Capitalization and initial funding
- The Corporation has an authorized capital of Two Billion Pesos (P2,000,000,000.00).
- Five Hundred Million Pesos (P500,000,000.00) of the authorized capital is initially subscribed.
- Twenty Five Million Pesos (P25,000,000.00) is paid for by the Central Bank of the Philippines.
Responsibilities and program objectives
- The Corporation is responsible for administering a program for the rescheduling and repayment of the foreign currency debt of the private corporate sector.
- The Corporation must use its powers to achieve these principal objectives:
- Provide flexible options for repayment of outstanding foreign currency debt in a manner consistent with the continuing financial viability and debt service capability of private corporate sector borrowers and their creditors.
- Provide forward exchange protection to corporations that wish to avail themselves of such cover.
- Assist the Central Bank in managing the outflow of foreign exchange from the Philippines consistent with the Government economic adjustment program.
Corporate powers and permitted transactions
- The Corporation may enter into forward exchange transactions or any other transaction with any domestic non-99 financial entity, enterprise or corporation duly registered and/or licensed under the laws of the Republic of the Philippines to hedge foreign exchange risk associated with foreign currency-denominated restructured debt.
- The Corporation may extend peso-denominated loans to such domestic non-financial entity, enterprise, or corporation, provided the loan proceeds are utilized solely to settle its restructured foreign currency-denominated debt.
- The Corporation may obtain or arrange borrowings from domestic or foreign sources when necessary and when warranted.
- The Corporation may buy, sell, and deal in foreign exchange.
- The Corporation may make contracts.
- The Corporation may lease or own real and personal property and may sell, mortgage, or otherwise dispose of the same.
- The Corporation may sue and be sued.
- The Corporation may adopt, alter, and use a corporate seal.
- The Corporation may invest funds not needed for operations.
- The Corporation may exercise the general power of a corporation in the Corporation Code of the Philippines insofar as the exercise is not inconsistent with this Decree and otherwise is necessary or proper to accomplish its objectives, or essential to proper operations, or as directed by the President of the Philippines.
Foreign borrowing and state guarantee
- The Corporation may contract foreign currency loans, credits, or indebtedness with the guarantee of the Republic of the Philippines.
- Foreign borrowing is subject to the terms agreed with the lenders.
- Foreign borrowing requires concurrence of the Monetary Board, either general or specific.
- Foreign borrowing requires final approval of the President of the Philippines.
Exchange profits and losses treatment
- All foreign exchange profits and losses arising from the Corporation’s forward exchange operations and other foreign exchange transactions are chargeable against the revaluation account of the Central Bank.
- The chargeable treatment is governed in accordance with Republic Act No. 265, as amended.
Board of directors composition and terms
- The Corporation’s powers and authority are vested in, and exercised by, a Board of Directors.
- The Board consists of:
- The Governor, Central Bank of the Philippines, as ex-officio Chairman.
- A Vice-Chairman.
- Five other members.
- Ex-officio members include:
- The Chairman of the Development Bank of the Philippines.
- The President of the Philippine National Bank.
- Two members from the Monetary Board, to be designated by the Monetary Board.
- Appointive members include:
- Two other members from the government or private sector appointed by the President of the Philippines.
- Appointive members serve for one year from the date of appointment and until their successors have been duly appointed and qualified.
- The Board elects from among themselves the Vice-Chairman.
- In case of death, resignation, removal, or disqualification of the Vice-Chairman or any Board member, the successor holds office for only the un-expired portion of the term.
Board powers, meetings, and per diems
- The Board formulates policies to carry out effectively the provisions of the Decree, subject to approval of the President of the Philippines.
- The Board prepares and issues rules and regulations necessary for effective discharge of the Corporation’s responsibilities and exercise of its powers.
- The Board directs the management, operations, and administration of the Corporation.
- The Board authorizes expenditures in the interest of effective administration and operations.
- The Board exercises other powers necessary to accomplish the purposes for which the Corporation was organized.
- The Board meets regularly at least once a month at the Corporation’s office unless otherwise determined by the Board.
- Special meetings are held whenever requested by the Chairman or on the written request of two (2) directors.
- Board members are entitled to per diems for every meeting actually attended, in an amount the Board deems appropriate, but not exceeding:
- Five hundred pesos (P500.00) per meeting, and
- Two thousand pesos (P2,000.00) for any single month.
Officers, appointments, and internal leadership
- The Corporation has the following officers: Chairman, Vice-Chairman, General Manager, and Deputy General Manager.
- The General Manager, Deputy General Manager, and all other officers and employees are appointed by the Chairman, with confirmation by the Board.
- The Central Bank may assign any of its officials or employees to the Corporation on detail.
- Such detail is deemed in the interest of the service and is not disciplinary, notwithstanding any contrary provision in existing law.
- Detail assignments do not suspend or interrupt the continuity of the official’s or employee’s services with the Central Bank.
- Detailed Central Bank officials and employees receive the remuneration and emoluments due from the Central Bank.
- Detailed Central Bank officials and employees do not receive any additional compensation from the Corporation.
- The Corporation pays directly or reimburses the Central Bank the remuneration and emoluments of Central Bank officials and employees detailed to the Corporation.
Chairman and quarterly reporting duties
- The Chairman presides at all Board meetings.
- The Chairman submits to the President of the Philippines quarterly reports on the Corporation’s activities and operations and containing information relating to Board proceedings and policies.
Vice-Chairman and succession in absence
- The Vice-Chairman performs the Chairman’s duties in the event of the Chairman’s absence or in the event of the Chairman’s death, inability, or refusal to act.
- The Board may assign the Vice-Chairman such other duties as it sees fit from time to time.
General Manager qualifications and functions
- The General Manager is the chief executive officer of the Corporation.
- No person may be appointed General Manager unless the person is:
- At least thirty five (35) years of age,
- Of good moral character and reputation, and
- Has reputed proficiency, expertise and recognized competence in banking and economics, or finance, management, government administration, or law.
- The General Manager:
- Prepares the agenda for Board meetings and submits policies and measures to the Board to carry out the Corporation’s purposes and objectives.
- Executes and administers policies, measures, orders, and resolutions approved by the Board.
- Executes contracts on behalf of the Corporation and enters into transactions required or permitted by the Decree upon proper Board authorization.
- Recommends appointment, promotion, assignment, or removal of subordinate officers and employees.
- Reports periodically to the Board on operations.
- Performs other functions delegated by the President with Board approval.
Deputy General Manager acting role
- In the absence of the General Manager or in the event of the General Manager’s death, inability, or refusal to act, the Deputy General Manager exercises the General Manager’s powers and performs the General Manager’s duties.
- The Deputy General Manager performs other duties assigned by the General Manager or the Board.
Audit, Commission on Audit role
- The Chairman of the Commission on Audit acts as the ex-officio Auditor of the Corporation.
- The Commission on Audit Chairman appoints a representative who acts as the Auditor of the Corporation.
- The Commission on Audit Chairman fixes the Auditor’s salary and appoints and fixes salaries of necessary personnel to assist the Auditor, subject to Board approval.
- The Auditor and personnel may be removed only by the Chairman of the Commission on Audit.
Tax exemption and immunity from taxes
- The Corporation is exempt from all national, provincial, municipal and city taxes, fees, charges and assessments.
- The exemption applies to taxes, fees, charges, and assessments now in force or hereafter established.
Repeal and immediate effectivity
- All laws, decrees, executive orders, rules and regulations inconsistent with the Decree are repealed, amended, or modified accordingly.
- The Decree takes effect immediately.
- The Decree is dated November 26, 1985 and was done in the City of Manila, Philippines on that date.