Article 132p. 132

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

two-thirds (2/3) of the salary of the president of the

institution in one (1) year, payable in twelve (12) equal

monthly payments: Provided , That, if at any time within

the one-year period, the conservatorship is terminated on

the ground that the institution can operate on its own,

the

conservator

shall

receive

the

balance

of

the

remuneration which he would have received up to the

end of the year; but if the conservatorship is terminated

on other grounds, the conservator shall not be entitled to

such

remaining

balance.

The

Monetary

Board

may

appoint

a

conservator

connected

with

the

Bangko

Sentral , in which case he shall not be entitled to receive

any remuneration or emoluments from the Bangko

Sentral

during

the

conservatorship.

The

expenses

attendant to the conservatorship shall be borne by the

bank or quasi-bank concerned.

The Monetary Board shall terminate the conservatorship

when it is satisfied that the institution can continue to

operate on its own and the conservatorship is no longer

necessary.

The

conservatorship

shall

likewise

be

terminated should the Monetary Board, on the basis of

the report of the conservator or of its own findings,

determine

that

the

continuance

in business of the

institution would involve probable loss to its depositors or

creditors, in which case the provisions of Section 30 shall

apply.

SECTION

30.

Proceedings

in

Receivership

and

Liquidation . — Whenever, upon report of the head of the

supervising

or

examining department, the Monetary

Board finds that a bank or quasi-bank:

(a) is unable to pay its liabilities as they become due to

the ordinary course of business: Provided , That this shall

not include inability to pay caused by extraordinary

demands induced by financial panic in the banking

community;

(b) has insufficient realizable assets, as determined by the

Bangko Sentral , to meet its liabilities; or

(c)

cannot

continue

in

business

without

involving

probable losses to its depositors or creditors; or

(d) has willfully violated a cease and desist order under

Section 37 that has become final, involving acts or

transactions which amount to fraud or a dissipation of

the assets of the institution; in which cases, the Monetary

Board may summarily and without need for prior hearing

forbid

the

institution

from

doing

business

in

the

Philippines

and

designate

the

Philippine

Deposit

Insurance

Corporation

as

receiver

of

the

banking

institution.

For a quasi-bank, any person of recognized competence

in banking or finance may be designed as receiver.

The receiver shall immediately gather and take charge of

all the assets and liabilities of the institution, administer

the same for the benefit of its creditors, and exercise the

general powers of a receiver under the Revised Rules of

Court but shall not, with the exception of administrative

expenditures, pay or commit any act that will involve the

transfer or disposition of any asset of the institution:

Provided , That the receiver may deposit or place the

funds of the institution in non-speculative investments.

The receiver shall determine as soon as possible, but not

later than ninety (90) days from take-over, whether the

institution may be rehabilitated or otherwise placed in

such a condition so that it may be permitted to resume

business with safety to its depositors and creditors and

the general public: Provided , That any determination for

the resumption of business of the institution shall be

subject to prior approval of the Monetary Board.

If the receiver determines that the institution cannot be

rehabilitated

or

permitted

to

resume

business

in

accordance

with

the next preceding paragraph, the

Monetary Board shall notify in writing the board of

directors of its findings and direct the receiver to proceed

with the liquidation of the institution. The receiver shall:

(1) file ex parte with the proper regional trial court, and

without requirement of prior notice or any other action, a

petition for assistance in the liquidation of the institution

pursuant to a liquidation plan adopted by the Philippine

Deposit Insurance Corporation for general application to

all closed banks. In case of quasi-banks, the liquidation

plan shall be adopted by the Monetary Board. Upon

acquiring jurisdiction, the court shall, upon motion by the

receiver after due notice, adjudicate disputed claims

against

the

institution,

assist

the

enforcement

of

individual liabilities of the stockholders, directors and

officers, and decide on other issues as may be material to

implement the liquidation plan adopted. The receiver

shall pay the cost of the proceedings from the assets of

the institution.

(2) convert the assets of the institution to money, dispose

of the same to creditors and other parties, for the purpose

of paying the debts of such institution in accordance with

the rules on concurrence and preference of credit under

the Civil Code of the Philippines and he may, in the name

of the institution, and with the assistance of counsel as he

may retain, institute such actions as may be necessary to

collect and recover accounts and assets of, or defend any

action against, the institution. The assets of an institution

under receivership or liquidation shall be deemed in

custodia legis in the hands of the receiver and shall, from

the moment the institution was placed under such

receivership or liquidation, be exempt from any order of

garnishment, levy, attachment, or execution.

The actions of the Monetary Board taken under this

section or under Section 29 of this Act shall be final and

executory, and may not be restrained or set aside by the

court except on petition for certiorari on the ground that

the action taken was in excess of jurisdiction or with such

grave abuse of discretion as to amount to lack or excess

of jurisdiction. The petition for certiorari may only be filed

by the stockholders of record representing the majority of

the capital stock within ten (10) days from receipt by the

board of directors of the institution of the order directing

receivership, liquidation or conservatorship.

The designation of a conservator under Section 29 of this

Act or the appointment of a receiver under this section

shall be vested exclusively with the Monetary Board.

Furthermore, the designation of a conservator is not a

precondition to the designation of a receiver.

SECTION

31.

Distribution

of

Assets .

—

In

case

of

liquidation of a bank or quasi-bank, after payment of the

cost of proceedings, including reasonable expenses and

fees of the receiver to be allowed by the court, the

receiver shall pay the debts of such institution, under

order of the court, in accordance with the rules on

concurrence and preference of credit as provided in the

Civil Code.

SECTION 32. Disposition of Revenues and Earnings . —

All revenues and earnings realized by the receiver in

winding up the affairs and administering the assets of

any bank or quasi-bank within the purview of this Act

shall

be

used to pay the costs, fees and expenses

mentioned in the preceding section, salaries of such

personnel whose employment is rendered necessary in

the discharge of the liquidation together with other

additional

expenses

caused

thereby. The balance of

revenues and earnings, after the payment of all said

expenses, shall form part of the assets available for

payment to creditors.

SECTION 33. Disposition of Banking Franchise . — The

Bangko Sentral may, if public interest so requires, award

to an institution, upon such terms and conditions as the

Monetary Board may approve, the banking franchise of a

bank under liquidation to operate in the area where said

bank or its branches were previously operating: Provided ,

That whatever proceeds may be realized from such award

shall be subject to the appropriate exclusive disposition of

the Monetary Board.

SECTION

34.

Refusal

to

Make

Reports

or

Permit

Examination . — Any officer, owner, agent, manager,

director or officer-in-charge of any institution subject to

the supervision or examination by the Bangko Sentral

within the purview of this Act who, being required in

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