Section 13
SEC. 13. Section 22 of the same Act is hereby further amended to read as follows: "SEC. 22. The combined capital accounts of each commercial bank shall not be less than an amount equal to ten percent (10%) of its risk assets which is defined as its total assets minus the following assets: "(a) Cash on hand; "(b) Amounts due from the Central Bank; "(c) Evidences of indebtedness of the Republic of the Philippines and of the Central Bank, and any other evidences of indebtedness or obligations the servicing and repayment of which are fully guaranteed by the Republic of the Philippines; "(d) Loans to the extent covered by hold-out on, or assignment of, deposits maintained in the lending bank and held in the Philippines; "(e) Loans or acceptances under letters of credit to the extent covered by margin deposits; and "(f) Other non-risk items which the Monetary Board may, from time to time, authorize to be deducted from total assets. "The Monetary Board shall prescribe the manner of determining the total assets of banking institutions for the purposes of this section, but contingent accounts shall not be defined as being included, among total assets. “The Monetary Board may, consistent with prudent banking and the general economic conditions obtaining at the time, prescribe ratios of net worth to risk assets lower than that hereinabove prescribed: Provided, That such ratios shall not be less than five percent (5%) : Provided, further, That the reduction from the ratio will apply uniformly to all banks, regardless of category, beyond a certain minimum size with respect to the level of their capital accounts: Provided, finally, That the Monetary Board may subsequently raise a ratio but any such upward adjustment shall be made effective only after a reasonable period of time. The Monetary Board may, at its discretion, require that the ratio of net worth to risk assets be determined on the basis of the combined risk assets of the parent bank and its subsidiaries, financial or otherwise. "Whenever the capital accounts of a bank are deficient with respect to the requirements of this Act, the Monetary Board, after considering a report of the appropriate supervising department on the state of solvency of the institution concerned, shall limit or prohibit the distribution of net profits and shall require that part or all of net profits be used to increase the capital accounts of the institution until the minimum requirement has been met. The Monetary Board may, furthermore, after considering the aforesaid report of the appropriate supervising department and if the amount of the deficiency justifies it, restrict or prohibit the making of new investments of any sort by the bank, with the exception of purchases of readily marketable evidences of indebtedness included under Subsection (c) of this Section, until the minimum required capital ratio has been restored. "Where in the process of a bank merger or consolidation, the merged or constituent bank may not be able to comply fully with the net worth to risk assets ratio herein prescribed, the Monetary Board may, at its discretion, temporarily relieve the bank from full compliance with this requirement under such conditions as it may prescribe."