Question & AnswerQ&A (PRESIDENTIAL DECREE NO. 195)
The main purpose of Presidential Decree No. 195 is to authorize the increase in the authorized capital stock and appropriate funds for the paid-up capital of the Development Bank of the Philippines (DBP) to enable it to sustain the credit requirements of a rapidly expanding economy.
The authorized capital stock of the Development Bank of the Philippines is increased to three billion pesos, divided into three million shares with a par value of one thousand pesos each.
The Government of the Republic of the Philippines fully subscribes to the capital stock of the Development Bank of the Philippines.
At least 50% of the surplus account as of June 30, 1962, at least 20% of future net profits, 50% of proceeds from the sale of reparations goods and services for 15 years, stabilization tax allocations, and conversion of certain obligations into paid-in capital.
Seventy-five million pesos is set aside as a trust fund to aid the establishment of private provincial and city development banks.
They are converted into paid-in capital by the Government, which assumes said obligations, with the President issuing treasury bonds or securities to the Central Bank of the Philippines to settle these obligations.
The decree takes effect immediately upon its signing on May 9, 1973.
The Secretary of Finance recommends to the President the issuance of treasury bonds, notes, or securities in settlement of the obligations and determines the terms and conditions in consultation with the Monetary Board.
Section Three of Republic Act No. 2081 (the DBP Charter), and it also refers to Section three of Republic Act No. 1789 and Section 4(c) of Republic Act No. 6125 (Stabilization Tax Law).