Article 142p. 142

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

shall carry such accounts as may result from Philippine

membership in, or operations with, said Fund.

SECTION

112.

Representation

with

Other

Financial

Institutions . — The Bangko Sentral may be authorized by

the Government to represent it in dealings, negotiations

or

transactions

with

the

International

Bank

for

Reconstruction and Development and with other foreign

or international financial institutions or agencies. The

President

may, however, designate any of his other

financial advisors to jointly represent the Government in

such dealings, negotiations or transactions.

SECTION 113. Official Deposits . — The Bangko Sentral

shall be the official depository of the Government, its

political subdivisions and instrumentalities as well as of

government-owned or -controlled corporations and, as a

general policy, their cash balances should be deposited

with the Bangko Sentral , with only minimum working

balances to be held by government-owned banks and

such other banks incorporated in the Philippines as the

Monetary Board may designate, subject to such rules and

regulations as the Board may prescribe: Provided , That

such banks may hold deposits of the political subdivisions

and instrumentalities of the Government beyond their

minimum working balances whenever such subdivisions

and instrumentalities have outstanding loans with said

banks.

The Bangko Sentral may pay interest on deposits of the

Government

or

of

its

political

subdivisions

and

instrumentalities, as well as on deposits of banks with the

Bangko Sentral .

SECTION 114. Fiscal Operations . — The Bangko Sentral

shall open a general cash account for the Treasurer of the

Philippines, in which the liquid funds of the Government

shall be deposited.

Transfers of funds from this account to other accounts

shall be made only upon order of the Treasurer of the

Philippines.

SECTION 115. Other Banks as Agents of the Bangko

Sentral . — In the performance of its functions as fiscal

agent, the Bangko Sentral may engage the services of

other government-owned and -controlled banks and of

other domestic banks for operations in localities at home

or abroad in which the Bangko Sentral does not have

offices or agencies adequately equipped to perform said

operations: Provided, however , That for fiscal operations

in foreign countries, the Bangko Sentral may engage the

services of foreign banking and financial institutions.

SECTION 116. Remuneration for Services . — The Bangko

Sentral may charge equitable rates, commissions or fees

for services which it renders to the Government, its

political subdivisions and instrumentalities.

ARTICLE II The Marketing and Stabilization of

Securities for the Account of the Government

A. The Issue and Placing of Government Securities

SECTION 117. Issue of Government Obligations . — The

issue

of

securities

representing

obligations

of

the

Government, its political subdivisions or instrumentalities,

may be made through the Bangko Sentral , which may

act as agent of, and for the account of, the Government or

its respective subdivisions or instrumentality, as the case

may be: Provided, however , That the Bangko Sentral shall

not guarantee the placement of said securities, and shall

not subscribe to their issue except to replace its maturing

holdings of securities with the same type as the maturing

securities.

SECTION

118.

Methods

of

Placing

Government

Securities .

—

The

Bangko

Sentral

may

place

the

securities to which the preceding section refers through

direct sale to financial institutions and the public.

The Bangko Sentral shall not be a member of any stock

exchange or syndicate, but may intervene therein for the

sole purpose of regulating their operations in the placing

of government securities.

The

Government,

or

its

political

subdivisions

or

instrumentalities, shall reimburse the Bangko Sentral for

the expenses incurred in the placing of the aforesaid

securities.

SECTION 119. Servicing and Redemption of the Public

Debt . — The servicing and redemption of the public debt

shall also be effected through the Bangko Sentral .

B. Bangko Sentral Support of the Government Securities

Market

SECTION 120. The Securities Stabilization Fund . — There

shall be established a "Securities Stabilization Fund"

which shall be administered by the Bangko Sentral for

the account of the Government.

The operations of the Securities Stabilization Fund shall

consist of purchases and sales, in the open market, of

bonds and other evidences of indebtedness, issued or

fully guaranteed by the Government. The purpose of

these operations shall be to increase the liquidity and

stabilize the value of said securities in order thereby to

promote private investment in government obligations.

The Monetary Board shall use the resources of the Fund

to

prevent,

or

moderate,

sharp

fluctuations

in

the

quotations of said government obligations, but shall not

endeavor to alter movements of the market resulting

from basic changes in the pattern or level of interest

rates.

The Monetary Board shall issue such regulations as may

be necessary to implement the provisions of this section.

SECTION 121. Resources of the Securities Stabilization

Fund . — Subject to Section 132 of this Act, the resources

of the Securities Stabilization Fund shall come from the

balance of the fund as held by the Central Bank under

Republic Act No. 265 as of the effective date of this Act.

SECTION 122. Profits and Losses of the Fund . — The

Securities Stabilization Fund shall retain net profits which

it may make on its operations, regardless of whether said

profits arise from capital gains or from interest earnings.

The Fund shall correspondingly bear any net losses which

it may incur.

ARTICLE III Functions as Financial Advisor of the

Government

SECTION

123.

Financial

Advice

on

Official

Credit

Operations . — Before undertaking any credit operation

abroad,

the

Government,

through

the

Secretary

of

Finance, shall request the opinion, in writing, of the

Monetary Board on the monetary implications of the

contemplated action. Such opinions must similarly be

requested

by

all

political

subdivisions

and

instrumentalities of the Government before any credit

operation abroad is undertaken by them.

The opinion of the Monetary Board shall be based on the

gold and foreign exchange resources and obligations of

the nation and on the effects of the proposed operation

on

the

balance

of

payments

and

on

monetary

aggregates.

Whenever

the

Government,

or

any

of

its

political

subdivisions

or

instrumentalities,

contemplates

borrowing within the Philippines, the prior opinion of the

Monetary Board shall likewise be requested in order that

the Board may render an opinion on the probable effects

of the proposed operation on monetary aggregates, the

price level, and the balance of payments.

SECTION 124. Representation on the National Economic

and

Development

Authority .

—

In

order

to assure

effective coordination between the economic, financial

and fiscal policies of the Government and the monetary,

credit and exchange policies of the Bangko Sentral , the

Deputy Governor designated by the Governor of the

© Compiled by RGL

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