Article 143p. 143

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

Bangko Sentral shall be an ex officio member of the

National Economic and Development Authority Board.

CHAPTER VI Privileges and Prohibitions

ARTICLE I Privileges

SECTION 125. Tax Exemptions . — The Bangko Sentral

shall be exempt for a period of five (5) years from the

approval of this Act from all national, provincial, municipal

and city taxes, fees, charges and assessments.

The exemptions authorized in the preceding paragraph

of this section shall apply to all property of the Bangko

Sentral , to the resources, receipts, expenditures, profits

and income of the Bangko Sentral , as well as to all

contracts, deeds, documents and transactions related to

the

conduct

of

the

business

of

the

Bangko

Sentral : Provided, however , That said exemptions shall

apply only to such taxes, fees, charges and assessments

for which the Bangko Sentral itself would otherwise be

liable, and shall not apply to taxes, fees, charges, or

assessments payable by persons or other entities doing

business with the Bangko Sentral : Provided, further , That

foreign loans and other obligations of the Bangko Sentral

shall be exempt, both as to principal and interest, from

any and all taxes if the payment of such taxes has been

assumed by the Bangko Sentral .

SECTION 126. Exemption from Customs Duties . — The

provision of any general or special law to the contrary

notwithstanding, the importation and exportation by the

Bangko Sentral of notes and coins, and of gold and other

metals to be used for purposes authorized under this Act,

and the importation of all equipment needed for bank

note production, minting of coins, metal refining and

other security printing operations shall be fully exempt

from all customs duties and consular fees and from all

other taxes, assessments and charges related to such

importation or exportation.

SECTION 127. Applicability of the Civil Service Law . —

Appointments in the Bangko Sentral , except as to those

which are policy-determining, primarily confidential or

highly technical in nature, shall be made only according

to the Civil Service Law and regulations: Provided , That no

qualification requirements for positions in the Bangko

Sentral shall be imposed other than those set by the

Monetary Board: Provided, further , That, the Monetary

Board or Governor, in accordance with Sections 15(c) and

17(d)

of this Act, respectively, may without need of

obtaining prior approval from any other government

agency, appoint personnel in the Bangko Sentral whose

services are deemed necessary in order not to unduly

disrupt the operations of the Bangko Sentral .

Officers and employees of the Bangko Sentral , including

all members of the Monetary Board, shall not engage

directly or indirectly in partisan activities or take part in

any election except to vote.

ARTICLE II Prohibitions

SECTION 128. Prohibitions . — The Bangko Sentral shall

not

acquire

shares of any kind or accept them as

collateral, and shall not participate in the ownership or

management

of

any

enterprise,

either

directly

or

indirectly.

The Bangko Sentral shall not engage in development

banking

or

financing:

Provided,

however ,

That

outstanding loans obtained or extended for development

financing shall not be affected by the prohibition of this

section.

CHAPTER VII Transitory Provisions

SECTION 129. Phase-out of Fiscal Agency Functions . —

Unless circumstances warrant otherwise and approved

by

the

Congress

Oversight

Committee,

the Bangko

Sentral shall, within a period of three (3) years but in no

case longer than five (5) years from the approval of this

Act, phase out all fiscal agency functions provided for in

Sections 117, 118, 119, and 120 as well as in other pertinent

provisions of this Act and transfer the same to the

Department of Finance.

SECTION 130. Phase-out of Regulatory Powers Over the

Operations

of

Finance

Corporations

and

Other

Institutions

Performing

Similar

Functions .

—

The Bangko Sentral shall, within a period of five (5) years

from the effectivity of this Act, phase out its regulatory

powers over finance companies without quasi-banking

functions

and

other

institutions

performing

similar

functions as provided in existing laws, the same to be

assumed by the Securities and Exchange Commission.

SECTION 131. Implementing Details . — The Bangko

Sentral shall be made operational by the performance of

the following acts:

(a) the President shall constitute the Monetary Board by

appointing the members thereof within sixty (60) days

from the effectivity of this Act; and

(b) the transfer of such assets and liabilities from the

Central Bank to the Bangko Sentral as provided in

Section 132 shall be completed within ninety (90) days

from the constitution of the Monetary Board.

All incumbent personnel in the Central Bank as of the

date of the approval of this Act shall continue to exercise

their duties and functions as personnel of the Bangko

Sentral subject to the provisions of Section 133: Provided ,

That such personnel in the Central Bank as may be

necessary for the purpose of implementing Section 132

may be assigned by the Bangko Sentral Monetary Board

to the Central Bank.

SECTION 132. Transfer of Assets and Liabilities . — Upon

the effectivity of this Act, three (3) members of the

Monetary Board, which may include the Governor, in

representation of the Bangko Sentral , the Secretary of

Finance and the Secretary of Budget and Management in

representation of the National Government, and the

Chairmen of the Committees on Banks of the Senate and

the House of Representatives shall determine the assets

and

liabilities

of

the

Central

Bank

which

may

be

transferred to or assumed by the Bangko Sentral . The

Committee shall complete its work within ninety (90)

days

from

the

constitution

of

the

Monetary

Board

submitting a comprehensive report with all its findings

and justification.

The following guidelines shall be strictly observed in the

determination of which assets and liabilities shall be

transferred to the Bangko Sentral :

(a) the Monetary Board and the Secretary of Finance shall

have

primary

responsibility

for

working out creative

monetary and financial solutions to retire the Central

Bank

liabilities

and

losses

at

the least cost to the

Government;

(b) the Bangko Sentral shall remit seventy-five percent

(75%) of its net profits to a special deposit account

(sinking fund) until such time as the net liabilities of the

Central

Bank

shall

have

been

liquidated

through

generally accepted finance mechanisms such as, but not

limited to, write-offs, set-offs, condonation, collections,

reappraisal,

revaluation

and

bond

issuance

by

the

National Government, or to the National Government as

dividends;

(c) the assets and liabilities to be transferred shall be

limited to an amount that will enable the Bangko Sentral

to perform its responsibilities adequately and operate on

a viable basis: Provided , That the assets shall exceed the

liabilities as certified by the Commission on Audit (COA),

by

an

initial

amount

of

Ten

billion

pesos

(P10,000,000,000);

(d) liabilities to be assumed by the Bangko Sentral shall

include liability for notes and coins in circulation as of the

effective date of this Act; and

(e)

any

asset

or

liability

of

the

Central

Bank

not

transferred to the Bangko Sentral shall be retained and

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