Composition and Appointment of the Monetary Board
- Monetary Board consists of seven members including the Governor (Chairman).
- Members include: Secretary of Finance, Director General of NEDA, Chairman of Board of Investments, an alternate government official, and three part-time private sector members.
- Appointments are made by the President with consent of the Commission on Appointments.
- Selection based on integrity, experience, and expertise.
Qualifications and Disqualifications for Monetary Board Members
- Must have good moral character, unquestionable integrity, recognized competence in related fields.
- Governor and deputy-governors must specialize in banking.
- Members must be natural-born Filipino citizens.
- Disqualified if holding public office (except academics, ex officio members) or connected to supervised banking institutions.
Meetings and Decision-Making of the Monetary Board
- Board meets at least biweekly.
- Quorum requires four members.
- Decisions require concurrence of at least four members, with exceptions for specific cases.
- Senior Deputy-Governor and Deputy-Governor for Economic Research attend meetings with voice but no vote.
Remuneration and Ethical Conduct
- Board members except Governor and Senior Deputy-Governor receive per diem for meetings.
- Members must withdraw from discussions where conflicts of personal interest arise.
- Such withdrawals and subject matter must be publicly recorded.
Authority and Responsibilities of the Monetary Board
- Formulate and issue necessary rules and regulations.
- Direct Central Bank's management and personnel actions.
- Authorize expenditures for effective operations.
- Hold members and employees liable for willful violations, gross negligence, or misuse of confidential information.
Remuneration and Appointment of Bank Executives
- Governor's salary fixed by Monetary Board with Presidential approval.
- Governor appoints senior deputy-governor and up to five deputy-governors.
- Senior Deputy-Governor acts as chief executive in Governor's absence.
- Deputy-Governors assigned specific areas; supervision of bank examinations vested in Deputy-Governor for Supervision.
Data Collection and Confidentiality
- Department of Economic Research authorized to obtain necessary data.
- Power to subpoena information from persons or entities.
- Refusal to comply incurs penalties.
- Individual firm data for statistical purposes kept confidential.
Training and Departmental Structure
- Central Bank promotes training in money and banking.
- Supervising and examining departments oversee compliance.
- Examiners have authority to administer oaths and compel documents.
- Supervising departments managed by Deputy-Governor for Supervision.
Prohibitions for Central Bank Personnel
- Prohibited from affiliations or receiving gifts from supervised institutions.
- Forbidden from disclosing confidential information except under court order or to authorized persons.
- Borrowing restrictions imposed to avoid conflict of interest.
Examination and Fees for Supervised Institutions
- Annual and special examinations mandated.
- Reports submitted to Monetary Board.
- Institutions must allow examination and pay annual fees proportional to assets.
- Fees capped at 0.05% of average total assets.
Conservatorship and Insolvency Proceedings
- Monetary Board may appoint conservators for banks unable to maintain solvency.
- Conservator powers include managing assets and restoring viability.
- If continuation risks depositors/creditors, court-assisted liquidation follows.
- Banking institutions forbidden from operating if insolvent.
Penalties for Non-Compliance and Misconduct
- Willful refusal to report: fine up to ₱10,000 or imprisonment up to one year.
- False statements: fine up to ₱15,000 or imprisonment up to two years.
- Violations of laws/orders: fine up to ₱20,000 and imprisonment up to five years.
- Administrative sanctions include fines, suspension, removal from office, or suspension of privileges.
Annual Reports and Financial Transparency
- Central Bank to submit annual reports to the President and Congress.
- Reports include policy review, economic analysis, and financial condition.
- Statistical data includes money supply, exchange rates, balance of payments, prices, etc.
Monetary and Exchange Rate Policies
- Board controls money supply, credit, and prices to maintain balanced growth.
- Defines terms like money supply and credit annually.
- Takes remedial measures for abnormal economic movements and reports to government.
- Maintains par value and convertibility of the peso.
- Exchange rates set and regulated by the Monetary Board.
Currency Issuance and Legal Tender
- Central Bank has exclusive authority to issue currency.
- Unauthorized currency circulation is prohibited.
- Notes and coins are legal tender with specified limits on coin denominations.
- Checks do not have legal tender power unless cleared.
Purchasing and Selling Gold and Foreign Exchange
- Central Bank may buy/sell gold and foreign exchange.
- Powers include regulating gold possession and foreign exchange transactions.
- Emergency restrictions can be imposed with Presidential approval.
Credit Operations and Lending
- Central Bank may grant rediscounts, advances, production credits, and special loans.
- Collateral accepted includes gold, securities, credit instruments, government obligations.
- Interest rates set by the Monetary Board.
- Provisions for emergency loans during financial panic included.
Reserve Requirements and Interbank Settlements
- Banks must maintain reserves proportional to deposits.
- Reserve substitutes defined and regulated.
- Penalties for reserve deficiencies.
- Central Bank provides nationwide interbank clearing facilities.
Interest Rates and Charges Regulation
- Monetary Board fixes maximum interest rates and may set differentials.
- Can fix maximum commissions and charges to prevent evasion.
Official Depository and Service Charges
- Central Bank is official depository for government and related entities.
- Does not charge fees for government services.
- May pay interest on government deposits and bank reserves.
Employment and Civil Service Regulations
- Appointments adhere to Civil Service Law, except for policy or highly confidential positions.
- Board has authority for promotions and transfers.
- Employees barred from partisan political activities except voting.
- Removal or suspension only for just cause.
Effectivity and Implementation
- The decree takes effect immediately upon promulgation.
- Enacted by President Ferdinand E. Marcos under powers vested by the Constitution and Proclamation No. 1081.
This comprehensive legal framework strengthens the Central Bank's role in managing the banking system, monetary policy, and safeguarding the economy through clear structural, operational, and regulatory provisions.