QuestionsQuestions (PRESIDENTIAL DECREE NO. 1937)
It aims to make the Central Bank’s monetary, banking, and credit policies more responsive to the needs of economic development, and to give the Central Bank greater flexibility in administering and directing the monetary and credit system.
Data on individual firms gathered by the Central Bank’s departments shall not be made available outside the Central Bank unless under an order of the court or under conditions prescribed by the Monetary Board. However, collective data on firms may be released to interested persons or entities.
It provides that for data on banks, the provisions of Section 27 apply.
When, based on a report by the appropriate supervising or examining department, the Monetary Board finds that a bank or a non-bank financial intermediary performing quasi-banking functions is in continuing inability or unwillingness to maintain adequate liquidity to protect depositors and creditors.
To take charge of assets, liabilities, and management; collect monies and debts; exercise necessary powers to preserve assets, reorganize management, and restore viability; and to overrule or revoke actions of the previous management and board in performing the relevant functions, notwithstanding any law to the contrary.
Only if there is convincing proof that the action is plainly arbitrary and made in bad faith.
Within ten (10) days from the date the conservator or receiver takes charge of assets and liabilities (or, in liquidation, within ten (10) days from receipt of notice of liquidation).
The petitioner/plaintiff must file a bond “in an amount to be fixed by the court.” If a restraining order/injunction is granted, it is refused or dissolved upon Central Bank filing a bond (cash or Central Bank cashier’s check) in an amount twice the petitioner’s/plaintiff’s bond, conditioned to pay damages suffered by refusal or dissolution.
It means that the realizable assets of a bank or non-bank financial intermediary (as determined by the Central Bank) are insufficient to meet its liabilities.
It may be up to five thousand pesos (PHP 5,000) a day for each type of violation. Attendant circumstances such as nature and gravity of the violation and the size of the bank are considered.
The Monetary Board may declare such person disqualified to become a director or officer, or hold any position (elective, appointive, or consultancy) in any financial institution supervised or regulated by the Central Bank, until after appropriate proceedings that the person is declared qualified.
Also up to five thousand pesos (PHP 5,000) a day for each type of violation, considering attendant circumstances such as nature, gravity, and size of the intermediary.
Consistent with monetary policy and international agreements, the Monetary Board may declare such revaluation profits/losses to be for the account of the Central Bank until banks give notice to the contrary. The notice must be communicated at least eight days before the revaluation risks cease to be for the account of the Central Bank, and it applies only to acquisitions after the effective date.
Waiver may be granted with the concurrent vote of at least five members for loans to government-owned or government-controlled banking institutions, provided the loans/advances are guaranteed by the Government or the government financial institution. Overdrafts incurred in a financial institution’s or the Government’s account with the Central Bank must be eliminated within the period prescribed by Central Bank regulations; at the Monetary Board’s discretion, it may be converted into an emergency loan/advance governed by Section 90.
Such reserve requirement deposits are exempt from attachment, garnishment, or any other court/government/administrative process to satisfy claims of parties other than the Government (or its political subdivisions or instrumentalities).
The Monetary Board may exclude certain extraordinary expenses from annual profit/loss computation and enter the amounts in a suspense account called the “Monetary Adjustment Account.” Similarly, the “Exchange Stabilization Adjustment Account” is created for exchange-related expenses (interest/commitment fees on foreign loans and documentation/other expenses) excluded from annual profit/loss computation; both are amortized based on adequacy of the Bank’s profit.