FURTHER AMENDING REPUBLIC ACT NUMBERED 6426, AS AMENDED, OTHERWISE KNOWN AS THE FOREIGN CURRENCY DEPOSIT ACT OF THE PHILIPPINES

• Number: Presidential Decree No. 1453
• Sections: 3

Preamble

WHEREAS, under Presidential Decree No. 1035, the authority

of certain depository banks under Republic Act No. 6426, which have the

necessary resources and managerial competence, was expanded to enable said banks

to engage more actively in foreign exchange transactions;

WHEREAS, the objectives behind the issuance of P.D. 1035

could be more readily achieved if said depository banks were allowed to freely

engage in foreign exchange trading and other similar transactions without being

unduly restricted by existing provisions of law, subject only to the regulatory

authority of the Monetary Board;

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

Philippines, by virtue of the powers in me vested by the Constitution, do hereby

order and decree that Republic Act No. 6426, as amended, be further amended as

follows:

Section 1

SECTION 1. The first paragraph of Section 4 of Republic Act

No. 6426, as amended, is hereby amended to read as follows:

"SEC. 4. Foreign currency cover

requirements.—Except as the Monetary Board may otherwise prescribe or

allow, the depository banks shall maintain at all times a one hundred percent

foreign currency cover for their liabilities, of which cover at least fifteen

percent shall be in the form of foreign currency deposit with the Central Bank,

and the balance in the form of foreign currency loans or securities, which loan

or securities shall be of short term maturities and readily marketable. Such

foreign currency loans may include loans to domestic enterprises which are

export-oriented or registered with the Board of Investments, subject to the

limitations to be prescribed by the Monetary Board on such loans. Except as the

Monetary Board may otherwise prescribe or allow the foreign currency cover shall

be in the same currency as that of the corresponding foreign currency deposit

liability. The Central Bank may pay interest on the foreign currency deposit,

and if requested shall exchange the foreign currency notes and coins into

foreign currency instruments drawn on its depository banks".

Section 2

SEC. 2. This Decree shall take effect immediately.

Done in the City of Manila, this 11th day of June in the year of Our Lord,

nineteen hundred and seventy-eight.

(Sgd.) FERDINAND E. MARCOS

President of the

Philippines

By the President:

(Sgd.) JACOBO C. CLAVE

Presidential Executive

Assistant