Article 128p. 128

COMMERCIAL LAWS NEGOTIABLE INSTRUMENTS, CORPORATION, INSURANCE, TRANSPORTATION, BANKING

June 14, 1993

REPUBLIC ACT NO. 7653

THE NEW CENTRAL BANK ACT

CHAPTER I Establishment and Organization of

the Bangko Sentral ng Pilipinas

ARTICLE I Creation, Responsibilities and

Corporate Powers of the Bangko Sentral

SECTION 1. Declaration of Policy . — The State shall

maintain a central monetary authority that shall function

and operate as an independent and accountable body

corporate

in

the

discharge

of

its

mandated

responsibilities concerning money, banking and credit. In

line with this policy, and considering its unique functions

and

responsibilities,

the

central

monetary

authority

established

under

this

Act,

while

being

a

government-owned corporation, shall enjoy fiscal and

administrative autonomy.

SECTION 2. Creation of the Bangko Sentral . — There is

hereby established an independent central monetary

authority, which shall be a body corporate known as the

Bangko Sentral ng Pilipinas, hereafter referred to as the

Bangko Sentral .

The capital of the Bangko Sentral shall be Fifty billion

pesos (P50,000,000,000), to be fully subscribed by the

Government of the Republic, hereafter referred to as the

Government, Ten billion pesos (P10,000,000,000) of which

shall be fully paid for by the Government upon the

effectivity of this Act and the balance to be paid for within

a period of two (2) years from the effectivity of this Act in

such manner and form as the Government, through the

Secretary

of

Finance

and

Secretary

of

Budget

and

Management, may thereafter determine.

SECTION 3. Responsibility and Primary Objective . — The

Bangko Sentral shall provide policy directions in the areas

of money, banking, and credit. It shall have supervision

over the operations of banks and exercise such regulatory

powers as provided in this Act and other pertinent laws

over the operations of finance companies and non-bank

financial institutions performing quasi-banking functions,

hereafter referred to as quasi-banks, and institutions

performing similar functions.

The

primary

objective

of

the

Bangko Sentral is to

maintain

price

ability

conducive to a balanced and

sustainable growth of the economy. It shall also promote

and maintain monetary stability and the convertibility of

the peso.

SECTION 4. Place of Business . — The Bangko Sentral

shall have its principal place of business in Metro Manila,

but

may

maintain

branches,

agencies

and

correspondents

in

such

other

places as the proper

conduct of its business may require.

SECTION 5. Corporate Powers . — The Bangko Sentral is

hereby authorized to adopt, alter, and use a corporate

seal

which

shall

be judicially noticed; to enter into

contracts; to lease or own real and personal property, and

to sell or otherwise dispose of the same; to sue and be

sued; and otherwise to do and perform any and all things

that

may

be

necessary or proper to carry out the

purposes of this Act.

The Bangko Sentral may acquire and hold such assets

and incur such liabilities in connection with its operations

authorized by the provisions of this Act, or as are essential

to the proper conduct of such operations.

The

Bangko

Sentral

may

compromise,

condone

or

release, in whole or in part, any claim of or settled liability

to the Bangko Sentral , regardless of the amount involved,

under such terms and conditions as may be prescribed

by the Monetary Board to protect the interests of the

Bangko Sentral .

ARTICLE II The Monetary Board

SECTION 6. Composition of the Monetary Board . — The

powers and functions of the Bangko Sentral shall be

exercised

by

the

Bangko

Sentral

Monetary

Board,

hereafter referred to as the Monetary Board, composed of

seven (7) members appointed by the President of the

Philippines for a term of six (6) years.

The seven (7) members are:

(a) the Governor of the Bangko Sentral , who shall be the

Chairman of the Monetary Board. The Governor of the

Bangko Sentral shall be head of a department and his

appointment shall be subject to confirmation by the

Commission on Appointments. Whenever the Governor is

unable to attend a meeting of the Board, he shall

designate a Deputy Governor to act as his alternate:

Provided , That in such event, the Monetary Board shall

designate one of its members as acting Chairman;

(b) a member of the Cabinet to be designated by the

President of the Philippines. Whenever the designated

Cabinet Member is unable to attend a meeting of the

Board,

he

shall

designate

an

Undersecretary in his

Department to attend as his alternate; and

(c) five (5) members who shall come from the private

sector,

all

of

whom

shall

serve

full-time:

Provided,

however , That of the members first appointed under the

provisions of this subsection, three (3) shall have a term of

six (6) years, and the other two (2), three (3) years.

No member of the Monetary Board may be reappointed

more than once.

SECTION 7. Vacancies . — Any vacancy in the Monetary

Board created by the death, resignation, or removal of any

member shall be filled by the appointment of a new

member to complete the unexpired period of the term of

the member concerned.

SECTION

8. Qualifications . — The members of the

Monetary Board must be natural-born citizens of the

Philippines, at least thirty-five (35) years of age, with the

exception of the Governor who should at least be forty

(40)

years

of

age,

of

good

moral

character,

of

unquestionable

integrity,

of

known

probity

and

patriotism, and with recognized competence in social

and economic disciplines.

SECTION

9.

Disqualifications .

— In addition to the

disqualifications imposed by Republic Act No. 6713 , a

member of the Monetary Board is disqualified from

being a director, officer, employee, consultant, lawyer,

agent or stockholder of any bank, quasi-bank or any other

institution which is subject to supervision or examination

by the Bangko Sentral , in which case such member shall

resign from, and divest himself of any and all interests in

such institution before assumption of office as member

of the Monetary Board.

The members of the Monetary Board coming from the

private sector shall not hold any other public office or

public employment during their tenure.

No person shall be a member of the Monetary Board if he

has

been

connected

directly

with

any

multilateral

banking or financial institution or has a substantial

interest in any private bank in the Philippines, within one

(1) year prior to his appointment; likewise, no member of

the Monetary Board shall be employed in any such

institution within two (2) years after the expiration of his

term except when he serves as an official representative

of the Philippine Government to such institution.

SECTION 10. Removal . — The President may remove any

member of the Monetary Board for any of the following

reasons:

(a) If the member is subsequently disqualified under the

provisions of Section 8 of this Act; or

(b) If he is physically or mentally incapacitated that he

cannot properly discharge his duties and responsibilities

© Compiled by RGL

128 of 211