QuestionsQuestions (PRESIDENTIAL DECREE NO. 251)
The Land Bank of the Philippines is created as a body corporate and government instrumentality with a principal place of business in Greater Manila. Its purpose is to provide timely and adequate financial support in all phases involved in the execution of needed agrarian reform.
The legal existence of the Land Bank is for a period of fifty (50) years from the date of approval of this decree.
The Bank has powers including prescribing its own by-laws, holding and disposing of property, suing and contracting, granting loans, financing farm lot acquisition, investing in securities, guaranteeing obligations, borrowing from the Central Bank, acting as trustee, and exercising general corporate powers consistent with this Decree.
The Land Bank finances acquisition under modes such as 10% cash and balance in 25-year tax-free 6% bonds, payment of 30% in preferred shares and balance in bonds, full guarantee of annual amortizations, establishment of annuities, exchange arrangements for government stocks, and other modes approved by the Board and the President.
The Bank may issue bonds up to ten times its paid-in capital and surplus, with approval from the President and consultations with key bodies. Bonds are redeemable by the Bank, bear interest rates fixed by the Bank, are secured by Bank assets, exempt from taxation, fully government guaranteed, negotiable, and may be mortgaged according to banking practices.
The Board has seven members: the Secretary of Finance (Chairman), President of the Bank (Vice-Chairman), Secretary of Agrarian Reform, Secretary of Labor (ex officio members), and three elected members. They formulate policies, approve budgets, establish branches, and oversee the Bank's operations.
The President is appointed and removable by the Board with advice and consent of the President of the Philippines. Executive officers must be of good moral character, unquestionable integrity, recognized competence in relevant fields, at least 35 years old, and possess demonstrated administrative skill.
The Land Bank is exempt from all national, provincial, municipal, and city taxes and assessments on its property, resources, receipts, expenditures, profits, income, and related contracts and transactions. These exemptions apply only to taxes payable by entities doing business with the Bank.
Directors, officers, employees, agents, or persons who violate the provisions shall be punished by a fine not exceeding ten thousand pesos (P10,000), imprisonment of not more than five years, or both, at the discretion of the Court.
The Special Guaranty Fund is set up by the Government to pay obligations if the Bank is unable. The Government pays five million pesos annually until the fund total reaches no less than 20% of the outstanding net obligation of the Bank. The fund is administered by the Central Bank of the Philippines.