New Central Bank Act

Objectives:
1. Maintain price stability conductive to a balanced and sustainable growth of the economy;
2. Promote and maintain the monetary stability and covertibility of the Philippine Peso;
3. Provide policy directions in areas of money, banking and credit, with supervision over operations
of banks and with regulatory powers over operations of finance companies and non-bank financial
institutions performing quasi-banking functions.

Roles:
1. Banker of the Government
2. Representation with IMF
3. Representation with other financial Institutions
4. Fiscal Operations

Privileges and Prohibitions:

1. Tax exemptions for 5 years from all national amd LGU fees, charges and assessments.
2. Exemptions from customs duties
3. Prohibitions
a. cannot acquire shares of any kind or accept them as collateral;
b. shall not participate in the ownership or management of any enterprise, directly or indirectly;
c. BSP cannot engage in the development banking or financing.
4. Phase-out fiscal agency functions for 3 to 5 years;
5. Phase-out of regulatory powers over the operations of finance corporations and other institutions
for 5 years.

Monetary Board
1. Exercises the powers and functions of BSP
2. Composed of 7 members appointed by the President for a term of 6 years
a. Governor as chairman;
b. A cabinet member
c. 5 members who shall come from the private sector; shall serve full-time; no member of the
board may be reappointed more than once

- in case of emergencies: the governor and 2 other members may decide any matter, or take an action
within the authority of the Monetary Board ; submit the report

3. Qualifications:
a. MEMBERS:
i. Natural-born Filipino citizens
ii. At least 35 years old
iii. Good moral character; unquestionable integrity; known probity and patriotism; and
iv. With recognized competence in social and economic disciplines

b. BSP Governor:
i. Natural-born Filipino Citizen;
ii. At least 40 years old;
 iii. Good moral character; unquestionable integrity; known probity and patriotism; and
iv. With recognized competence in social and economic disciplines
v. Head of the department; his appointment shall be subject to the confirmation by the
Commission on Appointments;
vi. CEO of the BSP;
vii. Monetary Board’s and BSP’s principal representative.

4. Disqualifications/Inhibition on Governor and Board Members:

a. Disqualified from being director, officer, employee, consultant, lawyer, agent or stockholder of
any bank, quasi-bank or any other institution which is subject to BSP supervision

b. Those coming from private sectors shall not hold any public office or employment during their
tenure;

c. Cannot be connected directly with any multilateral banking or financial institution or has a
substantial interest in any private bank in the Philippines, within 1 year prior to his appointment;

d. Cannot be employed in any such institution within 2 years after expiration of his term, except
when he serves as an official representative of the Government in such institution;

e. When any member with personal or pecuniary interest in any matter in Monetary Board
Agenda, he shall disclose his interest and shall retire from the meeting when the matter is taken
up.

f. Governor and full-time members shall limit their professional activities to those pertaining
directly to their position with BSP and may not accept any other employment.

i. Exceptions: positions in eleemosynary, civic, cultural or religious organizations or whatever

by designation of the President (task to represent the interest of the Government);

5. Removal of Governor and Board Members: (by the President)

a. Subsequent disqualifications;
b. At least 6 months of physical or mental incapacity;
c. Fraudulent or illegal acts or operations;
d. No longer possessing qualifications specified in the Act

6. Responsibilities/liabilities of BSP Officers and Employees:

a. Liable for loss or injury suffered by the BSP or other banking institutions due to willfully
violating the Act, negligence, abuses, cts of malfeasance, misfeasance or failure to exercise
extraordinary diligence in the performance of their duties;

b. Members, officers and employees shall be liable for:

i. Disclosure of any information confidential or not, monetary board discussions or resolutions
or confidential operations of BSP, unless such is in relation to official BSP functions or
authorized;

c. Use of information for personal gain or to the detriment of the Government, BSP or third
parties.
Subsidiary - A corporation more than 50% of the voting stock of which is owned by a bank or quasi-
bank.

Affiliate - A corporation, the voting stock of which, to the extent of 50% or less, is owned by a bank
or a quasi-bank, or which is related or linked, or such other factors determined by Monetary Board.

Supervision and Examination of Banks

1. No restraining order against BSP
2. Liabilities for their refusal to make reports
a. Fines not exceeding P30,000.00 a day for each violation
b. Suspension of:
i. Rediscounting privileges or access to BSP credit facilities;
ii. Lending or foreign privileges or make news investments;
iii. Interbank clearing privileges
c. Revocation of quasi-banking license

Prohibition on BSP Officers, Directors, Lawyers and Agents

1. Being an officer, director, lawyer or agent, employee, consultant or stockholder, directly or
indirectly, of any institution subject to BSP supervision or examination;

2. Directly or indirectly requesting, or receiving any gift, present or pecuniary or material benefit for
himself or another, from any institution subject supervision or examination;

3. Revealing in any manner, information relating to the condition or business of any such institution;

4. Borrowing from any such institution, unless: (i) adequately secured; (ii) fully disclosed to
Monetary Board

Appointment of Conservator
1. The bank or quasi-bank is in a state of continuing inability; or
2. Unwillingness to maintain a condition of liquidity deemed adequate to protect the interest of
depositors and creditors;
3. Appointment: not more than 1 year
4. Responsibilities:
i. Take charge of the assets, liabilities and the management;
ii. Reorganize the management;
iii. Collect all monies and debts due to the said bank;
iv. Exercise all powers necessary to restore its viability, with power to overrule or revoke the
actions of the previous management and board of directors of the bank or quasi-bank.

Termination or Conservatorship to Receivership

1. When the Monetary Board is satisfied that the institution can continue to operate on its own and the
conservatorship is no longer necessary;

2. If its continuance would involve probable loss to its depositors and creditors; receivership and
liquidation shall be pursued.

Receivership Proceedings
1. When the bank or quasi-bank is unable to pay its liabilities
2. Has insufficient realizable assets to meet its liabilities;
3. Cannot continue in business without involving probable losses to its depositors or creditors;
4. Has willfully violated a cease and desist order that has become final, involving acts or transactions
which amount to fraud, or a dissipation of the assets of the institution

Obligations and Functions of the Receiver

1. Immediately gather and take charge of all the assets and liabilities of the institution, and administer
the same for the benefit of its creditors;

2. Exercise the general powers of a receiver;

3. Determine as soon as possible, but not later than 90 days from takeover,