AUTHORIZING THE INCREASE IN AUTHORIZED CAPITAL STOCK AND APPROPRIATING FUNDS FOR PAID-UP CAPITAL OF THE DEVELOPMENT BANK OF THE PHILIPPINES

• Number: Presidential Decree No. 195
• Sections: 3

Preamble

WHEREAS, in line with the objectives of rapid economic

growth, it is necessary for the Government to provide massive credit

financing for the development and expansion of industry and agriculture;

WHEREAS, the Development Bank of the Philippines is one of

the primary agencies of the Government which provides credit facilities

for economic development;

WHEREAS, under its Charter (Republic Act No. 2081, as

amended) the Development Bank of the Philippines has an authorized

capital of P2 billion fully subscribed by the Government of which only

P408.7 million has been paid; and

WHEREAS, in accordance with the findings of the Performance

Evaluation Team which conducted an audit of the financial affairs and

operations of the Development Bank of the Philippines pursuant to

Presidential Memorandum Order No. 247, Series of 1971, it is desirable

to increase the capital stock and paid-up capital of the said Bank to

enable it to sustain the credit requirements of a rapidly expanding

economy;

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 all the Armed Forces of the Philippines, and

pursuant to Proclamation No. 1081, dated September 21, 1972, and General

Order No. 1, dated September 22, 1972, as amended, and in order to

effect the desired changes and reforms in the social, economic, and

political structures of our society, do hereby order and decree the

amendment of Republic Act No. 2081, as amended, as follows:

Section 1

SECTION 1. Section Three of R.A. No. 2081, as amended, is

hereby amended to read as follows:

"SEC. 3. Capital Stock. — The capital stock of the

Bank shall be three billion pesos divided into three 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 the said subscription shall be as follows:

"(a) 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.

"(b) The provisions of Section three of Republic Act Numbered Seventeen

hundred eighty-nine to the contrary notwithstanding, an amount

equivalent to fifty percent 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.

"(c) 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

of receipt thereof.

"(d) 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. No. 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."

Section 2

SEC. 2. This Decree shall take effect immediately.

Done in the City of Manila, this 9th day of May, 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