ARTICLE I.— The Exchange Standard Fund
Liquidation of the Exchange Standard Fund.
SEC. 134. Liquidation of the Exchange Standard Fund.— Prior to the date on which the Central Bank commences business, the Exchange Standard Fund shall be liquidated. The net assets of the Fund remaining after outstanding liabilities have been, met shall be used for the following purposes and in the following priority:
(a) Ten million (P10,000,000) pesos shall be used to subscribe to the capital stock of the Central Bank;
(b) Two million (2,000,000) pesos shall be transferred to the Securities Stabilization Fund; and
(c) The remainder shall be transferred to the Bank in accordance with the provisions of section 135.
ARTICLE II.—Retirement of Treasury Certificate and Coins
Assumption by the Central Bank of the liability for treasury certificates.
SEC. 135. Assumption by the Central Bank of the liability for treasury certificates.— On the date of which the Central Bank commences business, it shall assume the liability of the Treasury Certificate Fund for all outstanding treasury certificates. The amount of the liability shall be determined by the Secretary of Finance and certified by the Auditor-General. In consideration, for assuming this Inability the Treasurer of the Philippines shall transfer to the Bank all of the available assets of the Treasury Certificate Fund and that portion of the assets of the Exchange Standard Fund which may remain after deducting the amounts required to provide the capital of the Bank and the contribution to the Securities Stabilization Fund, as provided in the preceding section.
If the total assets thus transferred exceed the liability assumed, the difference shall be used to establish a reserve on the books of the Central Bank against the: contingency that the actual amount of treasury certificates which the Central Bank may be called upon to exchange for its own notes may prove to be larger than the liability originally assumed. If the total assets transferred should be less than liability assumed, the Secretary of Finance shall deliver to the Bank a non-interest bearing, non-negotiable note without fixed maturity in the amount of the difference.
The Central Bank shall, as soon as practicable, exchange outstanding treasury certificates for its own notes in accordance with the procedure described in section 59 of this Act. During the period of such exchange any treasury certificates exchanged, by the Bank in excess of the liability originally assumed for such certificates shall be charged, first, to the reserve mentioned in the preceding paragraph, if there be such reserve, and, second, to the deposit of the Government. At the expiration of the exchange period any remaining balance of the liability account for outstanding treasury certificates shall be applied, first, to reduce the face value of the note delivered by the Secretary of Finance in accordance with the preceding paragraph, if such a note has been issued, and, second, to reduce the Account to Secure the Coinage, the creation of which is provided for in the following section. Any remaining balance of the above-mentioned reserve shall be applied solely to reduce the Account to Secure the Coinage.
Assumption by the Central Bank of the liability for treasury coins.
SEC. 136. Assumption by the Central Bank of the liability for treasury coins.—On the date on which the Central Bank commences business, the total Philippine treasury coin issue, including coins dumped in Manila Bay but not yet salvaged, shall become a liability of the Bank. As a contra item against the liability thereby assumed there shall be set up on the books of the Central Bank an asset account in an amount equal to the face value of the total Philippine treasury coin issue. This account shall be called the "Account to Secure the Coinage."
The Central Bank shall, as soon as practicable, exchange treasury coins in circulation for Central Bank coins in accordance with the procedure described in section 59 of this Act. When the Monetary Board has completed the exchange of treasury coins for its own coins and has thereby determined the precise amount of the liability which it originally assumed for the treasury coin issue, the outstanding amount of the Account to Secure the Coinage shall be reduced by the difference between the original amount of the Account and the amount of the liability as finally determined.
ARTICLE III.—Extraordinary Advances to the Government
Extraordinary advances to the Government.
SEC. 137. Extraordinary advances to the Government. —Notwithstanding any provisions in the present Act to the contrary, the Central Bank may, until June 30, 1951, make direct advances to the Government when, in the opinion of the Monetary Board, the international reserve is adequate to meet all foreseeable demands upon it and when such advances are consistent with the achievement of the Boards objective of domestic monetary stability. The total advances made under the authority of this section shall not exceed two hundred million (P200,000,000) pesos.
The Bank shall make the above advances only against an equivalent amount of negotiable government securities having maturities which, insofar as possible, are appropriate to the uses to which the advances will be put, but which in no case shall exceed 15 years. In order .to permit their resale by the Central Bank, the securities shall be in denominations and bear interest rates which will make them attractive to the banks and to the public.
Advances shall be made only for certain purposes specifically authorized by law, and shall be made only for productive and income-producing projects, or for the repayment or servicing of external obligations of the Government.
ARTICLE IV.—Miscellaneous Provisions
Transfer of powers and functions of the Bureau of the Treasury to the Central Bank.
SEC. 138. Transfer of powers and functions of the Bureau of the Treasury to the Central Bank.— All powers, duties and functions vested in the Bureau of the Treasury and the Treasurer of the Philippines which by the provisions of this Act shall be exercised by the Bank are hereby transferred to the Central Bank.
SEC. 139. Transfer of authority, powers, and functions of the Bank Commissioner and the Bureau of Banking to the Central Bank.—All authority now vested in the Bank Commissioner and the Bureau of Banking with respect to the establishment, operation or liquidation of banking and credit institutions, and branches or agencies thereof, and all other powers, duties and functions vested in the Bureau, Ranking and the Bank Commissioner which by the protons of this Act shall be exercised by the Bank, are hereby transferred to the Central Bank.
Repeal of inconsistent laws.
SEC. 140. Repeal of inconsistent laws.— All laws, parts laws, and any special charters, or parts thereof, of banking and financial institutions inconsistent herewith are hereby repealed.
Exemption from restrictions on bank borrowing.
SEC. 141. Exemption from restrictions on bank borrowing.— The restrictions on bank borrowing which are contained in sections 6 and 7 of Act 3610 shall not apply bank borrowings from the Central Bank.
Effectivity of this Act.
SEC. 142. Effectivity of this Act.—This Act shall take effect upon approval. The Central Bank of the Philippines shall commence business upon organization of the Monetary Board and certification by the Secretary of Finance that the authorized capital of the Bank has been fully paid-in and that the Bank is ready for operation.
Approved, June 15, 1948.
Source: Official Gazette of the Republic of the Philippines — Philippine laws are public documents (works of the government).
