Section 9
SEC. 9. The same Act is further amended by adding the following sections after Section twelve thereof, which read as follows: "SEC. 12-A. The percentage of foreign-owned voting stocks in any domestic bank existing upon the effectivity of this Act, if such percentage is in excess of thirty per cent (30%) of the voting stock of the bank, shall not be increased, but may be reduced, and, once reduced, shall not be increased thereafter beyond thirty per cent (30%) of the voting stock of the bank. If the percentage of the foreign-owned voting stocks existing upon the effectivity of this Act is less than thirty per cent (30%) of the voting stock of the bank, this percentage may be increased up to thirty per cent (30%) of the voting stock of the bank with prior approval of the Monetary Board. These limitations on the increase of the percentage of foreign-owned voting stocks shall also apply to a merged or constituent bank arising from the merger or consolidation of domestic banks with foreign-owned voting stocks, and to a bank which has been established as a result of the local incorporation of a branch or agency of a foreign bank pursuant to Section sixty-eight of this Act. "Provided, however, That the Monetary Board may, with the approval of the President of the Philippines, increase the percentage of foreign-owned voting stocks in any domestic bank prescribed in the preceding paragraph from thirty per cent (30%) to forty per cent (40%). "The percentage of foreign-owned voting stocks in a bank shall be determined by the citizenship of the individual stockholders in that bank. In the case of corporations owning bank shares, the citizenship of each stockholders in that corporation shall be the basis of computing the percentage. In case the percentage of foreign-owned voting stocks in any domestic bank increases beyond that allowed under the first paragraph of this section due to: (a) A change in the citizenship of any stockholder of the bank or of any stockholder of a corporation owning shares of stock in that bank, and (b) A transfer to foreigners of Filipino-owned voting stocks in a corporation owning shares in the bank, the Monetary Board may, at its discretion, direct the bank concerned to take steps, within a reasonable period of time, to reduce the percentage of foreign-owned voting stocks in the bank to the original level before the increase. "Upon the effectivity of this Act, any sale or other forms of transfer of ownership of foreign-owned voting stocks in any domestic bank to other foreigners of entities with foreign-owned voting stocks, which sale shall raise the total of foreign-owned voting stocks thus sold or transferred from the effective date of this Act to more than forty per cent (40%) of the bank's voting stock, shall be subject to prior approval of the Central Bank. "Banks with foreign-owned voting stocks shall report to the Central Bank any sale or other forms of transfer of ownership of these stocks for purposes of determining compliance with the limitations on the percentage of foreign-owned voting stocks in domestic banks. "SEC. 12-B. The total voting stocks which any corporation, including its wholly or majority-owned subsidiaries, may own in any bank shall not exceed thirty per cent (30%) of the voting stock of that bank. In the case of a corporation which is wholly-owned, or the majority of the voting stock of which is owned by any one person or by persons related to each other within the third degree of consanguinity or affinity, that corporation may own not more than twenty per cent (20%) of the voting stock of any bank. However, the aggregate corporate holdings in any single bank shall be without limit: Provided, That if two or more corporations are owned or controlled by the same group of persons, the aggregate voting stocks which these corporations may own in any single bank shall not exceed thirty per cent (30%) of the voting stock of that bank. Provided, further, That if these corporations are owned or controlled by one person or groups of persons related to each other within the third degree of consanguinity or affinity, the aggregate voting stocks shall not exceed twenty per cent (20%) of the voting stock of that bank. "Any corporation owning more than thirty per cent (30%) of the voting stock of any bank upon the effectivity of this Act shall not increase such equity holdings in that bank, but these holdings may be reduced, and, once reduced, shall not be increased thereafter beyond thirty per cent (30%) of the voting stock of the bank. "Banks shall report to the Central Bank any sale or other forms of transfer of ownership of their shares of stock by and between corporations or individuals and corporations, for purposes of determining compliance with the limitations on bank equity holdings of corporations. "For purposes of this section, the term 'Corporation' shall include partnerships, cooperatives and associations. "SEC. 12-C. Corporations formed to hold equities of rural banks may only own equities in rural banks located within a particular region, as may be defined by the Central Bank, to the extent allowed by the preceding section. Any corporation organized to hold equities of rural banks must be partly owned by residents of the particular region where the rural bank or banks in which the equities are held are located. "SEC. 12-D. In order to promote the diffusion of bank ownership, especially of commercial banks, no new commercial bank shall be licensed to operate if the stockholdings of any person or persons related to each other within the third degree of consanguinity or affinity, constitute more than twenty per cent (20%) of the voting stock of the new bank. This limitation, as well as the limitations established under Section twelve-B of this Act, shall apply at all times to individual and corporate equity holdings in commercial banks that may be established hereafter. "Any person or persons with relations as specified in Section twelve-D of this Act, or any corporation which is wholly-owned or the majority of the voting stock of which is owned by such person or persons, owning more than twenty per cent (20%) of the voting stock of any bank upon the effectivity of this Act shall not increase these equity holdings in that bank, but these holdings may be reduced, and, once reduced, shall not be increased thereafter beyond twenty per cent (20%) of the voting stock of the bank."