QuestionsQuestions (OMB OFFICE ORDER NO. 05-303, S. 2005)
Acts No. 1865, enacted on June 18, 1908.
It is known as the “Agricultural Bank of the Philippine Government,” with its principal office and place of business in the city of Manila.
One million pesos, appropriated out of the general funds of the Insular Treasury not otherwise appropriated, as and for the bank’s capital.
The bank may receive deposits of funds of provinces, municipalities, the Postal Savings Bank, societies, corporations, and private persons; and the Postal Savings Bank and provincial and municipal governments are authorized to make such deposits. Interest paid shall not exceed four per centum per annum.
The board consists of (1) the Secretary of Finance and Justice (and in his absence or disability, the Acting Secretary of Finance and Justice), (2) the Insular Treasurer (and in his absence or disability, the Acting Insular Treasurer), and (3) three citizens appointed by the Governor-General with the advice and consent of the Philippine Commission. The Secretary of Finance and Justice (or Acting Secretary) is ex officio president of the board.
Three members of the board constitute a quorum at any meeting.
The Insular Treasurer (and in his absence or disability, the Acting Insular Treasurer) is the manager. The bond of the Insular Treasurer, or Acting Insular Treasurer in cases of absence/disability, is liable for the faithful performance of his duties as manager.
With the approval of the Governor-General, the Insular Treasurer may constitute provincial and municipal treasurers as agents. As agents, they have official responsibility, and their bonds are liable for faithful performance, safekeeping, and accounting of money/property of the bank in their custody.
Upon request of the board of directors or the manager, the Governor-General may require any officer or employee of the Government to perform services or render assistance deemed proper by him, subject to the Civil Service Act and rules and the bank’s by-laws.
The Attorney-General is the legal adviser. He may require services from provincial fiscals as he deems best in the interest of the bank.
The bank may make loans only for payment/satisfaction of encumbrances on agricultural lands, for construction of drainage and irrigation works, and for purchase of fertilizers, agricultural seeds, machinery, implements, and animals to be used exclusively by the borrower for agricultural purposes. It cannot make loans to persons/corporations not engaged in agricultural pursuits.
No borrower may receive less than P50 nor more than P25,000. Also, 50% of the bank’s capital must be set apart for loans of not more than P5,000 to any one person or corporation.
A first mortgage on unincumbered improved urban property or on incumbered agricultural land (subject to limitations). The loan may not exceed 40% of the value of the property. The Attorney-General must certify and the board must be satisfied that the real estate is free from encumbrances and that title is in the mortgagor. Mortgages must include a covenant requiring the mortgagor to insure strong-material buildings in favor of the mortgagee up to value fixed by the board.
It may be a chattel mortgage to the bank on crops already harvested, gathered, and stored. The loan must not exceed 40% of the market value of the crops as of the loan date. The mortgaged property (the crops) must be insured by the mortgagor for the full amount of the loan.
Registration with the register of deeds must be done in the jurisdiction where the property is situated. The register of deeds must indorse the date and hour of reception, and such registration constitutes notice to all the world of the lien and its terms. Registration expenses are paid by the borrower.
Interest/charges: the bank cannot exact more than 10% per annum on any loan (Sec. 14). Fees/commissions: no fee/charge/commission may be demanded or paid for granting/obtaining loans (Sec. 16). Loan term: loans cannot exceed 10 years, and may be payable in installments as the board determines (Sec. 15).
Within one year after the foreclosure sale, the mortgagor may redeem by paying the amount found due by the court in the foreclosure decree plus interest at the rate specified in the mortgage, as well as all costs incurred by the bank due to foreclosure and sale and care of the property.