Philippine Bank Rehabilitation Act

Creates a Financial Rehabilitation Board composed of five members.
Members are nominated by the President and appointed with the Commission on Appointments' consent.
The Board manages and invests the Rehabilitation Fund according to the Act's purposes.
Board regulates salaries and expenses of banks receiving aid.
Empowers the Board to issue necessary rules to implement the Act.

Board is authorized to invest in preferred shares of banks seeking financial assistance.
Requires applicants to have exhausted efforts to secure shareholder support prior to Board investment.
Preferred shares must have cumulative dividends: 1% for first 5 years, 2% for next 5 years, 3% thereafter.
Preferred shares have priority over common and other preferred shares during asset distribution upon liquidation.
Preferred shares held by the Board include voting rights.

Board may sell whole or parts of its preferred stock holdings to highest bidders in the open market.

Dividends received by the Board from preferred shares revert to the National Treasury's general fund.

Board mandated to meet monthly and additionally as needed.
President designates the Board Chairman who acts as executive officer.
Chairman supervises records and authorizes fund disbursements under Board oversight.

Authorizes the Board to utilize up to ten thousand pesos from the fund for operational expenses including personnel salaries.

Existing Philippine banks authorized to issue one or more classes of preferred shares per the Act.
Bank Commissioner may permit or require retirement of preferred shares when financial condition permits.
Retirement involves payment of par value plus accumulated dividends.
Post-retirement, the capital and surplus must not fall below ten percent of outstanding deposit liabilities.
Preferred shares held by the Board are prioritized for retirement.

Bank Commissioner may defer liquidation of insolvent banks by ordering segregation and conversion of excess non-preferred liabilities.
The liabilities converted into deferred pro rata credits payable from future net profits.
Deferred liabilities do not encumber bank assets; net profits first cover dividend requirements on preferred shares.
Creditors holding 25% or more of bank liabilities may challenge the Commissioner's order within ten days in the Supreme Court.
The Supreme Court exercises original jurisdiction, appoints a commissioner to receive evidence, simplifies proceedings, and renders a decision within 30 days.

All banks authorized to issue preferred stock according to the Act.
Banks not receiving assistance under the Act may issue preferred and/or common stock for rehabilitation purposes.