of a financially viable and
stable banking institution; Provided, further, that the Bank shall continue to be
classified as a development bank, and Provided, finally, that unless otherwise
provided herein, the Bank may perform all other functions of a thrift bank.
The Bank's principal office and place of business shall be in the National
Capital Region, also known as Metro Manila. It may open and maintain
branches, agencies or other offices at such places in the Philippines as its Board
of Directors may deem advisable, with the prior approval of the Monetary
Board of the Central Bank of the Philippines.
SECTION 3. Corporate Powers. The Development Bank of the Philippines
shall have the power.
(a) To accept such deposits as are allowed thrift banks under existing
law and Central Bank regulations, including, but not limited to demand,
savings, and time deposits;
(b) T o grant loans for the establishment, development or expansion of
any agricultural or industrial enterprise;
(c) To accept and manage trust funds and properties and carry on
the business of a trust corporation;
(d) To act as official government depository with authority to maintain
deposits of the government, its subdivisions, branches, and
instrumentalities, and of government-owned or controlled corporations,
subject to such rules and regulations as the Monetary Board may
prescribe;
(e) To acquire, assign, or otherwise dispose of marketable securities and
other debt instruments which are essential to the effective conduct of its
general banking activities;
(f) To enter into such contracts of guaranty or suretyship as are
generally allowed domestic banking institutions under the General
Banking Act; and
(g) To adopt, amend, or change its By-laws; to adopt, alter and use a
seal; to make contracts; to sue and be sued; and to exercise the general
powers of a corporation mentioned in the Corporation Code of the
Philippines, and of a thrift bank under the General Banking Act, insofar
as such powers are not inconsistent or incompatible with the provisions
of this Charter.
Unless otherwise provided in this Charter, the exercise of the abovementioned
powers on banking shall be subject to applicable law, as well as
regulations

promulgated by the Central Bank of the Philippines.

LANDBANK OF THE PHILIPPINES
SECTION 74. Creation. To finance the acquisition by the Government of
landed estates for division and resale to small landholders, as well as the
purchase of the landholding by the agricultural lessee from the landowner,
there is hereby established a body corporate to be known as the "Land Bank of
the Philippines", hereinafter called the "Bank", which shall have its principal
place of business in Manila. The legal existence of the Bank is extended for a
period of fifty (50) years from the expiration of its original term on 08
August 2013, renewable for another fifty (50) years. The Bank shall be
subject to such rules and regulations as the Central Bank may from time
to time promulgate.
SECTION 75. Powers in General. The bank shall have the power.
1. To prescribe, repeal and alter its own by-laws to determine its
operating
policies, and to issue such rules and regulations as may be necessary;
2. To adopt, alter and use a corporate seal;
3. To hold, purchase, acquire and own real and personal property,
introduce necessary improvements thereon to enhance and develop their
social and economic values, and to sell, mortgage or otherwise dispose
of the same;
4. To sue and be sued, make contracts, negotiate and secure loans from
both local and foreign sources. Before undertaking any such credit
operation, the Bank, through the Secretary of Finance, shall request the
opinion, in writing, of the Monetary Board on the monetary implications
of the contemplated action. All loans from foreign sources shall be
subject to approval by the President of the Philippines and shall be fully
guaranteed by the Philippine Government;
5. To grant short, medium and long term loans and advances against
security of real estate and/or other acceptable assets for the
establishment, development or expansion of agricultural, industrial,
home building or home financing projects and other productive
enterprises;
6. To grant loans to farmers' cooperatives/associations to facilitate
production, marketing of crops and acquisition of essential
commodities;
7. To finance and/or guarantee the acquisition, under Presidential
Decree No. 85 dated December 25, 1972, of farm lots transferred to
tenant-farmers pursuant to Presidential Decree No. 27 dated October 21,
1972;
8. To underwrite, hold, own, purchase, acquire, sell, mortgage, dispose
or otherwise invest or reinvest in stocks, bonds, debentures, securities
and other evidences of indebtedness of other corporations and of the

government or its instrumentalities which are issued for or in connection

with any project or enterprise;
9. The provision of any law to the contrary notwithstanding, to
guarantee acceptance(s), credits, loans, transactions or obligations of
any person, co-partnership, association or corporation in favor of any
financing or banking institution, whether foreign or domestic: Provided,
That the proceeds of such acceptances, credits, loans, transactions or
obligations are utilized or earmarked for the development and/or
expansion of agriculture and industry;
10. To borrow from, or rediscount notes, bills of exchange and other
commercial papers with, the Central Bank. The rate of interest to be
charged and the conditions on such obligations or borrowings shall be
subject to the rules and regulations of the Monetary Board;
11. To act as trustee, or administer any trust or hold property in trust in
accordance with the provisions of law governing trust corporations;
12. to act as an official government depository with full authority to
maintain deposits of the government, its branches, subdivisions and
instrumentalities, and of government-owned or -controlled
corporations which deposits shall be subject to liquidity floor
and/or reserve requirements as may be imposed by the Monetary
Board upon other commercial banks;
13. for the strengthening of the capital base of the bank, to establish
a national marketing umbrella for farmers and fisheries
cooperatives to attract massive capital formation from savings
deposits of the cooperative members nationwide; and
14. To exercise the general powers mentioned in the Corporation Law
and the General Banking Act, as amended, insofar as they are not
inconsistent or incompatible with this Decree.
Al-Amanah Islamic Investment Bank of the Philippines
SECTION 2. Name, Domicile and Place of Business. There is hereby
created the Al-Amanah Islamic Investment Bank of the Philippines, which
shall be hereinafter called the Islamic Bank. Its principal domicile and place of
business shall be in Zamboanga City. It may establish branches, agencies or
other offices at such places in the Philippines or abroad subject to the laws,
rules and regulations of the Central Bank.
SECTION 3. Purpose and Basis. The primary purpose of the Islamic Bank
shall be to promote and accelerate the socio-economic development of the
Autonomous Region by performing banking, financing and investment
operations and to establish and participate in agricultural, commercial and
industrial ventures based on the Islamic concept of banking.
All business dealings and activities of the Islamic Bank shall be subject to the
basic principles and rulings of Islamic Shari'a within the purview of the
aforementioned declared policy. Any zakat or "tithe" paid by the Islamic Bank
cda

on behalf of its shareholders and depositors shall be considered as part of

compliance by the Islamic Bank with its obligation to appropriate said zakat
fund and to disburse it in legitimate channels to be ascertained first by the
Shari'a Advisory Council.
SECTION 4. Shari'a Advisory Council. There is hereby created a Shari'a
Advisory Council of the Islamic Bank which shall be composed of not more
than five (5) members, selected from among Islamic scholars and jurists of
comparative law.
The members shall be elected at a general shareholders meeting of the Islamic
Bank every three (3) years from a list of nominees prepared by the Board of
Directors of the Islamic Bank. The Board is hereby authorized to select the
members of the first Shari'a Advisory Council and to determine their
remunerations.
SECTION 5. Functions of the Shari'a Advisory Council. The functions of
the Shari'a Advisory Council shall be to offer advice and undertake reviews
pertaining to the application of the principles and rulings of the Islamic Shari'a
to the Islamic Bank's transactions, but it shall not directly involve itself in the
operations of the Bank.
Any member of the Shari'a Advisory Council may be invited to sit in the
regular or special meetings of the Board of Directors of the Islamic Bank to
expound his views on matters of the Islamic Shari'a affecting a particular
transaction but he shall not be entitled to vote on the question presented before
the board meetings.
SECTION 6. Islamic Bank's Powers. The Al-Amanah Islamic Investment
Bank of the Philippines, upon its organization, shall be a body corporate and
shall have the power:
(1) T o prescribe its bylaws and its operating policies;
(2) T o adopt, alter and use a corporate seal;
(3) T o make contracts, to sue and be sued;
(4) T o borrow money; to own real or personal property and introduce
improvements thereon, and to sell, mortgage or otherwise dispose
of the same;
(5) T o employ such officers and personnel, preferably from the qualified
Muslim sector, as may be necessary to carry Islamic banking business;
(6) To establish such branches and agencies in provinces and cities in
the Philippines, particularly where Muslims are predominantly located,
and such correspondent offices in other areas in the country or abroad as
may be necessary to carry on its Islamic banking business, subject to the
provisions of Section 2 hereof;
(7) To perform the following banking services:
(a) Open current or checking accounts;

(b) Open savings accounts for safekeeping or custody with no

participation in profit and losses except unless otherwise authorized by
the account holders to be invested;
(c) Accept investment account placements and invest the same for a term
with the Islamic Bank's funds in Islamically permissible transactions on
participation basis;
(d) Accept foreign currency deposits from banks, companies,
organizations and individuals, including foreign governments;
(e) Buy and sell foreign exchange;
(f) Act as correspondent of banks and institutions to handle remittances or
any fund transfers;
(g) A ccept drafts and issue letters of credit or letters of guarantee,
negotiate notes and bills of exchange and other evidence of indebtedness
under the universally accepted Islamic financial instruments;
(h) Act as collection agent insofar as the payment orders, bills of
exchange or other commercial documents are exclusive of riba or interest
prohibitions;
(i) Provide financing with or without collateral by way of leasing, sale
and leaseback, or cost plus profit sales arrangement;
(j) Handle storage operations for goods or commodity financing secured
by warehouse receipts presented to the Bank;
(k) Issue shares for the account of institutions and companies assisted by
the Bank in meeting subscription calls or augmenting their capital and/or
fund requirements as may be allowed by law;
(l) Undertake various investments in all transactions allowed by Islamic
Shari'a in such a way that shall not permit the haram (forbidden), nor
forbid the halal (permissible);
(8) T o act as an official government depository, or its branches,
subdivisions and instrumentalities and of government-owned or
controlled corporations, particularly those doing business in the
autonomous region;
(9) T o issue investment participation certificates, muquaradah (noninterest-bearing bonds), debentures, collaterals and/or the renewal or
refinancing of the same, with the approval of the Monetary Board of the
Central Bank of the Philippines, to be used by the Bank in its financing
operations for projects that will promote the economic development
primarily of the Autonomous Region;
(10) T o carry out financing and joint investment operations by way of
mudarabah partnership, musharaka joint venture or by decreasing
participation, murabaha purchasing for others on a cost-plus financing
arrangement, and to invest funds directly in various projects or through
the use of funds whose owners desire to invest jointly with other
resources available to the Islamic Bank on a joint mudarabah basis;
(11) T o invest in equities of the following allied undertakings:
(a) Warehousing companies;
(b) L easing companies;
cd i

(c) Storage companies;

(d) S afe deposit box companies;
(e) Companies engaged in the management of mutual funds but not in the
mutual funds themselves; and
(f) Such other similar activities as the Monetary Board of the Central
Bank of the Philippines has declared or may declare as appropriate from
time to time, subject to existing limitations imposed by law;
(12) T o exercise the powers granted under this Charter and such
incidental powers as may be necessary to carry on its business, and
to exercise further the general powers mentioned in the Corporation Law
and the General Banking Act, insofar as they are not inconsistent or
incompatible with the provisions of this Charter.