Article 135p. 135

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

ARTICLE II Issue of Means of Payment

A. Currency

SECTION

49.

Definition

of

Currency .

—

The

word

"currency" is hereby defined, for purposes of this Act, as

meaning

all

Philippine

notes

and

coins

issued

or

circulating in accordance with the provisions of this Act.

SECTION 50. Exclusive Issue Power . — The Bangko

Sentral shall have the sole power and authority to issue

currency, within the territory of the Philippines. No other

person or entity, public or private, may put into circulation

notes, coins or any other object or document which in the

opinion

of

the

Monetary

Board,

might

circulate

as

currency, nor reproduce or imitate the facsimiles of

Bangko Sentral notes without prior authority from the

Bangko Sentral .

The Monetary Board may issue such regulations as it may

deem advisable in order to prevent the circulation of

foreign currency or of currency substitutes as well as to

prevent the reproduction of facsimiles of Bangko Sentral

notes.

The

Bangko

Sentral

shall

have

the

authority

to

investigate, make arrests, conduct searches and seizures

in accordance with law, for the purpose of maintaining

the integrity of the currency.

Violation of this provision or of any regulation issued by

the Bangko Sentral pursuant thereto shall constitute an

offense punishable by imprisonment of not less than five

(5) years but not more than ten (10) years. In case the

Revised Penal Code provides for a greater penalty, then

that penalty shall be imposed.

SECTION 51. Liability for Notes and Coins . — Notes and

coins issued by the Bangko Sentral shall be liabilities of

the Bangko Sentral and may be issued only against, and

in amounts not exceeding, the assets of the Bangko

Sentral .

Said

notes

and

coins

shall

be

a

first and

paramount lien on all assets of the Bangko Sentral .

The Bangko Sentral 's holdings of its own notes and coins

shall not be considered as part of its currency issue and,

accordingly, shall not form part of the assets or liabilities

of the Bangko Sentral .

SECTION 52. Legal Tender Power . — All notes and coins

issued by the Bangko Sentral shall be fully guaranteed by

the Government of the Republic of the Philippines and

shall be legal tender in the Philippines for all debts, both

public

and

private:

Provided,

however ,

That,

unless

otherwise fixed by the Monetary Board, coins shall be

legal

tender

in

amounts

not

exceeding Fifty pesos

(P50.00) for denominations of Twenty-five centavos and

above, and in amounts not exceeding Twenty pesos

(P20.00) for denominations of Ten centavos or less.

SECTION 53. Characteristics of the Currency . — The

Monetary Board, with the approval of the President of the

Philippines,

shall

prescribe

the

denominations,

dimensions,

designs,

inscriptions

and

other

characteristics of notes issued by the Bangko Sentral :

Provided, however , That said notes shall state that they

are

liabilities

of

the

Bangko

Sentral

and

are

fully

guaranteed by the Government of the Republic of the

Philippines.

Said

notes

shall bear the signatures, in

facsimile, of the President of the Philippines and of the

Governor of the Bangko Sentral .

Similarly, the Monetary Board, with the approval of the

President of the Philippines, shall prescribe the weight,

fineness,

designs,

denominations

and

other

characteristics of the coins issued by the Bangko Sentral .

In the minting of coins, the Monetary Board shall give full

consideration to the availability of suitable metals and to

their relative prices and cost of minting.

SECTION 54. Printing of Notes and Minting of Coins . —

The Monetary Board shall prescribe the amounts of notes

and coins to be printed and minted, respectively, and the

conditions to which the printing of notes and the minting

of coins shall be subject. The Monetary Board shall have

the authority to contract institutions, mints or firms for

such operations.

All expenses incurred in the printing of notes and the

minting of coins shall be for the account of the Bangko

Sentral .

SECTION

55.

Interconvertibility

of

Currency . — The

Bangko Sentral shall exchange, on demand and without

charge, Philippine currency of any denomination for

Philippine notes and coins of any other denomination

requested.

If

for

any

reason the Bangko Sentral is

temporarily unable to provide notes or coins of the

denominations requested, it shall meet its obligations by

delivering notes and coins of the denominations which

most nearly approximate those requested.

SECTION

56.

Replacement

of

Currency

Unfit

for

Circulation . — The Bangko Sentral shall withdraw from

circulation and shall demonetize all notes and coins

which for any reason whatsoever are unfit for circulation

and shall replace them by adequate notes and coins:

Provided, however , That the Bangko Sentral shall not

replace notes and coins the identification of which is

impossible, coins which show signs of filing, clipping or

perforation,

and

notes

which

have

lost

more

than

two-fifths (2/5) of their surface or all of the signatures

inscribed thereon. Notes and coins in such mutilated

conditions

shall

be

withdrawn

from circulation and

demonetized without compensation to the bearer.

SECTION 57. Retirement of Old Notes and Coins . — The

Bangko Sentral may call in for replacement notes of any

series or denomination which are more than five (5) years

old and coins which are more than ten (10) years old.

Notes and coins called in for replacement in accordance

with this provision shall remain legal tender for a period

of one (1) year from the date of call. After this period, they

shall cease to be legal tender but during the following

year, or for such longer period as the Monetary Board

may determine, they may be exchanged at par and

without charge in the Bangko Sentral and by agents duly

authorized by the Bangko Sentral for this purpose. After

the expiration of this latter period, the notes and coins

which have not been exchanged shall cease to be a

liability of the Bangko Sentral and shall be demonetized.

The Bangko Sentral shall also demonetize all notes and

coins, which have been called in and replaced.

B. Demand Deposits

SECTION 58. Definition . — For purposes of this Act, the

term "demand deposits" means all those liabilities of the

Bangko Sentral and other banks which are denominated

in Philippine currency and are subject to payment in legal

tender upon demand by the presentation of checks.

SECTION 59. Issue of Demand Deposits . — Only banks

duly authorized to do so may accept funds or create

liabilities

payable

in

pesos

upon

demand

by

the

presentation of checks, and such operations shall be

subject

to

the

control

of

the

Monetary

Board

in

accordance with the powers granted it with respect

thereto under this Act.

SECTION 60.

Legal Character . — Checks representing

demand deposits do not have legal tender power and

their acceptance in the payment of debts, both public

and private, is at the option of the creditor: Provided,

however , That a check which has been cleared and

credited to the account of the creditor shall be equivalent

to a delivery to the creditor of cash in an amount equal to

the amount credited to his account.

© Compiled by RGL

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