H. No. 3440 / 58 OG No. 3, 440 (January 15, 1962)

[ REPUBLIC ACT NO. 3147, June 17, 1961 ]

AN ACT TO FURTHER AMEND REPUBLIC ACT NUMBERED EIGHTY-FIVE, AS AMENDED BY REPUBLIC ACT NUMBERED TWO THOUSAND EIGHTY-ONE, CREATING THE DEVELOPMENT BANK OF THE PHILIPPINES.

Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled:SECTION 1. Section two of Republic Act Numbered Eighty-five, as amended by Republic Act Numbered Two thousand eighty-one, is further amended to read as follows:"SEC. 2. Corporate power.&mdashThe Development Bank of the Philippines shall have the power:

"(a) To grant loans for home building or home financing projects and for the rehabilitation, the establishment or development of any agricultural and/or industrial enterprise, including" public utilities, mining, livestock industry and fishing", whether offshore or inland; "(b) To purchase preferred redeemable shares of stock, securities other than shares of stock, and obligations of, and to grant loans to, any agricultural and industrial enterprises mentioned in paragraph (a), to finance their fixed and operating capital requirements. All purchases of preferred redeemable shares, securities and obligations and all loans shall be of such sound value or so secured, as reasonably to assure retirement of such shares, securities, or obligations or repayment of the loan; and shall be granted only under such terms, conditions and restrictions as the bank shall determine; "(c) To grant loans to provincial, city and municipal governments for the rehabilitations, construction or reconstruction of public markets, waterworks, toll bridges, slaughterhouses, for cadastral surveys and other self-liquidating or income-producing services, including the purchase and acquisition of municipal electric power plants and to agencies and corporations owned or controlled by the Government of the Republic of the Philippines for the production and distribution of electrical power, for the purchase and subdivision of rural and urban estates for housing projects, for irrigation and waterworks systems, and for other essential industrial and agricultural enterprises; "(d) To grant loans to cooperative associations to facilitate production, the marketing of crops, and the acquisition of essential commodities; "(e) To grant loans to individual employees in a government-owned or controlled corporation or private corporation engaged in the development and/or expansion of agriculture or industry, for the purpose of buying shares of stock directly from such corporation for the purpose of enabling them to participate in the ownership and to share in the profits thereof: Provided, That the yearly amortization of such loans shall not exceed ten per cent of the total annual salary and wages of the borrower: Provided, further, That such loans shall be payable in full within a period of not exceeding ten years: Provided, finally, That if the borrower should sell any share of stock acquired by him from the proceeds of such loans, the corporation that issued said share of stock shall have preference to purchase the same; "(f) To underwrite, purchase, own, sell, mortgage or otherwise dispose of stocks, bonds, debentures, securities and other evidences of indebtedness issued for or in connection with any project or enterprise referred to in the preceding paragraphs; "(g) To issue bonds, debentures, securities, collaterals, and other obligations and/or the renewal or the refunding of the same upon recommendation of the Secretary of Finance and with the approval of the President, but in no case to exceed at any one time an aggregate amount equivalent to one hundred per centum of its subscribed capital and surplus. These bonds and other obligations shall be redeemable at the option of the Bank at or before maturity and in such manner as may be stipulated therein and shall bear such rate of interest as may be fixed by the Bank. Such obligations shall be secured by the assets of the Bank including the stocks, bonds, debentures and other securities underwritten, purchased or held by it under the provisions of this Act.   The Bank shall provide for appropriate reserves for the redemption or retirement of said obligation. Such obligations may be issued and offered for sale at such price or prices as the Bank may determine, and shall be exempt from taxation both as to principal and interest. The said obligations shall be and are hereby fully and unconditionally guaranteed both as to principal and interest by the Government of the Republic of the Philippines and such guaranty shall be expressed on the face thereof;

"In the event that the bank shall be unable to pay debentures, bonds, collaterals, notes or other such obligations issued by it, the Secretary of Finance shall pay the amount thereof, which is hereby appropriated out of any moneys in the National Treasury not otherwise appropriated, and thereupon, to the extent of the amounts so paid, the Government of the Republic of the Philippines shall succeed to all the rights of the holders of such bonds, notes, debentures, collaterals, or other obligations."Subject to the above provisions, the Bank is also authorized to issue "Rehabilitation and development bonds" in denominations of not less than fifty pesos nor more than one thousand pesos redeemable by the Bank on demand at the option of the holder of said bonds, which may be of the following types: (1) rehabilitation and development bonds at progressive staggered interest with cumulative face value; and (2) rehabilitation and development bonds bearing interests as may be determined by the Board of Governors with the advice and consent of the Secretary of Finance and upon approval by the Monetary Board, said interest to become due and payable semi-annually and payment thereof to be annotated on the back of each bond certificate. Maturity of both types of bonds shall be fixed by the Board of Governors but in no case to exceed ten years."The Board of Governors shall have the power to prescribe rules and regulations for the issuance, reissuance, servicing, placement and redemption of the bonds herein authorized to be issued by the Bank as well as the registration of such bonds at the request of the holders thereof, with the approval of the Monetary Board of the Philippines.

"(h) To adopt, alter, and use a corporate seal which shall be judicially noticed; to make contracts; to borrow money; to issue or own real and personal property; and to sell, mortgage or otherwise dispose of the same; to sue and be sued; to employ such officers and personnel as may be necessary to carry out the business of the bank; and otherwise to do and perform any and all things that may be necessary or proper to carry out the purposes of the Bank; "(i) To subscribe out of its funds to the capital stock of private provincial and city development banks created pursuant to the provisions of this Act: Provided, That the aggregate of such subscriptions shall not exceed twenty-five million pesos; "(j) To rediscount intermediate and long term notes, loans and/or mortgages of the Philippine National Bank; and "(k) The provision of any law to the contrary notwithstanding, to guarantee acceptance credits, loans, transactions, or obligations of any person, co-partnership association or corporation in favor of any financing or banking institution, whether foreign or domestic: Provided, That the proceeds of such acceptance credits, loans, transactions or obligations have been utilized or are earmarked for the development and/or expansion of agriculture, or industry."

SEC. 2. Section four of said Act, as amended, is further amended to read as follows:

"SEC. 4. Loans.&mdashThe Bank may grant loans against security of real estate and/or other acceptable assets including, subject to the provision of existing laws, leasehold rights and permits from the government: Provided, That not more than forty-five per cent of its authorized capital stock shall be available for industrial loans, not more than thirty-five per cent of such capital stock shall be available for agricultural loans and not more than twenty per cent of such capital stock shall be available for miscellaneous loans including loans for home building or home financing projects: Provided, further, That the same proportion hereinabove stated shall be observed in the granting of loans for industrial, agricultural and miscellaneous purposes: Provided, further, That of the amount available for agricultural loans, not more than twenty per cent thereof shall be made available for any agricultural crop and that of the latter amount not more than five per cent thereof shall be loaned to any individual, association or corporation: Provided, further, That no person shall be granted a loan for home building in excess of thirty thousand pesos: Provided, further, That when the interest of the national economy so requires and upon approval of the President of the Philippines for a specified and limited period, the proportions hereinabove stated need not be observed in the granting of loans: Provided, further, That any provision of law to the contrary notwithstanding, the bank is authorized to grant loans on the security of real estate without torrens title if the real estate has been declared for purposes of taxation continuously for at least ten years and the applicant for loan and his predecessors in interest have been in continuous and uninterrupted possession thereof in the concept of owner for at least ten years, such possession to be established by affidavits of the owners of all the properties adjoining such real estate and other evidences that the Board of Governors may deem necessary: Provided, finally, That the bank may invest funds for the purchase of such mortgage bonds as the Philippine National Bank shall issue for the grant of medium and long-term development loans, which, bonds must be guaranteed by the government both as to principal and interest."

SEC. 3. Section twenty-three of said Act, as amended, is further amended to read as follows;

"SEC. 23. No officer or employee of the bank nor any government official who may exercise executive or supervisory authority over the said bank, either directly, or indirectly, for himself or as the representative or agent of others shall, except when the same shall be in the form of advances appropriated or set aside by the bank itself in order to provide for housing for the benefit of its officials and employees, borrow money from the bank, nor shall become a guarantor, endorser, or surety for loans from the said bank to others, or in any manner be an obligor for moneys borrowed from said bank. Any such officer or employee who violates the provisions of this section shall be immediately removed by competent authority and said officer or employee shall be punished by imprisonment of not less than one year nor exceeding five years and by a fine of riot less than one thousand nor more than five pesos."

"SEC. 4. This Act shall take effect upon its approval.Approved, June 17, 1961.

Source: Supreme Court E-Library