Authorized types of operations.
Section 87
SEC. 87. Authorized types of operations.—Subject to the principles stated in the preceding section of this Act, the Central Bank may normally and regularly carry on the following credit operations with banking institutions operating in the Philippines: (a) Commercial credits.—The Central Bank may rediscount, discount, buy and sell bills, acceptances, promissory notes and other credit instruments with maturities of not more than 180 days from the date of their rediscount, discount or acquisition by the Central Bank and resulting from transactions related to: (1) The importation, exportation, purchase or sale of readily salable goods and products, or their transportation within the Philippines; or (2) The storing of nonperishable goods and products which are duly insured and deposited, under conditions assuring their preservation, in authorized bonded warehouses or in other places approved by the Monetary Board. (b) Production credits. —The Central Bank may rediscount, discount, buy and sell bills, acceptances, promissory notes and other credit instruments having maturities of not more than 270 days from the date of their rediscount, discount or acquisition by the Central Bank and resulting from transactions related to the production or processing of agricultural, animal, mineral or industrial products. Documents or instruments acquired in accordance with this subsection shall be secured by a pledge of the respective crops or products. (c) Advances.—The Central Bank may grant advances against the following kinds of collateral for fixed periods which, with the exception of advances against the collateral named in clause (4) of the present subsection, shall not exceed I8O days: (1) Gold coins or bullion; (2) Securities representing obligations of the Central Bank or of other domestic credit institutions of recognized solvency; (3) The credit instruments to which reference is made in subsection, (a) of this section; (4) The credit instruments to which reference is made in subsection (b) of this section, for periods which shall not exceed 270 days; (5) Utilized portions of advances in current account covered by regular overdraft agreements related to operations included under subsections (a) and (b) of this section, and certified as to amount and liquidity by the institution soliciting the advance; (6) Negotiable treasury bills, certificates of indebtedness, notes and other negotiable obligations of the Government maturing within three years from the date of .the advance; and (7) Negotiable bonds issued by the Government of the Philippines, by Philippine provincial, city or municipal governments, or by any Philippine Government instrumentality, and having maturities of not more than ten years from the date of the advance. The rediscounts, discounts, loans and advances made in accordance with the provisions of this section may not be renewed or extended unless extraordinary circumstances fully justify such renewal or extension. Advances made against the collateral named in clauses (6) and (7) of subsection (c) of this section may not exceed; 80 per cent of the current market value of the collateral. C. EXTRAORDINARY CREDIT OPERATIONS