Section 3Sec./Art. 3

Section 22 of the National Internal Revenue Code of 1997, as amended, is hereby further amended to read as follows:

"Section 22. Definitions. - When used in the his Title:

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(L) The term 'shares of stock' shall refer to shares of stock of a corporation, warrants, options as well as units of participation in partnerships (except general professional partnerships), joint stock companies, joint account, joint ventures taxable as corporations, associations, and recreation or amusement clubs (such as golf, polo or similar clubs), and mutual fund certificates.

(M) The term 'shareholder' shall refer to a holder of shares of stock, warrants, options, as well as a holder of a unit of participation, in a partnership (except general professional partnership), joint stock company, joint account, taxable joint venture, and holder of a mutual fund certificate, joint stock company, or insurance company, or member in an association, recreation, or amusement club, such as golf, polo, or similar clubs.

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(T) The term 'securities' shall refer to share, participation, or interest in a corporation, commercial enterprise, or profit-making venture evidenced by a certificate, contract, or instrument, whether written or electronic in character, which shall include:

(1) Shares of stock. bonds, debentures, notes evidence of indebtedness, and asset-backed securities;

(2) Investment contracts, certificates of interest, or participation in a profit-sharing agreement, such as certificates of deposit for a future subscription;

(3) Fractional undivided interests in oil, gas, or other mineral rights;

(4) Certificates of assignment, certificates of participation, trust certificates, voting trust certificates, or similar instruments;

(5) Proprietary or non-proprietary membership certificates in corporations; and

(6) Other similar instruments as may be determined by the Securities and Exchange Commission.

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(Y) The term 'deposit substitute' shall refer to an alternative form of obtaining funds from the public other than deposits, through the issuance, endorsement, or acceptance of debt instruments for the borrower's own account, for the purpose of relending or purchasing of receivables and other obligations: Provided, That the term 'public' shall mean twenty (20) or more individual or corporate lenders at any given time.

These instruments may include, but need not be limited to, bankers' acceptances, promissory notes, repurchase agreements, excluding reverse repurchase agreements entered into by and between the Bangko Sentral ng Pilipinas (BSP) and any authorized agent bank, certificates of assignment or participation, and similar instruments with recourse: Provided, however, That debt instruments issued for interbank call loan with maturity of not more than five (5) days to cover deficiency in reserves against deposit liabilities, including those between or among banks and quasi-banks, shall not be considered as deposit substitute debt instruments.

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(MM) The term 'passive income' shall refer to any income that is earned from source that do not require a taxpayer's active pursuit and performance of trade or business and is not subject to value-added tax imposed in this Code."