AN ACT ESTABLISHING THE CENTRAL BANK OF THE PHILIPPINES, DEFINING ITS POWERS IN THE ADMINISTRATION OF THE MONETARY AND BANKING SYSTEM, AMENDING THE PERTINENT PROVISIONS OF THE ADMINISTRATIVE CODE WITH RESPECT TO THE CURRENCY AND THE BUREAU OF BANKING, AND FOR OTHER PURPOSES.

• Number: Republic Act No. 265
• Sections: 143

Preamble

A. DEPARTMENT OF ECONOMIC RESEARCH

A. CURRENCY

A. THE CREDIT POLICY OF THE CENTRAL BANK

A. THE ISSUE AND PLACING OF GOVERNMENT SECURITIES

ARTICLE 1.—Privileges

Section 1 Creation of the Central Bank.

SECTION 1. Creation of the Central Bank.—There is hereby created a body corporate to be known as the Central Bank of the Philippines, which shall be governed by the provisions of this Act.

The capital of the Central Bank shall be ten million (P10,000,000) pesos, which are hereby appropriated from the assets of the Exchange Standard Fund, as provided in section 134 of this Act.

Section 2 Responsibilities and objectives.

SEC. 2. Responsibilities and objectives.—It shall be the responsibility of the Central Bank of the Philippines to administer the monetary and banking system of the Republic.

It shall be the duty of the Central Bank to use the powers granted to it under this Act to achieve the following objectives:

(a) To maintain monetary stability in the Philippines;

(b) To preserve the international value of the peso and the convertibility of the peso into other freely convertible currencies; and

(c) To promote a rising level of production, employment and real income in the Philippines.

Section 3 Place of business.

SEC. 3. Place of business.—The Central Bank shall have its principal place of business in the City of Manila, but may have such branches, agencies and correspondents in other places as are necessary for the proper conduct of its business.

Section 4 Corporate powers.

SEC. 4. Corporate powers.—The Central Bank is hereby authorized to adopt, alter, and use a corporate seal which shall be judicially noticed; to make contracts; to lease or own real and personal property, and to sell or otherwise dispose of the same; to sue and be sued; and otherwise to do and perform any and all thing that may be necessary or proper to carry out the purposes of this Act.

The Central Bank may acquire and hold such assets and incur such liabilities as result directly from operations authorized by the provisions of this Act, or as are essential to the proper conduct of such operations.

Section 5 Composition of the Monetary Board.

SEC. 5. Composition of the Monetary Board.—The powers and functions of the Central Bank shall be exercised by a Monetary Board, which shall be composed of seven members, as follows:

(a) The Secretary of Finance, who shall preside at the meeting's of the Monetary Board. Whenever the Secretary of Finance is unable to attend a meeting of the Board, the Undersecretary of Finance shall act as his alternate, but shall not preside.

(b) The Governor of the Central Bank, who shall preside at the meetings of the Board in the absence of the Secretary of Finance. The Governor shall be appointed for a term of six years by the President of the Philippines with the consent of the Commission on Appointments. Whenever the Governor is unable to attend a meeting of the Board, the ranking deputy-governor shall act in his stead.

(c) The President of the Philippine National Bank, whose alternate shall be the senior vice-president of said bank.

(d) The Chairman of the Board of Governors of the Rehabilitation Finance Corporation, whose alternate shall be the ranking governor of said corporation.

(e) Three other members, to be appointed for terms of six years by the President with the consent of the Commission on Appointments: Provided, however, That the first members appointed under the provisions of this subsection shall have terms of office of two, four and six years, respectively.

In making appointments to the Monetary Board, the President of the Philippines shall give due regard to affording fair representation of the financial, agricultural, industrial and commercial interests, in the composition of the said Board.

Section 6 Vacancies.

SEC. 6. Vacancies.—Any vacancy in the Monetary Board created by the death, resignation, or removal of an appointive member shall be filled by the appointment of a new member to complete the unexpired period of the term of the member concerned.

Section 7 Qualifications.

SEC. 7. Qualifications.—No person shall be appointed as a member of the Monetary Board or as a deputy-governor of the Central Bank unless he be of good moral character and of unquestionable integrity and responsibility, and who is of recognized competence in the economics of banking, finance, commerce, agriculture or industry: Provided, however, That the Governor and deputy-governors of the Central Bank must be of recognized competence in the field of banking: Provided, further, That the Governor and the members of the Monetary Board shall be natural-born Filipino citizens.

Section 8 Disqualifications.

SEC. 8. Disqualifications.—With the exception of the ex-officio members and their respective alternates, none of the following may be a member of the Monetary Board or a deputy-governor of the Central Bank:

(a) Persons holding any public position or office, either by election or by appointment, except academic positions; and

(b) Directors, officers or employees of other banking institutions.

Section 9 Removal.

SEC. 9. Removal.—The President may remove any member of the Monetary Board for any of the following reasons:

(a) If the member is disqualified under the provisions of section 8 of this Act; or

(b) If the member is guilty of acts or operations which are of a fraudulent or illegal character or which are manifestly opposed to the aims and interests of the Central Bank; or

(c) If the member no longer possesses the qualifications specified in section 7.

Section 10 Meetings.

SEC. 10. Meetings.—The Monetary Board shall convene as frequently as is necessary to discharge its responsibilities properly, but shall meet at least once every two weeks. The Board may be convoked either by the Secretary of Finance, in his capacity as presiding officer of the Board, or by the Governor of the Central Bank.

The presence of four members shall constitute a quorum.

All decisions of the Monetary Board shall require the concurrence of at least four members, except in special cases where the provisions of other sections of this Act demand a greater majority.

Section 11 Attendance of the ranking deputy-governor and the chief of the Department of Economic Research.

SEC. 11. Attendance of the ranking deputy-governor and the chief of the Department of Economic Research.—The ranking deputy-governor of the Central Bank and the chief of the Department of Economic Research shall attend the meetings of the Monetary Board with the right to be heard but not to vote.

Section 12 Remuneration of members for attending meetings of the Board.

SEC. 12. Remuneration of members for attending meetings of the Board.— The members of the Monetary Board their respective substitutes, except the Governor and the ranking deputy-governor, shall receive a per diem for every Board meeting attended. The amount of said per diem shall be set by the President but may not exceed fifty (P50) Pesos, nor the sum of five hundred pesos (P500) for any single month.

Section 13 Withdrawal of persons having a personal interest.

SEC. 13. Withdrawal of persons having a personal interest.—Whenever any person attending a meeting of the Monetary Board has a personal interest of any sort in the discussion or resolution of any given matter, 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 person may not participate in the discussion or resolution of the matter and must retire from the meeting during the deliberations thereon. The minutes of the meeting shall note the withdrawal of the member concerned.

Section 14 Exercise of authority.

SEC. 14. Exercise of authority.—In order to exercise the authority granted to it under this Act, the Monetary Board shall:

(a) Prepare and issue such rules and regulations as it considers necessary for the effective discharge of the responsibilities and exercise of the powers assigned to the Monetary Board and to the Central Bank under this Act;

(b) Direct the management, operations and administration of the Central Bank and prepare such rules and regulations as it may deem necessary or convenient for this purpose;

(c) On the recommendation of the Governor, appoint, fix the remunerations, and remove all officers and employees of the Central Bank, with the exception of the Governor; and

(d) Authorize such expenditures by the Central Bank as are in the interest of the effective administration and operation of the Bank.

Section 15 Responsibility.

SEC. 15. Responsibility.— Any member of the Monetary Board or officer or employee of the Central Bank who wilfully violates this Act or who is guilty of gross negligence in the Performance of his duties shall be held liable for any loss or injury suffered by the Bank as a result of such violation or negligence. Similar responsibility shall apply to the disclosure of any information of a confidential nature about the discussions or resolutions of the Monetary Board or about the operations of the Bank, and to the use of such information for personal gain or to the detriment of the Government, the Bank or third parties.

Section 16 Powers and duties of the Governor.

SEC. 16. Powers and duties of the Governor.—The Governor shall be the chief executive of the Central Bank. His powers and duties shall be:

(a) To prepare the agenda for the meetings of the Monetary Board and to submit for the consideration of the Board the policies and measures which he believes to be necessary to carry out the purposes and provisions of this Act;

(b) To execute and administer the policies and measures approved by the Monetary Board;

(c) To direct and supervise the operations and internal administration of the Central Bank. The Governor may delegate certain of his administrative, responsibilities to other officers of the Bank, subject to the rules and regulations of the Monetary Board; and

(d) To exercise such other powers as may be vested in him by the Monetary Board.

Section 17 Representation of the Monetary Board and the Central Bank.

SEC. 17. Representation of the Monetary Board and the Central Bank.—The Governor of the Central Bank shall be the principal representative of the Monetary Board and of the Bank, and in his capacity and in accordance with the instructions of the Monetary Board he shall be empowered:

(a) To represent the Monetary Board and the Central Bank in all dealings with other offices, agencies and instrumentalities of the Government and with all other persons or entities, public or private, whether domestic, foreign or international;

(b) To authorize, with his signature, contracts concluded by the Central Bank, notes and securities issued by the Bank, and the annual reports, balance sheets, profit and loss statements, correspondence and other documents of the Bank. The signature of the Governor may be in facsimile wherever appropriate;

(c) To represent the Central Bank, either personally or through counsel, in any legal proceedings or action; and

(d) To delegate his power to represent the Bank, as provided in subsections (a), (b) and (c) of this section, to other officers of the Bank upon his own responsibility.

Section 18 Authority of the Governor in emergencies.

SEC. 18. Authority of the Governor in emergencies.— In the event of war or other emergencies which require immediate action and in which there is insufficient time to call a meeting of the Monetary Board, the Governor of the Central Bank, with the concurrence of the Secretary of Finance or, in his absence, with the concurrence of any two other members of the Monetary Board, may decide any matter or take any action within the authority of the Board itself and may suspend any resolution or decision of the Board.

In such cases, the Governor shall call a meeting of the Monetary Board as soon as possible, in order to explain his action and the reasons for departing from normal procedures. The Board may then confirm, revoke or modify such action as the circumstances warrant.

Section 19 Outside interests of the Governor.

SEC. 19. Outside interests of the Governor.—The Governor of the Central Bank shall be required to limit his professional activities to (those pertaining directly to his position with the Central Bank; accordingly, the Governor of the Bank may not accept any other employment, whether public or private, remunerated or ad honorem, with the exception of academic positions and of public commissions related to the formation, direction or implementation of monetary, banking or general economic policies which concern the national interest of the Philippines.

Section 20 Remuneration of the Governor.

SEC. 20. Remuneration of the Governor.—The salary of Governor of the Central Bank shall be fixed by the Monetary Board with the approval of the President of the Philippines, but in no case shall it exceed thirty thousand pesos per annum.

Section 21 Deputy-Governor.

SEC. 21. Deputy-Governor.—The Governor of the Central Bank, with the approval of the Monetary Board, shall appoint one deputy-governor who shall perform such duties as may be assigned to him by the Governor and the Board.

In the absence of the Governor of the Central Bank, the deputy-governor shall act as chief executive of the Central Bank and shall exercise the powers and perform the duties of the Governor.

Section 22 Responsibilities of the Department.

SEC. 22. Responsibilities of the Department.—The Central Bank shall establish and maintain a Department of Economic Research which shall prepare data and conduct economic research for the guidance of the Monetary Board in the formulation and implementation of its policies.

Toward this end, the Department of Economic Research shall prepare forecasts of the balance of payments of the Philippines, statistics on the monthly movement of the money supply and of prices, and other statistical series and economic studies useful for the formulation and analysis of monetary, banking and exchange policies.

The scope of the other functions and duties of the department shall be defined and prescribed by the Monetary Board.

Section 23 Authority to obtain information.

SEC. 23. Authority to obtain information.—The Department of Economic Research shall have the authority to request from any person or entity, including Government offices and instrumentalities, any data which the Central Bank may require for the proper discharge of its functions and responsibilities. The Central Bank shall have the power to issue a subpoena for the production of the books and records of all such persons and entities for the aforesaid purpose. Those who refuse without justifiable cause to supply the Bank with the data requested, or required by the subpoena, shall be subject to the penalties provided in section 32.

Section 24 Training of technical personnel.

SEC. 24. Training of technical personnel.—The Central Bank shall promote and sponsor the training of technical personnel in the field of money and banking. Toward this end, the Central Bank is hereby authorized to defray the costs of study, at home or abroad, of outstanding employees of the Bank, of promising university graduates or of any other qualified persons which shall be determined by proper competitive examinations to be conducted by the Commissioner of Civil Service as in other cases. The chief of the Department of Economic Research shall prepare and supervise the training program of the Bank, subject to the rules and regulations of the Monetary Board on the matter.

B. DEPARTMENT OF SUPERVISION AND EXAMINATION

Section 25 Creation of the Department.

SEC. 25. Creation of the Department.—In order to assure the observance of this Act and of other pertinent laws, and of the rules and regulations of the Monetary Board, the Central Bank shall have a Department of Supervision and Examination which shall be charged with the supervision and periodic examination of all banking institutions operating in the Philippines, including all government credit institutions. The Department of Supervision and Examination shall discharge its responsibilities in accordance with the instructions of the Monetary Board. The Chief of the department shall be known as the Superintendent of Banks.

The Superintendent of Banks and the examiners of the Department of Supervision and Examination are hereby authorized to administer oaths to any director, officer, or employee of any institution under the supervision of the department and to compel the presentation of all books, documents, papers or records necessary in has or their judgment to ascertain the facts relative to the true condition of any institution.

Section 26 Qualifications.

SEC. 26. Qualifications.—The Superintendent of Banks must be a person of recognized probity and competence in accounting, auditing and banking practice.

Section 27 Prohibitions.

SEC. 27. Prohibitions.—The Superintendent and all employees of the Department of Supervision and Examination are hereby prohibited from:

(a) Being an officer, director, employee, or stockholder, directly or indirectly, of any institution subject to supervision or examination by the department;

(b) Receiving any loan, advance, gift, or thing of value from any such institution or from any officer, director; or employee thereof;

(c) Revealing in any manner, except under orders of the court, information relating to the condition or business of any such institution. This prohibition shall not be held to apply to the giving of information to the Monetary Board or the Governor of the Central Bank, or to any person authorized by either of them, in writing, to receive such information.

Section 28 Examination and fees.

SEC. 28. Examination and fees.—It shall be the duty of the Superintendent, personally or by deputy, at least once in every twelve months, and at such other times as either he or the Monetary Board may deem expedient, to make an examination of the books of every banking institution within the purview of this Act and to make a report on the same to the Monetary Board.

Every such institution shall afford to the Superintendent and to his authorized deputies full opportunity to examine its books, cash and available assets and general condition at any time when requested so to do by the Superintendent: Provided, however, That none of the reports and other papers relative to such examinations shall be open to inspection by the public except in so far as such publicity is incidental to the proceedings hereinafter authorized, or is necessary for the prosecution of violations in connection with the business of such institutions.

The institutions which are subject to examination by the Superintendent shall reimburse the Central Bank for the cost of maintaining the Department of Supervision and Examination and, for this purpose, shall pay to the Central Bank, within the first thirty days of each year, an annual fee in an amount to be determined by the Monetary Board in the manner provided in the next paragraph of this section.

The fee to be paid by each institution shall be an amount equal to a prescribed percentage of its average total assets during the preceding year, as shown, on its end-of-month balance sheets, after deducting its cash on hand and amounts due from banks, including the Central Bank and banks abroad: Provided, however, That said percentage may not exceed one twentieth of one per cent (1/20 of 1%). If the total of the maximum fees authorized under this paragraph should be insufficient to defray the entire costs of the department, the difference shall be borne by the Central Bank.

Section 29 Proceedings upon insolvency.

SEC. 29. Proceedings upon insolvency.—Whenever, upon examination, by the Superintendent or his examiners or agents into the condition of any banking institution, it shall be disclosed that the condition of the same is one of insolvency, or that its continuance in business would involve probable loss to its depositors or creditors, it shall be the duty of the Superintendent forthwith, in writing, to inform the Monetary Board of the facts, and the Board, upon finding the statements of the Superintendent to be true, shall forthwith forbid the institution to do business in the Philippines and shall take charge of its assets and proceeds according to law.

The Monetary Board shall thereupon determine within thirty days whether the institution may be reorganized or otherwise placed in such a condition so that it may be permitted to resume business with safety to its creditors and shall prescribe the conditions under which such resumption of business shall take place. In such case the expenses and fees in the administration of the institution shall be determined by the Board and shall be paid to the Central Bank out of the assets of such banking institution.

At any time within ten days after the Monetary Board taken charge of the assets of any banking institution, institution may apply to the Court of First Instance for an order requiring the Monetary Board to show cause why it should not be enjoined from continuing such charge of its assets, and the court may direct the Board to refrain from further proceedings and to surrender charge of its assets.

If the Monetary Board shall determine that the banking institution cannot resume business with safety to its creditors, it shall, by the Solicitor General, file a petition m the Court of First Instance reciting the proceedings which have been taken and praying the assistance and supervision of the court in the liquidation of the affairs of the same. The Superintendent shall thereafter, upon order of the Monetary Board and under the supervision of the court and with all convenient speed, convert the assets of the banking institution to money.

Section 30 Distribution of assets.

SEC. 30. Distribution of assets.—In case of liquidation of a banking institution, after payment of the costs of the proceedings, including reasonable expenses and fees of the Central Bank to be allowed by the court, the Central Bank shall pay the debts of such institution, under order of the court, in accordance with their legal priority.

Section 31 Disposition of fees and commissions.

SEC. 31. Disposition of fees and commissions.—All costs and fees earned by the Central Bank in winding up the affairs and administering the assets of any banking institution within the purview of this Act shall be used to pay the salaries of the clerks and other employees whose employment is rendered necessary in the discharge of the trust, together with other additional expenses caused thereby. The balance of fees and costs earned, after the payment of all expenses, shall be for the account of the Central Bank.

Section 32 Refusal to make reports or permit examination.

SEC. 32. Refusal to make reports or permit examination.—Any owner, agent, manager, or other officer in charge of any banking institution within the purview of this Act who, being thereunto required in writing by the Monetary Board or by the Superintendent, shall willfully refuse to file the required report or permit any lawful examination into the affairs of such institution shall be punished by a fine of not more than ten thousand pesos or by imprisonment for not more than one year, or by both, in the discretion of the court.

Section 33 False statement.

SEC. 33. False statement.—The willful making of a false statement to the Monetary Board or to the Superintendent of Banks or to his examiners shall be punished by a fine not to exceed fifteen thousand pesos, or by imprisonment for a term not to exceed two years, or by both, in the discretion of the count.

Section 34 Proceedings upon violation of laws and regulations.

SEC. 34. Proceedings upon violation of laws and regulations.— Whenever any person or entity willfully violates this Act or any order, instruction, rule or regulation legally issued by the Monetary Board, the person or persons responsible for such violation shall be punished by a fine of not more than twenty thousand pesos and by imprisonment of not more than five years.

Whenever a banking institution persists in violating its charter or by-laws or any law, or orders, instructions, rules or regulations legally issued by the Monetary Board, or whenever a banking institution persists in carrying on its business in an unlawful or unsafe manner, the Board shall, by the Solicitor General, and without prejudice to the penalties provided in the preceding paragraph of this section, file a petition in the Court of First Instance praying the assistance of the court to compel the banking institution to discontinue the violations or practices objected to in the petition of the Board. The Monetary Board may, with the approval of the court, take such action as the court may deem necessary compel the banking institution complained against to discontinue the violations or practices set forth in the Boards petition, and, if necessary, the Board may, under order of the court, direct the Superintendent of Banks to liquidate the business of the institution.

C. OTHER DEPARTMENTS OF THE CENTRAL BANK

Section 35 Organization of other departments.

SEC. 35. Organization of other departments.—The Monetary Board shall organize a foreign exchange department, a credit department, and such other departments as it deems convenient for the proper and efficient conduct of the business of the Central Bank. The powers and duties of the departments shall be determined by the Monetary Board, within the authority granted to the Board and the Central Bank under this act.

Section 36 Reports and publications.

SEC. 36. Reports and publications.— Within the first eight days of each month the Central Bank shall publish a general balance sheet showing the volume and composition of its assets and liabilities as of the last working day of the preceding month.

Section 37 Annual report.

SEC. 37. Annual report.—Before the end of March of each year the Central Bank shall submit to the President of the Philippines, to the Senate through its President, to the House of Representatives through its Speaker, and shall publish an annual report on the condition of the Bank and a review of the policies and measures adopted, by the Monetary Board during the past year and an analysis of the economic and financial circumstances which gave rise to said policies and measures.

The annual report shall also include a statement of the financial condition of the Central Bank and a statistical appendix which shall present, as a minimum, the following data:

(a) The monthly movement of the money supply, distinguishing between currency and deposit money;

(b) The monthly movement of purchases and sales of exchange and of the international reserve of the Bank;

(c) The balance of payments of the Philippines;

(d) Monthly indices of wages, of the cost of living and of import and export prices;

(e) The monthly movement, in summary form, of exports and imports, by volume and value;

(f) The monthly movement of the accounts of the Central Bank and of other banks, by groupings and classifications to be determined by the chief of the Department of Economic Research in agreement with the Superintendent of Banks;

(g) The principal data on Government receipts and expenditures and on the status of the public debt, both domestic and foreign; and

(h) The texts of the major legal and administrative measures adopted by the Government and the Monetary Board during the year which relate to the functions or operations of the Central Bank or of banking institutions operating in the Philippines.

Section 38 Signatures on statements.

SEC. 38. Signatures on statements.—The balance sheets and other financial statements of the Central Bank shall be signed by the officers responsible for their preparation, by the Governor, and by the auditor of the Bank.

Section 39 Fiscal year.

SEC. 39. Fiscal year.—The fiscal year of the Bank shall begin on January first and end on December thirty-first of each year.

Section 40 Computation of profits and losses.

SEC. 40. Computation of profits and losses.—Within the first thirty days following the end of each fiscal year, the Central Bank shall determine its net profits or losses. In the calculation of net profits, the Bank shall make adequate allowance or establish adequate reserves for bad and doubtful accounts.

Section 41 Distribution of net profits.

SEC. 41. Distribution of net profits.—Within the first sixty days following the end of each fiscal year, the Monetary Board shall determine and carry out the distribution of the net profits, in accordance with the following rules:

(a) Twenty-five per cent (25%) of the net profits shall be carried to surplus until such time as the total capital accounts of the Bank reach a sum equivalent to at least ten per cent (10%) of the total assets of the Bank less its assets in gold and foreign currencies;

(b) Any net profits remaining after fulfilling the conditions established in subsection (a) of this section shall be used to increase the resources of the Securities Stabilization Fund, until the volume and liquidity of the Fund's assets are considered ample for any open market operations in which the Fund is deemed likely to engage;

(c) Any net profits remaining after fulfilling the conditions of subsections (a) and (b) of this section shall be used to reduce the Account to Secure the. Coinage or the Monetary Adjustment Account until said accounts shall have been liquidated. The Monetary Board shall determine the distribution between these two accounts;

(d) If any net profits remain after fulfilling the conditions of subsections (a), (b) and (c) of this section, the balance or any part thereof may be transferred, to surplus, or may be used to liquidate Government obligations to the Central Bank, or may be paid into the General Fund of the Government. The Monetary Board shall determine this distribution.

Section 42 Distribution of net losses.

SEC. 42. Distribution of net losses.— Should the Central Bank incur net losses during any fiscal year, such losses shall be debited to surplus, and if surplus be inadequate the balance shall be debited to the capital of the Bank.

Section 43 Extraordinary expenses of currency issue and monetary stabilization.

SEC. 43. Extraordinary expenses of currency issue and monetary stabilization.—The Monetary Board may, whenever it deems it advisable, exclude from the computation of the annual profits and losses of any given fiscal year all or part of the following extraordinary expenses incurred during that year:

(a) Extraordinary costs of printing notes or of minting coins;

(b) Extraordinary expenditures arising from the 0sue and service of the evidences of indebtedness to which reference is made in section 98; and

(c) Interest paid on bank reserves which exceed fifty per cent (50%) of bank deposits, in conformity with the provisions of section 101, last paragraph, of this Act.

The amounts which are excluded from the computation of profits and losses in accordance with the provisions of the first paragraph of this section shall be entered in a suspense account which shall be called the "Monetary Adjustment Account."

The Monetary Board shall in every case amortize such expenses over a period which shall not exceed five years and at a rate which shall be based on the adequacy of the Bank's surplus and of the resources of the Securities Stabilization Fund.

Section 44 Revaluation profits and losses.

SEC. 44. Revaluation profits and losses.—The revaluation profits or losses made or assumed by the Central Bank m accordance with the provisions of sections 77 and 83 of this Act shall not be included in the computation of the annual profits and losses of the Central Bank.

Any profits or losses arising in this manner shall be offset by any amounts which, as a consequence of such revaluations are owed by the Philippines to the International Monetary Fund and the International Bank for Reconstruction and Development or are owed by these institutions to the Philippines. Any remaining profit or loss shall be carried in a special frozen, account which shall be named "Revaluation of International Reserve" and the net balance of which shall appear either among the liabilities or among the assets of the Central Bank, depending on whether the revaluations have produced net profits or net losses.

The Revaluation of International Reserve account shall be neither credited nor debited for any purposes other than those specifically authorized in the present section or in section 45 of this Act.

Section 45 Profits from recoinage or from reductions in the Bank's currency liabilities.

SEC. 45. Profits from recoinage or from reductions in the Bank's currency liabilities.—Any profits arising from a remitting of coins or from a reduction in the currency liabilities of the Central Bank as a consequence of the loss, destruction or demonetization of notes and coins shall not be included in the computation of the annual profits of the Central Bank.

Any such profits shall be used to reduce the Monetary Adjustment Account, the Account to Secure the Coinage, or the asset account Revaluation of International Reserve. The distribution of such profits among these accounts shall be determined by the Monetary Board.

If none of said accounts exists, the profits to which this section refers shall be used to increase the resources of the Securities Stabilization Fund.

Section 46 Appointment and personnel.

SEC. 46. Appointment and personnel.—The Auditor-General shall appoint a representative who shall be the auditor of the Central Bank. The Auditor-General shall appoint the necessary personnel to assist said representative in the performance of his duties. The salaries of the auditor and his staff shall be determined by the Auditor-General with the advice of the Monetary Board. Said salaries and aid other expenses of maintaining the auditor office shall be paid by the Central Bank. The auditor of the Central Bank said personnel under him may be removed only by the Auditor-General.

The representative of the Auditor-General must be a certified public accountant with at least ten years experience as certified public accountant or a person who has had training and experience in commercial or central banking. No relative of any member of the Monetary Board or the Auditor-General within the sixth degree of consanguinity or affinity shall be appointed such representative.

Section 47 The peso.

SEC. 47. The peso.—The unit of monetary value in the Philippines is the "peso," which is represented by the sign “P.”

The peso is divided into one hundred equal parts called "centavos," which are represented by the "c."

Section 48 Par value.

SEC. 48. Par value.—The gold value of the peso is seven and thirteen-twenty firsts (7-13/21) grains of gold, nine-tenths (0.900) fine, which is equivalent to the United States dollar parity of the peso as provided in section 6 of Commonwealth Act No. 699.

Section 49 Changes in par value.

SEC. 49. Changes in par value.— The par value of the peso shall not be altered except when such action is made necessary by the following circumstances:

(a) When the existing par value would make impossible the achievement and maintenance of a high level of production, employment and real income without:

(1) The depletion of the international reserve of the Central Bank; or

(2) The chronic use of restrictions on the convertibility of the peso into foreign currencies or on the transferability abroad of funds from the Philippines; or

(3) Undue Government intervention in, or restriction of, the international flow of goods and services; or

(b) When uniform proportionate changes in par values are made by the countries which are members of the International Monetary Fund; or

(c) When the operation of any executive or international agreement to which the Republic of the Philippines is a party requires an alteration in the gold value of the peso.

Any modification in the gold or dollar value of the peso must be in conformity with the provisions of all executive and international agreements subscribed to and ratified by the Republic of the Philippines, and such modification shall be made only by the President of the Republic upon the proposal of the Monetary Board and with the approval of Congress. The proposal of the Monetary Board shall require the concurrence of at least five of the members of Board.

Notwithstanding the provision of the proceeding paragraph with respect to the approval of Congress, if there should be an .emergency which, in the opinion of the President, is so grave and so urgent as to require immediate action, the President may modify the par value of the peso without the prior approval of Congress: Provided, however, That he shall report to the Congress on his action at the earliest opportunity.