Presidential Decree No. 1478 (PD 1478) — Amending Presidential Decree No. 694 Providing for the 1975 Revised Charter of the Philippine National Bank.
WHEREAS, the Charter of the Philippine National Bank was
revised by Presidential Decree No. 694 to enable it to effectively carry out its
assigned role of providing the necessary financing for economic development of
the country under the program of the New Society;
WHEREAS, said Charter needs further amendment to enable the
Bank to strengthen its above-mentioned role in the economic development of the
country;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the
Philippines, by virtue of the powers vested in me by the Constitution, do hereby
decree and order the following:
SECTION 1. Section 3, Paragraphs (a) and (e), of
Presidential Decree No. 694 is hereby amended to read as follows:
"SECTION 3. Corporate Powers.—The Philippine
National Bank, upon its organization, shall be a body corporate and shall have
power:
"a. To engage in the business of commercial banking by accepting drafts and
issuing letters of credit, discounting and negotiating promissory notes, drafts,
bills of exchange, and other evidences of debts, receiving deposits, buying and
selling foreign exchange and gold or silver bullion, by acting as financial
agent, by financing or personality leasing, and by lending money against
personal security or against securities consisting of personal property or first
mortgages on improved real estate and the insured improvements thereon;
* * *
"e. To issue either in the Philippines or externally, for purposes of
augmenting its capital and/or fund generation requirements, all types of bonds,
promissory notes, debentures, certificates of indebtedness, or other debt
instruments whether senior, unsecured or subordinated obligations, including but
not limited to capital notes under such terms and conditions as may be
determined by the Board of Directors, which may be:
"1. Secured by credits against real estate or other assets of the Bank but
not in excess of 90% thereof, or without such security and purely on an
unsecured or subordinated basis;
"2. Long-term, medium-term or short-term;
"3. With fixed interest rate or floating interest rate;
"4. Denominated either in the lawful legal tender of the Philippines or in
such foreign currencies which are eligible for the foreign exchange reserves of
the Central Bank of the Philippines; and
"5. With such other features and requirements which in its discretion are
deemed necessary.
"These bonds, debentures, promissory notes, certificates of indebtedness, or
other debt instrument shall be unconditionally guaranteed as to principal and
interest by the Republic of the Philippines: Provided, however, That
the Bank is also authorized to issue these instruments without the guaranty of
the Republic of the Philippines;
"These bonds, debentures, promissory notes, certificates of indebtedness, or
other instruments, shall be exempt, both as to principal and interest, from any
and all taxes imposed by the Government or any of its
subdivisions."
SEC. 2. Section 4 of Presidential Decree No. 694 is hereby
amended to read as follows:
"SECTION 4. Authorized Capital Stock—Par
Value—Government Subscription and Payment.—Sale of Shares.—The authorized
capital stock of the Bank shall be further increased to Five Billion Pesos to be
divided into fifty million shares at par value of One Hundred Pesos each. The
Government shall increase its paid-in subscription of One Billion Pesos to Two
Billion Pesos. Payment for the additional capital contribution by the Government
shall be made as follows:
''a. P500 Million in the form of cash to be authorized under the
corresponding appropriation upon recommendation of the Secretary of Finance and
payable within three (3) years.
"b. The balance in cash or in exchange for the bonds or other government
securities which the Secretary of Finance is hereby authorized to issue under
such terms and conditions as he may prescribe.
"The bank's authorized capital stock shall be divided into the following
classes of shares:
"a. Preferred "A" shares which shall consist of one million shares available
for sale to or subscription by the general public. These shares shall have the
following features:
"1. preferred as to dividends at ten per cent (10%);
"2. cumulative;
"3. participating;
"4. non-voting;
"5. dividends thereon shall be exempt from income tax;
"6. redeemable at the option of the Bank at the prevailing book of value but
in no case less than par after five (5) years from issuance thereof; and
"7. convertible to Common shares at the option of the holder in case the Bank
fails to pay dividends thereon for two consecutive years; Provided,
however, That if the holder thereof signifies his intention to convert the
Preferred "A" shares to Common shares, the Bank may, at its option, redeem said
shares even before the lapse of five (5) years counted from date of their
issuance.
"b. Preferred "B" shares which shall consist of two million shares available
for sale to or subscription by citizens of the Philippines only. These shares
shall have the following features:
"1. preferred as to dividends;
"2. cumulative;
"3. participating;
"4. non-voting;
"5. dividends thereon shall be exempt from income tax; and
"6. convertible to Common at the option of the holder in case the Bank fails
to pay dividends thereon for two consecutive years.
"c. Common "A" shares which shall consist of five hundred thousand (500,000)
shares exclusively available for subscription at par by officers and employees
of the Bank. These shares shall have the following features:
"1. preferred as to dividends;
"2. cumulative;
"3. participating;
"4. voting;
"5. dividends thereon shall be exempt from income tax; and
"6. non-transferable except to qualified holders as herein
provided.
"Transfer of any kind, including that by hereditary succession, to any person
other than officers or employees of the Bank shall not be valid and shall not be
registered in the books of the Bank. Moreover, such transfer shall give rise to
the Bank's right to acquire the shares so transferred at par. The Board of
Directors of the Bank shall prescribe the terms and conditions for the
distribution of Common "A" shares to officers and employees of the Bank as well
as for the Bank's reacquisition of said shares from the holders thereof upon
their separation from the Bank or upon the transfer of said shares to any person
other than officers or employees of the Bank.
"d. The remaining balance of the authorized capital stock shall be in common
shares.
"The Board of Directors of the Bank may, at its discretion, increase the
number of any of the preferred shares as well as the Common "A" shares by
converting outstanding Common shares, if there are any available, to such shares
desired to be increased. Said increase shall be subject to the approval of the
President of the Philippines upon recommendation of the Secretary of Finance.
The Bank may take the necessary steps to have its preferred shares listed in any
duly registered stock exchange.
"Existing private stockholders may exercise their pre-emptive right.
"Upon full payment in cash, or with bonds or other government securities, of
its subscription of Two Billion Pesos, the government shall thereafter,
subscribe to the balance of the common shares at the rate of at least Two
Hundred Fifty Million Pesos per annum: Provided, however, that at any
time, the government may, upon recommendation by the Secretary of Finance and
the approval of the President of the Philippines, increase or decrease such rate
of subscription: Provided, further, that upon the lapse of five years
from the listing of the preferred shares in any duly registered stock exchange,
but not later than December 31, 1980, such preferred shares remaining unsold or
unsubscribed shall be automatically converted to Common shares and subscribed to
by the Government.
"Payment of these government subscriptions may likewise be in the form of
cash to be authorized under the corresponding appropriation that may be made
from time to time or in exchange for bonds or other government securities which
the Secretary of Finance is hereby authorized to issue under such terms and
conditions as he may prescribe. These bonds or other government securities may
be retired in the manner provided for in this Decree.
"The Bank is also authorized to purchase its own shares that are held
privately.
"Holders of Land Bank bonds may, under such terms and conditions as may be
prescribed by the Board of Directors of the Bank, exchange such bonds, for
shares of the Bank offered for sale to the
public."
SEC. 3. Section 6, paragraph (f) of Presidential Decree No.
694, is hereby amended to read as follows:
"SECTION 6. Loans and credit accommodations
authorized.—The Philippine National Bank is hereby authorized:
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"f. To make loans to any branch, subdivision or agency of the Republic of the
Philippines or to government-owned or controlled corporations, subject to the
condition that such loans should be for productive, revenue producing or
socio-economic projects pursuant to the priorities established in the
development program, as prepared, by the National Economic and Development
Authority, in an amount within the borrowing entity's paying capacity, duly
guaranteed by the National Government through the Secretary of Finance upon
authority of the President of the Philippines with respect to principal,
interest and other charges: Provided, however, that the government
guaranty may be dispensed with by the Board of Directors if such branch,
subdivision, or agency or government-owned or controlled corporation can offer
sufficient and acceptable collaterals in lieu of the guaranty: Provided,
further, that the requirement of government guaranty shall be considered
complied with in case of loans made to any branch, subdivision or agency of the
Republic of the Philippines or to government-owned or controlled corporations
which, by virtue of the law creating them or their respective charters or the
law authorizing their borrowings, are not required to secure the guaranty of the
national government through the Secretary of Finance: Provided,
furthermore, that loans covered by government guarantees shall not exceed
the ceiling prescribed by the Monetary Board: Provided, finally, that
such ceiling on government guarantees shall exclude loans to government
corporations with acceptable collateral. However, such loans to government
corporations shall nonetheless be subject to the lending ceiling on loans to
government agencies and entities provided for in paragraph (d) of Section
7."
SEC. 4. All laws, executive orders, decrees, rules and
regulations, or parts thereof, inconsistent with the provisions of this Decree
are hereby repealed, amended or modified accordingly.
SEC. 5. 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.) JUAN C. TUVERA
Presidential
Assistant
Source: Supreme Court E-Library, Republic of the Philippines. Philippine laws are public documents (works of the government).
