CREATING THE ASSETS MANAGEMENT COMPANY, DEFINING ITS POWERS AND FUNCTIONS, PROVIDING FUNDS THEREFOR, AND FOR OTHER PURPOSES.

• Number: Presidential Decree No. 2012
• Sections: 25

Preamble

WHEREAS, the Development Bank of the Philippines, (DBP), in

the pursuit of its objectives, extended financial assistance to various

development projects and undertakings which are presently encountering

operational and financial difficulties due to factors beyond its control (the

"non-performing accounts");

WHEREAS, as a result of the large accumulation of

non-performing accounts and the correspondingly low loan collections, the DBP is

currently facing severe liquidity problems, thereby weakening its capability to

continue financing development projects and maturing obligations;

WHEREAS, the Government is willing to provide the necessary

support and assistance in order to enable the DBP to operate viably, including

but not limited to absorbing the liabilities of the DEP occasioned by the

non-performing accounts, and undertaking the rehabilitation of companies or

projects classified as non-performing accounts and/or the disposal of these

companies or projects, whether completely rehabilitated or not, as well as other

assets presently held by the DBP as a consequence of its having financed the

projects;

WHEREAS, there is need to establish a government-owned or

controlled entity that will handle, administer, manage and otherwise dispose of

the non-performing accounts and assets of the DBP and other government financial

institutions to be transferred to the Government;

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:

Section 1 Short Title.

SECTION 1. Short Title.—This Decree shall be known

as the "Charter of the Assets Management Company".

Section 2 Creation, Name, Domicile and Term.

SEC. 2. Creation, Name, Domicile and Term.—There is

hereby created a body corporate under the Office of the President to be known as

the Assets Management Company, hereinafter referred to as the Company. Its

principal place of business shall be in Metropolitan Manila and it may establish

such offices, agencies or branches in other places within and outside the

Philippines, as may be necessary for the proper conduct of its business. It

shall have a corporate existence of twenty-five (25) years from the date of the

effectivity of this Decree.

Section 3 Statement of Principal Purpose.

SEC. 3. Statement of Principal Purpose.—The

principal purpose of the Company is to act and serve as a vehicle of the

National Government to handle, administer, manage or otherwise dispose of the

non-performing accounts and other assets of the Development Bank of the

Philippines (DBP) and other government financial institutions to be transferred

to it pursuant to this Decree.

Section 4 Powers and Functions of the Company.

SEC. 4. Powers and Functions of the Company.—The

Company shall have the general corporate powers provided in the

Corporation Code of the Philippines insofar as they are not inconsistent with

this Decree, and such other powers as may be necessary or proper to enable it to

effectively carry out its objectives and perform its powers and functions under

this Decree.

It shall have among others, the following powers and functions:

To acquire, hold, administer, manage, mortgage and alienate personal or real

property of whatever kind and nature in the Philippines or elsewhere, including

property or business covered by permits and licenses granted and/or issued by

the Government, the provisions of any law to the contrary notwithstanding;

To receive and collect the interests, dividends, and income arising from

real or personal properties, stocks, bonds, debentures, contracts, or

obligations, and to possess and exercise in respect thereof all the rights,

powers and privileges of ownership of such properties;

To sell, transfer, or otherwise dispose, with or without bidding, for cash

or on installment payment basis, real and personal property of every kind and

description, including shares of stock, bonds, debentures, notes, evidences of

indebtedness, and other securities or obligations of any corporation or

association, whether domestic or foreign;

To contract loans and issue bonds and other obligations as security

therefor, and for property purchased or acquired by it or for any other object

in or about its business; and to secure any bond or other obligation issued or

incurred by it;

To enter into contracts, with or without public bidding, with any person or

entity, domestic or foreign, or with governments, for the undertaking of

rehabilitation of projects, including the acquisition, by way of purchase, lease

or other deferred payment arrangements, of equipment and/or raw materials and

supplies, as well as for services connected therewith under such terms and

conditions as it may deem proper and reasonable;

To sue and be sued;

To adopt and use a corporate seal;

To succeed by its corporate name; and

To perform such other acts and exercise such other functions as may be

necessary or proper for the attainment of the primary purpose and objectives

herein specified, or as may be directed by the President of the Philippines.

Section 5 Capital Stock.

SEC. 5. Capital Stock.—The Company shall have an

authorized capital stock of One Hundred Billion Pesos (P100,000,000,000.00),

divided into one hundred million shares with a par value of One Thousand Pesos

(P1,000.00) per share, to be fully subscribed to and paid up by the Republic of

the Philippines, or by any of its agencies, instrumentalities and subdivisions,

including government-owned or controlled corporations. The Government is hereby

authorized to appropriate funds out of the National Treasury for the purpose of

paying the subscription of the Republic of the Philippines to the capital stock

of the Company.

Section 6 Board of Directors.

SEC. 6. Board of Directors.—The affairs and

business of the Company shall be directed, its powers exercised and its

properties managed and preserved by a Board of Directors, hereinafter referred

to as the Board, consisting of a Chairman, a Vice-Chairman and seven other

members to be appointed by the President of the Philippines who shall serve for

a term of three (3) years, unless sooner removed for any cause.

The Board shall convene as frequently as may be necessary to discharge its

responsibilities properly, but shall meet at least once every two (2) weeks. The

Board may be convened by the Chairman or, in his absence, by the

Vice-Chairman;

The presence of at least five (5) members shall constitute a quorum to do

business, and the majority vote of the members present, there being a quorum,

shall be necessary for the adoption of any resolution, rule, regulation,

decision or any other act of the Board.

The Chairman and other members of the Board shall receive per diem for each

Board meeting actually attended, as the Board may determine; Provided,

that such per diem shall not exceed Two Thousand Pesos (P2,000.00) during any

one month for each member. The members shall also be entitled to reimbursable

transportation and representation allowances in going to and coming from Board

meetings and transacting official business for the Company.

Whenever any member of the Board has a personal interest of any sort on a

matter before the Board, or any of his business associates, or any of his

relatives within the fourth degree of consanguinity or second degree of affinity

has such an interest, said member shall not participate in the discussion or

resolution of the matter and must retire from the meeting during deliberations

thereon. The subject matter, when resolved and the fact that a member had a

personal interest in it, shall be made available to the public and the minutes

of the meeting shall note the withdrawal of the member concerned.

Section 7 Powers and Responsibilities of the Board.

SEC. 7. Powers and Responsibilities of the

Board.—The Board shall have the following powers and responsibilities:

To define and approve the programs, plans, policies, procedures and

guidelines for the Company in accordance with its purposes and objectives, and

to control the management, operation and administration of the Company;

To approve the Company's organizational structure, staffing pattern,

operating and capital expenditures, and financial budgets, prepared in

accordance with the corporate plan of the Company;

To approve salary ranges, benefits, privileges, bonus, and other terms and

conditions of service for all officers and employees of the Company, upon

recommendation of the President of the Company;

To appoint, transfer, promote, suspend, remove or otherwise discipline any

subordinate officer or employee of the Company, upon recommendation of the

President of the Company;

To create such committee or committees and appoint the members thereof, as

may be necessary or proper for the management of the Company or for the

attainment of its purposes and objectives;

To approve the general terms and conditions for the sale, assignment,

transfer or disposition of companies, assets and other real or personal

properties owned or held by it; Provided, however, That the power to

approve particular contracts of sale may be delegated to an Executive Committee

composed of members of the Board as it may designate and under such guidelines

as it may determine;

To compromise, condone or release, in whole or in part, any claim or settled

liability to the Company or to an acquired company, regardless of the amount

involved, to promote the interest of the Company;

To reorganize or abolish the Company's offices, branches, or any other units

within or outside of the Philippines as it may deem necessary or proper;

To adopt, amend or modify the By Laws for the regulation of the Company's

proceedings, prescribing the duties of officers and employees of the Company;

delegating to the President the conduct of any business of the Board of

Directors; fixing the salaries, fees or other remuneration to be paid to the

Directors; and generally, for the conduct and management of its activities;

To promulgate such rules and regulations as may be necessary or proper to

implement this Decree, and to modify, amend or repeal the same from time to

time; and

To exercise such other powers and functions and perform other acts as may be

necessary, proper or incidental to the attainment of the purpose and objectives

of the Company, or as may be directed by the President of the Philippines.

Section 8 Executive Officers; Compensation.

SEC. 8. Executive Officers; Compensation.—The Chief

Executive of the Company shall be the President, who shall be chosen and may be

removed by the Board with the shall be assisted by such officers as may be

required whoe approval of the President of the Philippines. The President shall

be assisted by such officers as may be required whose appointment and removal

shall be approved and whose salaries shall be fixed by the Board.

Section 9 Duties and Powers of the President.

SEC. 9. Duties and Powers of the President.—The

President of the Company shall be a member of the Board, and shall, among

others, execute the policies, measures orders and resolutions promulgated by the

Board, and supervise and administer the operations of the Company. He shall be

the representative of the Company and shall enter into contracts and other

obligations on behalf of the Company required or permitted by this Decree. He

shall report periodically to the Board the main facts concerning the operations

of the Company, and shall recommend policies or changes in policies which may to

him seem best. He shall furnish upon request of the President of the Philippines

any information in his possession regarding the operations of the Company.

Section 10 Personnel.

SEC. 10. Personnel.—All officers and employees of

the Company shall be subject to the Civil Service Law, rules and regulations,

except those whose positions may, upon recommendation of the Board, be declared

by the President of the Philippines as policy-determining, primarily

confidential or highly technical in nature.

Section 11 Legal- Counsel.

SEC. 11. Legal- Counsel.—The Government Corporate

Counsel shall be the Legal Counsel of the Company; Provided, That the

Company may establish its own Legal Department under the control and supervision

of the Government Corporate Counsel to handle the day-to-day legal matters

affecting the affairs of the Company. For the performance of his duties and the

services of the Legal Staff of the Office of the Government Corporate Counsel,

the Board shall appropriate, and the President shall remit, such amount as shall

be determined by the Government Corporate Counsel.

Section 12 Auditor.

SEC. 12. Auditor.—The Commission on Audit shall

appoint a representative who shall be the auditor of the Company, and such

personnel as may be necessary to assist said representative in the performance

of his duties. The salaries and expenses in maintaining the auditor's office

shall be paid by the Company. The auditor and the personnel under him may be

removed only by the Commission on Audit.

Section 13

SEC. 13. Transfer of Non-Performing Accounts and Assets,

Including Acquired Assets of the Development Bank of the Philippines to the

Company.—As of the effectivity of this Decree, all the non-performing

accounts, assets, including acquired assets of the Development Bank of the

Philippines as hereinbelow defined, which are in the books of the Development

Bank of the Philippines as of are hereby transferred to the Company, which shall

exercise the powers and succeed to all the rights and interest of the

Development Bank of the Philippines in respect of such non-performing accounts,-

assets, and acquired assets thus transferred.

As used in this Decree, the following terms shall have the following meanings

(such meanings to be equally applicable to both the singular and plural forms of

the terms defined):

"Non-Performing Accounts"—DBP accounts including but not limited to

loans, contract mortgage receivables, equities, bond investment, advances,

guarantees and accounts receivable which have been classified thus by the

Development Bank of the Philippines.

"Assets"'—All property of every kind and nature which is, or may be

made available for the payment of the debts of an obligor classified as

non-performing account, including but not be limited to, all tangible and

intangible assets of that obligor assigned, mortgaged or otherwise alienated in

favor of the Development Bank of the Philippines or which may be

attached/garnished by the Development Bank of the Philippines in an appropriate

action.

"Acquired Assets"—shall also refer to all tangible and intangible

property presently owned by registered in the name of the Development Bank of

the Philippines which were acquired as a consequence of its lending operations

and which arc no longer used, or are not presently needed by the Development

Bank of the Philippines.

Section 14

SEC. 14. Assumption of Liabilities of the

Transferred Non-Performing Accounts of DBP by the National Government.—As

of the effectivity of this Decree, all the corresponding liabilities, debts,

obligations or responsibilities, whether absolute or contingent, direct or

indirect, arising from or in connection with the transferred non-performing

Accounts for which the Development Bank of the Philippines is or may be held

liable, are hereby transferred to and shall be assumed by, the National

Government, which shall create an office or unit under the Office of the

National Treasurer that will service the assumed liabilities.

Section 15 Procedure of Transfer.

SEC. 15. Procedure of Transfer.—The Development

Bank of the Philippines, the Company created under this Decree and the

representative (s) designated by the Office of the President shall formulate the

necessary procedures to expedite the transfers calls for by the two immediately

preceding Sections.

Section 16 Displaced DBP Personnel.

SEC. 16. Displaced DBP Personnel.—In the hiring of

the personnel of the Company or the personnel of the office to be created under

Section 17 Tax Exemption.

SEC. 17. Tax Exemption.—The Company shall be exempt

from all national, provincial, municipal and city taxes and assessments now

enforced or hereinafter established.

The exemption authorized in the preceding paragraph of this Section shall

apply to all properties of the Company, to the resources, receipts,

expenditures, profits and income of the Company, as well as to all contracts,

deeds, documents and transactions related to the conduet of the business of the

Company; Provided, however, That said exemptions shall apply

only to such taxes and assessment for which the Company would otherwise be

liable and shall not apply to taxes and assessments payable by persons or other

entities doing business with the Company.

Section 18 Appropriations.

SEC. 18. Appropriations.—The annual budget of the

National Government shall include appropriation for the yearly funding

i-equirement for the operations of the Company. For the initial funding

requirements of the Company, the sum of ONE HUNDRED SEVENTY-TWO MILLION

FORTY-FOUR THOUSAND PESOS (P172,044,000.00) is hereby set aside and appropriated

from the general funds not otherwise appropriated.

Section 19 Exemption from Attachment.

SEC. 19. Exemption from Attachment.—All assets of

the Company, including securities of non-performing accounts transferred to the

Company by the Development Bank of the Philippines shall not be subject to

attachment and execution.

Section 20

SEC. 20. Reports. The Company shall, within three (3) months

after the end of every fiscal year, submit its annaul report to the President of

the Philippines, together with its recommendations. It shall likewise submit

such other periodic or other reports and recommendations as may be required from

time to time.

Section 21

SEC. 21. Separability Clause. Should any provision of this

Decree be held unconstitutional, the remaining provisions hereof shall be valid

and effective; Provided, That such provisions can stand alone and be

enforced in their entirety.

Section 22

SEC. 22. Repealing Clause. All laws, decrees, executive

orders, administrative orders, rules and regulations, inconsistent herewith are

hereby repealed, amended or modified accordingly.

Section 23 Effectivity.

SEC. 23. Effectivity.—This Decree shall take effect

immediately.

Done in the City of Manila, this 20th day of January, in the year of our

Lord, nineteen hundred and eighty-six.

(Sgd.) FERDINAND E. MARCOS

President of the

Philippines

By the President:

(Sgd.) JOAQUIN T. VENUS, JR.

Deputy Presidential Executive

Assistant

Section 14

Section 14 hereof, priority shall be given to qualified DBP personnel whose

services may be dispensed with by the DBP as a result of the transfers mentioned

in Sections 13 and 14 of this Decree.