AMENDING SECTION 13 OF REPUBLIC ACT NUMBERED THIRTY-FIVE HUNDRED AND NINETY-ONE, AS AMENDED, ENTITLED "AN ACT ESTABLISHING THE PHILIPPINE DEPOSIT INSURANCE CORPORATION, DEFINING ITS POWERS AND DUTIES AND FOR OTHER PURPOSES".

• Number: Presidential Decree No. 653
• Sections: 3

Preamble

WHEREAS, the Philippine Deposit Insurance Corporation, as

insurer of bank deposits, is entrusted with the vital role of protecting

depositors from loss resulting from bank closures and in helping

develop a sound and stable banking system;

WHEREAS, the Corporation is empowered under its Charter to

borrow from the Central Bank for insurance purposes such amounts not

exceeding the aggregate amount of P100 million at any one time;

WHEREAS, the Corporation has been resorting to its authority

to borrow from the Central Bank in the payment of insured

deposits;

WHEREAS, considering that deposits covered by the

Corporation have considerably increased in recent years there is a need

to remove the ceiling on the Corporation's borrowings from the

Central Bank;

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 as part of the law of the

land:

Section 1

SECTION 1. Section 13 of Republic Act No. 3591 is hereby

amended to read as follows:

"SEC. 13. The Corporation is authorized to borrow from

the Central Bank of the Philippines and the Central Bank is authorized

and directed to loan the Corporation on such terms as may be fixed by

the Corporation and the Central Bank, such funds as in the judgment of

the Board of Directors of the Corporation are from time to time required

for insurance purposes including those provided for in Section 12 (c)

of this Act: Provided, That the rate of interest to be charged

in connection with any loan made pursuant to this Section shall not be

less than the current average rate on outstanding marketable and

non-marketable obligations of the Republic of the Philippines as of the

last day of the month preceding the making of such loan. Any such loan

shall be used by the Corporation solely in carrying-out its function

with respect to such insurance."

Section 2

SEC. 2. This Decree shall take effect immediately.

Done in the City of Manila this 1st day of February, in the year

of Our Lord, nineteen hundred and seventy-five.

(Sgd.)

FERDINAND E. MARCOS

President

Republic of the Philippines

By the President:

(Sgd.)

ROBERTO V. REYES

Acting Executive Secretary