FACILITATING BANK MERGERS OR CONSOLIDATIONS

• Number: Presidential Decree No. 117
• Sections: 3

Preamble

WHEREAS, the Government is currently engaged in instituting

vital reforms in the banking system to enable it to play a more

effective role in the socio-economic development of the country;

WHEREAS, as a means of further promoting the financial

stability and capacity of the different banking units, it is imperative

that incentives be provided to encourage bank mergers or consolidations;

WHEREAS, to encourage bank mergers or consolidations,

Presidential Decree No. 71, dated November 29, 1972, in amending certain

provisions of the General Banking Act, exempts merged or consolidated

banks from the application of Section 28 of the Corporation Law (Act No.

1459, as amended), which limits the number of directors in a

corporation; and

WHEREAS, other provisions of the Corporation Law tend to

restrict or impede bank mergers or consolidations;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the

Philippines, by virtue of the powers in me vested by the Constitution as

Commander-in-Chief of the Armed Forces of the Philippines, and pursuant

to Proclamation No. 1081, dated September 21, 1972, Proclamation No.

1104, dated January 17, 1973, and General Order No. 1, dated September

22, 1972, as amended, in order to facilitate bank mergers or

consolidations, do hereby order that this Decree be adopted as part of

the law of the land.

Section 1

SECTION 1. For the sole purpose of facilitating bank mergers

or consolidations duly approved by the Monetary Board of the Central

Bank of the Philippines, any bank may merge or consolidate with another

bank and the capital stock of a bank may be increased to the extent

necessary to effect such merger or consolidation by the affirmative vote

of the stockholders representing at least a majority of the subscribed

capital stock in a stockholders' meeting called for that purpose,

notwithstanding the provisions of Sections 281/2 and 17 of the

Corporation Law (Act No. 1459, as amended).

Section 2

SEC. 2. This Decree shall take effect immediately and shall

remain in force for a period of three (3) years from date hereof.

Done in the City of Manila, this 29th day of January, in the

year of Our Lord, nineteen hundred and seventy-three.

(Sgd.) FERDINAND E. MARCOS

President

Republic of the Philippines

By the President:

(Sgd.) ALEJANDRO MELCHOR

Executive Secretary