Presidential Decree No. 1461 (PD 1461) — Further Amending Certain Provisions of Republic Act No. 85, as Amended, Otherwise Known as the Dbp Charter
WHEREAS, the Development Bank of the Philippines is the
Government agency entrusted with the task of providing credit facilities for the
rehabilitation, development and expansion of the country's agriculture and
industry, the reconstruction of property damaged by war, the broadening and
diversification of the national economy and the promotion and establishment of
private development banks in the provinces and cities; and
WHEREAS, there is need to amend the charter of the DBP to
update its powers and functions and thus make it mere relevant and adaptable to
present circumstances and changing times;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the
Philippines, by virtue of the powers vested in me by the Constitution, do hereby
order and decree the following:
"SEC. 2. Corporation Powers.—The Development Bank
of the Philippines shall have the power:
To grant loans for home building or home financing projects and for the
rehabilitation, the establishment or development of any agricultural and/or
industrial enterprise, including public utilities, mining, livestock industry
and fishing; whether offshore or inland;
To purchase preferred redeemable shares of stock securities other than
shares of stock, and obligations of, and to grant loans to, any agricultural and
industrial enterprise mentioned in paragraph (a), to finance their fixed and
operating capital requirements. All purchases of preferred redeemable shares,
securities and obligations and all loans shall be of such sound value or so
secured, as reasonably to assure retirement of such shares, securities or
obligations or repayment of the loan; and shall be granted only under such
terms, conditions and restrictions as the bank shall determine;
To grant loans to provincial, city and municipal governments for the
rehabilitation, construction or reconstruction of public markets, waterworks,
toll bridges, slaughterhouses, for cadastral surveys and other self-liquidating
or income-producing services, or the purchase and acquisition of municipal
electric power plant to agencies and corporations owned or controlled by the
Government of the Republic of the Philippines for the production and
distribution of electric power, for the purchase and subdivision of rural and
urban estates, for housing projects and for immigration and waterworks systems;
To grant loans to cooperative associations to facilitate production, the
marketing of crops, and the acquisition of essential commodities;
To grant loans to individual employees in a government-owned or controlled
corporation or private corporation engaged in the development and/or expansion
of agriculture or industry, for the purpose of buying shares of stock directly
from such corporation for the purpose of enabling them to participate in the
ownership and to share in the profits thereof: Provided, That the
yearly amortization of such loan shall not exceed ten percent of the total
annual salary and wages of the borrower; Provided, Further, That such
loans shall be payable in full within a period of not exceeding ten years;
Provided, Finally, That if the borrower should sell any share of stock
acquired by from the proceeds of such loans, the corporation that issued said
share of stock shall have preference to purchase the same;
To underwrite, purchase, own, sell, mortgage or otherwise dispose of stocks,
bonds, debentures, securities and other evidence of indebtedness issued for or
in connection with any project or enterprise referred to in the preceding
paragraphs;
To accept and manage trust funds and properties and carry on the business of
a trust corporation. All loans outstanding as of the date of this Decree granted
by the Bank at the instance of the government are hereby deemed to have been
undertaken as a trust function and the corresponding funds thereof shall be
provided by the government;
To organize, establish and operate subsidiary corporations whenever
necessary to better achieve the purposes of its creation;
To issue bonds, debentures, securities, collaterals and other obligations
and/or the renewal or the refunding of the same upon recommendation of the
Secretary of Finance and with the approval of the President, but in no case to
exceed at any one time an aggregate amount equivalent to ten times of its
paid-in capital and surplus. These bonds and other obligations shall be
redeemable at the option of the Bank at or before maturity and in such manner as
may be stipulated therein and shall bear such rate of interest as may be fixed
by the Bank. Such obligations shall be secured by the assets of the Bank
including the stocks, bonds, debentures, and other securities underwritten,
purchased or held by it under the provisions of this Act. The Bank shall provide
for appropriate reserves for the redemption or retirement of said obligations.
Such obligations may be issued and offered for sale at such price or prices at
the Bank may determine, and shall be exempt from taxation both as to principal
and interest. The said obligations shall be and are hereby fully and
unconditionally guaranteed both as to principal and interest by the Government
of the Republic of the Philippines and such guaranty shall be expressed on the
face thereof;
In the event that the Bank shall be unable to pay debentures,
bonds, collaterals, notes or other such obligations issued by it, the Secretary
of Finance shall pay the amount thereof, which is hereby appropriated out of any
moneys in the National Treasury not otherwise appropriated, and thereupon, to
the extent of the amount so paid, the Government of the Republic of the
Philippines shall succeed to all the rights of the holders of such bonds, notes,
debentures, collaterals, or other obligations.
Subject to the above
provisions, the Bank is also authorized to issue "Rehabilitation and development
bonds" in denominations of not less than fifty pesos nor more than one thousand
pesos redeemable by the Bank on demand at the option of the holder of said
bonds, which may be of the following types: (1) rehabilitation and development
bonds at progressive staggered interest and cumulative face value; and (2)
rehabilitation and development bonds bearing interest as may be determined by
the Board of Governors with the advice and consent of the Secretary of Finance
and upon approval by the Monetary Board, said interest to become due and payable
semi-annually and payment thereof to be annotated on the back of each bond
certificate. Maturity of both types of bond shall be fixed by the Board of
Governors but in no case to exceed ten years.
The Board of Governors shall
have the power to prescribe rules and regulations for the issuance, reissuance,
servicing, placement and redemption of the herein authorized to be issued by the
Bank as well as the registration of such bonds at the request of the holders
thereof, with the approval of the Monetary Board of the Philippines;
To adopt, alter, and use a corporate seal which shall be judicially noticed;
to make contracts; to borrow money; to issue or own real and personal property;
and to sell, mortgage, or otherwise dispose of the same; to sue and be sued; to
employ such officers and personal as may be necessary to carry out the business
of the Bank; and otherwise to do and perform any and all things that may be
necessary or proper to carry out the purposes of the Bank;
To subscribe out of its funds to the capital stock of private provincial and
city development banks created pursuant to the provisions of Republic Act
Numbered Four Thousand Ninety Three;
The provisions of any law to the contrary notwithstanding, to guarantee
acceptance credits, loans, transactions, or obligation of any person,
co-partnership, association of corporation in favor of any financing or banking
institution, whether foreign or domestic: Provided, That the proceeds
of such acceptance credits, loans transactions or obligations have been utilized
or are earmarked for the development and/or expansion of agriculture or
industry;
To issue performance bonds or guarantee to secure the performance of
contracts funded in foreign currency by international financial institutions,
provided such contractors are domestic entities, enterprises or corporations the
majority of the capital of which is owned by citizens of the Philippines.
To
guarantee or counter-guarantee performance bonds or guarantees issued by
Philippine or foreign banking and financial institutions, for approved contracts
abroad, or for foreign currency funded domestic contracts, in favor of
Philippine contractors, provided such contractors are domestic entities,
enterprises or corporations majority of the capital of which is owned by
citizens of the Philippines; and
The provision of any law to the contrary notwithstanding the total
liabilities of any person, company, corporation or firm, or political
subdivision of the government with the exception of money borrowed against
obligations of the Central Bank or the Philippine Government, or borrowed with
the full guarantee by the Government of payment of principal and interest, shall
exclusive of guarantee under paragraph "1" of Section 2 hereof, at no time
exceed thirty (30%) percent of the paid-in capital and surplus of the Bank".
SEC. 2. Section Three of Republic Act No. 85 as amended, is
hereby further amended to read as follows:
"SEC. 3. Capital Stock.—The capital stock of the
Bank shall be FIVE Billion pesos divided into FIVE million shares having a par
value of one thousand pesos each. The said capital stock shall be fully
subscribed by the government of the Republic of the Philippines and payment of
said subscription shall be as follows:
At least fifty per centum (50%) of the surplus account of the Bank as of
June 30, 1962 and at least twenty per centum (20%) of the net profits that may
hereafter be realized as well as profits that may be assigned as dividends to
the shares of the Government shall be automatically applied to the payment of
the subscribed capital stock of the Government until the said capital stock
shall have been fully paid for, in which case the said profits shall be utilized
for such purposes as may be authorized by the Board of Governors.
The provisions of Section Three of Republic Act Numbered Seventeen Hundred
Eighty-Nine to the contrary notwithstanding, an amount equivalent to fifty per
cent of the proceeds from the sale of reparations goods and services for fifteen
years following the approval of this Act, is hereby appropriated to cover the
payment of the unpaid subscription of the government to the capital stock of the
Bank: Provided, That seventy-five million pesos of such amount shall be
set aside as a trust fund for the purpose of aiding the establishment of private
provincial and city development banks as provided in this Act.
The portion of the stabilization tax allocated for deposit to a Special
Account with the Development Bank of the Philippines, pursuant to Section 4 (c)
of Republic Act Numbered Six Thousand One Hundred Twenty Five, as amended,
otherwise known as the Stabilization Tax Law, shall be automatically applied to
the payment of the Government's subscription to the Capital Stock of the Bank
effective as of the date or receipt thereof.
The obligations of the Development Bank of the Philippines as of April 30,
1973 represented by bonds issued by said Bank and held by the Central Bank of
the Philippines including interest thereon rounded to the nearest thousand, and
loans or advances made under R.A. No. 265 and R.A. 2081, together with interest
thereon, rounded to the nearest thousand, shall be converted into paid-in
capital by the Government which shall assume said obligations; and for this
purpose, the President of the Philippines, upon recommendation of the Secretary
of Finance, shall issue in favor of the Central Bank of the Philippines treasury
bonds notes or securities, in such amounts as may be necessary for the
settlement of said obligations and under such terms and conditions as shall be
recommended by the Secretary of Finance in consultation with the Monetary Board.
The Secretary of Finance is hereby authorized to program and pay the unpaid
subscription of the government corresponding to the increase of the Bank's
authorized capital stock from Three Billon Pesos to Five Billion Pesos out of
any funds in the National Treasury not otherwise appropriated be they
collections from any or all taxes accruing to the general fund of proceeds from
loans, the issuance of bonds, treasury bills or notes which are hereby
authorized to be incurred or issued for the purpose."
SEC. 3. Section Four of Republic Act No. 85 as amended, is
hereby further amended to read as follows:
"SEC. 4. Loans.—The Bank may grant loans against
security of real estate and/or other acceptable assets including, subject to the
provision of existing laws, leasehold rights and permits from the government:
Provided, That any provision of law to the contrary notwithstanding,
the bank is authorized to grant loans on the security of real estate without
torrens title if the real estate has been declared for purposes of taxation
continuously for at least ten years and applicant for loan and his predecessors
in interest have been in continuous and uninterrupted possession thereof in the
concept of owner for at least ten years, such possession to be established by
affidavits of the owners of all the properties adjoining such real estate and
other evidence that the Board of Governors may deem necessary."
SEC. 4. Section Nine of Republic Act No. 85 as amended, is
hereby amended to read as follows:
"SEC. 9. A private development bank shall be organized in
the form of a stock corporation and its paid-up capital stock shall not be less
than four million pesos for Class A, two million pesos for Class C:
Provided, That at least seventy percent of the capital stock subscribed
by the private shareholder by the private sector shall be owned and held by
citizens of the Philippines: Provided, Further, That if said
subscription of private shareholders to the capital stock of a private
development bank cannot be secured or is not available, the Bank of
representative of the said private shareholders and with the approval of its
Board of Governors shall, within thirty days from date of said approval by the
Board of Governors, subscribe to the capital stock of such development banks,
which shall be paid in full at the time of subscription out of the trust fund
herein-above mentioned, in an amount equal to the fully paid subscribed capital
of the private stockholders: Provided, Further, That such shares of
stock subscribed by the bank shall be preferred shares entitled to cumulative
dividends at a rate of one per cent during the first five years, two percent
during the following five years, and three per cent thereafter, shall be
preferred against common and other preferred stockholders in the distribution of
assets in the event of liquidation, and shall be entitled to voting privileges:
Provided, Further, That additional subscriptions shall be entitled to
dividend rate to be determined by the bank: Provided, Further, That
such preferred shares of the bank may be sold at any time at par to private
individuals who are citizens of the Philippines and in the sale thereof the
qualified registered stockholders shall have the right of pre-emption within one
year from the date of offer in proportion of their respective holdings, but in
the absence of such buyers, preference shall be given to residents of the
province or city where the development bank is located; Provided,
Further, That such preferred shares of stock shall be automatically
converted to common shares when sold to private individuals: Provided,
Finally, That all members of the Board of Directors of the private
development banks shall be citizens of the Philippines:"
SEC. 5. Section Twelve of Republic Act No. 85 as amended, is
hereby further amended to read as follows:
"SEC. 12. The trust fund shall be used by the Bank in
assisting private development banks as follows:
To pay for its subscription to preferred shares of stock in said private
development banks in the manner and subject to the terms and conditions
prescribed in section nine hereof;
To rediscount promissory notes and other credit instruments held by the
private development banks under the following conditions and limitations.
It charges such rediscount or interest rates as it may determine taking into
account that the main objective of the private development banks is to engage in
medium-and long-term loans for economic development. The determination of such
rediscount or interest rates acceptable to the bank for purposes of this
provision shall be made by the said bank upon or immediately after the
commencement of operations of a private development bank;
Funds so acquired shall be used only to finance the establishment and
operation of projects within the program of the Bank, or along such projects and
activities as the Bank may, from time to time, approve."
"SEC. 14. Board of Governors.—The affairs and
business of the Bank shall be directed, its powers exercised, and its property
managed and preserved by a Board of Governors consisting of the Chairman and
eight other members to be appointed by the President of the Philippines. The
Chairman and four members of the Board to be designated by the President shall
render full time service to the Bank. The term of office of the Chairman and
other members of the Board shall be seven years, except that of the first
members which shall be one, two, three, four, five, six and seven years and
which shall be specified in their respective appointments. The compensation of
the Chairman and other members of the Board shall be fixed by the President of
the Philippines who may remove any of them for cause.
The President may designate as Vice-Chairman one of the eight members of the
Board. In the absence or temporary incapacity of the Chairman, the Vice-Chairman
shall exercise the powers and functions of the Chairman.
No person shall be appointed chairman or member of the Board of Governors
unless he be of good moral character and unquestionable integrity and be of
recognized competence in economics, agriculture, industry, finance and/or
banking.
SEC. 7. The same Act is amended by adding after Section
Thirty thereof the following new Section to be denominated Section Thirty One
thereof:
"SEC. 31. The provision of any law to the contrary
notwithstanding all income of the Bank derived from its operations and the
exercise of its function shall be free from all past and future assessment
whatsoever except under Section 24 of the National Internal Revenue Code. Taxes
due to the National Government on income of the bank under Section 24 of the
National Internal Revenue Code shall, beginning with taxes due on income for
calendar year 1978, be automatically applied to the payment of the subscribed
capital stock of the Government in the Bank."
Repealing Clause.
SEC. 8. Repealing Clause.—The provisions of laws,
decrees, orders, rules and regulations or parts thereof which are inconsistent
with the provisions of this Decree are hereby repealed or modified
accordingly.
Effectivity.
SEC. 9. Effectivity.—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
Source: Supreme Court E-Library, Republic of the Philippines. Philippine laws are public documents (works of the government).
